Logistics company Wincanton (WIN) shrugged off its pension deficit in the first half of its financial year, shifting the funding position to an £8.1m surplus. Strong cash generation during the period also meant net debt was pushed down by 42 per cent, according to chief financial officer Tim Lawler.
Alongside chipping away at its pension liabilities, the company has been looking through embattled competitor Eddie Stobart’s books. A possible takeover could have been dealt a blow as Stobart confirmed fellow prospective buyer DBAY Advisors’ strategy had proposed taking 51 per cent of Stobart in exchange for a £55m cash injection. Mr Lawler told us Wincanton would continue with its due diligence.
Parallel to this, day-to-day business has kept ticking along. Underlying profits benefited from the decision to cast off lower-margin contracts, prompting an improvement in the underlying operating profit margin to 4.8 per cent, from 4.6 per cent atthe same time last year. New business wins included a five-year deal with Morrisons (MRW) for the provision of transportation and vehicle maintenance services.
Consensus forecasts compiled by Bloomberg put 2020 full-year cash profits at £68m and earnings per share at 34.5p, climbing to £70m and 35.3p in 2021.
| WINCANTON (WIN) | ||||
| ORD PRICE: | 258p | MARKET VALUE: | £ 321.2m | |
| TOUCH: | 255-258p | 12-MONTH HIGH: | 275p | 210p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET DEBT: | £14.8m** | |
| Half year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 582 | 30.1 | 21.3 | 3.60 |
| 2019 | 593 | 28.5 | 19.7 | 3.90 |
| % change | +2 | -5 | -8 | +8 |
| Ex-div: | 05 Dec | |||
| Payment: | 10 Jan | |||
| *Negative shareholder funds **Excludes lease liabilities of £124m | ||||
