Chippenham-based Wincanton group returns to profit
The turnaround of logistics business Wincanton is "gathering momentum", its boss said today, after it returned to profit and clinched two major retail deals.
The Chippenham-based group, which counts Asda and The Co-operative among its customers, has struck a multimillion pound deal with DIY giant B&Q and signed a five-year contract with supermarket Morrisons to operate its first UK convenience store distribution centre in London.
In contrast to a £13.6 million loss last year, Wincanton today reported a £13 million pre-tax profit for the six months to September 30.
Chief executive Eric Born said the company's drive to lead the UK and Ireland market continued to gather momentum and that Wincanton's recent new business successes were a clear indication of progress.
Last year Wincanton sold its mainland European operations to focus on the UK and Ireland and it also disposed of its business delivering food to restaurants, pubs and other caterers.
Excluding the impact of the restructuring on 2011 figures, the group, which has reduced staff numbers from 26,000 over the last year to 16,000, saw underlying profits grow from £22.3 million to £24.3 million.
However, Wincanton said uncertain trading conditions in the construction sector and its containers business was impacting volumes in the short term.
It had worked for electricals retailer Comet since 2007, but opted not to renew a deal earlier this year as it was unwilling to accept longer payment terms.
The group said it will continue not to pay a dividend as it is committed to reducing debt levels.
Business analyst Steve Woolf said he expected further progress on the road to recovery with the benefits of last year's cost-cutting programmes supported by the exit of loss-making businesses such as food services.
He said he expected many of the new contract wins to start to contribute later this financial year.