Wincanton releases H1 2015 results

Wincanton announced H1 results for 2015 with revenues of £582.8m representing an increase of 5.79% year-on-year. The company also recorded an operating profit of £23.5m for the same period, a decline of 5.62%. Consequently, Wincanton’s margin stood at 4.03%, down from 4.52% for the same period in the previous year.

Wincanton attributed the increase in revenue to strong activity levels in open book contracts as well as new business including a five-year contract to manage the distribution centres of UK home improvement retailer, B&Q. Also of benefit to overall revenue figures were an expansion of an existing agreement with B&Q to provide home delivery for kitchens, bedroom and bathroom products as well as a three-year agreement for transport logistics with UK-retailer Halfords. Renewals of contracts with HJ Heinz and Dairy Crest also contributed to strong revenue figures.

The decline in operating profit was mainly attributed to losses in the Home Shopping division of Pullman Fleet Services, the vehicle maintenance and repair segment of Wincanton, with a number of onerous contracts coming to an end. However, Wincanton states that these difficulties were offset by a strong performance in the Contract Logistics division.

The Contract Logistics business reported revenues of £490.6m for the period, up 5.7% on the £464.1m reported for the same period last year. The increase in revenue was primarily driven by strong volumes and new business wins in the general merchandise and construction sector as well as good volume performance in the FMCG sector. Operating profit for the contract logistics sector was £24.4m, up by 16.7% on the £20.9m reported for the same period last year. This was mainly attributed to a number of renewals and contract extensions concluded in the period.

The Specialist business sector of Wincanton, which comprises container transport activities, records management and Pullman Fleet Services, reported revenue of £92.2m, up 6.22% year-on-year. This increase was attributed to growth in home shopping and fleet management contract volumes from Pullman. Underlying operating profit for the Specialist business sector was a loss of £0.9m, attributed to losses at Pullman as it continues its recovery plan and works through the exit of two loss-making contracts supporting home delivery fleets. In addition, the Containers business was impacted by higher driver and subcontract haulier costs.