Okay, I think we can make a start. Good morning. Welcome, everyone. Those who don't know me, my name is Donal Murphy, Chief Executive of DCC. Welcome to our results presentation for our year ending 31st of March 2018. It's great to see so many here this evening or this morning. I'm joined by my colleagues. From my right, Conor Costigan, Managing Director of our Healthcare division. Niall Ennis, Managing Director of our Technology division. Henry Cubbon, Managing Director of our LPG division. Eddie O'Brien, Managing Director of our Retail and Oil division. I think everyone knows Fergal O'Dwyer, our Chief Financial Officer. Thankfully, I don't have to read the disclaimer. You can all see it there and pass over it pretty quickly. Just our agenda this morning.
I'm going to cover off a little bit on the introduction and the highlights, give you a bit more detail on the performance of the business during the year. Fergal will take you through the financial details. We'll come back and talk about the development activity in what has been a record year for capital deployment for DCC, spending GBP 670 million on acquisitions during the year just gone. We'll summarize and open it up for questions and answers. Moving on just to look at the highlights of the year. It's been a strong year in terms of profit growth, and this is a consistent performance for DCC over many years. Our 24 years as a public company, we've grown our profitability over 14% year-on-year. A record year, as I said, for development with GBP 670 million spent on acquisitions across all four divisions.
We'll come back and talk about that in a little bit of detail later on. Group operating profit up 11.1%, 8.6% ahead on a constant currency basis to GBP 383.4 million. All divisions performing well during the year, and we'll go through the detail a little bit later. Adjusted EPS up 10.8% to GBP 3.175. The board has proposed a dividend increase of 10%. This is the 24th year of dividend growth in DCC. Again, ever since we went public. In terms of cash flow, it's been a good performance. Free cash flow conversion of 85% during the year. A key metric for DCC is our return on capital employed. Return on capital employed remained high at 17.5%. All in all, it's been a pretty good year for the business.
Just looking on at some of the trading highlights, as I said, at the start of this year, we split our Energy division into two divisions, DCC LPG and DCC Retail and Oil. It's the first time that we're splitting out the business for a full year across the four divisions. Pleasing that all four divisions grew during the year. Some of the highlights, I'll come back and talk about them in a little bit more detail later in the presentation. In LPG, we've had this strong growth and continuing in terms of the commercial and industrial market, mainly driven by oil to LPG conversions, focused on particularly in Britain and in Ireland. The launch of our B2C business in France, that's been a real focus for us. We talked about it before.
That has been launched in the second half of the year. We're pleased with performance to date. In our Retail & Oil business, we had excellent growth across all the business, developing our business in areas like aviation, lubricants, premium fuels, differentiated fuels. Building in the space of 4 years, we've built a retail petrol station business from practically no owned sites to over 1,000 sites today. Our Healthcare business, again, strong growth in the year. Half of our growth was organic, continuing to grow in medical devices and nutritional products, which have been strong growth areas for us over a period of time. In Technology, again, strong growth in the U.K. and Ireland. Market share gains in product areas like aviation, home automation, enterprise software components, and good progress on our infrastructure projects during the year. Really pleased with the performance across the business.
Moving on to look at the business in a little bit more detail. Operating profit in DCC LPG up 4.4%, up 1% on a constant currency basis. In Retail & Oil, very strong growth, up 20.4%, 18% on a constant currency basis. DCC Healthcare up 11%, 10.6% on a constant currency basis. DCC Technology up 16.3%, 15.5% on a constant currency basis. In terms of the split of business now, 44% of our profitability within our LPG division, 30% in our Retail & Oil, 14% in our Healthcare division, and 12% in our Technology division. In terms of geographic spread, if we go back a couple of years, the U.K. was the largest part of our business. Now continental Europe and the rest of the world operations accounting for 50% of our profitability, 45% in the U.K., Ireland accounts for 5% of our profitability.
