Wincanton FY results to beat market expectations
Logistics group Wincanton said on Wednesday that full-year results are set to beat market expectations thanks to an improved trading performance and cost intervention measures.
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In an update on trading since its AGM on 22 July, the company said it has seen a continued improvement in profitability in July and August, with a particularly strong performance in Digital and eFulfilment.
The Digital and eFulfilment business is benefitting from an increase in demand for online retail, with revenue "significantly" ahead of pre-Covid-19 levels, it said.
"Volumes in the two-person home delivery business within this sector have remained high through the summer months. Furthermore, operational efficiencies have led to an improvement in operating margins in Digital and eFulfilment."
Wincanton said the performance across the rest of the business is encouraging, supported by changes to the cost base implemented earlier in the year in the face of "challenging external conditions".
The balance sheet remains healthy, with strong cash collection and a robust working capital position.
"Given the combination of Wincanton's improved trading performance, cost intervention measures and the recovering economy, the board expects results for the current year to be materially ahead of market expectations," it said.
This continues to assume no further coronavirus impact that severely affects the business.
At 1255 BST, the shares were up 12% at 202p.
Broker Shore Capital said: "In our view, this represents further positive news for the group. It follows on a sequence of new contract wins and extensions secured by the group in the last three months. Notably, the strong performance in both digital and e-fulfilment is consistent with the commentary from the logistics sector, in general."