Logistics group Wincanton has been as much a victim of the consumer downturn as any high street store. After warning last month that falling volumes had left big gaps in some rented warehouses, the firm has booked an onerous lease provision of £34.1m. Still, management action appears to have stopped the rot, suggesting to us the share sell-off may be over.
Selling its mainland Europe operations and exiting lower margin and loss-making food services businesses may have been a smart move, but it has scarred the balance sheet. Over £68m of exceptional items plunged Wincanton deep into the red, and the group couldn’t win enough new business to offset lower volumes, contract losses and in-sourcing by customers, either. More cyclical work, like containers and construction, suffered most, but even so full-year underlying operating profit of £43.8m was still only down 6 per cent and marginally ahead of forecasts. Taking out around £10m of annual costs from central support functions helped, and another £10m should follow this year. Yet, with over £1bn of costs, it could easily double that.
Numis Securities expects current year adjusted pre-tax profit of £26.7m and EPS of 15.5p (£28.8m and 18p in 2012).
WINCANTON (WIN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 44.5p | MARKET VALUE: | £ 54.2m | |
| TOUCH: | 44.5-45p | 12-MONTH HIGH: | 127p | LOW: 36p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE | * | NET DEBT: | £114m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 2.16 | 36.7 | 21.0 | 14.9 |
| 2009 | 2.36 | 20.0 | 11.6 | 14.9 |
| 2010 | 2.18 | 3.0 | 1.6 | 14.9 |
| 2011** | 1.33 | 3.6 | 3.7 | 4.83 |
| 2012 | 1.20 | -47.4 | -35.3 | nil |
| % change | -9 | - | - | - |
*Negative shareholder funds of £268m **Restated for sale of Mainland Europe operations | ||||
