Acquisition
Wincanton PLC
09 December 2002
Proposed Acquisition of P&O Trans European for GBP152.5 million
'An ideal opportunity to continue the successful expansion of Wincanton'
Wincanton Plc ('Wincanton'), a leading provider of complex supply chain
solutions, is pleased to announce the proposed acquisition of P&O Trans European
('Trans European') on a debt free basis for GBP152.5 million in cash. This
acquisition increases the scale, range and geographic scope of Wincanton's
service offering to customers, confirming its position as the second largest
logistics company in the UK and opening up new markets in Continental Europe.
Key Points
Trans European
- An established pan-European contract logistics provider with
extensive coverage in the UK and Western Europe and growing presence in Eastern
Europe.
- A broadly-based business serving blue chip customers in the
petrochemical, automotive, and other industrial sectors. Growing presence in
consumer goods and retail.
- Full range of integrated logistics solutions on a dedicated and
shared user basis including cross border '4PL' supply chain services.
Reasons for Acquisition
- Confirms Wincanton's position as one of the largest supply chain
solutions companies in the UK.
- Creates a pan-European platform in a single step.
- Enables Wincanton to meet demand from its existing blue-chip
customer base to provide services on a broader geographic base.
- Complementary fit of Wincanton's retail and consumer customer base
with Trans European's predominantly industrial customer base.
Management
- Creation of two operating boards, one for the UK and one for
Continental Europe. Paul Bateman and Gerard Connell will sit on both boards.
- Wincanton and Trans European in UK and Ireland to be integrated into
a single management structure under Graeme McFaull, currently Managing Director,
Consumer Logistics and an experienced member of Wincanton's main board.
- Continental European businesses will report to Peter Brown,
currently Managing Director, Industrial Logistics and another
experienced member of Wincanton's main board.
Financial Background
- Acquisition is expected to enhance Wincanton's earnings, measured
before reorganisation costs and goodwill amortisation, in first full year of
ownership.
- Operational efficiencies of not less than GBP2 million p.a. within
18 months of acquisition.
- Acquisition is supported by a strong asset base with only a small
element of goodwill.
- In year ended 31 December 2001 Trans European reported operating
profit before goodwill amortisation and discontinued operations of GBP14.5
million (2000: GBP13.3 million) on sales before discontinued operations of
GBP690.9 million (2000: GBP596.9 million).
- Acquisition funded by new five year committed bank facilities of
GBP270 million.
Paul Bateman, Chief Executive of Wincanton, said:
'The earnings enhancing acquisition of Trans European is an ideal opportunity to
continue the successful expansion of Wincanton. Our strategy has long been to
expand our range of services and geographical coverage for our customers. Trans
European fits both these requirements.'
An analyst presentation will take place at the offices of Buchanan
Communications on Monday 9th December 2002, at 10.00 a.m., 107 Cheapside, London,
EC2
For further details please contact Buchanan Communications
For further enquiries please contact:
Wincanton
Paul Bateman, Chief Executive 020 7466 5000 (today)
Gerard Connell, Group Finance Director 01963 828282 (thereafter)
Charles Carr, Director of Marketing & Communications
Lazard
Richard Stables 020 7588 2721
Buchanan Communications
Richard Oldworth/Charles Ryland/Jeremy Garcia 020 7466 5000
Lazard is acting for Wincanton in connection with the acquisition of Trans
European and no-one else and will not be responsible to anyone other than
Wincanton for providing the protections offered to clients of Lazard nor for
providing advice in relation to the acquisition of Trans European nor any other
matter referred to in this announcement.
Cazenove and CSFB are acting as joint brokers to Wincanton.
Proposed Acquisition of P&O Trans European for GBP152.5 million
Introduction
Wincanton ('Company') announces that it has agreed the terms of the proposed
acquisition of P&O Trans European ('Trans European') ('Acquisition') from The
Peninsular and Oriental Steam Navigation Company ('P&O'). The total
consideration of GBP152.5 million, on a debt free basis, is payable in cash on
completion, subject to certain completion adjustments, including in respect of
working capital. The Acquisition will be financed by new bank facilities.
The Acquisition is expected to be earnings enhancing, before re-organisation
costs, in the first full year of ownership. There is also expected to be only a
small element of goodwill arising given the anticipated level of asset backing
relative to the consideration payable.
