Half Year Results

RNS Number : 8164Q

Wincanton PLC

12 November 2012

 



For immediate release

12 November 2012

WINCANTON plc

Half Year Results for the six months ended 30 September 2012 (unaudited)

Improved performance and strategic progress achieved

Wincanton plc ("Wincanton" or "the Group"), a leading provider of supply chain solutions in the UK & Ireland, today announces its half year results for the six months ended 30 September 2012.

Key Points

·      Underlying performance of the Group has been positive with good wins assisting future growth, including the following within the retail sector

o   Agreement with B&Q to support their multi-channel operations across the UK

o   Five-year contract with Morrisons to operate its first ever dedicated UK convenience distribution centre in London

·      Future growth continues to be supported by investment to develop product and service extensions

·      Current trading in line with expectations

Financial Key Points

·       Revenue £551.2m (2011 - £625.4m)

·       Underlying operating profit £24.3m (2011 - £22.3m)

·       Underlying profit before tax of £17.1m (2011 - £14.2m)

·       Profit before tax £13.0m (2011 - £13.6m loss)

·       Underlying earnings per share 10.6p (2011 - 9.0p)

·       Basic earnings per share 8.0p (2011 - 9.0p loss)

·       Net debt £123.0m (£114.5m at 31 March 2012)

Note:  Amounts stated relate to continuing operations only.  Underlying profit before tax and earnings per share are stated before net other items of £4.1m (2011: £27.8m), comprising exceptional restructuring and other costs of £nil (2011: £23.7m), and amortisation of acquired intangibles of £4.1m (2011: £4.1m).  Operating profit, including these items, amounted to £20.2m (2011: loss of £5.5m).  Profit before tax, including these items, amounted to £13.0m (2011: loss of £13.6m).

Eric Born, Chief Executive commented:

"The first six months of the current financial year reflect the progress the Group has made over the last 18 months.  Our strategy to achieve a clear leadership position in the UK & Ireland supply chain market continues to gather momentum and our recent new business successes are a clear indication of how this is now delivering tangible results".

"Our new business pipeline remains healthy and we continue to be successful in securing significant levels of customer contract renewals.  We remain acutely focused on margin growth and free cash flow generation."

For further enquiries please contact:

Wincanton plc Eric Born, Chief Executive Jon Kempster, Group Finance Director	Tel: [phone] today, thereafter Tel: [phone]
Buchanan Jeremy Garcia or Gabriella Clinkard	Tel: [phone]

Half Year Review

for the six months to 30 September 2012

Introduction

During the six months to 30 September 2012, the Group has made further progress in executing its strategy. Our stated aim is to be the leading partner in the UK & Ireland, helping our customers to unlock the potential in their supply chains. We achieve this through the combination of our operational excellence and outstanding delivery track record, our expertise in solution design and market leading system capabilities. Our operational capabilities are in warehousing, multi-modal transport and specialist services across a broad range of market sectors such as retail, defence, consumer goods, manufacturing, construction, milk and energy.

The Group is progressing as expected, realigning its cost base to fit its organic growth strategy, with all resources focused on operational delivery, further business improvement and profitable growth in the UK & Ireland. Operational efficiencies and cost savings, alongside new business wins and further product and service development will provide the impetus required for profitable growth.

The underlying performance of the Group in the period has been good. We are especially pleased to have won new contracts in the retail sector with customers such as B&Q and Morrisons. This is continued recognition of our operational credentials. Importantly the contract wins and renewals see our retail business improve in overall performance terms.  Within the construction sector and containers business, we continue to see uncertain economic trading conditions impacting volumes in the short term.

Retailers and manufacturers are increasingly seeking to engage with Wincanton where value added services are required over and above what can be achieved in-house, reflecting the breadth and depth of our expertise. Specific examples of this include collaborative transport solutions, operational and technology solutions to support multi-channel retailing and shared user warehousing backed by leading edge systems. To this end, Wincanton's ability to deploy market leading IT processes has allowed us to gain a competitive advantage in order to meet the requirements of our customers for cost efficient, best in class technology. Our recently announced contract win with Morrisons for the operation of their first convenience distribution centre in London included the deployment of our systems platform which, in addition to the warehouse contract, demonstrates how we can assist customers in the strategic development of new supply chain activities.

