Logistics giant Wincanton has seen profits dip by almost a third amid inflationary pressures and lower customer volumes.
The Wiltshire-based supply chain manager reported a statutory pre-tax profit of £38.2m for the 12 months to March, down 30% on the £54.8m recorded for its previous financial year.
Bosses at the London-listed firm, which serves clients across sectors such as retail, dairy and fuel, cited “challenging” wider economic conditions.
Read more: Parent firm of Wiltshire Farm Foods planning new Trowbridge factory
The board said a squeeze on consumer spending had impacted retail volumes in its grocery and e-commerce fulfilment divisions, while the company had also had to manage “inflationary pressures”, with steps taken to pass on some of its higher operating costs to clients. The company said reorganisation of its group transport operations had incurred restructuring charges of £19.5m.
Despite this, the Chippenham-headquartered group reported “profitable growth and strategic progress”, with revenue up by around 3% at £1.46bn. The group’s internally calculated underlying earnings before interest, taxes, depreciation and amortisation rose 12% to £121.9m, with an underlying pre-tax profit of £62.1m, up from £58.1m in 2022.
Bosses said “new business momentum” had been sustained with major customer wins across its four sectors, as well as contract renewals agreed with long-standing customers such as supermarkets Sainsbury's, Waitrose, and DIY retailer Wickes.
Earlier this year Wincanton said it was “extremely disappointed” to have lost a key government contract with HMRC, but in its trading update, the group said it had expanded contract wins with DHSC and Defra, and grown its defence activities through new work with aerospace firm BAE Systems.
Chief executive James Wroath 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 FY24 due to the macro-economic environment."
The group closed the year with net cash of £13.2m, up from £3.7m at the end of the 2022 financial year, with a full year dividend of 13.2p per share recommended, up 10% on last year.
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