FD quits Wincanton as restructuring benefits feed through

The top line was down but underlying half year profits were up at logistics specialist Wincanton, while the contracts pipeline is looking in good shape.

Revenue from continuing operations in the six months to September 30th fell to £551.2m from £625.5m the year before.

The Contract logistics business chipped in with £465.0m of revenue and £20.1m of underlying operating profit, versus £534.5m and £17.5m, respectively, a year earlier. The division's margin improved substantially from 3.3% at the interim stage in 2011 to 4.3% this time round.

Revenue from the Specialist business eased to £86.2m from £90.9m the year before, while underlying operating profit dipped to £4.2m from £4.8m. The division's margin fell below five per cent, to 4.9% from 5.3% the year before.

Reported profit before tax was £13.0m, versus a loss of £13.6m the year before. Underlying profit before tax, which excludes last year's restructuring costs plus other one-off items, improved to £17.1m from £14.2m.

Overall, margins for the group were much improved, hardening to 4.4% from 3.6% the year before.

Eric Born, Chief Executive of Wincanton commented: "Our new business pipeline remains healthy and we continue to be successful in securing significant levels of customer contract renewals. We remain acutely focused on margin growth and free cash flow generation."

Net debt of £123.0m at the end of September compares to £114.5m at the end of March and £177.6m at September 30th, 2011.

Whittling down the debt remains a priority for Wincanton, but it won't be a concern for Group Finance Director Jon Kempster, who has stood down from the board with immediate effect but who will stay on with the company until a replacement is found, or until January 31st, 2013, whichever comes sooner.

Kempster said that with the restructuring of the group now largely complete, the time was right to move on.

As expected, the group has not announced an interim dividend as it has previously stated it wants to get the debt down before thinking about returning cash to shareholders.

JH