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DCC focusing on Europe with expansion plans

By John Mulligan

EMO Oil owner DCC will continue to deploy the most of its acquisition capital in Europe over the next 18 months as it eyes opportunities to expand its fuel activities in the region, according to outgoing chief executive Tommy Breen.

The Irish FTSE 100 company, which also has technology and medical distribution businesses, announced last month that it had made its first foray outside Europe, agreeing to buy Shell's LPG activities in Hong Kong and Macau in a deal that places a £120m enterprise value on the business. DCC owns home-heating oil brand Emo Oil in Northern Ireland.

"We do believe there'll be an opportunity in south east Asia to build a bigger LPG business, but that's in the medium-term," Mr Breen said. "We're not saying that the only acquisitions will be in Europe, but I think in the next 12 to 18 months the likelihood is that there's still plenty of opportunity for us in Europe, and I think that's where the lion's share of the capital will go."

DCC committed £554m to acquisitions in the past financial year.

In February it announced plans to buy Esso's 142-strong company-owned forecourt chain in Norway. In January, DCC bought 97% of France's Gaz Europeen.

Mr Breen was speaking as DCC reported full-year results, with its operating profit rising 21% to £345m as it benefited from a euro translation effect given the weakness of sterling.

On a constant currency basis, meanwhile, operating profits were 13% higher.

Revenue in the 12 months to the end of March, excluding fuel, rose 9% to £3.2bn.

The company plans to raise its final dividend by 16.3%, resulting in a 15% rise in the total dividend for the year. Including fuel sales, revenue was up 17.4% to £12.2bn.

Despite what analysts said were good results and strong cashflow generation by DCC, shares in the company fell more than 3% soon after the opening bell in London.

The group's fuel sale volumes in the financial year rose 12.5% to 14.6 billion litres, and its operating profit at its energy division - its biggest unit - rose 24.3% to £254.9m.

The company benefited from the full-year inclusion of its Butagaz LPG business in France, which it bought in 2015.

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