18 May 2021

DCC Reports Very Strong Performance, Returns and Development

DCC, the leading international sales, marketing and support services group, is today announcing its results for the year ended 31 March 2021.

·    Strong growth in Group adjusted operating profit, up 7.3% (6.6% on a constant currency basis) to £530.2 million, ahead of market expectations. Approximately half of the constant currency growth was organic.

·    All divisions of DCC recorded growth in operating profit, despite the challenging trading environment.

·    A very strong working capital performance resulted in excellent free cash flow of £687.8 million and free cash flow conversion of 130%.

·    Return on capital employed, the Group's key metric, increased to 17.1%.

·    A proposed 12.6% increase in the final dividend will see the total dividend for the year increase by 10.0%, DCC's 27^th consecutive year of dividend growth.

·    DCC remains very active from a development perspective. The Group committed approximately £375 million to acquisitions in the period, including further bolt-on acquisitions announced today of £55 million. Each division was acquisitive during the year, including the significant expansion of DCC LPG's business in the US with the acquisition of UPG and the initial entry by DCC Healthcare into the German and Swiss primary care markets through the acquisition of Wörner.

·    DCC is committed to sustainability and leading by example in energy transition. The Group recently adopted a Net Zero 2050 (or sooner) target for its Group scope 1 and scope 2 emissions with an interim target of a 20% reduction by 20254.

·    DCC also continues to make good progress in enabling its customers to transition to cleaner energy solutions. Amongst other initiatives, during the year the Group expanded its EV fast-charging infrastructure by 50%, increased biofuel penetration to 11% of transport fuel volumes, acquired two solar businesses in France to add further capability to its strong platform in the market, transitioned all of DCC's growing power customer base in Ireland to renewable power and continued to convert customers to LPG, significantly reducing the carbon emissions of the customer.

·    Although the uncertainty created by the Covid-19 pandemic continues, DCC expects that the year ending 31 March 2022 will be another year of profit growth and development.

1 Excluding net exceptionals and amortisation of intangible assets

2 After net working capital and net capital expenditure and before net exceptionals, interest and tax payments

3 Excluding the impact of IFRS 16 Leases. Current year ROCE including the impact of IFRS 16 Leases is 15.7%

4 The base year for the interim target is 2019

Commenting on the results, Donal Murphy, Chief Executive, said:

"I am delighted to report that DCC has continued its excellent track record of growth and development, despite the unprecedented challenges during the year. The performance is testament to our 13,700 colleagues who worked tirelessly this year to ensure DCC's essential products and services were supplied to the millions of customers and end users who rely on us. A strong trading performance, excellent cash generation, very strong returns on capital employed and continued development activity are hallmarks of DCC's resilient business model. DCC has always put sustainability at the heart of our strategy. During the year, we committed both to interim targets and to ultimately reach net zero emissions from the Group's own operations by 2050 or sooner.

We remain active from a development perspective and are ambitious to build DCC into a global leader in our chosen sectors. We continue to have the platforms, opportunities and capability to do so. The Group is well placed to navigate the ongoing uncertainty, build on our momentum and continue DCC's growth and development into the future."

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Divisional Performance Reviews

DCC LPG performed resiliently throughout the year, notwithstanding the difficult conditions within the commercial and industrial sectors resulting from the Covid-19 pandemic. Despite trading behind the prior year for the first half of the financial year, DCC LPG recovered well and delivered modest operating profit growth for the full year, benefiting from acquisitions in the US market and the gradual easing of Covid-19 restrictions. Operating profit increased by 1.3% (0.3% on a constant currency basis) to £231.3 million.

Volumes increased by 3.8% driven by acquisition activity in the US and Ireland. Organic volumes declined modestly (-2.1%) due to lower commercial and industrial demand, which particularly impacted the British and Irish businesses given their weighting towards these sectors. Operating profit per tonne reduced modestly due to the mix impact of acquisition activity. A very good procurement performance ensured that the rising cost of product throughout the year did not materially impact profitability. 

