Shares in business support services company DCC soared in London trade today after it said it will focus on the energy sector and has begun preparations for the sale of its healthcare unit, which is expected to complete in 2025.
DCC also said it will review strategic options for its Technology division within the next 24 months.
Since it was founded in 1976, DCC said its strategy has been to buy and develop businesses, maximising return on capital, cash generation, management development and operational excellence.
Its shares closed 17% higher in London trade today.
It has been run as three divisions, Energy, Healthcare and Technology since 2014.
It sells LPG, operates service stations and electric vehicle fast-charging networks and distributes medical and electronic products. Its brands include Certa, Flogas, Certas Energy and Fannin.
DCC Healthcare comprises DCC Vital, which supplies medical products and devices to hospitals and GP surgeries across the UK, Ireland, and Europe, and DCC Health and Beauty, which develops and manufactures nutritional supplements and beauty products for brands including Estee Lauder and Vitabiotics.
DCC Technology has grown strongly over the last decade and provides products and services across three product areas - Pro Tech, Life Tech and Info Tech.
Donal Murphy, DCC's chief executive, said the company was announcing decisive actions today to simplify the group, pursue its largest growth and returns opportunity and unlock substantial shareholder value, from positions of strength.
"This aligns with our philosophy of disciplined capital allocation," he stated.
"In the energy sector we are building a unique, multi-energy, sustainable business focused on supporting our customers with their energy transition. Our strategy will deliver strong profit growth, high returns and a significant reduction in our customers carbon emissions," he said.
"Our Healthcare and Technology divisions have a long and successful heritage in DCC. They are high quality businesses, led by strong, entrepreneurial management teams. Our actions are designed to ensure that these businesses and our people have the best opportunity to grow and progress," he added.
DCC also reported results for the six months to the end of September today - the seasonally less
significant first half of the year - which showed a dip in revenues but increases in adjusted operating profits and adjusted earnings per share.
Revenues for the six month period dipped by 3% to £9.325 billion from £9.616 billion - mainly due to lower revenue in DCC Energy where average commodity prices were lower.
Its adjusted operating profits rose by 4.7% to £259.3m from £247.6m and adjusted earnings per share grew by 6.2% to 158.5 pence from 149.3 pence.
DCC said its interim dividend increased by 5% to 66.19 pence per share.
Since its final results in May, DCC has committed about £130m to eight bolt-on acquisitions.
The largest acquisitions were in DCC Energy: Wirsol in Germany, a solar photovoltaic (PV) and battery storage business; and Acteam ENR, a French solar PV business.
During the six month period, DCC also disposed of a majority stake in its liquid gas business in Hong Kong & Macau.
Breaking down its divisions, the company said its DCC Energy division saw its operating profits rose by 7% to £182.7m from £170.6m on the back of acquisitions in Energy Solutions and good organic growth in Energy Mobility.
It sold 7.1 billion litres of product in the first half, 1.1% behind the previous year.
Operating profits at its DCC Energy Solutions grew by 8.7% to £113.1m from £104.1m with volumes in line with last year.
The company noted that the division's performance in Ireland was robust, after a very strong prior year, while volumes across the UK and Ireland in liquid gas and liquid fuel were in line with last year.
Meanwhile, operating profits at its DCC Energy Mobility division rose by 4.5% to £69.6m from £66.5m the same time last year.
DCC said revenue at its DCC Healthcare division fell by 1.3% to £415.1m from £420.5m while half year operating profits dipped 0.4% to £38.1m from £38.3m.
It said the business has implemented a range of strategic initiatives to drive revenue growth and cost
optimisation, including strengthening the leadership team, driving product and process innovation, and re-branding its consumer health business as it drives increased customer engagement.
DCC said that against the backdrop of continued weak market conditions, DCC Technology performed robustly and in line with expectations. Operating profits at the business fell by 0.4% to £38.5m from £38.7m while revenues rose by 1.2% to £2.321 billion from £2.294 billion.
Donal Murphy, DCC's CEO, said the company delivered good profit growth in the first half of its financial year.
"Although the macro environment remains volatile, our resilient business continued to perform well," he said.
"Our disciplined approach to capital allocation is aligned with our strategic priorities to give all our customers the power to choose a cleaner energy future," he added.