Contract logistics

	2012	2011
Revenue	£465.0m	£534.5m
Underlying operating profit	£20.1m	£17.5m
Margin	4.3%	3.3%

Overall the Contract logistics business has performed well in what continues to be a challenging economic climate. Important wins in the period include a new contract with B&Q for the operation of its 1 million sq ft showroom fulfilment centre. Within our shared user warehousing portfolio we have added business with Ella's Kitchen and Unilever and new transport contracts were secured with CEMEX UK and Smyths Toys. The decline in revenue in the current period in the most part results from the insourced contracts last year which have yet to be offset by the new contract wins we have secured in the current year. Our new contract wins commence in the last quarter of our current financial year.

Our open book contracts, which account for approximately 60% of revenue and are primarily with the major retailers, continue to provide a stable profit stream supported by resilience to volume levels. Renewals included the Doncaster and Larne warehouses for Asda, warehousing and distribution for Musgrave Retail Partners in Northern Ireland and transport operations for The Co-operative Group servicing over 1,000 stores. Within the closed book portfolio which accounts for approximately 40% of revenue, we have enjoyed a strong performance renewing contracts during the period with Dairy Crest, AvantiGas, Marley Eternit and Neal's Yard Remedies.

Specialist businesses

	2012	2011
Revenue	£86.2m	£90.9m
Underlying operating profit	£4.2m	£4.8m
Margin	4.9%	5.3%

Our Specialist businesses are made up of three separate trading activities; Containers, Pullman and Records Management. The Containers business has continued to increase efficiency and productivity but these beneficial steps have not been able to counter the general volume weakness. The Pullman business has traded satisfactorily in the period and continues to look at providing cost saving opportunities for its customer base whilst expanding its fleet management services. The Records Management business has had a strong start to the year, securing new contracts with AIB, the Scottish NHS and Thomson Reuters.

Discontinued operations

The discontinued operations comprise the Mainland Europe businesses that were disposed of in the year ended 31 March 2012.

No profit or loss in relation to discontinued operations has been recognised in the six months to 30 September 2012.

Profit and loss summary

Continuing operations

Revenue for the six months was £551.2m (2011: £625.4m) down 11.9% against last year.  Underlying operating profit was £24.3m representing an increase of £2.0m compared with last year.  Overall margins at 4.4% are much improved against the equivalent six months last year (2011: 3.6%) and the 3.6% for the full year ended March 2012.

Net financing charges were £7.2m compared with £8.1m last year.  The charge in the period includes amortised arrangement fees of £0.7m, discount unwinding charges of £1.3m and an IAS 19 pension net financing credit of £2.1m compared with the previous half year of £1.5m, £0.9m and £2.6m respectively. 

Underlying profit before tax is £17.1m compared with £14.2m last year which translates into an underlying EPS of 10.6p (2011: 9.0p).

There were no exceptional items in the current period, whilst in the prior period there was a £23.7m charge for the costs of the phased exit from the Foodservice business including asset write downs and onerous contract provisions.

The total operating result for the period after amortisation of acquired intangibles and exceptionals in the prior year, of £4.1m (2011: £27.8m) is a profit of £20.2m (2011: £(5.5)m loss).  After net financing charges of £7.2m (2011: £8.1m) the profit before tax for the year is £13.0m (2011: £(13.6)m loss).

Balance Sheet and Cash Flow

Net debt of £123.0m at 30 September 2012 compares to £114.5m at 31 March 2012 and £177.6m at 30 September 2011. Reduction in the average net debt levels is a priority for the Group.  Average net debt for the six months of c. £210m compares favourably to the equivalent last year of c. £290m.  The Group continues to operate well within its banking covenants and continues to maintain strong relationships with its major lenders.

Capital expenditure of £3.7m compared with £5.5m in the same period last year, the latter part of the total of £11.4m shown as a comparative on the cash flow which includes the discontinued businesses. The working capital outflow in the period of £23.7m arises primarily, as expected, from the reduction in the management of purchase ledger balances at the reporting date as compared to the last year end, plus a marginal increase in the trade debtors receivable. Lastly, certain of the provisions made within exceptionals at the year end have been paid in the period and result in outflows of £5.1m for restructuring costs and £6.4m (£4.4m specifically relates to the onerous lease provision provided in the prior year accounts) in respect of onerous property liabilities.

