Wincanton’s pre-close statement has reaffirmed that trading results will be in line with expectations. With the proceeds received from the disposal of Records Management used to pay down debt and £34m of US Private Placement notes repaid on maturity via the RCF, Wincanton (LON:WIN) is set to see an ongoing reduction in financing costs as forecast. This follows the thesis set out in our March 2016 initiation that the group is now a more focused logistics play with increasing financial flexibility.
The pre-close statement confirmed that trading, adjusted for disposal of Records Management, which completed on 8 December 2015, is in line with expectations as set out at the time of the half year results on 12 November 2015. We see this as reaffirming our view that Wincanton is a clear UK logistics market leader with a diversified industry mix from which to grow further.
The statement confirmed that disposal proceeds from the Records Management sale have been used to repay £50m of the £75m M&G debt, which benefited average net debt during the final quarter and resultant financing cost, as we had anticipated in our forecasts. In addition and as planned, the group has utilised its RCF to repay £34m of US Private Placement debt on maturity, while a further £7m has also been contributed to the pension scheme from the Records Management disposal proceeds.
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