Wincanton resumes divi payments, sees FY results 'materially' ahead

Wincanton posted a decline in first-half profit on Thursday but said full-year results are set to be "materially ahead" of current market expectations following good momentum into the second half, as it announced the resumption of dividend payments.

In the six months to the end of September, underlying pre-tax profit fell 27.1% to £19.1m on revenue of £578.7m, down 2.4% from the same period a year ago. The logistics group attributed the slight decline in revenue to the impact of Covid-19 lockdown measures, primarily in the early months of the year.

The construction, energy and container markets were particularly affected, it said, along with Wincanton’s home delivery network, due to a requirement to shut down completely for a short period.

"These adverse effects have been largely offset by the strength of online performance within Digital & eFulfilment, by buoyant grocer sales through the lockdown and improving General Merchandise activity throughout H1," it said.

With good momentum into the second half, it expects FY20/21 to be materially ahead of current market expectations assuming no further severe impacts from the coronavirus.

In addition, Wincanton will resume dividend payments, having suspended them earlier in the year due to the pandemic. It will pay an interim dividend of 2.85p, down from 3.90p in 2019.

The company also announced that it has agreed to sell subsidiary Wincanton Pullman Fleet Services, its UK commercial vehicle repair and maintenance company, to asset management firm Aurelius for a "nominal" consideration.

The transaction will reduce the group’s annual revenue by around £30m but lead to a small benefit in underlying pre-tax profit.