Wincanton has found home is where the heart is as customers in the DIY and home retail sectors drove growth at the operator. At the same time it has begun surgery to return its industrial and transport division to health.
Group turnover for the six months to 30 September 2017 grew 3.4% to £581m (2016: £561.8m). Pre-tax profit increased 3.6% to £20.3m (2016: £19.6m).
Contract wins and renewals with Argos, a win with IKEA and Thales, and renewals with Ibstock and Aggregate Industries were all singled out as highlights for the group.
In its industrial and transport division, which Wincanton warned earlier this year faced "profit headwinds" due to a weaker than expected performance, Wincanton recorded a £2.9m exceptional cost in the period as it restructured and made redundancies.
Adrian Colman, CEO at Wincanton, said: “In the first half of the year the group has delivered a good overall performance. During the period we successfully commenced operations on a number of new contracts, which have helped mitigate some of the trading challenges we faced in Industrial & Transport, highlighting the benefit of our well diversified operational and customer portfolio.
“We have reacted quickly to the challenges identified earlier in the year, taking action by identifying cost saving initiatives to protect margins and ensure the business is competitively positioned going forward.”
Brokerage Liberum gave Wincanton's shares a buy recommendation. It said: "Encouraging results provided further evidence of both the return to growth and the benefits of a diverse customer and contract portfolio. Operating profit was slightly ahead of our forecast, with strength in retail and consumer more than offset weakness in industrial and transport."
Wincanton revenue analysis
Retail and consumer (£333.9m):
- Retail grocery - £106.3m (32%)
- Retail general merchandise - £174.6m (52%)
- Consumer products: £53m (16%)
Industrial and transport (£247.1m)
- Construction - £78.7m (32%)
- Transport services - £107.5m (43%)
- Other - £60.9m (25%)
Wincanton targets growth in retail, consumer and construction sectors.
