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At the heart of
British supply chains
Annual report and accounts 2022
Our purpose roadmap
Our purpose
Great people delivering sustainable supply chain value.
Read more on p12
Our strategic ambitions
Already underway, transforming who we are and how we work.
Financial ambitions
We will look to profitably
grow the business through
focusing on our strategic
growth markets while
continuing development of our
foundation markets.
People ambitions
We will do everything we
can to provide an inclusive
environment, to make sure
our colleagues are safe at
work and have the support
they need to have long
and enjoyable careers with
Wincanton. We will focus
on people retention and
encouraging supply chain and
logistics as a career choice.
Future ambitions: technology
and sustainability
Through our innovation activities supporting
the deployment of technology to provide
efficiencies we will:
– support our customers to navigate the supply chain
challenges of tomorrow
– develop new propositions with a clearly defined
technology-enabled service provision, alongside the
traditional physical fulfilment
– transform the consumer experience and grow our
customers’ market share.
wincanton.co.uk/why-
wincanton/our-people/
wincanton.co.uk/why-
wincanton/innovation/
We have set ambitious goals to achieve net-zero by 2040: to have carbon neutral home delivery operations in 2022
and to be carbon neutral for all our own non-transport operations from 2025.
Our strategic pillars
Our key strategic
areas of focus drive
positive gains across
the business.
Read more on p16
Our products
and services
Our
markets
Our
operating
model
Our
people
The
Wincanton
Way
Our ESG commitment is to the delivery of long term,
sustainable supply chain solutions which have a
positive impact on all of our stakeholders.
Read more on p22
Environmental
Building the road to net-zero
by 2040: a commitment to
being the leading supply
chain partner of net-zero
solutions for fleet, property
and waste.
Social
Celebrating diversity,
fostering a safe, empowering
and inclusive workplace and
supporting the communities
in which we operate.
Governance
Ensuring direction and
control of our business
through effective
management, culture,
systems and processes.
Summary of compliance
Highlights
Group highlights
ESG highlights
Revenue
Underlying EBITDA1
Profit before tax
Carbon intensity
£1,421.4m
+16.3%
£108.3m
+13.8%
£54.8m
+18.6%
235 tCO2e/£m rev
-12.9%
Underlying profit before tax1
£58.1m
+23.1%
Underlying earnings
per share1
40.8p
+27.5%
Basic earnings
per share
38.6p
+22.5%
Waste recycling
54.7%
+18.4%
Underlying profit before
tax margin
4.1%
+20bps
Net cash1
Dividend per share
Employee engagement score
£3.7m
-68.9%
12.0p
+15.9%
69%
+3.0%
1 Alternative performance measures (APMs): See page 42 and Notes 3, 9 and 30 to the consolidated financial statements for further information on
these underlying measures, including definitions and a reconciliation of APMs to statutory measures.
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Contents
Strategic report
IFC Our purpose roadmap
001 Highlights
002 At a glance
004 Our investment case
006 Chair’s statement
008 Chief Executive Officer’s review
014 Market review
016 Strategy
018 Business model
020 Our KPIs
022
034
035
ESG and sustainability
Section 172 statement
Task Force on Climate-related
Financial Disclosures (TCFD)
036 Chief Financial Officer’s review
044 Risk report
Introduction from the Chair
Governance
052
053 Summary of compliance
056 Board of Directors
058 Governance structure
066 Nomination Committee report
070 Audit Committee report
075 Directors’ remuneration report
089 Directors’ Remuneration Policy
092 Directors’ report
095
096 Independent auditor’s report
Statement of Directors’ responsibilities
Accounts
104
105
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash flows
Notes to the consolidated financial
statements
Wincanton plc Company balance sheet
Wincanton plc Company statement of
changes in equity
Notes to the Wincanton plc
Company financial statements
Group five year record
Shareholder information
Board of Directors and advisers
106
107
108
109
145
146
147
149
150
152
Non-financial information statement
As required by the non-financial reporting requirements of sections 414A and 414CB of the Companies Act 2006, information on
environmental matters, the Group’s employees, social matters, respect for human rights and anti-corruption and anti-bribery are included
within the ESG section of the Annual Report on pages 22 to 32. Details of our business model can be found on pages 18 and 19,
principal risks and our response to them are on pages 49 to 51 and non-financial key performance indicators are on page 20.
Wincanton plc Annual report and accounts 2022 – 001
At a glance
Wincanton is a leading supply chain
partner for British business, providing
supply chain solutions up and down the
country with colleagues working across
more than 170 sites.
What we do
High volume
eFulfilment
– Carrier
management services
– Returns management
– Picking and packing
– Two-person premium
home delivery
– Grocery ‘dark stores’
Extended supply chain
management
– Inbound logistics
for manufacturing
Large scale
outsourced operations
– Storage handling
and distribution
– Transport control tower
design and operation
– Transport and warehouse
asset management
– Extended materials
management and
consolidation
– Inspection and control
Innovation
– Turnkey automation
and robotics
– Future network design
and optimisation
– Artificial Intelligence (AI)
and data analytics
Read more about our business model on p18
Key facts
£1.4bn
revenue
170+
sites
16.1m sq ft
warehousing space
20,300
colleagues
5,380
drivers
8,500
vehicles responsible for
002 – Wincanton plc Annual report and accounts 2022
Our key sectors
Percentage of Group revenue
eFulfilment
Technology focused sector to support
the growing eCommerce market.
Revenue
Markets served:
£223.2m
– eCommerce, including high volume
eFulfilment, and value-added
services
– Grocery home delivery and
Customer Fulfilment Centre (CFC)
– Omnichannel retail
wincanton.co.uk/what-we-do/
eFulfilment/
Grocery and Consumer
Food focused sector creating a logical
connection in one of the UK’s most
critical supply chains.
£517.6m
Revenue
Markets served:
– Grocery
– Consumer packaged goods
wincanton.co.uk/what-we-do/
grocery-and-consumer/
eFulfilment
16+
15.7%
Grocery and
Consumer
37+
36.4%
General Merchandise
Non-food retail focused sector to
meet the evolving needs of major
multichannel customers.
£396.4m
Revenue
Markets served:
– Non-food retail
– Manufacturers and distributors
wincanton.co.uk/what-we-do/
general-merchandise/
Public and Industrial
Services focused sector for customers
in government and public sector,
infrastructure, defence, construction
and energy.
£284.2m
Revenue
Markets served:
– Public sector
– Infrastructure
– Healthcare
– Defence
– Building materials
– Fuel and gases
– Bulk food
General
Merchandise
28+
27.9%
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Public and
Industrial
20+
20.0%
wincanton.co.uk/what-we-do/
public-and-industrial/
Wincanton plc Annual report and accounts 2022 – 003
72
+
J
80
+
J
63
+
J
84
+
J
Our investment case
Five reasons to invest in Wincanton
1
2
3
A supply chain
partner of choice
for UK businesses
Delivering value
through
innovation
– Trusted partner to
– Innovation at the heart
businesses and public
sector organisations
with long term
customer relationships
– Strong heritage of
providing a broad
spectrum of contract
logistics services and
delivering sustainable
supply chain value
– Scale delivers resilient
operations and the ability
to respond to rapidly
changing markets
of the service proposition,
continually evolving
the offering to respond
to the changing needs
of customers
– Strategic focus on
eCommerce and
eFulfilment sector boosted
by recent acquisition
of Cygnia Logistics and
our state of the art
eFulfilment facility (The
WEB)
Investing
in growth
– Disciplined growth
through a selective
approach to new business
in attractive markets
– Positioned to take share
in growth and higher
margin markets – retail
omnichannel and pureplay
eFulfilment; consumer
products; infrastructure
development; and the
public sector
– Building on a well-
established position in
our foundation markets
of General Merchandise
and Grocery & Consumer
See business model on p18
See KPIs on p20
See KPIs on p20
004 – Wincanton plc Annual report and accounts 2022
4
5
Financially
resilient and cash
generative
– Consistent track record
of delivering returns,
underpinned by
multiyear contracts
– Strong cash generation and
working capital position;
refinancing secured through
to 2026
– Strong financial profile
facilitates complementary,
earnings accretive acquisitions
– Total shareholder return
consistently outperforming
market comparators
Committed
to sustainable
business practices
– Delivering long term,
sustainable solutions to
customers and committed
to leading the way
in responsible supply
chain management
– Plans to reduce emissions
across our business, with
a Group target of net-zero
by 2040
– A positive working
culture underpinned by
the guiding principles of
The Wincanton Way
– Investing in programmes
to ensure a talented,
sustainable and
diverse workforce
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Underpinned by a
strong track record
of delivery
Revenue
£1,421.4m
+16.3%
Consolidated Group revenue:
2022
2021
2020
2019
2018
£1,421.4m
£1,221.9m
£1,201.2m
£1,141.5m
£1,171.9m
Underlying PBT
£58.1m
+23.1%
Statutory PBT £54.8m
(2021: £46.2m as restated)
2022
2021
2020
2019
2018
£58.1m
£47.2m
£52.8m
£49.3m
£46.4m
Dividends declared
12.00p
(2021: 10.35p)
Final recommended dividend for 2022
of 8.0p per share
2022
2021
2020
2019
2018
12.00p
10.35p
3.90p
10.89p
9.90p
Basic underlying EPS
40.8p
+27.5%
Statutory basic EPS 38.6p (2021: 31.5p)
2022
2021
2020
2019
2018
40.8p
32.0p
36.1p
33.5p
30.8p
See financial review on p36
See ESG on p22
See KPIs on p20
Wincanton plc Annual report and accounts 2022 – 005
Chair’s statement
A year of strong growth in both underlying
revenue and profit.
Dr. Martin Read CBE
Chair
Introduction
I am pleased to report that Wincanton
has had a successful year despite the
continuing problems arising from Covid-19
and supply chain disruption. Revenue in
the year ending March 2022 grew 16.3% to
£1,421.4m. This compares with £1,201.2m
in the pre-Covid-19 year ending March
2020 which included revenue from the
now divested Containers and Pullman
businesses. In the year ending March 2022
revenues excluding disposed businesses,
increased by 21.4%.
The growth in underlying profit before tax
in the year ending March 2022 was also
strong, up 23.1% to £58.1m. This compares
with £52.8m in the pre-Covid-19 year
ending March 2020.
Over the last five years, our balance
sheet has been transformed. This enables
us to invest in the business and pursue
growth opportunities.
The funding of our pension scheme
continues to improve and the deficit
recovery programme is tracking well
ahead of expectations. We ended the
year with a substantial accounting surplus
against a deficit of £78.4m five years ago.
The next pension triennial valuation is due
in March 2023.
Crucially, encouraging progress has
been made in delivering against our
strategic initiatives. This has strengthened
our position as we enter the new
financial year.
Our people
This is the second year that the Company
has had to operate against a backdrop
of Covid-19 and significant supply chain
disruption. That we have successfully
overcome the difficulties and exceeded
expectations is in no small measure due
to the commitment and resourcefulness
of our people and I should like to thank
each one of them for their hard work
and loyalty.
I should also like to congratulate our
colleagues for yet another improvement
this year in the Company’s already
outstanding health and safety record.
The details can be found on page 28.
The last two years have greatly
increased the public’s understanding of
the importance of the logistics industry
and the contribution made by the people
who work in it. This has recently been
underlined by the shortage of labour,
particularly HGV drivers. Wincanton has
worked hard to attract, train and retain
006 – Wincanton plc Annual report and accounts 2022
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of Health and Social Care in delivering
Covid-19 related services and we won a
major contract with the Department for the
Environment, Food and Rural Affairs (Defra)
to operate border checks on plants and
animals being imported into the country.
We have also stepped up our activities
in infrastructure-related businesses.
Focus on our four core divisions provides
us with a diverse range of customers,
considerable stability and strong platforms
for growth. In addition, we have stepped
up our investment in technology to raise
productivity and provide cutting edge
solutions for our customers. This investment
includes the deployment of Autonomous
Mobile Robots (AMRs) for eFulfilment,
Winsight-ORTEC to underpin our digital
transport proposition and Oracle Cloud
to transform our back office processes.
We believe the repositioning we have
undertaken over the last two years provides
us with an excellent base from which to
expand our business in the years ahead.
Further details on the development of
our strategy are given in our CEO’s review
on pages 8 to 12.
Outlook
Despite the continued difficulties arising
from the pandemic and industry wide
challenges such as driver shortages, the
Group remains well positioned to achieve
growth in its chosen markets and continues
to invest in innovation and in implementing
its strategy.
We have little direct exposure to the conflict
in Ukraine or the economic sanctions placed
on Russia and we continue to work with our
customers to address the effects of inflation
and fuel cost increases.
While we are cautious about the state
of the economy and consumer sentiment,
we remain confident in the future growth
opportunities across all four of our sectors
and in the continued delivery of our strategy.
Dr. Martin Read CBE
Chair
19 May 2022
Dividend
The Board is recommending a final dividend
of 8.00p for the year ending March 2022. If
approved at our Annual General Meeting,
this will take the total dividend for the
year to 12.00p, which is in line with our
progressive dividend policy. This compares
with 10.35p in the year ending March 2021
and 10.89p in the year ending March 2019,
which was the last dividend before decisions
started to be affected by Covid.
Environmental, social
and governance
Wincanton has well developed and
robust governance policies in place and
has always taken a strong interest in the
communities in which it operates. In recent
years, we have placed increasing emphasis
on environmental issues. Last year, we
introduced an environmental strategy with
explicit goals, including net-zero by 2040
for our total business. We also targeted
and achieved carbon neutral premium
home delivery operations in the year ending
March 2022.
Developing and progressing our
environmental strategy is driven by a
committee of our executive team chaired
by our CEO. Debbie Lentz, one of our
Non-executive Directors, also sits on this
committee and provides an additional
interface to the Board. Further details
are given on page 32.
Strategic development
Good progress has been made in delivering
the strategy which we developed in the
summer of 2020 and significant changes
were made in our structure last year to
reflect our new direction.
During the year, we considerably
strengthened our capabilities in eFulfilment,
capitalising on changing retail and consumer
trends which have been accelerated by the
pandemic. Our state of the art, automated
eFulfilment facility in Rockingham (The WEB)
and our acquisition of Cygnia have been key
components in progressing our strategy.
The integration of Cygnia has progressed
well and we welcome our new colleagues to
Wincanton. We look forward to working with
them to grow our business in the promising
mid-sized company market.
In the public sector, our commercial
relationship with HM Revenue & Customs
has continued to grow, supporting new
customs arrangements which came into
force from the beginning of 2022. In
addition, we assisted the Department
Wincanton plc Annual report and accounts 2022 – 007
drivers and other workers. One of our key
initiatives has been the launch of our Future
Drivers Programme, aimed at developing a
stronger flow of drivers into the business.
We have also been active in making
representations to government on practical
short and medium term measures to address
the problems.
We have continued to strengthen our
communication with our workforce including
the launch of our intranet ‘MyPlace’, as well
as making good progress in delivering our
Diversity and Inclusion Strategy. Further
details are given on pages 29 to 30.
The Board
Tim Lawlor our CFO left the Company in
March to take up a position at Countryside
Partnerships plc. We thank him for his
important contribution to the Company
over the last six years. The Board is currently
engaged in a search for a new CFO. In
the meantime, we are grateful to James
Clarke, Finance Director, UK & Ireland,
who has stepped up to take on the role
of interim CFO.
During the year ending March 2022, we
undertook an internal Board evaluation
which confirmed that the Board continues
to function well. Further details are given
in the Report of the Nomination Committee
on page 66. An external Board evaluation
will take place in the new financial year.
We have put in place a strong Board at
Wincanton with a wide variety of experience
and diversity of thought. I should like
to thank my Board colleagues for their
continued diligence and commitment.
Chief Executive Officer’s review
Wincanton has delivered another strong set
of results, with growth across all four sectors
leading to a substantial increase in revenue
and profit ahead of pre-pandemic levels.
James Wroath
Chief Executive Officer
Introduction
Wincanton has delivered another strong
set of results, with growth across all four
sectors leading to a substantial increase in
revenue and profit ahead of pre-pandemic
levels. The core foundation sectors
of Grocery & Consumer and General
Merchandise continue to be a source
of strength for the Group, and we have
made significant progress in our focused
growth markets of Public & Industrial
and eFulfilment.
We have invested behind our strategy,
particularly in eCommerce with the
successful integration of Cygnia Logistics
and the eFulfilment capacity created at
The WEB, Rockingham. We continue to
develop automation solutions and robotic
technologies to create supply chains
that are efficient, agile and resilient.
This approach, coupled with Wincanton’s
longstanding reputation for high quality
service delivery enabled us to secure a
number of high-profile new contracts
and extensions.
I want to thank all our people who have
driven this performance through their
relentless attention on delivering for our
customers in what were often challenging
operating conditions. While mindful about
the macroeconomic headwinds facing our
sector, we are confident in the growth
opportunities we have ahead of us and
in our continued ability to deliver our
strategy successfully.
Group performance overview
Financial performance for the year
ended 31 March 2022 was excellent, with
revenue increasing 16.3% versus last
year and importantly also up by 18.3% on
pre-pandemic levels (2020: £1,201.2m).
Retail volumes remained strong and we
saw the benefit of new contract wins,
particularly in our key strategic growth
markets: eCommerce; Public sector;
and Infrastructure.
Underlying profit before tax increased
by 23.1% against last year and was up
10.0% on pre-pandemic levels (2020:
£52.8m), demonstrating the Group’s
positive momentum. We are in attractive
markets with widening opportunities.
Our performance was good despite
inflationary pressures experienced this
year together with the lag effect of price
renegotiations with customers. We remain
vigilant to respond to future market
conditions as necessary.
008 – Wincanton plc Annual report and accounts 2022
Automation and robotics are central to
our strategy to drive service enhancement
and efficiency in this sector. The WEB,
Rockingham, is our new highly automated
facility, and during the year further
investments in robotic technology in our
Nuneaton and Cygnia operations have been
made. The demand from the market for later
cut-off times and lower cost to serve will
provide opportunities and deliver attractive
returns and growth in the coming years.
The announcement of our contract
with The White Company is a milestone
for Wincanton. They are a premium
omnichannel retailer who have recognised
the huge benefit our approach will afford
them, and they will be a cornerstone
customer in Rockingham. The acquisition of
Cygnia further diversifies our portfolio, and
we are delighted to welcome brands such
as Molton Brown, Feelunique, Moonpig,
BrewDog and Whittard of Chelsea to our
customer base. Brands such as these, allied
to Wincanton’s significant retail logistics
reputation, are already leading to exciting
growth opportunities with new customers.
End-to-end capabilities are essential in
eFulfilment, so it was pleasing to have
onboarded new customers such as Wickes
and City Plumbing Supplies onto our carrier
management services platform. These
customers, when added to the Cygnia
volumes, increase our scale and buying
power significantly in this critical area.
Further new business with DFS in our two-
person home delivery network, an extension
of this service for Wickes and the award
of IKEA’s new Dartford distribution centre
further demonstrate Wincanton’s strength
and reputation in this growth sector.
Public & Industrial
Our Public & Industrial sector has gone
from strength to strength. Revenue was up
15.7% on a pandemic-impacted year, and
importantly was up 6% on the year ended
31 March 2020 as construction volumes were
more consistent and the full year effect of
our HMRC contract was realised.
We continued to build on our relationship
with the public sector and in particular
our inland border operations for the UK
Government. We secured an additional
contract with the Department for
Environment, Food and Rural Affairs (Defra)
and expanded the number of Inland Border
Clearance facilities. We also continued
our support operations for the national
pandemic response, shipping over one
billion Covid-19 tests throughout the UK and
managing the storage of PPE.
The recovery in volumes in our construction
business brought operational and commercial
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challenges, with demand uneven and
resources stretched, particularly for
mechanical-offload vehicles. We successfully
concluded price renegotiations with many
customers passing through the impact
of wage inflation. Our discipline on re-
tendering, pricing and margins has resulted
in some lost business but our offering
remains well positioned in the market.
Finally, we secured long-term extensions
to our key relationships in the defence and
infrastructure markets with BAE Systems
and Alstom.
Grocery & Consumer
Our Grocery & Consumer sector continued
to perform well throughout the year despite
challenges with drivers and high levels of
Covid-19 absence. Record volumes were
again delivered, often twice: once from our
consumer goods warehouses to retailers;
and again when we picked and delivered
them from supermarket distribution centres
into stores.
As a result, revenue was up 15.8% year
on year, despite the previous year already
seeing strong pandemic-driven volumes.
Additional transport business was awarded
by Asda in the North West and important
renewals were secured with Co-op, Nestlé
Purina and La Doria. However, some lost
business illustrates the necessity to continue
working on growth opportunities in the
sector for which we have a healthy pipeline.
