TIDMWIN
RNS Number : 8348M
Wincanton PLC
14 May 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
LEI: 213800Z5WTW8QKOHWQ82
For immediate release
14 May 2020
Wincanton plc
("Wincanton" or the "Company")
Trading Update and Financing Arrangements
Wincanton today issues an update on trading and management
actions during this period of unprecedented disruption and
uncertainty. In addition, the Company (together with its
subsidiaries, the "Group") announces an extension to its current
banking facilities.
Key Points
-- April Group revenue down 15% year-on-year, with significant
variations in the level of performance across the Group's
businesses and segments and a negative impact on year-to-date
profitability. Encouraging signs of gradual increase in activity
levels in affected segments.
-- Key focus on cash management actions including the furlough
of 15% of workforce; board and executive management temporary 20%
pay reduction; deferral of pension recovery payments; HMRC payment
deferrals until Q4; delay of non-business critical capex; and
suspension of the final dividend
-- Additional liquidity secured through a GBP40 million RCF
extension, available for 12 months from May 2020, bringing the
total available facility to GBP181 million
-- Performance for the year ended 31 March 2020 was in line with
market expectations with revenue growth of over 5%
Current Trading
Since the announcement of 25 March 2020, the Board has continued
to assess the impact of the disruption and uncertainty caused by
COVID-19.
Our key priority has continued to be to safeguard the health and
wellbeing of our employees and their families, whilst continuing to
provide those logistics services our customers need to help the
nation to function. Where operations have remained active, we have
applied safe systems of working, with appropriate distancing and
cleaning measures, and non-operational staff are working remotely
wherever possible.
It is too early to fully assess the financial implications of
the COVID-19 crisis on the Group's business and there remains
considerable uncertainty regarding the levels of demand and
business interruption for the remainder of the year. Group revenues
in April have been c.15% below the comparable period last year, but
with significant variations across our different businesses and
segments. The profit impact of volume shortfall is also varied
according to contract types, particularly between open and closed
book contracts, but as a whole the Group has seen a negative impact
to its profitability in the financial year to date.
At the onset of the COVID-19 crisis, we saw an increase in
volume and demand from both our grocery and consumer products
customers, particularly in March, as they responded to changes in
consumer buying habits, including initial 'panic buying' in stores.
Both areas have now returned to the volumes we would expect at this
time of year. The financial impact of these effects was a
short-term increase in revenue, although with limited profit uplift
due to the commercial models deployed in these customer
contracts.
In non-grocery retail we have seen a shift of supply chains from
in-store to on-line channels, although many of our larger customers
have been able to keep stores open. The picture varies by customer
and is developing as our customers modify their in-store
arrangements, but in general volumes in April were lower than prior
periods as shopping appears to have been more focused on
'essential' products. However, the open book nature of most of the
contracts has ensured that profitability has some protection in
this segment. Our defence business has started this financial year
more strongly in both revenue and profit versus last year, with
COVID-19 having a limited impact and new business won last year
flowing through.
In our closed book two-person home delivery network we were
required to cease operations at the end of March in line with
safety guidelines. This resulted in a significant negative impact
on profitability during the shutdown. Following a change to
government guidance the service has now restarted, although a
return to normal levels will take time.
Similarly, our construction business has seen major parts of the
network closed from early April, due to the voluntary shutdown of
many construction sites and builders' merchants. Revenues during
April were down by around 70% on the comparable period last year.
We have acted swiftly to reduce the variable elements of our cost
base with significant reductions in subcontractor and agency labour
costs. However, as we operate this business as a largely closed
book network, the reduction in revenue has had a substantial impact
on its profitability in April. Recent announcements in the
housebuilding and construction sectors on the recommencement of
operations are encouraging but we expect the pickup in business to
be gradual.
Container volumes and Pullman Fleet Services ("PFS") revenues
continue to be below expectations, with the container business
impacted by reduced traffic from Asia and PFS workshop volumes
depressed by general lower demand for vehicle maintenance and
repairs as a result of less road activity. Our energy business has
also experienced some slowdown due to reduced retail forecourt fuel
volumes. We have a blend of open and closed book contracts in this
area and there has been therefore some profit impact, however we
expect this to reduce as volumes return post lockdown.
Management's actions in response to COVID-19
As noted in our announcement of 25 March 2020, cash management
remains a key focus. In order to maintain liquidity within the
business, a number of measures have already been taken.
Across the business approximately 2,500 staff (c.15% of our
workforce) have been subject to furloughing arrangements, although
we continue to review staffing levels to ensure we can respond to
returning customer demand as quickly as possible.
We have also undertaken a forensic review of costs across all
operations including the use of agency labour and subcontracted
services and achieved significant reductions. All but business
critical capex and projects have been put on hold, we have
renegotiated payment profiles on certain asset leases and have also
taken advantage of HMRC arrangements to defer VAT.
Actions have been taken across the management population in
respect of remuneration and are under continued review. The Board
and executive management team have agreed to temporary pay
reductions of 20%, effective from 1 April 2020, and no cash
payments in respect of the executive management bonus scheme are
expected to be made in this financial year.
In addition, to retain near-term flexibility, the Board has
determined that the final dividend, which would ordinarily be paid
in July, should be suspended. The Board recognises the importance
of the dividend to our shareholders and will keep dividend payments
under review as the year progresses with a view to return to
payments as soon as appropriate.
We have also reached agreement in principle with the Pension
Trustees of the defined benefit pension scheme to defer upcoming
deficit recovery payments by twelve months which will improve the
Group's liquidity by approximately GBP6 million. The agreement
contains provisions for accelerated payment of deferred
contributions if dividends are paid within the deferral period.
Extension of the Banking facilities
The Group currently has a committed Revolving Credit Facility
("RCF") of GBP141 million, with our banking consortium comprising
HSBC, Barclays, Santander, ABN AMRO and AIB, which matures in
October 2023.
We have explored a range of additional financing options,
including government financial support schemes, bank debt and
equity, and have secured an extension to the RCF of GBP40 million
to be available for drawdown for a period of 12 months from May
2020 in lieu of the uncommitted Accordion facility. The financial
covenant tests remain unchanged as a result of this extension.
During this 12 month period, the payment of any dividends will
result in a corresponding reduction in size of the GBP40 million
extension. We continue to monitor our trading and downside
scenarios and will consider additional financing options in the
longer term should they be required.
James Wroath, CEO of Wincanton, commented:
"I am extremely proud of the response of our colleagues working
in challenging circumstances and embracing the changes that have
been required. Our priority remains the health and wellbeing of
them and their families.
The outlook is uncertain as we wait to see how the country will
emerge from lock-down and the impact varies considerably across our
diverse sectors. I am pleased that we have been able to secure an
extension to our banking facilities which will provide greater
liquidity in this period of uncertainty.
I am confident we are taking the right measures for the business
and stakeholders to put Wincanton in the very best possible
position to get through the coming months and to thrive in the
longer term."
Wincanton +44 (0) 12 4971 0000
Tim Lawlor, Chief Financial Officer
Buchanan (Financial PR) + 44 (0) 20 7466 5000
Richard Oldworth/Vicky Hayns
The person responsible for releasing this announcement is Lyn
Colloff, Company Secretary.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTKKNBNFBKDFPD
(END) Dow Jones Newswires
May 14, 2020 02:00 ET (06:00 GMT)
Grafico Azioni Wincanton (LSE:WIN)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Wincanton (LSE:WIN)
Storico
Da Apr 2023 a Apr 2024
