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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Dcc Plc | LSE:DCC | London | Ordinary Share | IE0002424939 | ORD EUR0.25 (CDI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
25.00 | 0.46% | 5,475.00 | 5,480.00 | 5,490.00 | 5,500.00 | 5,445.00 | 5,465.00 | 159,989 | 16:35:01 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Offices-holdng Companies,nec | 22.2B | 334.02M | 3.3818 | 16.22 | 5.42B |
TIDMDCC
RNS Number : 0399T
DCC PLC
12 November 2019
12 November 2019
DCC Reports Strong First Half Performance and
New US Health & Beauty Acquisition
DCC, the leading international sales, marketing and support services group, is today announcing its results for the six months ended 30 September 2019.
Highlights 2019 2018 % change ---------------------------------- Revenue GBP7.312bn GBP7.418bn -1.4% ---------------------------------- ----------- --------- Adjusted operating profit(1,2) GBP162.6m GBP141.9m +14.5% ----------- ----------- --------- DCC LPG GBP49.0m GBP40.9m +19.8% ----------- ----------- --------- DCC Retail & Oil GBP59.7m GBP56.3m +6.0% ----------- ----------- --------- DCC Technology GBP25.4m GBP17.8m +42.6% ----------- ----------- --------- DCC Healthcare GBP28.5m GBP26.9m +5.8% ----------- ----------- --------- Adjusted earnings per share(1,2) 110.2p 107.1p +3.0% ----------- ----------- --------- Interim dividend 49.48p 44.98p +10.0% ----------- ----------- --------- Operating cash flow GBP149.9m GBP173.2m ----------- ----------- ---------
-- Strong first half performance with Group adjusted operating profit increasing by 14.5% (up 13.7% on a constant currency basis) to GBP162.6 million, in line with expectations. All divisions recording good profit growth in the seasonally less significant first half of the year.
-- Adjusted earnings per share up 3.0% to 110.2 pence, reflecting strong earnings growth being offset by the increased number of shares in issue following the equity placing in the prior year.
-- Interim dividend increased by 10% to 49.5 pence per share.
-- The Group continues to be active from a development perspective and has today separately announced the recent acquisition by DCC Healthcare of Ion Laboratories Inc, a Florida-based contract manufacturer of nutritional products for an enterprise value of approximately $60 million. The acquisition represents a significant step in DCC Healthcare's strategy to build a material presence in the attractive US health supplements and nutritional products market.
-- The Group balance sheet at 30 September 2019 remains very strong and liquid, with net debt (excluding lease creditors) of GBP245.3 million, which will facilitate further development activity for the Group.
-- Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the Technology business in particular, the Group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations.
(1) The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines.
(2) Excluding net exceptionals and amortisation of intangible assets.
Commenting on the results, Donal Murphy, Chief Executive, said:
"I am pleased to report that the first half of the year has been another period of good growth and development for DCC. The business has performed strongly, with Group operating profit well ahead of the prior year and all divisions delivering good profit growth, despite the more difficult economic and market backdrop, particularly in the UK.
DCC Healthcare's acquisition of Ion Laboratories Inc in the US is a material step in the division's strategy to build a business of scale in the world's largest health supplements and nutritional products market. The US market is highly innovative, fragmented and growing strongly and, we believe, presents an exciting opportunity for the Group to develop, both organically and through acquisition, a leading market position in this attractive market.
The Group's significant development in recent years has resulted in DCC having the platforms, opportunities and capability to build the Group into a global leader in its chosen sectors.
Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the Technology business in particular, the Group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations."
Presentation of results and dial-in / webcast facility
There will be a presentation of these results to analysts and fund managers at 9.00 am today in the London Stock Exchange. The slides for this presentation can be downloaded from DCC's website, www.dcc.ie.
There will also be audio conference access to, and a live webcast of, the presentation. The access details for the presentation are:
Ireland: +353 (0)1 4319615 UK: +44 (0) 8445718892 International: +44 (0) 2071 928000 Passcode: 6157159 Webcast Link: https://edge.media-server.com/mmc/p/4uhsuse2
This report, the webcast of the presentation and further information on DCC is available at www.dcc.ie.
For reference, please contact:
Donal Murphy, Chief Executive Tel: +353 1 2799 400 Fergal O'Dwyer, Chief Financial Officer Email: investorrelations@dcc.ie Kevin Lucey, Head of Capital Markets Web: www.dcc.ie For media enquiries: Powerscourt (Lisa Tel: +44 207 250 1446 Kavanagh)
Group Results
A summary of the Group's results for the six months ended 30 September 2019 is as follows:
2019(1) 2018 GBP'm GBP'm % change Revenue 7,312 7,418 -1.4% Adjusted operating profit(2) DCC LPG 49.0 40.9 +19.8% DCC Retail & Oil 59.7 56.3 +6.0% DCC Technology 25.4 17.8 +42.6% DCC Healthcare 28.5 26.9 +5.8% Group adjusted operating profit(2) 162.6 141.9 +14.5% Finance costs (net) and other (26.7) (22.1) Profit before net exceptionals, amortisation of intangible assets and tax 135.9 119.8 +13.5% Net exceptional items before tax and non-controlling interests (45.7) (6.3) Amortisation of intangible assets (32.6) (27.6) Profit before tax 57.6 85.9 Taxation (15.4) (14.0) Profit after tax 42.2 71.9 Non-controlling interests (4.5) (3.9) Attributable profit 37.7 68.0 Adjusted earnings per share(2) 110.2 pence 107.1 pence +3.0% Dividend per share 49.48 pence 44.98 pence +10.0% Operating cash flow 149.9 173.2 Net debt at 30 September (excluding lease creditors) 245.3 830.4 Lease creditors 286.4 2.0 Net debt at 30 September (including lease creditors) 531.7 832.4 (1) The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines. As anticipated, the Group adjusted operating profit reflects a benefit of GBP2.7 million, while finance costs reflect an incremental charge of GBP4.2 million from the adoption of IFRS 16, resulting in a net after-tax negative impact on earnings of approximately GBP1.2 million, or 1.3 pence per share. See page 4 for further detail. (2) Excluding net exceptionals and amortisation of intangible assets.
Transition to IFRS 16
The Group transitioned to the new leasing standard, IFRS 16, with effect from 1 April 2019. In common with most companies, DCC has elected to adopt the modified retrospective approach, meaning that comparatives are not restated.
In transitioning to IFRS 16, the Group is capitalising approximately 2,000 leases. These 2,000 leases are with approximately 700 lessors, with no one lease or lessor relationship being individually significant. The applicable weighted average lease term is approximately four years. The capitalisation of the right to use assets underlying these leases has resulted in a 'Right-of-Use leased asset' of GBP286 million at 30 September 2019, with a related lease creditor of GBP286 million at the same date.
As anticipated, the transition to IFRS 16 resulted in a favourable impact on adjusted operating profit of approximately GBP2.7 million in the first half of the financial year, reflecting the replacement of operating lease charges with depreciation of a discounted right-of-use leased asset. It also resulted in an increase in net interest of approximately GBP4.2 million in the period reflecting the unwinding of the lease liability. Consequently, the net after-tax impact on earnings for the first six months of the financial year was a charge of approximately GBP1.2 million, or 1.3 pence per share.
Reporting currency
The Group's financial statements are presented in sterling. Results and cash flows of operations based in non-sterling jurisdictions have been translated into sterling at average rates for the year. The principal exchange rates used for the translation of results into sterling were as follows:
Average rate --------------------------- 2019 2018 StgGBP1= StgGBP1= Euro 1.1265 1.1306 Danish Krone 8.4133 8.4245 Swedish Krona 11.9717 11.7550 Norwegian Krone 11.0116 10.8614 US Dollar 1.2620 1.3409 Hong Kong Dollar 9.8892 10.5233
The net impact of currency translation on the Group income statement versus the prior period was modest, with average sterling exchange rates weakening against the US Dollar and marginally weakening against euro.
Revenue
Overall, Group revenue decreased by 1.4% (1.7% decrease on a constant currency basis) to GBP7.3 billion.
DCC LPG sold 798,500 tonnes in the first half of the year, an increase of 7.7% on the prior year (7.1% on a like-for-like basis). The strong volume performance was set against weaker comparatives in the prior year, but included good organic volume growth in both the LPG and natural gas product sectors.
DCC Retail & Oil sold 5.93 billion litres of product in the first half, a 3.8% decline versus the prior year (4.9% on a like-for-like basis). The reduction reflected lower volumes in the UK, particularly in the lower margin marine and commercial sectors as the business actively exited high volume, lower margin relationships, but also reflected lower commercial activity generally, given the more difficult UK economic backdrop. Volumes across Continental Europe, Scandinavia and Ireland were in line with expectations.
Revenue excluding DCC LPG and DCC Retail & Oil increased by 11.7% (up 10.8% on a constant currency basis) to GBP2.1 billion and declined modestly organically, driven by a decline in revenue in the Technology business in the UK.
Group adjusted operating profit
Group adjusted operating profit increased by 14.5% to GBP162.6 million (13.7% ahead on a constant currency basis), in the seasonally less significant first half of the year. The positive effect of IFRS 16 on Group adjusted operating profit was approximately 1.9% of the constant currency growth in the period. Approximately one-third of the remaining constant currency growth was organic.
DCC LPG recorded strong operating profit growth in the seasonally less significant first half of the year, with operating profit increasing to GBP49.0 million, 19.8% ahead of the prior year (18.6% on a constant currency basis), approximately three-quarters of which was organic. The performance was driven primarily by good organic volume growth and also the acquisition of Pacific Coast Energy.
In DCC Retail & Oil, operating profit increased by 6.0%, approximately one-third of which was organic. This good performance was driven by good organic profit growth from the businesses in France and Denmark with the remaining businesses performing in line with expectations.
Operating profit in DCC Technology was significantly ahead of the prior year, increasing by 42.6% (38.1% on a constant currency basis) in the seasonally less significant first half of the financial year. This performance was driven by the contribution from acquisitions completed in both the current and prior year and profits declined organically, with the UK business negatively impacted by increasingly difficult market conditions, given the economic environment, particularly in the consumer and enterprise channels. Good profit growth was achieved in North America, Ireland, the Middle East and Continental Europe.
DCC Healthcare recorded a good performance in the first half of the year, generating operating profit growth of 5.8%, over three-quarters of which was organic. DCC Vital performed well and generated good growth in the pharma sector in Ireland. DCC Health & Beauty Solutions generated strong growth in premium skincare products and good growth across its nutritional products, particularly in liquids and soft gel formats.
Finance costs (net)
Net finance and other costs increased to GBP26.7 million (2018: GBP22.1 million). The increase primarily reflects the impact of IFRS 16 in the current period of GBP4.2 million. The average net debt, excluding lease creditors, in the period was GBP349 million, compared to an average net debt of GBP914 million in the prior year. The decrease in average net debt excluding lease creditors reflects the benefit of the equity issuance completed in October 2018. The Group's gross private placement debt, which is the primary driver of finance costs, increased modestly versus the prior year.
Profit before net exceptional items, amortisation of intangible assets and tax
Profit before net exceptional items, amortisation of intangible assets and tax increased by 13.5% (12.5% ahead on a constant currency basis) to GBP135.9 million.
