Companies: WIN   

Despite the onset of Europe-wide downturn, leading logistics group Wincanton is resiliently growing organically and through astute ‘infill’ acquisitions.

Interim results to September showed sales increased 16.5% to £1.2bn, though restructuring costs pegged pre-tax profits back to £12m (2007: £22.1m). However, the underlying PBT figure was more encouraging, nudging 6% north to £21.4m. And from earnings up 8.5% at 12.7p, investors were treated to a hike in the half-time dividend from 4.6p to 4.83p.

CEO Graeme McFaull reported 11.1% operating profits growth in the UK and Ireland to £26m, alongside another period of improved performance in the mainland Europe business, where sales rose by 27% to £458m. ‘We have diversity in terms of industrial sectors and geography,’ he explained ‘and our core UK business is a contract logistics business with a level of resilience’.

In tough times, he insists, Wincanton benefits from the strength of its long-term ties with clients, who look to run leaner and more efficiently by outsourcing more and more of their business to the group. ‘Even in retail, we are still winning business,’ he opined.

Predicting further consolidation of the sector, McFaull expects a lot of acquisitive opportunities to come Wincanton’s way ‘over the next 18 to 24 months’. Indeed, a series of infill acquisitions have further broadened the business base and boosted long-term growth prospects. Alongside results, Wincanton announced the acquisition of CEL, for an initial £19.5m, in a move bringing market leadership in the UK container logistics market.

Backed here at 385p last year, shares in Wincanton, the number two player in the UK market behind DHL and number three in European contract logistics, are worth holding long-term.

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Wincanton	LSE	£212.42m	175.00p	4.75p
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