General Merchandise
The General Merchandise sector continued
to support new and existing customers
through a period of increased volumes as the
pandemic and lockdowns focused customer
demand on life at home. Consequently,
revenue was 18.6% higher versus last year
and over 32.5% against the year ended
31 March 2020.
We completed automation and robotics
projects in two of our Kingfisher distribution
centres, increasing throughput and reducing
reliance on people as the labour market
tightened. We also opened a new dedicated
location for the Kingfisher Group, as well
as launching an operation for them in
The WEB, Rockingham.
Notably, we entered the apparel market this
year with a five-year Primark contract for the
provision of transport services. Wincanton
will make more than 50,000 deliveries to 191
stores across the UK each year and deliver
significant operational efficiencies to the
supply chain.
Finally, we also commenced a toys and
games warehouse and transport operation
for MGA Entertainment, further broadening
our General Merchandise offering.
Wincanton plc Annual report and accounts 2022 – 009
Our service levels remain excellent, and
Wincanton’s reputation and track record for
delivering at scale for customers continues
to be industry-leading. Notwithstanding
the well-publicised challenges around driver
and warehouse resource availability in our
industry during the year, we worked closely
with our customers to mitigate these issues
and kept the country moving, clothed,
fed, and of course supplied with essential
Covid-19 tests and personal protective
equipment (PPE) during the pandemic.
Our industry leading safety programme
remains a clear priority for Wincanton.
This year we outperformed our Group Lost
Time Incident Frequency Rate performance
indicator target, which was 0.37 for the year,
by achieving 0.33 (2021: 0.32).
Sector performance
eFulfilment
Our three major sub-markets within
eFulfilment all made major strides forward
in the year. Overall revenue has grown to
over £220m this year from £115m in the year
ended 31 March 2020. In two-person home
delivery, volumes continued to accelerate
and will be further boosted by a three year
contract extension with Loaf starting in
June 2022. In omnichannel, the ramp-up
of our ‘dark store’ operations for Waitrose
& Partners has driven further growth
alongside wins including Dobbies Garden
Centres. Finally, in high-volume eFulfilment
we made major investments with the
acquisition of Cygnia and the new facility
The WEB, Rockingham, to significantly
increase our scale and presence in this
high-growth market.
Chief Executive Officer’s review continued
reviewed our own supply chains and
procurement channels and remain mindful
of the ongoing geo-political and macro-
economic uncertainties. Management
continues to closely monitor key suppliers,
though we remain confident that our
supply channels are robust.
Retail markets have stabilised in recent
months following the relaxation of
Covid-19 restrictions although there
has been a significant impact from the
pandemic with high levels of staff absence
across all sectors. The stop-start pattern
of lockdowns through 2020 and 2021 has
made comparison of our financial results
more challenging, with significant swings
between H1 and H2.
Wincanton is largely protected from the
recent increases in fuel prices through
the fuel price escalation clauses built into
many of our contracts with customers and,
with 72% of revenue derived from open
book contracts, the Group is navigating
the current inflationary environment well
and does not consider it a significant risk.
The Wincanton Way, our
ESG strategy
The Group continues to build on our ESG
commitments and strategy. From an
environmental performance perspective,
although our growth led to increased
carbon emissions, our carbon intensity
ratio decreased again year-on-year, see
pages 24 to 27. Our strategy makes explicit
environmental commitments both for the
long term, net-zero carbon emissions by
2040, and for the near-term, delivering
our commitment to a carbon neutral two-
person home delivery business this year.
Additionally, we announced this year that
our own non-transport operations will be
carbon neutral by 2025. Meanwhile, we
made good progress towards our target
of doubling our recycling from residual
waste by 2025.
Engagement with our colleagues
remains a critical ingredient to our
success. Throughout the pandemic
we ran shorter pulse surveys followed
by our full bi-annual survey in the
summer. Areas of strength remain in
‘Safety’, ‘Meaningful Work’ and ‘Peer
Relationships’. Communication is an area
for improvement: this has been partially
addressed with the roll-out of our Group
wide intranet, ‘MyPlace’ in April 2022.
This enables every colleague to have
immediate access to information such as
Company news and job vacancies. New
questions were added to the survey last
year on inclusion, the results of which
were encouraging with 8 out of 10 of our
colleagues recognising our efforts towards
creating a better culture in this area.
Group Operations
The power of the structural reorganisation
implemented in 2020 was evident this
year, most obviously in the success of
the team delivering a ‘One Wincanton’
operations approach across our sectors.
In Group Transport, an industry leading
transport management system was
implemented, allowing us to increase
visibility of our transport operations
across the business for the benefit of both
our customers and our haulier partners.
This exciting initiative lays a firm
foundation for driving further efficiencies
and synergies from our transport networks
and is a differentiator in the marketplace.
Winsight Powered by ORTEC provides the
Group with a substantial opportunity to sell
Transport Control Tower services (4PL) to
the market. In this technology-led business
model, ownership or management of the
assets becomes an additional consideration
for the Group rather than the core offer.
The Group Transport team also led the
recruitment of over 480 new drivers in the
year, working across our four sectors and
with the UK Government to attract people
to the industry and to Wincanton.
Group Operations co-ordinates and leads
on the automation and robotics activities
described in this report, and we continue
to build capability and expertise via a
growing team of IT experts and engineers,
ensuring we lead the market in this area.
Furthermore, the team provides
class leading capability in continuous
improvement, start-ups, fleet operations
and compliance which are critical to both
our own and our customers’ operations.
010 – Wincanton plc Annual report and accounts 2022
In response to labour and skill shortages,
we also developed and launched an
innovative ‘labour campus’ model in
the year, hiring Wincanton permanent
colleagues and deploying them flexibly
during periods of peak activity in
geographies where we have multiple
operations.
Outlook
The Group is well positioned to maintain
its positive performance across its chosen
markets, driven by ongoing investment
in the business and continuing progress
in delivering our strategy. We remain
focused on delivering sustainable,
profitable growth over the long-term
which is underpinned by a relentless focus
on customer service. Our healthy cashflow
enables continued investment in our
people, innovations and distributions to
shareholders.
Whilst we are mindful about the macro-
economic headwinds and the potential
impact on consumer sentiment, there
is good momentum in the new business
pipeline and we remain confident in the
future growth opportunities across all four
of our sectors and in our continued ability
to deliver our strategy successfully.
Market environment
The current economic environment, driver
shortages, Covid-19, inflation and the
war in Ukraine have all created additional
pressures on the supply chain. The Board
has been shocked and saddened by
Russia’s invasion of Ukraine in February
2022 and ongoing events in the region. In
response to the conflict and the economic
sanctions placed on Russia, we have
Strategy in action
Our products and services
New supply chain reality through
next generation thinking
W² Innovation programme
W² – incorporating W² Labs, W² Partner Network and
W² Innovation Centre – is Wincanton’s way of delivering
innovation in supply chains, creating new ideas and
harnessing them to deliver real outcomes. The W² Labs
programme is open to early-stage businesses and digital
disruptors and sees entrants pitch ideas and products that
can bring efficiencies across digitised supply chains.
Last year the third W² Labs accelerator programme focused on
three categories: dark store, people and open season – safety
technology. Some 207 businesses from around the world
applied, resulting in a day of 23 ‘Dragons’ Den-style’ pitches.
The ideas from the six finalists included rack climbing robotics;
automated volume recruitment with realistic pre-hire
assessment; asset tracking and intelligence; warehouse labour
optimisation; demand forecasting; and transport visibility.
Three of these have entered extended trials within the
business as we support our products and services strategy.
A fourth accelerator programme began in March 2022, focusing
on digital fulfilment; Environmental, Social and Governance
(ESG); and a ‘wild-card’ option – technology and robotics.
This year also saw the opening of the W2 Innovation Centre at
The WEB. This unique facility demonstrates our commitment
to shaping the digital supply chains of the future through
collaboration and innovation.
Read more on p34
WSCI: transparency made simple
Our materials management solution, Winsight Supply Chain
Integrator (WSCI), plays a pivotal role in ensuring surety
of supply across many thousands of product lines, creating
transparency to better manage the flow of materials for
major infrastructure and capital projects.
Originally a bespoke system built for EDF Energy, WSCI
provides visionary supply chain control to enhance the delivery
of its £23bn Hinkley Point C nuclear power station, of which
we are the Tier 1 warehouse and transport service partner.
Here, WSCI is making engineering teams more productive,
worksites safer and reducing environmental impact.
WSCI provides total, real-time visibility of materials and
co-ordination of suppliers, significantly increasing project delivery
reliability, optimising working capital and reducing waste.
Discover how WSCI is making the complex simple
Improving warehouse processes
and efficiencies with robots
We have developed a unique solution, pairing
autonomous mobile robots (AMRs) with colleagues
using wearable technology at our shared user facility
in Nuneaton, Warwickshire.
Fully integrated with order processing and inventory
management, our robotics solution has automated the
movement of goods between order allocation, picking and
packing stations. In a fast moving and demanding eCommerce
market the solution has improved productivity, order accuracy
and stock accuracy, providing flexibility and scale during
periods of increased demand.
At all times, the needs of our customer, Neal’s Yard Remedies,
has remained at the heart of this transformation. Accurate,
automated data has reduced the number of queries to its
customer care team and no loss of service was experienced
during the implementation period. Now the concept has been
proved, we’re looking at opportunities to improve productivity
with robotics across our business.
Discover how Wincanton’s innovative approach
is improving productivity
Wincanton plc Annual report and accounts 2022 – 011
Chief Executive Officer’s review continued
The Wincanton Way, our ESG
strategy continued
There is scope to improve our ethnic
diversity across the business. We are
one of the first signatories of the
CBI’s Change the Race: Ratio Charter
showing our commitment to improving
our representation of ethnic minority
groups. Alongside this external pledge,
we have spent time with groups across
our business to understand some of the
perceived barriers to attracting talent
from such backgrounds and identifying
opportunities to improve. Education of all
our line managers is key to this, starting
at the very top.
We are also seeking to improve our
support for under-represented groups
and in the past year we have introduced
practical initiatives into employment
including ex-offenders and ex-service
personnel, as well as offering work
experience opportunities to those
with physical or learning disabilities.
Our culture remains focused on health,
safety and wellbeing; learning and
development; diversity and inclusion; and
colleague engagement. Our sites actively
work with their communities, fundraising
for local schemes.
Our graduate group, the Wincantoneers,
raised £13,000 for the Prince’s Trust
which has been matched by the Group,
and they were a runner-up for the ‘Shoot
for the Stars Award’. We use initiatives
such as a funding match to encourage
further involvement in social engagement
and most recently the Group matched
colleagues’ local fundraising totals for
victims of the Ukraine conflict.
For governance, we have continued
to build on our Code of Conduct,
strengthening our awareness programmes
around ‘Speaking Up’, ‘Modern Slavery’,
‘Data Protection’ and ‘Anti-Bribery and
Corruption’. Our governance framework
is embedded within the business and has
been supplemented this year with an ESG
Committee of which I am Chair.
Delivering on our strategy
The Executive Management Team
and Board remain focused on
Wincanton’s vision:
Great people
delivering sustainable
supply chain value.
012 – Wincanton plc Annual report and accounts 2022
We deliver this through the continued
development of our people, alongside
technology enabled products for our
chosen markets.
We have a clear market strategy. Grocery,
consumer, non-food retail markets,
building materials, fuel and gases and
bulk food markets form the foundation
of our business, providing scale as well
as demonstrating capability in the highest
pace supply chain environments. We are
optimistic about our sales pipeline across
all of these markets.
Meanwhile, we have made key moves
in the markets we have identified as
key strategic growth opportunities,
being eCommerce, public sector and
infrastructure.
We acquired Cygnia, a specialist in
multichannel fulfilment with expertise
spanning the full breadth of their
customers’ requirements, including
high-volume order fulfilment, returns
and carrier management services. Cygnia
has approximately 700 colleagues across
three sites. The acquisition boosts our
reputation in the market and broadens
our customer base. Cygnia’s shared-user
model does expose us to more risk with
volumes than our more traditional open-
book dedicated retail contracts. This year’s
peak season did highlight this, with trading
softer than expected; however, we remain
convinced that it will be a driver of longer-
term growth in eCommerce. Furthermore,
as our first acquisition in over ten years
it paves the way for further selective
bolt-on opportunities.
We have also invested in property
specifically for eFulfilment. Critically,
however, we have done so alongside
automation and robotics deployment.
We see a clear opportunity in the
market for a pureplay logistics provider
to offer customers efficient, scalable
services to drive the growth of their
businesses. In doing so, we believe
there will be opportunities for increased
Wincanton margins.
The Group continues to invest in supply
chain innovation enabled by our W2 Labs
programme; digital solutions to support
people recruitment, asset tracking and
warehouse performance management
are all in extended pilots. In Nuneaton,
we deployed our first Autonomous Mobile
Robots (AMRs) in combination with glove
technology to improve speed, accuracy
and safety for Neal’s Yard Remedies.
Further deployment of AMRs across
our warehousing businesses is ongoing.
Wincanton’s presence in public sector
logistics has increased significantly,
delivering solutions to HMRC, Defra,
Department for Transport (DfT) and
Department of Health & Social Care
(DHSC) that are underpinned by scalable
IT systems.
Finally, Winsight Supply Chain Integrator
(WSCI), our major infrastructure product
designed for EDF, is live and is attracting
substantial interest from similar large-
scale projects.
James Wroath
Chief Executive Officer
19 May 2022
Strategy in action
Our markets
Diverse and growing markets
Supporting the growing
eCommerce market
Cygnia
In September 2020 we acquired Cygnia Logistics, a specialist
mid-market eCommerce and multichannel eFulfilment provider
with expertise spanning the full breadth of its customers’
requirements, including high volume order fulfilment, returns and
carrier management services. Working with leading brands such as
Molton Brown, Whittard of Chelsea and Brewdog, Cygnia delivers
agile, scalable and responsive eCommerce solutions for mid market
customers, ensuring they have a robust platform for growth.
The integration of the Cygnia business is progressing well, and new
business has already been won to manage the entire UK fulfilment
operations for pop culture collectables retailer Eaglemoss, which
holds licences with the likes of Marvel, Disney and Warner Bros.
The WEB, Rockingham
In April 2021 Wincanton launched The WEB, our second state of
the art eFulfilment centre. This highly automated 528,000 sq ft
shared user facility extends our eCommerce proposition and this
year has resulted in the addition of new business with B&Q, for its
Click & Collect service, and Saint-Gobain.
From The WEB, we also provide eFulfilment, stock management and
final mile home delivery services for fast growing online furniture
retailer Snug. Rob Bridgman, Founder & CEO at Snug, says that
as a “category creator and leader, we are continuing to invest in
offering a world-class customer experience and Wincanton offers us
capabilities to scale at pace and to deliver on our customer promise.”
The WEB is also home to Wincanton’s W2 Innovation Centre. This
unique facility demonstrates our commitment to shaping the digital
supply chains of the future through collaboration and innovation.
Seasonal support
Supply chain agility is an essential tool for retailers to build
resilience and maximise on opportunities during peak trading
periods. We continue to add value to our customers’ operations
through the exceptional execution of seasonal support.
John Waldock, Head of Logistics, The White Company, says:
“Wincanton provided vital peak support for The White Company
in 2021 from its facilities in Northamptonshire. Its collaborative
approach allowed us to scale up quickly and make sure that we hit
the Christmas peak running.
“The Wincanton team, which included both experienced managers
and talent from its graduate scheme, integrated professionally and
quickly delivered a commendable performance. They adopted a can-do
approach, providing invaluable warehousing expertise, and adopted our
business values seamlessly. As a result, we had a very successful peak
as a business with Wincanton adding great value to our customers.”
Wincanton plc Annual report and accounts 2022 – 013
Wincanton plc Annual report and accounts 2022 – 013
Supporting the provision
of public services
Department of Health and Social Care
Building on our 2020 contract with the Department of
Health and Social Care (DHSC), Wincanton responded rapidly
to deliver 64 million units of Covid-19 testing equipment
and Personal Protective Equipment (PPE) to schools across
a three-week period in summer 2021.
In November 2020, Wincanton was awarded a contract by
the UK Government to support the nation’s programme of
mass testing for Covid-19, via the Crown Commercial Service
(CCS) Logistics and Warehousing Framework Agreement. This
involves storage, order fulfilment and customer delivery of
mass testing kits to priority locations across the UK.
In addition to the existing operation, Wincanton rapidly
supported the UK Government by designing and implementing
a packing operation at our site in Doncaster within seven days.
This involved assembling and distributing 29,000 Covid-19 self
testing kits to UK schools before the end of the school year.
HMRC
In 2020 we were awarded a contract to provide logistics
services at Inland Border Clearance (IBC) facilities operated
by HMRC. This year saw the commencement of operations at
our sixth IBC facility in Holyhead, Wales, the latest milestone
demonstrating our expertise and experience in providing
valuable support to public sector customers.
Market review
Tackling global challenges
with technology, skills and insight
Current market disruptors
Labour market disruption
Our response
The number of job vacancies in the last
quarter of 2021 rose to a record high1. There is
competition in the job market for similar skill
sets, making retention of valued staff vital.
– Continuation and broadening of our apprenticeship programmes.
Developing and upskilling our colleagues to offer clear long
term career paths that facilitate retention.
– Introduction of future drivers programme to attract and train
new drivers.
– Development of tools and initiatives supporting our colleagues
to manage their own and each other’s wellbeing.
– Fostering a culture of inclusion that represents, encourages
and respects our diverse workforce.
– Trialling and implementing automation technology that
reduces reliance on manual labour.
– Direct links with key government offices provided input into
decisions ensuring supply chain continuity for our customers.
– Working with our supply partners to implement procurement
strategies to minimise supply disruption and mitigate cost
increases for our customers.
– Where affected, supported our customers to limit disruption
to their supply chain.
– Focused on health and safety and wellbeing programmes for
all colleagues.
– Provided storage and distribution for testing kits.
– Acquired Cygnia Logistics.
– Invested in The WEB – our highly automated
eFulfilment warehouse.
– Delivered the first grocery home delivery customer fulfilment
centre (CFC) for Waitrose.
Gas and fuel prices
The cost of crude oil has risen by over 50%2
over the past year, and these costs are being
passed through the supply chain, resulting
in higher costs on transport contracts.
Supply chain disruption
Brexit
Potential delays at borders with increased
lead times.
Covid-19
Every market has been impacted by Covid-19
disruption: online businesses have boomed
while health sector supply chains have been
severely tested.
The surge in eCommerce
Almost half of non-food retail sales in the
UK (46.9%) were conducted online during
20213 and the habits of shoppers have
been fundamentally changed as a result
of the pandemic.
014 – Wincanton plc Annual report and accounts 2022
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Future market trends
The drive to net-zero
Our response
Businesses’ responsibility to reduce carbon
emissions and waste is driving change
throughout the supply chain.
Responsible sourcing is also a factor.
We have set ambitious goals to achieve net-zero by 2040 by:
– having carbon neutral premium home delivery operations in 2022
– making our own non-transport operations carbon neutral from 2025
– having an all-electric company car fleet by 2026
– doubling our recycling rates from residual waste by 2025
– eliminating difficult to recycle packaging materials by 2030.
Digital transformation
Logistics and supply chains have been undergoing
significant levels of disruption, resulting in rapid
adoption of technology services.
Digital services that have been tentatively
discussed are now at the forefront of solutions
to improve visibility and productivity, to ease
the strain caused by gaps in the workforce
due to Covid-19.
Manufacturer innovation4
Shorter lead times, reduced costs,
development of local supply chains and, above
all, increased resilience against disruption are
driving manufacturers to evaluate and innovate
across their value chains. The added pressure
from consumers and government legislation to
address environmental issues are also playing a
role in increasing the levels of innovation that
are required.
Shifting consumer demands
Personalisation, pressure on speed and
flexibility demands from end consumers add
weight to the complexity of how retail supply
chains will run in the future.
While this trend is already visible from the
increase in eCommerce, it is set to develop into
an ever-growing pressure on retailers and their
supply chains to remain agile and competitive.
– Invested in automation to support eCommerce activity.
– Acquired Cygnia Logistics.
– Invested in The WEB – our highly automated eFulfilment warehouse.
– Third W2 Labs programme, for early-stage businesses and digital
disruptors, focused on dark store, people and open season. Fourth
programme focused on high volume eFulfilment, ESG and
a ‘wild-card’ option is now open.
– Collaborated with one of our customers to drive productivity
efficiencies for new repack methodologies, increasing
departmental capacity, reducing colleague fatigue and
cutting carbon dioxide emissions.
