Wincanton has put in place a turnaround plan for its Pullman Fleet Services business after the segment delivered an “underwhelming” performance in its most recent financial year.
The company intends to put in place a new management team and a profit improvement strategy for the vehicle maintenance and repair business (pictured below), after performance in the segment continued to have an impact on the group’s financial performance.
Rapid expansion in Pullman’s customers’ home delivery fleets “put pressure on the Pullman operating model and profitability”. Whilst the business won new contracts, higher volume business returned a lower margin than its traditional core HGV maintenance service, with two contracts “proving to be loss making”.
Turnover for the overall group continued to grow as it focused on winning new and renewed business, reducing net debt and improving efficiency. Preliminary results for the year to 31 March 2015, published today, showed that turnover grew marginally to £1.1bn (2013-14: £1.09bn), while pre-tax profit dropped from £34.9m to £24.9m.
Group financial director Adrian Colman, who will become chief executive when Eric Born leaves the business in July, told Motortransport.co.uk that “hard work and sticking to the strategy” it has had in place over the last four to five years contributed to a “very strong year”.
“We are very much satisfied with the performance of the group,” said Colman. “KPI performance and customer service has been very strong.”
Colman said the group saw particularly strong growth in the construction sector as the UK economy continued to grow, also having an effect on volumes from customers in the home and DIY sectors.
Volumes in its retail and grocery portfolio also performed well, but Colman said the firm expects to see some changes this year following the management restructures in some of the major supermarkets.
New business wins included three-year contracts with Howdens Joinery and Halo Foods, and Lavendon Group, for which it will be the sole logistics provider. Renewals included General Dynamics, Adidas, Total and Britvic.
Colman said Wincanton remains “very much focused on the UK and Ireland markets” as domestic consumption in the UK continues to grow.
“In the UK and Ireland, our business is very well regarded by our customers,” he said. “Customers want to come back to us and we’re constantly striving for better.”
