Wincanton has continued to trade in line with market expectations during Q3 and is on track to deliver around £50.5m profit before tax for the financial year to 31 March 2024, despite losing a major HMRC contract and battling tough trading conditions.

According to its latest trading update for Q3, which covers the three months to 31 December 2023, the group delivered a 1.3% year-on-year revenue boost, continued exiting its closed book transport contracts and delivered a ”seamless” operational performance for retail customers over the seasonal peak.

Revenue from core activities grew by 5% year-on-year, which the group attributed to progress in balancing the contract mix towards commercially protected agreements with reduced volume exposure.

The group hailed its core sectors’ strong Q3 performance which saw grocery and consumer revenue rise 2.9% year-on-year to 11.4%, aided by its major open book transport partnership with Sainsbury’s.

General merchandise delivered a revenue growth of 3.7%, reflecting the impact of new contracts with New Look and Segen.

Meanwhile efulfilment revenue grew 8.1% year-on-year, thanks to the ”strong performance” of IKEA, Wickes and The White Company contracts.

However public and industrial revenue took a tumble, falling by 11.9%, largely due to the loss of a major HMRC contract loss. The group said this was partially offset by a strong performance with defence and industrial customers, notably EDF, British Salt and BAE Systems operations.

The loss of the HMRC contract in March last year, following a retendering process, saw Wincanton issue a profits warning. The five-year contract, first awarded to Wincanton in 2019, had an estimated value of £71m. It involved the provision of logistics services to support UK customs operate and establish inland depots and storage locations for imported goods for sea, air, road and rail freight.

The trading update concluded that the group’s strong customer partnerships and focus on open book contracts, alongside ”robust” cost control, had helped its performance in the quarter, during what it described as a ”challenging macro-economic environment”.

James Wroath, Wincanton chief executive, said: ”Wincanton plays a crucial role at the heart of UK supply chains; this is never more apparent than during the seasonal peak trading period for our retail customers.I would like to thank all my colleagues for their hard work and dedication during this exceptionally busy period.

”We remain focused on being Britain’s best supply chain partner and on the opportunity to deploy technology to deliver transformational value for our customers and shareholders.

”The macro-economic environment remains uncertain as we move into 2024 but we are confident our strategy and strong financial position provides an excellent foundation for growth and continued strategic delivery in 2024.”