The French business performed well, benefiting in particular from strong cylinder demand, good procurement and cost control. Leveraging its strong brand, operations and supply chain in cylinders, the business strengthened its market position during the year and benefited from the introduction of both home delivery and bioLPG cylinders, as well as the 'Click and Collect' offering launched previously. These innovations proved attractive during the Covid-19 restrictions. The business maintains a leading position in LPG in the French market and it also continues to broaden its energy product and service offering to customers. Having introduced natural gas, electricity, wood pellets and bioLPG in recent years, the French business recently acquired two modest businesses providing solar photovoltaic ('PV') design, build and maintenance solutions. These services will complement its strong position in the retail and domestic LPG segments and its increasing presence in the commercial LPG, natural gas and power markets, enabling the business to offer increased solutions to customers.

In Britain and Ireland, DCC LPG recorded good growth with domestic and cylinder customers. However, this was offset by a decline in demand in the commercial and industrial sectors which were most impacted by Covid-19 restrictions. The business continued to invest in its 'Oil2LPG' offering, as customers are attracted to the lower energy cost and carbon intensity of LPG. The conversion of an existing LNG facility in Avonmouth into a large LPG storage terminal has progressed in line with expectations and is targeted to become operational in 2022. Once operational, the facility will improve the supply position of the British business. In Ireland, the natural gas and power business performed well and successfully integrated the recently acquired Budget Energy, and its attractive renewable energy offering, into its existing operations.

The US business delivered strong volume and operating profit growth during the year. It benefited from its weighting towards domestic customers where demand was resilient during lockdown and from the acquisitions of NES (September 2020) and UPG (January 2021). These acquisitions have considerably expanded the scale of DCC LPG's market presence in the US with the business now operating in 21 states compared to 10 states a year ago. The business has almost doubled its customer base to over 230,000 during the year.  The business in Hong Kong & Macau performed well during a difficult year for the region and continued to grow its customer base, adding several new large residential estates.

DCC Retail & Oil delivered good growth in operating profit and further improved its very strong return on capital employed, despite the disruption experienced across all economies during the year. Operating profit increased to £144.8 million, 3.3% ahead of the prior year (2.1% on a constant currency basis), almost all of which was organic. The good organic performance reflects the continuing focus on providing customers with essential liquid fuel products, increasing penetration of value-added products and services including lower emission fuels, and good cost control. The business continues to develop its customer offering, launching a number of digital initiatives in Scandinavia during the year designed to improve customer experience and also continued its successful roll out of EV charging. Across the division, DCC Retail & Oil grew fast charging points by 50% in the year.

DCC Retail & Oil sold 10.2 billion litres of product, a decline of 12.3% on the prior year (12.5% decline organically). Having been significantly adversely impacted in the first quarter by the Covid-19 restrictions, commercial and transport volumes improved steadily thereafter, reflecting the increased activity levels and mobility of customers, albeit mostly to lower levels than the prior year and variable by geography, depending on the severity of restrictions. The business experienced good demand in the domestic and agricultural sectors, particularly in Britain, Denmark, Austria and Ireland.

The business in Britain and Ireland performed robustly, given the material decline in volumes across the commercial, industrial and transport markets. The Covid-19 restrictions and related home working drove higher than typical domestic demand in the first quarter, including strong demand for premium products, which offer customers a cleaner alternative to standard heating fuels. The business continued to make good progress in developing its retail site network, increasing its in-store, non-fuel sales in Britain, acquiring seven retail sites in the North East of England and fully integrating 22 former Tesco sites in Ireland. The recent investments in broadening the product and service offering of the business continued to deliver, with profits increasing in truck-stop and roadside services. The business also completed further bolt-on acquisitions in lubricants in Britain and bulk distribution in Ireland.

The Scandinavian business performed strongly, driven by a very good performance in the retail sector, while also benefiting from strong demand from agricultural and commercial customers. Although all markets in Europe experienced volume disruption, Scandinavia, and Sweden in particular, experienced relatively less disruption.  Across Scandinavia, the business continued to see momentum in assisting customers to lower their carbon emissions by increasing the penetration of bio products, including Hydrogenated Vegetable Oil ('HVO').

