Wincanton expects its financial performance to be similar to last year, which is around the lower levels of analyst forecasts for the current year – mainly as a result of weakness in the markets for construction, home delivery and recycling as well as lower volumes in the continental activities.
Chief executive Graeme McFaull said: “We have moved swiftly to take cost out of our more volume-sensitive operations and re-position the group for a much more challenging economic environment. We will not be immune to the effects of the downturn, but are encouraged by the resilience of the majority of our business, the speed with which cost reduction initiatives are being implemented and our continuing success in growing our market share through new business wins.”
The group is soon to announce the details of contract gains with a major retailer, which it reckons will be one of the largest awards in the market this year. “We have also been notified, by one of Germany’s leading industrial groups, of preferred contractor status on a complex pan-European supply chain management contract.”
The profit improvement measures would lead to higher levels of exceptional costs in the second half, offset by property disposal proceeds and additional receipts in respect of the PGN arbitration. Exceptionals in the second half would also include the cost of exit from the chilled consolidation activities.
“These costs will be mitigated by the recognition of the value of our 20 per cent stake in the enlarged Culina Logistics, the business to which our chilled activities have been transferred.”