TIDMWIN
RNS Number : 8950S
Wincanton PLC
19 November 2021
For immediate release 19 November 2021
WINCANTON plc
Half Year results for the six months to 30 September 2021
(unaudited)
Wincanton delivers strong growth and continued strategic
progress
Wincanton plc ("Wincanton" or "the Group"), a leading supply
chain partner for UK business, today announces its half year
results for the six months ended 30 September 2021.
Key financial measures
H1 21/22 H1 20/21 Change
------------------------------ ----------- --------- -------
Revenue (GBPm) 690.3 578.7 19.3%
Underlying EBITDA (GBPm)
(1) 50.8 43.2 17.6%
Underlying profit before
tax (GBPm) (1) 27.3 19.1 42.9%
Underlying basic EPS (p)
(1) 18.2 12.9 41.1%
Dividend per share - interim
(p) 4.00 2.85 40.4%
Free cash flow (GBPm) (2) 17.9 76.4
Net (debt) / cash (GBPm)
(3) (16.4) 63.3
Statutory results
------------------------------ ----------- --------- -------
Profit before tax (GBPm) 25.1 19.1 31.4%
Basic EPS (p) 16.9 12.9 31.0%
Financial highlights
-- Revenue growth of 28.6% in H1, excluding businesses disposed of during FY 20/21
-- Underlying profit before tax of GBP27.3m up 42.9% from prior
year, back ahead of pre-pandemic profit levels (H1 19/20:
GBP26.2m)
-- Driver cost headwinds mitigated by business model; less than
20% of Group revenue is closed book transport of which price
increases or exits have been agreed on c.90%
-- Free cash flow generation of GBP17.9m in H1, prior year cash
position benefitted from significant temporary Covid-19 deferred
payments, acquisition funded through cash reserves
-- Interim dividend of 4.00p (H1 20/21: 2.85p), up 40.4% in line with underlying earnings
Positive progress against strategy
-- Acquisition of Cygnia Logistics (Cygnia), a specialist
eCommerce and multichannel eFulfilment provider, strengthens
capabilities and accelerates growth prospects
-- Continued organic investment in eCommerce, operations
commenced at the Group's automated facility in Rockingham, further
investment in robotics in other locations
-- Both short and medium-term actions taken to secure a
sustainable and diverse workforce with, for example, our Wincanton
Future Drivers programme, dedicated recruitment functions and
representations to Government
-- On track to achieve net-zero emission target for our premium
home delivery service by end of the year; new targets introduced of
net-zero for Wincanton owned transport by 2026
-- Year to date contract wins include new customers such as
Primark, MGA Entertainment, Lakeland, Snug Sofa and
Saint-Gobain
-- Notable contract renewals and extensions with Asda, IKEA,
Roper Rhodes, HMRC, BAE Systems and the Department for Transport
(DfT) demonstrate success across all parts of the business
-- Pipeline of further opportunities continues to grow with a
number in negotiation for implementation in FY23
James Wroath, Chief Executive Officer of Wincanton
commented:
"We have delivered a strong set of results in the first half of
the year with record levels of growth and positive contributions
from all parts of the business. Importantly, we have also made
meaningful progress against our strategic priorities. We completed
the acquisition of Cygnia and commenced operations at our automated
facility in Rockingham, and this significantly strengthens our
eCommerce proposition. I am particularly pleased that we have
delivered this performance notwithstanding the well-documented
challenges across the supply chain. We are taking steps to address
shortages of labour and we are well positioned to deal with the
cost pressures we are seeing across our markets.
So far this year, we have secured a healthy level of new
customer contracts, renewed agreements with businesses we are proud
to have supported for many years and have a strong pipeline of new
opportunities ahead of us. We are continuing to strengthen our
offer to customers through investments in digital and robotic
innovation and a culture of continuous improvement in our services.
All of this positions us well to benefit from the changes we are
seeing in our markets."
For further enquiries please contact:
Wincanton plc
Tim Lawlor, Chief Financial Officer Tel: 01249 710000
Headland
Susanna Voyle Tel: 020 3805 4822
Henry Wallers
Analyst presentation and conference call:
A presentation for analysts will be held today, Friday 19
November 2021, commencing at 10.30am. The presentation will be
followed by a Q&A session with the management team. The webcast
can be found at:
https://webcasting.brrmedia.co.uk/broadcast/5f8ed8b5c4d0076f2b942cc1
For those wishing to ask a question in the Q&A, please dial
into the call using the following details:
Telephone: 0800 279 7204
Confirmation code: 3842724
The presentation and Q&A will be made available to watch on
demand shortly after it finishes. This will be hosted on
Wincanton's website:
https://www.wincanton.co.uk/investors/results-reports-and-presentations/
Notes
(1) The section on Alternative Performance Measures (APMs) below
provides further information on these measures, including
definitions and a reconciliation of APMs to statutory measures.
(2) Free cash flow is defined as net cash inflow/(outflow)
before the movement in debt, pension payments, dividends, net
outflow on acquisition of subsidiary undertakings and the
acquisition of own shares.
(3) Net (debt) / cash is the sum of cash and bank balances, bank
loans and overdrafts and other financial liabilities excluding
lease liabilities. Note 12 to the consolidated half year financial
statements provides a breakdown of net (debt) / cash for the
current and prior periods.
Half Year Review
for the six months to 30 September 2021
Summary
Momentum maintained and significant growth delivered
The momentum from the second half of last year has been
maintained to deliver significant growth, with revenue of GBP690.3m
up 28.6% from prior year, excluding disposed businesses. The growth
of eCommerce activity, including the start-up of the dark store
operation for Waitrose, has led to revenue growth of over 50% in
the Digital & eFulfilment sector. Buoyant Grocery and General
Merchandise markets, and a positive post-Covid-19 recovery within
Public & Industrial, supported by public sector growth, has
resulted in revenue growth of over 15% in all sectors.
Underlying profit before tax increased by 42.9% to GBP27.3m (H1
20/21: GBP19.1m), with the Group's underlying profit before tax
margin increasing to 4.0% (H1 20/21: 3.3%). Group profits have
recovered well from the impact of the pandemic in FY20/21 and
exceeded FY 19/20 levels, despite the headwinds of driver shortages
and other national supply chain issues.
Underlying EPS increased by 41.1% to 18.2p per share (H1 20/21:
12.9p per share) reflecting the increase in profits.
Net debt at the end of H1 21/22 was GBP16.4m (H1 20/21: net cash
of GBP63.3m, 31 March 2021: net cash of GBP11.9m). Free cash flow
at H1 21/22 was GBP17.9m and the return to net debt reflects the
acquisition of Cygnia during the period. The prior year cash
position included the benefit of significant temporary cash
protection measures including the deferral of VAT, corporation tax
and pension recovery payments and the Coronavirus Job Retention
Scheme (CJRS), that were repaid during the second half of
FY20/21.
eCommerce offer bolstered by Cygnia and Rockingham
The Group's capabilities and market positioning in eCommerce
have been further strengthened by the acquisition of Cygnia, a
speciality mid-market, multichannel eFulfilment provider, enabling
us to better access mid-market customers. The acquisition,
announced in September 2021, is aligned with our strategy to
capitalise on the opportunities presented by online retail and will
position us well to benefit from many of the changes we are seeing
in the broader logistics sector. Wincanton has long been a leader
in supporting many of the UK's biggest brands and now, together
with Cygnia, we will be able to further extend our reach to
fast-growing, mid-market eCommerce customers.
Following a successful start-up, Wincanton's new Customer
Fulfilment Centre (CFC) for Waitrose is now fully operational with
over 13,000 online orders being processed each week, which is
growing as we head into the peak trading period. This 'dark store'
operation is the first outsourced facility of its kind operating in
the UK, providing warehouse eFulfilment and seven day
timed-delivery solutions across West London.
In addition to the successful launch of the Nuneaton eFulfilment
centre opened last year, the Group has opened a second facility at
Rockingham, which has been branded as The WEB (Wincanton
eFulfilment Base). The Group acquired this state-of-the-art
automated facility in April 2021 to extend its eCommerce
proposition. The new facility has resulted in the addition of new
business with B&Q, Snug and Saint-Gobain. Our investment in
cloud-based technology, including carrier management and returns,
underpins our shared fulfilment offering.
Innovation driving operational improvement
The WEB also houses the Group's new innovation centre which will
act as a hub to host and inspire customers, partners and community
stakeholders. The innovation centre demonstrates Wincanton's
deployments of robotics, wearable technology and artificial
intelligence as well as a 'City of the Future' that brings to life
the virtual customer experience. In Nuneaton, we deployed our first
Autonomous Mobile Robots (AMR's) in combination with glove
technology to improve speed, accuracy and safety for Neal's Yard
Remedies. Further deployment of AMR's in our eFulfilment and
warehousing businesses is ongoing. The Group continues to invest in
supply chain innovation enabled by our W(2) Labs programme; digital
solutions to support people recruitment, asset tracking and
warehouse performance management are all in extended pilots.
Positive contributions across all our sectors
We continue to support our established partners in the General
Merchandise and Grocery & Consumer sectors, maintaining good
service levels during unprecedented levels of demand and intense
competition for labour. General Merchandise saw growth of
approximately 30% on both last year and pre-pandemic levels, driven
by high volumes at our retail customers. Grocery & Consumer
expanded its relationship with Asda, which sees the Group take on
collection services at Asda's Lutterworth facility. Higher volumes
across customers such as Sainsbury's, Morrisons and Heinz
contributed to higher revenues, up over 15% from the prior year and
up over 20% from pre-pandemic levels.
Public sector growth has been delivered through new business
with HMRC and DfT which commenced in early 2021. Additionally, we
are 10 months into a contract with DHSC to provide storage, order
fulfilment and delivery of Covid-19 testing kits. The Group
successfully delivered its billionth testing unit in September. The
start-up of Inland Border facilities across the country and our
partnerships in Public sector, continue to open more opportunities
for growth.