In France, the business experienced significant volume declines from Covid-19 restrictions in April and May. From that point, the business recovered steadily and although faced with further restrictions on mobility throughout the year, subsequent restrictions had a more modest impact. The unmanned network performed well, reflecting customer preference for the local, low-cost, pay-at-the-pump model and a reduced propensity to use public transport. During the year the business also made good progress in improving the offering in the network, rolling out both lower emission E85 fuel and Ad-Blue, a product that lowers nitrogen oxide emissions from diesel engines. The Austrian business recorded strong profit growth driven by higher domestic demand in the first half of the year and continued to benefit from its focus on offering premium, cleaner products to customers.

The reported prior year figures include DCC Healthcare's UK generic pharmaceutical activities and related manufacturing facility in Ireland (Kent Pharma and Athlone Laboratories) which were disposed of in September 2019. Accordingly, the analysis and commentary below relate to the activities of DCC Healthcare which continue to be part of the Group.

DCC Healthcare delivered another strong performance, generating excellent operating profit growth of 45.9% on a continuing basis, more than half of which was organic. DCC Health & Beauty Solutions generated very strong organic growth in nutritional products and also benefited from the prior year acquisitions in the US.  DCC Vital also generated good growth, benefiting from its rapid response to changes in the product and service needs of the healthcare systems of Britain and Ireland. 

DCC Health & Beauty Solutions, which provides outsourced solutions to international nutrition and beauty brand owners, recorded excellent operating profit growth. The business benefited from its significantly expanded presence and enhanced capability in the US nutrition market, where the prior year acquisitions of Ion Labs (November 2019) and Amerilab Technologies (March 2020) each delivered very strong profit growth.  The nutrition sector globally has seen increased focus from consumers on preventative healthcare, which is accelerating growth in both consumer penetration and consumption of nutritional products.  DCC Health & Beauty Solutions responded quickly to increased demand from its customers in both Europe and the US, enabled by its high-quality facilities and agile business model.  The business generated strong growth across the breadth of its product and form-factor offering, and in particular experienced increased demand for immunity-related products, with heightened consumer awareness of this product category post the onset of the Covid-19 pandemic. DCC Health & Beauty Solutions also performed very well in the beauty sector. The business continued to enhance its customer and product mix, moving the weighting further towards premium, complex products for leading cosmetic and consumer healthcare brands.

DCC Vital, which is focused on the sales and marketing of medical products to healthcare providers, generated strong revenue and operating profit growth. Activity in the British and Irish healthcare systems was significantly impacted by the Covid-19 pandemic and resulted in substantially lower routine hospital procedures and in-person GP consultations. Despite these challenges, DCC Vital delivered good growth as it leveraged the breadth of its product range, its robust supply chain and extensive market reach to respond quickly and effectively to Covid-19 driven demand for PPE, ICU-related medical devices and other healthcare products. The business also benefited from the modest bolt-on acquisitions completed during the prior year and improved its operating margin as it exited a number of lower margin logistics services contracts in the UK. Importantly, DCC Vital has also now expanded its activities into continental Europe with the completion in April 2021 of the acquisition of Worner, a leading primary care supplier in Germany and Switzerland. The acquisition provides DCC Vital with another growth platform in primary care and provides an opportunity to expand DCC Vital's broader activities into Continental Europe.

DCC Technology delivered very strong operating profit growth of 11.0% (11.8% on a constant currency basis), approximately three quarters of which was organic. Although the Covid-19 pandemic created significant uncertainty across both retail and B2B markets, DCC Technology responded well to this uncertainty and benefited from the breadth of its customer base and product and service offering.

The significant impact of the pandemic on customer behaviour saw strong demand throughout the year for higher volume, lower margin consumer and working-from-home products, particularly through etail and non-traditional retail channels. Trading conditions in the higher margin B2B sectors, such as the Pro AV product category, remained challenging through the year. Given the difficult market conditions in the first half of the year and changing demand patterns, DCC Technology delivered a good cost control performance. As the year progressed, the business resumed investment in its product and service offering generally.

