(Reuters) - Ireland-based support services company DCC Plc DCC.L reported better-than-expected profit for the first half of the year, helped by growth across its divisions and the impact of a number of acquisitions over the past year.
DCC, whose wide range of services runs from distributing oil to making The Body Shop’s body butters, has announced a record 550 million pounds in deals this year as it seeks to broaden its footprint beyond Europe.
The company announced its first acquisition outside its core markets in April when it agreed to buy Shell's RDSa.L liquefied petroleum gas (LPG) business in Hong Kong and Macau at a value of about 120 million pounds.
Last week, the company agreed to buy NGL Energy Partners LP’s retail West LPG division Hickgas LLC to enter into the US market.
“We acquire other businesses and integrate to create a bigger business within the market and we think we have the opportunity to do that in the U.S.,” Chief Executive Donal Murphy told Reuters in a phone interview after the results, adding that he sees the United States as a good growth opportunity.
The company’s shares rose almost 1 percent in early trade in London on Tuesday.
Murphy, who took over from long-time chief executive Tommy Breen in July, said he could not say how much the company would earmark for further acquisitions, but would like to deploy capital across all four of its businesses.
Allan Smylie, an analyst with Davy Research, said at a conservative estimate the group could spend at least another 700 million pounds on M&A by March 2019.
DCC also reiterated its expectation that profit would rise for the year ending March 2018 compared to the previous year.
Analysts currently expect full year earnings before interest, tax and amortisation to come in at 378 million pounds. Total operating profit for the year to last March was 363.6 billion pounds.
Adjusted operating profit at its liquefied petroleum gas business, which sells LPG and natural gas to industrial, commercial and domestic customers, rose 19.2 percent in the six months ended Sept. 30.
DCC said its adjusted operating profit rose to 122.5 million pounds ($160.5 million) from 107.1 million pounds, a year earlier.
Analysts’ on average had estimated earnings of 118 million pounds.
Revenue rose 16.3 percent to 1.62 billion pounds.
Reporting by Arathy S Nair in Bengaluru; editing by Patrick Graham
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