We are also building on our partnerships in the infrastructure
market, supporting the construction of Hinkley Point C as the
official storage, warehousing and logistics provider. This is
underpinned by our investment in market leading technology. Our
extended supply chain visibility and data management tool meets the
emerging marketplace need for technology solutions to solve complex
supply chain problems. Winsight-Supply Chain Integrator (WSCI) is
deployed for EDF at Hinkley Point and creates transparency to
better manage the flow of materials for this substantial project.
Our pivotal role in ensuring surety of supply across the many
thousands of product lines has been recognised and the team have
been shortlisted in two categories for the HPC Excellence Awards.
We are translating this capability to deliver sustainable supply
chain value in other large-scale infrastructure projects.
Proactive steps taken to tackle labour shortages
Driver shortages and labour cost pressures continue to have an
impact on business operations and there remains uncertainty
regarding the supply of labour, particularly drivers. The Group's
contractual arrangements, however, provide a good degree of
commercial protection. The Group is taking steps to attract and
retain drivers, including extending its dedicated driver
recruitment and training functions, developing its Wincanton Future
Drivers programme and funding the cost of training for new
applicants. Wincanton is working alongside industry bodies and is
making representations to Government regarding measures that would
increase the pool of drivers in both the short and medium term. In
the short term, Wincanton is active in initiatives to make driving
a more inclusive, flexible and rewarding profession.
The Group has been tackling the issues together with its
customers and working collaboratively to mitigate further risk and
optimise service levels. Over 70% of the Group's revenue is derived
from open-book contracts which provides the Group with significant
direct protection against cost pressures. We have secured initial
price increases or exits on approximately 90% of our closed book
transport revenue and we expect further increases will be required
in the second half of the year in some contracts. Where customers
have been unwilling to agree price increases, we exited contracts
as they are no longer viable and so divert resources to more
profitable contracts.
Progress made against ESG goals
We remain committed to achieve net-zero emissions by 2040. We
are working with an implementation partner for our Wincanton
Woodland offset programme and remain on track to achieve net-zero
operating emissions for our premium home delivery service this
year. We have been investing in the most fuel-efficient diesel
vehicles whilst building strong relationships with innovation
consortia working on future fuels and infrastructure. The
implementation of our advanced Transport Management System
continues to drive improved planning and routing efficiency,
reducing the use of fuel and emissions. We continue to electrify
our company car fleet and are beginning to see a reduction in our
mean rated emissions. During this half year, our recycling
percentage from residual waste has increased by 13%.
Wincanton is also participating in a study led by the DfT and
Innovate UK to assess the economic and technical potential of the
UK's first 'eHighway' . We will provide information regarding our
operations and movements along the M18 and M180 as part of the UK's
first ever study on the electrification of long-range trucks with
dynamic charging , which uses overhead wires on motorways.
We are introducing new targets to support our commitment to the
social aspects of our ESG activity.
People are fundamental to our success and the Group is striving
to build a diverse and inclusive organisation. Structural changes
are needed in workforces across the supply chain to meet future
demand. We recognise the need for more diversity, especially with
regard to greater female representation. This will require
creativity and flexibility around shift patterns and investment in
facilities and amenities.
For National Inclusion week, in partnership with the Co-op, the
Group held a successful conference to show support and raise
awareness on how to build an inclusive environment. Our credentials
as a Diversity and Inclusion leader continue to grow and we are
proud that two of our Wincanton leaders were winners at the 2021
Amazon Everywoman in Transport and Logistics Awards . In addition,
our all-female transport team for Roper Rhodes were finalists for a
2021 Supply Chain Excellence Award and are current finalists for
two 2021 Logistics UK Awards, due to be announced in December.
Systems investment
We have successfully implemented a new enterprise-wide finance
and HR system, Oracle Cloud, across the business, on time and on
budget. The new system, together with the standardised processes
and controls to support it, are being embedded across the business.
We are moving into the second phase of the project, which is to
rationalise and insource payroll operations across the business and
will be completed in 2022. Following new accounting guidance (an
IFRIC Interpretation Committee agenda decision ), the costs of this
project can no longer be capitalised and costs incurred in the
period have been expensed as a non-underlying charge of GBP3.2m. A
further cost of approximately GBP4-5m is expected to be charged to
non-underlying items relating to the completion of the project over
the next twelve months.
People
As recently announced, Tim Lawlor, Chief Financial Officer
(CFO), has resigned in order to take up the role of Chief Financial
Officer at Countryside Properties PLC. The Board of Wincanton
wishes to thank Tim for his hard work, commitment and outstanding
contribution to the Group over the last six years and wish him
every success for the future. Tim will be leaving the business
during March 2022 and the Board is commencing a search for his
successor.
The Group would also like to announce the appointment of Carl
Moore who will take up the role of MD of Digital & eFulfilment
from January 2022. Carl has spent the last 13 years in a range of
senior roles including, most recently, Chief Commercial Officer at
Clipper Logistics.
Dividend
The Board is declaring an interim dividend of 4.00p per Ordinary
Share (2020: 2.85p per share) in line with its established policy
of increasing the dividend broadly in line with underlying earnings
movements . The Group's policy is for the interim dividend to be
approximately one third of the expected full year dividends.
Key priorities and outlook
The Group continues to execute the strategy launched in FY 20/21
and is committed to driving growth through delivering sustainable
supply chain value. The strong volume of activity seen in H1 21/22
has continued into the second half to date and the Group is
positive around future opportunities following a period of
heightened national interest in supply chain and logistics.
We continue to build on our partnerships with customers in our
primary markets. Recent contract renewals and additional new
business with Asda, BAE Systems, IKEA and Roper Rhodes is evidence
that the Group's existing relationships are strong and continue to
grow. The Group has delivered new wins this year with Primark, MGA
Entertainment, Snug Sofa and Saint-Gobain. We continue to have a
strong pipeline of sales opportunities to build on the momentum
from the first half of the year.
Our high growth markets remain eCommerce, public sector and
infrastructure and our activities, propositions and pipelines have
all developed further during the first half of the year. The
acquisition of Cygnia towards the end of the first half provides a
platform from which to drive a step change in mid-market
eFulfilment customers, expanding the target market within which we
operate and extending the reputation and reach of the Group.
The Group remains on track to deliver full year profits
consistent with market expectations and the Board is encouraged by
the sales pipeline and remains confident in the Group's future
growth opportunities.
Trading
H1 21/22 H1 20/21
Sector revenue GBPm GBPm Change
-------------------------------------------- -------- -------- ------
Digital & eFulfilment 103.2 65.0 58.8%
Grocery & Consumer 252.1 215.4 17.0%
General Merchandise 193.2 149.6 29.1%
Public & Industrial 141.8 106.6 33.0%
--------------------------------------------- -------- -------- ------
Retained business (GBPm) 690.3 536.6 28.6%
Specialist Services - 42.1 -
--------------------------------------------- -------- -------- ------
Total revenue (GBPm) 690.3 578.7 19.3%
--------------------------------------------- -------- -------- ------
Underlying EBITDA (GBPm) 50.8 43.2 17.6%
Underlying profit before tax (GBPm) 27.3 19.1 42.9%
Underlying profit before tax margin (%) 4.0% 3.3% 70bps
--------------------------------------------- -------- -------- ------
The Group delivered strong total revenue growth in the period of
19.3% on a reported basis, with a positive contribution from all
four sectors despite lost revenue following the disposal of the
Specialist Services businesses (Containers and Pullman Fleet
Services) in Q3 FY20/21.
The Digital & eFulfilment sector delivered exceptionally
strong growth through a combination of strong volumes in
eFulfilment and two-person home delivery and new business in
omnichannel. The most significant element of new business revenue
came from the first full six months of activity in our Waitrose CFC
in West London which commenced in March 2021. Other revenue growth
in this sector included contracts with new customers such as
Dobbies, Snug Sofa and Saint-Gobain. Our new acquisition, Cygnia,
will be reported within the Digital & eFulfilment sector but
only made a small contribution in the half year having been
purchased in mid-September.
An increase of 17% within Grocery & Consumer has been driven
by increased activity, particularly with our Grocery customers
where volumes have remained buoyant, and new business revenue
including our transport contract with Heineken.
The DIY market has remained strong through the first half of the
year which, along with a full period of reporting revenue from new
business commenced in FY20/21, resulted in a 29.1% revenue growth
in General Merchandise.
Public & Industrial revenue growth of 33% has been driven by
public sector volume, most notably with HMRC (Inland Border
Clearance Centres) and DfT (Covid-19 driver testing), in addition
to a recovery within construction and energy networks following the
impacts of the Covid-19 pandemic in the prior year period. The high
levels of demand in the closed book construction and energy
businesses, coupled with the driver shortage and increased costs of
subcontracted drivers has led to a squeeze in margins which we are
seeking to remediate through negotiations with customers. In one
instance where we have been unable to achieve a satisfactory
renegotiation, we have maintained our financial discipline and
chosen to exit the contract and redeploy our resources to a more
profitable customer contract.
Underlying profit before tax has significantly increased by
GBP8.2m to GBP27.3m (H1 20/21: GBP19.1m). The Group has recovered
successfully from the impact of Covid-19 in the prior period and
has benefitted from significant revenue growth. The well-publicised
transport pressures have been significant, but have been mitigated
by actions taken, including rate changes to optimise service levels
and recruitment and retention actions to manage driver shortages.
The Group also continues to optimise transport networks across the
Group to drive efficiencies, supported by the new systems
infrastructure.
Acquisition - Cygnia
On 10 September 2021, the Group acquired Cygnia, a specialist
mid-market eCommerce and multichannel eFulfilment provider with
expertise spanning the full breadth of their customers'
requirements, including high-volume order fulfilment, returns and
carrier management services. The Group paid consideration of
GBP23.9m for the business and there was a further GBP3.7m of cash
outflow in respect of working capital acquired and capital
expenditure incurred after the lockbox date. The final accounting
for the acquisition should be concluded in the second half of the
year, including the determination of goodwill and other intangible
assets.
Non-underlying items
In the period to 30 September 2021 net non-underlying items of
GBP2.2m were expensed.
