Business services group DCC says it continues to see the adverse impact of the weaker sterling/euro exchange rate and an increasingly difficult trading environment, especially for its Irish businesses.
In a trading update, the company says that despite these problems it has achieved an 'excellent' overall revenue and operating profit performance in its third quarter to the end of December.
It said its largest division, DCC Energy, saw 'substantial' operating profit growth in the three month period. This was due to the favourable impact of much colder weather in Ireland and the UK compared to the previous year as well as from synergies from recent acquisitions.
The firm's second largest division, DCC SerCom, saw double digit operating profit growth in its seasonally most important quarter.
However, DCC said that trading conditions in its Healthcare and Environmental divisions were more difficult that previously predicted and operating profit fell in both of these. Operating profits in its Food and Beverage also fell - as expected.
DCC said it expects to see earnings growth of between 13-15% for the year to the end of March. It estimates that sterling profits will represent about 72% of its operating profit in the current financial year. Due to seasonal factors, this will increase to 79% in the fourth quarter.
DCC said that if sterling profits for the year to March 2010 were similar to those anticipated for the current year and the sterling/euro exchange rate of 90 pence sterling held steady for the year, its operating profit would be adversely impacted by about €10m.
'The group is operating against a background of deteriorating economic conditions in its main geographic markets and is increasingly focused on cost efficiencies,' commented CEO Tommy Breen in today's trading update.
'Our strong balance sheet leaves us well placed both commercially and financially to take advantage of opportunities arising in these more challenging times,' he added.
Shares in the company closed up 10 cent at €11.35 in Dublin.