Net exceptional items before tax and non-controlling interests and amortisation of intangible assets
The Group recorded a net exceptional charge before tax and non-controlling interests of GBP45.7 million in the first six months of the year as follows:
GBP'm Loss on disposal 34.3 Restructuring and integration costs and other 6.1 Acquisition and related costs 4.9 IAS 39 mark-to-market ineffectiveness charge 0.4 Net exceptional charge 45.7 ----------------------------------------------- ------
In September 2019, DCC Healthcare completed the disposal of DCC Vital's UK generic pharma activities and related manufacturing facility in Ireland (Kent Pharma and Athlone Laboratories). The disposal sharpens the strategic focus of DCC Vital, allowing it to concentrate on those areas where it has market-leading positions and sustainable competitive advantage, in particular in the sales, marketing and distribution of medical products in Britain and Ireland. Whilst part of the DCC Group, the cashflows generated by the disposed business more than recovered its acquisition cost, however, the transaction will result in a loss on disposal of GBP34.3 million, principally representing a non-cash impairment of the goodwill recognised on the initial acquisition of the business.
Restructuring and integration costs and other of GBP6.1 million principally comprise the ongoing dual running costs relating to the UK SAP implementation which is live in an element of the UK business and to which the remaining components of the business will transition on a phased basis shortly following the end of the financial year. It also includes a restructuring charge relating to the LPG business in Britain, following acquisition activity (including the acquisition of Countrywide and a number of small dealers) in prior periods.
Acquisition and related costs include the professional fees and tax costs (such as stamp duty) relating to the evaluation and/or completion of acquisition opportunities and amounted to GBP4.9 million.
Most of the Group's debt has been raised in the US private placement market and swapped, where appropriate, using long-term interest and cross currency interest rate derivatives, to both fixed and floating rate sterling and euro. The level of ineffectiveness calculated under IAS 39 on the fair value and cash flow hedge relationships is charged or credited as an exceptional item. In the six months ended 30 September 2019, this amounted to an exceptional non-cash charge of GBP0.4 million. Following this charge, the cumulative net exceptional charge taken in respect of the Group's outstanding US private placement debt and related hedging instruments is GBP1.6 million. This, and any subsequent similar non-cash charges or gains, will net to zero over the remaining term of this debt and the related hedging instruments.
The charge for the amortisation of acquisition related intangible assets increased to GBP32.6 million from GBP27.6 million in the prior year, with the increase reflecting acquisitions completed in the prior year.
Profit before tax
Profit before tax decreased to GBP57.6 million.
Taxation
The effective tax rate for the Group in the first half of the year of 17.0% is based on the anticipated mix of profits for the full year and compares to a full year effective tax rate in the prior year of 17.0%.
Adjusted earnings per share
Adjusted earnings per share increased by 3.0% to 110.2 pence, with the growth in profit before exceptional items and goodwill amortisation of 13.5% being offset by the increased number of shares in issue following the equity placing, which was successfully completed in the prior year.
Dividend
The Board has decided to pay an interim dividend of 49.48 pence per share, which represents a 10.0% increase on the prior year interim dividend of 44.98 pence per share. This dividend will be paid on 11 December 2019 to shareholders on the register at the close of business on 22 November 2019.
Cash flow
As with its operating profit, the Group's operating cash flow is significantly weighted towards the second half of the year. The cash flow of the Group for the six months ended 30 September 2019 can be summarised as follows:
Six months ended 30 September 2019 2018 GBP'm GBP'm Adjusted operating profit 162.6 141.9 Increase in working capital (98.1) (25.7) Depreciation and other 85.4 57.0 Operating cash flow 149.9 173.2 Repayment of lease creditors(1) (31.8) - Capital expenditure (net) (87.7) (82.1) Free cash flow(1) 30.4 91.1 Net interest, tax paid and other (46.0) (34.2) Free cash flow after interest and tax (15.6) 56.9 Acquisitions (118.3) (270.3) Dividends (90.9) (73.2) Exceptional items (net) and disposals 25.4 (11.1) Share issues 0.3 1.1 Net outflow (199.1) (296.6) Opening net debt (18.4) (542.7) Translation and other (20.1) 6.9 (237.6) (832.4) IFRS 16 transition adjustment at 1 April 2019 (294.1) - Closing net debt (including lease creditors) (531.7) (832.4) Analysis of closing net debt (including lease creditors): Net debt at 30 September (excluding lease creditors) (245.3) (830.4) Lease creditors at 30 September (286.4) (2.0) (531.7) (832.4) (1) Following the adoption of IFRS 16, Leases, the Group has redefined 'Free Cash Flow' to include repayment of lease creditors which ensures that the Group's reported Free Cash Flow is consistent with those previously reported and consequently the comparative measure has not been restated.
Working capital increased by GBP98.1 million over the six-month period from 31 March 2019, driven by seasonal working capital requirements, lower supply chain financing utilisation and the increasing scale of the Group's activities. The value of working capital at 30 September 2019 was GBP110.1 million versus GBP60.0 million at 30 September 2018, which reflects the completion of acquisitions since the prior year and the increasing scale of the Group. Overall working capital days at 30 September 2019 were 2.4 days sales, which, excluding completed acquisitions, were broadly in line with the prior year (2018: 1.3 days sales). DCC Technology selectively uses supply chain financing solutions to sell, on a non-recourse basis, a portion of its receivables relating to certain larger supply chain/sales and marketing activities. The level of supply chain financing at 30 September 2019 was GBP189.3 million (2018: GBP211.1 million) and supply chain financing had a positive impact on Group working capital days of 4.1 days (30 September 2018: 4.4 days).
Net capital expenditure for the six months amounted to GBP87.7 million (2018: GBP82.1 million), was net of disposal proceeds of GBP4.3 million, and reflects continued investment in development initiatives across the Group. In the current year, investments in DCC LPG primarily comprised investment in relation to the Avonmouth LPG storage facility in the UK and further development expenditure to support the continued growth of the business including conversion of oil customers to LPG. In the Retail & Oil division, there was continued investment in new retail sites and site upgrades including capital expenditure in relation to the project to optimise the depot network in the UK to bring greater network and capital efficiency over time. The majority of the capital expenditure in DCC Technology relates to the SAP implementation which is ongoing in Exertis UK. In DCC Healthcare, the capital expenditure primarily relates to the previously announced investment in the expansion of the soft gel facility in South Wales, the construction of which is nearing completion and the commissioning process will commence shortly. Net capital expenditure exceeded the depreciation charge (excluding right-of-use leased assets) in the six months by GBP29.7 million.
Free cash flow in the six months ended 30 September 2019 of GBP30.4 million compares to GBP91.1 million in the prior year.
Total cash spend on acquisitions in the six months to 30 September 2019
The total cash spend on acquisitions in the six months ended 30 September 2019 was GBP118.3 million. This included the payment of deferred and contingent acquisition consideration previously provided of GBP24.5 million, completion of the acquisition of Pacific Coast Energy by DCC LPG, the completion of Amacom and Comm-Tec by DCC Technology and the completion of a number of small bolt-on acquisitions in DCC Retail & Oil and DCC Healthcare.
Committed acquisition and capital expenditure
Committed acquisition and capital expenditure in the period amounted to GBP163.4 million as follows:
Acquisitions Capex Total GBP'm GBP'm GBP'm DCC LPG 1.5 32.4 33.9 DCC Retail & Oil 3.5 33.9 37.4 DCC Technology 6.1 9.8 15.9 DCC Healthcare 64.6 11.6 76.2 Total 75.7 87.7 163.4 ------------------ ------------------- ----------- -----------------
Acquisition activity
Acquisition expenditure committed by the Group since the announcement of 2019 Final Results in May 2019 amounted to GBP75.7 million and included:
DCC Healthcare
As separately announced today, DCC Healthcare has acquired Ion Laboratories, Inc ('Ion'), a Florida-based contract manufacturer of nutritional products for an enterprise value of approximately $60 million. This acquisition represents a significant step in DCC Health & Beauty Solutions' strategy to build a material presence in the attractive US health supplements and nutritional products market. This acquisition follows the acquisition of Elite One Source in February 2018, and will significantly enhance DCC Health & Beauty Solution's service offering to customers in the US market, the world's largest health supplement and nutritional products market.
Ion has a broad product format capability encompassing tablets, capsules, powders and liquids across a variety of product categories including herbal and botanical products, probiotics and liquid nutritionals. In addition, Ion is currently commissioning a new nutritional gummies manufacturing line which will provide DCC Health & Beauty Solutions with capability in this fast growth category. Ion operates from well invested facilities which comply with FDA cGMP (current Good Manufacturing Practices) and Health Canada standards. The business is led by an experienced management team, employs 360 people and the business has annual revenues of approximately $80 million.
In addition, DCC Vital completed a number of complementary bolt-on acquisitions in Britain which have expanded its product portfolio and strengthened its market presence. SP Services is a leading supplier of medical consumables and equipment for first aid, ambulance, paramedic and rescue professionals in the 'blue light' and occupational health sectors. VacSax is a small British manufacturer and supplier of disposable suction devices used in operating theatres and hospitals.
DCC Retail & Oil
DCC Retail & Oil completed a number of small complementary bolt-on acquisitions in Britain during the period. These acquisitions have been successfully integrated into the existing business.
DCC Technology
DCC Technology acquired two small businesses during the period, a managed service business in Ireland and a Pro-AV specialist in the Benelux region. Although small, both acquisitions support DCC Technology's strategy to continuously enhance the service offering it provides to its customers and suppliers.
Disposal
DCC Healthcare
Kent Pharma and Athlone Laboratories
In September 2019, DCC Vital completed the disposal of its UK generic pharma activities and related manufacturing facility in Ireland (Kent Pharma and Athlone Laboratories). The disposal sharpens the strategic focus of DCC Vital, allowing it to concentrate on those areas where it has market-leading positions and sustainable competitive advantage, in particular in the sales, marketing and distribution of medical products in Britain and Ireland. DCC Vital will also continue to develop its pharma activities in Ireland which encompass a market leadership position in the procurement and sales of exempt medicinal products and agency distribution into the hospital and retail pharmacy segments.
Financial strength
An integral part of the Group's strategy is the maintenance of a strong and liquid balance sheet which, amongst other benefits, enables it to take advantage of development opportunities as they arise. At 30 September 2019, the Group had net debt (excluding lease creditors) of GBP0.25 billion, being term debt of GBP1.82 billion, and cash resources, net of overdrafts, of GBP1.57 billion. Lease creditors at the same date amounted to GBP0.28 billion. The Group's outstanding term debt at 30 September 2019, which has been raised in the US private placement market, had an average maturity of 6.2 years, with an implied average credit margin of 1.69% over Euribor/Libor. In April 2019, DCC successfully drew down a private placement issuance of approximately GBP350 million, the proceeds of which will be used to repay maturing private placement debt.
Outlook
Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the Technology business in particular, the Group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations.
Performance Review - Divisional Analysis
DCC LPG 2019 2018 % change ---------------------------- Volumes (thousand tonnes) 798.5kT 741.6kT +7.7% ---------- ---------- --------- Operating profit GBP49.0m GBP40.9m +19.8% ---------- ---------- --------- Operating profit per tonne GBP61.40 GBP55.16 ---------- ---------- ---------
DCC LPG recorded strong operating profit growth in the seasonally less significant first half of the year. Operating profit increased to GBP49.0 million, 19.8% ahead of the prior year (18.6% ahead on a constant currency basis), approximately three-quarters of which was organic. The performance was driven by good organic volume growth and the acquisition of Pacific Coast Energy in the US, which completed in May 2019.
DCC LPG sold 798,500 tonnes in the first half of the year, an increase of 7.7% on the prior year (7.1% on a like-for-like basis). The strong volume performance was set against weaker comparatives in the prior year and, as anticipated, operating profit per tonne increased versus the prior year. This reflected a more benign cost of product environment during the first six months of the year (versus a prior year which had been impacted by sustained rising cost of product) and strong cost control, which more than offset the mix effect of increased natural gas volumes.
