DCC to hand investors £800m from sale of healthcare arm
DCC plans to return £800million to shareholders following the disposal of its healthcare division.
The support services business last month agreed to offload its healthcare arm for £1.1billion to HealthCo Investment, a subsidiary of European private equity group Investindustrial Advisors.
Although DCC expects to complete the deal in the third quarter of 2025, it intends to soon start a £100million share buyback scheme as part of the divestment process.
Another £600million will be handed out once the disposal is finalised, while another £100million will be delivered after DCC receives a deferred payment of £130million within two years.
DCC made the announcement alongside results showing its pre-tax profits slumped by 17.9 per cent to £294.9million in the year ending March.
Adjusted operating profits in its technology segment plummeted by 15.7 per cent to £82million due to weak demand for consumer tech products across the UK and Europe in its information tech operations.
However, they rose by 6.5 per cent to £535.5million in the group's energy business despite lower average commodity prices dragging DCC's overall turnover down by 4.5 per cent to £18billion.
DCC Energy benefited from strong organic growth and takeovers, including Irish vehicle telematics provider Cubo and solar energy companies Wirsol and Acteam ENR.
Donal Murphy, chief executive of DCC, said: 'We are pleased to report that we delivered another year of good growth, while making strategic progress to simplify the group to focus on our opportunity in energy.
'Our sale of DCC Healthcare enables a material return of capital to shareholders. We will focus our efforts on energy, our largest and highest-returning business.'
Founded as Development Capital Corporation in 1976, DCC announced plans last November to break up the business to focus on the energy sector.
Among the services provided by the company's energy division are liquid gas and fuel distribution, solar panel installation, and retail forecourts.
Russ Mould, investment director at AJ Bell, said: 'DCC's future is in the energy sector, and it's fortunate that part of its business was the strongest.
'In a way, it justifies the decision to slim down.
'The problem child was the technology division, which is a concern given that DCC is on a mission to improve performance before selling the business. It needs to work fast to whip the tech arm into shape.'
DCC shares were 4.5 per cent down at £48.44 on late Tuesday morning, making them the FTSE 100's biggest faller.
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