Wincanton has released its financial results for the year ending March 31, 2020, reporting revenues of £1.2bn up 5.2% year-on-year. Meanwhile, underlying EBITDA rose 3.3% to £68.9m, while EBIT and earnings per share were up at 3.6% (£57.3m) and 6.9% (35.8p) respectively.
Retail & Consumer (R&C) revenues were £782.3m, up 10.4% annually. This was primarily due to strong growth in Grocery (+26.0%) and continued growth in General Merchandise (5.8%). The underlying profit was £36.4, up 16.7% year-on-year.
Industrial & Transport (I&L), revenues fell 3.2% year-on-year to £418.9m, underlying operating profits also declined by 13.3% year-on-year to £20.9m. The decline was primarily attributed to contract exits and Brexit related uncertainty. Profit margins contracted by 60bps, driven by an adverse mix of volume changes and Pullman competitive pressures.
Notable business wins in fiscal 2019 included: Morrisons, Wickes, Dwell and Sofa club; while key renewals included major contracts with Sainsbury’s, Waitrose & Partners, Williams Sonoma Inc., Ibstock, Müller Milk, Lucozade Ribena Suntory and Adidas.
Year to date revenue at the end of May was a little over 10% below the comparable period last year, but with an increase in May of approximately 7% over April. The most significant volume shortfalls have occurred in our Industrial & Transport sector, in particular the Construction and Transport Services businesses.
The profit impact of the volume movements has varied according to contract types, but as a whole, the Group has seen a disproportionate impact to its profitability in the financial year to date due to the areas impacted tending to be closed book operations. Encouragingly, however, profits increased in May as it was largely these closed-book operations that underpinned the month on month revenue growth. It remains too early to confidently estimate the financial impact of the COVID-19 crisis on the Group’s full-year results and there remains uncertainty regarding the levels of demand and business interruption for the remainder of the year.
At the onset of the COVID-19 crisis, the company noted an increase in volume and demand from both its Grocery and Consumer Products customers as consumers prepared for the lockdown. Both areas have now returned to the volumes expected for this time of year. In non-grocery retail, volumes have remained lower than the prior year periods reflecting a focus on ‘essential’ products and the lockdown impact on shopping habits.
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