Revenues fall at logistics firm as a result of tough trading conditions
Logistics firm Wincanton has said it revenues have fallen as a result of the tough trading conditions.
The Wiltshire company issued an upbeat trading update this morning for the first quarter of the financial year despite the drop in business.
The company said it continues to trade in line with market expectations[, and has made sustained strategic and operational progress despite the ongoing economic headwinds and lower delivery volumes.
Group revenue in the first quarter was down 4.5 per cent year-on-year when closed book transport contracts are excluded[.
Year-on-year revenue is 10.4 per cent lower when including closed book transport.
Wincanton said there has been a shift in strategy with the focus on the development, delivery and management of technology-based solutions and open-book dedicated networks.
The company said it is already seeing early benefits from this strategic shift, with new transport control tower business for both Sainsbury’s and Breedon.
A dedicated transport contract with New Look has commenced and a long-standing transport partnership with Halfords has been extended for a further five years.
The group’s main sectors continue to provide scale and strong cash generation in a challenging market.
Revenue in grocery and consumer decreased by 5.6 per cent year-on-year and general merchandise was 16.9 per cent lower, reflecting both volume reductions and customer churn.
Revenue from eFulfilment increased by 15 per cent in the first quarter, demonstrating its importance as a growth driver.
Wincanton secured several significant new eFulfilment contract wins in the quarter, all of which will commence in the next three months.
These contract wins include the expansion of the IKEA network partnership into Ireland and final mile delivery in Greater London, the UK launch of US home retailer Restoration Hardware and fulfilment services for Neom Organics and Brewers (Decorator Centres).
Revenue from the public and industrial sector increased by 2.1 per cent year-on-year, with growth in defence customers and EDF Hinkley Point offsetting the reductions from the contracts with HMRC and DEFRA.
The group secured new contract wins in the key defence and industrial markets, expanding its partnerships with Rheinmetall BAE Systems Land and British Salt.
Wincanton said it is well-placed to continue to navigate the challenging external environment with its successful strategy and continued investment in automation technology, underpinned by its diversified customer base.
