Wincanton expands e-commerce capacity
Wincanton has reported that the Group continued to perform strongly in the fourth quarter and underlying revenue, excluding disposed businesses, is expected to be around 15% ahead of prior year, with growth in all four sectors.
Digital and eFulfilment is again set to deliver year-on-year growth of c.40% in the period. In addition to the high volumes in its existing eCommerce activities, the sector has been bolstered by the startup of new business for Dobbies and Dwell and the commencement of operations at its west London Customer Fulfilment Centre (CFC) for Waitrose. The CFC has been running for just over three weeks and, in that time, the team has picked and dispatched close to 20,000 orders.
Public and Industrial is expected to show year-on-year growth of c.10% in the quarter. There has been
a ramp-up of Public Sector activity, most notably on contracts covering Inland Border Clearance services and the storage and distribution of Covid-19 testing kits, and the Group has experienced improved volumes for its building materials customers. This has been partially offset by lower levels of activity in the energy business due to the reduction in demand prompted by the lockdowns across the UK.
Performance in Grocery and Consumer remained strong and is expected to grow by around 3% against a challenging year-on-year comparison, with Q4 2019/2020 seeing the emergence of panic buying from consumers in the early weeks of the pandemic. The sector has secured a two-year contract with Heineken to handle products to retail outlets throughout England and Wales. General Merchandise (+c.28%) has benefitted from good levels of demand during the recent lockdown, particularly for DIY products. A new three-year contract was secured with garden landscaping products manufacturer, Kelkay, to provide a full transport service.
The Group has maintained a strong balance sheet whilst also repaying both its deferred pension contributions and VAT in full. Following the continued strong performance through the second half of Wincanton – Internal
the year, Wincanton has repaid £5.8m of Government support received under the Coronavirus Job Retention Scheme (CJRS), initially taken to protect jobs in its retained, closed book business. The Group expects to deliver full year profits above market expectations, after taking into account repayment of furlough support.
Expanding e-commerce capacity
Wincanton will be leasing a state-of-the-art, automated eFulfilment facility in Rockingham, Northamptonshire, as part of its ongoing strategy to extend its eCommerce proposition, creating additional capacity to drive expansion.
The 528,000 sq ft facility has been designed to deliver highly automated eFulfilment services to multiple clients, reducing unit costs and shortening lead-times in response to the rapidly changing demands of the consumer. The site is the Group’s second and largest multi-user eFulfilment centre, following the acquisition of a facility in Nuneaton in 2020, and it is the latest evidence of Wincanton’s strategic focus on the high-growth eCommerce market.
The site, which will be leased for an initial period of three-and-a-half years, will house the Group’s first Customer Innovation Centre and Wincanton will further invest in the facility to develop next generation robotics and digital solutions to maintain its leading position in this exciting market.
James Wroath, Chief Executive Officer of Wincanton, commented: “Wincanton has delivered another strong performance, maintaining our positive momentum throughout the final quarter of the year. Our people have met the challenges associated with operating in another lockdown and it is very satisfying to see all four parts of the business in growth and contributing positively to the Group.
“We are also delighted to have expanded our eFulfilment capabilities and capacity further with our new site in Rockingham. This serves as a marker of our ambitions to capitalise on the growth opportunities presented by the increasing prominence of online retail.”