Wincanton pleased with earnings growth as revenues slip
Wincanton
603.00p
12:54 26/04/24
Logistics company Wincanton said contract wins largely offset the impact of losses from its prior year and first half in its preliminary results on Thursday, reporting a revenue decline of 2.6% to £1.14bn for the year.
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The London-listed firm said its underlying operating profit increased by 4.5% to £55.3m for the 12 months ended 31 March, due to its exit from lower margin contracts, the benefits of restructuring in the prior year, and ongoing improvement initiatives.
Underlying profit before tax increased 6.3% to £49.3m, generating underlying earnings per share growth of 8.8% to 33.5p.
The board said it saw “robust” free cash flow generation of £57.0m, up from £25.0m year-on-year, with net debt down to £19.3m from £29.5m, and its pension deficit on an IAS 19 basis reduced to £7.1m from £49.5m.
Wincanton confirmed strong dividend growth of 10.0% over the prior year, with a proposed final dividend of 7.29p giving a total dividend for the financial year of 10.89p.
On the operational front, the company said it saw a “strong level” of new business wins during the year, including EDF Energy, Weetabix, Co-op, HMRC, Aggregate Industries, Roper Rhodes, Hapag-Lloyd, Jollyes and DCS.
High customer satisfaction reportedly drove successful renewals of major contracts in the year, including Asda, Loaf.com, Halfords, Micheldever Tyre Services, Lucozade Ribena Suntory, Marley, Ibstock, British Sugar and Valero.
Ongoing growth in retail general merchandise was reported at 9.0%, which Wincanton said reflected strong growth in multichannel fulfilment and in its two-man home delivery solutions.
W2 innovation programmes were also said to be driving a differentiated market position.
“This year, we have seen key areas such as our retail general merchandise business grow strongly, demonstrating the real value that we deliver to our customers,” said Wincanton chief executive Adrian Colman.
“In the second half of the year we secured substantial new contract wins that should position the group well in the coming periods.
“Revenue performance overall in the year was impacted by the loss of certain contracts at the end of the previous financial year and the first half of this year.”
Colman said disciplined contract selection, performance improvement and cost management initiatives across the group, including the benefits from restructuring actions taken last year, had combined to deliver underlying operating profit growth of 4.5% and underlying earnings per share growth of 8.8%.
“Our dividend per share growth of 10.0%, demonstrates our healthy balance sheet, strong cash generation and our confidence in delivering returns for all stakeholders.
“We will continue to develop our market-leading capabilities to enhance our excellent customer service and operational delivery, enabling us to make further progress in the years ahead.”