Wincanton has signed a conditional agreement to dispose of the operations of its container business to Maritime for around £1.5m.
Net liabilities of approximately £1m, primarily in respect of leased fleet, will transfer to the buyer. After fees and provision for costs of separation, the group expects to report a small exceptional gain on disposal.
The group said the transaction will reduce its annual revenue by approximately £60m and will lead to a small increase in the group’s underlying profit before tax.
The move is aligned with its strategy of focusing on its core markets which it said offered the greatest potential for growth.
The container business sits within Specialist Services in the group’s new reporting structure, providing port to distribution centre container logistics services.
The business is subject to a high level of volatility in the daily demand for its services and the short-term nature of its contracts differs from Wincanton’s core business model, where visibility of earnings is prioritised.
Wincanton further explained that the containers business is likely to require investment within the next two years and the company is committed to directing investment towards higher value areas of the group.
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“This transaction is an important step in our strategy to focus our efforts and resources on the exciting growth opportunities we see in our core markets," explained Wincanton chief executive James Wroath (pictured). "I would like to thank all our colleagues in the container business for their professionalism and service to our customers during Wincanton’s period of ownership and we wish them well for the future.”
Commenting on the group's full-year results back in June, Wroath told motortransport.co.uk that container volumes continued to be below expectations with the business impacted in April by reduced traffic from Asia and latterly by reduced consumer demand in the UK.
However, he said that for the time being this was something Wincanton was “prepared to live with" and that there were "things we can do internally around containers and fleet services to create more of a portfolio sale".
Under the deal, all employees and assets will be transferred to Maritime who will continue to work with Wincanton as a strategic partner supporting a number of its customers’ international supply chains.
The combined business will create a road fleet of 2,000 with 3,000 employees, based throughout the UK.
“We are delighted to have agreed terms with Wincanton to acquire its container transport business, Wincanton Container Logistics," said Maritime group chairman John Williams. "We welcome the staff and drivers and look forward to building our capability in the container transport sector and relationships with its customers.”