In view of the size of the Acquisition relative to the Group, completion is
conditional upon, inter alia, the approval of shareholders. This approval will
be sought at an Extraordinary General Meeting to be held at 10:30 am on 27
December 2002 at the offices of Linklaters, One Silk Street, London EC2Y 8HQ.
Background
Since the demerger of Wincanton, the continued growth in the UK market for
outsourced logistics services has resulted in attractive opportunities for the
Company. During this period, Wincanton has reported double digit earnings per
share growth (excluding pension credit and before exceptional items) and has
reduced net debt by GBP42 million, to GBP7.8 million at 30 September 2002.
In the UK, Wincanton has grown profitably by developing its contract base with
existing blue-chip customers and by targeting new customers, sectors and
services. Outside the UK, Wincanton has sought to develop a platform to achieve
its stated strategy of becoming a provider of supply chain services on a
pan-European basis and beyond. The Directors have, as a consequence, actively
reviewed a number of potential acquisitions, joint ventures and commercial
alliances.
The proposed acquisition of Trans European represents an attractive opportunity
for Wincanton to increase significantly the scale, range and geographic scope of
its service offering to customers, confirming its position as the second largest
company in its sector in the UK and opening up new markets in Continental
Europe.
Information on Trans European
Overview
Trans European's objective since the late 1980s has been to develop its
business, originally largely UK and transport-based, into a pan-European
provider of supply chain services. Through a combination of organic investment
in new facilities and acquisitions to expand services, customer base and
geographic coverage, significant progress has been made towards this objective.
A growing contract logistics business has been developed in the UK, with an
expanding service range recently further extended through acquisition into a new
market, data records management. A well-established national operation in
Germany, built originally around a shared user network, has been successfully
developing its portfolio of contract customers. The German business also
includes freight management operations focussing on intermodal movements by both
rail and river. Early entry into the markets of Eastern Europe has created good
positions in these growing economies. Facilities have been established in the
Benelux countries. Recent acquisitions have augmented Trans European's
operations in France and established a presence in the growing Spanish market.
Trading partners in other countries, such as Italy and Austria, substantially
complete the European coverage.
The business, operating from over 200 sites, is now able to offer its customers
both a presence in most of the national markets of Europe and supply chain
services on a pan-European basis. Its customer base is derived principally from
industrial sectors such as paper, engineering, petrochemical and automotive, and
it has also been successfully winning new business in the retail and consumer
sectors.
In the financial year ended 31 December 2001, turnover was generated as follows:
27 per cent. from the petrochemical sector; 25 per cent. from the automotive
sector; and 25 per cent. from other industrial sectors. Consumer goods and
retail accounted for 17 per cent. and 6 per cent. of turnover, respectively.
UK and Ireland
Like Wincanton, Trans European operates principally in the UK and Ireland on the
basis of open-book contracts. Good new business wins have been driven by
substantial capital investment in new warehousing facilities. Its customer base
now includes manufacturers of industrial and fast-moving consumer products,
general merchandise and grocery retailers and petroleum companies. Trans
European also has a growing presence in the data records management industry. In
the financial year ended 31 December 2001, the UK and Ireland business generated
GBP177.6 million of turnover.
Continental Europe
- Germany
Trans European has established a significant presence in Germany, the largest
logistics market in Europe. It operates both dedicated facilities and a shared
user network. Some 60 per cent. of the volume of goods handled by the shared
user network is generated by contract logistics customers. Trans European
operates few of its own vehicles, and predominantly sub-contracts the vehicle
movements that link together the shared user depot network. Trans European also
has an important intermodal business, managing freight movements by both rail
and river, with a strong presence in the management of container traffic on the
Rhine. In the financial year ended 31 December 2001, the German business
generated GBP380.3 million of turnover, of which intermodal represented
approximately 30 per cent.
Particular consideration has been given to the German market as part of
Wincanton's analysis of Trans European. Although substantial in turnover terms,
the German businesses are currently trading at around breakeven. New depot and
contract start-ups, in addition to a general economic slowdown, have adversely
affected profitability. We believe a strong presence in the German market to be
important strategically, but have made allowance for the short-term outlook in
our projections. Measures are being implemented by the German management team of
Trans European to increase operational efficiencies and reduce costs and these
will remain a key area of focus against an uncertain economic background.
Wincanton will also seek to increase the volume of network movements derived
from contract logistics customers, reassess the efficiency and asset utilisation
of the current network and work to generate new business in the German market
from existing Wincanton customers.
