REG - Wincanton PLC - Q1 Trading Update

WincantonAnnouncement

12/07/2023 07:00

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RNS Number : 6925F  Wincanton PLC  12 July 2023

12 July 2023

LEI: 213800Z5WTW8QKOHWQ82

 

WINCANTON PLC

("Wincanton" or the "Group")

Q1 Trading Update

Further strategic delivery against a challenging external environment

 

Wincanton plc, a leading supply chain partner for UK business, today provides
an update on its trading performance for the three months ended 30 June 2023
("Q1").

The Group continues to trade in line with market expectations 1 , and has made
sustained strategic and operational progress despite the ongoing economic
headwinds and resultant lower delivery volumes. Group revenue in Q1 was down
4.5% year-on-year when closed book transport contracts are excluded 2 .
Year-on-year revenue is 10.4% lower when including closed book transport.

Sector Performance

As set out in the Group's full year results, the strategic reorganisation in
Transport was instituted to create a more profitable and digitally enabled
service offering, alongside a more efficient allocation of capital. This
offering is focused on the development, delivery and management of
technology-based solutions and open-book dedicated networks. The Group is
already seeing early benefits from this strategic shift, with new Transport
Control Tower business for both Sainsbury's and Breedon. Our dedicated
transport contract with New Look has commenced and our long-standing transport
partnership with Halfords has been extended for a further five years.

The Group's foundation sectors continue to provide scale and strong cash
generation in a challenging market. Revenue in Grocery and Consumer decreased
by 5.6% year-on-year and General Merchandise was 16.9% lower, reflecting both
volume reductions and customer churn.

Revenue from eFulfilment increased by 15.0% in the first quarter,
demonstrating its importance as a growth driver. The Group secured several
significant new eFulfilment contract wins in the quarter, all of which will
commence in Q2. These contract wins include the expansion of the IKEA network
partnership into Ireland and final mile delivery in Greater London, the UK
launch of US home retailer Restoration Hardware and fulfilment services for
Neom Organics and Brewers (Decorator Centres).

Revenue from the Public and Industrial sector increased by 2.1% year-on-year,
with growth in our Defence customers and EDF Hinkley Point offsetting the
reductions from the contracts with HMRC and DEFRA. The Group secured new
contract wins in the key Defence and Industrial markets, expanding its
partnerships with Rheinmetall BAE Systems Land and British Salt. The Public
and Industrial sector includes construction closed book transport contracts.
Where no protection exists, these transport contracts are being exited in
alignment with our technology-based transport strategy.

Trading Outlook

Wincanton is well-placed to continue to navigate the challenging external
environment with its successful strategy and continued investment in
automation technology, underpinned by its diversified customer base. The
Group's strategic shift in transport towards open book contractual agreements
will deliver both financial and operational benefits.

The Group maintains a resilient financial position with a strong balance sheet
and consistent cash generation. Management continues to actively engage with
the Wincanton Pension Fund Trustees to agree an optimal contribution schedule
in response to the ongoing triennial valuation and expects to provide a
further update at half year.

 

-Ends-

 

For further information please contact:

Wincanton
plc
Tel: +44 1249 710 000

 

James Wroath, Chief Executive Officer

Tom Hinton, Chief Financial Officer

 

Headland
Tel: +44 20 3805 4822

Susanna Voyle/ Henry Wallers

E: wincanton@headlandconsultancy.com
(mailto:wincanton@headlandconsultancy.com)

 

 

About Wincanton

Wincanton is a leading British supply chain solutions company. The Group
provides business critical services including storage, handling and
distribution; high volume eFulfilment; retailer 'dark stores'; two-person home
delivery; fleet and transport management; and network optimisation for many of
the UK's best-known companies.

The Group is active across a range of markets including food and consumer
goods; retail and manufacturing; eCommerce; the public sector; major
infrastructure; building materials; fuel; and defence. With almost 100 years'
heritage, Wincanton's 20,300-strong team operates from 160 sites across the
country, responsible for 7,400 vehicles.

 1  Market consensus for FY24 PBT of £50.4m

 2  Year-on-year revenue comparisons provided in this update exclude closed
book transport contracts. When closed book transport contracts are included,
year-on-year movements of: Grocery & Consumer -12.3%, General Merchandise
-18.0%, eFulfilment +15.0%, Public and Industrial -15.3%

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