Moving to look at our LPG division in a little bit more detail. We're really pleased with that performance in the year. Profits up 4.4%. That's despite the headwinds from a rising cost of product, and also the investment that we've made in the B2C natural gas and electricity business in France. Volumes up 19.8%, pleasingly 4.7% on an organic basis. Overall volumes driven clearly by the acquisitions of Gaz Européen and the Shell business in Hong Kong and Macau that completed in January. France performed very well during the year. We had good margin growth in the business. We had a good cost performance. The big development in France was the launch of our B2C natural gas business, where we're leveraging the strength of the Butagaz brand, and also the infrastructure that we acquired through the B2B Gaz Européen business that we acquired in January 2017.
The natural gas business was launched in the second half of the year. While it's early days, we've been pretty pleased with the performance to date and the take-up from customers. Our business in Britain performed well despite some challenges from a supply perspective during the last quarter of the year. In fact, if we didn't have those supply challenges, the overall performance of the business would have been a little bit better. Shell business in Hong Kong and Macau, and I'll come back and talk about acquisitions in a little bit more detail later on, but pleased to have that completed in January, and it's trading in line with expectations since completion. Overall, it's been a really good year for growth in the LPG division, bringing the business from one continent into three continents.
It's not that long ago when our LPG business was just in Britain and Ireland, back in 2012, when we got our first opportunity to expand out. Today we're operating in 10 countries across three continents. Moving on to look at our Retail & Oil business. Very strong performance. Profitability up 20.4% in the year. We're really pleased with the growth of the business. Volume up 6.4%, driven by the acquisitions of Dansk Fuel and the Esso retail business in Norway. We had strong growth in Britain and Ireland. We benefited in the last quarter from slightly colder weather, which was a benefit in the last couple of months of the year. We've been very focused on building this business out into differentiated fuels, so premium heating-related products.
We've also been focused on building a little bit of stickiness into our customer base by putting in telemetry devices on customer tanks. That was beneficial during the year. We've also been building the business out in areas like lubricants, aviation. We talked at the interim stage on our growth in unmanned petrol stations in Britain, which has progressed during the year. Our fuel card business, again, performed strongly. Good organic profit growth. We're also investing in that business and expanding the business out into both France and Germany. Again, the underlying performance of the business would have been a bit stronger had we not been making those investments. We think that will be a platform for growth going forward for us within the fuel card business. Very pleased to have the Esso Norway business completed ahead of schedule. We completed that in October.
We have fully now integrated it into our retail hub and spoke structure. The market has been a little bit challenging, but we're well positioned now to improve the performance over the coming period. The Danish business has performed really well. We have fully integrated the former Shell assets into our business in Denmark. We're now operating in retail, in aviation, in marine, in agricultural fuels, and in commercial fuels, and delivering strong growth in the year just gone. Again, the business in France has performed well during the year in what has been a competitive enough market, with good profit growth during the year. We have been investing in the sites to roll out the Synergy fuels and re-imaging all the sites with the Synergy identity, which is the latest Esso identity across the sites and investing in our motorway concession.
As I said, from a number of years ago, with no petrol stations that we operated ourselves, today we have over 1,000 sites and we have a retail and fuel business operating across eight countries. Just moving on to Healthcare. We've had a strong growth in the Healthcare business. Operating profit up 11% during the year. About half of that was organic growth. In our Vital business, where we supply products into the healthcare providers, healthcare sector, we had very strong growth during the year in medical devices. We benefited from the prior year acquisition of Medisource, which supplies exempt medicines in the Irish market. Has performed well during the year. Our pharma business has performed well during the year as well. We are very focused on increasing the scale of our GP supplies business here in Britain.
We had two bolt-on acquisitions during the year, we've also expanded that business into the Irish market. Good growth across our Vital business. Our health and beauty business. This has been a very strong organic growth business for many years for DCC. Again, strong performance in the year just gone in the nutritional sector. We have set up a particular niche in manufacturing hard to manufacture, hard, complex to manufacture products. People are getting more discerning about the health supplements that they're taking, and that's driving growth in that segment of the market, which we're benefiting from here in Europe. We announced the acquisition in January of Elite One Source, which brings us into the U.S. market. The U.S. market is a very large market. It's five times the size of the market in Europe. It's very innovative, and it's growing strongly.
