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Wincanton chief executive Adrian Coleman has poured cold water on breaking up the group as the company reported rising profits for the year ending March.
Major shareholder Gatemore Capital last month called on Wincanton to sell one of its two divisions, Retail and Industrial Transport, and refocus the business to help fund the retirement scheme deficit.
But Mr Coleman told The Loadstar there was “no value” in breaking up the group, adding that the latest results were evidenc of Wincanton’s strengths.
“One of our shareholders believes Wincanton is undervalued,” said Mr Coleman. “This I of course agree with. But do I think it should be broken up? No, as all our divisions are logistics, through and through, so I can’t see where the value would come from.”
Shares in Wincanton leaped 20% following rumours of split earlier this year. Mr Coleman said he could not control shareholders, but was doing “his job”, running the company.
Revenues for the 12-month period increased 4.8% year on year to £1.2bn ($1.62bn), generating operating profits of £52.9m, up 1.5% on last year.
“During the first half of 2017-2018, we had some challenges in our industrial transport division, but found ourselves able to steady this in the second half,” said Mr Coleman. “As a result, we saw our margins slip to just below 5%.
“But for the year ahead, we’re looking for something above 5%, and I believe we can achieve this.”
The weak margins dragged profitability for the industrial transport division down almost 12% to £23.2m, but retail and consumer activities helped offset this with 15% growth, to £29.7m.
The latter division benefited from some “significant” contract wins, as well as long-term renewals on Argos and Halfords contracts.
“Over the last six to 12 months we have seen a lot of new business roll in, with the likes of Wickes signing us up to manage its home delivery,” said Mr Coleman. “Alongside this, we have new customers in events and have brought in Wilko, while expanding our service to Ikea – a customer since last year – to include two-man home delivery teams.”
Looking ahead, Mr Coleman said the multi-channel, general merchandise market would be a significant growth prospect for the company, with construction also remaining important.