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DCC Q1 update paints a picture of improving conditions

Exertis parent updates investors ahead of AGM, with signs of trading performance improving as the weeks progress

DCC has shared an update on its first-quarter progress to give investors a picture of how the business is faring during the pandemic, ahead of its AGM.

The firm, which owns Exertis, also operates a healthcare division and one focusing on the oil and gas market. The Group as a whole saw trading performance improve for the first six weeks of the fiscal year ending 31 March 2021.

DCC revealed in an interim management statement that operating profit in DCC Technology, the Exertis part of the business, was behind in terms of comparisons with the same period last year, but “trading improved steadily through the quarter”.

The retail side of the business helped Exertis during the start of the first quarter, with demand holding up for consumer tech in etail and non-traditional retail channels. The B2B side has been hit harder, with the statement making it clear that products and services that are reliant on resellers gaining access to customer business sites were hit by the lockdown.

Because the group operates across diverse markets, with healthcare in Q1 performing strongly and its oil operation also enjoying decent demand, it shared some confidence about the future with investors.

“DCC’s diverse, resilient business model and financial strength ensures the group is in a very strong position to navigate through the ongoing uncertainty. DCC remains active from an acquisitive development perspective and the group continues to have the platforms, opportunities and capability for further development across each of our four divisions,” said Donal Murphy, chief executive of DCC.

“The global measures being taken to mitigate the impact of the pandemic continue to have a significant impact on our employees, customers and business operations. All DCC business units have operated effectively during the quarter, ensuring our customers continue to receive the range of essential products and services we provide,” he said.

Stronger position

Murphy added that it had “recommenced selective organic development capital expenditure” during the quarter to put it into a stronger position to gain market share.

“Although a seasonally quieter period for the group, I have been pleased with the performance of each of DCC’s divisions during the quarter. The trading performance of the group has been very resilient, considering the significant challenges presented by the necessary restrictions,” he said.

The glimpse into the Q1 numbers comes just a couple of months after the DCC shared its results for the year ended 31 March, with operating profits improving by 7.3% to come in at £494.3m. Revenues went backwards slightly, by 3% to £14.755bn, but that was largely caused by the oil price falls hitting its division in that market. The company’s technology division saw revenues improve by 1% to £65.3m, which was a strong performance given the distributor’s heavy exposure to the retail sector.

Today’s AGM also marked the handing over of the torch in DCC’s finance office with chief financial officer Fergal O’Dwyer retiring and being replaced by Kevin Lucey, who will also be joining the firm’s board.

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