The IAS 19 pension deficit at the end of September 2012 was £114.7m compared with £68.1m last year and £118.2m at the year end.

Dividend

As the Board has stated previously, the Group is committed to reduce average debt levels before the reinstatement of a dividend.

Risks

The key risks and uncertainties facing Wincanton in the second half of the current financial year have not changed materially from those outlined in the Annual Report for the year ended 31 March 2012. The principal commercial and operational risks are the Group's ability to source new contracts, at an appropriate financial return for an acceptable level of risk, and subsequent performance of new and existing contracts. The average net debt level and the desire to reduce the debt level will assist in achieving a long term sustainable capital structure.

Outlook

The Board is pleased to report that Wincanton continues to perform satisfactorily and in line with expectations.

We continue to work alongside our valued customers to provide the excellent operational service delivery and value proposition they expect. The renewal of existing contracts remains a priority and will continue to underpin our success.  The Group also remains focused on pursuing opportunities to further assist our existing and new customers within the wider supply chain arena.

We are encouraged to see further new contract wins that will assist the Group over the next 18 months and have seen some initial opportunities to expand the product and service range to our traditional customers and also other groupings, such as mid-tier retailers. 

Whilst the challenge is undoubtedly greater against the current economic environment, many of the actions already underway throughout the Group will enable us to take advantage of any market upturn and we expect to make further progress in the remainder of the year.

Statement of Directors' responsibilities

The Board confirms to the best of their knowledge: 

·      that the consolidated half year financial statements for the six months to 30 September 2012 have been prepared in accordance with IAS 34 'Interim Financial Reporting' amended in accordance to changes in IAS 1 'Presentation of Financial Statements', as adopted by the EU; and 

·      that the Half Year Report includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the consolidated half year financial statements; a description of the principal risks and uncertainties for the remainder of the current financial year; and the disclosure requirements in respect of material related party transactions.

The composition of the Board of Directors has changed since the publication of the Annual Report in June 2012.  David Radcliffe and Martin Sawkins were appointed as non-executive Directors on 27 July 2012 and Neil England retired from the Board on 31 July 2012.

The above Statement of Directors' responsibilities was approved by the Board on 9 November 2012.

Consolidated income statement

for the six months to 30 September 2012 (unaudited)

	Note		Six months to 30 Sept 2012 £m		Six months to 30 Sept 2011 £m	Year ended 31 March 2012 £m
Continuing operations:
Revenue		2	551.2		625.4		1,202.8
Share of results of associates			-		0.7		1.3
Underlying operating profit		2	24.3		22.3		43.8
Amortisation of acquired intangibles			(4.1)		(4.1)		(8.2)
Exceptional restructuring and other costs		3	-		(23.7)		(68.0)
Operating profit /(loss)			20.2		(5.5)		(32.4)
Financing income		4	2.4		2.7		5.5
Financing cost		4	(9.6)		(10.8)		(20.5)
Net financing costs			(7.2)		(8.1)		(15.0)
Profit/(loss) before tax from continuing operations			13.0		(13.6)		(47.4)
Income tax (expense)/credit		5	(3.8)		3.3		6.8
Profit/(loss) for the period from continuing operations			9.2		(10.3)		(40.6)
Loss from discontinued operations		6	-		(62.7)		(61.8)
Profit/(loss) for the period			9.2		(73.0)		(102.4)
Attributable to
- equity shareholders of Wincanton plc			9.2		(73.3)		(102.8)
- minority interests - discontinued operations			-		0.3		0.4
Profit/(loss) for the period			9.2		(73.0)		(102.4)
Earnings/(loss) per share - basic and diluted
- continuing operations		7	8.0p		(9.0)p		(35.3)p
- discontinued operations			-		(54.8)p		(54.0)p
- Total			8.0p		(63.8)p		(89.3)p

The Directors do not recommend the payment of a dividend in respect of the above period (2011: nil).