– Supporting our customers developing and growing their
direct-to-consumer channel.
– Supporting retailers with an ethical delivery service.
– Delivering uncomplicated, seamless and convenient services for
the delivery of goods and products.
– White glove two-person home delivery services play a vital role in
the delivery of big-ticket and heavyweight purchases or products,
facilitating customers with delivery options and on-time delivery
and providing room of choice for assembly.
– Offering best practices, real-time tracking, accurate time of delivery,
full installation/assembly and removal of old items and packaging.
1 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/latest.
2 https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic.
3 https://econsultancy.com/stats-roundup-the-impact-of-covid-19-on-ecommerce/.
4 https://content.thesmartcube.com/hubfs/Infographic-Megatrends-Industrials_2021.pdf?hsLang=en.
Wincanton plc Annual report and accounts 2022 – 015
Strategy
Delivering sustainable supply chain value
Strategic pillar
Progress in 2021/22
Work to do in 2022/23
Highlights
Links to KPIs
Our products and services
Customer propositions which deliver
sustainable value and innovation throughout
the supply chain, meeting changing
market demands and harnessing industry
leading technologies.
Read more on p3
Our markets
Deliberately chosen markets for investment,
which offer the potential for organic
and inorganic growth, leveraging our
capabilities and our expertise.
Read more on p3
Our operating model
A disciplined and efficient operating model
which is agile and easy for our customers
and our people to engage with and enables
economies of scale.
Read more on p18
Our people
An inclusive culture supporting performance
and growth for our colleagues: developing the
best teams which attract and retain the most
talented people in the supply chain industry.
Read more on p22
016 – Wincanton plc Annual report and accounts 2022
– Autonomous Mobile Robot (AMR) and wearable technology picking
solution implemented for Neal’s Yard Remedies at our Nuneaton
eFulfilment Centre.
– Winsight Supply Chain Integrator (WSCI) deployed for
EDF at Hinkley Point C to manage end-to-end material
movement and flow.
– Our transport optimisation platform Winsight powered by ORTEC
implemented in Group Transport.
– Integrated yard management and traffic flow implemented at Inland
Border Clearance (IBC) facilities for HMRC.
– Building on eCommerce growth and laying the foundation
– Successful continuation of our
Growth priorities:
– Revenue
for our future through:
• the acquisition of Cygnia Logistics, a supply chain partner
to SME eCommerce
• our investment in The WEB, our highly automated, shared
user eFulfilment centre.
– Accelerated growth in the public sector with additional government
contracts awarded by HMRC, Defra and the DHSC.
– Health and safety: year on year performance improvement
across all KPIs.
– ESG governance: policy and statement published; ESG Board
Committee implemented with an ESG Board champion.
– Net-zero: agreed and shared net-zero targets for the business.
Wincanton two-person home delivery network carbon neutral
commitment implemented for 2022.
– Oracle Cloud: phase one of our implementation to support finance
and HR systems rolled out.
– Winsight powered by ORTEC: commenced rollout of a single
platform to manage all Group transportation activity.
– Strengthening our talent through robust succession planning and
development plans, alongside key management recruitment to
broaden our skills offering.
– Through continuous funding, our defined benefit pension scheme
position continues to improve and is ahead of the recovery plan due
to a well-executed investment strategy over recent years.
– Positively promoting supply chain and logistics as a career
with a focus on HGV driver recruitment; actively promoting
apprenticeships, our driving academy, and our future drivers
programme; and launching labour campus/warehouse labour
sharing opportunities.
Innovation funnel to create new products:
Product development priorities:
– Profitability
– W2 Labs – over 100 global start-up
– accelerate AMR deployment at scale
participants ranging from robotics to
data analytics to people engagement.
Six pilots run and three new products
developed:
• warehouse people optimisation
• eRecruitment
• asset tracking.
– Our Innovation Centre built and launched
to showcase our digital product capability
including robotics and asset optimisation.
partnership with EDF Energy supporting
the construction of Hinkley Point C.
– Strong volume growth in our foundation
markets: General Merchandise and
Grocery & Consumer.
across eFulfilment, General Merchandise
and Grocery & Consumer sectors
– Winsight Supply Chain Integrator
(WSCI) deployment for large
infrastructure projects
– expanding cloud-based eFulfilment carrier
management and returns services for
SME customers
– expansion of Winsight powered by ORTEC
for large scale network clients.
deployed in Nuneaton
27%
of warehouse operations
now enabled by robotics
and automation
new W2 Labs
products created
3
6
AMRs’
10
new contracts
1
acquisition
– eFulfilment – organic and inorganic
growth driven by Cygnia and The WEB
– Public Sector – extending relationships in
healthcare and border control
– Infrastructure – expanding with prime
contractors and government to support
major build projects in energy, rail
and road.
– Health and safety: continued focus on
maintaining a ‘best in class’ performance.
– ESG: focus on social value and creating
a unified Company-wide approach.
– ESG: continue to implement our carbon
neutral commitment for our own non-
transport operations.
0.33
Rate (LTIFR)
782
Lost Time Injury Frequency
– ESG targets
– Health and
safety targets
– Oracle Cloud: phase two of our
implementation, in summer 2022,
to include payroll systems.
– Winsight powered by ORTEC:
conclude rollout across all Group
transportation activity.
fleet assets use Winsight
powered by ORTEC
300
sub-contractors
using Winsight
powered by ORTEC
– Employee
engagement
score
– Empowering our colleagues by investing
– Further develop our ‘People Promise’
in high quality technology and systems,
by continuing to deliver on our diversity
enabling all colleagues to own their data
and inclusion strategy, communication
and careers.
– Supporting our colleagues through a
channels and wellbeing initiatives with
our colleagues.
wellbeing programme and community
– Continue to develop key skills for the future
available to everyone, as well as further
across digital supply chains which add value
embedding our diversity and inclusion
to our customers.
strategy to ensure all colleagues can be at
their best through an inclusive culture.
25%
of our Executive
Management
Team is female
480
future drivers
programme and
driver academy
participants
– Review of Wincanton values followed by
development of Behavioural Framework.
– Oracle Cloud: phase two of our implementation
will see our colleagues personally empowered
to manage their own data, making Wincanton
a better place to work.
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Strategic pillar
Progress in 2021/22
Work to do in 2022/23
Highlights
Links to KPIs
Our products and services
Customer propositions which deliver
sustainable value and innovation throughout
the supply chain, meeting changing
market demands and harnessing industry
leading technologies.
Our markets
Deliberately chosen markets for investment,
which offer the potential for organic
and inorganic growth, leveraging our
capabilities and our expertise.
Our operating model
A disciplined and efficient operating model
which is agile and easy for our customers
and our people to engage with and enables
economies of scale.
Our people
An inclusive culture supporting performance
and growth for our colleagues: developing the
best teams which attract and retain the most
talented people in the supply chain industry.
– Autonomous Mobile Robot (AMR) and wearable technology picking
solution implemented for Neal’s Yard Remedies at our Nuneaton
eFulfilment Centre.
– Winsight Supply Chain Integrator (WSCI) deployed for
EDF at Hinkley Point C to manage end-to-end material
movement and flow.
– Our transport optimisation platform Winsight powered by ORTEC
implemented in Group Transport.
– Integrated yard management and traffic flow implemented at Inland
Border Clearance (IBC) facilities for HMRC.
for our future through:
• the acquisition of Cygnia Logistics, a supply chain partner
to SME eCommerce
• our investment in The WEB, our highly automated, shared
user eFulfilment centre.
– Accelerated growth in the public sector with additional government
contracts awarded by HMRC, Defra and the DHSC.
– Health and safety: year on year performance improvement
across all KPIs.
– ESG governance: policy and statement published; ESG Board
Committee implemented with an ESG Board champion.
– Net-zero: agreed and shared net-zero targets for the business.
Wincanton two-person home delivery network carbon neutral
commitment implemented for 2022.
– Oracle Cloud: phase one of our implementation to support finance
and HR systems rolled out.
– Winsight powered by ORTEC: commenced rollout of a single
platform to manage all Group transportation activity.
– Strengthening our talent through robust succession planning and
development plans, alongside key management recruitment to
broaden our skills offering.
– Through continuous funding, our defined benefit pension scheme
position continues to improve and is ahead of the recovery plan due
to a well-executed investment strategy over recent years.
– Positively promoting supply chain and logistics as a career
with a focus on HGV driver recruitment; actively promoting
apprenticeships, our driving academy, and our future drivers
programme; and launching labour campus/warehouse labour
sharing opportunities.
Innovation funnel to create new products:
Product development priorities:
– W2 Labs – over 100 global start-up
– accelerate AMR deployment at scale
participants ranging from robotics to
data analytics to people engagement.
Six pilots run and three new products
developed:
• warehouse people optimisation
• eRecruitment
• asset tracking.
– Our Innovation Centre built and launched
to showcase our digital product capability
including robotics and asset optimisation.
across eFulfilment, General Merchandise
and Grocery & Consumer sectors
– Winsight Supply Chain Integrator
(WSCI) deployment for large
infrastructure projects
– expanding cloud-based eFulfilment carrier
management and returns services for
SME customers
– expansion of Winsight powered by ORTEC
for large scale network clients.
27%
of warehouse operations
now enabled by robotics
and automation
3
new W2 Labs
products created
6
AMRs’
deployed in Nuneaton
– Profitability
– Building on eCommerce growth and laying the foundation
– Successful continuation of our
Growth priorities:
partnership with EDF Energy supporting
the construction of Hinkley Point C.
– Strong volume growth in our foundation
markets: General Merchandise and
Grocery & Consumer.
– eFulfilment – organic and inorganic
growth driven by Cygnia and The WEB
– Public Sector – extending relationships in
healthcare and border control
– Infrastructure – expanding with prime
contractors and government to support
major build projects in energy, rail
and road.
– Health and safety: continued focus on
maintaining a ‘best in class’ performance.
– ESG: focus on social value and creating
a unified Company-wide approach.
– ESG: continue to implement our carbon
neutral commitment for our own non-
transport operations.
– Oracle Cloud: phase two of our
implementation, in summer 2022,
to include payroll systems.
– Winsight powered by ORTEC:
conclude rollout across all Group
transportation activity.
– Revenue
10
new contracts
1
acquisition
0.33
Lost Time Injury Frequency
Rate (LTIFR)
– Health and
safety targets
– ESG targets
782
fleet assets use Winsight
powered by ORTEC
300
sub-contractors
using Winsight
powered by ORTEC
– Empowering our colleagues by investing
in high quality technology and systems,
enabling all colleagues to own their data
and careers.
– Supporting our colleagues through a
wellbeing programme and community
available to everyone, as well as further
embedding our diversity and inclusion
strategy to ensure all colleagues can be at
their best through an inclusive culture.
– Further develop our ‘People Promise’
by continuing to deliver on our diversity
and inclusion strategy, communication
channels and wellbeing initiatives with
our colleagues.
– Continue to develop key skills for the future
across digital supply chains which add value
to our customers.
– Review of Wincanton values followed by
development of Behavioural Framework.
– Oracle Cloud: phase two of our implementation
will see our colleagues personally empowered
to manage their own data, making Wincanton
a better place to work.
25%
of our Executive
Management
Team is female
480
future drivers
programme and
driver academy
participants
– Employee
engagement
score
Read more on KPIs on p20
Wincanton plc Annual report and accounts 2022 – 017
Business model
A customer-centric,
innovation-driven approach
What sets us apart
What we do
Optimisation
By analysing, optimising and then
transforming the supply chains, overall
performance is enhanced, leading to
better service and lower cost.
Responsiveness
We help our customers deliver
faster and exceed their customers’
rising expectations.
Customer experience
We act as brand ambassadors for our
customers, delivering products and
services into their customers’ homes,
and ensuring a great experience from
start to finish.
Trusted expertise
We are the supply chain experts at
the heart of British supply chains,
providing solutions which give our
customers the competitive edge
in their chosen markets.
Sustainable value
We deploy existing and create new
processes and technologies to
reduce and enhance our own and our
customers’ environmental, social and
ethical impact for the long term.
People management
We enable our people to be their best.
The skills, capabilities and experience
of our workforce are what make us
different. They form a key part of The
Wincanton Way.
Great people delivering
sustainable supply
chain value
High volume eFulfilment
Our eFulfilment solutions are the
perfect platform for customers to
thrive in a fast-paced, eCommerce-
first environment. With dedicated and
shared user facilities incorporating
the latest automation technology, we
handle everything from goods in and
order picking through to fully branded
fulfilment and despatch.
Extended supply
chain management
Our integrated supply chain approach
brings together a number of services,
from inbound logistics to manufacturing,
transport control tower design and
operation and materials management and
consolidation. We manage activity, create
visibility and drive efficiency throughout
supply chains with an emphasis on
resilience and traceability.
Large scale
outsourced operations
We provide business critical services
including storage, handling and
distribution, transport and warehouse
asset management along with
inspection and control.
Read more about what we do on p2
The Wincanton Way is our
commitment to how we work
and our recipe for success
in becoming the UK’s most
innovative, effective and
respected logistics company.
wincanton.co.uk/sustainability/
the-wincanton-way/
Innovation
W2 is our way of delivering supply
chain innovation. We enable
customers to navigate the
challenges of tomorrow, develop
new propositions, transform the
consumer experience and grow
their market share.
wincanton.co.uk/why-
wincanton/innovation/
018 – Wincanton plc Annual report and accounts 2022
The Wincanton Way Through a wealth of experience and knowledge
Wincanton provides business critical services
including storage, handling and distribution;
high volume eFulfilment; retailer ‘dark stores’;
two-person home delivery; fleet and transport
management; and network optimisation for many
of the UK’s best-known companies.
W i n c a n ton Way
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High volume
eFulfilment
Extended
supply chain
management
Large scale
outsourced
operations
Innov a t i o n
Underpinned by our values
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The value we create
For customers
We provide the highest standards
of cost efficient logistics to help
businesses to run smoothly
and successfully.
Read more about our customers on p2
For colleagues
We aspire to develop a safe
environment with a culture where our
people feel valued and enabled to be
their best.
Read more about our colleagues on p28
For communities
We strive to make sure we do the
right thing. We are good neighbours,
creating a positive impact in our local
communities and adding social value.
Read more about our
communities on p28
For suppliers
We highly value our partnerships as we
explore collaborative ways of working
which will enable better and more agile
solutions across the supply chain.
For shareholders
We are focused on creating long term
value that we will distribute to our
shareholders when appropriate.
Excellence
Integrity
Passion
Read more about our
reasons to invest on p4
Proactivity
Togetherness
Trust
Wincanton plc Annual report and accounts 2022 – 019
Our KPIs
Measuring performance
Revenue
£1,421.4m
+16.3%
Underlying profit before tax1
£58.1m
+ 23.1%
Profit before tax
£54.8m
+18.6%
2022
2021
2020
2019
2018
1,421.4
1,221.9
1,201.2
1,141.5
1,171.9
2022
2021
2020
2019
2018
58.1
47.2
52.8
49.3
46.4
2022
2021
2020
2019
2018
Consolidated Group revenue.
Profit before tax before non-
underlying items.
Statutory IFRS profit before tax.
Link to our strategy
Link to our strategy
Link to our strategy
Underlying profit before tax margin1
Net cash/(debt)1
Underlying earnings per share1
4.1%
+20bps
2022
2021
2020
2019
2018
£3.7m
-£8.2m
40.8p
+27.5%
4.1
3.9
4.4
4.3
4.0
2022
2021
2020
2019
2018
3.7
11.9
(10.1)
(19.3)
(29.5)
2022
2021
2020
2019
2018
54.8
46.2
43.8
48.6
37.9
40.8
32.0
36.1
33.5
30.8
Underlying profit before tax
as a percentage of revenue.
Borrowings and other financial liabilities
net of cash and cash equivalents,
excluding lease liabilities.
Profit for the year attributable to
Wincanton plc shareholders before
non-underlying items and related
tax, divided by the weighted average
number of shares in issue.
Link to our strategy
Link to our strategy
Link to our strategy
Lost Time Injury Frequency
Rate (LTIFR)
0.33
+3.0%
2022
2021
2020
2019
2018
Employee engagement score
Earnings per share
69%
+3.0%
0.33
0.32
0.41
0.51
0.62
2022
2021
2020
2019
2018
38.6p
+22.5%
69
67
69
67
66
2022
2021
2020
2019
2018
38.6
31.5
31.1
34.5
25.2
Number of lost time incidents per
100,000 hours worked.
The percentage of positive responses
to five specific statements within the
employee survey.
Profit for the year attributable to
shareholders divided by the weighted
average number of shares in issue.
Link to our strategy
Link to our strategy
Link to our strategy
1
Alternative performance measure – see page 42 and Note 3 to the consolidated financial statements.
Link to strategy
Note: IFRS 16 Leases was adopted on 1 April 2019 using the modified retrospective approach without
restating prior year figures. 2018 figures are therefore presented on an IAS 17 basis.
020 – Wincanton plc Annual report and accounts 2022
Our products and services
Our markets
Our operating model
Our people
Strategy in action
Our operating model
Digital supply chains
Oracle Cloud: providing agility,
scalability and the infrastructure
for innovation
Our digital infrastructure took a major step forward this year
as Oracle Cloud went live across the business, a landmark
moment in the evolution of our business.
Providing necessary resilience and assurance in a highly secure
manner, Oracle Cloud supports a more streamlined operating
model and refines our agility, making it easier for us to evolve in
the future.
Oracle Cloud is a world-class, evergreen infrastructure which
facilitates our continued innovation; ensures we have scalability
to execute our growth strategy; and makes us more agile for
our people and our customers.
Phase one went live in the summer of 2021, integrating and
automating finance, procurement and HR processes seamlessly,
improving the employee experience and making it easier for
businesses to do business with us via our newly created supplier
portal. It has also provided the foundations for us to bring our
payroll services in house, facilitating a significant improvement
in our service.
Oracle Cloud provides our colleagues with quality and
consistency of information and more visibility of what is ahead.
All our colleagues benefit from a single entry point for key
processes as well as being personally empowered to manage
their own data, making Wincanton a better place to work.
We also benefit from the standardisation of process which
Oracle Cloud facilitates, enabling greater efficiencies across
the business. Standardisation allows us to make changes more
easily in the future, from onboarding new business through
to making the changes required by governance standards.
It’s been a great achievement
to deliver the first phase of
this investment over the last 12
months. Oracle Cloud provides
our organisation with greater
agility, both internally and for
our customers.
Richard Gifford
Chief Information Officer
Transforming transport with Winsight
powered by ORTEC
Our transport optimisation platform, Winsight powered by
ORTEC, positions us at the forefront of the digital transport
market, managing all transportation activity across
digitally transformed supply chains.
It gives our customers accurate, real-time visibility and ensures
the optimum utilisation of every asset across our transport
network. It also effortlessly confirms deliveries and collections,
providing GPS-tagged evidence of execution alongside
signature, document and timestamp proof of delivery.
Our driver app supports communications and workflow
management providing further proof of what has been
delivered, to who, where and when.
All data captured feeds into predictive modelling to allow
intelligent and agile decision making, dramatically reducing
time, resources and cost. Our investment in Winsight powered
by ORTEC ensures Wincanton and our customers will benefit
from the digital transport market revolution.
Wincanton plc Annual report and accounts 2022 – 021
ESG and sustainability
Protecting our futures
Our ESG strategy
Our ESG strategy is closely linked to our Group strategy, which comprises four key areas: our markets, our products and services,
our people and our operating model.
Each of these areas is underpinned by the issues that are most significant to our stakeholders in the areas of Environmental,
Social and Governance, to ensure we take a proactive and responsible approach to the way we operate.
The Wincanton Way – our ESG commitment
Our commitment to how we work and live our values, connecting and delivering with our
colleagues, customers, communities and suppliers.
Governance
Ensuring direction and control of our
business through effective management,
culture, systems and processes.
We are committed to:
– Board accountability
– transparent reporting
– continuous improvement.
Environmental
Building the road to net-zero by 2040: a
commitment to being the leading supply
chain partner of net-zero solutions for
fleet, property and waste.
Social
Celebrating diversity, fostering a safe,
empowering and inclusive workplace and
supporting the communities in which
we operate.
Our achievements include:
– our premium home delivery service
We are committed to:
– looking after our colleagues, providing
is carbon neutral from 2021/22
a safe and inclusive workplace
– building relationships with our
colleagues to promote engagement
– helping our colleagues to develop their
careers with Wincanton
– upholding diversity and inclusion
for our colleagues and leadership
– supporting and investing in
local communities.
– we have made our net-zero proposals
and roadmaps available to each of our
customers during 2021/22.
