Logistics business Wincanton (WIN) increased its underlying operating profit by 2.9 per cent as the improving UK economic environment boosted volumes in construction and consumer goods. This helped offset margin pressures on the renewal of tanker contracts, where volumes were down in what management described as a "highly competitive market".
Retail wasn't perfect, either, as growth in grocery and DIY volumes was balanced by the impact of site closures as chains reshape their store portfolios. Yet the renewal of contracts with household names like Waitrose wines and spirits, Adidas (De: ADS) and Britvic (BVIC), plus the welcoming of Halo Foods on a three-year deal, is encouraging. General Dynamics (US: GD) and Total (Fr: FP) also renewed contracts, while Howdens (HWDN) signed up for the first time, offering ample evidence that management is delivering on its pledge to keep and retain customers.
Some progress was also made on management's other key goal of reducing net debt, which at 30 September was 23 per cent lower than the previous year - albeit slightly higher than in March. This helped reduce net finance costs by £2.3m, boosting underlying EPS by more than a quarter year on year.
Broker Investec expects pre-tax profit of £28m for the current financial year, giving EPS of 16.6p (up from £25.6m and 15.3p).
| WINCANTON (WIN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £ 180m | |
| TOUCH: | 146-150p | 12-MONTH HIGH: | 152p | LOW: 108p |
| DIVIDEND YIELD: | nil | PE RATIO: | 6 | |
| NET ASSET VALUE: | * | NET DEBT: | £66.9m | |
| Half-year to 30 September | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 542.2 | 9.7 | 6.4 | nil |
| 2014 | 550.9 | 12.7 | 8.3 | nil |
| % change | +2 | +31 | +30 | - |
| *Negative shareholders' funds | ||||