- France, Spain and Benelux
Prior to the acquisition of Marqueset in 2000, Trans European's operations in
France consisted of Mondia, a well-established business based in Strasbourg. The
acquisition of Marqueset added branches in Paris and Lyons. The French business,
which is principally transport-based, has been developing a wider range of
logistics services and has been successful in winning contracts from domestic
customers as well as selling its services to existing multi-national customers
of Trans European, thereby extending these relationships into new markets.
In 2000, Trans European acquired Transportes Internacionales Marqueset SA, a
Spanish provider of domestic and international logistics and distribution
services, currently from a predominantly transport base. Operating from
Barcelona, Madrid, Valencia, and Irun, Trans European serves the automotive,
industrial and consumer goods sectors. As in France, Trans European is focussing
increasingly on logistics services and has successfully won contracts from
existing multi-national customers of Trans European.
Trans European activities in Benelux are centered around a modern logistics
complex at 's-Heerenberg from which it provides warehousing, distribution and
value added services such as re-packing and spare part logistics. In addition,
it operates a dedicated facility at Niederkorn in Luxembourg.
In the financial year ended 31 December 2001, the businesses in France, Spain
and Benelux generated GBP90.4 million of turnover.
- Eastern Europe
Trans European has an established presence in the growing markets of Poland,
Hungary and the Czech Republic. It offers warehousing and distribution services
through a network of shared user warehouses and transportation and also runs
dedicated operations, principally for multi-national customers. In the financial
year ended 31 December 2001, the East European businesses reported GBP23.8
million of turnover.
- 4PL
Trans European offers pan-European supply chain management services to a growing
number of customers. Its principal role is to organise and manage product flows
rather than physically operate the underlying assets required to handle these
flows. Such services are often referred to as 4th Party Logistics ('4PL'). In
the financial year ended 31 December 2001, Trans European's principal 4PL
contract, through a 50 per cent. share in a joint venture company, PGN,
generated GBP48.8 million of turnover. Outside PGN, new business has also been
won in this growing area and total turnover from such activities is expected to
be significantly higher in the current year.
Financial Performance
In the financial year ended 31 December 2001, Trans European reported operating
profit before goodwill amortisation from continuing operations of GBP14.5
million (2000: GBP13.3 million) on sales from continuing operations of GBP690.9
million (2000: GBP596.9 million). In the three years to 31 December 2001, Trans
European reported an increase in operating profits from GBP10.7 million to
GBP14.6 million. UK and Ireland operating profits fell from GBP5.1 million to
GBP3.1 million as growth in contract logistics was off-set by a deterioration in
the performance of the tanker operations. The profitability of the tanker
operations is believed to have stabilized in the current financial year. The
growth in profits from the Continental European operations arose from a
combination of contribution from acquisitions and a strong performance from 4PL
offsetting weakness in the German logistics business.
As at 31 December 2001, Trans European reported net assets of GBP90.6 million
(2000: GBP71.0 million). Pro forma net assets at the same date, excluding net
debt, were approximately GBP140.7 million, of which net assets of GBP12.4
million, consisting of properties, are not being acquired.
Management Structure Post Acquisition
Wincanton will establish a management structure which will recognise both the
continuing importance of national markets and the opportunities for future
growth on a regional basis. The new management structure will benefit from Paul
Bateman's extensive experience of the successful implementation of national and
international logistics strategies for both retailers and manufacturers.
The operations of Trans European and Wincanton in the UK and Ireland will be
integrated into a single management structure with a number of operating units
sharing common support services. The Managing Director of the UK and Irish
business will be Graeme McFaull, an experienced member of the main board of
Wincanton. In future, Wincanton will consolidate the results of the UK and Irish
operations for the purposes of financial reporting.
The current heads of the other European businesses will continue to report into
the Trans European Continental European head office in Mannheim, Germany. The
Managing Director of these international operations will be Peter Brown, another
experienced member of the main board of Wincanton, who will also be responsible
for the growing 4PL and international freight management businesses of the
Enlarged Group. The results of the Continental European and international
operations will be consolidated for the purposes of financial reporting.
Wincanton proposes to establish two operating boards, one for the UK and Ireland
and one for Continental Europe. These will consist of senior managers from both
Wincanton and Trans European. These boards will be chaired by Paul Bateman, the
Chief Executive of Wincanton. Gerard Connell, the Group Finance Director, will
also sit on both boards. These boards will initially be responsible for
integrating the Wincanton and Trans European businesses and thereafter for
overseeing the development of the enlarged group on a Europe wide basis.
