Interim Management Statement

RNS Number : 7151X

Wincanton PLC

20 August 2009

 



For Immediate Release

20 August 2009

Wincanton plc

Interim Management Statement

Wincanton plc ('Wincanton' or the 'Group'), the leading European supply chain solutions provider, today issues the following Interim Management Statement which covers the period from the beginning of the current financial year, 1 April 2009 to 20 August 2009. 

As previously reported Wincanton delivered a solid performance in challenging markets in the year to 31 March 2009, with new contract gains and cost reductions substantially offsetting the effect of volume decline in certain of the Group's businesses.

Wincanton's diversified portfolio of sectors, services and geographies, underpinned by our strong and resilient customer and contract base, is again proving to be of benefit in the current financial year. Market conditions in certain areas are nonetheless expected to remain difficult.

In the UK & Ireland, new business momentum remains strong, both in traditional markets and in newer sectors and services, including some of those affected by volume weakness in the second half of last year. Group financial performance is benefitting from the effects of cost reduction initiatives. 

Since the year-end, for example, we have taken the decision to focus resources on our dedicated home delivery services, an area in which we continue to win new contracts, and to close our more volume-sensitive shared-user home delivery services.

Contract gains in the new financial year include Argos, Micheldever, the addition of Strada in our food service operations and seasonal business with Sainsbury's. Further business gains have also been confirmed in food service, as well as in other areas such as defence, home delivery and general merchandise retail, although formal contracts are still under negotiation.

In Mainland Europe, contract gains and cost reduction initiatives are also mitigating the effects of volume decline, as in the UK & Ireland, but we expect economic conditions to continue to present challenges. 

A key area of focus continues to be the loss-making German groupage activities. Plans to eliminate these losses are progressing well and are expected to be implemented before the end of the calendar year. 

New business wins since the year-end in Mainland Europe include the pan-European distribution and installation of in-store technology for Rodenstock, the leading eyewear manufacturer, awarded to our German business, and a further contract with leading global brewer InBev in Holland.
Goodyear has also awarded Wincanton new contracts in France, Poland and Belgium adding to our existing business in Germany and Central and Eastern Europe, confirming the Group's status as a strategic logistics partner for one of the largest global automotive brands.

Good progress is also being made towards the renewal of our banking facilities.  Cash management remains a key area of focus and the Group is trading comfortably within the covenants of our current facilities. 

We expect a stronger performance in the second half as a result of action taken to reduce costs and exit businesses not delivering acceptable results.  Overall, we expect new business and market share gains, based on the quality of our existing customer and contract portfolio and the encouraging progress being made in our newer sectors and services, to contribute well. 

Whilst uncertain economic conditions offer less visibility of the short-term trading outlook, the Group remains focused on delivering a performance in line with expectations in the current financial year.

As the European No 2 in supply chain services, building a presence in a growing number of industry verticals and with an expanding range of support services, Wincanton is well-placed both to perform well relative to its competitors in the short term, and deliver renewed growth momentum in the medium to longer term.

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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