View Annual Report
Total Page:16
File Type:pdf, Size:1020Kb
90 years of delivery NCANT WI ON WE MAKE OUR CUSTOMERS’ BUSINESS BETTER. EVERY DAY Delivering excellent customer service for 90 years We started life delivering milk in 1925 and although we have never forgotten our heritage, and are still transporting milk daily, we now deliver so much more. Over the past 90 years we have entered new industry sectors, broadened our services and used technology to manage the increasing pace and complexity of the supply chain. Our people have consistently delivered and continue to strive to make our customers’ business better, every day. ANNUAL REPORT AND ACCOUNTS 2016 90 years of Inside this report service STRATEGIC REPORT About us 1 Chairman’s statement 2 Our business 4 Chief Executive’s statement 6 KPIs 10 Key drivers and trends 11 Our marketplace 16 Business model 18 Corporate responsibility 20 Financial review 24 Risk 30 GOVERNANCE 1925 1940s 1960s 1970s 1990s Wincanton starts life as a The Milk Marketing Board (MMB) Legislation changes allow Wincanton diversifies Wincanton merges with Unigate Board of Directors 34 subsidiary of West Surrey Central took on responsibility for all farm for heavier lorries to be used. into new market sectors, Chilled Distribution and enters Chairman’s introduction 36 Dairy Company, which later milk collections and contracted Wincanton introduced the ‘long including petroleum, and the retail market through the became Cow & Gate. Wincanton Transport and tom’ articulated vehicle capable develops new temperature acquisition of Glass Glover. Corporate Governance report 37 Engineering to collect milk on of carrying 4,500 gallons of milk. controlled operations. Nomination Committee report 40 their behalf for all UK dairies. Audit Committee report 41 Directors’ remuneration report 44 Annual report on remuneration 45 Directors’ remuneration policy 55 Directors’ report 61 Independent auditor’s report 64 NCANT WI ON ACCOUNTS Consolidated income statement 66 Consolidated statement of comprehensive income 67 2001 2002 – 2010 2012 2013 2015 2016 Consolidated balance sheet 68 Wincanton and UNIQ Wincanton makes a number of Wincanton disposes of its Wincanton has an Wincanton concentrates on Consolidated statement (formerly Unigate) demerge to acquisitions into new markets: Mainland European operations award winning year. core contract logistics activity of changes in equity 69 form separate organisations. Europe, containers, construction, to focus on growth in its market with disposal of its records defence and UK home delivery. leading UK&I business. management business. Consolidated statement Wincanton plc quoted on the of cash flows 70 London Stock Exchange. Wincanton wins Retail Week Supply Chain Award ‘Team of the Notes to the consolidated Year’ in partnership with Screwfix. financial statements 71 Wincanton celebrates Wincanton plc Company 90 years of service. balance sheet 98 Wincanton plc Company statement of changes in equity 99 Notes to the Wincanton plc Company financial statements 100 Additional information 103 Shareholder information 104 1 About us Delivering everyday excellence Our customers rely on us to organise, store and move their goods as efficiently and effectively as possible. In a fast changing and competitive environment the supply chain is becoming increasingly complex and the need for the right expertise has never been greater. We are focused on delivering operational excellence for our customers. In addition, we constantly seek opportunities to improve and innovate within the supply chain. Our people are key to this and are fundamental to our future success. Key themes A strong financial performance Our people Improved focus 2015/16 has seen further financial Wincanton’s success is based on the quality, The sale of Wincanton Records Management improvement as we have grown revenue, dedication and focus of our 17,500 people. (WRM) means that the Group is now focused EBITDA, operating profit, profit before tax In line with our vision, mission and values we on the UK and Ireland contract logistics and earnings per share (EPS) and reduced are more focused on ‘making our customers’ markets. The Containers and Pullman debt. As a result we are recommending a business better. Every day’ operations have been brought closer to the final dividend for the current year. core logistics business. Chairman’s statement Chief Executive’s statement Chairman’s statement See page 2 See page 6 See page 2 Chief Executive’s statement People feature Chief Executive’s statement See page 6 See page 12 See page 6 KPIs Corporate responsibility See page 10 See page 20 Financial review See page 24 NCANT WI ON Wincanton plc Annual Report and Accounts 2016 2 Chairman’s statement Making good progress “A KEY MILESTONE HAS BEEN THE BOARD’S RECOMMENDATION TO RESUME THE PAYMENT OF AN ANNUAL DIVIDEND, STARTING WITH A FINAL DIVIDEND THIS YEAR.” Steve Marshall Chairman Introduction The Contract logistics business integral part. Our role in meeting and continued to grow revenues exceeding our customers’ needs and 2015/16 proved to be a