Logistics giant Wincanton has reported drop in group revenue.
The Wiltshire-based supply chain manager recorded in its latest trading update that revenue in the first quarter was down 4.5% year-on-year, when closed book transport contracts are excluded, and year-on-year revenue was down 10.4% when included.
Bosses at the London-listed firm, which serves clients across sectors such as retail, dairy and fuel, cited "ongoing economic headwinds and resultant lower delivery volumes".
However, Wincanton said it continued to trade in line with market expectations and said it had made sustained operational progress despite these challenges.
Wincanton said there had been a "strategic shift" with a focus on the development, delivery and management of technology-based solutions and open-book dedicated networks.
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The group said it was already seeing early benefits from a new Transport Control Tower business for Sainbury's and Breedon. It also noted the commencement of its dedicated transport contract with New Look and said its transport partnership with Halfords has been extended for a further five years.
The Group's foundation sectors continue to provide scale and strong cash generation in a challenging market. Revenue in grocery and consumer decreased by 5.6% year-on-year and general merchandise was 16.9% lower, "reflecting both volume reductions and customer churn".
Revenue from eFulfilment increased by 15% in the first quarter. Wincanton said it had secured several new eFulfilment contract wins in the quarter, all of which will commence in the second. These 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.
In a statement Wincanton said: "Wincanton 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. The Group's strategic shift in transport towards open book contractual agreements will deliver both financial and operational benefits."
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