Wincanton shares fall on downbeat update

Chippenham, Wiltshire, UK: Logistics firm Wincanton gave a downbeat assessment today saying its container business had been hit unexpectedly hard by a drop in imports.

The company said its core UK & Ireland business had continued to trade satisfactorily since its last update on 21st July. Wincanton said it had secured new business wins in the period that would start to contribute in the second half of the year ending March 2012 and would help offset business lost through customer receiverships.

But the firm said its containers business had not achieved the year-on-year growth in volume that it had forecast due to the reduction in import activity and, as a result, profitability in the containers business had been hit.
It added that it was taking action to minimise on-going losses in its foodservice business.  “However, this will lead to exceptional charges in the results for the year ending March 2012,” Wincanton said.

In August the company announced it was to sell off its remaining operations in Europe to German rival Rhenus AG. The firm said the €44m cash sale would mark the end of Wincanton’s European activities. In today’s statement Wincanton said the proceeds of the deal would be used to reduce its overall average net debt.

The firm’s shares fell almost 7% following the trading update.