DCC Energy (LSE:DCC) on Tuesday told investors that first-half adjusted continuing operating profit rose 1.1% to £175.2 million for the six months to 30 September, as strong trading in Energy Products and Mobility offset what the company called very challenging conditions in Energy Services.
The London-listed energy products and services group, which changed its name from DCC in July, reported the results against the backdrop of its agreed takeover by a consortium led by Energy Capital Partners and KKR, which shareholders approved in September and which is expected to complete in the first quarter of 2027.
Adjusted continuing earnings per share rose 25.6% to 120.5p, which the company attributed primarily to the lower weighted average share count following the £100 million buyback and £600 million tender offer completed in the prior year.
Free cash flow conversion reached 119% on a rolling 12-month basis, up from 95% in the prior year.
Net debt excluding lease creditors stood at £828.0 million at 30 September, against £522.3 million a year earlier.
Within Solutions, which houses Energy Products and Energy Services, operating profit fell 4.3% to £97.4 million; Energy Products operating profit rose 5.5% despite a 2.5% fall in volumes, which the company linked to a pull-forward of demand into March, economisation, above-average temperatures and dry conditions curbing agricultural demand.
Energy Services operating profit fell 56.3% to £7.0 million, with the company saying heightened customer interest in energy resilience linked to the conflict in the Middle East did not translate into a material improvement in demand.
Mobility operating profit rose 8.9% to £77.8 million, with fuel volumes down 4.7% but margins and non-fuel services, up 22.1% in gross profit, more than offsetting the volume decline.
DCC Energy committed £214 million to acquisitions since its May full-year results, including the agreed purchase of Shell's Mobility and Convenience business in France, covering 70 service stations and an associated fuel card business, alongside deals in Poland, the US, Ireland and Germany; most have yet to complete, and the acquisitions did not contribute to first-half profit.
The group's agreed sale of Nexora, its technology division, to One Equity Partners for an enterprise value of $725 million was announced in October and is expected to complete on or after 1 March 2027, subject to regulatory approvals.
Read more about DCC
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Chief executive Donal Murphy said the disposal "will complete the simplification programme which we began in November 2024", which has already seen the sale of DCC Healthcare and DCC Technology's Info Tech business.
"DCC Energy now looks ahead to the future with confidence. Following shareholder approval of the recommended acquisition by the consortium led by Energy Capital Partners and KKR, we expect to transition to private ownership in the first quarter of 2027, subject to the satisfaction of the remaining conditions," Murphy said.
Consistent with the terms of the recommended acquisition and as set out in the scheme document, the company will pay no interim dividend in November, compared with 69.50p a year earlier.
The group recorded a net exceptional charge after tax of £371.1 million, including a non-cash impairment of £348.3 million tied to the expected proceeds on the Nexora disposal, along with £8.2 million of costs related to the recommended acquisition.
Completion of the Dragon Bidco takeover remains subject to the satisfaction of remaining conditions and sanction of the scheme by the Irish High Court, with effectiveness still targeted for the first quarter of 2027.