Interim Management Statement

RNS Number : 4983A

Wincanton PLC

02 February 2011

 



Immediate Release                                                                            2 February 2011

Wincanton plc

Interim Management Statement

Wincanton plc ('Wincanton' or the 'Group'), a leading European supply chain solutions provider today issues the following Interim Management Statement for the period from 1 October 2010 to the date of this announcement:

The Group has continued to face challenging conditions in the markets in which it operates, although results for the year to 31 March 2011 are expected to be in line with management's expectations.

The core UK & Ireland operations have continued to deliver high value to our customers in the period together with a stable stream of management fees under the 'open book' contractual arrangements.  Another period of important contract renewals has seen Wincanton maintain its strong relationships with customers including Mattel, Magnet and Honeywell.

The more growth oriented newer market segments; including Container Logistics, Defence and Construction have performed ahead of expectations, although as a result of the opening of a significant new site in the year the Foodservice business, as previously indicated, has been loss making in the period.

In Mainland Europe, the German operation has continued to deliver improved operational and financial results. This strong operational performance has helped secure contract extensions with a number of key customers including Bosch Siemens and BMW. As reported previously, the loss making French business has performed less well and restructuring action is being taken to address the underlying cost base. The Central & Eastern European operations are operating at similar levels of profitability to the prior year.

The new management team has placed the reduction in the Group's debt as a priority and is considering several options. Actions to preserve cash and to curtail losses in underperforming businesses have commenced;

-     a restructuring has commenced in France to reduce the cost base and target a break even position in the near term. The exceptional cost will be approximately £2.5m and savings will be similar on an annualised basis.

-     a programme of work has commenced in the UK to identify additional cost savings required in order to ensure the Group's competitiveness and underpin the short term profitability of the Group.

-     the IT transformation project reported at the interims has been re scoped to limit the cash cost and minimise the distraction in the business at a time when improving performance is a priority. The revised scope will lead to a significant exceptional impairment at the year end.

Eric Born, Chief Executive of Wincanton commented; "Our operations continue to deliver excellent service and are highly valued by our customers.  The Board is actively addressing a number of challenges facing the Group and we will invigorate our business proposition in order to drive profitable growth across the market segments we serve."

Wincanton plc

Eric Born, Chief Executive                                                       01249 710000

Jon Kempster, Group Finance Director

Buchanan Communications

Charles Ryland / Jeremy Garcia                                              020 7466 5000

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