Electrical retailer, Comet has extended its contract with Wincanton for three years.
The revised agreement will make Wincanton the sole provider of transport and warehousing activities for Comet in the UK.
This is the largest logistics agreement that Comet has made with a single provider and is the largest distribution contract awarded by the company in the UK.
Wincanton counts cost of Rhine closure
Wincanton says revenue in its German intermodal business has been affected by the four-week closure of the Rhine in January and February.
The disruption was caused by a barge capsizing and leaking sulphuric acid into the river.
However, the group said in a trading update that overall performance was in line with management expectations.
Chief executive Eric Born said: “We continue to address the cost base in the UK, Germany and in France as part of our initial objective of achieving stable year on year results in the new financial year.
“In the UK core business, we have seen a number of successful renewals notably with customers including Comet, Tesco, WH Smith, BP, Musgrave, Nestle and Wavin. We are confident of further key renewals later in the year and can report a healthy new business pipeline.”
Born took over as chief executive from Graeme McFaull in December last year, and immediately made reduction in the group’s debt a priority. In February, the group set out a series of measures to preserve cash and to curtail losses in underperforming businesses including:
* a restructuring in France to reduce the cost base and target a break even position in the near term. The exceptional cost is expected to be about £2.5m and savings will be similar on an annualised basis.
* a programme in the UK to identify additional cost savings required to ensure the group’s competitiveness and underpin short term profitability.
* re-scoping a major IT transformation project to limit the cash cost and minimise the distraction in the business at a time when improving performance is a priority.