Investors taking the long view of Wincanton’s (WIN) March-end financial year don’t have too much to grumble about. Yes, contracts lost at the beginning of the period caused a dip in the top line and stalled share price momentum. But operating profits climbed in the period – by 23 per cent in statutory terms, or 4.5 per cent on an underlying basis. For a low-margin business like logistics, that’s normally considered a win.
On a related note, the Chippenham-headquartered group has landed most of the contracts it has bid for of late, as clients shake off any Brexit-induced paralysis in tendering activity. That provides a benign environment for Adrian Colman to step aside as chief executive. Picking up the reins, by October, is logistics veteran James Wroath, currently chief operating officer at LSG Sky Chefs, Lufthansa’s airline catering subsidiary.
Mr Wroath will need to add legacy pension scheme management to his expertise in in-flight meals, such is the state of Wincanton’s liabilities. Fortunately for him, and shareholders, the pension deficit dropped to £7.1m in the period, thanks to £32.3m-worth of group payments. Deducting this from free cash flow of £57m still left enough for dividends and £10.2m cash, which explains the dip in net debt.
Broker Numis upgraded its forecasts following these numbers, and now expects pre-tax profits of £51.1m and earnings of 34p a share for the year to March 2020, rising to £52.8m and 34.5p in FY2021.
| WINCANTON (WIN) | ||||
| ORD PRICE: | 267p | MARKET VALUE: | £331m | |
| TOUCH: | 263=267p | 12-MONTH HIGH: | 280p | LOW: 200p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 8 | |
| NET ASSET VALUE: | * | NET DEBT: | £19.3m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.11 | 24.9 | 16.6 | nil |
| 2016 | 1.15 | 65.8 | 50.7 | 5.50 |
| 2017 | 1.12 | 45.4 | 34.2 | 9.10 |
| 2018 | 1.17 | 37.9 | 25.2 | 9.90 |
| 2019 | 1.14 | 48.6 | 34.5 | 10.89 |
| % change | -3 | +28 | +37 | +10 |
| Ex-div: | 04 Jul | |||
| Payment: | 02 Aug | |||
| *Negative shareholder funds. | ||||