The Board of Wincanton believes that the Trans European business will benefit
from greater focus as a consequence of being part of a dedicated supply chain
services group.
Acquisition Rationale
Wincanton believes that many existing and potential customers will continue to
award contracts for the outsourcing of supply chain services on a national
basis. Over the medium-term, however, many larger companies, including
Wincanton's current customers, are also expected to offer opportunities to
service providers able to operate on a broader geographic basis.
The acquisition of Trans European confirms Wincanton's base in the UK, brings a
national presence in the major European economies as well as the growing markets
of Eastern Europe, and offers a platform to develop customer services on a
pan-European basis. Wincanton's Board believes that the Acquisition will
generate significant incremental growth potential for Wincanton.
The short-term initiatives envisaged by Wincanton differ from country to
country, not least because Trans European's presence is not equally
well-developed in each of the countries in which it operates. The medium-term
objective is the creation of a leading pan-European provider of supply chain
services, capable of generating incremental growth opportunities through the
transfer of people, operational expertise and customer relationships within and
across national boundaries. The senior management resource of the business will
increase its focus on the profitable utilisation of existing assets rather than
further network expansion.
UK and Ireland
Trans European's UK and Irish operations are well known to Wincanton. Its
customer base complements the Wincanton customer base and both broadens and
strengthens Wincanton's presence in these markets. The UK and Ireland will
continue to represent key areas of focus for the Enlarged Group and there is
believed to be significant potential to generate operational efficiencies,
improve asset utilisation and reduce infrastructure costs by merging the two
businesses. The Trans European data records management business also takes
Wincanton into a new and growing market. The combination of the Trans European
and Wincanton businesses will reinforce Wincanton's current position as the
second largest supply chain service provider in the UK market.
Continental Europe
Trans European brings Wincanton both a domestic presence in the main markets of
Continental Europe and an ability to offer pan-European supply chain services to
larger customers. Acquiring such a platform, in a single step, is believed to
represent a lower level of transaction and integration risk than the acquisition
of a series of national businesses to create a similar level of regional
coverage.
Wincanton's strategy for Trans European is to both build critical mass in
national markets and improve its efficiency as a regional network. There are
already encouraging signs of new business having been won in countries such as
France and Spain as a consequence of customer relationships elsewhere in the
Trans European business. It is believed that further progress will be made
through developing business in Continental Europe with Wincanton's existing
customers through the transferral of key Wincanton skills such as automated
warehousing.
Financial Effects of Acquisition
Wincanton's Board believes that the combination of Wincanton with Trans
European's existing operations will result in opportunities to generate both
additional revenue growth in the UK and Continental Europe and operational
efficiencies, initially in the UK. Improvements in operational efficiency are
expected to improve operating profit by not less than GBP2.0 million per annum
within 18 months of acquisition. The Directors do not expect the cash costs of
achieving this level of savings to exceed GBP2.0 million.
The Directors believe that, measured before reorganisation costs and goodwill
amortisation, the Acquisition will enhance Wincanton's earnings in the first
full year of ownership. The statements in this paragraph should not be
interpreted to mean that Wincanton's future earnings per share will necessarily
be higher or lower than its historical published earnings per share.
Financing the Acquisition
The total consideration payable on completion on a debt free basis will be
GBP152.5 million.
In order to fund this consideration and to ensure that the enlarged group is
financed on a conservative basis, Wincanton has entered into new debt facilities
totalling GBP270 million. Of these facilities, GBP155 million is available under
a 5 year amortising term loan and GBP115 million is available under a 5 year
revolving credit facility. In addition, the Enlarged Group will have overdraft
and other short-term facilities in excess of GBP20 million.
The Board believes that the Enlarged Group will operate within prudent balance
sheet and profit and loss account financing ratios following completion of the
Acquisition and will also focus, as it has done in respect of Wincanton since
demerger, on opportunities to improve the cashflow and reduce the asset
intensity of Trans European.
Current trading and future prospects of the Enlarged Group
As indicated when the interim results were announced on 5 November 2002, good
progress has been made towards Wincanton's new business targets and levels of
enquiry remain encouraging. Wincanton's markets continue to be challenging and
competitive but the Board remains confident that Wincanton will achieve further
progress this year.
Current trading for 2002 remains in line with expectations for Trans European.