That's been a really good development step for us within our health and beauty business. Our beauty business was held back a little bit by some de-stocking on certain customers, we have a good pipeline as we go into the current year, and we're delivering very strong growth within our sachet filling business here in Britain, which is supplying into the U.S. market. Given the strength of the growth within our health and beauty business, we are investing in our infrastructure. We're expanding our facilities in our softgel business here in the U.K. to drive further growth. We're investing in infrastructure within the recently acquired U.S. business. We feel really good about the healthcare business coming out of a year of strong growth. Finally, our technology division. Again, very strong profit growth in the year just gone, up 16.3%.
We have been delivering good organic growth in the market in the U.K. and Ireland. That focus that I mentioned earlier on product areas like audiovisual, like home automation, components and gaming, we have been gaining market share in the U.K. and Ireland market. The acquisitions of Hammer, which is in the enterprise infrastructure space, has performed really well since we acquired it in the prior year. Median also, we acquired in the prior year, contributing in the year just gone. MTR, which is a business that we acquired in the current year just ended. MTR is a business that provides services to refurbish mobile devices, so mobile phones and tablet devices. That's a very important development step for us as we expand out our service offering, making us more important to both our suppliers and to our customers. Our B2B business in France performed well.
This is where we supply products into the reseller and the electrician sector of the market. Our French business, on the consumer side, I've talked about being quite challenging over the last number of years, we have made significant steps to reduce costs within that business and improve our logistics and our operational efficiency to position us for growth going forward. Our Nordic business performed strongly during the year. The Nordic business is based, and when we acquired the business based out of Gothenburg in Sweden, we have been expanding that business across the markets in the Nordics. During the year, we made good progress in building the business in Norway. We've opened up an operation in Denmark, we've opened up an operation in Finland. We've also invested in a new distribution center in Gothenburg to manage the growth of that business.
Our business in the Middle East continues to perform strongly. We've talked about the major infrastructure projects that we've been working on within the Technology division here in Britain. Good progress. We have our NDC up in Burnley Bridge up and running. We're in the process and made good progress in divesting the existing warehouses that we had in Britain. We're also making good progress on the related project to implement and upgrade our ERP systems, that'll go live before the end of the year. Overall, a strong performance within the Technology division. I'll hand over to Fergal to take you through the financial summary.
All right. Thanks, Donal. At this stage, we'll just give you some additional color in relation to the financial numbers. Just in an overall way, we had a 16%-plus increase in our revenues to give us GBP 14.3 billion. It drove gross margins, our gross margin number of GBP 1.4 billion, and with operating costs of just over GBP 1 billion to give us our net operating profit of GBP 383 million. On the revenue front, dealing with the two energy-related businesses, sales values don't really count for a whole lot given the underlying movements in the price of a barrel of oil. Donal's already talked about the very good volume performances we had in both LPG and in Retail & Oil. Excluding those two divisions, our revenues in DCC Healthcare and DCC Technology were up 12.6%. Roughly half of that was organic, so a very good performance there.
On the gross margin front, as anticipated, gross margins declined a bit in LPG, driven by the anticipated cost of product increase, and also an increase in mix of natural gas. Donal's already talked about the developments we have in that space. In Retail & Oil, margins were up slightly. Again, it's a mixed effect as we have more retail volumes within the overall volume driven a bit by Norway. Gross margins, excluding the two energy-related businesses, were broadly the same as last year at 10.1%. Our operating cost is to say just over GBP 1 billion in the year, up GBP 105 million on last year. Most of that has been driven by acquisitions and currency. Like for like, our organic increase in our operating costs was GBP 9 million or around 1%. That drove our operating profit of GBP 383 million, up 11%.
Roughly a third of that was organic. Our finance costs increased from GBP 31 million to GBP 35 million, driven by the drawdown of the GBP 450 million private placement facility that we did in September 2017. Our tax rate reduced marginally from 17.5% to 17%. In an overall way, this drove earnings per share growth of 10.8%, or 8.3% on a constant currency basis. This allowed us to pay a dividend of nearly GBP 1.23, or an increase of 10% on last year. As Donal said, our 24th consecutive year of dividend growth. Our return on capital employed at 17.5% is very strong. It's impacted somewhat by the timing and the spend we had on acquisitions in the current year. Moving on to cash flow.
