Shares in the UK’s largest third-party logistics firm Wincanton (WIN) climbed 6% to a three-month high of 225p after it reported ‘resilient’ trading for the six months to the end of September helped by rising demand for online retail and several significant business wins.
Notable e-commerce contract wins include a dark store and online home delivery service for Waitrose, a renewed contract ‘for all Asda operations’ and additional transport services for Wm Morrison (MRW).
Additionally the firm won ‘a significant PPE storage solution’ to support the NHS and a contract to operate a new distribution centre for Screwfix, part of the Kingfisher (KGF) group of companies.
Chief executive James Wroath commented: ‘When we outlined our strategy earlier this year, we stated our commitment to focus our business on opportunities in growth markets. The new contracts we have secured are clear evidence that this strategy is being implemented and is working.’
Wincanton raised its full year earnings guidance last month, saying its results would be ‘materially ahead of market expectations’ thanks to higher Digital and eFulfilment revenues and better margins due to a reduction in its cost base. Today’s announcement confirms September’s guidance.
In less headline-grabbing news, the firm inked an agreement with the trustees of its pension scheme to reduce its annual cash contributions by £6 million from April 2021 to March 2027 ‘due to positive investment returns and longevity experience since the 2017 valuation was agreed.’
Analyst Greg Lawless at Shore Capital observed: ‘Given the retail backdrop we can see more retailers outsourcing elements of their distribution and e-commerce operations to the benefit of specialist providers’.
