Strong retail performance mitigates contract losses at Wincanton

Wincanton saw annual turnover fall in the year ended 31 March 2019 but profit increase, thanks to a strong performance in retail that offset contract losses elsewhere.

Turnover was 2.6% lower for the period at £1.14bn (2018: £1.17bn). Pre-tax profit (normalised to strip out exceptional items such as previous restructuring) was up 6.3% to £49.3m (2018: £46.4m).

Its statutory pre-tax profit for the period was 28.2% more at £48.6m (2018: £37.9m).

Wincanton’s debt was down by more than a third year-on-year at £19.3m.

Adrian Colman, chief executive at the 3Pl, said: “This year, we have seen key areas such as our retail general merchandise business grow strongly, demonstrating the real value that we deliver to our customers.

“In the second half of the year we secured substantial new contract wins that should position the group well in the coming periods. Revenue performance overall in the year was impacted by the loss of certain contracts at the end of the previous financial year and the first half of this year.

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“Disciplined contract selection, performance improvement and cost management initiatives across the group, including the benefits from restructuring actions taken last year, have combined to deliver underlying operating profit growth of 4.5% [£55.3m] and underlying earnings per share growth of 8.8%.

“Our dividend per share growth of 10.0% [representing a payment of 10.89p per share], demonstrates our healthy balance sheet, strong cash generation and our confidence in delivering returns for all stakeholders. We will continue to develop our market-leading capabilities to enhance our excellent customer s

ervice and operational delivery, enabling us to make further progress in the years ahead.”

New business wins in the year included EDF Energy, Weetabix, Co-op, HMRC, Aggregate Industries, Roper Rhodes, Hapag-Lloyd, Jollyes and DCS.

Successful renewals of major contracts in the year included Asda, Loaf.com, Halfords, Micheldever Tyre Services, Lucozade Ribena Suntory, Marley, Ibstock, British Sugar and Valero.

Analyst Liberum described the results as in line with expectations and added that they showed encouraging profit growth despite "revenue headwinds".

"Outgoing CEO Adrian Colman appears to be leaving the group in good shape," it added in a briefing note, recommending investors buy the shares.