Wincanton has set out plans to eliminate losses in underperforming businesses and to preserve cash in the business.
In its interim management statement, the 3PL said the new management team had made debt reduction a priority. It said the group continued to face challenging conditions in the markets in which it operates, although results for the year to 31 March 2011 are expected to be in line with management’s expectations.
In the UK it has started a programme to identify additional cost savings to ensure the Group’s competitiveness and underpin the short term profitability of the group.
It has also started restructuring its French business to reduce the cost base and target a break even position in the near term. “The exceptional cost will be approximately £2.5m and savings will be similar on an annualised basis.”
An IT transformation project reported at the interims has been re-scoped to limit the cash cost and minimise the distraction in the business at a time when improving performance is a priority.
“The revised scope will lead to a significant exceptional impairment at the year end.”
Eric Born, who took over as chief executive in December, said: “Our operations continue to deliver excellent service and are highly valued by our customers. The board is actively addressing a number of challenges facing the group and we will invigorate our business proposition to drive profitable growth across the market segments we serve.”
The bright spot for the group was the more growth oriented newer market segments. These include container logistics, defence and construction which have performed ahead of expectations. However, the opening of a significant new site for the Foodservice business meant it had been loss making in the period.