During the period the Group changed its accounting policy in
relation to the capitalisation of IT software implementation
contracts following an April 2021 IFRS Interpretation Committee
agenda decision. Costs relating to configuring or customising
software under SaaS (Software as a Service) agreements which would
have previously been capitalised, are now being expensed. As a
result, GBP3.2m of costs relating to the implementation of a new
enterprise-wide finance and HR system were expensed rather than
capitalised. A prior period restatement was also required to adjust
costs previously capitalised (GBP2.2m H2 20/21).
The Group has released GBP1.0m relating to a potential claim
under a historic warranty provision dating back to a disposal made
in 2015, as any claim is now considered to be remote.
Further details of other non-underlying items are set out in
Note 4 to the interim consolidated financial statements. There were
no non-underlying items in the period to 30 September 2020.
Net financing costs
H1 21/22 H1 20/21 GBPm
GBPm
-------------------------------------------------- -------- --------------
Interest income - 0.1
Interest on the net defined benefit pension asset 0.6 1.1
Bank interest payable on loans (1.2) (1.4)
Unwinding of discount on provisions (0.2) (0.3)
Interest on lease liabilities (1.7) (1.8)
--------------------------------------------------- -------- --------------
Net financing costs (2.5) (2.3)
--------------------------------------------------- -------- --------------
Net finance costs have increased to GBP2.5m (H1 20/21: GBP2.3m),
GBP0.2m higher than the prior period. Bank interest payable on
loans of GBP1.2m (H1 20/21: GBP1.4m) was lower than prior period,
primarily due to lower amortisation of arrangement fees for the
twelve-month GBP40m RCF extension taken on in response to the
pandemic in May 2020. Financing charges of GBP1.7m in respect of
the interest on lease liabilities were broadly in line with the
prior period (2019: GBP1.8m).
The non-cash interest income on the defined benefit pension
asset in the period of GBP0.6m (H1 20/21: GBP1.1m) was lower than
the prior period due to the reduced pension net surplus position
reported at the start of the period.
Taxation
H1 21/22 H1 20/21
GBPm GBPm
---------------------------------------- -------- --------
Underlying profit before tax 27.3 19.1
----------------------------------------- -------- --------
Underlying tax 4.7 3.1
Tax on non-underlying items (0.6) -
----------------------------------------- -------- --------
Tax as reported 4.1 3.1
----------------------------------------- -------- --------
Effective tax rate on underlying profit
before tax (%) 17.2% 16.1%
----------------------------------------- -------- --------
Underlying tax of GBP4.7m (H1 20/21: GBP3.1m) represents an
underlying effective tax rate (ETR) of 17.2% (H1 20/21: 16.1%) on
underlying profit before tax. The underlying ETR applied at the
half year is an estimate of the expected full year rate and is
lower than the statutory corporation tax rate of 19.0% due to tax
benefits expected under the new Government regime permitting
capital allowances of 130% on qualifying expenditure to promote
business investment.
With effect from FY22/23, the ETR is expected to move towards
the statutory rate of 19.0%.
Corporation tax paid in respect of the period was GBP1.8m (H1
20/21: GBPnil). The GBPnil in the prior period was due to the
uncertainty over the taxable profits for the year and therefore the
payments on account were deferred to the second half of the year.
In the current financial year, payments on account are based on the
latest view of taxable profits for the full year.
Profit after tax and EPS
Profit after tax for the period was GBP21.0m (H1 20/21:
GBP16.0m) which translates to a basic EPS of 16.9p (H1 20/21:
12.9p). Underlying EPS, which excludes the impact of non-underlying
items, increased to 18.2p (H1 20/21: 12.9p). The calculation of
these EPS measures is set out in Note 8 to the consolidated half
year financial statements.
Dividends
The Group's policy is for the dividend to grow sustainably and
broadly match the growth in underlying earnings.
In setting the dividend the Board considers a range of factors,
including the Group's strategy (including downside sensitivities),
the current and projected level of distributable reserves and
projected cash flows, including cash payments to the pension scheme
and deferred payment arrangements.
Reflecting the continued growth in underlying profit before tax
and the confidence in the growth prospects of the business, the
Board has declared an interim dividend of 4.00p (H1 20/21: 2.85p)
per share relating to the six month period ended 30 September 2021,
payable on 31 December 2021.
Financial position
The summary financial position of the Group is set out
below:
30 September 2021 30 September 2020 31 March 2021
GBPm GBPm GBPm
------------------------------------------------------------- ----------------- ----------------- -------------
Non-current assets (excl. employee benefits) 290.0 204.7 235.1
Net current liabilities (excl. net debt) (150.5) (213.9) (158.0)
Non-current liabilities (excl. net debt / employee benefits) (175.7) (106.8) (138.9)
Net (debt) / cash (excl. lease liabilities) (16.4) 63.3 11.9
Net pension asset (excl. deferred tax) 67.6 24.3 48.2
-------------------------------------------------------------- ----------------- ----------------- -------------
Net assets / (liabilities) 15.0 (28.4) (1.7)
-------------------------------------------------------------- ----------------- ----------------- -------------
The increase in net assets of GBP16.7m since 31 March 2021,
relates primarily to the profit after tax of GBP21.0m delivered
during the six months to 30 September 2021.
The increase in both non-current assets and liabilities since 31
March 2021 relates to the acquisition of Cygnia, with Goodwill and
Right-of-use (ROU) assets being offset by increased lease
liabilities and borrowings.
The movement in the net pension asset is primarily due to
employer contributions paid into the Scheme plus net actuarial
movements on pension assets and liabilities.
Net debt and cash flows
Net debt at 30 September 2021 was GBP16.4m (H1 20/21 net cash of
GBP63.3m, 31 March 2021: net cash of GBP11.9m), reflecting a net
cash outflow of GBP79.7m over the intervening 12 months and
GBP28.3m since 31 March 2021.
The Group's change in net cash flows are summarised in the
following table:
30 September 2021 30 September 2020 31 March
GBPm GBPm 2021
GBPm
--------------------------------------------- ----------------- ----------------- --------
Underlying EBITDA 50.8 43.2 95.2
Working capital (10.6) 54.1 3.0
Tax (1.8) - (5.7)
Net interest (2.9) (3.1) (6.3)
Repayment of obligations under leases (13.5) (16.2) (35.1)
Capital expenditure net of disposal proceeds (1.1) (2.4) (5.1)
Other items 0.2 0.8 -
Non-underlying items (3.2) - (2.2)
Free cash flow 17.9 76.4 43.8
Pension payments (9.2) (3.0) (18.3)
Dividends (9.4) - (3.5)
Acquisition:
* Consideration (23.9) - -
* Additional net assets acquired (3.7) - -
---------------------------------------------- ----------------- ----------------- --------
(Increase) / decrease in net debt (28.3) 73.4 22.0
---------------------------------------------- ----------------- ----------------- --------
The Group's net debt increased by GBP28.3m (H1 20/21: GBP73.4m
reduction) with a free cash inflow of GBP17.9m (H1 20/21:
GBP76.4m).
There was a working capital outflow of GBP10.6m in the period
due to revenue growth and the deferred payment of the 19/20 bonus
award, delayed from prior year. This delay was part of cash
protection measures taken by the Group at the start of the pandemic
and the cash protection measures are now fully unwound. The growth
element related to strong volumes in open book contracts where
invoices are raised in advance based on budgeted levels. Volume
levels across certain contracts have been significantly higher than
customer budgets resulting in a short-term outflow until the excess
expenditure is recovered the following month. General disciplines
around billing and cash collection remained strong throughout the
half. The significant working capital inflow in the prior year
reflected GBP55m of pandemic-related timing benefits including
deferral of VAT payments and bonus payments.
The Group paid GBP1.8m corporation tax in the period benefitting
from enhanced capital allowances together with tax deductions
received on pension contributions. Payments in the prior period to
H1 20/21 were GBPnil as all corporation tax payments on account
were deferred until the second half of the year as a result of
Covid-19.
The amount of cash interest paid of GBP2.9m is broadly in line
with prior year (GBP3.1m).
Other items of GBP0.2m (H1 20/201: GBP0.8m) comprise of non-cash
items which relate primarily to net movements on provisions and
share-based payment charges in the period.
Non-underlying items of GBP3.2m (H1 20/21: GBPnil, H2 20/21
GBP2.2m) include costs primarily relating to the upgrade of finance
and HR systems that have been expensed in line with our revised
accounting policy, as detailed in Note 4 to the consolidated half
year financial statements.
Gross capital expenditure was GBP2.3m (H1 20/21: GBP2.8m) and
principally consisted of investments in start-up activity at The
WEB and the Waitrose CFC. This was partly offset by the disposal of
assets, mainly fleet of GBP1.2m (H1 20/21: GBP0.4m).
Deficit recovery contributions paid to the Group's defined
benefit pension scheme in the year to 31 March 2022 will be
GBP18.5m (31 March 2021: GBP18.3m) which is net of administration
costs of GBP0.7m paid directly by the Group.
The final FY20/21 dividend paid in H1 21/22 was GBP9.4m. No
dividend was paid in the first half of the prior year following
suspension due to the impact of Covid-19. The total interim cash
dividend payment in the second half is expected to be GBP5.0m and
will be paid on 31 December 2021.
The acquisition of Cygnia in September resulted in a net cash
outflow of GBP27.6m as described above.
Financing and covenants
The Group's committed facilities at the period end were
GBP141.2m (H1 20/21: GBP181.2m). The reduction is due to the expiry
of the 12-month GBP40m RCF extension which was agreed in the midst
of the uncertainty of the early part of the pandemic in May 2020
and which is no longer required. The headroom in the committed
facilities compared to net debt of GBP16.4m at H1 21/22 was
GBP124.8m (H1 20/21: GBP244.5m). The Group also has a Receivables
Purchase Facility (RPF) with Santander UK plc and operating
overdrafts which provide day to day flexibility and amount to a
further GBP50m and GBP7.5m respectively in uncommitted facilities.
At H1 21/22, utilisation of the Group's non-recourse RPF was
GBP8.4m (H1 20/21: GBP5.2m).
