DCC boss hails ‘astonishing year’ as PPE demand boosts profit
The boss of multinational conglomerate DCC this year hailed an “astonishing year” for the firm as it smashed market expectations across the board.
For the full year the FTSE 100 company, which sells energy, healthcare, and tech products, said its operating profit was up 7.3 per cent.
As a result, it elected to boost its dividend to 159.8p per share, up 10 per cent year-on-year.
Despite the results, shares in DCC are down 1.0 per cent so far today.
Chief executive Donal Murphy told Morning Wire: “If this was a normal year we’d be saying this was a really good performance. But considering we’ve delivered what we have in a year in which we’ve had to turn the business upside, it’s pretty astonishing.
Murphy said that the fact that DCC’s core areas were all industries that were heavily in demand during the pandemic had driven the firm’s organic growth.
“All of the areas in which we provide products and services to our customers are those which people have needed everyday over the last year”, he said.
He added that the firm had seen a bump in its standout healthcare division due to demand from hospitals and GPs for PPE and surgical equipment.
The division saw profit rise 45.9 per cent to £81.7m over the course of the year.
DCC also recently snapped up German medical supplier Wörner for around €80m, a business which it hopes can be its springboard into the European medical market.
“It’s our first opportunity to grow that business in Europe”, Murphy said. “It comes with a little pipeline of acquisition opportunities, so we hope to be applying further capital there in the near future.”
Across 2020 as a whole, DCC put the second most money towards acquisitions in its history – £375m. And Murphy suggested the firm was unlikely to slow down.
“Ideally, we’d like to be spending £300m-£400m every year. That’s if we could wave a magic wand. But with acquisitions, you tend to get some bigger years and some years when you spend a little bit less.”
The firm also announced the purchase of two French solar energy businesses today.
DCC also increased its electric vehicle fast charging infrastructure network by 50 per cent in 2020. Murphy said the firm would seek to grow the sector even further.
“We see ourselves very well positioned to strive energy transition, and support customers and in transitioning to lower carbon fuels so you’ll see us continuing to invest continuing to talk about the initiatives across our business” he said.
DCC taps JP Morgan investment banker as its next chairman
The firm also announced that former JP Morgan investment banker Mark Breuer would be its next chairman.
Breuer will take over from John Moloney, who has held the post since 2014, on 16 July after DCC’s AGM.
Bruer spent the majority of his career as an investment banker, mostly at JP Morgan, where where he was vice-chairman global M&A and a member of the global strategic advisory council before his retirement in 2017.
The incoming chair also sits on the board of Derwent London.
Donal Murphy, chief executive of DCC, paid tribute to the outgoing Moloney:
“On behalf of the management team, I would like to thank John for his exceptional contribution to the Board and the Group, during which he oversaw the significant growth and development of DCC.
“His wise counsel, support and leadership have also been very much appreciated by myself and the Board. We wish John well for the future. I look forward to working closely with our new chairman Mark Breuer as we continue to grow and develop the Group.”