DCC Plc

[piccadilly]

Anybody bought shares in this company?

[Elzerbelzer]

I bought them in early 2012 at less than €20 - they have since moved to a FTSE listing & Stg£
Most profitable investment ever for me. Only issue is I top sliced a few times as they were getting to be too large a % of my holdings
Track record of divi increases is now 22 years and still very well covered.
They have a tremendous record of acquiring and integrating bolt on acquisitions especially in fuel distribution. They have done a number of deals with the oil majors at lowish multiples, certainly a lot < than their cost of capital.
They are still conservative and have low levels of gearing - from memory they had a placement of 5% about 18 months ago at £48 to fund the Butagaz acquisition. This was the first serious dilution in a long time. They have very strong cash flow which has funded all other acquisitions.
My only long term concern would be the dependence on the oil & gas energy sector but the energy revolution is still many years away.
Management is well incentivised with decent levels of holdings. Their overall pay isn't too exorbitant for a FTSE company.
I have attended their last three AGMs. I'm happy to hold for the long term and ride out any short term weakness - part of which I suspect is exchange related as a large % of their income is Euro denominated.
Their recent trading update was vey bullish. Their results are highly geared to their 6 m/e 31 March, so the Sep results should be weighted accordingly. However they expect results to be ahead of current market expectations and significantly ahead of last year - puts them on a prospective P/E of the mid to high teens. I'm looking for EPS of £3.50 so prospective P/E is 17.5. Yield is circa 1.6%. Might sound a bit pricey but given managements track record, I think it's more than deserved.
Last couple of winters in the UK have been relatively mild. If the coming one is cold, look for a further spike in their results.
All in all a core holding for me
DYOR
Elzerbelzer

[piccadilly]

Thank you for the reply.

The brokers are tipping as a strong buy - but the shares fell last week despite good results.

I don't understand this.

I bought as they dipped and could make a small profit now if I sold - but it seems from what you say there is more to go.