The French business performed in line with expectations during the first half of the year and has continued to make progress in developing its offering in adjacent product areas, broadening its position in the French energy market. The continued rollout of the 'Click & Collect' cylinder offering has been a positive development for the LPG business, offering an additional route to market. The overall performance in France benefited from strong organic growth in the natural gas B2B sector, driven by good business development with new customers, and the business continues to grow its presence in the B2C natural gas and power sector.
In Britain & Ireland, the business performed strongly, achieving organic volume growth and also benefiting from good procurement and cost control. The German business delivered good LPG volume growth and was successful in winning new customers through its newly launched online platform, while the business in Hong Kong & Macau also performed in line with expectations, notwithstanding the impact of the ongoing protests in the region.
The US business performed well during the first half of the year and has fully integrated Pacific Coast Energy, acquired in April 2019, significantly strengthening its footprint in the north west of the US.
DCC LPG has substantial operations in ten countries and is very well placed to continue its development both in existing and new territories, as well as expanding its position in adjacencies, which broadens its service offering to its customers.
DCC Retail & Oil 2019 2018 % change ---------------------------- Volumes (billion litres) 5.930bn 6.157bn -3.8% ---------- ---------- --------- Operating profit GBP59.7m GBP56.3m +6.0% ---------- ---------- --------- Operating profit per litre 1.01ppl 0.91 ppl ---------- ---------- ---------
DCC Retail & Oil performed in line with expectations in the first half of the financial year and delivered good operating profit growth of 6.0%, approximately one-third of which was organic.
DCC Retail & Oil sold 5.93 billion litres of product in the first half, a 3.8% decline on the prior year (4.9% on a like-for-like basis). The reduction reflected lower volumes in Britain, particularly in the lower margin marine and commercial sectors as the business actively exited some high volume, lower margin, relationships but also reflected lower commercial activity generally, given the more difficult UK economic backdrop. Volumes across Continental Europe, Scandinavia and Ireland were in line with expectations.
In Britain and Ireland, the business performed in line with expectations, delivering organic profit growth. The impact of reduced marine and commercial volumes was partially offset by increased penetration of premium fuels, including premium heating oil, and a good cost performance. The business continues to make good progress in expanding its retail network, as well as developing into adjacent areas, such as lubricants, having now successfully integrated the two modest lubricant blending businesses acquired in the prior year. In addition, the business has continued to develop its HGV truck stop network and enhance its offering of additional services to HGVs at these truck stops, such as secure parking and truck washes. The Fuel Card business delivered good organic profit growth, notwithstanding the more difficult economic environment impacting the commercial sector of the market.
In Scandinavia, the Danish business continued to deliver strong organic profit growth, driven by a good performance in retail fuels. In July 2019, the business entered into a new branded marketing and distribution agreement with Shell Aviation, which involved Shell taking a stake in the existing Danish aviation operations, giving the business access to Shell's global network and settlements platform, further strengthening DCC Retail & Oil's presence in the aviation fuels market. The businesses in both Norway and Sweden performed in line with expectations.
The French business delivered strong organic profit growth, reflecting a continued focus on business development and customer engagement following the successful implementation of customer-centred initiatives in the prior year including a loyalty programme, fuel differentiation through Esso's Synergy Fuels, and an improved car wash offering. The business in Austria performed in line with expectations.
DCC Retail & Oil has substantial operations in eight countries and has developed a low-cost and scalable platform to grow the business in existing and new territories.
DCC Technology 2019 2018 % change ------------------ Revenue GBP1.795bn GBP1.588bn +13.1% ----------- ----------- --------- Operating profit GBP25.4m GBP17.8m +42.6% ----------- ----------- --------- Operating margin 1.4% 1.1% ----------- ----------- ---------
DCC Technology achieved very strong operating profit growth in the seasonally less significant first half of the year. Operating profit increased by 42.6% (38.1% on a constant currency basis) with the performance driven by the contribution from acquisitions completed in both the current and prior years. Operating profit declined organically, reflecting weakness in the UK market.
During the first half of the year, the UK business was increasingly impacted by general weakness in the UK technology market, reflecting the more difficult economic environment of recent months. This slowdown particularly impacted demand in the consumer and enterprise channels. Following the pilot transition of a component of the UK business to the new ERP system last year, the remainder of the business will transition to the new ERP system on a phased basis shortly following the end of the financial year. The upgrade is expected to significantly enhance the capability of the business to service both its customers and suppliers. The business in Ireland performed well, generating good operating profit growth on the back of a strong retail market and an expansion of its B2B service offering.
The business in the Nordics generated strong revenue growth, especially in the AV and IT product categories, and continues to drive efficiencies on the back of investments made in the operating infrastructure in the prior year. In Western Europe, the acquisition of Amacom, which services retailers across the Netherlands, has performed well since its acquisition in June 2019 and will provide additional service capability to support the growth of DCC Technology's consumer proposition. The B2B business also performed in line with expectations and continues to invest in its audio-visual proposition, with the business' offering in this area being further supported by the recent acquisition of Comm-Tec in Germany and a small bolt-on acquisition in the Benelux region. The business in the Middle East performed well and continued its track record of achieving organic revenue and operating profit growth.
During the prior year, DCC Technology acquired both Stampede and Jam, providing DCC with platforms for growth and development in North America in the Pro AV, Pro Audio and consumer electronics markets. These acquisitions represented a significant step in DCC Technology's strategy to extend its geographic footprint and product range, strengthening its partnership with existing suppliers while also broadening its base of customers and suppliers. Both businesses have been integrated successfully and traded in line with expectations during the first half of the year delivering organic profit growth. The good performance was driven by strong demand for display and projector products from the hospitality and government sectors in the US in particular, and the business also saw good demand for Pro Audio and professional event lighting products.
Following an active period of development over the last eighteen months, DCC Technology is building an international business of scale and has excellent platforms for further development in its chosen markets.
DCC Healthcare 2019 2018 % change ------------------ Revenue GBP287.3m GBP275.9m +4.1% ---------- ---------- --------- Operating profit GBP28.5m GBP26.9m +5.8% ---------- ---------- --------- Operating margin 9.9% 9.8% ---------- ---------- ---------
DCC Healthcare recorded a good performance in the first half of the year, generating operating profit growth of 5.8%, approximately three-quarters of which was organic. During the period, the business also made material progress in sharpening its strategic focus by divesting its UK generic pharma activities and enhancing its market positions through a number of bolt-on acquisitions. Subsequent to the half-year end, in November 2019, DCC Health & Beauty Solutions took a further step in its strategy to build a significant presence in the US market, completing the acquisition of Ion, a Florida-based contract manufacturer of nutritional products.
DCC Vital, which is focused on the sales and marketing of medical products and pharmaceuticals to healthcare providers in Britain and Ireland, performed well in the first half of the year and enhanced its strategic positioning. In the Irish market, the business generated good growth in the pharma sector, particularly in sales of blood plasma products and exempt medicinal products. In Britain, the business performed robustly against a market background which was impacted by some destocking post the original March Brexit deadline, as well as continued public healthcare funding constraints. During the period, DCC Vital expanded its product portfolio and strengthened its market presence by completing a number of small bolt-on acquisitions in the medical devices and primary care sectors in Britain.
In September 2019, DCC Vital completed the disposal of its UK generic pharma activities (and related beta lactam antibiotic manufacturing facility in Ireland). This disposal allows DCC Vital to focus on those areas where it has strong market positions and sustainable competitive advantage, including further developing its presence in the primary care sector in Britain and continuing to scale its medical devices activities.
DCC Health & Beauty Solutions, which provides outsourced solutions to international nutrition and beauty brand owners, generated good sales growth in the first half of the year. The business generated strong growth in premium skincare products and good growth across its nutritional product formats, particularly liquids and soft gels, despite the impact of some destocking from certain customers. Profit growth was held back by some short-term costs required to onboard new customer and product wins in the beauty sector, as well as investments made to enhance operational capability and increase capacity generally. DCC Health & Beauty Solutions made good progress across a range of capacity expansion projects, most notably the expansion of its soft gel encapsulation plant in Wales. The construction of the plant is nearing completion and the commissioning process will begin shortly.
The acquisition of Ion in November 2019 is another significant step in DCC Health & Beauty Solutions ambition to build a leading contract manufacturing business in the US, to complement its existing presence in Europe. The US is the largest market in the world for health supplements and nutritional products and is an innovative, growing and fragmented market. Ion will add new customer relationships and new product format capability in the US. Ion has a broad product format capability encompassing tablets, capsules, powders and liquids. The business is currently commissioning a nutritional gummies manufacturing line which will provide DCC Health & Beauty Solutions with an entry into this fast growth product category. Ion will work closely with Elite One Source in Montana and DCC Health & Beauty Solutions' European business to cross-sell the full breadth of DCC Health & Beauty Solutions' comprehensive service offering.
Forward-looking statements
This announcement contains some forward-looking statements that represent DCC's expectations for its business, based on current expectations about future events, which by their nature involve risk and uncertainty. DCC believes that its expectations and assumptions with respect to these forward-looking statements are reasonable; however, because they involve risk and uncertainty as to future circumstances, which are in many cases beyond DCC's control, actual results or performance may differ materially from those expressed in or implied by such forward-looking statements.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk management and internal control systems, which are designed to identify, manage and mitigate potential material risks to the achievement of the Group's strategic and business objectives. The Board has approved a Risk Management Policy which sets out delegated responsibilities and procedures for the management of risk across the Group.
The principal risks and uncertainties facing the Group in the short to medium term, as set out on pages 17 to 20 of the 2019 Annual Report (together with the principal mitigation measures), continue to be the principal risks and uncertainties facing the Group for the remaining six months of the financial year.
This is not an exhaustive statement of all relevant risks and uncertainties. Matters which are not currently known to the Board or events which the Board considers to be of low likelihood could emerge and give rise to material consequences. The mitigation measures that are maintained in relation to these risks are designed to provide a reasonable and not an absolute level of protection against the impact of the events in question.
Group Income Statement
Unaudited 6 months ended Unaudited 6 months ended Audited year ended 30 September 2019 30 September 2018 31 March 2019 ------------------------------------------ ------------------------------------------ ------------------------------------------- Pre Exceptionals Pre Exceptionals Pre Exceptionals exceptionals (note Total exceptionals (note 6) Total exceptionals (note 6) Total 6) Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue 5 7,311,721 - 7,311,721 7,418,009 - 7,418,009 15,226,893 - 15,226,893 Cost of sales (6,510,346) - (6,510,346) (6,704,752) - (6,704,752) (13,589,254) - (13,589,254) ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Gross profit 801,375 - 801,375 713,257 - 713,257 1,637,639 - 1,637,639 Administration expenses (249,874) - (249,874) (217,752) - (217,752) (410,388) - (410,388) Selling and distribution expenses (387,697) - (387,697) (354,174) - (354,174) (793,514) - (793,514) Other operating income 15,622 241 15,863 13,985 112 14,097 45,600 2,537 48,137 Other operating expenses (16,865) (45,570) (62,435) (13,398) (10,403) (23,801) (18,815) (30,722) (49,537) ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Adjusted operating profit 162,561 (45,329) 117,232 141,918 (10,291) 131,627 460,522 (28,185) 432,337 Amortisation of intangible assets (32,664) - (32,664) (27,569) - (27,569) (63,312) - (63,312) ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Operating profit 5 129,897 (45,329) 84,568 114,349 (10,291) 104,058 397,210 (28,185) 369,025
Finance costs (49,427) (371) (49,798) (40,122) - (40,122) (83,595) - (83,595) Finance income 22,324 - 22,324 17,720 3,974 21,694 36,980 4,307 41,287 Equity accounted investments' profit after tax 469 - 469 248 - 248 717 - 717 ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Profit before tax 103,263 (45,700) 57,563 92,195 (6,317) 85,878 351,312 (23,878) 327,434 Income tax expense 7 (15,414) 44 (15,370) (13,396) (628) (14,024) (55,617) (685) (56,302) ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Profit after tax for the financial period 87,849 (45,656) 42,193 78,799 (6,945) 71,854 295,695 (24,563) 271,132 ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Profit attributable to: Owners of the Parent Company 83,304 (45,617) 37,687 74,947 (6,945) 68,002 287,156 (24,563) 262,593 Non-controlling interests 4,545 (39) 4,506 3,852 - 3,852 8,539 - 8,539 ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- 87,849 (45,656) 42,193 78,799 (6,945) 71,854 295,695 (24,563) 271,132 ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- ------------- Earnings per ordinary share Basic earnings per share 8 38.34p 76.15p 280.14p Diluted earnings per share 8 38.26p 76.02p 279.73p Adjusted basic earnings per share 8 110.22p 107.05p 358.16p Adjusted diluted earnings per share 8 109.99p 106.87p 357.63p ------------ ------------ -------------
The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines.