The North American business performed very well, delivering strong organic revenue and operating profit growth. Sales of 'entertainment at-home' products, including consumer electronics, Pro Audio and music products, grew very strongly and the mobile living products introduced in the prior year also performed well. As in other markets, the business in North America experienced significantly lower demand in the Pro AV sector, where spend across large event, conference, and other 'at-work' locations was postponed. Despite the impact of the pandemic, the business remained active from a development perspective in North America and completed two complementary bolt-on acquisitions (The Music People and JB&A) which have strengthened DCC Technology's developing market presence and product portfolio.

In the UK, the business experienced strong demand for lower margin consumer products from etailers, grocers and non-traditional retailers and from B2B customers offering mobility and working-from-home products. This strong demand was more than offset by a reduction in sales of higher margin Pro AV, enterprise and other B2B categories and as a result, operating profit was modestly behind the prior year. Despite the challenges of remote working, the business successfully transitioned to its new ERP system (SAP) during the first half of the year and this significant investment will enhance the service offering to all customers and suppliers. The business in Ireland performed strongly, with good organic revenue and operating profit growth driven by demand for consumer and mobile products which more than offset reduced demand in the B2B sectors.  

In Continental Europe, the business generated good organic revenue and operating profit growth.  Sales of consumer and working-from-home products grew strongly, while the trading environment for B2B products remained challenging, particularly in the DACH region. In France, the consumer business benefited from operational improvements and a significant increase in sales of products from key vendors. The French B2B business also performed well, driven by strong growth in its range of own-brand accessories. In April 2021, the business completed the acquisition of Azenn, which will complement and enhance the product and service offering to DCC Technology's B2B customers in France. The business in the Benelux region also performed well, leveraging its technology-enabled services and customer integration capability, which particularly benefited e-tailers and retailers during the challenging pandemic trading environment. In Scandinavia, the business also reported strong revenue and profit growth, particularly in the consumer category. 

Group Financial Review

A summary of the Group's results for the year ended 31 March 2021 is as follows:

Income Statement Review

Reporting currency 

The Group's financial statements are presented in sterling, denoted by the symbol '£'. The principal exchange rates used for the translation of results into sterling are set out in note 3, Reporting Currency, on page 24. The net impact of currency translation on the Group Income Statement versus the prior year was modest, with average sterling exchange rates marginally weakening against euro.

Revenue

Overall, Group revenue decreased by 9.1% to £13.4 billion primarily driven by lower activity levels in DCC Retail & Oil and the lower oil price that prevailed during the year.

Volumes in DCC LPG increased by 3.8% to 2.3 million tonnes, driven by acquisitions completed during the year in the US and Ireland. Organically, volumes declined by 2.1% as lower commercial and industrial demand during Covid-19 restrictions was somewhat offset by good demand from cylinder and domestic heating customers.

DCC Retail & Oil volumes of 10.2 billion litres were 12.3% behind the prior year (a decline of 12.5% organically) reflecting lower demand for transport and commercial fuels during Covid-19 restrictions.

Combined revenue in DCC Healthcare and DCC Technology was £5.1 billion, an increase of 14.4%, driven by strong organic revenue growth in DCC Technology and the first-time contributions of acquisitions.

Group adjusted operating profit

Group adjusted operating profit increased by 7.3% (6.6% on a constant currency basis) to £530.2 million and approximately half of the constant currency growth was organic. The growth was driven by the excellent organic performance in DCC Healthcare and the strong organic growth in DCC Technology, along with the contribution from acquisitions completed in the current and prior year.

The strong growth in Group adjusted operating profit was achieved in uncertain and difficult trading conditions throughout the year. In particular, the first quarter of the financial year was difficult, given the first-time imposition of Covid-19 restrictions across all economies where the Group operates. The Group responded well to these challenges and continued to meet the needs of customers. During this time, the Group initiated cost management initiatives including cessation of all discretionary or nonessential expenditure and certain of the Group's operations placed employees on temporary working arrangements and utilised government schemes to support the continued employment of staff in those parts of their businesses that experienced much reduced activity levels. All furlough or similar employee related government supports received during the year have now been repaid. Whilst uncertainty prevailed throughout the year, as demand began to recover during the second quarter and trading conditions improved, DCC again adapted, recommencing expenditures in areas that had been curtailed, including development capital expenditure, and delivered strong growth in operating profit in the remainder of the financial year.

