The resumption of a dividend following strong results is a clear signal that Wincanton (LON:WIN) has moved from deleveraging and addressing legacy issues to growth. With the £60m Records Management (WRM) disposal and forthcoming integration of the remaining specialist businesses into core logistics, Wincanton is positioning to leverage group-wide integrated opportunities. Recent contract wins have reconfirmed the longstanding relationship-based model, while the reorganisation into retail & consumer and industrial & transport segments will enable further market focus and service development to drive both revenue and efficiency.
Positive results achieved and dividend resumed
Full year results confirmed significant progress. Revenues increased 3.6% to £1.15bn (+4.4% l-f-l excluding WRM), while underlying operating profit was up 2.4% to £50.9m (+5.4% l-f-l). Underlying PBT grew 12.4% to £35.3m driven by lower financing costs due to reduced average net debt and prior year refinancing. Underlying EPS increased 13.3% to 23.9p and closing net debt was £39.5m (2015: £57.6m). This reflected good cash generation offset by onerous lease settlements, while the WRM proceeds were utilised to reduce the overall level of indebtedness and to normalise year end working capital resulting in lower intra-period volatility of net debt. This improved position allowed the board to recommend a final dividend of 5.5p, with a progressive policy in-line with earnings expected in future years.
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