Interim Management Statement

RNS Number : 7344M

Wincanton PLC

04 February 2009

 



For immediate release                                                                                                   4 February 2009

Wincanton plc

('Wincanton')

Interim Management Statement

The following statement comprises Wincanton's Interim Management Statement for the period from 1 October 2008 to 4 February 2009:

'At the half year we reported another period of good profit progress but noted volume weakness in certain areas of our business such as construction, home delivery and recycling. This weakness has had a more marked effect on our second half performance in the UK & Ireland. From November onwards we have also seen lower volumes in our Mainland Europe activities.

As a result rapid action has been taken across the business to reduce operational capacity in the areas affected.  Costs have been reduced throughout the Group in support functions. The cost improvement programmes already under way in the German road network have been accelerated.  

Perhaps more importantly, we are continuing to bring new business successfully onstream and report further new contract gains.  New business has been won, or existing business expanded, with customers such as Mars in Poland, SCA in Germany, Velux in France and BAe and Marley in the UK.  

Two more recent developments are of particular note.  We will be announcing shortly the details of significant contract gains with a major UK retailer, which we expect to be one of the largest awards in the market this year.  We have also been notified, by one of Germany's leading industrial groups, of preferred contractor status on a complex pan-European supply chain management contract. This represents further evidence of the increasing recognition of Wincanton's credentials as a premium-quality service provider across Mainland Europe.

Our continuing new business momentum confirms the underlying strength and resilience of the Group's industry-leading position and the opportunities for Wincanton to grow market share even in more challenging economic conditions.

We do not expect, however, that either new business wins, or the major programme of cost reduction initiatives under way, will fully offset the negative impact of economic slowdown on certain of our activities. As a consequence we now anticipate that our financial performance will be broadly similar to last year, which is around the lower levels of analyst forecasts for the current year.

The further profit improvement measures being implemented will give rise to higher levels of exceptional costs in the second half, offset by property disposal proceeds and additional receipts in respect of the PGN arbitration.  Our cash position is also expected to be improved by the receipt of £7m from Uniq plc following an interim court award in Wincanton's favour on 23 January 2009.  We will continue to pursue vigorously the remaining monies owed to the Group by Uniq plc.

Exceptionals in the second half will also include the cost of exit from our chilled consolidation activities.  These costs will be mitigated by the recognition of the value of our 20 per cent stake in the enlarged Culina Logistics, the business to which our chilled activities have been transferred.'

Graeme McFaull, Wincanton Chief Executive, commented:

'Wincanton has a strong, diversified portfolio of businesses underpinned by our substantial open book contract base in the UK & Ireland. We have moved swiftly to take cost out of our more volume-sensitive operations and re-position the Group for a much more challenging economic environment.  

We will not be immune to the effects of the downturn, but are encouraged by the resilience of the majority of our business, the speed with which cost reduction initiatives are being implemented and our continuing success in growing our market share through new business wins.'

For further information please contact: 

Wincanton plc	01249 710 000
Graeme McFaull, Chief Executive Gerard Connell, Group Finance Director
Buchanan Communications	020 7466 5000
Charles Ryland / Jeremy Garcia / Ben Romney

 

END

 

 

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