Brexit uncertainty boosts Wincanton profits
Logistics firm Wincanton reported strong results for the six months to the end of September as British companies scramble to prepare for a no-deal Brexit.
The figures
Wincanton’s revenue was up a marginal 0.1 per cent to £581.8m.
Profit before tax rose 48 per cent to £30.1m.
Cash flow was up to £33.5m from £1m for the same period last year.
Net debt decreased to £24.2m from £29.5m at the end of March.
The company recorded an exceptional profit of £6m relating to the disposal of an under-used freehold property.
Why it’s interesting
Wincanton’s results, which are slightly ahead of expectations, reflect the uncertainty surrounding Brexit negotiations as companies launch contingency plans for a no-deal scenario.
Some businesses that import from the EU are beginning to stockpile products ahead of Britain leaving the union in March next year.
The logistics company said it had secured new deals with EDF Energy, Roper Rhodes and Hapag-Lloyd. It has also renewed contracts with retailers such as Loaf.com and Halfords.
Liad Meidar, managing partner and chief investment officer at Gatemore Capital Management, said: “We are pleased that today’s results are slightly ahead of expectations. We believe that over the coming quarters… Wincanton will develop a more ambitious strategy and will ensure the proper alignment of incentives for management.”
Gatemore has been invested in Wincanton since February this year and currently holds a 2.5 per cent stake in the company.
What Wincanton said:
Wincanton chief executive Adrian Colman said: “In the first half of the year the group has delivered a healthy overall performance from a stable platform. We continue to develop our business and propositions to meet the needs of our customers, especially benefiting from growth in ecommerce in the retail & consumer environment.
“The strong operating profit growth delivered in the period reflects the improvements we made to our performance and cost base last year and the robust approach taken to only renewing work where we can see appropriate rates of return.”
He added: “The strong underlying earnings per share growth of eight per cent and free cash flow generation highlights our continued ability to deliver predictable results and returns for all stakeholders. We look forward to making further strategic and operational progress to support long term returns for our stakeholders.”