Our cash conversion of 85% was really driven by the fact that our CapEx spend was about GBP 50 million higher than our depreciation, all for the right reasons. It was development spend on new site developments and site upgrades within Retail and Oil, on oil to gas conversions within DCC LPG, and the build-out of our facilities within the DCC Technology space. Our working capital movement of GBP 14 million on an overall increase in revenue of 16%, of just GBP 14 million, we believe, was a really good performance in the year. Our cash conversion was 85%. You can see the acquisition spend of nearly GBP 700 million that we had in the year, with GBP 160 million coming from the disposal of our environmental division back in May last year.
That left us with a net cash outflow of GBP 411 million, leaving us with net debt at the end of the year of just over GBP 540 million, or a net debt EBITDA of just over 1.1 times. On a pro forma basis, it probably flips to being just less than one times, given that we had a significant amount of acquisition spend in the last quarter and two large acquisitions, Retail West and TEGA, literally on the last day of the financial year. Overall, we end the year with a very strong balance sheet, a very liquid balance sheet, with nearly GBP 1 billion of cash liquidity available to us. We go into this year with a lot of firepower to spend on development. Thank you.
Thanks, Fergal. Speaking of development, it's been a record year for development spend for the group, GBP 670 million spent during the year. I suppose some of the important factors on that, we have set out to build our business out geographically. We're really pleased to expand our business now from a European-based business to a business that's operating in three continents. We're always focused on building greater share within the market. There is integration which plays very much into the skill sets within DCC of acquiring businesses, integrating them, extracting synergies out of those acquisitions. We made good steps in that during the year. We're very committed to diversity within the group. We're very committed to deploying capital across all four sectors. We have deployed capital across all four sectors.
Clearly, it's been weighted more in the year just gone to the Retail and Oil and the LPG businesses, but we have deployed capital in all sectors, and we'll talk about, as we look forward, we want to continue to deploy capital across all four sectors within the group. Just picking on some of the highlights. I mentioned earlier the Shell business in Hong Kong and Macau. That was an important step for us in terms of building a presence within the market in Asia. The business is a really good business. We've a strong presence now in Hong Kong and Macau. Maybe over time, there's opportunities to acquire other assets within those markets, but we will work to learn about the region, build our knowledge of the region, similar to what we did when we entered the Danish market back in 2009.
We said at the time it was a modest business, but it was about learning about the region, and since then, we've built a very strong business out across Scandinavia. Over time, we see the opportunities to expand in Asia, but it's kind of more a medium-term opportunity for us. Retail West is a very important development for us. We have looked at the U.S. market over a long period of time, and we were delighted when we announced that acquisition in November. As Fergal said, it completed at the end of the financial year. It's early days for us owning the business, but so far so good. The business is performing well. The really important bit here, the U.S. market is a very large market. It's nine times the size of the largest market that DCC operated in, which was the French market.
It is a growing market, and it is highly fragmented. There is 4,000 players across the market in the U.S. The largest player is 13% share. There's a couple of players with 8%-9% share, and then you're down to more modest market shares. We now have 0.6% share. We've a presence across 10 states, strong position within three of those states. Bolt-on acquisitions in those areas would be very synergistic. It's creating a platform for DCC to grow within the U.S. market, and that's an area that we continue to focus on going forward. It's great to have that acquisition completed. It's great to have Sean Cody and his team within the DCC family and looking to build and grow that business in the U.S. TEGA, again, similarly, is an important development for us.
We have looked for many years at the German market for acquisition opportunities. We've a modest business within our oil division in Bavaria. We looked at the LPG market, which unlike a lot of the other European markets, remains somewhat or relatively fragmented. The TEGA business, which we acquired from Linde, has 2% share of the German market. While it's got a good base in Germany, it is, again, a platform for growth, and we look to grow that business through acquisition. As an added benefit to the TEGA acquisition, it is also a business that operates in the refrigerant gas market in Europe, and we have a decent position now within refrigerant gases, and that's another adjacency as we start to build out our gas business into other segments of the market. We already have a medical gas business here in Britain.
