Small cap logistics firm Wincanton boosted profits in its latest financial year despite slipping revenues, sending shares up 1.6 per cent to 260p in early trading.
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Profit before tax increased 6.3 per cent year on year to £49.3m in the 12 months to the end of March, Wincanton revealed today.
That came in spite of a 2.6 per cent drop in revenue to £1.1bn as the company recorded new contract wins too late for inclusion in its financial year.
Cash flow jumped 128 per cent to £57m while Wincanton hacked net debt back to £19.3m from almost £30m the previous year as well as tackling its pension deficit to reduce it from £49.5m to £7.1m.
Basic earnings per share surged by over a third to 34.5p while Wincanton also raised its dividend to 10.89p per share, up from 9.9p per share a year earlier.
Why it’s interesting
Wincanton pointed to new business contract wins including EDF Energy, Weetabix, Co-op and HMRC as it chases higher margin deals after revenue was hurt by the loss of some contracts last year.
It also concluded its Triennial pension negotiations - putting money into the pot but retaining its ability to invest and offer dividends.
Chairman Martin Read said: “Our challenge now is to use the group's respected market position, its extensive national coverage in the UK and its strong operational base to develop and grow profitably. I believe Wincanton can deliver much better value for its shareholders in the years ahead.”
What Wincanton said
Chief executive Adrian Colman, who will step down by October to be replaced by James Wroath, formerly the boss of Lufthansa’s catering arm, said cost management and restructuring efforts have started to bear fruit.
"This year, we have seen key areas such as our Retail General Merchandise business grow strongly, demonstrating the real value that we deliver to our customers. In the second half of the year we secured substantial new contract wins that should position the Group well in the coming periods. Revenue performance overall in the year was impacted by the loss of certain contracts at the end of the previous financial year and the first half of this year.
“Our dividend per share growth of 10 per cent, demonstrates our healthy balance sheet, strong cash generation and our confidence in delivering returns for all stakeholders,” he added. “We will continue to develop our market-leading capabilities to enhance our excellent customer service and operational delivery, enabling us to make further progress in the years ahead.”