Re-focusing of German Busines

RNS Number : 2781B

Wincanton PLC

23 October 2009

 



For Immediate Release

23 October 2009

Wincanton plc ('Wincanton' or 'the Group')

RE-FOCUSING OF GERMAN BUSINESS

Wincanton in Germany has a market-leading intermodal and container forwarding business, a growing portfolio of contract logistics customers, with particular strengths in the high-tech, automotive, paper & packaging and chemicals industries, and a substantial and fast-developing presence in domestic and international transport management.

We have today announced in Germany that we are restructuring the in-house groupage network that forms part of our transport management activities and joining a new groupage co-operation. This new co-operation will give continuing access to a high quality service, meeting the groupage requirements of our customers but materially reducing the infrastructure costs associated with an in-house network. It will substantially reduce the Group's exposure to fluctuations in market volumes.

The restructuring involves the closure of three loss-making groupage depots. We are also withdrawing from the currently loss-making groupage activities at a further four locations to enable these sites to increase their focus on their profitable warehousing and transport management operations.  The remaining sites, which are already profitable, will continue with their current mix of warehousing and transport management but will in future contribute their groupage volumes into a new partnership with ILN, an existing Pan-European network operator.

The loss-making groupage activities being closed or restructured will address the material adverse effect of the in-house network upon the profitability of both our transport management activities and our German business as a whole.  The restructuring, which is scheduled to be fully implemented by the end of the third quarter of the current financial year, is expected to deliver a profitable, less volatile business base for the Group in Germany but will lead to an exceptional charge of up to £13m.  

Following the restructuring, Wincanton's German business will be clearly focused on higher value-added activities and a portfolio of businesses which few, if any, of the Group's competitors can match in terms of range, depth and flexibility.

Commenting on the announcement, Graeme McFaull, Wincanton Chief Executive, said:

'The restructuring announced today, which we expect to deliver an attractive profit and cashflow payback, will enable us to focus more clearly on the significant growth opportunities for Wincanton in the German market and contribute positively to our overall progress in Mainland Europe'.

Wincanton plc

Graeme McFaull, Chief Executive                              01249 710 000

Gerard Connell, Group Finance Director

Buchanan Communications

Charles Ryland / Jeremy Garcia / Ben Romney        020 7466 5000

 

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