Although behind for the first half of the financial year, DCC LPG recovered during the second half and delivered modest growth for the full year. Operating profit increased by 1.3% (0.3% on a constant currency basis) to £231.3 million and declined modestly organically, with the recovery in the second half benefiting from the gradual easing of Covid-19 restrictions and the acquisitions completed in the US.

Operating profit in DCC Retail & Oil increased to £144.8 million, 3.3% ahead of the prior year (2.1% ahead on a constant currency basis) almost all of which was organic. The good organic performance reflects the continuing focus in providing customers with essential liquid fuel products, increasing penetration of value-added products and services including lower emission fuels, and good cost control.

DCC Healthcare generated strong profit growth on its continuing activities (i.e. excluding the UK generic pharma activities disposed of in September 2019 of 45.9%, two thirds of which was organic, reflecting strong organic growth in nutritional products in DCC Health & Beauty Solutions and the benefit of the prior year acquisitions in the US.  DCC Vital also generated good growth, benefiting from its rapid response to changes in the product and service needs of the healthcare systems in Britain and Ireland. 

DCC Technology delivered very strong operating profit growth of 11.0% (11.8% on a constant currency basis) during the year, approximately three quarters of which was organic. Although the pandemic created significant uncertainty across both retail and B2B markets, DCC Technology responded well to this uncertainty and benefited from the breadth of its customer base and product and service offering.

Finance costs (net) and other

Net finance costs and other increased to £59.1 million (2020: £54.3 million). The increase reflects the interest charge associated with higher average lease creditors due to the growth of the Group, a reduction in interest earned on deposits given lower base rates, a higher average gross debt balance during the year and a lower contribution from the Group's modest joint venture arrangements.  The average net debt, excluding lease creditors, was £215 million, compared to an average net debt of £342 million in the prior year, and reflects the excellent working capital performance throughout the year. The Group's private placement debt, which is the primary driver of finance costs, decreased modestly by year end versus the prior year reflecting the repayment of private placement debt and the strengthening of sterling against the euro and US dollar. Interest was covered 13.2 times¹ by Group adjusted operating profit before depreciation and amortisation of intangible assets (2020: 13.0 times).

¹Using the definitions contained in the Group's lending agreements

Profit before net exceptional items, amortisation of intangible assets and tax

Profit before net exceptional items, amortisation of intangible assets and tax increased by 7.1% to £471.1 million. 

Net exceptional charge and amortisation of intangible assets  

The Group incurred a net exceptional charge after tax and non-controlling interests of £35.0 million (2020: net exceptional charge of £63.0 million) as follows:

There was a net cash outflow of £29.4 million relating to exceptional items.

Restructuring and integration costs and other of £26.9 million relates to restructuring of operations as part of the integration of completed acquisitions across a small number of businesses. It includes the costs related to the restructuring of DCC LPG's consumer gas and power business in France where a new partnership with a third party has been created to better leverage the strong brand presence while reducing risk associated with this market in France. It also includes the reducing dual running costs relating to the DCC Technology's UK SAP implementation which went live during the summer in the majority of the UK business. DCC Technology also incurred restructuring costs across a number of businesses where some right-sizing was required given the change in mix in the business as a result of the pandemic.

Acquisition and related costs include the professional fees and tax costs relating to the evaluation and completion of acquisition opportunities and amounted to £13.6 million.

The level of ineffectiveness calculated under IAS 39 on the Group's US private placement market debt and related hedging instruments is charged or credited as an exceptional item. In the year ended 31 March 2021, this amounted to an exceptional non-cash gain of £1.4 million. The cumulative net exceptional charge taken in respect IAS 39 ineffectiveness is £0.7 million. This, or any subsequent similar non-cash charges or gains, will net to zero over the remaining term of this debt and the related hedging instruments.  

The charge for the amortisation of acquisition-related intangible assets increased to £66.9 million from £62.1 million in the prior year reflecting acquisitions completed in the current and prior year.

Profit before tax

Profit before tax increased by 17.2% to £365.1 million.

