The disposal of Records Management is effectively the end of the current phase of restructuring, with net debt reduced from a peak of £270m to £45m in FY16e and Wincanton (LON:WIN) now back on the front foot. A programme of continuous improvements has increased the resilience of the core UK logistics business with improved margins and profits. Despite its market leadership the rating remains at a discount to its global peers and our valuation range (219-242p). Another potential catalyst is the resumption of dividends.
Now on front foot after restructuring and refocusing
Following the over-expansion in its pan-European ambitions and high levels of debt, the group has been implementing a five-step action plan of restructuring, disposal, refinancing, reducing pension fund risk and onerous leases. This has improved cash generation and put the group back on the front foot. Following a series of disposals (including Records Management for £60m in November 2015), debt levels are now much reduced and it appears we are nearing the conclusion of the current phase, which will allow dividends to be reconsidered having been cancelled in 2011.
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