The spike in online shopping this summer drove up profits at logistics group Wincanton, with its digital and eFulfilment divisions operating significantly ahead of their pre Covid-19 levels.
As a result, the Chippenham-based group expects this year’s results to be “materially” ahead of market expectations.
In a trading update to shareholders, the UK’s largest third-party logistics group said the two divisions had benefited even as lockdown measures were being eased in July and August, while volumes in the two-person home delivery business also remained high through the summer months.
Operational efficiencies had also led to an improvement in operating margins in its digital and eFulfilment businesses.
The group, which has a fleet of 3,500 vehicles, employs 5,500 drivers and operates 14m sq ft of warehouse space across the UK, works with scores of blue-chip retailers, many of them enjoying huge increases in online business as many more consumers avoid the high street and shop from home.
Wincanton described the performance across the rest of the group as “encouraging”, saying it had been supported by changes to its cost base implemented earlier in the year, which were made in the face of challenging external conditions.
Its balance sheet remained healthy, with strong cash collection and a robust working capital position, it said.
Given the combination of the improved trading performance, cost intervention measures and the recovering economy, directors expect results for the current year to be “materially ahead of market expectations”, it said in its statement, but added: “This continues to assume no further Covid-19 impact that severely affects the business”.
In July Wincanton said it was looking to take a bigger share of the online growth in the home, and health and beauty sectors after opening a new dedicated eCommerce facility.
The first beneficiaries of the Nuneaton site are existing Wincanton customers home furnishings brand Loaf and health and beauty company Neal's Yard Remedies.
Last month Wincanton signed a three-year contract with furniture retailer Dwell, including for click-and-collect services in its stores and home deliveries.
The group also recently struck a deal with upscale supermarket group Waitrose to create a customer fulfilment centre in London for its online grocery deliveries that it described as ‘transformational’.
