Fuels, healthcare and technology company DCC (LON:DCC) has a strong balance sheet but it will undoubtedly have been hit by COVID-19 lockdowns in recent months.
DCC reports its figures for the year to March 2020 on Tuesday 19 May. There may have been some effect from lockdowns in the period, but the announcement will be able to guide investors about the effect since the year end.
DCC has already reassured the market in February that trading was on course to produce figures in line with expectations. It has not made any other trading statements since then. Revenues will be slightly lower than the previous year at around £15bn. Pre-tax profit could improve from £415m to between £427m and £437m.
Peel Hunt expects earnings per share to edge up slightly to just over 358p, although others are assuming a decline in earnings.
Acquisitions have led to a rise in net debt to more than £50m. At the end of the period, £72m was spent on effervescent nutritional products manufacturer Amerilab Technologies. The debt figure is not significant for such a large company and there are available credit facilities.
At 5694p, the shares are trading on 16 times estimated earnings for last year.
LPG is the biggest profit contributor and it is likely to make more than two-fifths of group profit in 2019-20. There was a combination of organic and acquisitive growth. This is an international business with operations in Europe, US and Hong Kong.
The petrol forecourts and oil distribution business is the next biggest contributor with the retail side particularly strong.
The healthcare division changed enormously during the year. The UK generic pharma business was sold and Ion Labs acquired. The focus is supplying services to health and beauty companies and distribution of health products.
The technology division was hit by weak trading in the UK.
This financial year will be tougher, and the international nature of the business will not help to offset this. Part of the strategy has been to increase the level of business in the US, so the lockdown there will probably have a significant effect.
The results should provide some guidance on how the period has started. Although, in common with many other companies there is probably limited information about the potential trading over the next few months.