Logistics group Wincanton has shrugged off what it described as a “challenging trading environment” to increase its revenue.
The Chippenham-headquartered group, which has 20,300 employees and 8,500 vehicles in more than 170 sites across the country, grew by 1.3% year-on-year in the third quarter despite the tougher market and its ongoing exit from closed-book transport contracts.
Revenue from its core activities increased by 5% year-on-year as it made progress in balancing its contract mix towards commercially protected agreements with reduced volume exposure.
Wincanton launched a strategic reorganisation of its transport operations last year to create a more profitable and digitally enabled service offering alongside a more efficient allocation of capital.
It secured some early successes, with new business for supermarket giant Sainsbury's and construction materials company Breedon.
However, the cost of living crisis and the loss of some major contracts has created a more challenging environment following several years when the group performed strongly. This included benefitting from the huge increase in home shopping during the Covid lockdowns and the switch to e-fulfilment by major retailers.
Wincanton said its ‘foundation’ sectors delivered a strong third quarter. Revenue in grocery & consumer was up 2.9% year-on-year driven primarily by the major open book transport partnership with Sainsbury's.
General merchandise delivered revenue growth of 3.7%, reflecting the impact of new contracts with clothes and homeware retailer New Look and renewables distributor Segen.
eFulfilment, which has become a more important part of the business over recent years, increased revenue by 8.1% year-on-year, driven by the strong performance from contracts with IKEA, Wickes and The White Company.
While public & industrial revenue was down 11.9% against a strong prior year comparator, reflecting the impact of Wincanton’s contract with HMRC, this was partially offset by a strong performance with defence and industrial customers, primarily EDF, British Salt and BAE Systems operations.
As a result, the group said it continued to trade in line with market expectations, with profits for the current financial year also in line with these.
Wincanton chief executive officer James Wroath said: “Wincanton plays a crucial role at the heart of UK supply chains; this is never more apparent than during the seasonal peak trading period for our retail customers.
“We remain focused on being Britain's best supply chain partner and on the opportunity to deploy technology to deliver transformational value for our customers and shareholders.
“The macro-economic environment remains uncertain as we move into 2024 but we are confident our strategy and strong financial position provides an excellent foundation for growth and continued strategic delivery in 2024.”