New contracts are being won and existing contracts extended, in spite of the
uncertainty arising from the sale of the business which was announced by P&O in
May 2002. Profit progress is anticipated to be made in the UK operations with
weaker economic conditions in Germany resulting in reduced profitability in
Continental Europe.
Against this background and following the Acquisition of Trans European,
Wincanton's Board views the future prospects of the Enlarged Group with
confidence.
Extraordinary General Meeting
An Extraordinary General Meeting of Wincanton is to be held at the offices of
Linklaters, One Silk Street, London EC2Y 8HQ at 10:30 am on 27 December 2002. At
this meeting, the Resolution will be proposed to approve the Acquisition. A
circular is expected to be posted to Ordinary Shareholders shortly setting out
the Resolution to be proposed at the EGM and further details of the Acquisition.
Directors Intentions
Wincanton's Directors, who have received financial advice from Lazard, consider
the Acquisition to be in the best interests of the Company and Shareholders as a
whole. In providing financial advice to the Directors, Lazard has placed
reliance on the Directors' commercial assessment of the Acquisition.
Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the Resolution to be proposed at the Extraordinary General Meeting as
they intend to do in respect of their own beneficial holdings of in aggregate
212,345 Ordinary Shares, representing approximately 0.19 per cent. of the
Company's existing issued ordinary share capital.
For further enquiries please contact:
Wincanton
Paul Bateman, Chief Executive 01963 828282
Gerard Connell, Group Finance Director
Charles Carr, Director of Marketing & Communications
Lazard
Richard Stables 020 7588 2721
Buchanan Communications
Richard Oldworth / Charles Ryland/ Jeremy Garcia 020 7466 5000
Lazard is acting for Wincanton in connection with the acquisition of Trans
European and no-one else and will not be responsible to anyone other than
Wincanton for providing the protections offered to clients of Lazard nor for
providing advice in relation to the acquisition of Trans European nor any other
matter referred to in this announcement.
Financial Information - Trans European
Combined profit and loss accounts for the three years ended 31 December 2001
1999 2000 2001
GBP GBP GBP GBP GBP GBP
m m m m m m
Turnover
Continuing operations 529.9 596.9 687.8
Acquisitions - - 3.1
-------- --------- --------
529.9 596.9 690.9
Discontinued operations 43.3 45.1 30.0
-------- -------- --------
573.2 642.0 720.9
Net operating expenses (562.6) (628.8) (705.2)
-------- -------- --------
Operating profit before goodwill
amortisation 10.6 13.2 15.7
Goodwill amortisation (0.1) (0.4) (0.9)
-------- -------- --------
Operating profit
Continuing operations 10.4 12.9 12.7
Acquisitions - - 1.1
-------- -------- --------
10.4 12.9 13.8
Discontinued operations 0.1 (0.1) 1.0
-------- -------- --------
Operating profit 10.5 12.8 14.8
Share of operating profit/(loss)
of associates 0.2 - (0.2)
-------- -------- --------
Total operating profit 10.7 12.8 14.6
Profit on sale of discontinued
operations - - 10.4
Profit/(loss) on sale of assets
used in continuing operations (1.4) 0.2 (0.9)
-------- -------- --------
Profit on ordinary activities
before interest 9.3 13.0 24.1
Interest receivable and similar
income 0.7 1.1 0.8
Interest payable and similar
charges (4.2) (7.4) (8.2)
-------- -------- --------
Profit on ordinary activities
before taxation 5.8 6.7 16.7
Tax on profit on ordinary
activities (1.2) (3.3) (3.8)
-------- -------- --------
Profit on ordinary activities
after taxation 4.6 3.4 12.9
Minority interests (0.6) (1.5) (1.9)
-------- -------- --------
