Covid-19 and Brexit trade hitches deliver boost for Wincanton as home shopping booms

January 20, 2021

Shares in Chippenham-based logistics group Wincanton soared by just under 14% this morning after it said it was benefiting from the major switch to home shopping caused by Covid-19 restrictions as well as from moving coronavirus testing kits around the country.

The group is also working with the government to provide logistics services at some of the 11 Inland Border Clearance Centres set up to deal with Brexit-related trade problems. 

At the same time a number of logistics contracts itwon last year with major businesses have come on  stream.

As a result, Wincanton directors said in a third quarter trading update that they expect profit in its current year to be “materially ahead” of market expectations, assuming no unforeseen severe Covid-19 impact in the closing months of the year.

In the year to March 31, 2020, the group made a pre-tax profit of £43.8m on sales of £1.2bn.

In the trading update, which covers the period from November 5 last year, Wincanton said it had enjoyed a continued improvement in revenues and profitability since the initial impact of Covid-19 early in 2020 and, “following a period of recovery and stabilisation”, had returned to growth in the third quarter of the current financial year.

Revenue shot up by more than 10% in the quarter compared to the prior year, with growth in all of the group’s four core business segments – a result Wincanton said reflected positive momentum in the delivery of its strategy and the operational value it brought to its customers.

The largest increase was in the digital and eFulfilment sector, where revenues were up 40% due to higher demand as customers continued to switch to shopping from home.

Revenue in the public and industrial sector were boosted by strong volumes in construction and the increased use of its shared transport network.

Recent contract wins included a mandate to provide logistics services at a number of Inland Border Clearance Centres and a contract for the storage, order fulfilment and customer delivery of testing kits to priority locations across the UK.

There was also further “significant” new business in digital and eFulfilment for both Waitrose and garden centre group Dobbies.

Wincanton chief executive officer James Wroath said: “The strong performance of our underlying business and the new contracts we are implementing in our strategic growth markets are clear evidence that we are delivering on our strategy even in the difficult current climate.”

Wincanton has a fleet of around 3,500 vehicles, employs 5,500 drivers and operates 14m sq ft of warehouse space across the UK.

By mid-morning its shares were trading at 310p, up 13.9% on the day.

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