Our targets include:
– net-zero carbon emissions by 2040
– all our own non-transport businesses
will be carbon neutral from 2025
– we will double recycling rates from
residual waste by 2025
– all company cars will be electric by 2026
– we will eliminate difficult to recycle
packaging by 2030
– we will reduce our carbon offsetting
needs over time through innovation
and continuous improvement.
Transparent reporting
Wincanton is committed to transparent ESG reporting. In order to achieve this we have begun to reference our reporting against
standard measures from the Global Reporting Initiative (GRI). This is not yet comprehensive and our reporting will evolve over time.
Read more about the UN SDGs and GRI Reporting.
022 – Wincanton plc Annual report and accounts 2022
Environmental
Building the road to net-zero
by 2040: a commitment to being
the leading supply chain partner
of net-zero solutions for fleet,
property and waste
At Wincanton we want to be the leading partner
of net-zero solutions for fleet, property and
waste to support current and future customer
engagement, and to be the best performing
and most trusted supply chain partner.
Our performance:
334
ktCO2e
Carbon
235
tCO2e/
£m rev
Carbon
intensity
1.41
TWh
Energy
54.7
%
Waste
recycling
6,132
tCO2e
Offsets
Social
Celebrating diversity, fostering
a safe, empowering and inclusive
workplace and supporting the
communities in which we operate
Our long term success is dependent on our
employees; providing a safe, inclusive and
ethical working environment, to support them
and help them grow. This is all intrinsic to The
Wincanton Way and sets out what we stand for
as a company.
Our performance:
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81% 58% 8.0
Lost Time Injury
Frequency Rate
(LTIFR)
increase in
volunteer
diversity
champions
of driver
programme
participants
under the age
of 34
(out of 10)
score on
inclusivity at
Wincanton
Governance
Ensuring direction and control
of our business through effective
management, culture, systems
and processes
At Wincanton we lead by example, and to achieve
this we have refocused our approach to ESG
across our Board and senior leadership team, to
ensure we deliver on all of our promises.
Our performance:
Companies are facing challenges that limit their
potential to grow, such as scarce natural resources,
climate risk, lack of qualified talent, access to
infrastructure and investment opportunities.
Our customers and stakeholders expect a
strong leadership team who can address these
environmental and social risks and opportunities,
and who supports our purpose of ‘great people
delivering sustainable supply chain value’.
No modern
slavery
incidents
ESG linked
remuneration
in place
ESG Committee
in place
Wincanton plc Annual report and accounts 2022 – 023
ESG and sustainability continued
Environmental
Our commitment to the UN Sustainable
Development Goals (SDGs)
The road to
net-zero by 2040
Our environment programme is overseen
by the Head of Sustainability, who chairs
an environmental ‘task force’ to guide our
programme. This team provides monthly
updates on progress to the Executive
Management Team (EMT) and to the new
ESG Committee as required.
Monthly management reports include
detailed carbon reports for each
business sector and contract, as well as
performance against our headline ESG
targets, such as our commitments to
achieve net-zero emissions by 2040 and to
double our recycling rates from residual
waste by 2025.
Sitting at the heart of the environment
strategy, our Environmental Management
System (EMS) is certified to ISO 14001 and
available across the business. The EMS
tracks a range of key indicators, enabling
us to take prompt actions where necessary
and to identify and exploit performance
improvement opportunities wherever
they arise.
During the year, we continued to
collaborate closely with industry partners
and customers to develop sustainability
plans covering our contract operating
locations. These plans include projects
designed to reduce our environmental
impacts and ensure that we continue to
make progress towards our ESG targets.
024 – Wincanton plc Annual report and accounts 2022
Greenhouse gas emissions
and energy use
As a Carbon Trust Standard bearer since
2010, we’ve made continual reductions
in our annual carbon emissions. For 2021,
our climate risk disclosure and emissions
performance were again rated ‘B’ by CDP.
This rating indicates that we’re a company
‘managing carbon’ and demonstrates
that we’re implementing actions, policies
and strategies to address climate risks
and opportunities and have achieved
carbon reduction performance that
demonstrates this.
Our carbon emissions information
is prepared with reference to the
Greenhouse Gas Protocol Corporate
Accounting and Reporting Standard
for operational control. Carbon factors
used are as per Defra conversion factors
for company reporting 2021, with both
electricity generation and distribution
emissions included as scope 2 emissions.
For all UK mainland operations where we
have the supply contract, we continue
to purchase ‘green tariff’ electricity
which complies with the market-based
scope 2 reporting requirements of the
GHG Protocol. However, we continue to
report electricity use at UK grid average
emissions for the purposes of this Annual
Report and Accounts.
We record and publish energy and fuel
use for managed supplies, which includes
all supplies that are managed at sites
wholly operated by our teams, either for
ourselves or our customers, irrespective
of whether the fuel and/or energy is
purchased by us directly. The sources of
emissions include road transport fuels;
fuels for non-road transport uses; energy
utilities for buildings; and fuel for business
travel in Wincanton-driven vehicles.
Energy figures are provided on the same
scope 1 and 2 basis as carbon emissions.
We also include consumption of fluorinated
refrigerant gases as a scope 1 emission
and have not excluded purposely any
scope 1 and 2 emissions sources regardless
of materiality.
Our commitment to net-zero carbon
emissions by 2040 is an absolute
target for carbon emissions reduction,
irrespective of future growth, and we
strive to decouple emissions performance
from business performance. However, as
changes in our business activities continue
to directly affect our emissions, we use a
carbon intensity measure to manage our
carbon efficiency.
Our carbon intensity is defined as total
scope 1 and 2 carbon emissions from
managed supplies per unit of revenue,
and our carbon intensity ratio for the year
ended 31 March 2022 was 235 tonnes of
carbon dioxide equivalent (tCO2e) per
£m of revenue.
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Transparent reporting
Read more for details on our environmental reporting against GRI.
2040
commitment to net-zero carbon emissions
As a result of the work we have done to optimise our fleet efficiency and take
our first steps towards net-zero carbon by 2040, our energy use and carbon
emissions figures are as follows:
The increase in scope 1 and 2 carbon
emissions this year relates to our strong
revenue growth, offset by improvements
in transport efficiency through continued
deployment of our transport optimisation
platform Winsight powered by ORTEC;
continued deployment of “green” tyres;
and increased fuel and energy efficiency
as we continue to upgrade our fleet and
warehouse estate. Increases in emissions
would have been more significant but have
been further offset by increases in sub-
contracted deliveries which have become
scope 3 emissions. As a result of these
actions, our scope 1 and 2 carbon intensity
has reduced significantly this year.
We recognise that scope 3 emissions are
material to interpreting our emissions
performance and anticipate including our
scope 3 emissions in future annual reports.
Energy use table
Energy use (MWh)
Scope 1 transport
Scope 1 non-transport
Scope 2 electricity
Total energy (MWh)
Carbon emissions table
2021/22
2020/21
2019/20
1,175,113 1,145,210 1,207,317
149,718
134,995
120,207
83,943
80,562
83,767
1,408,774 1,360,767 1,411,292
Carbon emissions (tCO2e)
Scope 1 transport
Scope 1 non-transport
Scope 2 electricity
Total emissions
Carbon intensity
(tCO2e/£m)
2021/22
2020/21 1
2019/20
2018/19
2017/18
278,295
275,512
295,547
290,470
308,227
36,504
19,401
32,879
20,398
28,810
23,229
18,567
26,760
22,931
35,943
334,200
328,789
347,586
335,797
367,101
235
270
290
295
315
Note: Less than 1% of total scope 1 and 2 emissions relate to operations outside the
UK (1,398 tCO2e).
Wincanton plc Annual report and accounts 2022 – 025
As we try to shape our net-zero future
we have provided operating data and
operational input to several innovation
consortia working on catenary electric
highway systems, hydrogen fuel cell trucks
and electric truck charging infrastructure.
We anticipate that this work will continue
into 2023 and beyond and we hope to trial
our first hydrogen fuel cell truck in 2022
and also join consortia delivering further
innovation towards our net-zero future.
During 2021 we added a new target to
our commitments, specifically to be
carbon neutral in our own non-transport
operations by 2025. To deliver this we will
electrify as much of our warehouse energy
use as we can; increase energy efficiency
where feasible; generate and/or purchase
renewable electricity and/or green tariff
utilities; and then offset residual emissions
from 2025.
Towards this new, non-transport target,
we are planning further investments in
our remaining LED lighting opportunities;
exploring further electrification of
mechanical handling equipment including
lithium-ion and hydrogen fuel cells; and
developing a landlord-led project to install
solar photovoltaic generating capacity
which we hope will become a template for
further such projects across our estate.
In March 2022 we purchased our first
carbon offset credits to allow us to deliver
a carbon neutral premium home delivery
operation this year. These 6,132 credits
were a blend of certified carbon credits
from a range of international offset
projects and we also chose to invest in
UK forestry projects to allow us to build
a pipeline of UK offsets verified against
the Woodland Carbon Code. These 1,022
UK ‘Pending Issuance Units’ (PIU) will take
some time to mature into UK ‘Woodland
Carbon Units’ (WCU) and were not utilised
in our ‘carbon neutral’ declaration which
was self- assessed.
Our international offset projects
were predominantly sourced from
an afforestation project in Bukaleba,
Uganda, with the balance from renewable
energy development in Karnataka, India.
These projects deliver environmental
and social value to communities in
developing economies which make a
further contribution to the UN Sustainable
Development Goals that we have chosen
to make progress against.
Until we can electrify our commercial
vehicle fleet at scale, we have committed
to electrifying our company car fleet
by 2026 and, after announcing the
programme in April 2021, over 60% of all
open orders are for pure electric vehicles,
with over 30% plug-in hybrids (PHEVs)
and a small number of diesel vehicles
approved on an exception basis. We will
be making significant further investment
in workplace charging to ensure we
maintain our change momentum and
we will eliminate PHEVs from the car
list during 2022.
ESG and sustainability continued
Greenhouse gas emissions
and energy use continued
Within the context of a new ESG policy,
published this year, which aligns our
ESG programme to the UN Sustainable
Development Goals against which
Wincanton can deliver the most value,
we have been communicating our targets,
further defining the detail of their
implementation and contributing to a
range of projects that we anticipate will
make us a compelling long term supply
chain partner for our customers as they
continue to define and refine their
net-zero carbon plans.
In line with our 2021 commitments,
Wincanton has communicated its net-zero
strategy to its customers and provided
net-zero roadmaps for transport and
fleet, warehouse and infrastructure
and packaging and waste.
We continue to ensure we optimise
our use of diesel through a variety of
continuous improvement measures in
both transport and warehousing and
deployment of our Winsight powered by
ORTEC digital fleet technology to optimise
the efficiency of our network operation.
We have implemented new customer
activity utilising biomethane trucks and
have prepared trials of Hydrotreated
Vegetable Oil (HVO) as a drop-in
replacement fuel for diesel for several
customers although HVO pricing has
proved challenging over the year.
We completed evaluations of a number
of electric commercial vehicles up to
16.7 tonnes; have installed our first two
rapid commercial vehicle chargers in
our estate; and have prepared customer
proposals for further deployment of
electric vehicles although no adoption
has been agreed so far.
026 – Wincanton plc Annual report and accounts 2022
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Our waste management programme is
on track to meet our target of doubling
recycling rates from residual waste by 2025.
We set our performance baseline during
this year at 36.3%, making our target 72.6%
by 2025, and have achieved 54.7% against a
2021/22 interim year end target of 44.2%.
We have continued to consolidate our
preferred packaging supplier list to ensure
that we have strong innovation capability
in our supplier base and will continue to
drive waste reduction and circular economy
principles into our packaging sourcing in
collaboration with our customers, linking
packaging design to our Innovation Centre
where appropriate. The UK plastic packaging
tax was introduced in April and we moved
to higher recycled content in applications
where it was appropriate and simply reduced
plastic packaging volumes through technical
innovation where it was advantageous
environmentally. We will continue to
innovate on packaging to support our
customers, meet our targets and comply
with legislation.
Although we have set a long term
net-zero carbon target and some interim
sub-targets, we have not committed to
a formal Science-Based Target (SBT). We
plan on evaluating an SBT during 2022/23
and while we recognise that this has
become a standardised approach for many
companies, decarbonisation trajectories
for the freight transport sector are, as
yet, unclear. Our progress against targets
is currently focused on scope 1 and 2
emissions and we anticipate that we will
achieve a 30% reduction in emissions
by 2030 based on the wider industry
decarbonisation and legislative landscape.
We expect a further 70% reduction from
2030 to 2040 as electrification technologies
and infrastructure, potentially including
hydrogen, become more widespread and
commercially available.
To date, since we have been focused on our
scope 1 and 2 emissions, we have chosen
not to declare any scope 3 emissions in our
Annual Report. However, we have been
quantifying our scope 3 emissions for the
past eight years as part of our Carbon Trust
Standard certification. Downstream third
party transport and distribution will take
us above the SBT qualifying threshold for
scope 3 emissions and our net-zero 2040
target was set with this in mind and covers
scope 3 emissions. During this year, as part
of our compliance to the Crown Commercial
Service PPN 06/21 requirement, we declared
scope 3 emissions estimates related to
upstream and downstream transport and
distribution; employee commuting; waste;
and business travel. Details of methodology
and figures are available on our external
website please see below for the link. We
will develop our scope 3 methodology and
emissions statements in conjunction with
our SBT evaluation work and future interim
target setting. We consider this work in
progress and have not included it here
although more information will be available
through the ESG reporting page referenced
on page 22.
Learn more about our carbon reduction plan
Wincanton plc Annual report and accounts 2022 – 027
ESG and sustainability continued
Social
Our commitment to the UN Sustainable
Development Goals (SDGs)
8.2
eNPS score on colleagues reporting
having meaningful work
380
active learners engaged in
apprenticeships
0.33
Lost Time Injury Frequency Rate
(LTIFR) performance
028 – Wincanton plc Annual report and accounts 2022
Setting the
highest standards
Our people are at the heart of our
success. Through a combination of flexible
working practices, openness and support
we enable them to be their best and to
understand the integral role they play in
making our business a great place to work.
Looking after our colleagues
through the pandemic
Covid-19 has decimated lives and
livelihoods worldwide. By the time of the
UK’s first lockdown in March 2020, we
already had extensive business continuity
plans to keep our people safe while
protecting our business and that of our
customers. These included establishing
a Covid-19 task force which brought
together key central departments to
manage communications, daily bulletins
and policy changes.
As the pandemic continued, we were well
placed to ensure that all our locations
were safe for our colleagues and
customers, while at all times following
government regulations. In some cases,
we went further than those regulations,
for example by increasing standards for
face coverings. We also took part in pilot
schemes for lateral flow tests, further
ensuring that our colleagues felt confident
in their safety at work.
Providing a safe workplace
The safety of our colleagues and everyone
affected by our processes is of paramount
importance and is absolutely non-negotiable.
Everybody has the right to go home safe
after a day’s work. While there’s no room for
complacency, we’ve made good progress
again this year, reducing lost time accidents
while also increasing engagement with
colleagues through our safety conversation
and hazard spotting programmes.
Our safety measures
During the year, we retained our sharp focus
on our Lost Time Injury Frequency Rate
(LTIFR) measure. We exceeded our target of
0.37 and delivered an LTIFR of 0.33 against
a backdrop of busy implementations of new
business, ensuring that our safety standards
are present from the outset.
Our Total Recordable Injury Frequency
(TRIF) measure was a success this year.
Based on our target of 4.10, we achieved
3.75, showing a real reduction in the
underlying smaller incidents that can
become a lost time incident.
We also focus on blameworthy Collisions
per Million KMs (CMK), achieving 5.70 in
2021/22. Last year we achieved 5.17 CMK,
however, fleet utilisation during 2020/21
was lower due to the impact of Covid-19
lockdowns on operations. Every driving
record, behaviour and incident is tracked,
monitored and regularly reviewed.
As always, the aim is to do everything we
can to minimise the impact of our activities
on our employees, other road users and
members of the public.
Continuous improvement
We’ve continued to deliver schemes to
promote the safety of our people and the
public. For example, The Wincanton Drivers’
Handbook sets out specific guidelines on
driving and handling including details on
the EVADE programme, which aims to
improve awareness of the dangers that
HGVs can pose to vulnerable road users,
particularly cyclists.
Our employees’ expertise in health and
safety matters is supplemented by regular
courses. During 2021/22, our portfolio
of courses grew from around 80 to more
than 120, enabling us to upskill over
8,500 colleagues.
We have also benefitted from adapting
the majority of our training courses so that
they could be delivered virtually alongside
other courses that were held face to face
in Covid-19 secure environments.
Wincanton is now also the only provider
in the supply chain to hold training
accreditations for the Institution
of Occupational Safety and Health
(IOSH), the National Examination Board
in Occupational Safety and Health
(NEBOSH), Qualsafe and the Institute
of Environmental Management and
Assessment (IEMA).
Sustainability is at the heart of Wincanton’s
ambitions with a Group target to be net-
zero carbon by 2040. By training the next
generation of logisticians, Wincanton
is inspiring supply chain professionals to
deliver sustainable value to our customers
and colleagues.
Our training teams are always looking for
ways in which new technology can improve
the effectiveness of courses. For example,
we have added a mixed reality capability
into our Virtual Reality (VR) fire safety
solution, using a real fire extinguisher
as part of the VR experience.
In February 2022, we launched our new
dedicated training and research facility
at Magna Park in Lutterworth. Developed
through a partnership between industry
and education, the Centre for Logistics
Education and Research (CLEAR) will
eventually host around 1,000 students
and address the key challenges faced
by the logistics sector. The pandemic
has highlighted the role of logistics and
supply chain operators in keeping shelves
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58%
Percentage of future drivers programme
participants under the age of 34
stocked. As clients demand increased
efficiencies, higher safety standards and
greater sustainability, CLEAR will help us
act smarter as a sector and make sure that
we’re attracting, developing and retaining
the highly skilled individuals on which our
business relies.
Supporting our people
At Wincanton, we continue to support a
diverse and inclusive workplace that treats
colleagues with dignity and respect. We
ensure our colleagues are given the right
support and opportunities to reach their full
potential, ensuring we deliver sustainable
supply chain value. This year all our
colleagues have continued to have access
to wellbeing training and development
as we support them through and beyond
the pandemic.
Our Diversity and Inclusion Steering
Group, chaired by Chief Executive James
Wroath and including executive sponsors
responsible for gender, race, disability and
LGBTQ+, has expanded its remit this year to
include ex-military personnel. The number of
volunteer diversity champions who support
the Group has grown by 81%.
Last year we included three new questions
in our ‘Your Pulse’ survey to measure how
satisfied our employees are in relation to our
approach to inclusion within Wincanton. The
results were encouraging with respondents
reporting an 8.0 (out of 10) score regarding
our inclusive culture.
Transparent reporting
Read more for details on our social reporting against GRI.
Future drivers programme
We are dedicated to making driving a more inclusive, flexible and rewarding
profession to ensure our customers’ supply chains are properly resourced
and capable of meeting the needs of a resurgent economy.
This year we piloted and implemented our future drivers programme to attract,
select and train new drivers. Through a combination of targeted apprenticeships
and fast track driver’s licence acquisition schemes, supported by the government’s
Plan for Jobs skills and employment programme, we are developing the careers
of our existing colleagues as well as attracting and training new colleagues as
Wincanton drivers.
Some 480 colleagues participated in our future drivers programme this year,
with all participants ultimately qualifying as drivers. With 58% of this year’s
intake to our future drivers programme under the age of 34, and 6% female, the
programme is developing a more diverse pool of drivers. This success has been
delivered in collaboration with our customers, as the programme is open to our
customers’ warehouse-based colleagues looking to advance their careers in our
transport network.
In a challenging year for driver recruitment and labour sourcing our future drivers
programme has built a strong foundation to ensure retention, engagement and
loyalty among our drivers as we invest in, develop and support their career paths.
Our future drivers programme has delivered exceptional
results this year, developing a diverse pool of driving
talent. Its continued success ensures a strong foundation
as we continue to meet the needs of our customers.
Sally Austin
Chief People Officer
Learn more about how we are developing our future drivers through
targeted apprenticeships
Wincanton plc Annual report and accounts 2022 – 029
ESG and sustainability continued
Supporting our people continued
Diversity matters at the highest level
of our organisation. Our Executive
Management Team (excluding CEO
and CFO) is 33% female and there is
43% female representation among
our Board of Directors, exceeding the
Hampton-Alexander Review target of 33%
representation on FTSE 350 Boards
and Executive Committees. Below the
Executive Management Team level, female
representation in our Senior Management
Group has fallen slightly from 29% to 27%
in the past year.
