Part 227 Feb 2020 19:50
interesting time to come to Wincanton, with the likes of DHL, XPO, Kuehne + Nagel and ESL making every sector “fiercely competitive”.
He’s understandably cagey on the specifics of his forward strategy but insists his predecessor Adrian Colman did “fantastically well” and that he plans an “evolution rather than a revolution”.
He’s not afraid to touch on Wincanton’s well-documented past problems either. In fact he’s honest enough to admit that five or six years ago the company had “survival problems” created by purchasing companies in Europe and not being able to successfully integrate and manage them. “That led to a retrenchment back to the UK,” he explains, “and created a lot of debt.”
But with those troubles resolved, and in light of his interest in ESL, are any other acquisitions on the agenda?
“ESL was very much opportunistic when the share price was suspended,” he says. “It has always been on our board’s radar but never actively pursued. The straight answer is no but we’ll consider an M&A approach as part of the strategy.
“It was interesting, through the Stobart discussions, that our shareholders and the market were supportive of us considering acquisitions. But nobody wants us to go on an acquisition spree just to get bigger for the sake of it.”
That said, Wroath reveals there are markets where taking Wincanton’s expertise and being able to build on that with partners would be “interesting”.
“In the modern supply chain you don’t have to acquire, you can partner, particularly in IT but also in robotics for example. Strategic partnerships with smaller more agile organisations can really drive customer value.”
Review of strategy
Wroath also rejects claims that when he arrived he ordered a strategy review: “It’s a review of strategy not a strategy review which are two very different things in the public world,” he smiles. “The one area for improvement is growth. Growth in contract logistics is really easy if you don’t worry about making money out of it. Profitable growth is really tough. You have to pick the right skills and services and leverage those two and drive yourself into the markets where there’s more opportunity.”
But asked where those opportunities might be, he’s less forthcoming. You sense he’s keen to tell the sector he’s arrived, but less inclined to reveal his hand in any detail.
“We’re still looking at that,” he says. “We‘re not leaping into stuff we don’t do. In contract logistics, operational credibility is critical. We’ll be cautious about how public we are. I don’t warn the competition that we’re making investments in certain markets. The moves we make will generally be in markets we’re already in or are developing in new and interesting ways.”
Wroath is also content with Wincanton’s half-year results to September 2019 which revealed a 5.3% fall in group pre-tax profits, year-on-year, to £28.5m but a 1.9% rise in group revenue to £592.9m. Underlying profit before tax climbed 9% to £26.3m, w
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