Group Statement of Comprehensive Income
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Group profit for the period 42,193 71,854 271,132 Other comprehensive income: Items that may be reclassified subsequently to profit or loss Currency translation 43,742 38,005 5,649 Movements relating to cash flow hedges (9,702) 26,532 1,555 Movement in deferred tax liability on cash flow hedges 1,650 (4,510) (264) ---------- ---------- --------- 35,690 60,027 6,940 ---------- ---------- --------- Items that will not be reclassified to profit or loss Group defined benefit pension obligations: - remeasurements (5,513) 2,928 (1,346) - movement in deferred tax asset 937 (489) 223 ---------- ---------- --------- (4,576) 2,439 (1,123) ---------- ---------- --------- Other comprehensive income for the period, net of tax 31,114 62,466 5,817 ---------- ---------- --------- Total comprehensive income for the period 73,307 134,320 276,949 ---------- ---------- --------- Attributable to: Owners of the Parent Company 67,452 129,975 269,387 Non-controlling interests 5,855 4,345 7,562 ---------- ---------- --------- 73,307 134,320 276,949 ---------- ---------- ---------
Group Balance Sheet
Unaudited Unaudited Audited 30 Sept. 30 Sept. 31 March 2019 2018 2019 Notes GBP'000 GBP'000 GBP'000 ASSETS Non-current assets Property, plant and equipment 1,047,558 980,731 996,536 Right-of-use leased assets 12 285,962 - - Intangible assets and goodwill 2,117,107 2,136,655 2,069,558 Equity accounted investments 27,273 24,933 24,233 Deferred income tax assets 26,792 26,872 26,142 Derivative financial instruments 209,049 119,661 143,554 3,713,741 3,288,852 3,260,023 ---------- ---------- ---------- Current assets Inventories 736,480 728,648 678,006 Trade and other receivables 1,471,835 1,459,337 1,517,507 Derivative financial instruments 42,331 78,232 67,987 Cash and cash equivalents 1,675,517 977,571 1,554,093 ---------- ---------- ---------- 3,926,163 3,243,788 3,817,593 ---------- Total assets 7,639,904 6,532,640 7,077,616 ---------- ---------- ---------- EQUITY Capital and reserves attributable to owners of the Parent Company Share capital 17,422 15,455 17,422 Share premium 882,881 281,587 882,561 Share based payment reserve 10 32,392 25,315 28,706 Cash flow hedge reserve 10 (22,939) 5,844 (14,887) Foreign currency translation reserve 10 150,115 138,608 107,722 Other reserves 10 932 932 932 Retained earnings 1,314,696 1,231,736 1,368,250 ---------- ---------- ---------- Equity attributable to owners of the Parent Company 2,375,499 1,699,477 2,390,706 Non-controlling interests 50,467 39,604 42,821 ---------- ---------- ---------- Total equity 2,425,966 1,739,081 2,433,527 ---------- ---------- ---------- LIABILITIES Non-current liabilities Borrowings 1,849,457 1,547,012 1,441,904 Lease creditors 12 232,770 1,462 452 Derivative financial instruments 2,187 7,489 1,122 Deferred income tax liabilities 172,783 196,434 174,250 Post employment benefit obligations 13 3,200 (4,515) (1,397) Provisions for liabilities 279,295 283,025 269,580 Acquisition related liabilities 84,692 86,118 73,586 Government grants 336 348 342 ---------- ---------- ----------
2,624,720 2,117,373 1,959,839 ---------- ---------- ---------- Current liabilities Trade and other payables 2,112,083 2,134,197 2,218,838 Current income tax liabilities 41,207 23,107 49,799 Borrowings 298,602 438,584 331,124 Lease creditors 12 53,640 547 449 Derivative financial instruments 21,985 12,726 9,008 Provisions for liabilities 43,183 40,809 47,208 Acquisition related liabilities 18,518 26,216 27,824 ---------- ---------- ---------- 2,589,218 2,676,186 2,684,250 ---------- ---------- ---------- Total liabilities 5,213,938 4,793,559 4,644,089 ---------- ---------- ---------- Total equity and liabilities 7,639,904 6,532,640 7,077,616 ---------- ---------- ---------- Net debt included above (excluding lease creditors) 11 (245,334) (830,347) (17,524) ---------- ---------- ----------
The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines.
Group Statement of Changes in Equity
For the six Attributable to owners of the months ended 30 Parent Company September 2019 -------------------------------------------------------------------- Other Non- Share Share Retained reserves controlling Total capital premium earnings (note Total interests equity 10) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2019 17,422 882,561 1,368,250 122,473 2,390,706 42,821 2,433,527 Profit for the period - - 37,687 - 37,687 4,506 42,193 Currency translation - - - 42,393 42,393 1,349 43,742 Group defined benefit pension obligations: - remeasurements - - (5,513) - (5,513) - (5,513) - movement in deferred tax asset - - 937 - 937 - 937 Movements relating to cash flow hedges - - - (9,702) (9,702) - (9,702) Movement in deferred tax liability on cash flow hedges - - - 1,650 1,650 - 1,650 Total comprehensive income - - 33,111 34,341 67,452 5,855 73,307 Re-issue of treasury shares - 320 - - 320 - 320 Share based payment - - - 3,686 3,686 - 3,686 Sale of equity interest to non-controlling interest - - 4,306 - 4,306 1,791 6,097 Dividends - - (90,971) - (90,971) - (90,971) ------------- ------- ------------------ ------------- --------- ------------------ --------- At 30 September 2019 17,422 882,881 1,314,696 160,500 2,375,499 50,467 2,425,966 ------------- ------- ------------------ ------------- --------- ------------------ --------- For the six Attributable to owners of the months ended 30 Parent Company September 2018 ---------------------------------------------------------------------------------------------------- Other Non- Share Share Retained reserves controlling Total capital premium earnings (note Total interests equity 10) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2018 15,455 280,533 1,237,937 108,733 1,642,658 35,259 1,677,917 IFRS 9 transition adjustment - - (3,450) - (3,450) - (3,450) ----------------------- ------- ----------------------- --------------------- ------------------ ------------------------- ------------------ At 1 April 2018 (restated) 15,455 280,533 1,234,487 108,733 1,639,208 35,259 1,674,467 Profit for the period - - 68,002 - 68,002 3,852 71,854 Currency translation - - - 37,512 37,512 493 38,005 Group defined benefit pension obligations: - remeasurements - - 2,928 - 2,928 - 2,928 - movement in deferred tax asset - - (489) - (489) - (489) Movements relating to cash flow hedges - - - 26,532 26,532 - 26,532 Movement in deferred tax liability on cash flow hedges - - - (4,510) (4,510) - (4,510) Total comprehensive income - - 70,441 59,534 129,975 4,345 134,320 Re-issue of treasury shares - 1,054 - - 1,054 - 1,054 Share based payment - - - 2,432 2,432 - 2,432 Dividends - - (73,192) - (73,192) - (73,192) ----------------------- ------- ----------------------- --------------------- ------------------ ------------------------- ------------------ At 30 September 2018 15,455 281,587 1,231,736 170,699 1,699,477 39,604 1,739,081 ----------------------- ------- ----------------------- --------------------- ------------------ ------------------------- ------------------ For the year Attributable to owners of the ended 31 March Parent Company 2019 ------------------------------------------------------------------------------------------------------------- Other Non- Share Share Retained reserves controlling Total capital premium earnings (note Total interests equity 10) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2018 15,455 280,533 1,237,937 108,733 1,642,658 35,259 1,677,917 IFRS 9 transition
adjustment - - (3,349) - (3,349) - (3,349) ----------------------- ---------------- ----------------------- --------------------- ------------------ ------------------------- ------------------ At 1 April 2018 (restated) 15,455 280,533 1,234,588 108,733 1,639,309 35,259 1,674,568 Profit for the period - - 262,593 - 262,593 8,539 271,132 Currency translation - - - 6,626 6,626 (977) 5,649 Group defined benefit pension obligations: - remeasurements - - (1,346) - (1,346) - (1,346) - movement in deferred tax asset - - 223 - 223 - 223 Movements relating to cash flow hedges - - - 1,555 1,555 - 1,555 Movement in deferred tax liability on cash flow hedges - - - (264) (264) - (264) Total comprehensive income - - 261,470 7,917 269,387 7,562 276,949 Issue of share capital 1,967 600,970 (10,847) - 592,090 - 592,090 Re-issue of treasury shares - 1,058 - - 1,058 - 1,058 Share based payment - - - 5,823 5,823 - 5,823 Dividends - - (116,961) - (116,961) - (116,961) ----------------------- ---------------- ----------------------- --------------------- ------------------ ------------------------- ------------------ At 31 March 2019 17,422 882,561 1,368,250 122,473 2,390,706 42,821 2,433,527 ----------------------- ---------------- ----------------------- --------------------- ------------------ ------------------------- ------------------
Group Cash Flow Statement
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 Notes GBP'000 GBP'000 GBP'000 Cash flows from operating activities Profit for the period 42,193 71,854 271,132 Add back non-operating expenses/(income) - tax 15,370 14,024 56,302 - share of equity accounted investments' profit (469) (248) (717) - net operating exceptionals 45,329 10,291 28,185 - net finance costs 27,474 18,428 42,308 ---------- ---------- ---------- Group operating profit before exceptionals 129,897 114,349 397,210 Share-based payments expense 3,686 2,432 5,823 Depreciation 87,964 54,434 109,626 Amortisation of intangible assets 32,664 27,569 63,312 Profit on disposal of property, plant and equipment (1,347) (863) (2,182) Amortisation of government grants (6) (34) (40) Other (4,822) 1,049 (3,709) (Increase)/decrease in working capital (98,133) (25,717) 37,465 ---------- ---------- ---------- Cash generated from operations before exceptionals 149,903 173,219 607,505 Exceptionals (12,600) (19,626) (34,619) ---------- ---------- ---------- Cash generated from operations 137,303 153,593 572,886 Interest paid (including lease interest) (41,877) (39,142) (78,031) Income tax paid (30,221) (12,780) (34,500) ---------- ---------- ---------- Net cash flows from operating activities 65,205 101,671 460,355 ---------- ---------- ---------- Investing activities Inflows: Proceeds from disposal of property, plant and equipment 4,282 4,252 8,810 Dividends received from equity accounted investments - - 420 Disposal of subsidiaries and equity accounted investments 38,040 8,573 8,492 Interest received 21,890 17,715 34,831 64,212 30,540 52,553 ---------- ---------- ---------- Outflows: Purchase of property, plant and equipment (91,984) (86,341) (182,311) Acquisition of subsidiaries 14 (93,858) (249,259) (266,525) Payment of accrued acquisition related liabilities (24,462) (21,048) (30,311) ---------- ---------- ---------- (210,304) (356,648) (479,147) ---------- ---------- ---------- Net cash flows from investing activities (146,092) (326,108) (426,594) ---------- ---------- ---------- Financing activities Inflows: Proceeds from issue of shares 320 1,054 593,148 Net cash inflow on derivative 43,903 - - financial instruments Increase in interest-bearing loans and borrowings 353,210 201,357 201,357 Increase in lease creditors - 989 492 397,433 203,400 794,997 ---------- ---------- ---------- Outflows: Repayment of interest-bearing loans and borrowings (123,700) - (201,357) Repayment of lease creditors (27,565) (53) (630) Dividends paid to owners of the Parent Company 9 (90,971) (73,192) (116,961) (242,236) (73,245) (318,948) ---------- ---------- ---------- Net cash flows from financing activities 155,197 130,155 476,049 ---------- ---------- ---------- Change in cash and cash equivalents 74,310 (94,282) 509,810 Translation adjustment 30,203 (900) (8,075) Cash and cash equivalents at beginning of period 1,466,028 964,293 964,293 ---------- ---------- ---------- Cash and cash equivalents at end of period 1,570,541 869,111 1,466,028 ---------- ---------- ---------- Cash and cash equivalents consists of: Cash and short-term bank deposits 1,675,517 977,571 1,554,093 Overdrafts (104,976) (108,460) (88,065) 1,570,541 869,111 1,466,028 ---------- ---------- ----------
The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines.
