DCC Technology delivers revenue growth in H1 2020

Exertis owner DCC has been able to lean on its wide portfolio to ride out the worst months of the pandemic.

The firm has seen increased demand for lower-margin consumer and home working products while conditions in its higher-margin B2B areas and Pro AV operation remain challenging.

In the six months to 30 September, DCC Technology revenues rose by 9.7% to £1.96bn and operating profit was almost flat, with a 0.7% improvement to £25.5m.

DCC managing director Tim Griffin said it was encouraged by the revenue growth and had seen demand change as the pandemic wore on.

“The first-quarter results were more than a little challenging, particularly in the context of April and May, where we were locked down around the world. If you think about the half as a story of two halves, the first quarter was severely challenging, then a modicum of normality adjustment came through in the second quarter and we saw a significant bounce, particularly in consumer, retail and work-from-home technologies. That allowed us to deliver growth in both the top line and the bottom line,” he said.

“If you think about the slings and arrows of outrageous Covid that we’ve had to navigate our way through, and to be able to come out with a growth story at the end of that is nothing short of extraordinary,” he added.

Griffin is hoping it will be able to improve the fortunes at its Pro AV operation as customers return to offices, retail and public spaces that require audiovisual solutions.

“The nature of Pro AV very much plays into where crowds gather and that just simply hasn’t been able to happen for society. Whether it’s churches or musical events, large conferences or large corporate audiences, all those who’ve been stymied somewhat will come back. I think there will be a certain amount of pent-up demand in society and business for the need and the desire to gather, so we’re fully expecting that to bounce over the medium term,” he said.

Griffin added that DCC continued to manage costs and had seen some of its portfolio, including the healthcare business, achieve strong growth to offset the problems suffered by its oil and gas operation.

“We’re very much of the opinion that diversity works in every aspect of the elements that make up our business, both in terms of the markets they serve, the types of technologies they operate in, as well as the people we have providing the specialist knowledge,” he said.

Distribution as a sector has come in for praise about its handling of the pandemic, with the CEO of the GTDC highlighting the positive response of the channel in the past seven months.

Griffin agreed that the sector has been able to add value and demonstrate its capabilities both to resellers and vendors.

“Technology’s never been more important in a distributed environment. I think the relevance of the channel similarly has become more and more important, particularly as you start thinking about different models of getting to your audience,” he added. “The relevance of the technology and developments of the channel have never been stronger.”

He added that DCC had put a lot of energy into developing its online proposition and its ability to execute through to those working from home.