- Sales top forecasts

- Earnings back above pre-Covid levels

- Strong pipeline of new contracts

Logistics group Wincanton (WIN) delivered a strong set of full year results and sounded an optimistic note on the outlook for current trading.

Shares in the Wiltshire-based firm jumped as much as 4% to 419p in early trading, just shy of their 12-month highs.

SOLID REVENUE GROWTH

Revenues for the year to March were up 16.3% to £1.42 billion on a headline basis, ahead of market forecasts, driven by growth in all four business segments.

The core grocery and consumer business enjoyed record volumes, while the general merchandise operations benefitted from robotic solutions for the Kingfisher Group (KGF) including Screwfix.

The e-fulfilment business was bolstered by the integration of Cygnia Logistics and the previous investment in automation at its Nuneaton and Rockingham sites.

Public and industrial revenues were boosted by contract wins and renewals with several government departments such as HMRC, DHSC and DEFRA, and new contracts with defence firms Alstom and BAE Systems (BA.).

EARNINGS BACK ON TRACK

Thanks to a high proportion of open-book contracts which reprice in line with inflation and management action to drive down costs, underlying pre-tax profits rose 23% to £58 million taking them 10% above their pre-pandemic level.

Meanwhile, the shortage of labour has been mitigated to a degree by stepping up its investment in apprenticeships and instituting a fast-track driver scheme.

The firm said while it was mindful of the macro headwinds facing the economy and the potential impact on consumer sentiment, ‘there is good momentum in the new business pipeline and we are confident in the future growth opportunities across all four of our sectors’.

Analyst Gerald Khoo at Liberum said that while growth may moderate this year against a tough comparative, he sees ‘encouraging momentum in new business wins’.

Khoo kept his buy recommendation on the stock and nudged his price target up from 520p to 535p.

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Issue Date: 20 May 2022