Consolidated statement of comprehensive income

for the six months to 30 September 2012 (unaudited)

	Six months to 30 Sept 2012		Six months to 30 Sept 2011			Year ended 31 March 2012
	£m		£m			£m
Profit/(loss) for the period		9.2		(73.0)		(102.4)
Other comprehensive income
Actuarial losses on defined benefit pension schemes, net of deferred tax		-		-		(50.0)
Net foreign exchange gain/(loss) on investment in foreign subsidiaries net of hedged items		0.3		0.6		(0.8)
Translation reserve relating to disposals transferred to profit or loss		-		(2.8)		(4.4)
Effective portion of changes in fair value of cashflow hedged items		(1.0)		(4.2)		(4.3)
Net change in fair value of cashflow hedges transferred to profit or loss		0.8		0.8		1.5
Income tax relating to components of other comprehensive income		(1.1)		-		(0.8)
Other comprehensive expense for the period, net of income tax		(1.0)		(5.6)		(58.8)
Total comprehensive income/(expense) for the period		8.2		(78.6)		(161.2)
Attributable to
- equity shareholders of Wincanton plc		8.2		(78.9)		(161.6)
- minority interests - discontinued operations		-		0.3		0.4
Total comprehensive income/(expense) for the period		8.2		(78.6)		(161.2)

Consolidated balance sheet

at 30 September 2012 (unaudited)

		30 Sept 2012		30 Sept 2011		31 March 2012
Note		£m		£m		£m
Non-current assets
Goodwill and intangible assets		118.8		122.9		123.2
Property, plant and equipment	8	73.8		92.7		84.5
Investments, including those equity accounted		-		15.8		-
Deferred tax assets		23.5		10.7		28.8
		216.1		242.1		236.5
Current assets
Assets held for sale		-		179.3		-
Inventories		6.9		7.2		6.7
Trade and other receivables		163.9		204.7		158.9
Cash and cash equivalents	9	146.6		29.5		165.6
		317.4		420.7		331.2
Current liabilities
Income tax payable		(7.1)		(6.6)		(7.2)
Borrowings and other financial liabilities	9	(60.0)		(8.0)		(59.7)
Trade and other payables		(312.0)		(352.3)		(332.0)
Employee benefits		(0.5)		(0.6)		(0.8)
Provisions		(26.1)		(23.8)		(34.8)
Liabilities held for sale		-		(145.8)		-
		(405.7)		(537.1)		(434.5)
Net current liabilities		(88.3)		(116.4)		(103.3)
Total assets less current liabilities		127.8		125.7		133.2
Non-current liabilities
Borrowings and other financial liabilities	9	(209.6)		(203.6)		(220.4)
Employee benefits		(114.7)		(68.1)		(118.2)
Provisions		(62.0)		(38.6)		(61.9)
Deferred tax liabilities		(1.1)		(1.0)		(1.1)
		(387.4)		(311.3)		(401.6)
Net liabilities		(259.6)		(185.6)		(268.4)
Add back: pension deficit, net of deferred tax		88.3		75.7		89.8
Net liabilities before net pension deficit		(171.3)		(109.9)		(178.6)
Equity
Issued share capital		12.2		12.2		12.2
Share premium		12.8		12.8		12.8
Merger reserve		3.5		3.5		3.5
Translation reserve		0.3		3.0		-
Hedging reserve		(4.5)		(4.9)		(4.3)
Retained earnings		(283.9)		(212.8)		(292.6)
Equity deficit attributable to shareholders of Wincanton plc		(259.6)		(186.2)		(268.4)
Minority interest		-		0.6		-
Total equity deficit		(259.6)		(185.6)		(268.4)

Consolidated statement of changes in equity

at 30 September 2012 (unaudited)

	Issued share  capital	Share premium	Merger reserve	Hedging reserve	Translation reserve	Retained earnings	Total	Minority interest	Total equity deficit
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 1 April 2012	12.2	12.8	3.5	(4.3)	-	(292.6)	(268.4)	-	(268.4)
Total comprehensive expense	-	-	-	(0.2)	0.3	8.1	8.2	-	8.2
Increase in IFRS 2 reserve	-	-	-	-	-	0.6	0.6	-	0.6
Balance at 30 September 2012	12.2	12.8	3.5	(4.5)	0.3	(283.9)	(259.6)	-	(259.6)
Balance at 1 April 2011	12.2	12.8	3.5	(1.5)	5.2	(139.7)	(107.5)	0.5	(107.0)
Total comprehensive expense	-	-	-	(3.4)	(2.2)	(73.3)	(78.9)	0.3	(78.6)
Increase in IFRS 2 reserve	-	-	-	-	-	0.2	0.2	-	0.2
Dividends paid to shareholders	-	-	-	-	-	-	-	(0.2)	(0.2)
Balance at 30 September 2011	12.2	12.8	3.5	(4.9)	3.0	(212.8)	(186.2)	0.6	(185.6)
Balance at 1 April 2011	12.2	12.8	3.5	(1.5)	5.2	(139.7)	(107.5)	0.5	(107.0)
Total comprehensive income	-	-	-	(2.8)	(5.2)	(153.6)	(161.6)	0.4	(161.2)
Minority interests relating to disposals	-	-	-	-	-	-	-	(0.5)	(0.5)
Increase in IFRS 2 reserve	-	-	-	-	-	0.7	0.7	-	0.7
Dividends paid to shareholders	-	-	-	-	-	-	-	(0.4)	(0.4)
Balance at 31 March 2012	12.2	12.8	3.5	(4.3)	-	(292.6)	(268.4)	-	(268.4)

