Marketing and business group DCC said the profit contribution from its 49% owned Manor Park Homebuilders is expected to be materially better than market expectations for the year ending March 31, 2006.
However, in a trading update today it said the profit contribution may be materially less in the year to 31 March 2007. DCC said this changed expectation is due to Manor Park earning a significant profit on a transaction that it completed last Friday. DCC had expected the deal to happen next year.
The company also said that planning issues have delayed the start of some planned housing developments by Manor Park, which will defer some profits to its next financial year.
In this morning's trading statement, DCC said it expects to report group operating profit, before contribution from associates, for the year to 31 March 2006 in line with market expectation.
Because of the higher expected profit contribution to DCC from Manor Park in 2006, it said it expects to report early double digit growth in its adjusted earnings per share for the year to 31 March 2006, which is ahead of market expectation.
'Based on DCC's current estimate of the profit contribution to DCC from Manor Park in the year to 31 March 2007, DCC's adjusted earnings per share for the year to 31 March 2007 may be approximately 5% below market expectation,' the statment added.
'The value of DCC's investment in Manor Park has significantly increased over the past year. Manor Park has a large landbank for housing development and other projects in the pipeline from which it should earn substantial profits in the future,' commented DCC's CEO Jim Flavin.
DCC shares closed down 18 cent to €19.02 in Dublin this evening.