Wincanton operates comfortably within its banking covenants, as
summarised in the table below:
Covenant Ratio At 30 September 2021
-------------------- --------- ----------------------
Leverage ratio <2.75:1 0.63
Interest cover >3.5:1 24.2
Fixed charge cover >1.4:1 2.9
-------------------- --------- ----------------------
Pensions
The Group has a number of pension arrangements in the UK and
Ireland including defined benefit arrangements which are described
below.
The Group has reported an IAS 19 net asset of GBP67.6m (GBP50.7m
net of deferred tax) at H1 21/22 (H1 20/21: net asset of GBP24.3m,
31 March 2021: net asset of GBP48.2m) as set out in the following
table:
30 September 30 September 31 March
GBPm 2021 2020 2021
------------------ ------------ ------------ ---------
Assets 1,256.4 1,284.5 1,211.9
Liabilities (1,188.8) (1,260.2) (1,163.7)
------------------ ------------ ------------ ---------
Pension net asset 67.6 24.3 48.2
------------------ ------------ ------------ ---------
Discount rate (%) 2.00 1.55 2.00
------------------ ------------ ------------ ---------
The movement in the net asset since 31 March 2021 is due to
employer contributions paid into the Scheme of GBP9.7m plus net
actuarial movements of GBP10.1m on pension assets and
liabilities.
The estimated actuarial deficit at H1 21/22 has reduced to
GBP53m, compared to GBP67m at 31 March 2021. At H1 21/22, the
Scheme's investments were split between 18% in return-seeking
assets and 82% in defensive assets. The inflation and interest rate
risks facing the Scheme are hedged to mitigate the quantum of any
future movements in the actuarial deficit. Currently we are 108%
hedged against the IAS 19 liabilities, 98% hedged against the
actuarial liabilities.
Risks
The key risks and uncertainties facing Wincanton in the second
half of the current financial year have not changed materially from
those outlined on pages 39 to 41 of the Annual Report for the year
ended 31 March 2021, with the exception of the tightening of the
labour market resulting in increased cost and making recruitment
and retention difficult for both driver and warehouse operative
populations. The principal commercial and operational risks are the
Group's ability to source new contracts, at an appropriate
financial return for an acceptable level of risk, and the
subsequent performance of new and existing contracts. Wincanton has
a diversified customer base which spans large sectors of the UK
economy.
Going Concern
The interim financial statements have been prepared on a going
concern basis as set out in the statement of Directors'
responsibilities. Having considered the ability of the Company and
the Group to operate within its existing facilities and meet its
debt covenants, the Directors have a reasonable expectation that
the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future.
In determining whether the financial statements can be prepared
on a going concern basis, the Directors considered the Group's
business activities, together with the factors likely to affect its
future development, performance and position. The review also
included the financial position of the Group, its cash flows, and
borrowing facilities.
The Board considered in detail the future impact on the Group of
a possible downturn in financial and trading performance together
with unplanned working capital outflows. The Board has considered a
base case and a severe but plausible downside case. In both
scenarios, the Group has adequate headroom in existing bank
facilities to meet its liabilities as they fall due and it complies
with the financial covenants under its committed borrowing
facilities throughout the forecast period. Further details are
provided in the Basis of Preparation note in Note 1 Accounting
Policies in the interim financial statements.
Other key factors considered by the Directors were:
-- The implications of the current economic environment and
future uncertainties, which includes the continuing impact of the
Covid-19 pandemic, around the Group's revenues and profits by
undertaking forecasts and projections on a regular basis;
-- The impact of the competitive environment within which the Group's businesses operate; and
-- The potential actions that could be taken in the event that
revenues are worse than expected, to ensure that operating profit
and cash flows are protected.
Alternative Performance Measures
Alternative Performance Measures (APMs) are used by the Board in
assessing the Group's performance and are applied consistently from
one period to the next. They therefore provide additional useful
information for shareholders on the underlying performance and
position of the Group. Additionally, underlying EPS is used as a
key performance indicator for the share incentive scheme, being the
Long Term Incentive Plan (LTIP), (excluding FY 20/21, where the
LTIP moved to being measured entirely on Total Shareholder Return).
These measures are not defined by IFRS and are not intended to be a
substitute for IFRS measures.
The Group presents underlying EBITDA, operating profit and EPS
which are calculated as the statutory measures stated before
non-underlying items, including related tax where applicable.
Non-underlying items are those items of income and expenditure
which, due to their nature or size, the Directors consider should
be disclosed separately on the face of the income statement, such
as amortisation of acquired intangibles, exceptional items and
related tax.
The table below reconciles the APMs to the statutory reported
measures.
2021 2020
----------
Non-underlying Non-underlying
GBPm Statutory items(1) Underlying Statutory items(1) Underlying
Revenue 690.3 - 690.3 578.7 - 578.7
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
EBITDA (2) 48.6 2.2 50.8 43.2 - 43.2
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
EBITDA margin (%) 7.0% - 7.4% 7.5% - 7.5%
Depreciation,
amortisation and
impairments (21.0) - (21.0) (21.8) - (21.8)
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
Operating profit 27.6 2.2 29.8 21.4 - 21.4
Net financing
costs (2.5) - (2.5) (2.3) - (2.3)
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
Profit before tax 25.1 2.2 27.3 19.1 - 19.1
Income tax (4.1) (0.6) (4.7) (3.1) - (3.1)
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
Profit after tax 21.0 1.6 22.6 16.0 - 16.0
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
Earnings per share
(p) (3) 16.9 1.3 18.2 12.9 - 12.9
Dividend per share
(p) 4.00 2.85
Net cash / (debt)
excluding lease
liabilities (4) (16.4) - (16.4) 63.3 - 63.3
------------------ --------- ------------------ ---------- ---------- ------------------ ----------
1 Note 4 to the consolidated half year financial statements
provides further detail of non-underlying items.
2 EBITDA refers to operating profit before depreciation,
amortisation and impairments.
3 Note 8 to the consolidated half year financial statements
provides further detail of underlying earnings per share.
4 Net debt is the sum of cash and bank balances, bank loans and
overdrafts and other financial liabilities excluding lease
liabilities. Note 12 to the consolidated half year financial
statements provides a breakdown of net debt for the current and
prior periods.
Statement of Directors' responsibilities
The Board confirms to the best of its knowledge:
-- that the consolidated half year financial statements for the
six months to 30 September 2021 have been prepared in accordance
with UK-adopted IAS 34 Interim Financial Reporting; and
-- that the Half Year Report includes a fair review of the
information required by sections 4.2.7R and 4.2.8R of the
Disclosure Guidance and Transparency Rules, being an indication of
important events that have occurred during the period and their
impact on the consolidated half year financial statements; a
description of the principal risks and uncertainties for the
remainder of the current financial year; and the disclosure
requirements in respect of material related party transactions.
The above Statement of Directors' responsibilities was approved
by the Board on 18 November 2021.
T Lawlor
Director
Consolidated income statement
for the six months to 30 September 2021 (unaudited)
Six months to 30 September 2021 Six months to 30 September 2020
----------------------------------- -----------------------------------
Underlying Non-underlying Total Underlying Non-underlying Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Revenue 3 690.3 - 690.3 578.7 - 578.7
Net operating costs (660.5) (2.2) (662.7) (557.3) - (557.3)
--------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Operating profit 4 29.8 (2.2) 27.6 21.4 - 21.4
Financing income 5 0.6 - 0.6 1.2 - 1.2
Financing costs 5 (3.1) - (3.1) (3.5) - (3.5)
--------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Profit/(loss) before tax 27.3 (2.2) 25.1 19.1 - 19.1
Income tax (expense) / credit 7 (4.7) 0.6 (4.1) (3.1) - (3.1)
--------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Profit/(loss) attributable to equity
shareholders of Wincanton plc 22.6 (1.6) 21.0 16.0 - 16.0
--------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Earnings per share
- basic 18.2p 16.9p 12.9p 12.9p
- diluted 17.9p 16.7p 12.8p 12.8p
--------------------------------------- ---------- -------------- ------- ---------- -------------- -------
Consolidated statement of comprehensive income
for the six months to 30 September 2021 (unaudited)
Six months to Six months to
30 September 30 September
2021 2020
GBPm GBPm
--------------------------------------------------------------------------------- ---------------- --------------
Profit for the period 21.0 16.0
Other comprehensive income/(expense)
Items which will not subsequently be reclassified to the income statement
Remeasurements of defined benefit asset 10.1 (73.6)
Deferred tax on remeasurements of defined benefit asset (5.4) 13.9
---------------------------------------------------------------------------------- ---------------- --------------
Other comprehensive income for the period, net of income tax 4.7 (59.7)
---------------------------------------------------------------------------------- ---------------- --------------
Total comprehensive income/(loss) attributable to equity shareholders of
Wincanton plc 25.7 (43.7)
---------------------------------------------------------------------------------- ---------------- --------------
Consolidated balance sheet
at 30 September 2021 (unaudited)
30 Sept 31 March
30 Sept 2020 2021
2021 Restated(1) Restated(1)
Note GBPm GBPm GBPm
---------------------------------------------------- -------- ------------- -------------
Non-current assets
Goodwill and intangible assets 10 109.2 86.2 84.6
Property, plant and equipment 11 23.1 18.5 21.0
Right-of-use assets 14 157.7 98.5 129.3
Investments, including those equity accounted - 0.3 0.2
Deferred tax assets - 1.2 -
Employee benefits 17 70.2 26.9 50.8
----------------------------------------------- --- -------- ------------- -------------
360.2 231.6 285.9
----------------------------------------------- --- -------- ------------- -------------
Current assets
Inventories 2.4 1.4 1.4
Trade and other receivables 191.0 159.4 190.2
Income tax receivable 0.7 - 0.6
Cash at bank and in hand 12 23.6 71.0 30.6
----------------------------------------------- --- -------- ------------- -------------
217.7 231.8 222.8
Assets classified as held for sale 13 0.2 5.8 0.9
----------------------------------------------- --- -------- ------------- -------------
217.9 237.6 223.7
----------------------------------------------- --- -------- ------------- -------------
Current liabilities
Income tax payable - (4.0) -
Borrowings and other financial liabilities - (7.7) (9.7)
Lease liabilities 14 (38.8) (34.7) (32.3)
Trade and other payables (291.5) (326.2) (303.7)
Provisions 15 (14.5) (12.5) (15.1)
----------------------------------------------- --- -------- ------------- -------------
(344.8) (385.1) (360.8)
Liabilities classified as held for sale 13 - (3.1) -
----------------------------------------------- --- -------- ------------- -------------
(344.8) (388.2) (360.8)
----------------------------------------------- --- -------- ------------- -------------
Net current liabilities (126.9) (150.6) (137.1)
----------------------------------------------- --- -------- ------------- -------------
Total assets less current liabilities 233.3 81.0 148.8
----------------------------------------------- --- -------- ------------- -------------
Non-current liabilities
Borrowings and other financial liabilities 12 (40.0) - (9.0)
Lease liabilities 14 (137.9) (82.2) (113.4)
Employee benefits 17 (2.6) (2.6) (2.6)
Provisions 15 (28.1) (24.6) (23.9)
Deferred tax liabilities (9.7) - (1.6)
(218.3) (109.4) (150.5)
----------------------------------------------- --- -------- ------------- -------------
Net assets/(liabilities) 15.0 (28.4) (1.7)
----------------------------------------------- --- -------- ------------- -------------
Equity
Issued share capital 12.5 12.5 12.5
Share premium 12.9 12.9 12.9
Merger reserve 3.5 3.5 3.5
Translation reserve (0.4) (0.2) (0.4)
Own shares (0.8) (1.3) (1.0)
Retained earnings (12.7) (55.8) (29.2)
----------------------------------------------- --- -------- ------------- -------------
Total equity/(deficit) 15.0 (28.4) (1.7)
----------------------------------------------- --- -------- ------------- -------------
(1) The comparatives have been restated due to prior period
adjustments as explained in Note 1 'Accounting policies'.