Consolidated statement of cash flows

for the six months to 30 September 2012 (unaudited)

Note		Six months to 30 Sept 2012 £m	Six months to 30 Sept 2011 £m				Year ended 31 March 2012 £m
Operating activities
Profit/(loss) before tax		13.0		(13.6)		(47.4)
Adjustments for
- depreciation and amortisation		11.6		13.3		25.3
- write downs of non-current assets	2	-		9.3		11.4
- interest expense		7.2		8.1		15.0
- share of results of associate		-		(0.7)		(1.3)
- net result of business disposals		-		-		4.8
- share-based payments fair value charges		0.6		0.2		0.7
		32.4		16.6		8.5
(Increase)/decrease in trade and other receivables		(5.2)		1.0		46.7
(Increase)/decrease in inventories		(0.2)		1.3		1.9
Decrease in trade and other payables		(18.5)		(13.9)		(33.8)
(Decrease)/increase in provisions		(9.6)		10.6		44.3
Decrease in employee benefits		(1.7)		(9.9)		(19.5)
Income taxes received/(paid)		0.4		1.1		(0.5)
Cash (utilised)/generated from continuing operations		(2.4)		6.8		47.6
Cash utilised from discontinued operations		-		(22.2)		(17.7)
Cash flows from operating activities		(2.4)		(15.4)		29.9
Investing activities
Proceeds from sale of property, plant and equipment		6.5		0.9		1.9
Net proceeds from business disposals		-		23.1		61.3
Interest received		0.3		0.2		0.2
Dividends received from associates		-		-		0.5
Additions of property, plant and equipment		(3.7)		(11.4)		(16.0)
Additions of computer software costs		-		(10.9)		(14.4)
Cash flows from investing activities		3.1		1.9		33.5
Financing activities
(Decrease)/increase in borrowings		(6.9)		(21.3)		36.0
Payment of finance lease liabilities		(3.7)		(1.7)		(1.4)
Dividends paid to minority interest in subsidiary undertakings		-		(0.2)		(0.4)
Interest paid		(9.1)		(10.7)		(19.4)
Cash flows from financing activities		(19.7)		(33.9)		14.8
Net (decrease)/increase in cash and cash equivalents		(19.0)		(47.4)		78.2
Cash and cash equivalents at beginning of the period		165.6		88.3		88.3
Effect of exchange rate fluctuations on cash held		-		(0.3)		(0.9)
Cash and cash equivalents at end of period		146.6		40.6		165.6
Represented by
- cash at bank and in hand		131.5		10.4		148.7
- restricted cash, being deposits held by the Group's captive insurer		15.1		19.1		16.9
Cash and cash equivalents as shown on the balance sheet		146.6		29.5		165.6
- cash at bank and in hand - classified as asset held for sale		-		11.1		-
		146.6		40.6		165.6

Notes to the consolidated half year financial statements

for the six months to 30 September 2012 (unaudited)

1    Basis of preparation and Statement of compliance

Wincanton plc (the 'Company') is a company incorporated in England and Wales.  The consolidated half year financial statements of the Company for the six months to 30 September 2012 comprise the Company and its subsidiaries (together referred to as the 'Group') and, where relevant, the Group's interests in associates and jointly controlled entities.