Our gender pay gap remains consistent
with previous years and we believe that
we are on the right course to greater
gender pay parity in the future. There
were a far greater number of bonuses
paid out in the last year. The proportion
of males receiving a bonus doubled and
the proportion of females receiving a
bonus tripled.
We remain committed to the CBI-led
‘Change the Race: Ratio Charter’ and
continue to work with the Department for
Work and Pensions Disability Confident
Campaign and the Armed Forces Covenant
and will continue to honour these
commitments in the coming year.
Supporting the wellbeing of
our colleagues
We have continued to focus on creating
a supportive environment at Wincanton
and we understand and appreciate that
the Covid-19 pandemic, and its subsequent
impact on supply chains, has affected our
colleagues in different ways.
Our initiatives support our colleagues and
this year we have launched our wellbeing
commitment of ‘looking after ourselves
and others’. Our dedicated wellbeing
intranet and resource centre, supported
by our investment in Oracle Cloud, has
built a community throughout the year
to provide support, advice and ideas
for our colleagues to help them learn
about, manage and enhance their health
and wellbeing.
We have supplemented this support
through continued development of our
colleague app, iSmile, which facilitates our
direct communication with all colleagues.
Our Company-wide peer-to-peer
recognition platform, A Little Thank You, has
also launched this year, and saw some 400
recognition messages sent in the first week.
We delivered a series of Covid-19 pulse
surveys exploring colleagues’ feelings and
feedback on Wincanton communications,
health and safety measures, return to
work guidance and wellbeing during
the pandemic.
New questions have been built into our
annual engagement survey to explore
wellbeing and mental health. This data is
supporting the business in understanding
where and how additional support services
can be provided. We have developed a
number of training programmes from
finance to stress management over the
past year to support our colleagues and
we have further increased the provision
of qualified mental health first aiders
across Wincanton by 76%.
This year we have also strengthened
our partnership with Mates In Mind, a
registered charity that raises awareness
and addresses the stigma of poor mental
health in the workplace. We have also
built on our relationship with Retail Trust,
our employee assistance programme
service provider.
030 – Wincanton plc Annual report and accounts 2022
7.3
eNPS score on how appropriately the
business has managed the pandemic
8.0
eNPS score on inclusivity
in Wincanton
76%
increase in mental health first aiders
across Wincanton
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Developing the next generation
of supply chain talent
Apprenticeships
We rely on our 20,300 colleagues to deliver
for our customers every day. We need to be
able to access all the talent that exists in our
country and provide an exceptional career
development path. Our apprenticeship
programmes are designed to develop and
progress internal talent, while balancing a
pipeline of external recruitment to support
growth and sustainable succession planning.
At Wincanton we offer over 80 different
apprenticeship programmes reflecting the
breadth and diversity of our people and our
business. Our apprentices range from 17
to 64 years of age; 31% are female and 69%
male while 3% have declared disabilities.
Our apprenticeship programmes range
from driver and warehouse roles through
to specialist areas such as HR and finance.
We maintained our apprenticeship numbers
over the past year with approximately 2%
of our workforce, some 380 active learners
engaged in programmes. This is in line with
consistent learner numbers since April 2017,
which are steady at 1.9% of our colleagues
engaged in apprenticeships.
This year we have seen 76% retention of
apprentices after programme completion
and engagement has improved as we
continue to deliver night shift apprenticeship
programmes. A blended style of delivery has
made our apprenticeship programmes more
inclusive, enabling colleagues to enrol for
an apprenticeship when before they might
have not been able to commit to attending
daytime face-to-face sessions.
We have also seen a growing number
of colleagues embark on a second, higher
level apprenticeship to further develop
their careers within Wincanton with
some 20% of active learners engaged
in a second apprenticeship.
Graduate placements
This year has seen a 50% increase in our
graduate intake, with the number of female
graduates on placements increasing by
54% and male graduates increasing by 46%.
Overall on our one year graduate placement
scheme, entrants from ethnic minority
backgrounds have increased by 37%. Our
graduates have raised over £13,000 for The
Prince’s Trust Million Makers entrepreneurial
challenge, which is changing the lives of
young people across the UK.
Plan for jobs
This year we have offered 37 roles and
employability training for young people
through the government’s Kickstart
Scheme. This scheme provides funding for
employers to create jobs for 16 to 24 year
olds on Universal Credit. 30% of these young
people are now Wincanton colleagues and
have secured permanent roles with us.
Strategic resourcing
This year we brought our recruitment
activities inhouse, creating a strategic
resourcing team to identify, attract and
recruit the very best talent to our business.
As we emerge from the pandemic and
address the regulatory changes and
challenges to day to day operations brought
about by the UK’s withdrawal from the
European Union, and the economy reboots
itself, we have improved our capabilities to
source quality people, respond quickly and
improve the overall recruitment experience
in line with our values and behaviours.
Wincanton plc Annual report and accounts 2022 – 031
ESG and sustainability continued
Governance
Transparent reporting
Read more for details on our governance reporting against GRI.
Our Board is accountable for the delivery
and success of our ESG strategy. An ESG
Committee chaired by the CEO will focus
on strategy, target setting, performance
and communication.
The ESG Committee is supported by a
Working Group, which meets regularly
to roll out ESG initiatives and to
address the communication around the
programme of work.
We have also introduced sustainability
targets applicable to our senior
management for discussion in their
performance reviews.
We have set the necessary measures and
targets to manage our ESG performance
and ensure transparent and consistent
reporting. We are beginning to use
standardised measurement systems
aligned to the Global Reporting initiative
(GRI), to better enable our stakeholders
to monitor our ESG performance over
the long term and provide transparency
on methodology.
We published our first ESG policy statement
on our website in November 2021.
Read more about our ESG policy statement
Our governance position has been further
strengthened through revised policies
and associated compliance training and
awareness sessions run throughout the
business, for example modern slavery;
GDPR; IT acceptable use; and Speaking Up.
We completed the Business in the
Community ‘Responsible Business Tracker’
and the EcoVadis CSR assessment this
year and received valuable external
feedback on our ESG programme. Our ESG
materiality assessment aligns with our
principal business risk heatmap provided
on page 46 and is also aligned with our
selected UN Sustainable Development
Goals and GRI reporting described
elsewhere in this report.
Responsible Business Tracker® 2021
Wincanton’s Code of Conduct and our compliance programme
help colleagues make the right choices
Code of Conduct
– Sets out what we stand
Speaking Up
– Speaking up is the right
for as a company
thing to do
– Underpinned by a
robust corporate
governance framework
– EthicsPoint provides
our helpline and
reporting portal
– Applied across
the Group
wherever we work
– Awareness campaigns
encourage an open and
transparent culture
Modern Slavery
– Modern slavery
statement is on
our website
– Supply chain risk
assessment and
social audits
– Modern slavery
awareness campaigns
and targeted training
Anti-Bribery and
Corruption
– Zero tolerance policy
– Mandatory e-learning
training module
– Gifts and hospitality
approval process
and register
Data Protection
– Personal data is
only collected and
processed and stored
in line with our
Company policies and
legal requirements
– Systems and processes
are assessed before
implementation to
ensure data is securely
processed and stored
032 – Wincanton plc Annual report and accounts 2022
Strategy in action
Our people
A responsible and sustainable
business focused on the future
Leading the way in diversity
and inclusion
National Inclusion Week is designed to celebrate everyday
inclusion in all its forms and brings organisations together
to celebrate, share and inspire inclusion practices.
Wincanton was proud to support National Inclusion Week
this year at our customer focused ‘It’s All About Inclusion’
Conference on 30 September, 2021 at The WEB, our state
of the art eFulfilment centre.
The event was host to speakers from organisations including
HS2, Nestlé and B&Q and themes such as disability, inclusive
procurement and inclusive leadership were discussed
alongside workshops focusing on race, mental health and
women in logistics.
Our colleagues and our customers were able to interact with
representatives from our diversity partner organisations
including Business in the Community; Business Disability
Forum; Remploy; and CBI’s Change the Race: Ratio Charter.
Attendees included representatives from our customers,
trade unions and our employment law partner.
Diversity and inclusion at Wincanton
means providing a supportive, motivating
working environment, regardless of
background, race, gender, sexuality or
level of ability.
Wincanton has long been an industry
leading champion of safety. A strong
culture of diversity and inclusion is a
critical part of providing a safe, welcoming
working environment.
James Wroath
Chief Executive Officer
Wincanton plc Annual report and accounts 2022 – 033
Investing in our people
At Wincanton, we strive to enable our people to be their
best and to offer meaningful development opportunities to
all our colleagues. A career in supply chain and logistics is
varied and rewarding and provides long term opportunities
for our colleagues to achieve their potential. Investing in
the development of our people provides new skills for our
customers’ needs and the capabilities we require to execute
against our strategy.
Throughout this year we have successfully delivered new
learning and development programmes across the business.
Our future skills programme has delivered apprenticeships
focused on data, engineering and technology solutions:
– this year we launched our data analyst apprenticeship
programme to support Winsight powered by ORTEC,
which manages all transportation activity across digitally
transformed supply chains
– we have placed 15 apprentices on engineering
focused programmes
– we launched our first Business Technology Solutions
(BTS) apprenticeship programme to address future skills
requirements and talent pipelining.
This year we have put 56 colleagues through our new sales
and account management development programme, which
standardises responsibilities and methodologies for the benefit
of our customers. We have also introduced an employee
relations and industrial relations development programme,
developing knowledge and capability in our people team, and
our NextGen programme for emerging and strategic leaders.
wincanton.co.uk/why-
wincanton/our-people/
Section 172 statement
Engaging with
our stakeholders
Under section 172(1) of the Companies Act 2006 (the Act), Directors are required
to explain how they have performed their duty to promote the success of the
Company having regard to the likely long term consequences of their decisions,
their employees’ interests, the Company’s relationships with its suppliers,
customers and others, and any operational impact on the community and
environment, whilst maintaining a good reputation and acting fairly.
Our responsibilities
The Board considers it has fulfilled its responsibilities under
section 172 of the Act. It recognises the need to reflect the
views of the Group’s key stakeholders in its discussions and
consider the impact of the decisions it takes on them. This year
such key decisions have included the acquisition of Cygnia,
capital investment in the W2 Innovation Centre and The WEB,
and the dividend payment to shareholders.
Our approach
The Board maintains strong relationships with Wincanton’s
stakeholders (customers, colleagues, investors, communities and
suppliers) through multiple methods of engagement, including
a Non-executive Director dedicated to bringing the voice of
the workforce into the boardroom. There is a comprehensive
programme of pulse surveys, newsletters, a CEO blog, and
monthly CEO and leadership calls with colleagues. The Board visits
operational sites and has regular conversations with investors
plus results roadshows and specific consultations. Dedicated
account teams alongside management engage with customers in
regular reviews to deliver the best business outcomes and build
long terms strategic partnerships through delivering insights,
innovation and direct investment in new solutions. Our Supplier
Management Framework also includes operational, commercial
development and strategic review meetings.
Key decision: Cygnia acquisition
The decision to acquire Cygnia in September 2021 was in line
with Wincanton’s strategic focus on eCommerce and aligned
to the interests of investors and colleagues by bolstering the
Group’s growing eFulfilment business division. It offered new
growth opportunities via access to the mid-market sector.
The acquisition provides Cygnia with access to Wincanton’s scale
and expertise, enabling it to accelerate the pace of its growth.
Having a specialist eFulfilment provider in the Group strengthens
capabilities for the Group as a whole and accelerates growth prospects.
A stronger business division with new growth opportunities offers
positive future prospects for both Wincanton and Cygnia colleagues
and a positive impact on employment in the community. Customers
were contacted by both Cygnia and Wincanton management in
advance of the announcement, and detailed account reviews of the
top ten clients took place for the first 30 days post-acquisition. The
deal was also considered through the lenses of affordability and
financial benefit for our investors. The expected additional revenue
and new business opportunities resulting from the acquisition are
in the interests of the long term success of the Company.
Key decision: reinstatement of dividend payments
Regular contact with Wincanton’s investors and shareholders has made
the Board very cognisant of how important dividends are to them,
and the reinstatement of the payment of dividends in August 2021
demonstrated the Board’s recognition of this. Having repaid all the
government assistance received at the height of the pandemic, the
Board approved the recommencement of the dividend programme
to return profits to shareholders. The interim dividend payment was
4.0p per share with a proposed final dividend of 8.00p.
Engagement in action:
Investment in The WEB and W2 Innovation Centre
The Cygnia acquisition follows the Group’s investment earlier in 2021 in its state of the art, automated eFulfilment facility in
Rockingham, Northamptonshire (The WEB), to create additional capacity to drive growth in eCommerce.
The Board has visited the new W2 Innovation Centre adjacent to The WEB, which opened in September. The purpose of the Centre is
to develop and showcase cutting edge design and technology for the benefit of Britain’s supply chains and all those who rely on them.
The centre will host customers, partners, colleagues and community groups. The Innovation Centre has been visited by its local MP
and has also hosted visits from universities including Aston and Derby (Wincanton is a NOVUS sponsor company), Cranfield, Coventry
and Royal Holloway in relation to students’ career development and potential joint working opportunities with those institutions.
Mencap has also visited as part of its young learners’ programme that Wincanton is involved with.
A recruitment day was hosted in conjunction with Logistics UK, a CILT Women in Logistics event was held in March and our first diversity
and inclusion event was held at The WEB and Innovation Centre in September. This saw experts from our customers’ businesses and
from across other sectors sharing knowledge and experiences. We have also hosted our Trade Union Council Meetings in the Centre and
the local South East Midlands Local Enterprise Partnership has visited, strengthening our presence in the local community.
034 – Wincanton plc Annual report and accounts 2022
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Task Force on Climate-related Financial Disclosures (TCFD)
Task Force on Climate-related
Financial Disclosures (TCFD)
Wincanton recognises that climate change will have significant long term impacts
on our customers, markets and operations. To ensure we manage these climate
risks, opportunities and changes effectively and for the long term benefit of our
stakeholders, we have integrated climate governance into our standard operating
models, adopted climate risk as a principal business risk, set ambitious targets for
greenhouse gas reduction and communicated our net-zero strategy to customers.
We have made disclosures throughout this Annual Report consistent with the TCFD recommendations this year for the first time and
have summarised them in the table below. We have not yet completed climate scenario modelling for our business and we are in the process of
developing our metrics to assess climate related risks and opportunities. We have provided some guidance on when and how this will be done.
In addition to the table and disclosures in this document, we have also provided links to our external ESG reporting website where more detail
on measures aligned to the Global Reporting Initiative can be found.
Within our sustainability strategy we have set a clear objective to achieve net-zero carbon emissions by 2040 and have made a commitment to be
the leading third party logistics partner of net-zero solutions for fleet, property and waste. We achieved our 2021/22 target to be carbon neutral
for our premium home delivery service and we are working towards being carbon neutral for our own non-transport operations from 2025.
As a Group, we have publicly reported our GHG (carbon) emissions since 2014 and have been a Carbon Trust Standard bearer since
2010. A summary of our progress against the TCFD recommendations is given below and the Group will continue to refine these
disclosures to enhance our reporting for stakeholders.
TCFD reference
Governance
Board oversight of climate-related risks
and opportunities
Our ESG Committee focuses on strategy, target setting, performance and
communication. This management committee is chaired by the CEO and includes
a Non-executive Director to provide additional Board interface
Wincanton reference
Page(s)
52, 58
Management’s role in managing
climate-related risks and opportunities
Ownership of the management of climate related risks ultimately sits with the Chief
Operating Officer and is managed by the Head of Sustainability. Climate change risks
feature on the principal risk register.
51
Strategy
What are our climate-related risks, in
the short, medium and long term?
Details of climate-related risks are included in the disclosure of Principal risks and
uncertainties
51
What is the impact of climate-related
risks and opportunities on our business,
strategy and financial planning?
We have made a commitment to net zero carbon emissions. We deploy existing
and create new processes and technologies to reduce and enhance our own and
our customers’ environmental impact for the long term. Details are provided
in the Market Review and our Strategy sections
14 to 19
How resilient is our business strategy to
different climate scenarios?
Wincanton has not yet completed a formal assessment of business resilience to
climate scenarios. We anticipate utilising the IPCC Representative Concentration
Pathways (RCPs) and the associated condition statements to complete this no later
than 2024. As a UK supply chain company for a wide range of sectors, we anticipate
that our customers’ scenario planning will play a key role in shaping the resilience
of our business strategy and our own scenario planning statements
Risk
management
What are the processes through which
we assess and manage climate-related
risk and how are these integrated into
our risk management programme?
More details in the risk report
Further details on climate-related principal risk
44 to 51
51
Metrics and
targets
How do we assess the climate-
related risks and opportunities facing
the business?
We are still in the process of developing metrics to assess our climate related risks
and opportunities. Climate-related opportunities are considered monthly as part
of our strategy review process
44 to 51
Our scope 1, 2 and 3 GHG emissions
The targets we use to manage the risks
and opportunities
Environmental section in the ESG and sustainability report. KPIs for scope 1 and 2
emissions have been reported in recent Annual Reports; provisional scope 3 KPIs
are available on our website
Long and short term targets are set out in the Environmental section of the ESG
report. ESG-related remuneration targets are included in the Annual Bonus
for the Executive Management Team, specifically relating to health and safety
and Diversity and Inclusion. Targets around climate have not been included this
year due the long term nature of these targets
24 to 27
24 to 27
Wincanton plc Annual report and accounts 2022 – 035
Chief Financial Officer’s review
The key financial aspects are outlined
below with the results presented on an
underlying basis, excluding non-underlying
items, to provide a better understanding
of the underlying performance.
Reconciliations to statutory numbers are
set out in the Alternative Performance
Measures section at the end of this review
on pages 42 and 43, and Notes 3, 9 and 30
to the consolidated financial statements
which also include details of the items
reported as non-underlying in the current
and prior year.
Financial performance summary
Revenue for the year ended 31 March
2022 was at its highest level since the 2011
Group restructuring, increasing over the
prior year by £199.5m to £1,421.4m despite
lost revenue following the disposal of the
Specialist Services businesses (Containers
and Pullman Fleet Services) in the prior
year. Compared to the year ended 31
March 2020, revenue increased 18.3%;
this reflects the excellent trading across
all four sectors. Growth came from
increased volumes and new contracts
as well as renewals and extensions with
existing customers. The Group also
benefited from the full year impact of a
number of the new contracts such as the
Waitrose & Partners ‘dark store’, Dobbies
Garden Centres and HMRC Inland Border
Clearance facilities which commenced
late in the previous year. Growth was
particularly strong in the eFulfilment
sector from two-person home deliveries,
omnichannel and high-volume eFulfilment.
The Group’s underlying profit before tax
also saw significant growth of 23.1%,
increasing by £10.9m to £58.1m, with
growth of 10.0% against the year ended
31 March 2020. The underlying profit
margin has strengthened to 4.1% (2021:
3.9%). This is despite headwinds in labour
and fuel costs, and other inflationary
pressures, which are mostly mitigated
by our business model and strategy.
Revenue from open book contracts which
provide protection from price increases
was 72% (2021: 69%) of our total revenue.
The Group’s underlying profit before tax saw
significant growth of 23.1%, despite headwinds
in labour and fuel costs and other inflationary
pressures, which were mostly mitigated by our
business model and strategy.
James Clarke
Interim Chief Financial Officer
Financial performance for the year
ended 31 March 2022 was strong, with
revenue increasing 16.3% versus last
year and importantly also up by 18.3% on
pre-pandemic levels (2020: £1,201.2m).
Revenue increased across all four sectors
and we saw the benefit of new contract
wins, particularly in our key strategic
growth markets: eCommerce; public
sector; and infrastructure.
Underlying profit before tax increased by
23.1% against last year’s Covid-19 affected
result and was up 10.0% on pre-pandemic
levels (2020: £52.8m), demonstrating the
Group’s positive momentum.
Positive cashflow performance is reflected
in net cash of £3.7m (2021: net cash
£11.9m) notwithstanding the acquisition
of Cygnia for £27.6m in September 2021.
The net pension asset has increased to
£114.5m (2021: £48.2m) with net assets
at £63.6m (2021: net liabilities £1.7m).
We have also successfully renewed our
revolving credit facility (RCF) for a further
four years until March 2026 and extended
the commitment to £175.0m.