Notes to the Condensed Financial Statements
for the six months ended 30 September 2019
1. Basis of Preparation
The Group condensed interim financial statements which should be read in conjunction with the annual financial statements for the year ended 31 March 2019 have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency rules of the Irish Financial Services Regulatory Authority and in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of certain assets, liabilities, revenues and expenses together with disclosure of contingent assets and liabilities. Estimates and underlying assumptions are reviewed on an ongoing basis.
These condensed interim financial statements for the six months ended 30 September 2019 and the comparative figures for the six months ended 30 September 2018 are unaudited and have not been reviewed by the Auditors. The summary financial statements for the year ended 31 March 2019 represent an abbreviated version of the Group's full accounts for that year, on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies.
2. Accounting Policies
The accounting policies and methods of computation adopted in the preparation of the Group condensed interim financial statements are consistent with those applied in the 2019 Annual Report and are described in those financial statements on pages 193 to 201, except for those noted below.
The following new standards have been adopted in the current year:
IFRS 16 Leases
This standard replaces IAS 17 Leases. The changes under IFRS 16 are significant and predominantly affect lessees, the accounting for which is substantially reformed. The lessor accounting requirements contained in IFRS 16's predecessor, IAS 17, remain largely unchanged. The main impact on lessees is that almost all leases are recognised on the balance sheet as the distinction between operating and finance leases is removed for lessees. Under IFRS 16, an asset (the right to use the leased item) and a liability (the lease creditor) to pay rentals are recognised. The only exemptions are short-term leases and low-value leased assets. The standard introduces new estimates and judgemental thresholds that affect the identification, classification and measurement of lease transactions.
The Group adopted IFRS 16 on the transition date of 1 April 2019 using the modified retrospective approach, which means that comparatives do not need to be restated. The Group applied the following practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17:
-- Account for leases ending within 12 months of the date of initial application as short-term leases;
-- Apply a single discount rate to a portfolio of leases with reasonably similar characteristics; and
-- Rely on a previous assessment of whether leases are onerous in accordance with IAS 37 immediately before the date of initial application as an alternative to performing an impairment review.
At transition date, the Group calculated the lease commitments outstanding at that date and applied appropriate discount rates to calculate the present value of the lease commitment which was recognised as a creditor and a right-of-use leased asset on the Group's Balance Sheet. The right-of-use leased asset was adjusted for any prepayments, accruals and onerous lease provisions with no adjustment to opening retained earnings. The discount rates applied were arrived at using a methodology to calculate the incremental borrowing rates across the Group. The Group engaged a specialist valuation expert to assist with this process. The weighted average incremental borrowing rate applied to lease creditors on the Consolidated Balance Sheet was 3.0% at 1 April 2019.
In the Income Statement, the Group previously recognised operating lease rentals in operating expenses. Under IFRS 16, a right-of-use leased asset is capitalised and depreciated over the term of the lease as an operating expense with an associated finance cost applied annually to the lease creditor. The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met; such lease costs continue to be expensed in the Income Statement as incurred. Wholly variable lease payments are also expensed as incurred. See note 12, Leases, for further information.
The adoption of IFRS 16 had a material impact on the Group's interim financial statements as follows:
-- Right-of-use leased assets: increase of GBP297 million on transition at 1 April 2019;
-- Lease creditors: increase of GBP294 million on transition at 1 April 2019; -- Adjusted operating profit: increase of GBP2.7 million in the period; -- Net finance cost: increase of GBP4.2 million in the period; and -- Adjusted earnings per share: decrease of 1.3 pence in the period.
A reconciliation of the operating lease commitment previously reported under IAS 17 to the discounted lease creditor as at 1 April 2019 under IFRS 16 is as follows:
As at 1 April 2019 GBP'000 Operating lease commitment under IAS 17 376,337 Contracts identified as leases under IFRS 16 25,509 Wholly variable leases not capitalised under IFRS 16 (29,749) Commitments relating to low value leased assets and short-term leases (5,017) Existing IAS 17 finance leases 901 Impact of discounting (72,940) --------- Discounted lease creditor under IFRS 16 as at 1 April 2019 295,041 ---------
Set out below is the new accounting policy of the Group upon adoption of IFRS 16, Leases:
The Group enters into leases for a range of assets, principally relating to property. These property leases have varying terms and renewal rights, including periodic rent reviews linked with indices. The Group also leases motor vehicles, plant, machinery and other equipment. The terms and conditions of these leases do not impose significant financial restrictions on the Group.
A contract contains a lease if it is enforceable and conveys the right to control the use of a specified asset for a period of time in exchange for consideration, which is assessed at inception. A right-of-use asset and lease creditor are recognised at the commencement date for contracts containing a lease, with the exception of leases with a term of 12 months or less, leases where the underlying asset is of low value and leases with associated payments that vary directly in line with usage or sales (such lease costs continue to be expensed in the Income Statement as incurred). The commencement date is the date at which the asset is made available for use by the Group.
The lease creditor is initially measured at the present value of the future minimum lease payments, discounted using the incremental borrowing rate over the remaining lease term. Lease payments include fixed payments, variable payments that are dependent on an index known at the commencement date, payments for an optional renewal period and termination option payments, if the Group is reasonably certain to exercise those options. The lease term is the non-cancellable period of the lease adjusted for any renewal or termination options which are reasonably certain to be exercised. Management applies judgement in determining whether it is reasonably certain that a renewal or termination option will be exercised.
Incremental borrowing rates are calculated using a portfolio approach, based on the risk profile of the entity holding the lease and the term and currency of the lease.
After initial recognition, the lease creditor is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future minimum lease payments or when the Group changes its assessment of whether it is reasonably certain to exercise an option within the contract. A corresponding adjustment is made to the carrying amount of the right-of-use asset.
The right-of-use asset is initially measured at cost, which comprises the lease creditor adjusted for any payments made at or before the commencement date, initial direct costs incurred, lease incentives received and an estimate of the cost to dismantle or restore the underlying asset or the site on which it is located at the end of the lease term. The right-of-use asset is depreciated over the lease term and is tested periodically for impairment if an impairment indicator is considered to exist.
IFRIC 23 Uncertainty over Income Tax Treatments
This IFRIC clarifies the accounting for uncertainties in income taxes and is applied to the determination of taxable profit (or tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12 Income Taxes. The adoption of this IFRIC has had an immaterial impact on the Group's interim financial statements.
The following changes to IFRS became effective for the Group during the period but did not result in material changes to the Group's consolidated financial statements:
-- Annual Improvements to IFRS Standards 2015-2017 Cycle -- Amendments to IAS 19: Plan amendment, curtailment or settlement -- Amendments to IAS 28: Long-term interests in associates and joint ventures -- Amendments to IFRS 9: Prepayment features with negative compensation
The Group has not applied certain new standards, amendments and interpretations to existing standards that have been issued but are not yet effective. They are either not expected to have a material effect on the consolidated financial statements or they are not currently relevant for the Group.
3. Going Concern
Having reassessed the principal risks facing the Group (as detailed on pages 17 to 20 of the 2019 Annual Report), the Directors believe that the Group is well placed to manage these risks successfully.
The Directors have a reasonable expectation that DCC plc, and the Group as a whole, has adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. For this reason, the Directors continue to adopt the going concern basis of accounting in preparing the condensed interim financial statements.
4. Reporting Currency
The Group's financial statements are presented in sterling, denoted by the symbol 'GBP'. Results and cash flows of operations based in non-sterling countries have been translated into sterling at average rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date. The principal exchange rates used for translation of results and balance sheets into sterling were as follows:
Average rate Closing rate ---------------------------------------- ---------------------------------------- 6 months 6 months Year 6 months 6 months Year ended ended ended ended ended ended 30 Sept. 30 Sept. 31 March 30 Sept. 30 Sept. 31 March 2019 2018 2019 2019 2018 2019 StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= Euro 1.1265 1.1306 1.1319 1.1291 1.1270 1.1651 Danish Krone 8.4133 8.4245 8.4407 8.4297 8.4035 8.6977 Swedish Krona 11.9717 11.7550 11.7467 12.0761 11.6184 12.1146 Norwegian Krone 11.0116 10.8614 10.9172 11.1723 10.6689 11.2536 US Dollar 1.2620 1.3409 1.3184 1.2294 1.3046 1.3090 Hong Kong Dollar 9.8892 10.5233 10.3392 9.6385 10.2084 10.2755 5. Segmental Reporting
DCC is an international sales, marketing and support services group headquartered in Dublin, Ireland. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as Mr. Donal Murphy, Chief Executive and his executive management team. The Group is organised into four operating segments: DCC LPG, DCC Retail & Oil, DCC Technology and DCC Healthcare.
DCC LPG is a leading liquefied petroleum gas ('LPG') sales and marketing business with presences in Europe, North America and Asia and a developing business in the retailing of natural gas and electricity in Europe.
DCC Retail & Oil is a leader in the sales, marketing and retailing of transport fuels and commercial fuels, heating oils and related products and services in Europe.
DCC Technology is a leading route-to-market and supply chain partner for global technology brands.
DCC Healthcare is a leading healthcare business, providing products and services to healthcare providers and health and beauty brand owners.
The chief operating decision maker monitors the operating results of segments separately in order to allocate resources between segments and to assess performance. Segment performance is predominantly evaluated based on operating profit before amortisation of intangible assets and net operating exceptional items. Net finance costs and income tax are managed on a centralised basis and therefore these items are not allocated between operating segments for the purpose of presenting information to the chief operating decision maker and accordingly are not included in the detailed segmental analysis.
The consolidated total assets of the Group as at 30 September 2019 amounted to GBP7.6 billion. This figure was not materially different from the equivalent figure at 31 March 2019 and therefore the related segmental disclosure note has been omitted in accordance with IAS 34 Interim Financial Reporting. Intersegment revenue is not material and thus not subject to separate disclosure.