Taxation

The effective tax rate for the Group was consistent with the prior year at 17.0%. The Group's effective tax rate is influenced by the geographical mix of profits arising in any year and the tax rates attributable to the individual territories.

Adjusted earnings per share

Adjusted earnings per share increased by 6.6% to 386.62 pence, reflecting the increase in profit before exceptional items and goodwill amortisation.

Dividend

The Board is proposing a 12.6% increase in the final dividend to 107.85 pence per share, which, when added to the interim dividend of 51.95 pence per share, gives a total dividend for the year of 159.80 pence per share. This represents a 10.0% increase over the total prior year dividend of 145.27 pence per share. The dividend is covered 2.4 times by adjusted earnings per share (2020: 2.5 times). It is proposed to pay the final dividend on 22 July 2021 to shareholders on the register at the close of business on 28 May 2021. 

Over its 27 years as a listed company, DCC has an unbroken record of dividend growth at a compound annual rate of 13.9%.

Return on capital employed

The creation of shareholder value through the delivery of consistent, sustainable long-term returns well in excess of its cost of capital is one of DCC's core strategic aims. The return on capital employed by division was as follows:

The Group continued to generate very strong returns on capital employed, notwithstanding the substantial increase in the scale of the Group in recent years. The increase in return on capital employed versus the prior year reflects the good organic operating profit performance and excellent working capital management across each division of DCC.

The adoption of IFRS 16 on 1 April 2019 had a material impact on the Group's financial statements, creating a significant right-of-use leased asset and corresponding lease creditor. The net impact on the Group's current year return on capital employed was, as anticipated, a reduction of 1.4%.

Cash Flow, Development and Financial Position

Cash flow

The Group generated excellent operating and free cash flow during the year as set out below:

The Group's operating cash flow amounted to £842.3 million, compared to £665.8 million in the prior year, an increase of 26.5%.

Working capital decreased by £177.7 million. Each division of DCC delivered an excellent underlying working capital performance throughout the year. Both energy divisions achieved improved terms in some material supply contracts during the year, while DCC Healthcare and DCC Technology both achieved stock efficiencies.    The year-end working capital position benefited from the timing of the year end just prior to the Easter holiday period, which resulted in very strong cash collections and from relatively higher utilisation of supply chain financing.  DCC Technology selectively uses supply chain financing solutions to sell, on a non-recourse basis, a portion of its receivables relating to certain larger supply chain/sales and marketing activities. The level of supply chain financing at 31 March 2021 was £25 million higher than the prior year, consistent with the increased sales to very large etail and retail customers. Supply chain financing had a positive impact on Group working capital days of 4.9 days (31 March 2020: 5.1 days) or £232.6 million (2020: £207.8 million).

Overall working capital days were negative 4.3 days sales, compared to negative 0.6 days sales in the prior year.

As illustrated in the table below, net capital expenditure amounted to £146.9 million for the year (2020: £167.8 million) and was net of disposal proceeds of £15.9 million (2020: £13.2 million). The level of net capital expenditure reflects continued investment in organic initiatives across the Group, supporting the Group's continued growth and development.

Capital expenditure in DCC LPG primarily comprised investment in relation to the Avonmouth LPG storage facility in the UK and further development expenditure to support the continued growth of the business, primarily in tanks (supporting the conversion of oil customers to LPG) and cylinders (including for bioLPG cylinders and the continued rollout of 'Click and Collect'). In the Retail & Oil division, there was continued investment in new retail sites and site upgrades, including adding further lower emission product capability, AdBlue and EV fast charging. It also included capital expenditure in relation to the ongoing project to optimise the depot network in the UK to bring greater network and capital efficiency over time. In DCC Healthcare, the capital expenditure primarily related to increased manufacturing capacity and additional product capability across DCC Health & Beauty Solutions, both in Europe and the US, to facilitate the strong growth in customer demand. The majority of capital expenditure in DCC Technology related to the SAP implementation which is now live in the UK business. Net capital expenditure for the Group exceeded the depreciation charge (excluding depreciation on right-of-use leased assets) in the year by £15.7 million. 