Retail and Oil, as I mentioned, completing the acquisition of Esso Norway ahead of schedule. That's a really high-quality business. We have 250 sites in Norway within the network, and we have a world-class convenience offering in partnership with NorgesGruppen, who are the largest retailer within the Norwegian market. In the space of four years, we've gone from our initial acquisition of Qstar in Sweden to owning and operating over 1,000 sites across Europe, and we see opportunities to further grow that business. There's 142,000 sites across Europe. Our focus is growing our retail business within Europe. Associated with that, the Danish business I mentioned earlier, not just bringing us into retail in Denmark, but a strong position within aviation, stronger position within marine. Again, areas that we want to deploy further capital on in the Retail and Oil business.
Elite in the healthcare business, that was very important. Conor and the team have been looking at the U.S. market for some time. The business is a quality business operating in Missoula, in Montana. As I mentioned earlier, the U.S. market in population terms, broadly similar to the European market. In terms of this segment of the market, it's five times the size of the European market. The U.S. consumers are more discerning on the health supplements that they take, so the products tend to be more complicated. Lots more innovation in the market. We can learn from that and bring that into the market in Europe, and then there's some innovations that we'd have in our business here in Europe that we can bring to the U.S. market.
Similar to the LPG market, the health supplements market in the U.S., the contract manufacturing side of it, is highly fragmented, opportunities for further growth going forward. MTR in the technology side, again, strengthening our service as I mentioned earlier. A really good year for development, positioning us strongly as we go into the current year. The benefit of the acquisitions from a trading perspective in the current year, but platforms for further growth within not just Europe now, but within the U.S. and within Asia. DCC today has sales in excess of GBP 14 billion. We've operations across 15 countries in three continents. We've a very substantial business to grow and develop going forward. We are going to have a capital markets day on the 13th of September. Anyone who would like to, and we'd encourage everyone to come along to sunny Marseille.
We have a large facility in Rognac in our Butagaz business. We'll go across, we'll have obviously a deep dive into the DCC group, and also the opportunity for investors and analysts to visit our facility in Rognac. There's a little link there to register for the capital markets day. In summary, really pleased with the performance in the year. As I say, it's been an excellent year in terms of trading performance, but it's also been a record year in terms of capital deployment for the group. Expanding our business both within the markets that we operate within and into new geographies. We really feel good about the business. We've real momentum in the business. We've momentum on the development side. We've momentum on the trading side.
As we go into the current year, we believe that it's going to be another year of good growth and development for the group. We'll open it up to questions and leave you with our favorite slide, which shows our track record. As I mentioned earlier, 14.4% year-on-year growth since going public back in 1994, 14.5% growth in our dividend, and an unbroken record in terms of dividend growth over that period. Josh?
Morning.
Yeah. Hi, Josh Punnell from Berenberg. Question on M&A. There's been a lot of activity, in particular over the last three years. How do you feel about the pipeline now relative to the last three years, and do you have the management capacity to continue at a similar pace?
Yeah. No, very important, Josh, the management capacity piece because that's something that we've worked hard on in terms of the building out the resource within the business to make sure that management isn't a limiting factor when it comes to development opportunities. The split of the energy division was part of that so that we have discreet management running each of those divisions, development directors within each of those divisions. Building out the skill sets across the business to position us for growth. As you know, we don't talk about the pipeline per se publicly. I think when you look at, if you'd have asked me, so maybe go back a different way. If you'd have asked me at the start of the year, would we have spent GBP 670 million on acquisitions during the current year, I probably wouldn't have called it at that number.
Opportunities come along, some of the opportunities that we completed during the year happened relatively quickly. We think we're in very good positions. We have created new platforms for growth. We talked about the U.S., Asia, probably more medium-term. Within Europe, the opportunities that we have now in Germany, the opportunities within the existing market. We've built a lot of scale, we've built a lot of credibility as a buyer of these assets. I think that positions us well going forward. Gerry.
Hi. Gerry Hennigan. Don, you mentioned you had some challenges in the retail side in Norway. What were the factors behind that?
Yeah, maybe I'll ask Eddie to
Yeah. Gerry, initially when we took the business over, there was some increased promotional activity from loyalty schemes, which led to some more competitive pricing in unmanned. Then Circle K changed the way that they go to market, which has led to, in a rising price environment, some pressure on margins in the short term. We've seen that in other markets, and we expect it to come back to normal over time.
