On behalf of the Board, I am happy to report a strong set of results for the year ended 31 March 2009. DCC has extended to 15 years its track record of unbroken operating profit growth. Its balance sheet, funding and liquidity are in very good shape. A thorough strategic review has been brought to a conclusion by year end, as promised. A substantial Board renewal programme has also been successfully undertaken during the year.

 

Results Highlights
The year ended 31 March 2009 has seen DCC deliver strong revenue, operating profit and earnings per share growth. There was a good balance between organic growth and acquisition elements and an excellent return on capital employed was achieved against the backdrop of extremely disruptive economic and trading conditions, including a dramatic decline in the value of sterling against the euro. Highlights of the financial results include:

•	31% growth in revenue, in constant currency terms
•	22.4% growth in operating profit in constant currency terms and 7.9% growth in reported terms
•	17% growth in earnings per share on a constant currency basis and 2.5% growth on a reported basis
•	Net debt of €90.7 million at year end, compared with equity of €726.2 million
•	Free cash flow after interest and tax of €218.5 million

 

Financial performance is analysed in much more detail in the Chief Executive’s Review, the Business Review and Financial Review sections of this Annual Report.

 

Dividend Increase
The Board is recommending a final dividend of 39.73 cent per share which, when added to the interim dividend of 22.61 cent per share, gives a total dividend of 62.34 cent for the year. This represents a 10% increase over the prior year. The dividend is covered 2.7 times by adjusted earnings per share (2.9 times in 2008). It is proposed to pay the final dividend on 23 July 2009 to shareholders on the register at the close of business on 29 May 2009.

 

Board
On Jim Flavin’s resignation as Executive Chairman and Chief Executive on 27 May 2008, I was appointed Non-Executive Chairman. Board renewal was a major agenda item during the year. Three new non-executive directors and one new executive director were co-opted to the Board. Two non-executive directors retired. The Board now consists of seven non-executive directors and three executive directors. On becoming Chairman, I ceased, under the Combined Code, to be defined as independent. The Board has determined that each of the other non-executive directors meets the criteria for independence.

 

The Board is fortunate in the personal qualities, wide ranging capabilities and highly relevant experience that our new non-executive directors, David Byrne (who has been appointed Deputy Chairman and Senior Independent Director), Kevin Melia and John Moloney bring to the table. I warmly welcome them to DCC.

 

Donal Murphy, who joined the Board as an executive Director, has management responsibility for DCC’s Energy division and has extensive previous experience in other parts of the Group. DCC Energy is by far the largest division in the Group and has in recent years established a clear leadership position in Britain and Ireland.

 

Tony Barry and Paddy Gallagher retired from the Board during the year. They each made a major contribution to the development of the Group and to robust Board discussion over the years. In last year’s annual report, I paid tribute to the outstanding contribution Jim Flavin made as founder and leader of DCC over a 32 year period and I would once again like to reaffirm those sentiments.

 

At year-end I conducted a formal evaluation of the performance of all Directors and can confirm that each Director performed effectively during the period and continues to show strong commitment.

 

In line with the practice I initiated last year, all directors will offer themselves for re-election at the Annual General Meeting.

 

Management and Staff
Tommy Breen was appointed Chief Executive on 27 May 2008. I said in last year’s Annual Report, which was written shortly after that event, that I had been struck by the quality, focus and cohesiveness of the management team. Those qualities continue to be strikingly evident today. The results achieved in the year just ended demonstrate just how smoothly the succession process has worked.

 

DCC operates a highly devolved management system within a framework of very specific performance measures. This ensures that both the small Group-level team and operating management in individual businesses remain focussed on operational improvements and cost efficiencies, while staying very close to opportunities that might arise for valuable acquisitions. There are approximately 7,200 people employed by the Group in 15 countries. I want to thank each of them warmly for their contribution to the continued success of DCC.

 

Strategic Review
The extensive strategic review of the business, which was undertaken over the past year, occupied a very considerable amount of Board and management time. The conclusions reached by the Board are set out on page 12.

 

Corporate Sustainability
DCC established a new Corporate Sustainability Working Group in 2008 comprising senior group, divisional and subsidiary executives. The group decided to focus in the period immediately ahead on the following four aspects of Corporate Sustainability as they have a high business value to DCC as well as a high economic, environmental or social value: Direct Economic Value Added, Climate Change, Occupational Health & Safety and Business Ethics. Specific objectives and KPIs will be implemented in respect of these aspects. Further detail is provided in the Sustainability Report on pages 40 to 43.

 

Appointment of Inspector/Fyffes Case
In last year’s Annual Report I gave a detailed account of developments arising from the Fyffes case, including the intention expressed by the Director of Corporate Enforcement to apply to the High Court for the appointment of Inspectors, under Section 8 of the Companies Act 1990, to investigate and report on whether certain provisions of the Companies Acts were breached in the transactions relating to the intra-group transfer of the Fyffes’ shares by DCC in 1995 and their ultimate disposal in 2000. On 29 July 2008 the High Court appointed Mr Bill Shipsey SC as an Inspector to examine specific issues relating to the legal and beneficial interests of DCC and two of its subsidiaries S&L Investments Limited and Lotus Green Limited, in the shares of Fyffes plc between February 1995 and April 2000 (with particular reference to the periods between early February 1995 and end September 1995, and early November 1999 to end April 2000). The High Court Order does not relate to the ongoing business of the Group.

 

As the Inspector’s work is still under way, it would be inappropriate for me to comment any further on this matter, other than to say that DCC’s focus is to facilitate a timely conclusion of the inspection, given the very specific issues and timeframe involved in the inspection. The Inspector, in presenting an interim report to the High Court on 28 January 2009, said that “I wish to record and acknowledge that to date the companies, their directors, officers and advisers have been providing me with the utmost cooperation and have responded promptly to my requests for assistance.” The Group continues to cooperate fully with the Inspector.

 

Outlook
All current indications are that, in the year to 31 March 2010, a troubled economic and business environment will continue to create headwinds. At best, operating conditions may begin to show signs of improvement towards the end of the period. But we are well prepared, and will continue to focus on, operating efficiencies and cash generation. Those same conditions will bring to us opportunities for acquisition and development at good value levels. We are better positioned than most to capitalise on them when they arise.

 

Michael Buckley
Chairman
18 May 2009