An analysis of the Group's performance by segment and geographic location is as follows: (a) By operating segment Unaudited six months ended 30 September 2019 ----------------------------------------------------------------------------- DCC DCC DCC DCC
LPG
Retail & Oil Technology Healthcare Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Segment revenue 685,934 4,542,944 1,795,538 287,305 7,311,721 -------- ----------- ---------------- -------- -------------- Adjusted operating profit 49,034 59,670 25,342 28,515 162,561 Amortisation of intangible assets (15,932) (5,286) (9,436) (2,010) (32,664) Net operating exceptionals (note 6) (4,075) (969) (4,526) (35,759) (45,329) -------- ----------- ---------------- -------- -------------- Operating profit 29,027 53,415 11,380 (9,254) 84,568 -------- ----------- ---------------- -------- -------------- Unaudited six months ended 30 September 2018 -------------------------------------------------------------------------- DCC DCC DCC DCC
LPG Retail & Oil Technology Healthcare Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Segment revenue 721,410 4,832,561 1,588,153 275,885 7,418,009 -------- ----------- ---------------- ---------------- -------------- Adjusted operating profit 40,915 56,288 17,767 26,948 141,918 Amortisation of intangible assets (16,176) (5,258) (2,979) (3,156) (27,569) Net operating exceptionals (note 6) (2,236) (1,467) (6,034) (554) (10,291) -------- ----------- ---------------- ---------------- -------------- Operating profit 22,503 49,563 8,754 23,238 104,058 -------- ----------- ---------------- ---------------- -------------- Audited year ended 31 March 2019 ---------------------------------------------------------------------------------
DCC
DCC DCC DCC
LPG
Retail & Oil Technology Healthcare Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Segment revenue 1,778,293 9,241,281 3,630,934 576,385 15,226,893 --------- ----------- ---------------- ---------------- ------------- Adjusted operating profit 201,826 133,731 64,638 60,327 460,522 Amortisation of intangible assets (31,525) (10,574) (14,885) (6,328) (63,312) Net operating exceptionals (note 6) (7,041) (4,063) (16,175) (906) (28,185) --------- ----------- ---------------- ---------------- ------------- Operating profit 163,260 119,094 33,578 53,093 369,025 --------- ----------- ---------------- ---------------- ------------- (b) By geography
The Group has a presence in 20 countries worldwide. The following represents a geographical revenue analysis about the country of domicile (Republic of Ireland) and countries with material revenue.
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Republic of Ireland 391,597 420,661 849,795 United Kingdom 3,345,739 3,559,461 7,345,634 France 1,403,076 1,401,882 2,958,479 Other 2,171,309 2,036,005 4,072,985 ---------- ---------- ------------------- 7,311,721 7,418,009 15,226,893 ---------- ---------- ------------------- (c) Disaggregation of revenue The following table disaggregates revenue by primary geographical market, major revenue lines and timing of revenue recognition. The economic factors within each geographic region which affect the nature, amount, timing and uncertainty of revenue and cash flows within sub categories of LPG, retail & oil and technology products and services are similar. DCC Healthcare revenues have been further disaggregated into two product sub categories reflecting the different economic factors affecting those sub categories. Unaudited six months ended 30 September 2019 ----------------------------------------------------------------------------- DCC DCC DCC DCC
LPG
Retail & Oil Technology Healthcare Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Republic of Ireland (country of domicile) 48,715 176,163 120,392 46,327 391,597 United Kingdom 117,141 1,974,964 1,036,101 217,533 3,345,739 France 344,124 947,051 111,901 - 1,403,076 Other 175,954 1,444,766 527,144 23,445 2,171,309 ------- --------- ---------------- ------- --------- 685,934 4,542,944 1,795,538 287,305 7,311,721 ------- --------- ---------------- ------- --------- Products transferred at point in time 685,934 4,542,944 1,795,538 287,305 7,311,721 Products transferred over time - - - - - ------- --------- ---------------- ------- --------- 685,934 4,542,944 1,795,538 287,305 7,311,721 ------- --------- ---------------- ------- --------- LPG and related products 685,934 - - - 685,934 Oil and related products - 4,542,944 - - 4,542,944 Technology products and services - - 1,795,538 - 1,795,538 Medical and pharmaceutical products - - - 171,666 171,666 Nutrition and health & beauty products - - - 115,639 115,639 ------- --------- ---------------- ------- --------- 685,934 4,542,944 1,795,538 287,305 7,311,721 ------- --------- ---------------- ------- --------- Unaudited six months ended 30 September 2018 ------------------------------------------------------------------------
DCC
DCC DCC DCC
LPG
Retail & Oil Technology Healthcare Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Republic of Ireland (country of domicile) 53,009 166,802 159,525 41,325 420,661 United Kingdom 119,415 2,131,002 1,095,321 213,723 3,559,461 France 354,263 955,507 92,112 - 1,401,882 Other 194,723 1,579,250 241,195 20,837 2,036,005 ------- --------- ---------------- ------- --------- 721,410 4,832,561 1,588,153 275,885 7,418,009 ------- --------- ---------------- ------- --------- Products transferred at point in time 721,410 4,832,561 1,588,153 275,885 7,418,009 Products transferred over time - - - - - ------- --------- ---------------- ------- --------- 721,410 4,832,561 1,588,153 275,885 7,418,009 ------- --------- ---------------- ------- --------- LPG and related products 721,410 - - - 721,410 Oil and related products - 4,832,561 - - 4,832,561 Technology products and services - - 1,588,153 - 1,588,153 Medical and pharmaceutical products - - - 166,813 166,813 Nutrition and health & beauty products - - - 109,072 109,072 ------- --------- ---------------- ------- --------- 721,410 4,832,561 1,588,153 275,885 7,418,009 ------- --------- ---------------- ------- --------- Audited year ended 31 March 2019 ------------------------------------------------------------------------------------- DCC DCC DCC DCC
LPG
Retail & Oil Technology Healthcare Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Republic of Ireland (country of domicile) 128,086 365,814 268,795 87,100 849,795 United Kingdom 298,731 4,125,047 2,477,365 444,491 7,345,634 France 911,829 1,835,326 211,324 - 2,958,479 Other 439,647 2,915,094 673,450 44,794 4,072,985 --------- --------- ---------------- ------- ---------- 1,778,293 9,241,281 3,630,934 576,385 15,226,893 --------- --------- ---------------- ------- ---------- Products transferred at point in time 1,778,293 9,241,281 3,630,934 576,385 15,226,893 Products transferred over time - - - - - --------- --------- ---------------- ------- ---------- 1,778,293 9,241,281 3,630,934 576,385 15,226,893 --------- --------- ---------------- ------- ----------
LPG and related products 1,778,293 - - - 1,778,293 Oil and related products - 9,241,281 - - 9,241,281 Technology products and services - - 3,630,934 - 3,630,934 Medical and pharmaceutical products - - - 344,955 344,955 Nutrition and health & beauty products - - - 231,430 231,430 --------- --------- ---------------- ------- ---------- 1,778,293 9,241,281 3,630,934 576,385 15,226,893 --------- --------- ---------------- ------- ---------- 6. Exceptionals Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Restructuring costs (6,233) (5,124) (19,430) Acquisition and related costs (4,939) (5,123) (9,564) Loss on disposal (34,265) - - Adjustments to contingent acquisition consideration 211 49 1,727 Other operating exceptional items (103) (93) (918) Net operating exceptional items (45,329) (10,291) (28,185) Mark to market of swaps and related debt (371) 3,974 4,307 ---------- ---------- --------- Net exceptional items before taxation (45,700) (6,317) (23,878) Deferred tax 44 (628) (685) ---------- ---------- --------- Net exceptional items after taxation (45,656) (6,945) (24,563) Non-controlling interest share of net 39 - - exceptional items after taxation ---------- ---------- --------- Net exceptional items attributable to owners of the Parent Company (45,617) (6,945) (24,563) ---------- ---------- ---------
In September 2019, DCC Healthcare completed the disposal of DCC Vital's UK generic pharma activities and related manufacturing facility in Ireland (Kent Pharma and Athlone Laboratories). The disposal sharpens the strategic focus of DCC Vital, allowing it to concentrate on those areas where it has market-leading positions and sustainable competitive advantage, in particular in the sales, marketing and distribution of medical products in Britain and Ireland. Whilst part of the DCC Group, the cashflows generated by the disposed business more than recovered its acquisition cost, however, the transaction will result in a loss on disposal of GBP34.265 million, principally representing a non-cash impairment of the goodwill recognised on the initial acquisition of the business.
Restructuring and integration costs of GBP6.233 million principally comprise the ongoing dual running costs relating to the UK SAP implementation which is live in an element of the UK business and to which the remaining components of the business will transition on a phased basis shortly following the end of the financial year. It also includes a restructuring charge relating to the LPG business in Britain, following acquisition activity (including the acquisition of Countrywide and a number of small dealers) in prior periods.
Acquisition and related costs include the professional fees and tax costs (such as stamp duty) relating to the evaluation and/or completion of acquisition opportunities and amounted to GBP4.939 million.
Most of the Group's debt has been raised in the US private placement market and swapped, where appropriate, using long-term interest and cross currency interest rate derivatives, to both fixed and floating rate sterling and euro. The level of ineffectiveness calculated under IAS 39 on the fair value and cash flow hedge relationships is charged or credited as an exceptional item. In the six months ended 30 September 2019, this amounted to an exceptional non-cash charge of GBP0.371 million. Following this charge, the cumulative net exceptional charge taken in respect of the Group's outstanding US private placement debt and related hedging instruments is GBP1.6 million. This, and any subsequent similar non-cash charges or gains, will net to zero over the remaining term of this debt and the related hedging instruments.
7. Taxation
The taxation expense for the interim period is based on management's best estimate of the weighted average tax rate that is expected to be applicable for the full year. The Group's effective tax rate for the period was 17% (six months ended 30 September 2018: 17% and year ended 31 March 2019: 17%).
8. Earnings per Ordinary Share Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Profit attributable to owners of the Parent 37,687 68,002 262,593 Amortisation of intangible assets after tax 25,050 20,647 48,565 Exceptionals after tax 45,617 6,945 24,563 ---------- ---------- --------- Adjusted profit after taxation and non-controlling interests 108,354 95,594 335,721 ---------- ---------- ---------
Basic earnings per ordinary share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Company and held as treasury shares. The adjusted figures for basic earnings per ordinary share (a non-GAAP financial measure) are intended to demonstrate the results of the Group after eliminating the impact of amortisation of intangible assets and net exceptionals.
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 pence pence pence Basic earnings per ordinary share 38.34p 76.15p 280.14p Amortisation of intangible assets after tax 25.48p 23.12p 51.81p Exceptionals after tax 46.40p 7.78p 26.21p ---------- ---------- --------- Adjusted basic earnings per ordinary share 110.22p 107.05p 358.16p ---------- ---------- --------- Weighted average number of ordinary shares in issue (thousands) 98,306 89,297 93,736 ---------- ---------- ---------
Diluted earnings per ordinary share
Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Share options and awards are the Company's only category of dilutive potential ordinary shares. Employee share options and awards, which are performance-based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable shares are excluded from the computation of diluted earnings per ordinary share where the conditions governing exercisability would not have been satisfied as at the end of the reporting period if that were the end of the vesting period.
The adjusted figures for diluted earnings per ordinary share (a non-GAAP financial measure) are intended to demonstrate the results of the Group after eliminating the impact of amortisation of intangible assets and net exceptionals.