We feel, Gerry, that we have a really good management team in place. We got the acquisition completed a little bit ahead of schedule. It's fully integrated now into our retail hub and spoke model. We're busy about affecting the improvement within the performance of that business.
Just in terms of, you mentioned, I think it was 142,000 retail stations across Europe. Clearly, obviously, Europe is a very fragmented picture. What sort of areas would you avoid, put it that way?
Yeah. I think the retail, we talked about it last November. There's a lot of capital chasing after retail assets in Europe. One of the things that shareholders should take good comfort in is our discipline about returns within the market. There's areas where we've been disappointed. We've been disappointed because we've a big presence in the oil market here in Britain. The prices retail assets were changing hands, that just didn't make sense for us to compete. We find a different route, and we start to build our unmanned platform, leveraging the infrastructure that we have within the market. I think it'll be a lot of markets are pretty attractive. It's really, can we find the right assets at the right returns? Sam.
Hi there. Sam Land, J.P. Morgan. There was a small working capital outflow in the year, which I think has been attributed to having bought some businesses with some higher working capital requirements. Is that basically all it is, and there wouldn't be any change to hopefully seeing maybe a return to some small inflows in future periods?
If I may. Sam, the mix of our business has changed over time. The large inflows we've seen in previous years were largely driven by bulk oil businesses that we bought that had negative working capital, and we were able to increase that negative working capital position. More recently, we've been buying retail businesses which have almost a neutral working capital position. We've been buying LPG businesses and technology businesses which have small positive working capital positions. Whilst we can bring improvements to it doesn't allow us move the dial significantly to start bringing in large inflows. You'd like to think that if you look at our operating profit, that you'll see most of that in cash, except for if we are then growing the business and we're having to spend on development CapEx. Our working capital movements should be pretty small.
Okay. That's very helpful. Just in the LPG business, there's been some impact from this rising commodity cost in the year. Just on current commodity prices, just give a feeling of where we are through that process. Would you expect limited impact going forward into next year on current prices?
Yeah. We're broadly through it. If we go back, it's a benefit from the past that was really dissipated as we went through the last year. There's probably, if you look at the commodity price at the moment, it's been rising pretty strongly over the last number of months. That's a little bit of an impact. For those who know us well, there's a lead and lag in the LPG business. As prices rise, it takes a bit of time to pass it into the market. As they fall, you get a little bit of a benefit. Nothing material, Sam. It's just part of the lead and lag effect. Okay.
Chris Banbury, Peel Hunt. On the capital side of things, obviously with the changing mix more towards LPG, increasing scale of the business, and also as convention, I think in technology healthcare of increasing investment is the kind of CapEx you're looking at for this year. I know business is constantly changing, but is that kind of what the new level would be in terms of CapEx?
Yeah. Including some development spend. You're absolutely right. It's a bigger business. There's more infrastructure in it. We see depreciation GBP 120-ish, GBP 115, GBP 120, and CapEx GBP 150 to GBP 160.
I think the important piece with that as well. There's clearly the growth and the scale of the business. We are investing capital for growth. The oil to LPG conversions we talked about earlier. We put infrastructure on customer sites. We're getting a very good return on those investments. The more capital spend The better in some respects. We keep clearly a very tight control on it. From a development perspective, there's been lots of opportunity for us to deploy capital. We're seeing the benefits of that coming through in the trading performance.
Another one, if I may. Just the profit per ton for LPG and per liter for oil. Could you give us the constant currency numbers for comparison?
It's an honest question.
Mike, we'll come back to that.
Sure.
If that's okay. Yeah. I don't think it's going to be material different anyway, just the constant currency factors. George? Sorry, Josh, do you want to take it, given that you got the microphone?
Yes, Rory actually.
Rory. Sorry. I beg your pardon.
It's Rory McKenzie from UBS. I want to talk about the investment in the LPG division. How much of that is going into the LPG conversions you still reference, versus the new development of natural gas and electricity? Second to that, how you think about the success or growth of these new networks? I think, Donal, you referenced take-up rates from customers. Can you give some metrics to how that's going and what you'd hope to target two years down the line or something like that?