Consolidated statement of changes in equity
at 30 September 2021 (unaudited)
Total
Issued equity/
share Share Merger Translation Profit and loss (deficit)
capital premium reserve reserve Own shares Restated(1) Restated(1)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 1 April 2021 12.5 12.9 3.5 (0.4) (1.0) (29.2) (1.7)
Profit for the period - - - - - 21.0 21.0
Other comprehensive
income - - - - - 4.7 4.7
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Total comprehensive
income - - - - - 25.7 25.7
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Share based payment
transactions - - - - 0.2 0.3 0.5
Current tax on share
based payments - - - - - (0.2) (0.2)
Deferred tax on share
based payments - - - - - 0.1 0.1
Dividends paid to
shareholders - - - - - (9.4) (9.4)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 30 September
2021 12.5 12.9 3.5 (0.4) (0.8) (12.7) 15.0
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 1 April 2020 12.5 12.9 3.5 (0.2) (1.5) (12.5) 14.7
Profit for the period - - - - - 16.0 16.0
Other comprehensive
expense - - - - - (59.7) (59.7)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Total comprehensive
expense - - - - - (43.7) (43.7)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Share based payment
transactions - - - - 0.2 0.3 0.5
Deferred tax on share
based payments - - - - - 0.1 0.1
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 30 September
2020 12.5 12.9 3.5 (0.2) (1.3) (55.8) (28.4)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 1 April 2020 12.5 12.9 3.5 (0.2) (1.5) (12.5) 14.7
Profit for the year - - - - - 39.1 39.1
Other comprehensive
expense - - - (0.2) - (52.9) (53.1)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Total comprehensive
expense - - - (0.2) - (13.8) (14.0)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Share based payment
transactions - - - - 0.5 0.1 0.6
Deferred tax on share
based payment
transactions - - - - - 0.5 0.5
Dividends paid to
shareholders - - - - - (3.5) (3.5)
------------------------- --------- --------- --------- ------------ ----------- ---------------- -------------
Balance at 31 March 2021 12.5 12.9 3.5 (0.4) (1.0) (29.2) (1.7)
========================= ========= ========= ========= ============ =========== ================ =============
(1) The comparatives have been restated due to prior period
adjustments as explained in Note 1 'Accounting policies'.
Consolidated statement of cash flows
for the six months to 30 September 2021 (unaudited)
Six
months Year
Six to 30 ended
months Sept 31 March
to 30 Sept 2020 2021
2021 Restated(1) Restated(1)
GBPm GBPm GBPm
------------------------------------------------- ------------ ------------- -------------
Operating activities
Profit before tax 25.1 19.1 46.2
Adjustments for:
- depreciation and amortisation 21.0 20.4 41.1
- research and development expenditure
credit - - (1.0)
- net financing costs 2.5 2.3 4.6
- impairments - 1.4 2.3
- profit on disposal of property,
plant and equipment (0.2) - (0.7)
- gain on derecognition of lease liabilities (0.1) - -
- profit on disposal of businesses (0.5) - (0.4)
- share of results of joint venture - - (0.1)
- write down of trade investment - - 0.1
- share based payment transactions 0.5 0.5 0.6
------------------------------------------------- ------------ ------------- -------------
48.3 43.7 92.7
------------------------------------------------ ------------ ------------- -------------
Decrease / (increase) in trade and
other receivables 6.8 (24.4) (64.8)
(Increase) / decrease in inventories (0.9) 0.4 0.6
(Decrease) / increase in trade and
other payables (16.5) 78.1 66.5
Decrease in provisions (1.6) (0.2) (0.3)
Increase in employee benefits before
pension deficit payment 0.5 0.6 1.5
Income taxes paid (1.8) - (5.7)
------------------------------------------------- ------------ ------------- -------------
Cash generated before pension deficit
payments 34.8 98.2 90.5
Pension deficit payments (9.2) (3.0) (18.3)
------------------------------------------------- ------------ ------------- -------------
Cash flows from operating activities 25.6 95.2 72.2
------------------------------------------------- ------------ ------------- -------------
Investing activities
Proceeds from sale of property, plant
and equipment 1.2 0.4 4.5
Purchase of subsidiary undertaking,
net of cash acquired (13.6) - -
Net cash inflow / (outflow) from disposal
of businesses 0.6 - (0.2)
Interest received - 0.1 0.1
Addition of trade investment - (0.1) -
Additions of property, plant and equipment (2.3) (1.2) (8.2)
Additions of computer software - (1.6) (1.4)
------------------------------------------------- ------------ ------------- -------------
Cash flows from investing activities (14.1) (2.4) (5.2)
------------------------------------------------- ------------ ------------- -------------
Financing activities
Increase / (decrease) in borrowings 24.9 (71.0) (62.0)
Borrowings repaid (14.0) - -
Payment of lease liabilities (13.5) (16.2) (35.1)
Equity dividends paid (9.4) - (3.5)
Interest paid on borrowings (1.2) (1.4) (2.6)
Interest paid on lease liabilities (1.7) (1.8) (3.8)
------------------------------------------------- ------------ ------------- -------------
Cash flows from financing activities (14.9) (90.4) (107.0)
------------------------------------------------- ------------ ------------- -------------
Net (decrease) / increase in cash and
cash equivalents (3.4) 2.4 (40.0)
Cash and cash equivalents at beginning
of the period 27.0 67.0 67.0
Cash and cash equivalents at end of
the period 23.6 69.4 27.0
------------------------------------------------- ------------ ------------- -------------
Represented by:
- cash at bank and in hand 20.8 67.5 28.8
- bank overdrafts - (1.6) (3.6)
- restricted cash, being deposits
held by the Group's insurance subsidiary 2.8 3.5 1.8
------------------------------------------------- ------------ ------------- -------------
23.6 69.4 27.0
------------------------------------------------ ------------ ------------- -------------
(1) The comparatives have been restated due to prior period
adjustments as explained in Note 1 'Accounting policies'.
Notes to the consolidated half year financial statements
for the six months to 30 September 2021 (unaudited)
1 Accounting policies
General information
Wincanton plc (the 'Company') is a company incorporated in the
United Kingdom and domiciled and registered in England and Wales.
The consolidated half year financial statements of the Company for
the six months to 30 September 2021 comprise the Company and its
subsidiaries (together referred to as the 'Group') and, where
relevant, the Group's interests in joint ventures.
These consolidated half year financial statements do not include
all of the information required for full annual financial
statements and should be read in conjunction with the consolidated
financial statements for the year ended 31 March 2021. The
comparative figures for the year ended 31 March 2021 have been
extracted from those accounts but do not comprise the full
statutory accounts for that financial year. Except for the 31 March
2021 comparatives, the financial information set out herein is
unaudited but has been reviewed by the auditors and their report to
the Company is set out below.
The consolidated financial statements for the year ended 31
March 2021 have been reported on by the Group's auditor, delivered
to the Registrar of Companies, and are available upon request from
the Company's registered office at Methuen Park, Chippenham,
Wiltshire, SN14 0WT or at www.wincanton.co.uk. The report of the
auditor was unqualified and did not contain a statement under
Section 498(2) or (3) of the Companies Act 2006.
The Half Year Report, which includes the consolidated half year
financial statements, was approved by the Board on 18 November
2021.
Basis of preparation
The consolidated half year financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
also in accordance with the measurement and recognition principles
of UK-adopted international accounting standards. As required by
the Disclosure Guidance and Transparency Rules of the UK's
Financial Conduct Authority, the consolidated half year financial
statements have been prepared on the basis of the accounting
policies adopted by the Group and applied and disclosed in its
consolidated financial statements for the year ended 31 March 2021,
except as described below.
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. The group
transitioned to UK-adopted international accounting standards in
its consolidated financial statements on 1 April 2021. There was no
impact or changes in accounting policies from the transition.
The preparation of these consolidated half year financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. In preparing these
consolidated half year financial statements, the nature of the
significant judgements made by management in applying the Group's
accounting policies and the nature of the key areas of estimation
were the same as those that applied to the consolidated financial
statements for the year ended 31 March 2021. The estimates and
judgements that are specific to the preparation of the half year
financial statements that were considered by the Group are the
consideration of the appropriateness of the recognition and
carrying value of the Group's provisions, the recognition and
measurement of the acquired assets and liabilities relating to the
acquisition of Cygnia and the measurement of the defined benefit
pension scheme liabilities.
