Wincanton, the Chippenham-based logistics group which recorded a £75.5m first half loss, said in a trading update today that it continued to trade in line with its expectations for the year ended March 31 – but the market was not impressed and marked its shares down nearly 10% yesterday morning.
The group says it has successfully retained and won a number of contracts across all of its market sectors. However, conditions have been challenging in the retail and FMCG (fast moving consumer goods) sectors and the containers business and it expects no improvement in the year ahead.
A number of clients are seeing a decline in volumes and this is resulting in reduced demand for warehouse space and excess property in the group.
However, Wincanton has continued to perform well in Pullman Fleet Services, Records Management and in its Construction and Defence sectors.
The group sees significant opportunities in the medium term and is developing more flexible and advanced "product solutions", combining its assets, best in class processes and system capabilities "to help customers to improve further the performance of their supply chain".
It warns, however, that in the year to March 2013, some of its businesses will be hit by loss of volume, together with some excess space and the decision to invest in future growth opportunities. Wincanton "continues to look for ways to reduce costs and make efficiency improvements following on from cost reduction measures which have helped stabilise the profitability".
Chief executive Eric Born said the year had been one of transition following disposal of the mainland Europe business. He added: "Our focus remains on stabilising and maximising opportunities in the core business while developing product solutions that will provide profitable growth in the future and enable us to further reduce our average net debt."
Annual results will be announced on June 14.
