Pre-Close Statement

RNS Number : 2505E

Wincanton PLC

25 September 2008

 



For immediate release

25 September 2008

WINCANTON plc 

('Wincanton')

Pre-Close Statement

The strong new business win momentum in the UK & Ireland, which drove another period of good profit progress last year, has continued to benefit our performance in the first half.  A substantial part of our business is contracted on an open-book basis in the UK & Ireland. This has given a stable, defensive core to our operations and protection against both volatility in fuel prices and reductions in customer volumes.  We have seen lower levels of activity in certain of our smaller, more volume-related business areas as the first half has progressed.  Actions have already been taken to reduce variable costs in these areas and adjust our operational capacity to the lower volumes expected in the second half of the year.

Our experience of previous periods of economic uncertainty has been that they give rise to new opportunities for the Group. Our business development pipeline in the UK & Ireland is again beginning to reflect such opportunities for Wincanton as customers look to further outsourcing and gain-share initiatives to deliver cost reduction and efficiency improvements.

In Mainland Europe, our plans to improve the performance of our German road network are progressing according to plan.  A wide range of productivity and efficiency measures are being successfully delivered, and we are currently on target for the network to be reaching a break-even running rate by the end of the financial year.  Both our logistics and intermodal operations in Germany are also benefitting from the increased focus of our new German management team. 

Elsewhere in Mainland Europe we continue to see encouraging new business momentum building in France and our international transport activities in Holland and Central & Eastern Europe are also successfully attracting new freight management opportunities with multinational customers.

As indicated in our AGM statement, the Group's interest charge will be higher in the first half as a result of both increased levels of debt following recent acquisitions and higher pension costs.  We have also seen some pressure on working capital which we will be seeking to redress in the second half but which may affect net debt levels at the half year.  We currently expect restructuring and acquisition integration costs in the first half in the UK and Germany to be partially offset by profits on property disposals. 

The third and fourth quarters of the year will be an active period for contracted new business wins coming onstream, leading to a result for the full year which will be more weighted towards the second half. We also continue to review a number of opportunities to further diversify and strengthen our portfolio of services, sectors and geographies through infill acquisitions and joint ventures.

The economic outlook clearly gives ground for caution, but we currently expect that the actions taken to reduce our costs, increase the flexibility of our operations and support our customers in challenging markets should nonetheless allow Wincanton to make further progress in the second half of the year.

We therefore continue to anticipate, on the basis of currently projected levels of business activity, that the Group will perform in line with management expectations in the financial year to 31 March 2009.

Wincanton intends to announce its interim results for the six months to 30th September 2008 on 6th November 2008.

Enquiries:

Wincanton plc

Graeme McFaull, Chief Executive            [phone]

Gerard Connell, Group Finance Director            

Buchanan 

Charles Ryland / Jeremy Garcia              [phone]

 

END

 

 

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