Wincanton has reported renewed progress in automated warehousing, an encouraging new business pipeline in the UK and Ireland, building development momentum in Continental Europe, and an increasing market share with blue-chip customers.
The company reported an adjusted operating profit of £21.5 million, up 8.6% (2003: £19.8m), with adjusted pre-tax profit up by 22.7% to £16.2 million (2003: £13.2m) on turnover of £844.5 million, £0.9 million less than last year. Adjusted earnings per share increased by 15.7%, and net debt has been reduced to £55.4 million.
Profit progress was particularly marked in Continental Europe, with an improved performance in the German intermodal business, steady progress in most other countries and good results from pan-European 4PL activities being the principal factors behind a 77.8% increase in reported operating profit, to £3.2 million. Overall progress was hindered by slower trading in Spain. Operating profit of £18.3 million in the UK & Ireland represented a 1.7% increase on the same period last year. Adjusting for rental income foregone on an investment property sold last year, the increase would have been approximately 4.2%.
In the UK and Ireland, Wincanton renewed contracts with customers such as Heinz, Pernod Ricard, Britvic and Procter & Gamble, and won transport & warehousing contracts with Alba, Arnotts, B&Q, Argos, First Milk and Dairy Farmers of Britain, J Sainsbury, Comet, Statoil and Twyford Bathrooms.
Wincanton successfully implemented an automated warehouse for Matalan and a new import centre for Tesco in Daventry. The company was also awarded a 10-year contract to operate a new automated warehouse for GlaxoSmithKline, and renewed the contract for its existing automated warehouse for GlaxoSmithKline for a further 10 years. New logistics contracts in Germany included a warehouse operation for Honeywell. Wincanton now operates twelve automated facilities in the UK and one in Germany.
Wincanton’s first reverse logistics project was successfully established for Index, and the company is in discussions with other retailers.
The company’s businesses in the Benelux countries reported improved performance, winning new business with Mitsubishi Motors and Nedcar and extending the warehousing operation for Dow. The Strasbourg-based operations in France delivered a new European distribution centre for Viking. In central Europe, the company reported high levels of activity, particularly in Poland, and won new business with a number of multinational customers including Goodyear. In Hungary, new business was added with Hipp, serving their regional requirements across Central Eastern Europe and South Eastern Europe from a warehouse in Budapest.
Progress has been sustained in Germany following last year's return to profitability. Wincantons’ intermodal activities, in particular, saw a stronger first half, and the company benefited from higher volumes of container traffic and good new business progress.
Due to continuing difficulties in international groupage, Wincanton closed one site in France and one in Spain.
Commenting on the results, chief executive Paul Bateman, said: “The quality of our creative solutions and the consistency of our operational performance continue to strengthen our market position. We have made further good progress in the first half of the year, both operationally and financially. We are confident that our strategy of offering our customers national, regional and pan-European solutions will deliver enhanced opportunities for growth.”