These consolidated half year financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting.  As required by the Disclosure and Transparency Rules of the Financial Services Authority, the half year financial statements have been prepared on the basis of the accounting policies adopted by the Group and applied and disclosed in its consolidated financial statements for the year ended 31 March 2012.  In addition the amendment to IFRS7 Financial Instruments : Disclosures and Transfers of Financial Assets is effective for accounting periods commencing after 31 March 2012 and has been applied, where applicable, in these consolidated half year financial statements.  Adoption of this amendment has not had a significant effect on the consolidated results or financial position of the Group.  These policies are in accordance with IFRS as adopted by the EU (Adopted IFRS).

These consolidated half year financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements for the year ended 31 March 2012.  The comparative figures for the year ended 31 March 2012 have been extracted from those accounts but do not comprise the full statutory accounts for that financial year.  Except for the 31 March 2012 comparatives, the financial information set out herein is unaudited but has been reviewed by the auditors and their report to the Company is set out on page 18.

The consolidated financial statements for the year ended 31 March 2012 have been reported on by the Group's auditor; delivered to the Registrar of Companies; and are available upon request from the Company's registered office at Methuen Park, Chippenham, Wiltshire SN14 0WT or at www.wincanton.co.uk.  The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

The preparation of these consolidated half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.  In preparing these consolidated half year financial statements, the significant judgements made by management in applying the Group's accounting policies and the key areas of estimation were the same as those that applied to the consolidated financial statements for the year ended 31 March 2012.

The consolidated half year financial statements have been prepared on a going concern basis, which assumes the Group will be able to meet its liabilities as they fall due for the foreseeable future. The Directors have prepared cash flow forecasts on the basis of which they expect that the Group will continue as a going concern.

The Group is reporting net liabilities of £259.6m (31 March 2012: net liabilities of £268.4m) due primarily to the inclusion of the pension deficit and the impact of the disposal of the Mainland Europe businesses. To provide greater visibility of the Group's underlying balance sheet position, net liabilities before the net pension deficit are also shown on the face of the balance sheet. This presentation is consistent with the financial statements for the year ended 31 March 2012.

The Half Year Report, which includes the consolidated half year financial statements, was approved by the Board on 9 November 2012. 

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

2    Operating segments

Wincanton plc provides contract logistics services.  The Group manages its operations in two distinct operating segments; Contract logistics (the majority of activities include transport and warehousing for various market sectors including retailers, manufacturers, Defence and Construction) and Specialist businesses (Pullman, Containers, and Wincanton Records Management).

The results of the operating segments are regularly reviewed by the Board to allocate resources to these segments and to assess their performance. The Group evaluates performance of the operating segments on the basis of underlying operating profit. 

	Contract logistics				Specialist businesses				Consolidated
	Six months to 30 Sept 2012	Six months to 30 Sept 2011	Year ended 31 March 2012	Six months to 30 Sept 2012		Six months to 30 Sept 2011	Year ended 31 March 2012	Six months to 30 Sept 2012		Six months to 30 Sept 2011	Year ended 31 March 2012
	£m	£m	£m	£m		£m	£m	£m		£m	£m
Continuing operations
Revenues from external customers 1	465.0	534.5	1,023.8	86.2		90.9	179.0	551.2		625.4	1,202.8
Depreciation	(6.0)	(7.4)	(13.6)	(1.5)		(1.6)	(3.4)	(7.5)		(9.0)	(17.0)
Amortisation of software intangibles	-	(0.2)	(0.1)	-		-	-	-		(0.2)	(0.1)
Share of results of the associate 2	-	0.7	1.3	-		-	-	-		0.7	1.3
Reportable segment underlying operating profit 3	20.1	17.5	34.6	4.2		4.8	9.2	24.3		22.3	43.8
Other material non-cash items:
- write down of other non-current assets 4	-	(9.3)	(11.4)	-		-	-	-		(9.3)	(11.4)

¹      Included in segment revenue is £537.0m (2011: £609.3m) in respect of customers based in the UK.

²      The associate reported relates to the Group's 20% investment in Culina Logistics Limited which was disposed of during the year ended 31 March 2012.  This had been classified as a continuing operation.

³      Underlying operating profit includes the share of results of the associate up to the date of disposal and is stated before amortisation of acquired intangibles and exceptionals. 

⁴      The write down of other non-current assets comprises the write down of property plus plant and equipment to recoverable value.

