Wiltshire-based supply chain specialist Wincanton has admitted that many of its existing and potential customers are still keeping a tight rein on costs despite the economic recovery.
The Chippenham logistics group, which operates warehouses and distribution networks for major clients, has won a raft of contracts or extended previous agreements and, as a result, is trading in line with expectations, it said in an interim management statement issued to shareholders.
The announcement, covering the period from April 1 to yesterday, said the group’s performance had remained consistent with that achieved during the second half of the previous financial year.
“The UK construction industry continues to perform well, however in other sectors in which the group operates, despite the economic conditions being more benign, we continue to see competitive pressure in our marketplace as our customers retain a tight focus on their costs,” the group said.
Its contract logistics business had secured a number of new business wins including a nationwide warehouse and distribution services for Loaf.com, the UK’s fastest-growing homeware company.
It also signed a four-year contract in the construction sector with Marley Eternit to distribute cladding materials and a three-year contract with Halo Foods.
A three-year extension was agreed to its long-standing partnership with drinks group Britvic to operate its automated national distribution centre.
Wincanton last month announced a refinancing of its main banking facilities for a further five years through to support its medium-term funding requirements, including a new £17m facility which gives it committed facilities of £300m.
Chief executive Eric Born said: “Wincanton has traded well in the first part of the year following on from the good performance delivered in the last two years. The new business wins and renewals in the year to date show our continued ability to add significant value to our customers’ logistics and supply chain operations.
“We have now developed a solid platform and will continue to progress along our path to focus on renewals, new contract wins, operational excellence and free cash flow generation to reduce our overall debt position.”