Wincanton posts record profit as IKEA partnership strengthens

Logistics business Wincanton plc has announced a growth in sales and profit, delivered against a ‘challenging external environment’,

According to its preliminary results for the year ended 31 March 2023, total sales rose 2.9% to £1.46bn from £1.42bn in 2022. Underlying profit before tax increased 6.9% to £62.1m, a record result for the company.

Wincanton, which provides services for furniture retailers including Loaf, Dwell, DFS, IKEA and The White Company, said that major new business wins were secured across all four of the Group’s sectors, with significant contract renewals also agreed with long-standing customers including Sainsbury’s, while also doubling its business with IKEA.

“We had a fantastic year developing our partnership with IKEA. Firstly, we were chosen to run their new London area customer distribution centre at Dartford,” Wincanton said. “The 450k sq ft purpose-built facility opened in May 2023. Additionally, we have extended our final mile home delivery services out of the new location, doubling our current final mile activity. Excitingly, the new contract also commits us to work collaboratively on a full electric vehicle operation by 2025.

“Finally, we will also be setting up IKEA’s first customer distribution centre for the Irish market in 2024. In doing so, we are taking on new property in Dublin that has capacity to support Wincanton’s growth in Ireland. These three new contracts underline the trust that IKEA has in Wincanton and the value that we bring to the partnership.”

Commenting on its contract extensions with both Loaf and DFS, Wincanton added: “We built on our reputation for continued service performance excellence, despite the challenges brought about by global supply issues. We also extended our partnership with DFS with the addition of a new service overseeing the end-to-end management of all customer orders through multiple suppliers, known as “drop-ship vending”.”

During the year, the company invested in robotics and automation technologies, with successful deployment of Autonomous Mobile Robots at the Group’s Cygnia facility.

While challenging economic conditions are expected to continue in the new financial year, Wincanton forecasts results for FY24 in line with market expectations.

James Wroath, Chief Executive Officer, said: “Our strategy delivered a strong result in FY23 despite the prevailing macro-economic challenges, particularly with regard to retail volumes and inflation. We continue to invest in technology as the route to deliver competitive advantage in the industry. Significant opportunities remain for warehouse automation across our Group, both in the foundation sectors and strategic growth markets.

“Furthermore, our transport operations have had a shift in focus with technology at the heart of our new market proposition. I am thankful to the Wincanton team who has delivered excellent performance in a difficult economy. Their determination and innovation will continue to be essential, as we expect volumes to remain under pressure into FY24 due to the macro-economic environment.”

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