If logistics businesses such as Wincanton (WIN) form the circulatory system of the UK economic body, this month's rise in inflation (as judged by the consumer prices index) to 2.7 per cent is potentially a high cholesterol reading. Chief executive Adrian Colman sees no sign of ill-health, however, and is not worried that his clients' increasing costs of doing business might constrain trading activity. Specifically, he told us inflation will not have a pronounced hit on "all the things we're moving - high volume necessity items that a nation of 65m people need to keep themselves going".
Mr Colman is sanguine on rates, too, reporting that orthodox customer requests - "a bit more for a bit less cash" - are unchanged. Discard the contribution last year from the records management business (whose flattering £32.5m disposal explains the pre-tax profit drop) and underlying operating profit increased 7 per cent in the reported period. Strong cash flow allowed for investment in the fleet and a £15.2m net debt reduction. After all that there was room for a 6.1p final dividend and a further £14.1m payment to the pension fund, whose net deficit is now down to £65m.
Analysts at broker Numis predict adjusted pre-tax profits of £44.1m and EPS of 28.2p in the year to March 2018 (from £41.5m and 26.8p in FY2017).
WINCANTON (WIN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £350m | |
| TOUCH: | 283-285p | 12-MONTH HIGH: | 288p | LOW: 160p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 8 | |
| NET ASSET VALUE: | * | NET DEBT: | £24.3m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.09 | 14.0 | 8.7 | nil |
| 2014 | 1.10 | 34.9 | 23.6 | nil |
| 2015 | 1.11 | 24.9 | 16.6 | nil |
| 2016 | 1.15 | 65.8 | 50.7 | 5.5 |
| 2017 | 1.12 | 45.4 | 34.2 | 9.1 |
| % change | -3 | -31 | -33 | +65 |
Ex-div: 6 Jul Payment: 4 Aug *Negative shareholder funds, including intangible assets of £86.9m, or 70p a share | ||||
