A strong performance in Wincanton’s contract logistics business saw turnover jump in the first half of its financial year, but losses in its Pullman Fleet Services division slowed profit growth.

Group turnover increased 5.8% to £582.8m in the six months to 30 September (2014: £550.9m), mainly driven by strong volumes in open book contracts and new and renewed business wins, including extended contracts with long-standing customers Dairy Crest and HJ Heinz. Pre-tax profit crept up 1.6% to £12.9m (2014: £12.7m).

Speaking to Motortransport.co.uk, chief executive Adrian Colman said the two renewals take its relationship with each of the firms to “well over 20 years” and “show the resilience of Wincanton’s business”.

“We can provide the resource and agility customers need. Being just a UK and Ireland focused business, we can make decisions quickly without any complex international intervention,” he said of the group’s success in its contract logistics division, which accounted for £490.6m of Wincanton’s half-year turnover (2014: £464.1m).

Pullman turnaround

Wincanton is making progress with the turnaround of its Pullman Fleet Services vehicle maintenance division, which achieved a 12.2% increase in turnover to £40.2m during the period. However,  rapid growth in retail grocers’ home delivery fleets put pressure on the business.

“[The turnaround] has probably been harder than we expected,” Colman said. “We’ve had contracts that weren’t working well for us that we are in the process of exiting.”

Wincanton does not expect the retail market to grow significantly over the next six months, and Colman said grocers will look for ways to lower Wincanton’s cost to serve.

“We will be looking at new and innovative ideas and our challenge is to bring that to them,” he added.

He also expects growth to continue in the construction sector. Turnover derived from construction business in the six-month period jumped 20% to £81.5m (2014: £67.8m).

Colman said the business was able to achieve “great value” from the disposal of its Records Management business, which was sold to market specialist Restore for £60m earlier this month.

Container logistics

Colman is confident about the prospects for Wincanton’s container business, which sits within the Specialist business segment, despite the sale of its records division and the launch of the Pullman turnaround plan also in the division.

Containers achieved a turnover of £41m during the period, up slightly on 2014 (£40m).

“Containers and Pullman have good customer affinity,” Colman said. “It has a future in the business and [we can see it] working with contract logistics.”