DCC – Solid result across all divisions but we see limited upside. “HOLD”
DCC reported their half year results to the end of September this morning.
The results were solid with reported revenue for continuing operations of £6.45 billion, a 17.1% increase versus last year and c.5% ahead of analyst expectations. EBITA was £122.5 million, in line with consensus and adjusted EPS was 96.4p, 16.1% ahead of last year. Additionally, management maintained net debt at c.£112 million and increased the dividend by 10% to 40.89p.
DCC LPG had an excellent H1 reporting revenue of $502 million. 36.5% ahead of last year, with operating profit increasing 19.2% to £44.1 million. Following the completion of the acquisitions of Shell Hong Kong & Macau and Retail West, DCC LPG will operate in nine countries and is well positioned to continue its expansion in both current and new geographies.
DCC Retail and Oil recorded a solid performance, increasing revenue 15.5% to £4.3 billion and increasing operating profit by 8% to £42.2 million. The integration of ESSO Norway and Dansk Fuels was also completed over the period.
Revenue growth was more muted for DCC Healthcare but operating profit managed to grow 11.6% to £22.6 million.
DCC Technology achieved stellar revenue growth, increasing revenue by 19.8% to £1.4 billion and growing operating profit by 25.8% to £14.2 million. The growth was primarily driven by acquisitions.
The company’s balance sheet continues to be in stellar shape and the Groups net debt to EBITDA multiple was c.0.6x.
DCC currently trades on 19.5x next year’s earnings, 12.5x EV/EBITDA and offers a 1.9% dividend yield. We feel the stock is fully valued at the moment and reiterate our recommendation “HOLD”

Dylan Simmonds
Equity Analyst

Darren McKinley, CFA
Senior Equity Analyst