REG - Wincanton PLC - Update on Pension Scheme

WincantonAnnouncement

20/09/2023 07:00

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RNS Number : 9880M  Wincanton PLC  20 September 2023

20 September 2023

LEI: 213800Z5WTW8QKOHWQ82

 

This announcement contains inside information.

 

WINCANTON PLC

("Wincanton" or "the Group")

Update on Pension Scheme

Wincanton, a leading supply chain partner for UK business, is pleased to
announce it has reached an agreement with the Group's Pension Scheme Trustee
(the "Trustee") on the terms of the 2023 Triennial Valuation (the "2023
valuation").

Highlights:

·          As at 31 March 2023, the valuation of the Group's defined
benefit pension scheme showed an actuarial surplus of £3.9m, compared to an
actuarial deficit of £154m at 31 March 2020.

·          The strength of the Scheme means that it is well
positioned to meet its obligations to both deferred members and current
pensioners; with members' liabilities fully backed by assets on current market
assumptions.

·          The significant improvement in the Scheme is a reflection
of the Trustees' stewardship and collaboration with the Group during a period
of macro-economic turbulence.

·          The Group and the Trustees have agreed that no further
contributions are currently payable into the Scheme as a consequence of the
2023 valuation.

·          Prior conditions around shareholder distributions have
been removed.

 

Further detail:

The key elements of the 2023 valuation and related covenants are set out
below:

·    With the Scheme now approaching a self-sufficient position, no
further contributions into the Scheme by the Group will be required between 30
September 2023 and the completion of the 2026 valuation. Previously,
contributions for the year ending 31 March 2024 would have been £23.6m and
£25m per annum from April 2024 to March 2027, growing in line with the Retail
Prices Index.

·    There will be no conditions associated with the payment of dividends
or the execution of share buybacks. Previously, Wincanton was required to
provide additional 50% matching payments to the Scheme where aggregated
shareholder distributions (dividend and buyback) grew more than 10%
year-on-year and on a full matching basis if distributions grew more than 15%
per annum.

·    £12m of Letters of Credits can now be released in line with the
original Contingent Funding agreement as they were required only if
contributions above £25m per annum were needed.

·    If the Scheme experiences severe adverse performance, such that the
Technical Provisions deficit of the Scheme exceeds an agreed threshold for two
consecutive measurement dates (or if Group financial leverage exceeds agreed
trigger points), Wincanton will review contribution requirements or establish
contingent assets to protect the Scheme. The current expectation is that
either of these are extremely unlikely, due to the substantial headroom
between the current position and the agreed thresholds. This mechanism ensures
the protection of members' benefits under extreme market or company events.

 

The significant improvement in the position is the result of Group
contributions, a strong return on assets and positive market changes.

 

The Board will continue to review the performance of and options for the
Scheme, in line with the Group's capital allocation framework.

 

Tom Hinton, Chief Financial Officer, Wincanton, said:

"We are delighted with the outcome of the 2023 Triennial Valuation, which is
the result of a well-executed investment strategy by the Scheme Trustees and
strong cash generation from the Group enabling consistent contributions into
the Scheme in recent years."

"Scheme members can take comfort in the funding level and security of the
Scheme, with their benefits backed by a strong portfolio of assets."

"The agreement will significantly improve the Group's free cash flow and we
look forward to providing a further update on Wincanton's capital allocation
at our Interim Results in November."

-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 more than 170 sites
across the country, responsible for 8,500 vehicles.

 

 

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