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 pence pence pence Diluted earnings per ordinary share 38.26p 76.02p 279.73p Amortisation of intangible assets after tax 25.43p 23.08p 51.73p Exceptionals after tax 46.30p 7.77p 26.17p ---------- ---------- --------- Adjusted diluted earnings per ordinary share 109.99p 106.87p 357.63p ---------- ---------- --------- Weighted average number of ordinary shares in issue (dilutive, thousands) 98,514 89,451 93,874 ---------- ---------- ---------
The earnings used for the purposes of the diluted earnings per ordinary share calculations were GBP37.687 million (six months ended 30 September 2018: GBP68.002 million) and GBP108.354 million (six months ended 30 September 2018: GBP95.594 million) for the purposes of the adjusted diluted earnings per ordinary share calculations. The weighted average number of ordinary shares used in calculating the diluted earnings per ordinary share for the six months ended 30 September 2019 was 98.514 million (six months ended 30 September 2018: 89.451 million). A reconciliation of the weighted average number of ordinary shares used for the purposes of calculating the diluted earnings per ordinary share amounts is as follows:
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 '000 '000 '000 Weighted average number of ordinary shares in issue 98,306 89,297 93,736 Dilutive effect of options and awards 208 154 138 --------- --------- -------- Weighted average number of ordinary shares for diluted earnings per share 98,514 89,451 93,874 --------- --------- -------- 9. Dividends Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Interim - paid 44.98 pence per share on 12 December 2018 - - 43,853 Final - paid 93.37 pence per share on 18 July 2019 (paid 82.09 pence per share on 19 July 2018) 90,971 73,192 73,108 90,971 73,192 116,961 ---------------------- ------------------------- ---------
On 11 November 2019, the Board approved an interim dividend of 49.48p pence per share (GBP48.662 million). These condensed interim financial statements do not reflect this dividend payable.
10. Other Reserves For the six months ended 30 September 2019 Foreign Share based Cash flow currency payment hedge translation Other reserve reserve reserve reserves Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2019 28,706 (14,887) 107,722 932 122,473 Currency translation - - 42,393 - 42,393 Movements relating to cash flow hedges - (9,702) - - (9,702) Movement in deferred tax liability on cash flow hedges - 1,650 - - 1,650 Share based payment 3,686 - - - 3,686 ------------------- --------- ----------- -------- ------- At 30 September 2019 32,392 (22,939) 150,115 932 160,500 ------------------- --------- ----------- -------- ------- For the six months ended 30 September 2018 Foreign Share based Cash flow currency payment hedge translation Other reserve reserve reserve reserves Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2018 22,883 (16,178) 101,096 932 108,733 Currency translation - - 37,512 - 37,512 Movements relating to cash flow hedges - 26,532 - - 26,532 Movement in deferred tax liability on cash flow hedges - (4,510) - - (4,510) Share based payment 2,432 - - - 2,432 ------------------- --------- ----------- -------- ------- At 30 September 2018 25,315 5,844 138,608 932 170,699 ------------------- --------- ----------- -------- ------- For the year ended 31 March 2019 Foreign Share based Cash flow currency payment hedge translation Other reserve reserve reserve reserves Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2018 22,883 (16,178) 101,096 932 108,733 Currency translation - - 6,626 - 6,626 Movements relating to cash flow hedges - 1,555 - - 1,555 Movement in deferred tax liability on cash flow hedges - (264) - - (264) Share based payment 5,823 - - - 5,823 ------------------- --------- ----------- -------- ------- At 31 March 2019 28,706 (14,887) 107,722 932 122,473 ------------------- --------- ----------- -------- ------- 11. Analysis of Net Debt Unaudited Unaudited Audited 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 Non-current assets: Derivative financial instruments 209,049 119,661 143,554 ------------ ------------ ------------------- Current assets: Derivative financial instruments 42,331 78,232 67,987 Cash and cash equivalents 1,675,517 977,571 1,554,093 ------------ ------------ ------------------- 1,717,848 1,055,803 1,622,080 ------------ ------------ ------------------- Non-current liabilities:
Derivative financial instruments (2,187) (7,489) (1,122) Unsecured Notes (1,849,457) (1,547,012) (1,441,904) ------------ ------------ ------------------- (1,851,644) (1,554,501) (1,443,026) ------------ ------------ ------------------- Current liabilities: Derivative financial instruments (21,985) (12,726) (9,008) Bank overdrafts (104,976) (108,460) (88,065) Bank borrowings - (206,960) - Unsecured Notes (193,626) (123,164) (243,059) ------------ ------------ ------------------- (320,587) (451,310) (340,132) ------------ ------------ ------------------- Net debt (excluding lease creditors) (245,334) (830,347) (17,524) ------------ ------------ ------------------- Lease creditors - non-current* (232,770) (1,462) (452) Lease creditors - current* (53,640) (547) (449) ------------ ------------ ------------------- Total lease creditors (286,410) (2,009) (901) ------------ ------------ ------------------- Net debt (including lease creditors) (531,744) (832,356) (18,425) ------------ ------------ -------------------
*Lease creditors at 30 September 2018 and 31 March 2019 represent amounts previously disclosed as 'finance leases'.
An analysis of the maturity profile of the Group's net debt (including lease creditors) at 30 September 2019 is as follows:
Between Between Less than 1 and 2 and Over 2 5 1 year years years 5 years Total At 30 September 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash and short-term deposits 1,675,517 - - - 1,675,517 Overdrafts (104,976) - - - (104,976) --------- --------- ------------- ----------- ----------- Cash and cash equivalents 1,570,541 - - - 1,570,541 Unsecured Notes (193,626) (116,631) (691,878) (1,040,948) (2,043,083) Derivative financial instruments - Unsecured Notes 38,375 17,537 132,531 58,974 247,417 Derivative financial instruments - other (18,029) (2,180) - - (20,209) --------- --------- ------------- ----------- ----------- Net debt (excluding lease creditors) 1,397,261 (101,274) (559,347) (981,974) (245,334) Lease creditors (53,640) (40,297) (76,884) (115,589) (286,410) --------- --------- ------------- ----------- ----------- Net debt (including lease creditors) 1,343,621 (141,571) (636,231) (1,097,563) (531,744) --------- --------- ------------- ----------- -----------
The Group's Unsecured Notes fall due between 24 March 2020 and 4 April 2034 with an average maturity of 6.2 years at 30 September 2019. The full fair value of a hedging derivative is allocated to the time period corresponding to the maturity of the hedged item.
12. Leases
The Group adopted IFRS 16 Leases with effect from 1 April 2019. At the date of transition, the Group calculated the lease commitments outstanding at that date and applied appropriate discount rates to calculate the present value of the lease commitment which was recognised as a lease creditor and a right-of-use leased asset on the Group's Balance Sheet.
The movement in the Group's right-of-use leased assets during the period is as follows:
Plant, Land and Motor machinery & buildings vehicles other Total GBP'000 GBP'000 GBP'000 GBP'000 At 1 April 2019, net carrying - - - - amount Effect of adopting IFRS 16 240,413 53,425 2,968 296,806 Translation adjustment 3,806 972 54 4,832 Net additions 8,346 2,472 137 10,955 Arising on acquisition 3,346 - - 3,346 Depreciation charge for the period (17,386) (12,291) (300) (29,977) -------- -------- ----- -------- At 30 September 2019, net carrying amount 238,525 44,578 2,859 285,962 -------- -------- ----- -------- The movement in the Group's lease creditors during the period is as follows: GBP'000 At 1 April 2019 901 Effect of adopting IFRS 16 294,140 Translation adjustment and other 4,633 Net additions of right-of-use assets 10,955 Arising on acquisition 3,346 Payments (31,818) Discount unwinding 4,253 -------- At 30 September 2019 286,410 --------
An analysis of the maturity profile of the discounted lease creditor arising from the Group's leasing activities as at 30 September 2019 is as follows:
Unaudited 30 Sept. 2019 GBP'000 Within one year 53,640 Between one and two years 40,297 Between two and five years 76,884 Over 5 years 115,589 --------------- Total 286,410 --------------- Analysed as: Non-current liabilities 232,770 Current liabilities 53,640 --------------- 286,410 ---------------
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met. Wholly variable lease payments directly linked to sales or usage are also expensed as incurred. The following lease costs have been charged to the Income Statement as incurred:
Unaudited 6 months ended 30 Sept. 2019 GBP'000 Short-term leases 3,031 Leases of low value assets 52 Wholly variable lease payments 2,938 --------- Total 6,021 --------- The total cash outflow for lease payments during the period was as follows: Cash outflow for short-term leases, leases of low value assets and wholly variable lease payments 6,021 Lease payments relating to capitalised right-of-use leased assets 31,818 ------ Total cash outflow for lease payments 37,839 ------
Lease commitments for short-term leases are similar to the portfolio of short-term leases for which costs were expensed to the Income Statement. The effect of excluding future cash outflows arising from variable lease payments, termination options, residual value guarantees, and leases not yet commenced from lease creditors was not material for the Group. Income from subleasing and gains/losses on sales and leaseback transaction were not material for the Group.
13. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were measured at fair value at 30 September 2019. The defined benefit pension schemes' liabilities at 30 September 2019 were updated to reflect material movements in underlying assumptions.
The Group's post employment benefit obligations moved from a net asset of GBP1.397 million at 31 March 2019 to a net deficit of GBP3.200 million at 30 September 2019. This movement was primarily driven by an actuarial loss on liabilities arising from a decrease in the discount rates used to value these liabilities.
The following actuarial assumptions have been made in determining the Group's retirement benefit obligation for the six months ended 30 September 2019:
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 Discount rate - Republic of Ireland 1.05% 2.20% 1.75% - United Kingdom 1.85% 2.80% 2.50% - Germany 1.05% 2.20% 1.75% ---------- ---------- --------- 14. Business Combinations
A key strategy of the Group is to create and sustain market leadership positions through acquisitions in markets it currently operates in, together with extending the Group's footprint into new geographic markets. In line with this strategy, the principal acquisitions completed by the Group during the period, together with percentages acquired, were as follows:
-- The acquisition by DCC LPG in April 2019 of 100% of Pacific Coast Energy, an LPG distribution business operating in the north-west of the US;
-- The acquisition by DCC Technology in June 2019 of 75% of Amacom Holding BV ('Amacom'). Amacom is a leading distributor of consumer electronics, AV and IT products, primarily to the retail and e-tail sectors in the Netherlands; and
-- The acquisition by DCC Technology in July 2019 of 100% of Comm-Tec GmbH ('Comm-Tec'). Comm-Tec is a leading value-added distributor of Pro AV and IT products to system integrators and resellers across Germany, Austria, Switzerland, Italy and Spain.
The acquisition data presented below reflects the fair value of the identifiable net assets acquired (excluding cash and cash equivalents acquired) in respect of acquisitions completed during the six months ended 30 September 2019.
6 months 6 months ended ended 30 Sept. 30 Sept. 2019 2018 GBP'000 GBP'000 Assets Non-current assets Property, plant and equipment 10,892 13,894 Right-of-use leased assets 3,346 - Equity accounted investments 1,802 - ------------------ ----------------- Total non-current assets 16,040 13,894 ------------------ ----------------- Current assets Inventories 30,237 105,207 Trade and other receivables 40,442 139,044 ------------------ ----------------- Total current assets 70,679 244,251 ------------------ ----------------- Liabilities Non-current liabilities Deferred income tax liabilities (104) (447) Lease creditors (2,494) - Provisions for liabilities and charges (76) (2,128) Total non-current liabilities (2,674) (2,575) ------------------ ----------------- Current liabilities Trade and other payables (38,653) (119,376) Current income tax (liability)/asset (84) 233 Lease creditors (852) - Government grants - (147) ------------------ Total current liabilities (39,589) (119,290) ------------------ ----------------- Identifiable net assets acquired 44,456 136,280 Intangible assets - goodwill 72,534 146,318 ------------------ ----------------- Total consideration 116,990 282,598 ------------------ ----------------- Satisfied by: Cash 81,226 256,796 Cash and cash equivalents acquired 12,632 (7,537) ------------------ ----------------- Net cash outflow 93,858 249,259 Acquisition related liabilities 23,132 33,339 ------------------ ----------------- Total consideration 116,990 282,598 ------------------ -----------------
None of the business combinations completed during the period were considered sufficiently material to warrant separate disclosure of the fair values attributable to those combinations.