036 – Wincanton plc Annual report and accounts 2022
Financial performance summary
Revenue
Underlying EBITDA2
Underlying EBITDA margin (%)2
Net financing costs
Underlying profit before tax2
Underlying profit before tax margin (%)2
Non-underlying items3
Profit before tax
Income tax
Profit after tax
Underlying EPS
Basic EPS
Closing net cash (£m)
Dividend per share
2022
£m
2021
(Restated) 1
£m
1,421.4
1,221.9
Change
16.3%
13.8%
(20bps)
95.2
7.8%
(4.6)
(43.5)%
47.2
3.9%
(1.0)
46.2
(7.1)
39.1
32.0p
31.5p
11.9
23.1%
20bps
18.6%
22.5%
27.5%
22.5%
(8.2)
108.3
7.6%
(6.6)
58.1
4.1%
(3.3)
54.8
(6.9)
47.9
40.8p
38.6p
3.7
12.00p
10.35p
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1 Certain comparatives have been restated due to a required change in accounting policy which has resulted in costs previously capitalised now presented
as a non‑underlying expense within net operating profit, as explained in Note 1 to the consolidated financial statements.
2 The section on Alternative Performance Measures (APMs) below and Notes 3 and 9 to the consolidated financial statements provide further information on these
underlying measures, including definitions and a reconciliation of APMs to statutory measures.
3 Details of items reported as non-underlying in the current and prior year are included in the section headed non-underlying items below and in Note 3
to the consolidated financial statements.
Furthermore, for the majority of our closed
book contracts, contract renegotiations
have been completed in the year with price
increases agreed at an average of 15%. In
addition, our driver training programmes
have enrolled over 480 colleagues to
become future drivers in our business and
this both ensures a good pipeline of future
drivers as well as reducing the reliance on
more expensive agency labour.
Statutory profit before tax of £54.8m (2021:
£46.2m as restated) is impacted by non-
underlying costs primarily reflecting cloud
computing configuration and customisation
costs now expensed as a result of changes in
accounting guidance and acquisition-related
costs. Non-underlying credits include the
release of a historic warranty provision and
consequential gains on business and asset
disposals. Profit after tax for the year on a
statutory basis increased to £47.9m (2021:
£39.1m as restated), an increase of 22.5%.
Underlying EPS, which excludes earnings
from non-underlying items, increased by
27.5% to 40.8p (2021: 32.0p), reflecting
increased profits and the benefit of a lower
effective tax rate. Basic EPS increased by
22.5% to 38.6p (2021: 31.5p as restated).
Acquisition of Cygnia Logistics
On 10 September 2021, the Group acquired
Cygnia Logistics, a specialist in multichannel
fulfilment with expertise spanning the full
breadth of their customers’ requirements,
including high-volume order fulfilment,
returns and carrier management services.
The Group paid consideration of £23.9m
for the business including the repayment
of borrowings acquired and there was a
further £3.7m of cash outflow in respect
of working capital acquired and capital
expenditure incurred after the lockbox
date. The accounting for the acquisition
has been finalised and further details can
be found in Note 27 to the consolidated
financial statements.
Cygnia contributed £22.6m to revenue in
the period since acquisition in September
2021 and, alongside our existing automated
facilities has resulted in significant new
business wins. Customer retention has
been strong, with Wincanton re-securing
over 95% of Cygnia’s existing customers at
contract renewal.
Systems investment
We have successfully implemented phase
one of a new enterprise-wide finance
and HR system, Oracle Cloud, across the
business, on time and on budget. The new
system, together with the standardised
processes and controls to support it, are
being embedded. We are moving into phase
two of the project, which is to rationalise
and insource payroll operations across the
business and is scheduled to be completed
in 2022. Following new accounting guidance
(an IFRS Interpretations Committee agenda
decision), the costs of this project can no
longer be capitalised and costs incurred in
the year have been expensed as a non-
underlying charge of £4.1m. To complete this
project over the next 12 months, a similar
cost to this year is expected to be incurred.
Wincanton plc Annual report and accounts 2022 – 037
Chief Financial Officer’s review continued
Sector revenue
eFulfilment
Public & Industrial
Grocery & Consumer
General Merchandise
Ongoing operations
Disposed businesses
Total
eFulfilment was our fastest growing sector
for the second successive year, reflecting
the strong demand for its services from
retail markets. Organic growth was 38.9%
reflecting both new business wins as
well as the full year impact of contract
wins in the previous year which included
the Waitrose & Partners ‘dark store’. Our
investment into The WEB, Rockingham, an
automated facility, also provided further
growth capacity where we commenced
operations with Lakeland, Snug and
Saint-Gobain. In time the recently secured
contract with The White Company will
transition to this facility. The acquisition
of Cygnia delivered additional revenue
to the sector of £22.6m. This was slightly
down on our expectation reflecting some
softening in consumer online demand
during the final quarter although the
sales pipeline has presented some good
prospects for continued growth.
The Public & Industrial sector saw full
year revenue growth of 15.7% and
importantly grew against pre-pandemic
levels. The recovery seen during the
second half of the previous year continued
within the construction and energy
markets. The strategy to increase our
public sector business saw the full year
impact of our HMRC Inland Border
Clearance facility contract and we were
successful in securing a new contract
with Defra (border checks and clearance
of imported plants and animals) where
mobilisation commenced towards the
end of the year. We also started a new
contract to receive, sort and store PPE
on behalf of the UK Government, which
was facilitated through our innovative
shared warehousing platform, OneVAST
warehouse. Finally, we also expanded our
relationship with BAE Systems through an
additional site at Linwood.
Net financing costs
Interest income
Interest on the net defined benefit pension asset
2022
£m
223.2
284.2
517.6
396.4
2021
£m
144.4
245.6
447.0
334.3
1,421.4
1,171.3
Change
%
54.6%
15.7%
15.8%
18.6%
21.4%
–
50.6
(100.0)%
1,421.4
1,221.9
16.3%
Both Grocery & Consumer and General
Merchandise sectors have seen similar
levels of strong growth in the year
reflecting the largely strong consumer
demand for our customers’ products
as well as contract expansion and new
business wins. We continue to support
the growth of the Kingfisher Group and
opened a further distribution centre in
Daresbury, welcoming 400 new colleagues
to Wincanton. We also won new work
with MGA Entertainment and Primark and
benefited from the full year revenues of
Heineken and Kelkay.
The mix of open to closed book
business continues to be a focus as we
seek to balance the relative risks and
opportunities presented from each
sector. With strong growth across all four
sectors the mix of business remained
fairly consistent with revenue from open
book contracts increasing slightly to 72%
(2021: 69%).
2022
£m
–
1.1
(2.1)
(0.4)
(5.2)
(6.6)
2021
£m
0.1
2.3
(2.8)
(0.4)
(3.8)
(4.6)
Change
£m
(0.1)
(1.2)
0.7
–
(1.4)
(2.0)
Bank interest payable on loans of £2.1m
(2021: £2.8m) includes commitment
fees and arrangement fees of £0.7m
(2021: £1.5m).
Non-cash net interest income of £1.1m
(2021: £2.3m) relates to the net defined
benefit pension asset. The discount
rate applied in calculating the interest
decreased from 2.3% to 2.0%, reducing
the net position from £2.3m to £1.1m in
the current year.
Interest expense
Unwinding of discount on provisions
Interest on lease liabilities
Net financing costs
Net financing costs were £6.6m (2021:
£4.6m), £2.0m higher year on year. The
largest proportion of this relates to
interest on lease liabilities which reflects
a higher proportion of leased assets
acquired for new contracts.
038 – Wincanton plc Annual report and accounts 2022
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Taxation
Underlying profit before tax1
Underlying tax charge
Non-underlying tax
Tax charge as reported
2022
£m
58.1
(7.5)
0.6
(6.9)
2021
£m
47.2
(7.5)
0.4
(7.1)
Change
£m
10.9
–
0.2
0.2
Effective tax rate on underlying profit before tax
12.9%
15.9%
(300)bps
1 Alternative Performance Measure: refer to Note 3 to the consolidated financial statements.
The underlying tax charge of £7.5m
(2021: £7.5m) represents an underlying
effective tax rate (ETR) of 12.9% (2021:
15.9%) on underlying profit before tax and
is stated before net tax credits of £0.6m
(2021: £0.4m) in respect of non-underlying
items. Corporation tax paid in the year was
£3.3m (2021: £5.7m).
The ETR is lower than the statutory rate
of 19.0%, in part due to the introduction
of super capital allowances of 130% on
qualifying assets which will remain effective
until 31 March 2023. The benefit of this
deduction has reduced underlying tax
by £1.4m resulting from the permanent
deduction of 30% on qualifying capital
spend and has reduced the tax paid in the
year by £5.2m. In addition, the Group has
optimised the use of tax losses and will
accelerate tax payments to benefit from
the change in tax rates from 19% to 25%
from 1 April 2023.
In line with the increase in the corporation
tax rate to 25% from 1 April 2023 the rate
at which deferred tax is calculated has
increased. Net deferred tax at the end
of the year is a liability of £16.9m (2021:
£1.6m) which mainly comprises deferred
tax liabilities related to the net pension
assets, partially offset by deferred tax assets
arising on tax losses carried forward and
the tax treatment of IFRS 16 leases. As the
movement in deferred tax liability related
to the net pension asset is reported through
other comprehensive income, it does not
impact the profit and loss tax charge.
Dividends and dividend policy
Interim
Final (proposed)
2022
pence
4.00
8.00
2021
pence
2.85
7.50
Total
12.00
10.35
In setting the dividend the Board considers
a range of factors, including the Group’s
strategy (including downside sensitivities),
the current and projected level of
distributable reserves and projected cash
flows, including cash payments to the
pension scheme and deferred payment
arrangements.
The Board is proposing a final dividend
of 8.0p (2021: 7.5p), which, together
with the interim dividend of 4.0p per share
(2021: 2.85p per share), will result in a total
dividend per share for 2022 of 12.0p (2021:
10.35p). This brings the total dividend back
above pre-pandemic levels and broadly
tracks the improvement in underlying
earnings. The proposed final dividend is
subject to approval by shareholders at the
Annual General Meeting on 12 July 2022 and
if approved by shareholders, will be paid
on 5 August 2022 to shareholders on the
register on 15 July 2022. The estimated final
dividend amount to be paid is £10m and in
accordance with Adopted IFRS has not been
included as a liability in these statements.
Dividend payments in the year of £14.3m
(2021: £3.5m) comprised the final 2021
dividend and the 2022 interim dividend
(2021: interim 2021 dividend only).
Profit after tax and
earnings per share
Underlying profit before tax for the year
increased by 23.1% to £58.1m (2021:
£47.2m as restated) due to the increased
revenue as outlined above. There was also
a small contribution to underlying profits
resulting from improved margins across
the Group, following the implementation
of cost control measures and contract
renegotiations completed in the year. This
increase was partially offset by increased
net financing costs, principally due to
higher interest payable on leases and less
interest income on the defined benefit
pension surplus.
Underlying profit after tax for the year
is £50.6m (2021: £39.7m). The increase of
27.5% reflects the increase in underlying
profit before tax as well as the reduction
in the underlying effective tax rate from
15.9% to 12.9% as explained above.
Profit after tax for the year on a statutory
basis increased to £47.9m (2021: £39.1m as
restated), an increase of 22.5%. This reflects
increases in non-underlying costs primarily
relating to cloud computing configuration
and customisation costs now expensed as
a result of changes in accounting guidance
and acquisition-related costs. Non-underlying
credits include the release of a historic
warranty provision and consequential
gains on business and asset disposals.
Underlying EPS, which excludes earnings
from non-underlying items, increased by
27.5% to 40.8p (2021: 32.0p). Basic EPS
increased by 22.5% to 38.6p (2021: 31.5p
as restated).
The calculation of these EPS measures is set
out in Note 9 to the consolidated financial
statements. The weighted average number
of shares used in the calculation of basic EPS
is impacted by shares issued and purchased
during the year related to share options, and
for diluted EPS, by share options in issue not
yet exercised.
Wincanton plc Annual report and accounts 2022 – 039
Chief Financial Officer’s review continued
Financial position
The summary financial position of the Group is set out below:
Non-current assets (excluding pension assets)
Net current liabilities
Non-current liabilities (excluding pension liabilities)
Net cash (excluding lease liabilities)
Net pension asset (excluding deferred tax)
Net assets
2022
£m
325.6
(156.2)
(224.0)
3.7
114.5
63.6
2021
Restated 1
£m
235.1
(158.0)
(138.9)
11.9
48.2
(1.7)
Change
£m
90.5
1.8
(85.1)
(8.2)
66.3
65.3
1 The comparative for non-current assets has been restated following a required change in accounting policy as explained in Note 1 to the
consolidated financial statements.
The increase in net assets of £65.3m since
31 March 2021 relates primarily to the
positive movement on the net pension
asset which has increased to £114.5m
(2021: £48.2m), an increase of £66.3m.
The pension movement is primarily due
to the impact of external market factors
as explained in the Pension section below.
with Cygnia, with right-of-use (ROU) assets
being offset by increased lease liabilities.
Movements in non-current assets also
include goodwill recognised on the
business combination, with non-current
liabilities reflecting increased borrowings
and deferred tax liabilities, mainly related
to the net pension asset.
The increase in both non-current assets
and non-current liabilities during the year
reflects significant new leases for property
and other assets, including those acquired
Revenue growth and good cash
management have led to the Group
reporting a net cash position of £3.7m at
31 March 2022 (2021: £11.9m net cash),
despite reporting a net debt position
at the end of H1 of £16.4m, shortly after
completion of the Cygnia acquisition.
The prior year cash position included
the benefit of significant temporary
cash protection measures including the
deferral of VAT, corporation tax and
pension recovery payments and the
Coronavirus Job Retention Scheme (CJRS),
which were repaid during the second half
of the prior year.
Cash flow and net debt/cash
Net cash at 31 March 2022 was £3.7m (2021: net cash £11.9m), reflecting a net cash outflow of £8.2m over the intervening 12 months.
Free cash flow, defined as the movement in net debt/cash before acquisitions, pension payments, dividends and the purchase of own
shares, was an inflow of £54.0m (2021: £43.8m inflow).
Underlying EBITDA2
Working capital
Tax
Net interest
Other items
Repayment of obligations under leases
Capital expenditure
Proceeds from asset disposals
Free cash flow
Pension payments
Dividends
Own shares acquired
Acquisition:
– Consideration
– Additional net assets acquired
(Decrease)/increase in net cash
2022
£m
108.3
6.0
(3.3)
(8.3)
(2.7)
(37.7)
(11.2)
2.9
54.0
(18.5)
(14.3)
(1.8)
(23.9)
(3.7)
(8.2)
2021
(Restated) 1
£m
95.2
3.0
(5.7)
(6.3)
(2.2)
(35.1)
(9.6)
4.5
43.8
(18.3)
(3.5)
–
–
–
22.0
Change
£m
13.1
3.0
2.4
(2.0)
(0.5)
(2.6)
(1.6)
(1.6)
10.2
(0.2)
(10.8)
(1.8)
(23.9)
(3.7)
(30.2)
1 Certain comparatives have been restated due to a required change in accounting policy which has resulted in costs previously capitalised now
presented as a non-underlying expense within net operating profit, as explained in Note 1 to the consolidated financial statements.
2 Alternative Performance Measure: refer to Note 3 to the consolidated financial statements.
Working capital movement in the year
resulted in an inflow of £6.0m (2021:
inflow of £3.0m) driven mainly by
good cash management, the mix of
revenue growth from both new and
existing customers on favourable terms,
and a timing difference on payables
supporting growth.
The Group paid cash tax in the year of
£3.3m, benefiting from enhanced capital
allowances together with tax deductions
received on pension contributions.
Additional tax of £3.9m was paid in April
2022 as a consequence of group tax
losses being deferred until future years to
benefit from the higher rate of tax 25%
from 1 April 2023.
040 – Wincanton plc Annual report and accounts 2022
Net interest includes arrangement fees
of £1.4m paid on completion of the Group
successfully renegotiating its revolving
credit facility. During H2, additional
drawdowns were made against the Group’s
revolving credit facility principally to fund
the Cygnia acquisition and support cashflows
associated with the peak period for the
foundation markets.
The Group manages capital expenditure
tightly as demonstrated during the
pandemic period. This year it has made
significant investment in the upgrade and
replacement of assets where appropriate.
Capital expenditure increased to £11.2m
(2021: £9.6m) supporting growth through
investment in automation and innovation in
Nuneaton and The WEB, Rockingham; the
prior year has been restated to reflect the
change in accounting policy around cloud
computing implementation costs.
Net proceeds from asset disposals of £2.9m
relates to the disposal of a number of
specialist vehicles in the year and includes
the proceeds of assets recorded as held for
sale at 31 March 2021. In the prior year, the
net proceeds of £4.5m primarily relate to the
disposal of sundry vehicles.
Other items of £2.7m (2021: £2.2) comprise
non-cash items relating to net movements
on provisions and share-based payment
charges in the year. It also includes cash
costs relating to the upgrade of our finance
and HR systems that have been expensed
in line with our revised accounting policy
around cloud computing implementation
costs and acquisition-related expenses,
offset by contingent consideration from the
disposal of our Specialist Services businesses
in the prior year.
The cash contributions to fund the pension
deficit in the current year to 31 March
2022 were £19.2m (31 March 2021: £18.9m)
less administration costs of £0.7m (2021:
£0.7m). The Group expects to contribute
£20.7m to the pension scheme in the next
financial year.
Equity dividends of £14.3m (2021: £3.5m)
were paid in the year, reflecting the return
to the Group’s progressive dividend policy.
The interim cash dividend paid in the second
half was £4.9m (2021: £3.5m). As noted
above, the recommended final dividend for
the year ended 31 March 2022 will result in
an estimated cash outflow of £10.0m in the
first half of the year ended 31 March 2023.
The Group acquired 500,000 of its own
shares (2021: nil) during the year for a
total payment of £1.8m (2021: nil) to
provide shares for the Employee Benefit
Trust in respect of its long term incentive
plan commitments.
The acquisition of Cygnia in September 2021
resulted in a net cash outflow of £27.6m
as described above.
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Financing and covenants
The Group has a £175.0m (2021: £141.2m) committed RCF which has been renegotiated during the year and matures in March 2026. The headroom
in these committed facilities in addition to net cash of £3.7m at 31 March 2022 was £150.0m (2021: £132.2m). The Group also has a Receivables
Purchase Facility (RPF) and operating overdrafts which provide day to day flexibility, amounting to a further capacity of up to £50m and £7.5m
respectively in uncommitted facilities. At 31 March 2022, utilisation of the Group’s non-recourse RPF was £4.1m (2021: £7.1m).
Wincanton operates comfortably within its banking covenants, as summarised in the table below:
Covenant
Leverage ratio
Interest cover
Fixed charge cover
Ratio
At 31 March 2022
At 31 March 2021
<3.0:1*
>3.5:1
>1.4:1
0.7
38.8
2.7
0.3
29.2
2.8
*
Leverage ratio was <2.75:1 under previous RCF agreement.
The calculation of these covenants and reconciliations to reported numbers are included in Note 30 to the consolidated financial statements.
Pensions
The Group operates a number of pension arrangements in the UK and Ireland.
Defined benefit arrangements
The Wincanton plc Pension Scheme (the Scheme) includes defined benefit sections which were closed to future accrual on 31 March 2014.
The Group has reported an IAS 19 net asset of £114.5m (£85.9m net of deferred tax) at 31 March 2022 (2021: £48.2m).
£m
Assets
Liabilities
Net pension asset
Discount rate (%)
31 March 2022
30 September 2021
At 31 March 2021
1,208.3
(1,093.8)
114.5
2.7%
1,256.4
(1,188.8)
67.6
2.0%
1,211.9
(1,163.7)
48.2
2.0%
The movement in the net defined benefit
asset in the year was primarily the result
of the impact of external market factors.
Scheme liabilities are calculated using
a discount rate based on high quality
corporate bond yields while Scheme assets
are hedged against movements in gilt yields.
Credit spreads on corporate bonds increased
due to market uncertainty resulting in a
reduction in the liabilities, which was not
matched with a corresponding fall in the
value of assets as at 31 March 2022.
The deficit funding contribution in the year,
net of expenses, was £18.5m (2021: £18.3m).
The estimated actuarial deficit on a technical
provision basis has reduced to £37m at
31 March 2022, compared to £67m at 31
March 2021. At 31 March 2022, the Scheme’s
investments were split between 19% in
return-seeking assets and 81% in defensive
assets. The inflation and interest rate risks
facing the Scheme are hedged to mitigate
the quantum of any future movements
in the actuarial valuation.
The sensitivities of the present value of
the Scheme obligations to changes in
the key actuarial assumptions have been
assessed; an increase of 0.25% in the
discount rate has been estimated to further
reduce the liability by £41m and reduce the
assets by £52m, a net reduction in the net
asset of £11m.