Profit for the financial year 4.0 1.9 11.0
-------- -------- --------
Combined balance sheets at 31 December 1999, 2000 and 2001
1999 2000 2001
GBPm GBPm GBPm
Fixed assets
Intangible assets 2.7 12.9 17.2
Tangible assets 94.7 119.0 136.5
Investments
Investments in associates 1.9 1.1 1.9
Other investments 2.2 2.2 1.5
------- ------- -------
101.5 135.2 157.1
------- ------- -------
Current assets
Stocks 5.8 6.6 6.5
Debtors 109.5 136.0 144.4
Cash at bank and in hand 15.6 24.3 20.1
------- ------- -------
130.9 166.9 171.0
Creditors: amounts falling within one year (113.6) (134.4) (156.8)
------- ------- -------
Net current assets 17.3 32.5 14.2
------- ------- -------
Total assets less current liabilities 118.8 167.7 171.3
Creditors: amounts falling due after more than one year (28.5) (68.1) (55.7)
Provisions for liabilities and charges (21.5) (22.9) (20.2)
------- ------- -------
Net assets before minority interests 68.8 76.7 95.4
Minority interests (4.6) (5.7) (4.8)
------- ------- -------
Net assets 64.2 71.0 90.6
------- ------- -------
Combined shareholders' funds 64.2 71.0 90.6
------- ------- -------
Combined cash flow statements for the three years ended 31 December 2001
Combined cash flow statement
1999 2000 2001
GBPm GBPm GBPm
Cash flow from operating activities 16.6 15.0 23.7
Dividends from associates 0.2 - -
Returns on investments and servicing of finance (2.8) (4.6) (8.4)
Taxation (3.9) (1.6) (1.5)
Capital expenditure and financial investment (19.7) (27.5) (32.3)
Acquisitions and disposals (3.5) (11.0) 7.0
------- ------- -------
Cash outflow before financing (13.1) (29.7) (11.5)
Financing 18.7 42.5 0.2
------- ------- -------
Increase/(decrease) in cash in the period 5.6 12.8 (11.3)
------- ------- -------
Reconciliation of net cash flow to movement in net debt
1999 2000 2001
GBPm GBPm GBPm
Increase/(decrease) in cash in the period 5.6 12.8 (11.3)
Cash (inflow)/outflow from loans to and from P&O 3.2 (39.1) 15.6
Cash (inflow)/outflow from changes in debt (2.8) 1.5 (6.6)
------- ------- -------
Change in net debt resulting from cash flows 6.0 (24.8) (2.3)
Loans (acquired)/sold with subsidiary (0.1) (3.0) 0.9
Exchange differences (0.1) (0.4) 0.8
------- ------- -------
Movement in net debt in the period 5.8 (28.2) (0.6)
Net debt at the start of the period (27.1) (21.3) (49.5)
------- ------- -------
Net debt at the end of the period (21.3) (49.5) (50.1)
------- ------- -------
Combined statement of total recognised gains and losses for the three years
ended 31 December 2001
1999 2000 2001
GBPm GBPm GBPm
Profit for the financial year
Trans European 3.8 1.9 11.2
Share of associates 0.2 - (0.2)
------- ------- -------
4.0 1.9 11.0
Revaluation of properties 0.1 0.4 (0.2)
Currency translation differences on foreign currency
investments (0.2) 0.1 (0.1)
------- ------- -------
Total recognised gains and losses relating to the financial
year 3.9 2.4 10.7
------- ------- -------
Combined shareholders' funds reconciliation for the three years ended 31
December 2001
1999 2000 2001
GBPm GBPm GBPm
Total recognised gains arising in the year 3.9 2.4 10.7
Net investment by P&O 19.1 3.8 10.1
Exchange adjustments (5.4) 0.6 (1.2)
------- ------- -------
Net movement in combined shareholders' funds 17.6 6.8 19.6
Opening combined shareholders' funds 46.6 64.2 71.0
------- ------- -------
Closing combined shareholders' funds 64.2 71.0 90.6
------- ------- -------
Segmental information
Trans European is a provider of European logistics services. An analysis of
Trans European's financial results by geographical origin is provided below. An
analysis of Trans European's financial results by geographical destination has
not been provided as it is not materially different from the analysis provided
by geographical origin.
