Full year results are anticipated to be above market expectations
Wincanton has provided an update on its Q4 trading performance in advance of the release of its full year results on 20 May. Full year results are anticipated to be above market expectations.
The Group has continued to perform strongly in Q4 and underlying revenue, excluding disposed businesses, is expected to be around 15.0% ahead of prior year, with growth in all four sectors.
Digital and eFulfilment is again set to deliver year-on-year growth of c.40.0% in the period. In addition to the high volumes in its existing eCommerce activities, the sector has been bolstered by the start-up of new business for Dobbies and Dwell and the commencement of operations at its west London Customer Fulfilment Centre (CFC) for Waitrose. The CFC has been running for just over three weeks and, in that time, the team has picked and dispatched close to 20,000 orders.
Public and Industrial is expected to show year-on-year growth of c.10.0% in the quarter. There has been a ramp-up of Public Sector activity, most notably on contracts covering Inland Border Clearance services and the storage and distribution of Covid-19 testing kits, and the Group has experienced improved volumes for its building materials customers. This has been partially offset by lower levels of activity in the energy business due to the reduction in demand prompted by the lockdowns across the UK.
Performance in Grocery and Consumer remained strong and is expected to grow by around 3.0% against a challenging year-on-year comparison, with Q4 2019/2020 seeing the emergence of panic buying from consumers in the early weeks of the pandemic. The sector has secured a two-year contract with Heineken to handle products to retail outlets throughout England and Wales. General Merchandise (+c.28.0%) has benefitted from good levels of demand during the recent lockdown, particularly for DIY products. A new three-year contract was secured with garden landscaping products manufacturer, Kelkay, to provide a full transport service.
The Group has maintained a strong balance sheet whilst also repaying both its deferred pension contributions and VAT in full. Following the continued strong performance through the second half of the year, Wincanton has repaid £5.8 million of Government support received under the Coronavirus Job Retention Scheme (CJRS), initially taken to protect jobs in its retained, closed book business. The Group expects to deliver full year profits above market expectations, after taking into account repayment of furlough support.