Profits at Chippenham-based supply chain management group Wincanton have fallen despite it winning a raft of new business and successfully renewing a number of contracts.
The group blamed the 5.6% decrease in underlying operating profits to £23.5m in the half year to the end of September on two “onerous” home shopping contracts coming to an end for its Pullman vehicle maintenance and repair business.
These problems offset a better performance by its contract logistics division and also impacted on the group’s overall underlying operating margin, which eased from 4.5% to 4%. 
New business wins in the half year included a five-year contract to manage B&Q’s distribution centres, a three-year agreement for transport logistics with Halfords and the expansion of its services for B&Q to include home delivery services for its kitchen, bedroom and bathroom products
It also renewed contracts with long-standing customers such as HJ Heinz and Dairy Crest. These helped drive up group revenue by 5.8% to £582.8m. Pre-tax profits came in 1.6% higher at £12.9m.
Looking ahead, the group said the contract logistics sector continued to perform well in a very competitive environment with a continued focus on cost efficiency and margin pressure on renewals.
Its smaller specialist division, which includes Pullman and its container business, was being turned around and the commercial impact of the two home shopping contracts would end in the second half, it said.
Doncaster-based Pullman operates more than 30 workshops across the UK handling repairs, maintenance and breakdown services.
The group said it remained well positioned to pursue new business opportunities and that, through its ongoing focus on cost reduction, asset efficiency and cash generation, it would make continued strategic and operational progress.
It continued to trade in line with full year expectations, as adjusted for the £60m disposal of its records management business, which provides a full suite of document storage and associated scanning and shredding services.
Average net debt would be lower than expected due to receipt of the proceeds from the disposal.
Chief executive Adrian Colman said: “Our contract logistics sector has been a strong performer in the first half which has helped to mitigate the performance pressures in specialist businesses, most notably in the Pullman business.
“The recently announced disposal of Wincanton Records Management realises substantial value for the group, strengthens our balance sheet, provides greater capacity for future investment and focuses the group on its core skills and capabilities in logistics operations.”