Adoption of amended standards
The Group has adopted the following amendments to standards in
the year: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16:
Interest Rate Benchmark Reform Phase 2. None of these amendments
have had a significant impact on the results or net assets of the
Group.
Notes to the consolidated half year financial statements
(continued)
for the six months to 30 September 2021 (unaudited)
1 Accounting policies (continued)
Prior period restatements
Previously reported
A prior period presentational error has been corrected in
connection with cash and overdraft balances. As disclosed in the
2021 Annual Report, prior to 31 March 2021 the Group had presented
on a net basis cash and overdraft balances that did not meet the
criteria in IAS 32 for offset. The presentation of these balances
has been restated at 30 September 2020, resulting in an increase in
cash and short-term borrowings of GBP7.7m. The opening and closing
cash balances within the prior period Statement of Cash Flows have
also been restated to reflect the above adjustment. A short-term
borrowing balance of GBP6.1m is not now classed as a cash and cash
equivalent. Accordingly, this has resulted in an increase in cash
and cash equivalents at 31 March 2020 and 30 September 2020 of
GBP6.1m.
Change in accounting policy - Software-as-a-Service (SaaS)
arrangements
Following the IFRS Interpretations Committee (IFRIC) agenda
decision published in April 2021, the Group has reviewed its
accounting policy regarding the configuration and customisation
costs incurred when implementing a SaaS arrangement.
The Group's revised policy aligns with the IFRIC agenda decision
whereby:
-- In SaaS arrangements where the Group controls the underlying
software, configuration and customisation costs are capitalised as
part of bringing the identified intangible asset into use.
-- Where the Group does not control the underlying software, but the related configuration and customisation costs are not distinct from access to the software, these costs are expensed over the SaaS contract term.
-- In all other circumstances, configuration and customisation
costs are recognised as an expense as incurred, except in the
limited instances where these costs result in a separately
identifiable intangible asset.
During the previous financial year, the Group commenced the
implementation of a new cloud-based ERP and Human Resources system,
and at 31 March 2021 costs of GBP2.2m had been capitalised. The
above change in accounting policy has been applied retrospectively
and results in a prior period restatement to the 31 March 2021
balance sheet, to recognise these costs as a non-underlying
expense. No costs had been incurred prior to 30 September 2020 and
as such no restatement is required.
The effect on the 31 March 2021 balance sheet is a reduction in
both intangible assets and retained earnings by GBP2.2m. The effect
on the 31 March 2021 cash flow statement is a decrease in cashflows
from operating activities of GBP2.2m, and a corresponding reduction
in cash outflows due to investing activities of GBP2.2m.
Going concern
The Directors have concluded that it is reasonable to adopt a
going concern basis in preparing the half year financial
statements. In adopting the going concern basis, the Directors have
considered Wincanton's business activities, together with factors
likely to affect its future development and performance, as well as
Wincanton's principal risks and uncertainties.
The adoption of the going concern basis is based on an
expectation that the Group will have adequate resources to continue
in operational existence for at least twelve months from the
signing of the half year financial statements. For the purpose of
this going concern assessment, the Directors have considered an 18
month period from the balance sheet date, aligned with the business
forecasting outlook period, to 31 March 2023. The Group has
reported a profit before tax of GBP25.1m for the six months ended
30 September 2021 (30 September 2020: GBP19.1m), has net current
liabilities of GBP 126.9m (30 September 2020: GBP150.6m, 31 March
2021: GBP137.1m) and net assets of GBP15.0m (30 September 2020: net
liabilities of GBP28.4m, 31 March 2021: net liabilities of
GBP1.7m).
The Group's committed facilities at 30 September 2021 comprise a
syndicated Revolving Credit Facility (RCF) of GBP141.2m, which
matures in October 2023. The Group had GBP101.2m of undrawn amounts
against the RCF facility as at 30 September 2021, with drawn debt
being used to fund the working capital cycle and the
Notes to the consolidated half year financial statements
(continued)
for the six months to 30 September 2021 (unaudited)
1 Accounting policies (continued)
Going concern (continued)
acquisition of Cygnia during the period. The RCF requires the
Group to comply with the following three financial covenants at 30
September and 31 March each financial year:
-- Leverage ratio: Consolidated total net borrowings of no more
than 2.75 times Consolidated EBITDA for the preceding 12-month
period;
-- Interest cover: Consolidated EBITDA for the preceding
12-month period is not less than 3.5 times higher than Consolidated
net finance charges for the preceding 12-month period; and
-- Fixed charge cover: Consolidated EBITDA plus Operating lease
costs for the preceding 12-month period is not less than 1.4 times
higher than Consolidated net finance charges plus Operating lease
costs for the preceding 12 month period.
In addition, the Group also has an uncommitted GBP50m Receivable
Purchase Facility, providing flexibility to manage net debt peaks
down and an uncommitted overdraft facility of GBP7.5m. In arriving
at the conclusion on going concern, the Directors have given due
consideration to whether the funding and liquidity resources above
are sufficient to accommodate the principal risks and uncertainties
faced by the Group.
The Directors have reviewed the financial forecasts across a
range of scenarios. Wincanton has modelled a base case based on
revenue and profit run rates at the end of September 2021, that
form the basis of the FY21/22 budget, forecast and 3 year plan.
The severe but plausible downside case assumes a deterioration
in trading performance, similar to that seen as a result of the
Covid-19 pandemic in FY21. This scenario also assumes a major cash
outflow based on a large customer going into administration and a
deterioration in working capital performance compared to the base
case, as well as a further material unplanned cash outflow linked
to a general commercial dispute. These downsides would be offset by
the application of further mitigating actions to the extent they
are under management's control, including deferrals of capital and
other discretionary expenditure, as well as management bonus
payment deferral and claiming against insurance cover to offset any
commercial dispute.
In both scenarios, the Group has sufficient liquidity and
adequate headroom in the committed facilities set out above to meet
its liabilities as they fall due without the use of uncommitted
facilities throughout the forecast period. In addition, in both
scenarios the Group complies with the financial covenants under the
RCF at 30 September and 31 March throughout the forecast
period.
The Group has carried out reverse stress tests against the
downside case to determine the performance levels that would result
in a breach of covenants. For a breach in covenants to occur during
the relevant period, the Group would need to experience a sustained
drop in EBITDA (more than 40%) versus the downside case throughout
the period. The Directors do not consider this scenario to be
plausible given the ability of the Group to continue its operations
through the recent pandemic, the customer contract security within
the Group and the buoyant nature of many of the markets within
which the Group operates.
2 Operating segments
Wincanton plc provides supply chain solutions in the UK and
Ireland. The business is structured as one operating segment with
one segment manager who reports to the Chief Executive Officer
(CEO). The CEO is a member of the Executive Management Team and of
the Board and is the Chief Operating Decision Maker. The results of
the business are presented to the Board and the performance of the
business is assessed on the basis of the Group's performance as a
whole.
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
3 Revenue
Customer contracts are disaggregated by sector with revenue
generally being recognised over time. Further detail is given in
the table below:
Six months to Six months to
30 Sept 2021 30 Sept 2020
Sector revenue GBPm GBPm
---------------------- ------------- -------------
Digital & eFulfilment 103.2 65.0
Grocery & Consumer 252.1 215.4
General Merchandise 193.2 149.6
Public & Industrial 141.8 106.6
Specialist Services - 42.1
----------------------- ------------- -------------
Total revenue (GBPm) 690.3 578.7
----------------------- ------------- -------------
Revenue from open book contracts totalled GBP491.1m (30
September 2020: GBP387.7m) and from closed book contracts GBP199.2m
(30 September 2020: GBP191.0m).
Revenue of GBP155.6m (30 September 2020: GBP123.3m) and GBP82.1m
(30 September 2020: GBP65.4m) arose from sales to the Group's two
largest customers, being groups of companies under common control.
No other single customer or group of customers under common control
contributed 10% or more to the Group's revenue in either the
current or prior period.
4 Non-underlying items
Six months to 30 Sept 2021 Six months to 30 Sept 2020
GBPm GBPm
------------------------------------------------------ --------------------------- ---------------------------
Cloud computing configuration and customisation costs (3.2) -
Acquisition related transaction costs (0.7) -
Release of warranty provision 1.0 -
Gain on disposal of businesses 0.5 -
Net profit on disposal of assets 0.2 -
(2.2) -
------------------------------------------------------ --------------------------- ---------------------------
Non-underlying items are those items of income or expenditure
which, due to their nature, size or incidence, the Directors
consider should be disclosed separately on the face of the income
statement, in order to better present the underlying performance of
the business.
a) Cloud computing configuration and customisation costs
Following the IFRS Interpretation Committee agenda decision
published in April 2021, the Group has revised its accounting
policy regarding the customisation and configuration costs incurred
when implementing a SaaS software arrangement.
The Group is currently undertaking a major systems
implementation for new cloud computing software, resulting in costs
of GBP3.2m being recognised as an expense. In addition, GBP2.2m of
implementation costs were incurred in the year to 31 March 2021.
The first phase of the implementation has gone live and was
achieved on time and to budget. A further cash cost of
approximately GBP4-5m is expected to be charged to non-underlying
items relating to the completion of the project over the next
twelve months.
Due to the size, nature and incidence of these costs they are
presented as a non-underlying item as they are not reflective of
underlying performance.
b) Acquisition related transaction costs
As part of the acquisition of Cygnia, the Group has incurred
acquisition related costs and professional fees of GBP0.7m which
have been recognised as an expense as required by IFRS 3 Business
combinations.
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
4 Non-underlying items (continued)
c) Release of warranty provision
The Group has released the value of a potential claim under a
historic warranty provision, dating back to 2015, as any outflow of
economic benefits is now considered to be remote. As the original
provision was recognised as a non-underlying item, the write-back
has been recognised in a consistent manner.
d) Gain on disposal of businesses
On 3 October 2020 the Group disposed of its Containers business,
and during the period GBP0.5m of contingent consideration related
to the disposal has been recognised.
e) Net profit on disposal of assets
The Group has disposed of several specialist vehicles that were
not required for ongoing operations. A profit on disposal of
GBP0.2m has been recognised during the period.
