DCC’s H1 numbers benefit from recovering market

UK supply issues the only negative in a first-half update that shows the group, which owns Exertis, has kept the momentum going after last year

Exertis parent DCC has issued an interim report covering its first half, indicating that the business continues to improve revenues.

The group, which operates in technology, healthcare and the oil and LPG market, overall saw its revenues improve by 26.8% to £7.518bn from £5.931bn in the equivalent period last year.

DCC Technology also delivered improved revenues, up 0.8% to reach £1.985bn and operating profits improved by 6.5% to £27.2m from £25.5m for the six months ended 30 September 2021. Operating profits were also up by 6.5% to £27.2m and operating margin improved to 1.4% from 1.3%.

The interim update included some details of how the technology business has been operating, with it benefiting from recovering demand in some of its higher-margin areas, including the Pro AV product and the ongoing demand for technology to support home working.

Supply problems were a feature of the UK market and revenue and operating profits declines, with labour shortages along with product shortages being felt most acutely here. The firm also introduced a new warehouse system in the second quarter that caused some disruption. In Ireland, there was decent organic growth and DCC moved to larger facilities to support further growth in the country.

The business operates in other territories, with the North American business performing strongly, with recent acquisitions starting to have a positive impact on the bottom line. There was a similar story across continental Europe, with the B2B customer base continuing to recover.

DCC also bolstered its position during H1 by completing the acquisition of Azenn, a French distributor of structured cabling systems and network devices.

Donal Murphy, chief executive of DCC, said the business had been able to build on its last financial year and had kept growth going.

“I am pleased to report a strong performance in the seasonally less significant first half, which builds on the growth recorded during the first half of the prior year,” he said. “Each of our four divisions has delivered good growth, underlining the resilience of our business model and our ability to adapt to the very volatile macro environment.”

Murphy touched on what is fast becoming the issue of the moment – sustainability – and talked about the group’s commitments on that front.

“Sustainability is core to how we do business, and we continue to make good progress across each of our four sustainability pillars, including within energy transition,” he said. “During the period, we have developed a number of new partnerships with energy suppliers, bringing innovative and lower-carbon solutions to our customers.” he said.

Looking ahead, Murphy said the firm would continue to expand its operations and grow the business. “With the strength of our market positions and an active acquisition pipeline, DCC has the capability and financial strength to continue the growth and development of the group across the energy, healthcare and technology sectors,” he said.

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