DCC Taps Energy Boss as Next CEO

 

Support services company DCC has picked the head of its energy division, Donal Murphy, to succeed retiring chief executive Tommy Breen from July, it said on Wednesday.

 

The company also announced plans to buy Shell's liquid petroleum gas (LPG) business in Hong Kong and Macau for HK$1.165 billion ($150 million) including debt, as part of a drive to focus more on energy - its largest business.

 

With the same strategy in mind, it said it would sell its environmental business to private equity firm Exponent for 219 million pounds ($274 million), including debt.

 

DCC, whose activities range from distributing oil to making Body Shop's body butters, said it expected to receive about 170 million pounds in cash after that sale completes in the quarter ending June 30.

 

"The disposal of the environmental division brings sharpened strategic focus to the group and will allow DCC to concentrate fully on growing and developing the Energy, Healthcare and Technology divisions," Breen said in a statement.

 

DCC has been looking to buy distribution and market assets from oil majors as they slim down to cope with weaker oil prices, and said on Wednesday the Shell deal would give it one of the leading LPG businesses in Hong Kong and the market leader in Macau.

 

The operations will retain the Shell brand and the deal is expected to complete before the end of DCC's financial year on March 31, 2018.

 

Incoming CEO Murphy has led the energy business, which accounts for about 68 percent of DCC's profit, for eleven years, during which time the unit's profit has grown by more than 400 percent and it has expanded into 11 markets through about 125 acquisitions worth 1.4 billion pounds in total.

 

"Donal has led the very significant growth of the energy division ... (He) is well known to, and regarded by investors and his appointment should be well received," Peel Hunt analysts wrote in a note.

 

DCC stuck by its November forecast for operating profit in the year ended March 31, 2017, to be significantly ahead of the previous year, thanks to past acquisitions and strong trading.

 

Davy analysts have forecast earnings before interest, tax, depreciation and amortisation (EBITDA) of 360 million pounds.

 

DCC shares were up 1.8 percent at 7,145 pence at 1159 GMT, the third biggest rise on London's bluechip index.