Wincanton plc Annual report and accounts 2022 – 041
Chief Financial Officer’s review continued
Defined contribution
arrangements
The Group’s defined contribution
arrangements include the Retirement
Savings Section, including the Auto
Enrolment section, and the Pension
Builder Plan in the UK, Cygnia
contributions to a Master trust and
a separate similar local scheme in
Ireland. The charge incurred for
these arrangements total £36.7m
(2021: £34.0m).
Contingent liabilities
From time to time, the Group is notified
of legal claims in respect of work carried
out and the potential exposure can be
material. Where management believes we
are in a strong position to defend these
claims and the likelihood of an outflow
of economic benefit is not probable, no
provision is made.
The Group has received notification of
a potential claim from a former customer
and is in the early stages of defending
this claim. At this time, the Group
considers that it is not probable that any
claim will result in an outflow of economic
benefit. The Group is actively seeking
further information to substantiate the
allegations made. Given the early stage of
the legal and commercial process it is not
practicable to make an estimate of the
potential financial impact. In parallel, the
Group continues to work with its insurance
providers to confirm coverage if required.
Going concern
The financial statements have been
prepared on a going concern basis.
Having considered the ability of the
Company and the Group to operate
within its existing facilities and meet its
debt covenants, the Directors have a
reasonable expectation that the Company
and the Group have adequate resources to
continue in operational existence for the
foreseeable future.
In determining whether the financial
statements can be prepared on a going
concern basis, the Directors considered the
Group’s business activities, together with
the principal risks and uncertainties likely to
affect its future performance and position.
The review also included the financial
position of the Group, its cash flows, and
adherence to its banking covenants.
The Board considered the following
key uncertainties in considering the
Group’s future:
– a deterioration in trading performance
together with unplanned working
capital outflows
– further waves of the Covid-19 pandemic
and its impact on trading
– a decline in current market conditions,
including the impact of further
increases in inflation and increased
competition, resulting in lower Group
revenues and profits.
The Board has also considered a base case
and a severe but plausible downside case.
In both scenarios, the Group has adequate
headroom in existing bank facilities to
meet its liabilities as they fall due, and
it complies with the financial covenants
under its committed borrowing facilities
throughout the forecast period.
The forecasts on which the going concern
assessment is based have also been subject
to sensitivity analysis and stress testing to
assess the impact of the above uncertainties.
The Directors also reviewed the potential
mitigation actions that could be taken in
the event that revenues are worse than
expected, to ensure that operating profit
and cash flows are protected.
The Directors have considered the impact
of climate related matters on the Group’s
going concern assessment, and do not
expect this to have a significant impact on
the going concern assessment throughout
the forecast period to 30 September 2023.
Further details are provided in Note 1
‘Accounting policies’ in the consolidated
financial statements.
Alternative Performance Measures
The table below reconciles the APMs to the statutory reported measures.
Revenue
EBITDA
EBITDA margin (%)
Depreciation, amortisation and impairments
Operating profit
Net financing costs
Profit before tax
Income tax
Profit after tax
Earnings per share2
Dividend per share
Net cash excluding lease liabilities
2022
Non-
underlying
Items
£m
£m
Underlying
£m
–
1,421.4
1,221.9
(2.7)
–
(0.6)
(3.3)
–
(3.3)
0.6
(2.7)
105.6
7.4%
(44.2)
61.4
(6.6)
54.8
(6.9)
47.9
38.6p
12.00p
3.7
95.2
7.8%
(43.4)
51.8
(4.6)
47.2
(7.5)
39.7
32.0p
10.35p
11.9
Underlying
£m
1,421.4
108.3
7.6%
(43.6)
64.7
(6.6)
58.1
(7.5)
50.6
40.8p
12.00p
3.7
2021
Non-
underlying
items
(Restated) 1
£m
–
0.6
–
(1.6)
(1.0)
–
(1.0)
0.4
(0.6)
Statutory
(Restated) 1
£m
1,221.9
95.8
7.8%
(45.0)
50.8
(4.6)
46.2
(7.1)
39.1
31.5p
10.35p
11.9
1 Comparatives have been restated following a required change in accounting policy as explained in Note 1 to the consolidated financial statements.
2 Alternative Performance Measure: – refer to Notes 3 and 9 to the consolidated financial statements.
042 – Wincanton plc Annual report and accounts 2022
The Alternative Performance Measures
(APMs) or underlying results reported
in this Annual Report and Accounts
statutory measures adjusted for items
which management considers could distort
the understanding of performance and
comparability year on year.
both in a better understanding of the
financial performance achieved and in
making projections of future results.
A balanced approach to both gains and
losses is applied, to be both consistent
and clear in the accounting and disclosure
of such items.
APMs are used by the Board to assess
the Group’s performance and are applied
consistently from one period to the next.
They therefore provide additional useful
information for shareholders on the
underlying performance and position of the
Group but should not be viewed in isolation.
Additionally, underlying profit before
tax is used in determining annual bonus
payments and underlying EPS is used as a
key performance indicator for most awards
under the Long Term Incentive Plan (LTIP)
share incentive scheme. These measures are
not defined by IFRS and are not intended
to be a substitute for IFRS measures.
Wincanton’s underlying measures may not
be comparable to similarly titled measures
used by other companies.
The Group presents underlying EBITDA,
operating profit, profit before tax and
EPS which are calculated as the statutory
measures stated before non-underlying
items. These are items which the Directors
consider separate disclosure would assist
The Group identifies items as non-underlying
based on the following principles:
– items that are significant in nature. The
event or transaction is clearly unrelated
to, or only incidentally related to, the
trading activities of the Group or the
event or transaction would not reasonably
be expected to recur in the foreseeable
future; and/or
– items that are significant in size. The
event is considered significant in size and
therefore distorts the underlying results
In addition, the Group will always disclose
the items below as ‘non-underlying items’:
– amortisation charges relating to acquired
intangible assets
– profits or losses arising on the disposal
of continuing or discontinued operations
– adjustments to amounts previously
reported as non-underlying
– the tax impact of non-underlying items
Further details of underlying results and the
definition of non-underlying items can be
found in Note 3 to the consolidated financial
statements.
EBITDA refers to earnings (operating
profit) before interest, tax, depreciation
of property, plant and equipment and
right-of-use assets and amortisation of
finite-lived intangible assets. This measure
also excludes the impact of impairment of
non-current assets.
Other APMs used which relate to cash
flow are net debt/cash and free cash flow.
Net debt/cash is the sum of cash and bank
balances, bank loans and overdrafts and
other financial liabilities excluding lease
liabilities. Note 30 to the consolidated
financial statements provides a breakdown
of net debt/cash for the current and
prior year. Free cash flow is defined as
the movement in net debt/cash before
acquisitions, pension payments, dividends
and the purchase of own shares.
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Non-underlying items
Cloud computing configuration and customisation costs1
Acquisition-related costs
Amortisation of acquired intangibles
Release of warranty provision
Gain on disposal of businesses
Net profit on disposal of assets and freehold property
Pension Scheme – Guaranteed Minimum Pension (GMP)
2022
£m
(4.1)
(1.0)
(0.6)
1.0
0.9
0.5
–
(3.3)
2021
(Restated) 1
£m
Change
£m
(2.2)
0.2
–
–
0.4
1.3
(0.7)
(1.0)
(1.9)
(1.2)
(0.6)
1.0
0.5
(0.8)
0.7
(2.3)
1 Certain comparatives have been restated due to a required change in accounting policy which has resulted in costs previously capitalised now presented
as a non‑underlying expense within net operating profit, as explained in Note 1 to the consolidated financial statements.
The Group has reviewed and clarified its
policy on non-underlying items during the
year and seeks to take a balanced approach
to both gains and losses, to be both
consistent and clear in the accounting and
disclosure of such items.
Cloud computing configuration and
customisation costs relate to a major
systems implementation which has gone
live during the year. These costs have been
expensed following a revised accounting
policy implemented in accordance with
updated accounting guidance. They have
been presented as a non-underlying item
as they are not reflective of underlying
performance. Comparatives have been
restated to reflect the change of accounting
policy, with £2.2m previously capitalised
now being expensed.
The Group has incurred acquisition-related
costs, professional fees and integration costs
of £1.0m related to the acquisition of Cygnia,
which have been recognised as an expense
as required by accounting standards. In the
prior year, a balance related to estimated
costs of aborted M&A activities was released
following the conclusion of these bids.
The Group has released the value of a
potential claim under a historic warranty
provision now considered to be remote and
has recognised a gain of £0.9m arising from
contingent consideration recognised on the
Group’s disposal of its Containers business
in October 2020. Further gains which relate
to the disposal in the year of a number of
specialist vehicles that were not required for
ongoing operations have also been treated
as non-underlying.
James Clarke
Interim Chief Financial Officer
19 May 2022
Wincanton plc Annual report and accounts 2022 – 043
Risk report
How we manage risk
The Board accepts that in order to achieve
its strategic objectives and generate
suitable returns for shareholders, it must
accept and manage a certain level of risk.
Lyn Colloff
Company Secretary
The Board sets the policy for managing
risk in the business. It recognises the
importance of having effective policies
and procedures for identifying, actively
monitoring, mitigating and managing the
financial and non-financial risks facing
the Group.
By regularly reviewing the Group risks,
which are derived from the detailed
operational risks identified across the
Group by businesses and functions,
and satisfying itself that these risks are
managed within the Group’s risk appetite,
the Board ensures that the Group’s
risk exposure remains appropriate and
links to the effective delivery of its
strategic objectives.
The Board has ultimate accountability
for the execution of risk management
and internal control systems, with the
Executive Management Team responsible
for execution of the management of
risk throughout the Group. The Risk
Management Committee provides
assurance regarding the management
of Group and operational risks.
044 – Wincanton plc Annual report and accounts 2022
The Financial Assurance Committee
provides assurance regarding the
management of financial risk.
The Board has delegated responsibility
for the monitoring and reviewing of
the effectiveness of the Group’s risk
management and internal control systems
to the Audit Committee. Assurance over
the effectiveness of these systems is
provided through regular management
reporting to the Audit Committee. The
process for monitoring and controlling
risk emphasises ongoing evaluation and
monitoring by the management teams at
each appropriate level: sector, specialist
function and Group level.
All risks are assessed using an ‘impact
and likelihood’ model; the heatmap shown
on page 46 is a summary of where on
that model the current score for each
principal risk resides. The outcome of the
risk management process is moderated
through the Risk Management Committee
in the first instance. Both the Risk
Management Committee and the Audit
Committee undertake ‘deep dives’ with
the relevant risk manager into specific
risk areas to ensure that management of
the risk is understood and the mitigation
actions and scoring challenged.
Climate change risks are considered in
exactly the same way as other operational
risks within the business and feature on
the principal risk register; see page 49.
Ownership of the management of climate-
related risks ultimately sits with the Chief
Operating Officer and is managed by the
Head of Sustainability.
We have adopted a proactive approach
to the management of emerging issues
and horizon scanning with sectors
and central functions providing early
identification through a number of routes.
These include weekly operational trading
updates; twice weekly EMT touchpoints;
monthly EMT meetings; and sector
reviews. Externally, potential risks are
picked up from sources such as media
scanning, and legal and market updates.
A good example of our work in action was
demonstrated in response to the recent
Ukraine/Russia conflict where we were
able to do a thorough assessment of
potential impacts to our business within
a very short timeframe and to increase our
controls around payments and supply chain
control appropriately.
The Group manages risk by operating a three
lines of defence risk and control model.
The first line of defence consists of
operational management implementing
and maintaining effective risk identification,
reporting, management and internal control
systems. This ensures that risk management
remains an integral part of the Group’s
day to day operations and facilitates the
escalation of significant risks as and when
they are identified.
The second line of defence consists of the
subject matter expert functions which,
in addition to supporting operational
management in their own specialist areas,
also maintain their own risk registers. The
second line also includes the EMT, Risk
Management Committee and Financial
Assurance Committee which regularly
review the Group risks and other strategic
risks affecting the Group and perform
deep dive reviews on specific risk areas.
Internal Audit, which forms the third
line of defence, is empowered to
provide an independent assessment of
the effectiveness of risk management
and internal control systems, as well as
Wincanton three lines of defence
identifying areas for improvement. The
Audit Plan has been built with input from the
Group risk registers. The audit assignments
planned for the coming year include providing
assurance on a number of Group risk types.
The Internal Audit function reports directly
to the Audit Committee Chair to ensure
its independence and objectivity. These
lines of defence also include the Group’s
whistleblowing reporting system, which
enables employees to raise concerns over
ethics and compliance matters.
In support of our ‘people’ focus in our strategic
deliberations this year, Internal Audit will be
providing a summary of culture indicators that
it encounters in audit assignments which will
be reported to the Audit Committee.
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Board/Audit Committee
Executive Management Team
Risk Management Committee
Financial Assurance Committee
First line of defence
Management controls
Internal controls
Policies and procedures
Control risk
self-assurance
Second line of defence
Assurance
Financial assurance
Information security
Health, safety and
environmental
assurance and business
continuity planning
Transport compliance
Defence compliance
People assurance
Risk management
Data protection
compliance
Third line of defence
Internal Audit
Annual Audit Plan
Wincanton plc Annual report and accounts 2022 – 045
Risk report continued
Risk heatmap
Current risk assessments taking account of current mitigations
94
2
1
3
5
6
8
7
1 Pensions
2 Recruitment and retention
3 Legal and regulatory
compliance
4 Cyber security
5 Significant changes
to market sectors and
operating environments
6 Business continuity
7 Climate change risks
8 Significant health, safety
or environmental incident
9 Failure to deliver business
systems
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w
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Rare
Unlikely
Moderate
Likelihood
Likely
Almost certain
Principal risk and uncertainties
The Group maintains a register of Group
(or principal) risks and uncertainties
which are identified as either: financial;
reputational; operational; legal/
compliance; strategic; or climate change-
related risk types. The Group’s risk
management framework is structured to
ensure that risks are identified promptly
by management teams so that they are
mitigated and managed appropriately
in support of the delivery of the Group’s
strategic plan. The risks identified are
documented and measured, including the
ownership of individual risks. Data from
this process has been aggregated and has
been used as the basis for the Group’s
principal risk disclosure on pages 49 to 51.
The risks are regularly reviewed and
exposure is rated in terms of both gross
risk (before mitigations) and current risk
(after mitigations), which allows the Group
to identify risks that are heavily dependent
on internal mitigating controls and to
allocate resources appropriately. Risks
are also given a target risk score which,
along with an action plan to achieve, sets
out where each risk is targeted to move to
within a 12–18 month time horizon. In this
way the Board and management teams
can monitor progress to reduce risk within
the business.
The Board has overall responsibility for
risk management, for determining the risk
appetite in relation to the risk types, for
implementation of the risk management
policy and for reviewing effectiveness of
the risk management systems. The Risk
Management Committee is chaired by the
Company Secretary and meets to review
the Group risk register entries and make
recommendations regarding any new or
emerging risks and any potential impact
they may have on the risk appetite and the
ability of Wincanton to manage such risks.
The Board accepts that in order to achieve
its strategic objectives and generate
suitable returns for shareholders, it must
accept and manage a certain level of risk.
It undertakes an exercise, at least annually,
to consider the nature and level of risk
it is prepared to accept to deliver the
strategy. Risk appetite is set across the
risk types directly relevant to the Group,
supported by high level risk assertions and
parameters which set out how our people
are expected to work across each category
of risk. The resulting assessment of risk
appetite is set out in the table on page 47.
Conclusion
By following the risk management
processes outlined above, the
Board considers it has performed a
robust assessment of principal and
emerging risks.
046 – Wincanton plc Annual report and accounts 2022
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Risk appetite
Risk appetite – process
The risk appetite statement details the Group’s approach to risk and includes a series of risk assertions, together with the risk
parameters within which we expect our people to work. Compliance with the risk appetite statements for each Group risk is
assessed six monthly through the risk management process, moderated by the risk management team and challenged by the
Risk Management and Audit Committees. The Board reviews the risk appetite statement annually.
Risk appetite statement
Our markets are subject to disruption by new market
entrants based on advances in technology and automation.
We continue to pursue ambitious growth plans increasing
revenue and margin and transforming the capabilities
of the Group, thus changing its market perception. We
are willing to accept a controlled level of risk to increase
the likelihood of achieving or exceeding our growth and
transformational objectives.
Risk appetite varies depending on the risk type
The Board’s appetite for risk varies depending on the
risk type. The Group measures risk by estimating the
potential financial impact. The Board has a low tolerance
for compliance, reputational or finance-related risk.
Conversely, it has a higher tolerance for strategic risk
(growth and transformation). Prevailing market conditions
are taken into account when setting the risk appetite.
Risk type
Risk assertion
Risk parameter
Risk appetite
Financial
We will manage or avoid situations or actions that
might adversely impact the integrity of financial
reporting or the strength of our balance sheet.
It is a critical requirement that financial reporting
complies with relevant accounting standards and is
fair, balanced and understandable.
Reputational We will manage or avoid negative press or media
coverage which will adversely impact the way that
Wincanton is perceived or adversely affect the
share price.
Legal/
compliance
We will ensure we comply with all legal requirements
and manage or avoid situations or actions that
could have a negative impact on our reputation or
our brand.
It is also imperative that financial risk is limited to
between 1% and 2.5% of operating profit.
It is imperative that the Wincanton reputation or share
price is not impacted by media or press comment.
There is no tolerance for breaches of:
– legislative or statutory requirements
– delegated authority levels
– policies and procedures
– health, safety and environment regulations.
Low
Low
Low
Operational
We will train and develop our people to ensure they
have an inclusive working experience and understand
The Wincanton Way of working.
The management of our assets must be considerate
and commensurate with the benefits we aim
to achieve.
Moderate
We will manage our property assets to make the best
use of space and maximise the return from premises.
We will manage our vehicle assets in a safe and
considerate way, in order to maximise the return from
each asset.
Climate
We will limit our impact on the climate in any way we
can identify, subject to mitigation being available at
commercial scale.
We will work with our suppliers and our customers to
offer climate friendly solutions in our transport and
warehouse operations, as they become available.
Moderate
Strategic
We will not pursue growth at any cost. We will expect
reasonable margins and returns on capital.
We will pursue our growth strategy to meet our
market growth objectives. We aim for high operating
margins in our eFulfilment and Public and Industrial
sectors (our growth markets).
High
Wincanton plc Annual report and accounts 2022 – 047
Risk report continued
Viability statement
In accordance with provision 31 of the 2018
UK Corporate Governance Code, the Directors
have assessed the prospects and financial
viability of the Group and have concluded
that they have a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they fall
due over the period of the assessment. They
have assessed the viability of the Group over
a three year period to 31 March 2025, taking
into account the Group’s current position and
the potential financial and operational impact
of the principal risks documented on pages
49 to 51 of the Annual Report, in severe but
plausible scenarios. In making its assessment,
the Board carried out a robust assessment of
the principal risks facing the Group, including
those that would threaten its business model,
future performance, solvency or liquidity.
The Board has determined that a three year
period is an appropriate period over which to
provide its viability statement. This period
aligns with the Group’s annual planning and
forecasting process, which is led by the CEO
and CFO with input from operational and
central support functions. It is also consistent
with the Group’s debt cycle reflecting
historical refinancing which typically occurs
one year prior to the expiry date.
We believe that this presents the Directors
and readers of the Annual Report and
Accounts with a reasonable degree of
confidence over the longer term outlook.
The Directors have no reason to believe the
Group will not be able to meet its liabilities
as they fall due over a longer period.
Scenarios tested include the following:
Scenario 1: Future pandemic
In the event of another pandemic causing either
temporary or national lockdown the Group is
likely to suffer lower revenue and profits as
certain activities of the Group are suspended
Assumptions:
– Based on the impact of the pandemic in 2020,
lower trading has been modelled for three
months starting in April 2022, with a slow
recovery for a further six to nine months
Risk 6: Pandemic and other
worldwide events
Scenario 2: Growth and retention
The Group could lose a major customer as they
fail to renew a rolling or fixed contract. This
could also have a wider impact on reputation
and could result in a reduction in new wins
Scenario 3: Operational performance
The ability to run a disciplined and efficient
operating model is key and any lack of controls
or ability to capture the correct costs could
impact the Group’s overall margin
Assumptions:
– Loss of major customer with effect from
Risk 5: Significant changes to market
sectors and operating environments
1 October 2022
– Contract wins 50% lower
– Contract losses 50% higher
Risk 8: Significant health and safety or
environmental incidents
Assumptions:
– Reduction in margin in foundation markets
to 1%
– Increased support function costs
– Inability to negotiate favourable
supplier rates
Risk 2: Recruitment and retention
Risk 3: Legal and regulatory compliance
Risk 5: Significant changes to market
sectors and operating environments
Risk 9: Failure to deliver business systems
Scenario 4: Operational performance
IT systems and technology underpin the
Group’s operating model and any delay with
the new ERP implementation or system failures
could have a significant reputational impact
on the Group
Assumptions:
– A major IT system fails for an extended
period of time
– Delayed implementation of finance and
HR system
– Loss of customer contracts at renewal due to
the poor systems and IT failure
Risk 3: Legal and regulatory compliance
Risk 4: Cyber security
Risk 9: Failure to deliver business systems
Scenario 5: Customer claim
The contractual terms with which Wincanton engages with its customers can be complex,
reflecting the nature of the services offered. As such, it is plausible that a dispute could arise,
leading to a potential outflow
Risk 3: Legal and regulatory compliance
Risk 5: Significant changes to market
sectors and operating environments
and the Group will be able to continue in
operation and meet liabilities as they fall due
over the three year period to 31 March 2025.
