Challenging year ahead compounded by contract loss but Wincanton remains positive on growth Wincanton issues profit warning after loss of major HMRC contract

By Carol Millett

Wincanton has issued a profit warning after losing a major contract with HM Revenue and Customs (HMRC) to French contract catering giant Sodexo following a retendering process.

The five-year contract, first awarded to Wincanton in 2019, had an estimated value of £71m. It involved the provision of logistics services to support UK customs with establishing and operating inland depots and storage locations for goods imported via sea, air, road and rail freight.

The Wiltshire-based firm said it was “extremely disappointed” to lose the HMRC deal following a “well-executed implementation”, which it said the group had delivered in “exceptionally shortened timescales”. The company also noted that it has delivered an “acknowledged strong performance over the past two years”.

According to the Financial Times, Sodexo has a market capitalisation of £12bn versus Wincanton’s £300m and is looking to diversify its portfolio of services.

A Wincanton spokesman said: “Alongside the loss of this contract, and as previously announced, Wincanton continues to expect a more challenging external environment in the coming financial year, including an accelerated reduction in consumer spending and customer volumes.

“The combination of these factors will impact financial performance in FY24. The group now forecasts a reduced profit before tax for FY24 materially lower than current market consensus.”

Mike Parr, MD of Kent-based perishable goods haulier PML told MT the news “makes a mockery of everything that Brexit was supposed to stand for” and that Sodexo’s experience is “not exactly commensurate with managing international border control posts”.

“Sodexo is also the company that was caught up in the 2013 horse meat scandal, when it was forced to withdraw all frozen beef products from the UK following positive testing for horse DNA,” he added. “Again, not exactly instilling confidence when considering the magnitude of their impending responsibilities as custodians of best practice for imported and exported food.

“It would appear that price, rather than quality of service, has been the deciding factor for those in control of the border control posts, which is ironic when so many businesses in the UK have lost money in their attempts to keep up with the constantly changing Brexit protocol goalposts,” he concluded.

On a more positive note, Wincanton said it continues to see significant growth opportunities across both the e-fulfilment and public and industrial sectors, alongside its core and “resilient” general merchandise and grocery and consumer sectors.

It will also continue to develop its automated warehouse and transport technology, which it said will “significantly” increase the value of the business over the medium term. Wincanton confirmed that it remains confident in its strategy and its ability to deliver sustainable growth.