Wincanton integration of Trans European on track
Wincanton, the UK based contract logistics company, has released a trading update ahead of the publication of its full year results. The Chief Executive Paul Bateman stated that the positive trends which the company identified in the first half of the year continued into the second semester. This includes Germany where the economic downturn has been felt particularly severely. He also announced that the integration of the former P&O Trans European business which it acquired in 2002 is on schedule within a three year plan.
The integration of the two companies in the UK, where there was considerable overlap and hence opportunities to reduce costs, has involved the rationalisation of business functions within a single organization. The most obvious example of this was the closure of P&O Trans European’s UK head office in Ipswich and the transfer of finance, human resources, IT and other administrative functions to Wincanton’s head office.
Due to ‘old’ Wincanton being predominantly based in the UK, there were few overlaps with the mainland European business of P&O Trans European. As a result, the organization has remained substantially as it was pre-acquisition, although a new managing director was appointed at the outset and tighter financial controls have been introduced to improve cash flow. An area which has still to be fully addressed is a rationalization of the various IT systems which exist throughout the company as a whole.
Following the acquisition of P&O Trans European, management stated that it was confident in realising £2m (€3.5m) through successful integration of the two businesses. However at its interim results last November it stated that it had managed to identify £4m (€6m) in cost savings. Exceptional costs related to the integration process have amounted so far to £2.8m (€4.2m).
As far as the company’s future expansion plans are concerned, management has stated that it is open to further acquisition. However although acquisitive growth throughout Europe (including central and eastern Europe) is possible, development in markets outside of the EU is less likely.