year of requirements have been achieved with the intense activity for Wincanton and and profits in a market that utmost proficiency. remains highly competitive as our also something of a milestone. A key milestone has been the Board’s The Records Management customers strive to make progress recommendation to resume the payment business (WRM), which lacked across a broad cross-section of of an annual dividend, starting with a final fit with the rest of the Group, changing markets. dividend this year. Over the last four years, was sold for an enterprise value Whatever the sector, rising customer the Group has sought to simplify and expectations, unprecedented information concentrate on its UK contract logistics of £60m, which represents an heartland, strengthen what was a heavily excellent return for shareholders. transparency, the rapid evolution of multichannel and accelerating technological geared balance sheet and drive customer and The Pullman business was change all impose intense cost efficiency and operational focus. It is appropriate to record stabilised and returned to responsiveness challenges on customers’ that shareholders have without exception been profitability in the second half. supply chains, of which Wincanton is an supportive and patient during this period. Wincanton plc Annual Report and Accounts 2016 3 This has enabled the Board to address capital volatility, average net debt and period Dividend Wincanton’s priorities in the appropriate end net debt will be more closely aligned The Board is proposing a final dividend of order and for the long term benefit of in future. 5.5p for 2015/16 payable in August 2016. It is all stakeholders. The period end IAS 19 accounting deficit stood anticipated that in future years, the interim and at £105.6m (gross of deferred tax), down from final dividend split will be broadly one-third / Results £144.2m in the prior year. However, the more two-thirds. meaningful actuarial deficit is significantly Group revenues at £1.15bn were up by 3.6% on The Board’s intention is to adopt a progressive higher, and the Board continues to be focused the prior year and by 4.4% excluding the WRM dividend policy, with annual dividend on meeting the Group’s ongoing obligations to disposal from both years. Underlying operating growth broadly matched to the growth in this important stakeholder group. profits were up by 2.4% from £49.7m to £50.9m underlying earnings. and by 5.4% excluding WRM again from both years. People and the Board Outlook The Contract logistics business continued to There was a smooth transition of Adrian The key themes that have been the hallmark grow revenues and profits materially during Colman into his new role of Chief Executive of Wincanton’s recovery phase over the last the year. Although the new business pipeline Officer, and I would like to thank the outgoing four years – the strong emphasis on contract provided fewer large opportunities than Chief Executive, Eric Born, for his contribution renewal and customer retention, delivering in the prior year, the emphasis on existing to Wincanton’s recovery in his four years in the internal and customer cost efficiencies, on customer account growth and renewal role. Following Adrian’s promotion in August operational and portfolio simplification and on together with delivering cost efficiencies once 2015, a search was conducted to appoint his generating free cash flow – will remain. again underwrote financial performance. replacement as Group Finance Director. It was Within Specialist businesses, profits were down, a pleasure to welcome Tim Lawlor to the Board Importantly, the Group now has the financial due to only a part year contribution from WRM in that role, his appointment effective from capability to also support limited scale prior to disposal and increased first half losses the end of September 2015. Tim’s extensive investments in skills and technology to both from Pullman, prior to the successful resolution experience and his ready understanding of a protect and grow the core contract logistics of its two onerous customer contracts in the demanding business to business contracting business for the longer term. This will be done second half. environment has already proved an asset. progressively, and in bite size chunks, to avoid There were no other Board changes during raising the Group’s overall risk profile. Underlying profit before tax was up 12.4% to the period. £35.3m, reflecting lower financing costs due During the coming year, the Board expects to reduced average net debt and last year’s Most importantly, the hard work and Wincanton to make continued progress. refinancing. Underlying earnings per share dedication of Wincanton’s 17,500 employees continued to advance, up by 13.3% to 23.9p. should once again be recognised. The Board appreciates that their commitment to safely Steve Marshall The focus on strengthening the balance Chairman and enthusiastically meeting the needs of our sheet continued. Net debt at the year end was customers remains one of Wincanton’s key down, from £57.6m in the prior year, to £39.5m.