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Wincanton has lifted underlying profits to record levels despite pressure on consumer spending depressing volumes at the logistics group.
Revenues at the company increased 2.9% to £1.5bn in the year ended 31 2023, but lower customer volumes acted as a drag on the top line in the second half, particularly in the grocery & consumer, general merchandise and eFulfilment divisions.
However, underlying EBITDA rose 12.6% to £121.9m and underlying pre-tax profits climbed 6.9% to a record £62.1m, with the group renewing contracts with long-standing customers such as Sainsbury’s, Asda, Waitrose and Co-op.
Pre-tax profits fell 30.3% to £38.2m as a result of non-underlying items as it underwent a “strategic transport reorganisation” and incurred “cloud computing configuration and customisation costs”.
CEO James Wroath said the company’s starategy delivered “a strong result” in the financial year despite the “prevailing macro-economic challenges”.
“I am thankful to the Wincanton team who has delivered excellent performance in a difficult economy,” he added.
“Their determination and innovation will continue to be essential, as we expect volumes to remain under pressure into FY24 due to the macro-economic environment.”
Revenues in the grocery & consumer arm fell 1% year on year as a result of the lower volumes but Wincanton highlighted a “strong operational performance” throughout the year, despite a challenging labour market.
The group said it had delivered “an excellent peak” for customers during the key trading period, including the winter World Cup.
It added that it won a five-year renewal with Asda on the back of the service record and was also awarded a five-year contract to manage the whole of the Sainsbury’s and Argos transport network.
Wincanton maintained its outlook for the 2024 financial year, which it said reflected the challenging external economic environment.
Shares in the group rose 0.9% to 218.9p this morning.
Morning update
It’s a quiet start to the week on the markets for grocery and fmcg.
The FTSE 100 opened up 0.2% to 7,771.16pts.
Early risers included Naked Wines, up 3.5% to 106.4p, Deliveroo, up 1.8% to 109.7p, C&C Group, up 1.4% to 132.8p, and THG, up 1.2% to 58.1p.
Virgin Wines UK, Just Eat Takeaway and Bakkavor are among the early fallers, down 3.1% to 31p, 2.3% to 1,443p and 2.3% to 92.9p respectively.
This week in the City
Tomorrow morning kicks off with the latest Kantar monthly grocery sales figures and annual results from pork and chicken processor Cranswick.
The big results for the week are scheduled for Wednesday as Marks & Spencer release preliminaries, with caterer SSP Group also set to file interims and Deliveroo holding its AGM.
The latest UK inflation figures for April are also out on Wednesday morning.
Pets at Home publishes full-year figures on Thursday and the ONS puts out retail sales figures for April on Friday.
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