Wincanton has reported an underlying operating profit of £43.8m for the year to 31st March, but exceptional costs of £76.2m and a loss from discontinued operations of £61.8m meant that it turned in a loss for the year of £102.4m.
The group has gone through a period of dramatic change over the past year, selling of its continental businesses, and restructuring its UK businesses to focus on its strongest sectors. As a result, its revenue has fallen from more than £2bn to £1.2bn.
However, the group has been able to reduce its average level of debt. Chief executive Eric Born said: “Our refinancing has improved both the maturity and diversification of our debt. Over time the board will address the legacy debt.”
Wincanton’s business now has two prinicipal divisions: Contract Logistics led by Guy Elliot, and Specialist Businesses led by Ian Wilson.
The Contract Logistics business saw a underlying operating profit fall £2m to £34.6m on sales down £120m to £1.02bn, reflecting falling volumes in tough domestic market.
But it has made some significant business wins, including a new convenience store warehouse for Sainsbury’s in South East London, a new-build distribution centre contract in Rochdale for Asda, a retail distribution warehouse for SuperGroup, a national transport planning contract for B&Q and a warehousing contract for Kiddicare to support their retail store network.
The group is targeting a number of new business areas including: a ready-made, pay-as-you-go complete supply chain offering; collaborative transport; multi-channel supply chain management; and supply chain services consultancy.
Sales in the Specialist businesses, which includes container transport and records management, were down slightly at £179m with an underlying operating profit down £900,000 at £9.2m, again reflecting tough trading conditions.
Wincanton closed its Foodservice operation in the second half of the year at a cost of £23.4m. The group also reported an exceptional cost of £34.1m relating to onerous lease provisions. It said: “Some properties have been, or will shortly be, returned to us as customers have contracted their supply chains in response to the external market environment. In certain cases the lease ends are reasonably short which will make it difficult to sub-let or assign and this, plus the general economic environment and the overall property market which have both deteriorated over the course of the year, has led us to review all empty and part-used sites and extend our anticipated marketing periods and the incentives required to sub-let or assign these sites.”
Overall, said Born: “The operating business in the UK & Ireland is now better focused and is performing well both in securing existing contracts and winning new business.
“This creditable performance has been achieved against a significant headwind from economic uncertainty which has not only impacted volumes but also, more materially, the actions of our customers.”
Looking ahead, Born said: “In the new financial year we will continue to concentrate on improving the performance of the operating business to its full potential and will also develop further our product and service extensions.”