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

3    Exceptionals

	Six months to 30 Sept 2012 £m		Six months to 30 Sept 2011 £m			Year ended 31 March 2012 £m
Exceptional restructuring and other costs
Closure and restructuring of operations
- UK & Ireland		-		(23.7)		(29.1)
Onerous property provisions		-		-		(34.1)
Disposal of investment in Culina Logistics Limited		-		-		(4.8)
		-		(23.7)		(68.0)

4      Net financing costs

	Six months to 30 Sept 2012 £m		Six months to 30 Sept 2011 £m			Year ended 31 March 2012 £m
Interest income		0.3		0.1		0.4
Expected return on defined benefit pension scheme assets		21.3		22.2		44.3
Interest on defined benefit pension scheme obligations		(19.2)		(19.6)		(39.2)
		2.4		2.7		5.5
Interest expense		(8.0)		(9.5)		(18.1)
Finance charges payable in respect of finance leases		(0.3)		(0.4)		(0.7)
Unwinding of discount on insurance and other provisions		(1.3)		(0.9)		(1.7)
		(9.6)		(10.8)		(20.5)
Net financing costs		(7.2)		(8.1)		(15.0)

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

5      Income tax expense/(credit)

	Six months to 30 Sept 2012 £m		Six months to 30 Sept 2011 £m		Year ended 31 March 2012 £m
Current tax (credit)/expense
Current year	0.1		0.1		0.3
Adjustments for prior years	(0.5)		-		(0.8)
	(0.4)		0.1		(0.5)
Deferred tax expense/(credit)
Current year	3.4		(3.4)		(6.1)
Adjustments for prior years	0.8		-		(0.2)
	4.2		(3.4)		(6.3)
Total income tax expense/(credit) in the income statement	3.8		(3.3)		(6.8)

 

In accordance with IAS 34 the tax expense recognised in the income statement for the half year is calculated on the basis of the estimated effective full year tax rate. 

The main UK Corporation tax rate will reduce from 24% to 23% with effect from 1 April 2013.  The closing UK deferred tax provision is calculated based on the rate of 23% which was substantively enacted at the balance sheet date.

6      Discontinued operations

During the year ended 31 March 2012 the Group disposed of all its operations in Mainland Europe.  In accordance with IFRS5 Non-current Assets Held For Sale and Discontinued Operations the results of these operations have been classified as discontinued operations in the Group's consolidated income statement.

No profit or loss on discontinued operations has been recognised in the period to 30 September 2012.

7      Earnings/(loss) per share

Earnings/(loss) per share are calculated on the basis of earnings/(loss) attributable to the equity shareholders of Wincanton plc of £9.2m (2011: £(73.3)m) and the weighted average of 115.6m (2011: 114.9m) shares which have been in issue throughout the period. 

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

7          Earnings/(loss) per share (continued)

The weighted average number of ordinary shares for both basic and diluted earnings/(loss) per share are calculated as follows:

Weighted average number of ordinary shares	Six months to 30 Sept 2012 millions		Six months to 30 Sept 2011 millions		Year ended 31 March 2012 millions
Issued ordinary shares at the beginning of the period	115.5		114.6		114.6
Net effect of shares issued and purchased during the period	0.1		0.3		0.5
	115.6		114.9		115.1
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares at the end of the period	115.6		114.9		115.1

An alternative earnings per share number is set out below, split between continuing and discontinued, being before amortisation of acquired intangibles and any impairment of goodwill and acquired intangibles, and exceptionals plus related tax, since the Directors consider that this provides further information on the underlying performance of the Group: 

 

	Six months to 30 Sept 2012  pence		Six months to 30 Sept 2011 pence		Year ended 31 March 2012 pence
Underlying earnings per share - continuing operations
- basic	10.6		9.0		18.0
- diluted	10.6		9.0		18.0
Underlying earnings per share - discontinued operations
- basic	-		1.7		1.6
- diluted	-		1.7		1.6

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

 

7          Earnings/(loss) per share (continued)

Underlying earnings are determined as follows:

