Source: Sharecast
Berenberg said DCC's FY26 results showed a resilient performance during a period of major strategic change, with adjusted underlying earnings from continuing operations rising 3.6% year‑on‑year to £634m and the group returning £700m of capital from recent disposals.
Berenberg noted that management remains on track to become a dedicated energy group by the end of the calendar year and continues to target £830m of adjusted EBIT by FY30 - implying a doubling of energy division profits from FY22. It also pointed to the division's long‑term metrics, including a ten‑year ROCE of 18.7%, a 10.4% EBIT compound annual growth rate and 99% free‑cash‑flow conversion, as evidence of its quality.
The German bank said DCC was well placed to benefit from shifting customer priorities within the energy "trilemma", with security of supply and affordability now in sharper focus amid geopolitical tensions. It also argued that the group's multi‑energy offering and broad supply‑chain access position it strongly for medium‑term demand.
Berenberg, which reiterated its 'buy' rating on the stock, left its core forecasts largely unchanged, making only housekeeping adjustments, and said DCC's long‑standing growth algorithm of 3–4% organic growth plus 6–8% M&A has delivered around 12% adjusted EBIT CAGR over more than three decades.
It also referenced the ongoing bid situation, after DCC rejected an unsolicited £58‑per‑share approach from KKR and Energy Capital Partners in May, saying the proposal "fundamentally undervalued" the group.
Reporting by Iain Gilbert at Sharecast.com