The Group's free cash flow amounted to £687.8 million, representing an excellent 130% conversion of operating profit into free cash flow.

Committed acquisition and net capital expenditure

Committed acquisition spend since the prior year preliminary results statement and net capital expenditure in the current year amounted to £521.5 million. An analysis by division is shown below:

Throughout the year, DCC has remained very active from a development perspective, notwithstanding the difficulties caused by the pandemic. Since the results announcement for the year ended 31 March 2020 in May 2020, DCC has committed approximately £375 million to new acquisitions across Europe and North America. The Group has the platforms, opportunities and capability to build the Group into a global leader in its chosen sectors. Recent acquisition activity of the Group includes:

DCC LPG

France solar acquisitions

In recent months the French LPG business has acquired two modest solar photovoltaic ('PV') businesses in France. The acquisitions further extend DCC LPG's product and service offering in the French energy market. The acquired businesses help customers design, build and manage their solar installations and provide energy management services. The businesses are based in west and south west France and mostly serve a commercial customer base of agricultural, manufacturing and public sector customers. Integrating the acquisitions into the broader product offering in France will allow DCC LPG to cross-sell the offering to new and existing customers. Following the acquisitions, DCC LPG now provides LPG, bioLPG, natural gas, power, solar and wood pellet offerings to its customer base in France.

United Propane Gas ('UPG')

In January 2021, DCC LPG completed the acquisition of UPG, materially expanding its presence in the US LPG market. Headquartered in Paducah, Kentucky, the business employs approximately 360 people, has over 110,000 active customers and sells approximately 120,000 tonnes of LPG annually from 80 operating locations. Together with a smaller bolt-on acquisition completed in Colorado in December 2020, the combined enterprise value of the transactions was $145 million (£106 million). UPG is DCC LPG's largest acquisition since initially entering the US market in April 2018 and follows the material bolt-on acquisitions of NES Group in September 2020 and Pacific Coast Energy in April 2019. It is a further significant step in the execution of the strategy to build a business of scale in the highly attractive and growing US LPG market. The acquisition will considerably expand DCC LPG's geographic presence from 14 to 21 states, will almost double its customer base to over 230,000 customers and the combination will create the sixth largest business in the highly fragmented US LPG market.

NES Group

In September 2020, DCC LPG completed the acquisition of NES Group in the US market. Headquartered in Brooklyn, Connecticut, the business employs approximately 70 people, has over 22,000 active customers and sells approximately 40,000 tonnes equivalent of product annually.

Primagaz

During September 2020, DCC LPG agreed to acquire Primagaz from SHV Energy, subject to competition authority approval. The business is highly complementary to DCC LPG's existing business in the Benelux region. Primagaz, which focuses on the bulk and cylinder LPG markets, serves approximately 10,000 customers and supplies over 28,000 tonnes of LPG annually. The transaction is expected to complete during the first quarter of the current financial year.

DCC LPG also completed a number of other small bolt-on acquisitions during the year in the US, Germany and Austria.

DCC Retail & Oil

In April 2021, DCC Retail & Oil agreed to acquire Jones Oil in Ireland, subject to competition authority approval. The business distributes liquid fuels across the domestic, agricultural, commercial, industrial, and marine markets throughout Ireland. In December 2020, DCC Retail & Oil acquired Campus Oil Ireland ('Campus'). The acquisition of both Jones Oil and Campus are complementary to DCC's existing liquid fuels distribution business in Ireland. DCC Retail & Oil also recently completed the acquisition of a small bolt-on acquisition in the lubricants sector in the UK, building further scale in this growing business area. In addition, DCC Retail & Oil recently agreed to acquire a small portfolio of convenience service stations in the north of England and a small bolt-on acquisition in the retail market in Austria.

DCC Healthcare

Wörner

In April 2021, DCC Healthcare acquired Wörner Medizinprodukte Holding GmbH ('Wörner'), a leading supplier of medical and laboratory products to the primary care sector in Germany and Switzerland. Wörner sells a broad product range to approximately 20,000 customers annually, including general practitioners, primary care centres, specialist medical centre and laboratories. The business recorded revenue of approximately €70 million in 2020 and employs 158 people. Joining the DCC Vital group, Wörner will provide a platform for the expansion of DCC Vital's broader activities into Continental Europe, particularly in Germany, which is a large, well-funded and growing healthcare market. DCC acquired Wörner based on an initial enterprise value of approximately €80 million.

