Leading logistics firm Wincanton has warned this morning that a significant reduction of retail sales volumes is having an adverse effect on its business.
The firm, which conducts supply chain operations for major retailers such as Marks & Spencer, Sainsbury‘s and Asda, says that it is still trading in line with expectations but that slow sales at many of their customers will mean some of its businesses ill be “adversely impacted” over the next year.
Demand for warehouse space has reduced, meaning excess property in the group, and Wincanton will continue to look for ways to reduce costs through efficiencies to offset this decline.
Eric Born, CEO of Wincanton, said: “The year ended 31 March 2012 has been a year of transition for Wincanton, set against an economic environment that is very difficult.
“The disposal of the Mainland European businesses has enabled the Group to focus on the core UK and Ireland businesses, reduce overall debt levels and refinance its existing bank facilities.”
Wincanton finalised a refinancing agreement in January this year, with the group now operating a £185 million committed bank facility which will mature in 2015, and a separate £75 million term facility which matures in 2021.
Substantial investment has already been committed by Wincanton to developing improved product solutions and exploring future growth opportunities over the next few years.
With the outlook for many of its retail clients looking challenging, the group is also looking to reduce its net debt in order to achieve a more sustainable level in context of its continuing operations.
Born continued: “Our focus remains on stabilising and maximising opportunities in the core business whilst developing product solutions that will provide profitable growth in the future and enable us to further reduce our average net debt.”