Brexit fears weigh on UK fuel and tech sales at DCC

Chief executive Donal Murphy told the Irish Independent that the group was a "good barometer" of economic activity, and pointed out that lower demand in the consumer and enterprise technology sector was "definitely uncertainty-related".

Releasing its first-half results yesterday, DCC noted that its retail and oil division sold 5.93 billion litres of product in the six months to the end of September. That was a 3.8pc fall on the first half of the previous financial year and was 4.9pc lower on a like-for-like basis.

Mr Murphy said the decline was mostly due to lower volumes in the UK.

The unit's sales include a string of unmanned petrol stations in France and Sweden.

The division additionally sells fuel to agricultural and aviation customers.

The decline in the unit's UK sales was also a result of DCC exiting high-volume, lower-margin contracts in the marine sector.

"The commercial sector is a little bit weaker and that's just really following the economy," said Mr Murphy.

"The next few months are all about what the weather is going to do," he added.

DCC is the largest distributor of home heating oil in the UK.

"Cold and miserable is good for us," he said.

DCC's technology unit has seen sales decline in the UK. "Over the summer and into the autumn, the demand for technology products in both the consumer side and the enterprise side has been weak," said Mr Murphy.

"We've a big business here [in the UK] and the market shares are holding up. It's purely a demand issue and that's definitely uncertainty-related.

"Consumer confidence is dented and business confidence is dented."

DCC said that its revenue in the first half of the year slipped by 1.4pc to £7.31bn (€8.5bn), while its adjusted operating profit increased by 14.5pc to £162.6m.

The latter was up 13.7pc on a constant currency basis.

The group also announced the acquisition for an enterprise value of $60m (€54.5m) of Florida-based Ion Laboratories.

The firm is a contract manufacturer of health supplements and nutritional products for the US market.

It represents DCC's second acquisition in that space in the United States in the past two years.

The group is already the biggest contract manufacturer for such products in the UK, from where many of the products are exported to markets including the US.

Mr Murphy said the contract manufacturing space in the US for health supplements and nutritional products was worth about $7bn, but highly fragmented.