Take the natural gas one. Firstly, it is early days, Rory, in terms of our investment. We effectively went live with the offering just before Christmas. We've invested in the current year kind of GBP 6 million-GBP 7 million, or the year just gone, GBP 6 million-GBP 7 million, in terms of building that business in France. The underlying growth in actually the LPG business organically would have been very strong, had we not been making those investments. It's something that we have talked about ever since we acquired the Butagaz business. The take-up rate from consumers is good. I'm not going to throw numbers out on it, but it's been encouraging. We think there's over 80% of this market in France today is in both gas and electricity, is in the hands of the two incumbents.
There has been a fair bit of capital investment in the sector. You'll see Total bought a public company called Direct Énergie. They believe there's a big opportunity there. We believe there's a big opportunity within France. We think the power of the Butagaz brand is very significant competitive advantage that we have within the French market. The consumer's awareness of Butagaz, not as an LPG brand, but as a gas brand, is very strong. I'd say one of the interesting things that we've found to date is the take-up of electricity has been a lot higher than we might have thought. Again, Butagaz and electricity, that was one that we weren't quite sure what the take-up rate would have been. I think we've been pretty pleased, and we'd be targeting to gain a decent share of that market going forward.
The Total investment, I think, is good, actually, because it means it's all about creating kind of awareness in the customer's mind about the propensity to change. Further investment within the market, I think, will be helpful. On the LPG side, we have, and this has been a trend for some time. We have taken a leadership position, really, in oil to LPG conversions. That's something we're continuing to see the benefit of. That organic growth I talked about earlier within the LPG business. Some of that clearly is natural gas and electricity. Some of that is also on the LPG side. I don't know, Henry, if you have anything to add.
No, not at all. The growth rate from oil to LPG conversion is just continuing. Traditionally, a customer would be someone who's not on the natural gas grid. It's a business operating in a rural community outside the gas grid. We go in, and we help them convert across to LPG. The capital you mentioned involves us installing a storage tank and also associated pipework and burning equipment. We put a package together for the customer. We are very closely looking at the return on capital employed from those investments. It's not just the tank, but also the working capital associated with that. Nine times out of 10, it certainly hits our hurdle rate. Once it hit the hurdle rate, we then go ahead with the investment.
Just on the new markets in the LPG. Can you talk about the return on capital you might think about there, either initially or down the road? Because they're more underdeveloped and some more fragmented. Equally, then you've got less or a lower amount of network benefits initially. As you look at Germany and the U.S., how are you thinking about your return targets there?
Yeah. Take it in steps, I suppose, Rory. Hong Kong and Macau, we bought that business at a 12.5% return. I think we said at the time that hopefully there's opportunities to improve somewhat the performance of the business. There's not going to be a dramatic change in that business going forward, absent being able to acquire someone else within the market that would give us material synergies. We continue to eke up the returns. The German business we bought is a good return. I think there's a real opportunity there to grow the scale of that business. There's some interesting dynamics within the German market where there's shared haulage infrastructure. From the base we have, we can go and acquire customers organically and deliver to them on a very cost-effective basis without necessarily having infrastructure throughout the whole of the country.
There's a good organic story within that business. Then clearly, as we have seen many times in the past, when we acquire something, they're very synergistic. The U.S., and you're right, in the U.S. market, we have a strong position in three states in the U.S. We have a presence in 10 states. Infill acquisitions will be very synergistic, and we'll drive up returns on the back of infill acquisitions. Building out the business into other states, and that's very much our objective. We'll have an entry level on returns in those states. Then again, infill acquisitions will be the driver for improved returns going forward. The LPG market, most countries we're in is very consolidated. Where it's consolidated, the returns are stronger.
The fragmented market as it consolidates, and I've no doubt that the market in the U.S. will consolidate further, again, over time should be beneficial.
Chris, just coming back to you on your question about constant currency movement in net margins per ton or per liter. In oil and retail, they're up 10.7%. Really, again, that's a mix of more retail petrol station volumes coming in. In LPG, they're down 16%. That's really driven by the whole big amount of natural gas volume in a developing market that we have in France, where we're investing money. We're not making any money on a net basis on that volume. It has an overall dilutive impact on our overall margins per year or per ton.
