TIDMWIN
RNS Number : 8832A
Wincanton PLC
02 October 2020
2 October 2020
Wincanton plc
("Wincanton" or the "Group")
TRADING UPDATE & NOTICE OF RESULTS
-- Trading remains resilient underpinned by strong eFulfilment performance
-- Agreement reached on 2020 triennial valuation of pension scheme
Wincanton plc, the largest British third-party logistics
company, today issues the following trading update ahead of its
half year results for the six months ended 30 September 2020.
The performance of the Group was resilient during the period
despite the challenging external environment. The Digital and
eFulfilment business continues to benefit from increased demand for
online retail, while performance and the level of new business wins
across the rest of the Group has been encouraging.
During the period, Wincanton secured notable contracts
including:
-- A dark store and online home delivery service for Waitrose
-- eFulfilment operations with Dwell, Loaf, The White Company and Wickes
-- Additional transport services with Morrisons
-- A new distribution centre to support further Screwfix growth
-- A renewed contract for all Asda operations
-- A significant PPE storage solution to support the NHS
The Group is expected to have a net cash position of
approximately GBP60m at 30 September 2020 (net debt at 30 September
2019: GBP14.8m).
On 9 September 2020, the Group updated the market that the Board
expected results for the current year to be materially ahead of
market expectations at that time; this guidance remains
unchanged.
Wincanton plc Pension Scheme 2020 Triennial Valuation
The Group has reached an agreement with the Trustee of the
Wincanton Pension Scheme (the 'Scheme') on the 2020 triennial
valuation (the '2020 valuation') and recovery plan. The key
elements of the 2020 valuation and recovery plan are set out
below.
The end date of the deficit recovery plan is unchanged from the
2017 valuation and the recovery plan will run to 31 March 2027. The
annual deficit contributions, excluding deferred amounts from the
current year, are as follows:
-- GBP18.2m p.a. (GBP18.9m p.a. gross less GBP0.7m pension
administration expenses as currently incurred by the Group) from
April 2021 through to March 2024, the net amount increasing
annually from April 2021 in line with the Retail Prices Index
-- GBP21.3m p.a. (GBP22m p.a. gross less GBP0.7m pension
administration expenses incurred by the Group) from April 2024 to
March 2027, increasing annually from April 2024 in line with the
Retail Prices Index
-- The annual cash contributions are c.GBP6m p.a. lower than
proposed for the period from April 2021 to March 2027 under the
2017 valuation due to positive investment returns and longevity
experience since the 2017 valuation was agreed
-- To provide further protection to the Scheme in the event of
severe adverse Scheme experience and Group default, a letter of
credit of GBP3m p.a. will be provided by the Group as a contingent
asset.
The payments are deductible for corporation tax purposes.
The actuarial deficit at 31 March 2020 was GBP154m (31 March
2017: GBP221m). The deficit at this date was impacted by market
volatility in relation to the Covid-19 uncertainty. The estimated
actuarial deficit at 30 June 2020 had reduced to GBP105m. Following
this improvement and as part of the overall Triennial agreement,
the Trustees and the Group agreed to a substantial acceleration of
the planned de-risking of the Scheme's investment strategy to lock
in the lower deficit position. This will reduce the probability of
future volatility in the deficit. The change to investment strategy
has largely been implemented.
No material changes were made to other provisions with the
Scheme agreed with the 2017 valuation.
Interim results
The Group will announce its interim results for the six months
ended 30 September 2020 on Thursday, 5 November 2020.
Following the review of the Group's strategy announced earlier
this year, Wincanton reorganised its customer-facing sectors and
simplified its operating model to create greater focus on growth in
its key markets and to drive collaboration across the business.
Wincanton will be introducing reporting of the new sectors at the
interim results. Further detail on the changes can be found on the
Group's investor relations website:
https://www.wincanton.co.uk/investors/results-centre/
James Wroath, Chief Executive Officer of Wincanton plc,
said:
"I continue to be extremely proud of how our people are
responding to the demands placed on them by the coronavirus
pandemic. 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.
"The agreement reached with the Trustees of our pension scheme
provides greater certainty and lower risk for both the Group and
the Scheme and we welcome the reduction in the deficit and the
revision to cash payments for the remainder of the recovery
period."
+++Ends+++
For further information please contact:
Wincanton Plc Tel: +44 12 4971 0000
Tim Lawlor, Chief Financial Officer
Headland Tel: +44 20 3805 4822
Susanna Voyle/ Henry Wallers/ Jane Glover
E: wincanton@headlandconsultancy.com
Notes to Editors
About Wincanton
Wincanton is the largest British third-party logistics (3PL)
company, providing supply chain solutions to some of the world's
most admired companies across a wide range of industries including
retail, construction, defence and energy.
As a trusted and respected business partner, we design and
implement services and solutions that range from setting up and
operating distribution networks, through to bonded warehouses,
technology hosting, container transport and storage. We strive for
operational excellence in everything we do.
We work hard to understand and respond to our customers' needs,
build long-term relationships and use our skills and expertise to
deliver a smarter, added value service, every day. Our customers
rely on us to make their businesses operate more efficiently and to
gain a competitive advantage in their sector.
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END
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October 02, 2020 02:00 ET (06:00 GMT)
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