Profits fall at logistics firm as inflationary pressures continue to bite
Profit before tax fell by just over 30 per cent to £38.2m at Wiltshire logistics firm Wincanton.
The fall in profits was largely triggered by reorganisation and impairment charges but the company said tough trading conditions continued through the second half of the year.
According to the preliminary results full year revenue was up 2.9 per cent to £1.4bn.
Underlying EBITDA was £121.9m, an increase of 12.6 per cent and underlying profit before tax was up 6.9 per cent to £62.1m.
Wincanton managed inflationary pressures throughout the year and steps were taken to pass through costs in open book contracts and control costs in closed book contracts.
The company said its business remains highly cash-generative, with strong free cash flow generated from operating activities.
New business momentum was sustained with major customer wins secured across all sectors.
Contract renewals agreed with long-standing customers included Sainsbury’s, Waitrose & Partners, Wickes, Co-op and Halfords
Wincanton is forecast results for the full year will be in line with expectations, which as previously indicated, reflect the challenging external economic environment.
James Wroath, Chief Executive Officer, said: “Our strategy delivered a strong result in FY23 despite the prevailing macro-economic challenges, particularly with regard to retail volumes and inflation.
“We continue to invest in technology as the route to deliver competitive advantage in the industry.
“Significant opportunities remain for warehouse automation across our group, both in the foundation sectors and strategic growth markets.
“Furthermore, our transport operations have had a shift in focus with technology at the heart of our new market proposition. I am thankful to the Wincanton team who has delivered excellent performance in a difficult economy. Their determination and innovation will continue to be essential as we expect volumes to remain under pressure into 2024 due to the macro-economic environment.”