5 Net financing costs
Six months to
30 Sept 2021 Six months to 30 Sept 2020
GBPm GBPm
--------------------------------------------------- -------------- ---------------------------
Recognised in the income statement
Interest income - 0.1
Interest on the net defined benefit pension asset 0.6 1.1
--------------------------------------------------- -------------- ---------------------------
0.6 1.2
--------------------------------------------------- -------------- ---------------------------
Interest expense (1.2) (1.4)
Interest on lease liabilities (1.7) (1.8)
Unwinding of discount on provisions (0.2) (0.3)
(3.1) (3.5)
--------------------------------------------------- -------------- ---------------------------
Net financing costs (2.5) (2.3)
--------------------------------------------------- -------------- ---------------------------
6 Government grants and other support
During the current financial period no government grants have
been received. In the six months to 30 September 2020 the Group
received GBP12.4m under the Coronavirus Job Retention Scheme (CJRS)
which the UK Government made available to help companies affected
by Covid-19. The scheme was utilised as it was intended to avoid
redundancies in areas of the business that were significantly
impacted by the pandemic. However, following the strong performance
during the second half of the year to 31 March 2021 the Group
repaid GBP5.8m of the support received. The Group elected to
recognise the grant as a credit against the related staff costs and
not as an item of other income.
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
7 Income tax expense
Recognised in the income statement Six Six
months to months to
30 Sept 30 Sept
2021 2020
GBPm GBPm
--------------------------------------------------------------------------- ---------- ----------
Current tax expense
Current year 1.8 2.8
Adjustments for prior years - (1.2)
--------------------------------------------------------------------------- ---------- ----------
1.8 1.6
--------------------------------------------------------------------------- ---------- ----------
Deferred tax expense
Current year 2.3 1.5
2.3 1.5
--------------------------------------------------------------------------- ---------- ----------
Total income tax expense 4.1 3.1
--------------------------------------------------------------------------- ---------- ----------
Recognised in other comprehensive income
Items which will not subsequently be reclassified to the Income statement:
Remeasurements of defined benefit pension asset 5.4 (13.9)
--------------------------------------------------------------------------- ---------- ----------
Recognised directly in equity
Current tax on share based payment transactions 0.2 -
Deferred tax on share based payment transactions (0.1) (0.1)
--------------------------------------------------------------------------- ---------- ----------
In accordance with IAS 34 Interim Financial Reporting the tax
expense recognised in the income statement for the half year is
calculated on the basis of the estimated underlying effective full
year tax rate of 17.2% (30 September 2020: 16.1%).
The main UK Corporation tax rate remained at 19% (30 September
2020: 19%).
The closing UK deferred tax asset is calculated based on the
rate of 25% which was substantively enacted at the balance sheet
date. The increase in the tax rate at which the UK deferred tax
rate is calculated has increased the closing UK deferred tax
liability by GBP2.7m.
8 Earnings per share
The basic earnings per share of 16.9p (30 September 2020: 12.9p)
is calculated based on the profit attributable to the equity
shareholders of Wincanton plc of GBP21.0m (30 September 2020:
GBP16.0m) and the weighted average shares of 124.2m (30 September
2020: 124.0m) which have been in issue throughout the period.
The diluted earnings per share of 16.7p (30 September 2020:
12.8p) is calculated based on there being 1.8m (30 September 2020:
1.3m) additional shares deemed to be issued at GBPnil consideration
under the Company's share option schemes. The weighted average
number of ordinary shares for both basic and diluted earnings per
share is calculated as follows:
Six months to Six months to
30 Sept 30 Sept
2021 2020
Millions Millions
--------------------------------------------------------------------- -------------- --------------
Weighted average number of Ordinary Shares (basic)
Issued Ordinary Shares at the beginning of the period 124.1 123.9
Net effect of shares issued and purchased during the period 0.1 0.1
--------------------------------------------------------------------- -------------- --------------
124.2 124.0
--------------------------------------------------------------------- -------------- --------------
Weighted average number of Ordinary Shares (diluted)
Weighted average number of Ordinary Shares at the end of the period 124.2 124.0
Potential ordinary shares 1.8 1.3
--------------------------------------------------------------------- -------------- --------------
126.0 125.3
--------------------------------------------------------------------- -------------- --------------
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
9 Dividends
During the period a final dividend of 7.50p per share was paid,
relating to the year ended 31 March 2021 (2020: GBPnil per
share).
The Board has declared an interim dividend of 4.0p per share for
the period ended 30 September 2021 (30 September 2020: 2.85p per
share) which will be paid on 31 December 2021 to shareholders on
the register on 3 December 2021, an estimated total of GBP5.0m.
10 Goodwill and intangible assets
Additions and disposals
With the exception of any amounts disclosed in note 18, during
the half year to 30 September 2021 the Group acquired intangible
assets with a cost of GBPnil (30 September 2020: GBP1.6m).
11 Property, plant and equipment
Additions and disposals
With the exception of any amounts disclosed in note 18, during
the half year to 30 September 2021 the Group acquired tangible
fixed assets with a cost of GBP2.3m (30 September 2020: GBP1.2m).
Assets with a carrying amount of GBP0.3m were disposed of during
the half year to 30 September 2021 (30 September 2020:
GBP0.4m).
Capital commitments
At 30 September 2021 the Group had entered into contracts to
purchase property, plant and equipment for GBP0.1m (30 September
2020: GBP0.3m); delivery is expected in the second half of the year
to 31 March 2022.
12 Analysis of changes in net debt
1 April 30 Sept
2021 Cash flow On acquisition Non-cash movements 2021
GBPm GBPm GBPm GBPm GBPm
------------------------------------------------ -------- ---------- --------------- ------------------- --------
Cash and bank balances 30.6 (9.4) 2.4 - 23.6
Bank overdrafts classified as cash equivalents (3.6) 3.6 - - -
Bank loans and overdrafts (15.1) (10.9) (14.0) - (40.0)
Net debt excluding lease liabilities 11.9 (16.7) (11.6) - (16.4)
------------------------------------------------ -------- ---------- --------------- ------------------- --------
Lease liabilities (145.7) 15.2 (29.1) (17.1) (176.7)
------------------------------------------------ -------- ---------- --------------- ------------------- --------
Net debt including lease liabilities (133.8) (1.5) (40.7) (17.1) (193.1)
------------------------------------------------ -------- ---------- --------------- ------------------- --------
1 April 30 Sept
2020 Cash flow Non-cash movements 2020
Restated (1) GBPm GBPm GBPm GBPm
------------------------------------------------ -------- ---------- ------------------- --------
Cash and bank balances 79.0 (8.0) - 71.0
Bank overdrafts classified as cash equivalents (12.0) 10.4 - (1.6)
Bank loans and overdrafts (77.1) 71.0 - (6.1)
Net debt excluding lease liabilities (10.1) 73.4 - 63.3
------------------------------------------------- -------- ---------- ------------------- --------
Lease liabilities (129.7) 18.0 (5.2) (116.9)
------------------------------------------------- -------- ---------- ------------------- --------
Net debt including lease liabilities (139.8) 91.4 (5.2) (53.6)
------------------------------------------------- -------- ---------- ------------------- --------
(1) The comparatives have been restated due to prior period
adjustments as explained in Note 1 'Accounting policies'.
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
12 Analysis of changes in net debt (continued)
1 April Non-Cash movements 31 March
2020 Cash flow GBPm 2021
GBPm GBPm GBPm
------------------------------------------------ -------- ---------- ------------------- ---------
Cash and bank balances 79.0 (48.4) - 30.6
Bank overdrafts classified as cash equivalents (12.0) 8.4 - (3.6)
Bank loans and overdrafts (77.1) 62.0 - (15.1)
------------------------------------------------ -------- ---------- ------------------- ---------
Net debt excluding lease liabilities (10.1) 22.0 - 11.9
------------------------------------------------ -------- ---------- ------------------- ---------
Lease liabilities (129.7) 38.8 (54.8) (145.7)
------------------------------------------------ -------- ---------- ------------------- ---------
Net debt including lease liabilities (139.8) 60.8 (54.8) (133.8)
------------------------------------------------ -------- ---------- ------------------- ---------
Cash and bank balances include restricted cash, being deposits
held by the Group's insurance subsidiary of GBP2.8m (30 September
2020: GBP3.5m, 31 March 2021: GBP1.8m).
13 Assets and liabilities classified as held for sale
In the period to 30 September 2020, following a review of the
Group's activities, the Board identified the Containers business as
non-core. A short competitive tender process was held in the first
half of the year and a purchaser identified. In addition, certain
vehicles were surplus to requirement at 30 September 2020 and their
value was expected to be recovered by their sale and not through
ongoing use in the business.
The related assets and liabilities were therefore classified as
held for sale at 30 September 2020. No impairment was recognised on
classification as held for sale. The disposal of the Containers
business completed on 17 October 2020, resulting in a small net
gain on disposal after transaction and other disposal costs are
taken into account. The Containers business did not meet the
definition of a discontinued operation.
The major classes of assets and liabilities classified as held
for sale are:
30 September 30 September 31 March
2021 2020 2021
GBPm GBPm GBPm
-------------------------------- ------------- ------------- ---------
Property, plant and equipment 0.2 4.0 0.9
Right-of-use assets - 1.6 -
Inventories - 0.2 -
Assets classified as held for
sale 0.2 5.8 0.9
-------------------------------- ------------- ------------- ---------
Lease liabilities - (3.1) -
Liabilities classified as held
for sale - (3.1) -
-------------------------------- ------------- ------------- ---------
14 Leases
Additions and disposals
During the period to 30 September 2021, with the exception of
the amounts disclosed in note 18, the Group recognised lease
liabilities and corresponding right-of-use assets with a value of
GBP11.2m (30 September 2020: GBP6.8m). In addition, lease
modifications resulted in an increase in the value of lease
liabilities and corresponding right-of-use assets of GBP12.3m (30
September 2020: GBPnil). Right-of-use assets with a carrying amount
of GBP7.7m were disposed of and lease liabilities of GBP8.0m were
derecognised during the period to 30 September 2021 (30 September
2020: GBP0.3m).
