Holding group DCC reported pretax losses of €14.86 million after a €50 million insider dealing provision wiped out its profit in the first half of its fiscal year.
The loss was recorded in the six months to September, the period in which the Supreme Court found that DCC executive chairman Jim Flavin engaged in illegal insider trading when selling its stake in Fyffes in 2000. The ruling has not prompted any regulatory action against DCC.
Mr Flavin made light of the €50 million exceptional charge, insisted the company had "high ethical standards" and said he was very pleased with the interim figures.
Asked if he was disappointed to report losses on foot of the one-off charges arising from his insider dealing, he said: "Not really. I have to say as a board and a management team we think this is one of the best sets of results we've reported since we went public back in '94 and we're proud and pleased of them."
Mr Flavin upgraded DCC's full-year profit forecast to "high-teen growth" after first-half operating profits before one-off charges and amortisation of intangible assets rose 17.6 per cent to €51.6 million.
DCC had an interim operating loss of €7.7 million, down from an operating profit of €39.8 million a year ago. Sales rose 25.3 per cent to €2.26 billion.
The second half of the year is seasonally more significant for the firm. Adjusted earnings per share rose 14.4 per cent to 48.52 cent and the interim dividend rose 15 per cent to 20.55 per share. The interim dividend payment to Mr Flavin, who owns 2.47 million DCC shares, will be €507,751.
DCC's stock gained 2.72 per cent to close at €19.99 after analysts upgraded their full-year profit forecasts. "We are currently expecting 12 per cent operating profit growth, so mid-teen growth suggests full-year 2008 operating profit of €167-€168 million, which feeds through to a circa 5 per cent earnings per share upgrade," said Gavin Kelleher at Merrion Capital.
DCC has signed a €38.1 million deal with Fayrewood to acquire Banque Magnétique in Paris, which supplies consumer electronics and IT peripherals to the French retail market. This firm made operating profits of €4.5 million in 2006 before group charges, goodwill amortisation and exceptionals on sales of €245 million. Operating profits of €5.6 million are forecast this year.
DCC, which made a profit of €85 million on the sale of its Fyffes stake, faces an action for damages from Fyffes and four groups who bought stock from it.
Mr Flavin declined to say how DCC arrived at the €50 million figure, other than to cite legal advice.
When asked if DCC might have to make further provisions arising from the case, he said: "I cannot add or subtract to the view of our legal advisers."
There was no new information on the sale of homebuilder Manor Park, under way since February.
Mr Flavin said the firm "wouldn't have the value today that it might have had a year ago".
Asked if it would have been better to sell a year ago, he said: "I agree entirely with that."