There were no adjustments made to the carrying amounts of assets and liabilities acquired in arriving at their fair values. The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in respect of a number of the business combinations above given the timing of closure of these transactions. Any amendments to these fair values within the twelve-month timeframe from the date of acquisition will be disclosable in the Group's condensed interim financial statements for the six months ending 30 September 2020 as stipulated by IFRS 3.
The principal factors contributing to the recognition of goodwill on business combinations entered into by the Group are the expected profitability of the acquired business and the realisation of cost savings and synergies with existing Group entities.
Acquisition and related costs included in other operating expenses in the Group Income Statement amounted to GBP4.939 million (six months ended 30 September 2018: GBP5.123 million).
No contingent liabilities were recognised on the acquisitions completed during the financial period or the prior financial years.
The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to GBP40.608 million. The fair value of these receivables is GBP40.442 million (all of which is expected to be recoverable).
Approximately GBP26.3 million of the goodwill recognised in respect of acquisitions completed during the period is expected to be deductible for tax purposes.
The fair value of contingent consideration recognised at the date of acquisition is calculated by discounting the expected future payment to present value at the acquisition date. In general, for contingent consideration to become payable, pre-defined profit thresholds must be exceeded. On an undiscounted basis, the future payments for which the Group may be liable for acquisitions completed during the period range from nil to GBP46.0 million.
The acquisitions during the period contributed GBP77.9 million to revenues and GBP2.9 million to profit after tax. Had all the business combinations effected during the period occurred at the beginning of the period, total Group revenue for the six months ended 30 September 2019 would have been GBP7,365.7 million and total Group profit after tax would have been GBP43.3 million.
15. Seasonality of Operations
The Group's operations are significantly second-half weighted primarily due to a portion of the demand for DCC's LPG and Retail & Oil products being weather dependent and seasonal buying patterns in DCC Technology.
16. Related Party Transactions
There have been no related party transactions or changes in the nature and scale of the related party transactions described in the 2019 Annual Report that could have had a material impact on the financial position or performance of the Group in the six months ended 30 September 2019.
17. Events after the Balance Sheet Date
In November 2019, DCC Healthcare acquired Ion Laboratories, Inc, a Florida-based contract manufacturer of nutritional products for an enterprise value of approximately US$60 million. An initial assignment of fair values to identifiable net assets acquired has not been completed given the timing of the closure of this transaction.
18. Board Approval
This report was approved by the Board of Directors of DCC plc on 11 November 2019.
19. Distribution of Interim Report
This report and further information on DCC is available at the Company's website www.dcc.ie. A printed copy is available to the public at the Company's registered office at DCC House, Leopardstown Road, Foxrock, Dublin 18, Ireland.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of interim financial statements for the six months ended 30 September 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and
-- the interim management report includes a fair review of the information required by:
-- Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
-- Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board
John Moloney Donal Murphy
Chairman Chief Executive
11 November 2019
Supplementary Financial Information
Alternative Performance Measures
The Group reports certain alternative performance measures ('APMs') that are not required under International Financial Reporting Standards ('IFRS') which represent the generally accepted accounting principles ('GAAP') under which the Group reports. The Group believes that the presentation of these APMs provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides investors with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions.
These APMs are primarily used for the following purposes:
-- to evaluate the historical and planned underlying results of our operations;
-- to set director and management remuneration; and
-- to discuss and explain the Group's performance with the investment analyst community.
None of the APMs should be considered as an alternative to financial measures derived in accordance with GAAP. The APMs can have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. These performance measures may not be calculated uniformly by all companies and therefore may not be directly comparable with similarly titled measures and disclosures of other companies.
The principal APMs used by the Group, together with reconciliations where the non-GAAP measures are not readily identifiable from the financial statements, are as follows:
Adjusted operating profit ('EBITA')
Definition
This comprises operating profit as reported in the Group Income Statement before net operating exceptional items and amortisation of intangible assets. Net operating exceptional items and amortisation of intangible assets are excluded in order to assess the underlying performance of our operations. In addition, neither metric forms part of Director or management remuneration targets.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ------------------------------------- --------- --------- ------------- Operating profit 84,568 104,058 369,025 Net operating exceptional items 45,329 10,291 28,185 Amortisation of intangible assets 32,664 27,569 63,312 ------------------------------------- --------- --------- ------------- Adjusted operating profit ('EBITA') 162,561 141,918 460,522 ------------------------------------- --------- --------- -------------
Net interest
Definition
The Group defines net interest as the net total of finance costs and finance income before interest related exceptional items as presented in the Group Income Statement.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ----------------------------------------- --------- --------- ------------- Finance costs before exceptional items (49,427) (40,122) (83,595) Finance income before exceptional items 22,324 17,720 36,980 ----------------------------------------- --------- --------- ------------- Net interest (27,103) (22,402) (46,615) ----------------------------------------- --------- --------- -------------
Constant currency
Definition
The translation of foreign denominated earnings can be impacted by movements in foreign exchange rates versus sterling, the Group's presentation currency. In order to present a better reflection of underlying performance in the period, the Group retranslates foreign denominated current year earnings at prior year exchange rates.
Restated 6 months 6 months ended ended 30 Sept. 30 Sept. 2019 2018 Calculation: Revenue - constant currency GBP'000 GBP'000 ------------------------------------------ ---------- ---------- Revenue 7,311,721 7,418,009 Currency impact (18,446) - ------------------------------------------ ---------- ---------- Revenue - constant currency 7,293,275 7,418,009 ------------------------------------------- ---------- ---------- 6 months 6 months ended ended 30 Sept. 30 Sept. 2019 2018 Calculation: Adjusted operating profit GBP'000 GBP'000 - constant currency ----------------------------------------------- --------- --------- Adjusted operating profit 162,561 141,918 Currency impact (1,268) - ----------------------------------------------- --------- --------- Adjusted operating profit - constant currency 161,293 141,918 ------------------------------------------------ --------- ---------
Effective tax rate
Definition
The Group's effective tax rate expresses the income tax expense before exceptionals and deferred tax attaching to the amortisation of intangible assets as a percentage of EBITA less net interest.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ---------------------------------------------- --------- --------- ------------- Adjusted operating profit 162,561 141,918 460,522 Net interest (27,103) (22,402) (46,615) ---------------------------------------------- --------- --------- ------------- Earnings before taxation 135,458 119,516 413,907 ---------------------------------------------- --------- --------- ------------- Income tax expense 15,370 14,024 56,302 Exceptional deferred tax 44 (628) (685) Deferred tax attaching to amortisation of intangible assets 7,614 6,922 14,747 ---------------------------------------------- --------- --------- ------------- Total income tax expense before exceptionals and deferred tax attaching to amortisation of intangible assets 23,028 20,318 70,364 ---------------------------------------------- --------- --------- ------------- Effective tax rate (%) 17.0% 17.0% 17.0% ---------------------------------------------- --------- --------- -------------
Net capital expenditure
Definition
Net capital expenditure comprises purchases of property, plant and equipment, proceeds from the disposal of property, plant and equipment and government grants received in relation to property, plant and equipment.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ------------------------------------------- --------- --------- ------------- Purchase of property, plant and equipment 91,984 86,341 182,311 Proceeds from disposal of property, plant and equipment (4,282) (4,252) (8,810) Net capital expenditure 87,702 82,089 173,501 ------------------------------------------- --------- --------- -------------
Free cash flow
Definition
Free cash flow is defined by the Group as cash generated from operations before exceptional items as reported in the Group Cash Flow Statement after repayment of lease creditors and net capital expenditure. Following the adoption of IFRS 16, Leases, the Group has redefined 'free cash flow' to include repayment of lease creditors which ensures that the Group's reported free cash flow is consistent with those measures previously reported and consequently the comparative measures have not been restated.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 --------------------------------------- --------- --------- ------------- Cash generated from operations before exceptionals 149,903 173,219 607,505 Repayment of lease creditors (31,818) - - Net capital expenditure (87,702) (82,089) (173,501) --------------------------------------- --------- --------- ------------- Free cash flow 30,383 91,130 434,004 --------------------------------------- --------- --------- -------------
Free cash flow (after interest and tax payments)
Definition
Free cash flow (after interest and tax payments) is defined by the Group as free cash flow after interest paid (excluding interest relating to lease creditors), income tax paid, dividends received from equity accounted investments and interest received. As noted in the definition of free cash flow, interest amounts relating to the repayment of lease creditors has been deducted in arriving at the Group's free cash flow and are therefore excluded from the interest paid figure in arriving at the Group's free cash flow (after interest and tax payments).
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 -------------------------------------------- --------- --------- ------------- Free cash flow 30,383 91,130 434,004 Interest paid (excluding interest relating to lease creditors) (37,624) (39,142) (78,031) Income tax paid (30,221) (12,780) (34,500) Dividends received from equity accounted investments - - 420 Interest received 21,890 17,715 34,831 -------------------------------------------- --------- --------- ------------- Free cash flow (after interest and tax payments) (15,572) 56,923 356,724 -------------------------------------------- --------- --------- -------------
Committed acquisition expenditure
Definition
The Group defines committed acquisition expenditure as the total acquisition cost of subsidiaries as presented in the Group Cash Flow Statement (excluding amounts related to acquisitions which were committed to in previous years) and future acquisition related liabilities for acquisitions committed to during the period.
6 months 6 months ended ended Year ended 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ------------------------------------------- --------- --------------- ------------- Net cash outflow on acquisitions during the period 93,858 249,259 266,525 Net cash outflow on acquisitions which were committed to in the previous period (75,245) (10,488) (14,750) Acquisition related liabilities arising on acquisitions during the period 23,132 33,339 29,946 Acquisition related liabilities which were committed to in the previous period (20,359) (7,171) (4,099) Amounts committed in the current period 54,278 7,000 90,700 ------------------------------------------- --------- --------------- ------------- Committed acquisition expenditure 75,664 271,939 368,322 ------------------------------------------- --------- --------------- -------------
Net working capital
Definition
Net working capital represents the net total of inventories, trade and other receivables (excluding interest receivable), and trade and other payables (excluding interest payable, amounts due in respect of property, plant and equipment and current government grants).
As at As at As at 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ------------------------------------------- ------------ ------------ ------------ Inventories 736,480 728,648 678,006 Trade and other receivables 1,471,835 1,459,337 1,517,507 Less: interest receivable (631) (134) (193) Trade and other payables (2,112,083) (2,134,197) (2,218,838) Less: interest payable 12,335 4,403 5,058 Less: amounts due in respect of property, plant and equipment 2,192 1,912 2,831 Less: government grants 11 11 11 ------------------------------------------- ------------ ------------ ------------ Net working capital 110,139 59,980 (15,618) ------------------------------------------- ------------ ------------ ------------
Working capital (days)
Definition
Working capital days measures how long it takes in days for the Group to convert working capital into revenue.
As at As at As at 30 Sept. 30 Sept. 31 March 2019 2018 2019 GBP'000 GBP'000 GBP'000 ------------------------- ----------- -------------- ----------- Net working capital 110,139 59,980 (15,618) September/March revenue 1,374,838 1,438,866 1,343,551 ------------------------- ----------- -------------- ----------- Working capital (days) 2.4 1.3 days (0.4 days days) ------------------------- ----------- -------------- -----------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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November 12, 2019 02:01 ET (07:01 GMT)
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