Wincanton relaxed on Deutsche Post takeover of Exel – interview with Chief Executive
Wincanton PLC, the pan-European logistics group, is relaxed about the competitive implications of Deutsche Post AG’s agreed 5.5 bln eur takeover of Exel PLC that will create a world leader in air and sea freight forwarding and contract logistics, according to chief executive Paul Bateman.
He said the deal won’t make the combined group any bigger in terms of UK logistics as Deutsche Post currently doesn’t have a presence.
‘On the Continent yes they will be bigger but I would guess that on the track record of Deutsche Post acquisitions ‘watch this space and see if they make any progress’.’
Last month Klaus Zumwinkel, Deutsche Post’s chief executive, admitted he was disappointed with the integration of DHL, which it acquired in 2002, in both France and the UK.
Bateman noted that, unlike Wincanton, Deutsche Post has a presence in both America and in Asia and delivers letters and parcels.
‘They do a number of things that we don’t do but we’re firmly of the belief that you don’t have to offer all things to all men. You don’t have to have an integrated one-stop global offering. As far as we can see it the majority of customers don’t necessarily want that,’ he continued.
‘Our focus is very much on contract logistics in Europe, which of itself is a very significant market in which we’re already a very significant player. In terms of infrastructure on the ground across Europe, presence and quality of customer base and quality of people, we’re more than pitching our weight against the likes of Exel and confident that we’ll continue to do so against the background of Exel as part of Deutsche Post.’
Bateman, who retires in December to be succeeded by Graeme McFaull, currently managing director UK and Ireland, was speaking after Wincanton published interim results.
For the six months to Sept 30 the group reported an 18.5 pct rise in profit before taxation, exceptional items and amortisation to 16 mln stg — some 10 pct above analysts’ expectations. Revenue increased 10 pct to 879.8 mln stg.
The interim dividend was raised 7.7 pct to 3.94 pence, payable from basic earnings per share of 9.5 pence, up 25 pct.
Wincanton said new business activity in the UK and Ireland remains high, while continuing progress is being made in Continental Europe.
Last month the group purchased the French operations of Premium Logistics for an initial 31.5 mln eur. Further bolt-on or in-fill deals have not been ruled out although the focus will be on organic growth.
‘The prospects for continuing organic growth, together with an initial contribution from our recent French acquisition, give us confidence that the full year will be another year of operational and strategic progress,’ added Bateman.
The group is discussing with the pension trustees an up-front contribution to address its deficit, which stood at 52.1 mln stg at the end of March but is anticipated to have since increased. This will be funded by the disposal of surplus property.
At 2.15 pm shares in Wincanton were up 1 pence at 318, valuing the business at 372 mln stg.
