Logistics group Wincanton has said it is managing to avoid of the worst of the HGV recruitment crisis currently hitting supply chains and so remained on course to deliver full-year profits in line with market expectations.
In a trading update the Chippenham-headquartered group, which employs around 5,500 drivers, admitted the shortage had affected parts of its business but mostly it remained immune to the issue.
The statement, which comes ahead of its half-year results for the six months to September 30, said ‘closed book’ transport contracts, particularly in the construction and FMCG (fast-moving consumer goods) market had been the most impacted parts of the business.
However it said it had made good progress in agreeing rate changes to optimise service levels.
It added that it is also continuing to work closely with its customers in taking active steps to address the impact of the shortage of HGV drivers in the UK and to both attract and retain drivers.
A significant majority of its contractual arrangements provided mitigation against cost pressures, it said, pointing out that the recent fuel shortages had not impacted group profitability.
As a result, it was on track for full-year profits to meet market expectations, which it said reflected a combination of strong retail volumes and the rate changes in closed book contracts.
It also said it remained confident of future growth opportunities, having delivered a strong increase in revenue throughout the period, with positive contributions from all four of its sectors and particularly from retail customers.
Last month’s £23.9m acquisition of Northampton-based Cygnia Logistics, a specialist mid-market eCommerce and multichannel eFulfilment provider, further strengthened its offer in the high-growth sector.
It also secured a five-year extension to its framework agreement with long-term customer, defence giant BAE Systems during the period.
Under the contract Wincanton will continue to provide transport, warehousing, materials management, packing and inspection services to BAE Systems. It also secured an expanded mandate with Asda, under which it will take on collection services at its facility in Lutterworth, Leicestershire.
Britain’s largest third-party logistics group, Wincanton employs around 19,600 workers, including 5,500 drivers, providing supply chain services to brands ranging from Britvic to Screwfix and across a wide range of industries including retail, construction, defence and energy.
The group, which operates from more than 200 sites across the UK totalling 14m sq ft of space and uses 3,500 vehicles, said its pipeline of new contracts and extensions of existing agreements remained encouraging.
Its interim results for the six months ended September 30 are due to be announced on November 19.