He passes the honors question. George.
Morning, it's George McGree from Exane BNP Paribas. Two, please. Firstly, Donal, just on the retail and oil business. Noticed that there was a reasonable acceleration in organic profit growth in the second half versus the first half. Perhaps you could just split that out between the weather impact and, of course, anything else that may have contributed to the growth.
Yeah. Go on, Eddie.
The weather impact was really in the U.K. and Ireland in the last quarter, and that was a couple of million GBP, where it was obviously had the Beast from the East for a month. Dansk Fuels, obviously the operating leverage that we got in the second half in the Dansk Fuels acquisition was a big contributor to the organic development, which was 50% of the profit growth. The rest of the business have performed pretty well across all the commercial sectors throughout the year. Everybody sort of hit their expectations.
I think it's been a really good performance in the DCC Retail and Oil business, as I said, particularly in the second half of the year. The really encouraging thing was the leverage that we're getting out of the Dansk Fuels acquisition has been really good.
Sorry, on that Dansk Fuels, is that synergy driven after having fully annualized the M&A impact?
Yeah.
Yeah.
There's two things. Obviously, the synergies are a driver, and then we're winning business as well from the bigger platform. We have more cross-selling across the different commercial sectors as well. A strong sales performance.
Thank you. A similar question on LPG. Obviously, what looked to have been a very strong first half. If you strip out the input cost and the investment, what did the underlying business do H2 versus H1?
In H2, we had, in terms of weather, which has an impact on our business, we've actually seen a pretty flat performance in France in terms of weather. The weather in France was pretty close to the 10-year average, so we didn't get much of an uplift from there. In Britain, as Eddie said, the weather was a little colder, so 6.4 degrees against 6.7 as an average. In Britain, we should have seen an uplift in performance. As Donal mentioned earlier, however, we did have an impact from supply interruption, so a number of refineries around Britain had interrupted supply due to maintenance and breakdown. That's impacted us by probably a couple of million. That's not a lost volume because that volume is still, if you like, in the order book.
That hopefully will come through in the coming weeks as we catch back on delivering it to our customers. There's also, which we talk about, the impact on the rising cost of product, which impacted really in the second half of the year. That was a drag. As I said, the GBP 6 million-GBP 7 million investment in the natural gas, which was all in the second half of the year.
Thanks very much.
Smiley.
Hi. Calvin Smiley from Davy. Just a couple of simple follow-on questions. Just within LPG, would it be possible to get the nat gas volume and profit split so we can track the development of that business as it grows going forward? Just a rough sense of where it might actually be helpful.
I think, Calvin, that's something that we come back to in the future at some point because one, for a couple of reasons. A, it's small. Secondly, it's a pretty competitive space. We don't want to be giving the competition any views on what we're doing and the progress that we're making. We keep everyone informed, but I think we've given very good transparency now in splitting out our Retail and Oil and our LPG business. You have plenty to work on without breaking it down even further.
Perfect. Thanks. Just a follow on Josh's question earlier. Given the record rate of spend last year, Fergal, if you could update us on where you see balancing capacity now for potential spend over the next 12 to 24 months.
Our views haven't changed on balancing capacity. Where we are as a management team, we've always said we wouldn't like to see net debt to EBITDA go beyond 1.8, 1.9 times. We're just below one on a pro forma basis. With the guts of one turn of EBITDA, you all know what the consensus is for next year, and the association number is about 120. It probably means we have GBP 500 million plus of capacity at the moment.
Chris. Another honors question.
On the development of the fuel cards business in Germany and France, just interested to know perhaps the differences between those markets and the U.K. Is there much investment going in, and what are you kind of expecting over the next two or three years? Is it a gradual development or are there kind of
Eddie?
Yeah. I suppose the markets are very different in that the U.K. market is a well-established reseller market, and the ability to cold call customers is pretty straightforward. In Germany and France, that's a different market. We've really tipped our toe in the water with a small greenfield to really see what the market is like. Is it suitable for the U.K. model? Because there are no acquisition opportunities in those markets. It's early days, and it's slow development at the minute. If we see progress along the U.K. model, then we'll invest in people and ramp up the sales operation.
Okay. Thank you.
Any other questions?