1999 2000 2001
GBPm GBPm GBPm
Turnover by geographical area of origin
Germany and Switzerland 333.9 351.2 380.3
France, Spain and Benelux 34.2 54.4 90.4
Eastern Europe 15.1 17.6 23.8
PGN (a pan-European 4PL business) 39.6 44.6 48.8
------- ------- -------
Continental Europe 422.8 467.8 543.3
UK and Ireland 150.4 174.2 177.6
------- ------- -------
573.2 642.0 720.9
------- ------- -------
Total operating profit by geographical area of origin
UK and Ireland 5.1 4.4 3.1
Continental Europe 5.6 8.4 11.5
------- ------- -------
10.7 12.8 14.6
------- ------- -------
Profit before interest by geographical area of origin
UK and Ireland 5.0 4.4 3.1
Continental Europe 4.3 8.6 21.0
------- ------- -------
9.3 13.0 24.1
------- ------- -------
Net assets before minority interests by geographical area of
origin
UK and Ireland 15.7 14.0 10.6
Continental Europe 53.1 62.7 84.8
------- ------- -------
68.8 76.7 95.4
------- ------- -------
FINANCIAL INFORMATION - ENLARGED GROUP
UNAUDITED PRO FORMA STATEMENT OF NET ASSETS OF THE ENLARGED GROUP
The following unaudited pro forma statement of net assets of the Enlarged Group
as at 30 September 2002 has been prepared to illustrate the effect of the
Acquisition on the Group as if it had taken place on 30 September 2002. No
adjustments have been made to take account of any changes in the trading and net
assets of the Group since 30 September 2002, being the date to which its
unaudited interim accounts were prepared. No adjustments have been made to take
account of any changes in the trading and net assets of Trans European since 31
December 2001, being the date to which the Accountants' Report is prepared.
The pro forma statement of net assets has been prepared on the basis set out in
the notes below. It is provided for illustrative purposes only and, because of
its nature, may not give a true picture of the financial position of the
Enlarged Group.
Unaudited pro forma statement of net assets of the Enlarged Group as at 30
September 2002
Net assets Net assets
of of Adjustments Pro forma net
Wincanton Trans European ------------------------ assets of the
as at as at Net assets not Purchase of Enlarged
30 September 31 December being acquired Trans Group
2002 2001 European
(i) (ii) (iii)
GBPm GBPm GBPm GBPm GBPm
Fixed assets
Intangible assets - 17.2 - 4.7 21.9
Tangible assets 145.1 136.5 (12.4) - 269.2
Investments - 3.4 - - 3.4
---------- ---------- ---------- ---------- ----------
145.1 157.1 (12.4) 4.7 294.5
---------- ---------- ---------- ---------- ----------
Current assets
Stocks 3.8 6.5 - - 10.3
Debtors 99.1 144.4 - - 243.5
Cash at bank and in hand 24.9 20.1 (20.1) - 24.9
---------- ---------- ---------- ---------- ----------
127.8 171.0 (20.1) - 278.7
Creditors: amounts
falling due within one
year
Borrowings and finance (12.4) (18.9) 18.9 - (12.4)
leases
Other creditors (161.7) (137.9) - - (299.6)
---------- ---------- ---------- ---------- ----------
Net current liabilities (46.3) 14.2 (1.2) - (33.3)
---------- ---------- ---------- ---------- ----------
Total assets less current 98.8 171.3 (13.6) 4.7 261.2
liabilities
Creditors: amounts
falling due after more
than one year
Borrowing and finance
leases (20.3) (51.3) 51.3 (133.0) (153.3)
Other creditors - (4.4) - - (4.4)
Provisions for
liabilities and charges (62.5) (20.2) - - (82.7)
---------- ---------- ---------- ---------- ----------
Net assets before
minority interests 16.0 95.4 37.7 (128.3) 20.8
Minority interests - (4.8) - - (4.8)
---------- ---------- ---------- ---------- ----------
Net assets 16.0 90.6 37.7 (128.3) 16.0
---------- ---------- ---------- ---------- ----------
Net debt (7.8) (50.1) 50.1 (133.0) (140.8)
---------- ---------- ---------- ---------- ----------
Notes:
(i) The net assets not being acquired include GBP12.4 million of properties
and net debt of GBP50.1 million.
(ii) The acquisition adjustments reflect:
(a) The consideration for the acquisition of Trans European by
Wincanton of GBP133.0 million being the purchase price of
GBP152.5 million less adjustment for working capital of GBP19.5
million (being the difference between Trans European's working
capital at 31 December 2001 of GBP13.0 million and target
working capital of GBP32.5 million).
(b) Goodwill of GBP4.7 million being the difference between the net
assets acquired of GBP128.3 million, and the consideration of
GBP133.0 million.
(iii) The pro forma net indebtedness of the Enlarged Group at 30 September
2002 would have been GBP140.8 million, being GBP153.3 million of borrowings due
after more than one year and GBP12.4 million of borrowings due within one year,
less GBP24.9 million cash at bank and in hand.
The unaudited pro forma statement of net assets of the Enlarged Group does not
reflect any fair value adjustments that may be required as a result of the
acquisition, any costs of acquisition, or any restructuring costs that may
follow the acquisition.
This information is provided by RNS
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