	Six months to 30 Sept 2012 £m		Six months to 30 Sept 2011 £m		Year ended 31 March 2012 £m
Continuing operations:
Profit/(loss) for the period attributable to equity shareholders of Wincanton plc	9.2		(73.3)		(102.8)
Discontinued operations excluding amounts attributable to minority interests	-		63.0		62.2
Exceptional costs (note 3)	-		23.7		68.0
Amortisation of acquired intangibles	4.1		4.1		8.2
Tax on the above items	(1.1)		(7.2)		(14.9)
Underlying earnings - continuing operations	12.2		10.3		20.7
Discontinued operations:
Discontinued operations excluding amounts attributable to minority interests	-		(63.0)		(62.2)
Loss on disposal of discontinued operations	-		64.4		63.0
Amortisation of acquired intangibles	-		0.9		1.4
Tax on the above items	-		(0.3)		(0.3)
Underlying earnings - discontinued operations	-		2.0		1.9

Comparative figures for underlying earnings per share - continuing operations, included share of result of the associate, being the investment in Culina Logistics Limited which was sold in March 2012.  Underlying earnings excluding Culina for the six months to 30 September 2011 were £9.6m (year to March 2012: £19.4m) and earnings per share 8.4p (March 2012: 16.9p)

8          Property, plant and equipment

Additions and disposals

During the half year to 30 September 2012 the Group acquired assets with a cost of £3.4m (2011: £10.7m).

Assets with a carrying amount of £6.3m were disposed of during the half year to 30 September 2012 (2011: £0.5m). 

Capital commitments

At 30 September 2012 the Group had entered into contracts to purchase property, plant and equipment for £4.1m (2011: £3.4m); delivery is expected in the second half of the year to 31 March 2013.

Notes to the consolidated half year financial statements (continued)

for the six months to 30 September 2012 (unaudited)

9          Analysis of net debt

	30 Sept 2012 £m		30 Sept 2011 £m		31 March 2012 £m
Cash and cash equivalents
Cash at bank and in hand	131.5		10.4		148.7
Restricted cash, being deposits held by the Group's captive insurer	15.1		19.1		16.9
	146.6		29.5		165.6
Cash at bank and in hand - classified as assets held for sale	-		11.1		-
	146.6		40.6		165.6
Borrowings
Current
US$ private placement	(55.9)		-		(55.4)
Bank loans and overdrafts	(0.2)		(0.5)		(0.4)
Finance lease liabilities	(1.9)		(6.0)		(2.4)
Other financial liabilities	(2.0)		(1.5)		(1.5)
	(60.0)		(8.0)		(59.7)
Bank loans and overdrafts - classified as liabilities held for sale	-		(2.5)		-
	(60.0)		(10.5)		(59.7)
Non-current
US$ private placement	(56.5)		(120.7)		(57.1)
Bank loans	(150.0)		(78.5)		(156.7)
Finance lease liabilities	(0.4)		(0.8)		(3.6)
Other financial liabilities	(2.7)		(3.6)		(3.0)
	(209.6)		(203.6)		(220.4)
Bank loans and overdrafts - classified as liabilities held for sale	-		(4.1)		-
	(209.6)		(207.7)		(220.4)
Net debt - as shown on the balance sheet	(123.0)		(182.1)		(114.5)
Net debt - classified as assets and liabilities held for sale	-		4.5		-
Total net debt	(123.0)		(177.6)		(114.5)

 

Independent review report to Wincanton plc

Introduction

We have been engaged by the Company to review the consolidated half year financial statements in the Half Year Report for the six months to 30 September 2012 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash flows and the related explanatory notes.  We have read the other information contained in the Half Year Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the consolidated half year financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA").  Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The Half Year Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Year Report in accordance with the DTR of the UK FSA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The consolidated half year financial statements included in this Half Year Report have been prepared in accordance with IAS 34, Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the consolidated half year financial statements in the Half Year Report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the consolidated half year financial statements in the Half Year Report for the six months to 30 September 2012 are not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

AC Campbell-Orde

for and on behalf of KPMG Audit Plc
Chartered Accountants 

100 Temple Street

Bristol

BS1 6AG

9 November 2012

Shareholder information

Preliminary announcement of full year results	June 2013
Annual General Meeting	July 2013
Announcement of half year results	November 2013

Shareholders' enquiries

All administrative enquiries relating to shareholdings should, in the first instance, be directed to the Registrar at the following address:

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6ZY

Telephone: [phone]   Fax: [phone]

Text phone: [phone]

Web queries: www.investorcentre.co.uk/contactus

 

END

 

 

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