Transport division drags down profits for Wincanton

Supply chain solutions group Wincanton saw its underlying operating profit fall in the six months leading to 30 September as a strong showing by its retail and consumer business was held back by a softening in its industrial and transport division.

Although underlying profit before tax grew 8.7% to £58.1m thanks to lower net finance charges, underlying operating profit as a whole fell 1.5% to £25.7m as the group's operating margin dropped to 4.4% from 4.6% at the same time a year earlier.

Revenues increased 3.4% to £58.1m as contract wins from the previous year carried into the first half of its current financial period as well as a significant uptick in volume growth of its home and DIY customer base.

Retail and consumer revenues moved ahead 4.5% to £333.9m, but £2.9m in exceptional costs resulting from Wincanton's restructuring efforts and the 25.9% percent decline to £10.6m recorded in its industrial and transport business left the group behind its operating profit mark of twelve months prior.

Net debt was up to £43.5m from £32.2m a year earlier.

Adrian Colman, Wincanton's chief executive officer, said, "During the period we successfully commenced operations on a number of new contracts, which have helped mitigate some of the trading challenges we faced in Industrial & Transport, highlighting the benefit of our well-diversified operational and customer portfolio."

"We have reacted quickly to the challenges identified earlier in the year, taking action by identifying cost-saving initiatives to protect margins and ensure the business is competitively positioned going forward," he added.

As of 1145 GMT, shares had dropped back 0.565 to 266.00p.