“We believe management now needs to be more proactive about demonstrating value. We believe buy-backs make sense at the current level, and also think potentially asset disposals could demonstrate value. If management does not act, we would not rule out private equity or activist action.”DCC shares have fallen almost 27 per cent over the past 12 months, while the FTSE 100, the index on which it is listed, has risen almost 4 per cent.
Mr Brooke said he believed DCC’s shares had underperformed due to consumer exposure and the conglomerate nature of the company, with divisions spanning healthcare, technology, liquefied petroleum gas and fuel retail and oil. Investors have also been concerned about uncertainty over the energy transition and DCC’s “lack of focus on shareholder returns”, he said. DCC makes up about two-thirds of its profits from energy.
However, the company, led by chief executive Donal Murphy, said last May that it expected to double its operating profits and reduce the proportion of business coming from the sale of fossil fuels by the end of the decade, as it sets off on a journey to cut carbon emissions from its energy business to net zero by 2050.
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