DCC - H1 2018: opportunities abound

Davy Research
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DCC has delivered a strong performance in what is seasonally the least important half. On a constant FX basis, EBITA is +9.7% yoy and adjusted EPS +11.5% yoy. Development activity is also in full swing. Including Retail West, DCC has committed c.£550m on M&A since January 2017 and expanded its footprint into the US and Asia. With 2019 net debt/EBITDA at just 0.3x, we think the scope for further M&A activity remains exciting. We are putting through 2% and 4% increases to FY18 and FY19 EPS, mainly reflecting FX and Retail West. Our price target moves to £82.5.