Earlier this year, Wincanton (WIN) warned that while year-on-year revenues had advanced thanks to the retail and consumer business, trading profits were under pressure at the industrial and transport division. Five months on and half-year results reveal that sales in the affected division were up 2 per cent to £247m, but underlying operating profit had fallen by more than a quarter to £10.6m on a 160 basis point fall in the margin. Management at the logistics group has already initiated restructuring measures, including some staff cuts and operational changes, which chief executive Adrian Colman said will be completed by the group's March year-end at a one-off cost of £7m.
As foreshadowed, shareholders will take some solace from the performance of the retail and consumer business, where top-line growth of 4.5 per cent was augmented by rising margins, leading to a 28 per cent hike in underlying operating profit to £15.1m. This growth was driven by new contract wins, including a new four-year deal with Ikea and a five-year deal managing UK transport operations for the wilko retail chain, together with strong volumes from DIY customers.
Analysts at Numis expect pre-tax profits of £44.9m in the year to March 2018, giving EPS of 28.4p, up from £41.5m and 26.8p in FY2017.
| WINCANTON (WIN) | ||||
| ORD PRICE: | 266p | MARKET VALUE: | £330m | |
| TOUCH: | 265-266p | 12-MONTH HIGH: | 309p | LOW: 183p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 8 | |
| NET ASSET VALUE: | * | NET DEBT: | £43.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 562 | 19.6 | 13.2 | 3.00 |
| 2017 | 581 | 20.3 | 13.7 | 3.27 |
| % change | +3 | +4 | +4 | +9 |
| Ex-div: | 07 Dec | |||
| Payment: | 10 Jan | |||
| *Negative shareholder funds, including intangible assets of £84.9m, or 69p a share | ||||
