Ira Sohn London: Ross Turner, founder of Pelham Capital

Ira Sohn Conference notes Ross Turner

Trade Idea: DCC

Price Target:


Ross Turner on oil distribution

Themes: Recently moved main listing to UK from Ireland. Distribution services group. Energy makes up majority of revenue. Strong record of earnings growth. Oil distribution (51%) and LPG is main part of energy division. Oil distribution of oil from tankers and import terminals to personal and commercial premises throughout the UK. 28 acquisitions across the UK to build wide distribution network. Market share 18% of the UK’s total oil distribution – lots of room for growth. Bolt-on acquisitions creating value through highly fragmented industry. Many small players family owned, small acquisitions over brought out for low cost to family nature. 18% return on capital achieved. Costs synergies as network builds. Recently brought out BP plc (NYSE:BP) (LON:BP)’s UK LPG business for £40 mil.

£180 million in free cash flow. Over next few years presumed £700 million in free cash flow plenty of room for acquisitions. 8% free cash flow yield at today’s price.

15% earnings growth going forward currently trading at only 12 times earnings.

Catalysts: Europe is a great region for growth. Germany is still a highly fragmented market and company is making progress there. Buying small companies all over the continent. Better LPG pricing.

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