Wincanton, a British logistics firm, faced a financial downturn prior to its acquisition by US company GXO.
- The firm announced an annual pre-tax loss of £44.9 million, a stark contrast to its previous year’s profit.
- Revenue declined in several divisions, with a few exceptions such as efulfillment, which showed growth.
- Strategic decisions and external economic pressures were cited as factors contributing to the financial results.
- Wincanton remains optimistic about its future, highlighting new contracts and customer relationships as positive indicators.
Wincanton, a prominent logistics firm in the United Kingdom, encountered a significant financial setback with an annual pre-tax loss of £44.9 million, a marked decrease from the £38.2 million profit recorded the previous year. This comes ahead of its £760 million acquisition by the US supply chain management giant GXO, scheduled for April. The latest financial results reveal a dip in turnover to £1.4 billion from £1.46 billion the prior year.
The company attributed its loss to a range of factors, notably costs associated with its acquisition by GXO and challenges faced by its Cygnia division. Cygnia, specialising in efulfillment and two-person home delivery services, suffered due to macro-economic headwinds and the loss of a significant customer, exacerbated by unavoidable contract conditions following the customer departure.
Performance fluctuated across the company’s divisions. Notably, the efulfillment division recorded a 9.4% increase in revenue despite encountering softer retail volumes. On the other hand, the grocery and consumer segment saw a 2.5% revenue decline, reflecting the consumer impact of the current cost of living crisis. A newly secured major contract with Sainsbury’s helped cushion the blow from the loss of contracts with Morrisons, Lucozade, and Ribena Suntory.
The general merchandise sector experienced a 6.9% drop in revenue despite securing several new contracts, including a substantial three-year agreement with fashion retailer New Look. Additionally, partnerships with SEGEN and JD Sports were formed. Similarly, the public and industrial division reported a revenue decrease of 13.4%, partly due to a strong performance in the prior year bolstered by a lucrative inland border contract with HMRC.
Despite these setbacks, Wincanton remains optimistic about its prospects. The company emphasised its robust portfolio of blue-chip customers, including BAE Systems, Thales, and Tata Chemicals Europe. Significant new business developments include a three-year contract extension with RBSL and a ten-year logistical agreement with Tata Chemicals Europe, alongside a public sector engagement with Supply Chain Co-ordination Limited for post-pandemic PPE management.
Wincanton anticipates leveraging new contracts and customer relationships to navigate future challenges successfully.
