Wincanton continues to deliver against organic growth strategy

Wincanton

In the first half of 2017 Wincanton delivered a good overall performance. Revenue for the six months increased by 3.4% to £581.0m (2016: £561.8m) driven primarily by the impact of contract wins announced in the prior year and volume growth with Home & DIY customers. This growth was partly offset by the impact of lost volumes primarily in Retail grocery due to the loss of a Tesco contract.

Underlying operating profit decreased 1.5% to £25.7m, with strong operating profit performance from the Retail & Consumer segment. This was partly offset by the impact of weaker performance within certain transport-related activities in Industrial & Transport and the inclusion of end of contract settlement credits in the prior year. Underlying profit before tax has grown by 8.7% in the half of the year compared to the same period last year.

Retail & Consumer reported revenues of £333.9m, up 4.5% on the £319.6m reported in the same period in the prior year. Underlying operating profit was £15.1m, up 28.0% (2016: £11.8m).

Industrial & Transport reported revenues of £247.1m, up 2.0% on the £242.2m reported in the same period in the prior year. Underlying operating profit was £10.6m, down 25.9% (2016: £14.3m) due to lower volumes in Transport services and weaker than expected operational and financial performance from certain transport-related activities.

The Group has delivered this growth through a continued focus on its organic growth strategy by winning new business and by expanding wallet share with existing customers. During the period it successfully commenced operations on a number of new contracts, which have helped mitigate some of the trading challenges the company faced in Industrial & Transport, highlighting the benefit of its diversified operational and customer portfolio.

New business wins include a four-year contract with IKEA to set up and operate two new distribution centres to support their multichannel distribution growth strategy. Wincanton also signed a five-year contract with Wilko, managing all UK transport operations as well as a three-year contract with Wickes to operate home delivery of building products where Wincanton has implemented new technology and a specialist fleet to support their multichannel strategy. Additional business wins include the renewals with Ibstock, Aggregate Industries and Argos.

Moving forward, the Group’s priority will be to make further progress in the delivery of its organic growth strategy.

Source: Transport Intelligence, November 9, 2017

Author: Violeta Keckarovska

 

 

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