DCC Technology

Azenn

DCC Technology agreed to acquire Azenn Holding Développement ('Azenn'), a French valued added distributor in April 2021, subject to regulatory approval. Azenn is a leading distributor of structured cabling solutions and provision of logistics, refurbishment and staging services for network devices. The acquisition of Azenn will complement, enhance and extend the service offerings of DCC Technology's existing Exertis Connect business in France, and allow the expansion of Azenn's cabling and network device offerings to new customers. The business employs approximately 200 staff across five locations throughout France and had revenues of approximately €60 million in its most recent financial year.

JB&A and The Music People

In December 2020, DCC Technology agreed to acquire JB&A, a leading North American distributor of broadcast, post-production and Pro AV technologies, to system integrators and B2B resellers. Located in San Rafael, California, the business recorded revenues of $80 million in its most recent financial year and employs approximately 30 people. DCC Technology also completed the acquisition of The Music People in the US in November 2020. The acquisition of JB&A and The Music People continues DCC Technology's strategy of building a leading Pro AV, Pro Audio and consumer value-added distribution business in North America.

Total cash spend on acquisitions for the year ended 31 March 2021

The total cash spend on acquisitions completed in the year was £272.6 million. The spend primarily reflects acquisitions committed and completed during the current year, but also includes the acquisition of Budget Energy, announced in the prior year's results in May 2020. Payment of deferred and contingent acquisition consideration previously provided amounted to £36.3 million.

Financial strength

An integral part of the Group's strategy remains the maintenance of a strong and liquid balance sheet which, amongst other benefits, enables it to take advantage of development opportunities as they arise. The increasing scale and geographic diversity of DCC will enable the Group to evolve its approach somewhat into the future, leveraging a broader array of funding options and, over time, reducing the relative level of gross cash held on the balance sheet. At 31 March 2021, the Group had: net debt (including lease creditors) of £150.2 million; net cash (excluding lease creditors) of £165.0 million; cash resources (net of overdrafts) of £1.7 billion; undrawn, committed debt facilities of £400 million and total equity of £2.7 billion.

The strong cash flow performance at year-end resulted in the Group reporting a modest net debt position of £150.2 million, or excluding lease creditors, a net cash position of £165.0 million. This modest net cash position (excluding lease creditors) is before acquisition expenditure committed during the year but not yet deployed at the balance sheet date of £152.0 million (i.e. the acquisition of Wörner). As such, on a pro-forma basis, the Group had a modest net cash position at year end of £13.0 million.

The Group's outstanding term debt had an average maturity of 5.2 years. Substantially all of the Group's debt has been raised in the US private placement market with an average credit margin of 1.65% over floating Euribor/Libor.

Outlook

Although the uncertainty created by the Covid-19 pandemic continues, DCC expects that the year ending 31 March 2022 will be another year of profit growth and development.

Annual General Meeting

Due to the potential continuation of Covid-19 restrictions in relation to public gatherings and to prioritise the health and safety of our shareholders, employees and other stakeholders, the Annual General Meeting is likely to be held at 11.00 am on 16 July 2021 at DCC House, Leopardstown Road, Foxrock, Dublin 18, with the minimum necessary quorum of two shareholders.

An audio webcast and conference call facility will be provided to allow shareholders to listen live to the meeting. Shareholders will be able to submit questions in advance of the meeting or via the webcast.

Further details on the Annual General Meeting will be published in due course.  Shareholders should monitor the Company's website for information in this regard. 

Forward-looking statements

This announcement contains some forward-looking statements that represent DCC's expectations for its business, based on current expectations about future events, which by their nature involve risk and uncertainty. DCC believes that its expectations and assumptions with respect to these forward-looking statements are reasonable, however because they involve risk and uncertainty as to future circumstances, which are in many cases beyond DCC's control, actual results or performance may differ materially from those expressed in or implied by such forward-looking statements.