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The online shopping boom during the coronavirus pandemic has significantly boosted revenues and profits at logistics group Wincanton.
Profitability continued to improve in July and August, with a particularly strong performance in digital and e-fulfilment, the group said in a trading update this morning.
The two areas were benefitting from an increase in demand for online retail, with revenue significantly ahead of pre-Covid-19 levels, added the third-party logistics provider to the likes of Morrisons, Asda and Waitrose.
Volumes in the two-person home delivery business within this sector have remained high through the summer months.
Margins in digital and e-fulfilment businesses have also improved as a result of cost management and operational efficiencies.
Wincanton said performance across the rest of the group was “encouraging”, supported by changes to the cost base implemented earlier in the year at the height of the outbreak.
“Given the combination of Wincanton’s improved trading performance, cost intervention measures and the recovering economy, the board expects results for the current year to be materially ahead of market expectations,” it added.
“This continues to assume no further Covid-19 impact that severely affects the business.”
The balance sheet also remained healthy, with strong cash collection and a robust working capital position, according to the trading update.
Shares in Wincanton shot up 10% to 197.5p as markets opened on the back of the positive update.
Morning update
After a busy day on the markets yesterday, things are much quieter this morning.
The FTSE 100 opened on the front foot today after yesterday’s losses, climbing up by 0.5% to 5,962pts.
Bakkavor has continued its march upwards, rising another 2.3% to 59.7p. Unilever is also among the morning’s risers, up 1.75 to 4,647p, as it Greencore, up 1.4% to 119.4p.
The sell-off continued at WH Smith and McColl’s Retail Group, falling 6% to 1,117p and 2.7% to 23.6p respectively. Marston’s opened down 7% to 48p and Pets at Home also fell by 2.4% to 285p.
Yesterday in the City
The FSTE 100 slipped into the red in the afternoon to finish the day down 0.1% to 5,930.30pts as fears over a no-deal Brexit spooked the City and investors in the US continueds to sell-off tech shares.
Grocery fallers from the blue-chip index included Primark owner Associated British Foods, down 3.9% to 1,959p, B&M European Value Retail, down 1.2%, and Compass Group, down 1.3% to 1,257p.
Household goods manufacturer McBride slumped 4.6% to 62.8p after it posted a 2.1% drop in full-year group revenues to £706.2m.
Other big fallers yesterday included SSP Group, down 7.1% to 252.6p, McColl’s Retail Group, down 7.1% to 24.3p, and WH Smith, down 5.5% to 1,188p.
Fever-Tree shares plunged yesterday morning after revealing a big drop sales and profits in the first half as it was hit by bar closures during the coronavirus lockdown. However, investor sentiment picked up in the afternoon and shares in the premium mixer brand ended the day up 1.3% to 2,147p.
Bakkavor surged another 5.1% to 58.3p as the ready meal and food-to-go manufacturer proved its resilience in the first half despite being affected by the pandemic. Revenues at the business fell almost 5% in the first six months of 2020, but it flagged an improvement in May and June as volumes stablised.
DS Smith soared 8% to 294.8p after the packaging group revealed it would declare an interim divident when it releases its first-half results later in the year.
Applegreen was up 1.6% to 320p after it announced it was part of a consortium awarded a 33-year lease for the design, construction, financing, operation and maintenance of the 27 motorway service areas on the New York State Thruway.
Risers also included C&C Group, up 4.9% to 215p, AG Barr, up 1.3% to 393p, and Diageo, up 2.2% to 2,600.5p.
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