Lease commitments
At 30 September 2021 the Group had committed to enter into lease
arrangements valued at GBP8.7m (31 March 2021: GBP9.3m); delivery
is expected in the second half of the year to 31 March 2022.
Notes to the consolidated half year financial statements (continued)
for the six months to 30 September 2021 (unaudited)
15 Provisions
Insurance Property Other provisions Total
GBPm GBPm GBPm GBPm
-------------------------------- ------------ ----------- ----------------- --------
At 1 April 2021 24.6 9.4 5.0 39.0
Acquired as part of a business
combination - 4.4 0.6 5.0
Provisions made during the
period 5.1 0.2 1.1 6.4
Provisions used during the
period (2.7) (0.9) - (3.6)
Provisions released during
the period (2.1) - (2.3) (4.4)
Unwinding of discount 0.1 0.1 - 0.2
At 30 September 2021 25.0 13.2 4.4 42.6
-------------------------------- ------------ ----------- ----------------- --------
Current 6.3 3.8 4.4 14.5
Non-current 18.7 9.4 - 28.1
-------------------------------- ------------ ----------- ----------------- --------
25.0 13.2 4.4 42.6
-------------------------------- ------------ ----------- ----------------- --------
The Group owns 100% of the share capital of an insurance company
which insures certain risks of the Group. The insurance provisions
in the above table are held in respect of outstanding insurance
claims, the majority of which are expected to be paid within one to
seven years. Provisions are released when the obligation no longer
exists or there is a reduction in management's estimate of the
liability. The discount unwinding arises primarily on the
employers' liability policy which is discounted over a period of
seven years at a rate based on the Group's assessment of a risk
free rate. The Group provides standby letters of credit to the
fronting insurer for employers' liability and motor third party
claims totalling GBP19.6m (31 March 2021: GBP18.6m).
The property provisions are determined on a site by site basis
and comprise primarily provisions for dilapidations. Dilapidation
provisions comprise dilapidation estimates made in the normal
course of business. Provisions are released when the obligation no
longer exists or there is a reduction in the estimate. They are
expected to be utilised at the end of the lease term. Estimated
costs have been discounted at a rate based on the Group's
assessment of a risk free rate.
Other provisions include the estimated costs of warranties and
indemnities provided on disposal of businesses together with
provision for sundry claims and settlements where the outcome is
uncertain.
16 Contingent liability
From time to time, the Group is notified of legal claims in
respect of work carried out and the potential exposure can be
material. Where management believes we are in a strong position to
defend these claims and the likelihood of outflow of economic
benefit is not probable, no provision is made.
The Group has recently received notification of a potential
claim from a former customer and is in the process of receiving the
full facts and circumstances connected with this matter. At this
time, the Group considers that it is not probable that any claim
will result in an outflow of economic benefit. The Group is
actively seeking further information to substantiate the
allegations made. Given the early stage of the legal and commercial
process it is not practicable to make an estimate of the potential
financial impact. In parallel, the Group continues to work with its
insurance providers to confirm coverage if required.
17 Employee benefits
The Group operates a funded pension scheme with a net surplus of
GBP70.2m at 30 September 2021 (31 March 2021: GBP50.8m). The
movement in the pension net asset is due to employer contributions
of GBP9.7m paid into the Scheme plus net actuarial movements of
GBP10.1m on pension assets and liabilities.
During the period the net expense recognised in the income
statement was GBP0.3m (30 September 2020: net income of
GBP0.2m).
Notes to the consolidated half year financial statements
(continued)
for the six months to 30 September 2021 (unaudited)
17 Employee benefits (continued)
The values of scheme assets and liabilities are shown below.
30 September 30 September 31 March
2021 2020 2021
GBPm GBPm GBPm
----------------------- ------------- ------------- ----------
Assets 1,256.4 1,284.5 1,211.9
Liabilities (1,188.8) (1,260.2) (1,163.7)
----------------------- ------------- ------------- ----------
67.6 24.3 48.2
Presented as:
Non-current asset 70.2 26.9 50.8
Non-current liability (2.6) (2.6) (2.6)
67.6 24.3 48.2
----------------------- ------------- ------------- ----------
The principal actuarial assumptions for the Scheme and for the
UK unfunded arrangement at the balance sheet date were as
follows:
30 Sept 31 March
2021 30 Sept 2020 2021
% % %
--------------------------------------------- --------- ------------ ---------
Discount rate 2.00 1.55 2.00
Price inflation rate - RPI 3.55 3.10 3.40
Price inflation rate - CPI 2.95 2.20 2.80
Rate of increase of pensions in deferment(1) 2.50-2.95 2.20 2.50-2.80
Rate of increase of pensions in payment(1) 2.10-3.40 1.80-3.05 2.05-3.30
--------------------------------------------- --------- ------------ ---------
(1) A range of assumed rates exists due to the application of
annual caps and floors to certain elements of service.
Sensitivity to changes in assumptions
The sensitivity of the present value of the Scheme's liabilities
and, due to hedging, the fair value of its assets, to changes in
key actuarial assumptions are set out in the following table.
(Increase)/ Increase/
decrease in liability (decrease) in assets
Change in assumption GBPm GBPm
--------------------------- -------------------- ---------------------- ---------------------
Discount rate + 0.25% 47.0 (56.0)
Credit spread + 0.25% 47.0 (6.0)
Price inflation rate - RPI + 0.25% (33.0) 27.0
Mortality rate + 1 year (59.0) -
--------------------------- -------------------- ---------------------- ---------------------
The illustrations consider the results of only a single
assumption changing with the others assumed unchanged and includes
the impact of the interest rate and inflation rate hedging. In
reality, it is more likely that more than one assumption would
change and potentially the results would offset each other.
Notes to the consolidated half year financial statements
(continued)
for the six months to 30 September 2021 (unaudited)
18 Business combinations
On 10 September 2021, the Group acquired 100% of the equity
shares in Caledonia Bidco Limited and its subsidiaries which
include Cygnia Logistics Limited (Cygnia). Cygnia is a specialist
mid-market eCommerce and multichannel eFulfilment provider with
expertise spanning the full breadth of their customers'
requirements, including high-volume order fulfilment, returns and
carrier management services. The acquisition is in line with the
Group's strategic focus on eCommerce and provides access to
exciting new growth opportunities in the mid-market sector.
As the Group is in the process of establishing the fair value of
the assets acquired and the liabilities assumed, the fair values
presented below are provisional.
GBPm
--------------------------------------------------------------- ------
Tangible assets 3.7
Right-of-use assets 29.6
Intangible assets 0.5
Inventories 0.1
Trade and other receivables 7.6
Cash and cash equivalents 2.4
Trade and other payables (4.5)
Financial liabilities - interest bearing borrowings (14.0)
Provisions (5.0)
Lease liabilities (29.1)
Provisional fair value of net liabilities acquired (8.7)
------------------------------------------------------------------ ------
Purchase consideration:
Cash paid 16.0
Amounts eligible for repayment upon settlement of
acquired liabilities (0.3)
------------------------------------------------------------------ ------
Total purchase consideration 15.7
------------------------------------------------------------------ ------
Excess of purchase consideration over net liabilities acquired 24.4
------------------------------------------------------------------ ------
In addition to the cash purchase consideration paid of GBP16.0m
above, the Group immediately settled Cygnia's interest bearing
borrowings and amounts due to a debt factoring company of GBP11.8m
and GBP2.2m respectively and acquired cash of GBP2.4m.
Purchase consideration of GBP1.7m was paid into escrow to cover
certain indemnities provided by the seller. The Group's best
estimate of the amounts to be recovered from the seller is GBP0.3m
as highlighted above.
The excess of purchase consideration includes amounts paid for
goodwill and acquired intangible assets. Due to the acquisition
being completed close to the reporting date, the Group is in the
process of determining the fair value of intangible assets
acquired. The excess of purchase consideration over net liabilities
acquired has been included in goodwill and intangible assets in the
consolidated balance sheet as at 30 September 2021.
Gross trade receivables were GBP5.6m on acquisition, of which
GBP5.6m are expected to be recovered.
During the period, the acquisition contributed GBP2.1m to
revenue and an operating loss of GBP0.1m. If the acquisition had
occurred at the beginning of the period, it would have contributed
GBP19.2m of revenue and an operating loss of GBP0.4m.
Notes to the consolidated half year financial statements
(continued)
for the six months to 30 September 2021 (unaudited)
19 Related Parties
Related party relationships exist with the Group's subsidiaries,
key management personnel, pension schemes and employee benefit
trust. A full explanation of the Group's related party
relationships is provided on page 124 of the Annual Report and
Accounts 2021.
There are no material transactions with related parties or
changes in the related party transactions described in the last
annual report that have had, or are expected to have, a material
effect on the financial performance or position of the Group in the
six month period ended 30 September 2021.
INDEPENT REVIEW REPORT TO WINCANTON PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2021 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated balance sheet, the consolidated statement
of changes in equity, the consolidated statement of cash flows and
the related explanatory notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group will be prepared in accordance with UK adopted international
accounting standards. The condensed set of financial statements
included in this interim financial report has been prepared in
accordance with UK adopted International Accounting Standard 34,
"Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2021 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
INDEPENDENT REVIEW REPORT TO WINCANTON PLC (continued)
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London
18 November 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Shareholders' enquiries
All administrative enquiries relating to shareholdings should,
in the first instance, be directed to the Registrar at the
following address:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: +44 (0) 371 384 2272
Email: customer@equiniti.com
Website: www.shareview.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR UWOWRAUUAAAA
(END) Dow Jones Newswires
November 19, 2021 02:00 ET (07:00 GMT)
Wincanton (LSE:WIN)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Wincanton (LSE:WIN)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024