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Wincanton has reported a year of 'profitable growth and strategic progress' against what it called a 'challenging external environment'.

The logistics giant also announced a reorganisation of its transport operations to focus on dedicated open book networks and 4PL activities.

The move is aimed at creating 'a more efficient, profitable, digitally enabled service offering', despite restructuring and associated impairment charges of £19.5m.

Results for the financial full-year ended 31 March 2023 showed revenue increased by 2.9% to £1,462.0m and underlying profit before tax increased 6.9% to £62.1m, a record result. The total dividend for the year was raised 10% to 13.2p.

Major new business wins were secured across all four of the group’s sectors, with significant contract renewals also agreed with long-standing customers including Sainsbury’s, Waitrose & Partners, Wickes and Halfords.

The news comes after Wincanton issued a profit warning in March for its 2024 full-year results after losing a major contract with HM Revenue and Customs (HMRC).

In the same month, Morrisons terminated its transport contract with Wincanton 'with immediate effect' and handed the entire operation over to Stobart, a year earlier than its original agreed length.

However, a trading update that accompanied today's results said that while challenging economic conditions are expected to continue in the new financial year, Wincanton forecasts results for FY24 in line with market expectations.

The company added that headwinds detailed in the first half of the year continued with lower customer volumes impacting performance in H2.

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Steps were taken to manage inflationary pressures, with costs passed through in open book contracts and controlled in closed book deals.

The group remains highly cash-generative, the update said, with strong free cash flow generated from operating activities.

However, it said consumer spending trends impacted retail volumes in Grocery & Consumer, General Merchandise and e-fulfilment.

Public & Industrial revenue was boosted in the year by expanded contract wins with DHSC and Defra, together with growth in defence through new work with BAE Systems.

Wincanton also made strategic investments through the year in robotics and automation technologies with the successful deployment of autonomous mobile robots at the group’s Cygnia facility.

Commenting on the results, Wincanton chief executive James Wroath said: “Our strategy delivered a strong result in FY23 despite the prevailing macro-economic challenges, particularly with regard to retail volumes and inflation.

"We continue to invest in technology as the route to deliver competitive advantage in the industry. Significant opportunities remain for warehouse automation across our group, both in the foundation sectors and strategic growth markets. Furthermore, our transport operations have had a shift in focus with technology at the heart of our new market proposition.

"I am thankful to the Wincanton team who has delivered excellent performance in a difficult economy. Their determination and innovation will continue to be essential, as we expect volumes to remain under pressure into FY24 due to the macro-economic environment.”