Lyn Colloff
Company Secretary
19 May 2022
The Directors have considered the potential
impact of climate change on the viability
assessment. The impact of regulatory change
resulting from the effort to mitigate climate
change has been considered and built into the
Group’s forecasts, which include cash outflows
from the purchase of carbon offsetting credits.
However, there is not considered to be a
significant risk of climate change causing a
significant downturn in cash flows across the
Group over the viability assessment period and
therefore no specific sensitivities relating to
climate change have been considered over and
above the scenarios above.
Having conducted this viability scenario
testing, the Directors have concluded that
none would impact the Group’s ability to meet
its liabilities in full as they fall due. The Group
would have sufficient liquidity and adequate
headroom in the bank facilities and compliance
with the Group’s financial covenants would
not be affected. In the highly unlikely
situation that all downside scenarios occurred
simultaneously, only one of the covenants
(net debt:EBITDA) would be breached at one
testing point (31 March 2023).
The facility headroom as at 31 March 2022
was £150.0m.
In severe but plausible scenarios, mitigating
actions such as tighter cost controls as
implemented throughout the Covid-19
pandemic during the year ended 31 March 2021
would need to be introduced.
Based on this assessment, the Directors have
a reasonable expectation that the Company
048 – Wincanton plc Annual report and accounts 2022
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Principal risks and
uncertainties of the Group
1. Pensions
2. Recruitment
and retention
3. Legal and
regulatory compliance
Description
The Group has a significant Defined Benefit
Pension Scheme. The employer contribution
levels required and the value of the pension
fund itself are subject to: financial market
conditions, global economic and political
matters, demographic factors, expected
future investment returns and the legal
and regulatory environment. Significant
adverse changes in any of these factors could
materially alter the value and lead to a material
change in cash contributions, a change to the
repayment period, regulatory intervention, or
a combination thereof. These changes could
impact the cash flow and profitability of the
Group and restrict its ability to invest in the
business, pay dividends and repay debt.
Controls and key mitigations
The Group has undertaken steps to mitigate
the risk exposure of financial market
movements and economic and political
conditions. The Defined Benefit section of the
Scheme was closed to future accrual in 2014,
to cap the risk. The Group maintains a strong
working relationship with the Trustee, which is
responsible for managing the fund and setting
the investment strategy. The investment
strategy is intended to reduce the investment
risk through an appropriate level of matching
between assets and liabilities in the Scheme.
The level of hedging is under constant review
to ensure it mitigates the impact of inflation
and interest rate movements. The Group and
the Trustee engage high quality external fund
managers and actuaries, and have separate
legal, covenant and audit advisers to support
and inform their decision making. The Group
and the Trustee have agreed an appropriate
level of annual contributions to the Scheme
together with contingency plans to protect the
Scheme in the event of adverse developments.
The objective remains to ensure that the Group
meets its commitments to pensioners and the
Scheme and that the recovery contributions are
affordable and sustainable for the Group.
Accountability
Risk owner: Chief Financial Officer
Risk manager: Director of Treasury,
Tax and Insurance
Description
The inability to recruit and retain employees,
from drivers and warehouse operatives to
executive talent, is considered a principal risk.
Failure to retain people with the right skills,
competencies, values and behaviours needed
to operate and grow the business would impact
the long term success of the Group.
Controls and key mitigations
The Group has a strong and highly capable
People function to monitor and maintain a
high standard of recruitment and a regular
appraisal process, based on key competencies.
The Group constantly reviews and refreshes
strategies and processes for recruitment and
retention, monitoring vacancies and future
requirements and utilising data to manage
and adapt the service provision. The Group has
also established relationships with preferred
agencies to provide additional contingency
workforce. Regular engagement surveys are
completed to ensure feedback is received
from our people and the scores are monitored
as a KPI. The Senior Independent Director
visits sites to bring employee feedback into
the boardroom. Talent and development are
monitored and supported by a dedicated
team to ensure people at all levels have access
to our comprehensive training programme
and development opportunities. Rewards
are reviewed against market practice to
ensure they remain competitive. The Board
and Nomination Committee closely monitor
and review the Board, executive and senior
management strategies for succession
planning and review the Group’s talent
pool on a regular basis.
Accountability
Risk owner: Chief People Officer
Risk manager: Group Learning and
Development Director
Description
The Group must comply with an extensive
range of regulations and legislation in order
to provide its services and solutions. Failure
to comply with the required standards could
lead to significant legal claims and regulatory
actions, sanctions, removal of licences and
permits, penalties and fines. It could also result
in reputational damage to the Group and our
customers and potential harm to the Group’s
employees or property.
Controls & key mitigations
Policies and processes are in place throughout
all areas of the Group to ensure systems,
operations and central functions comply
with relevant areas of legislation. The Group
Secretariat monitors emerging legislation and
determines any potential impact to the Group
and its policies, controls, communications
and training provision. Second-line oversight
by central functions reviews the operation
of controls and their effectiveness, including
on annual review of Group policies. External
expert advice is sought as appropriate.
Processes and controls around sanctions and
money laundering have been tightened in
light of the current climate and the sanctions
placed on Russian citizens and interests during
this year.
Awareness sessions are regularly distributed in
different formats across the business to ensure
our colleagues know the legal and regulatory
risks we face.
Accountability
Risk owner: Company Secretary
Risk managers: Deputy Company Secretary
and Head of Compliance
Trends
Link to strategy
Increasing
Our products and services
Static
Our markets
Reducing
Our operating model
Our people
Wincanton plc Annual report and accounts 2022 – 049
Risk report continued
4. Cyber security
5. Significant changes
to market sectors and
operating environments
6. Business continuity
Description
The Group is aware of cyber risk and its
potential for disrupting our business and that
of our customers. A cyber security incident
could impact the Group’s operational
performance and reputation through
the application of penalties, fines and/or
regulatory action.
Description
The Group provides services in a competitive
and complex environment, with large
customers. The Group faces commercial
pressures to renew and win business with
acceptable levels of margin in order to
deliver sustainable growth and returns.
These pressures may stem from:
Description
Since the beginning of the Covid-19 crisis,
the Group has been committed to keeping
its customers, colleagues and communities
as safe as possible, while continuing to play
a vital role in delivering essential goods
throughout the UK. There remains risk
of other global pandemics and events.
Controls and key mitigations
The Group routinely assesses our cyber
risk and has established comprehensive
information security controls to reduce
our exposure. Controls include but are
not limited to: vulnerability management,
penetration testing, regular audits and
routine access reviews.
In response to the current geopolitical
situation, we have increased security
awareness to ensure our colleagues
remain vigilant.
Accountability
Risk owner: Chief Information Officer
Risk manager: Head of IT Security and Risk
– changes in customer appetite for
Risks to our operations include:
outsourcing services
– strategic or behavioural changes in
the competition, which may impact
market pricing
– new disruptors, in particular the
emergence of new technologies
– customer business models can be
affected by customer confidence and the
geopolitical situation; this may have a
knock-on effect on volume pass-through in
our business
– cost increase pressures specifically in
relation to wage inflation.
Controls and key mitigations
The Group regularly reviews its strategy as
part of an annual strategy planning process.
That process includes, but is not limited
to, the review of market opportunities and
threats including changes to high level
customer requirements, the competitive
environment or individual sector strategies,
developments in new business and
innovation propositions, and other areas of
strategic importance to the business.
The Group reviews its strategic performance
through a set of strategic KPIs and ensures
execution through strategic programme
management of the initiatives resulting
from the aforementioned strategy
planning process.
Wage inflation is managed through customer
collaboration on open book contracts, and
cost escalation clauses on closed book
operations.
Accountability
Risk owner: Strategy Director
– labour shortages due to illness and
other absence
– inability to deliver contracted services
due to regulatory or safety requirements
– loss of revenue and profit due to business
interruption, reductions in customer
volumes or customer failure
– cost pressures due to additional process
steps, increased staffing costs and lost
economies of scale
– liquidity pressure due to delayed receipts,
potential customer failure and availability
of financing.
Controls and key mitigations
The Group operates a strong programme
office which enables rapid, controlled
responses to be implemented in the changing
landscape. Business continuity plans are in
place across all areas of the business. These
plans identify the requirements that may
be needed for each area of the business to
function under a wide range of scenarios.
The plans are mobilised as the situation
evolves and include:
– the introduction of additional health
and safety measures
– close liaison with customers to adapt
processes and requirements to ensure
continuity of service
– the redeployment of staff and resources
across business areas
– interaction with government and industry
bodies to ensure regulatory requirements
are understood and best practice is
being adopted
– expense control and elimination of cost,
Risk manager: Strategy Manager
where possible
Trends
Link to strategy
Increasing
Our products and services
Static
Our markets
Reducing
Our operating model
Our people
050 – Wincanton plc Annual report and accounts 2022
– strong focus on cash management
and a close relationship with
financial stakeholders
– extensive impact analysis and downside
scenario testing. Please refer to the
viability statement on page 48 and
the basis of preparation note in Note
1 Accounting policies in the financial
statements on page 111.
Accountability
Risk owner: Chief Operating Officer
Risk manager: Group HSEQ Director
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7. Climate change risks
8. Significant
health, safety or
environmental incident
9. Failure to deliver
business systems
Description
The use of fossil fuels and the associated release
of carbon dioxide and other greenhouse gases
have led to rising average global temperatures
and accelerating climate change with the
associated physical risks that this brings. The
UK target of net-zero carbon emissions by 2050
came into force in 2019. The interim UK carbon
budgets and targets associated with the 2050
goal will result in legislation, taxation and
incentive changes to the business, investment
and consumer landscape that represent
material risks and opportunities for Wincanton.
Risks to operations include:
– physical risks such as more extreme weather
events and regional flooding
– changing policy on fuel duties and taxation,
leading to increased costs for carbon
intensive fuels
– new low and zero carbon technology and
infrastructure requiring higher capital
expenditure
– consumer preference and awareness driving
changes to our customers’ sourcing criteria
and targets
– poor response to climate change risks leading
to reputational damage and loss of business.
Controls and key mitigations
The Group has launched a sustainability
strategy which seeks to lead on climate and
other environmental risks, developing net-zero
propositions which offer both mitigation and
new opportunities for engagement with our
customers. The Group has also made changes
to its ESG policy and governance statements to
increase visibility and transparency on climate and
other environmental risks. We have enhanced our
ESG and environment programme offices which
enable sustained, positive action towards our
goals and targets; course correction in response
to performance indicators; and new propositions
in response to technology developments and
opportunities for collaboration.
Actions taken include:
– setting our own short, medium and long
term carbon emissions targets
– development of long term roadmaps with
sector specific technology solutions
– close liaison with customers in all sectors
to propose and develop lower and zero
carbon solutions
– achieving a carbon neutral two-person home
delivery service through carbon offsetting
– engagement and interaction with
government and industry bodies to ensure
regulatory requirements are well defined and
understood and shaped where possible
– establishment of a strategic procurement
process with our supply chain and innovation
partners to deliver the solutions we need.
Accountability
Risk owner: Chief Operating Officer
Risk manager: Head of Sustainability
Description
The Group operates in environments which
have the potential to be hazardous to people
or property if not actively managed. A failure
to manage these risks properly could result
in injury or death and/or damage to property
and the environment. Should such an event
occur it could lead to regulatory action, fines,
withdrawal of licences, site closures and
damage to the Group’s reputation. All of these
outcomes have the potential to impact the
Group’s ability to win and do business.
Controls and key mitigations
The Group has detailed health, safety and
environment procedures and processes in place
and employs health, safety and environment
teams at all business locations. The local
team and operations are then monitored
by a second-line central health, safety and
environment team. The Group undertakes
regular training and assessment programmes,
monitors business records and completion
of risk self-assessments, analyses all ‘near
miss’ reporting, undertakes routine audits
and performs investigations where necessary.
Health, safety and environmental reports
are provided to business management and
leadership to manage and achieve target
business performance.
Accountability
Risk owner: Chief Operating Officer
Risk manager: Group HSEQ Director
Description
The Group relies on secure and highly available
solutions and capabilities that enable our
business and that of our customers. The
potential inability to meet the expectations
of our business and customers could result
in reputational damage and contractual
implications leading to loss of custom,
penalties, fines and/or regulatory action.
Failure to onboard customers and/or facilities
could result in reduced profitability.
Controls and key mitigations
The Group continues to develop its IT strategy
which supports the business strategy. The IT
strategy is underpinned by a new product-
centric operating model combined with
the investment required for its adoption.
The Group has invested significantly in its
back office and transport management
systems with the goal of driving competitive
advantage and reducing risk through the
decommissioning of legacy systems. The
evolving pandemic has led to an increased need
to support flexible working, resulting in Group-
wide improvements to our infrastructure,
connectivity and collaboration tool sets.
Accountability
Risk owner: Chief Information Officer
Risk manager: Infrastructure and
Operations Director
Wincanton plc Annual report and accounts 2022 – 051
Introduction from the Chair
team and the Company Secretary. Formally,
and in line with the Code requirements,
an effectiveness evaluation exercise is
undertaken annually, either internally or
through an externally led process. This year
an internal evaluation process was facilitated
by the Company Secretary. Details of
the process and outcomes are set out
on page 69.
Our stakeholders
The Board places great emphasis on ensuring
that the Group can deliver on its strategy
and is operating in the best interests of the
Group’s stakeholders over the long term.
On page 34 you can read how we continue
to meet our statutory obligations to ensure
that the interests of all our stakeholders are
considered and how we engage with them.
As a people-driven business, Board
engagement with employees continues to
be a focus for us. Stewart Oades, our Senior
Independent Director, leads our employee
engagement programme which supports
the Board’s relationship with the wider
workforce. On page 64 you can read about
the engagement events and the outcomes
that have resulted from this programme.
AGM
The ongoing uncertainty regarding
restrictions arising from the Covid-19
pandemic meant we were unable to hold
our 2021 AGM as a face to face meeting. We
recognise the importance of shareholders’
interaction with the Board, and therefore
offered a live webcast of the AGM. This
online event included an overview of
the business by the CEO. There was an
opportunity for shareholders to ask
questions of the Board both in advance and
during the meeting itself, as well as to vote
their shares in real time during the AGM. No
questions were received.
Our AGM will be held at 11:00 am on Tuesday
12 July 2022 at the offices of Herbert Smith
Freehills, Exchange House, Primrose Street,
London EC2A 2EG.
Details are given in the AGM Notice.
Dr. Martin Read CBE
Chair
19 May 2022
During the year we have set up an ESG Committee
to focus on strategy, target setting, performance
and communications.
Dr. Martin Read CBE
Chair
Dear shareholder
On behalf of the Board, I am pleased
to introduce the Group’s Corporate
Governance Statement for 2022. In the
reports that follow, we set out our activities
during the year, explain our governance
arrangements and detail how we have
applied the provisions of the UK Corporate
Governance Code 2018 (the Code).
Further information on the Code can
be found on the FRC’s website at
www.frc.org.uk.
Governance and the impact
of Covid-19
The continued impact of Covid-19 during this
financial year meant that some of our Board
and Committee meetings had to be held
remotely. However, the majority took place
in person and Board members were able to
make site visits to Sevington in August and
to two of our Screwfix sites, one in Stafford
and one in Trentham, in October. We also
had the opportunity to hold a Board meeting
at our new site in Rockingham (The WEB)
and visit our Central Distribution Centre at
Greenford in London which we operate on
behalf of Waitrose.
Our Environmental, Social and
Governance strategy
We have made good progress in the various
areas of our ESG strategy. For further
details, please refer to pages 22 to 33.
052 – Wincanton plc Annual report and accounts 2022
During the year, we set up an ESG
Committee to focus on strategy, target
setting, performance and communication.
This is a management committee, chaired
by the CEO, but includes a Non-executive
Director to provide an additional interface to
the Board.
Board balance and composition
A detailed review of our Board balance
and composition was completed by the
Nomination Committee in the year. Further
details can be found on page 68.
Changes to the Board
In November 2021 we announced the
resignation of Tim Lawlor, Chief Financial
Officer. In February 2022 we announced
that Tim would step down from the Board
with effect from 28 February 2022, with
James Clarke (Finance Director, UK & Ireland)
assuming the role of Interim CFO pending
the selection of a permanent successor.
We thank Tim for his service over the last
six years and wish him well in his new role.
The Nomination Committee is progressing
the appointment of his replacement.
Board and Committee evaluation
The Board and its Committees continuously
monitor their own performance and seek
to improve their effectiveness. Informally
this happens through open channels of
communication between members with
the support of the senior management
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Summary of compliance
Our compliance with the 2018 code
In accordance with the Listing Rules of the UK Listing Authority, the Board confirms that throughout
the year and as at the date of this report, the Company has complied with the Principles and
Provisions set out in the 2018 UK Corporate Governance Code (the Code).
This report, together with the Audit Committee and Nomination Committee reports, the Directors’ Remuneration Report, the Strategic
Report and the Directors’ Report, sets out how we have done that.
Board leadership and company purpose
Code Principle
How we comply
A A successful company is led by an effective and entrepreneurial Board,
See our s172 statement on page 34.
whose role is to promote the long term sustainable success of the Company,
generating value for shareholders and contributing to wider society.
B The Board should establish the Company’s purpose, values and
strategy, and satisfy itself that these and its culture are aligned. All
Directors must act with integrity, lead by example and promote the
desired culture.
C The Board should ensure that the necessary resources are in place for
the Company to meet its objectives and measure performance against
them. The Board should also establish a framework of prudent and
effective controls, which enable risk to be assessed and managed.
More information about Board Leadership can be
found on page 58.
More information about our purpose and The
Wincanton Way can be found on pages 18 and 22.
Our values are set out in our Code of Conduct and
on our website.
See our Audit Committee report on page 70.
D In order for the Company to meet its responsibilities to shareholders
See Board Engagement on page 63.
and stakeholders, the Board should ensure effective engagement with,
and encourage participation from, these parties.
E The Board should ensure that workforce policies and practices are
consistent with the Company’s values and support its long term sustainable
success. The workforce should be able to raise any matters of concern.
Our Code of Conduct and our Corporate Framework set
out the Group’s values and policies. Read more about The
Wincanton Way on our website www.wincanton.co.uk/
sustainability/the-wincanton-way/.
Division of responsibilities
Code Principle
How we comply
F The Chair leads the Board and is responsible for its overall effectiveness
in directing the Company. They should demonstrate objective
judgement throughout their tenure and promote a culture of openness
and debate. In addition, the Chair facilitates constructive Board relations
and the effective contribution of all Non-executive Directors, and
ensure that Directors receive accurate, timely and clear information.
G The Board should include an appropriate combination of Executive
and Non-executive (and, in particular, independent Non-executive)
Directors, such that no one individual or small group of individuals
dominates the Board’s decision-making. There should be a clear
division of responsibilities between the leadership of the Board
and the executive leadership of the Company’s business.
The effectiveness of the Chair is considered as part of
the Board evaluation process.
The Senior Independent Director leads a discussion
with the rest of the Board to ensure that the Chair’s
effectiveness is monitored and would feed back any
areas of concern from this process.
Biographies of Board members are on pages 56 and 57.
As at the date of this report, the majority of members
on the Board are Non-executive. There are six Non-
executive Directors and pending the appointment
of a new CFO, one Executive Director.
See governance framework on page 58.
See roles of CEO and Chair on page 65.
H Non-executive Directors should have sufficient time to meet their Board
responsibilities. They should provide constructive challenge, strategic
guidance, offer specialist advice and hold management to account.
See meeting attendance chart on page 61.
See External Directorships on page 65.
Wincanton plc Annual report and accounts 2022 – 053
Summary of compliance continued
Division of responsibilities continued
Code Principle
How we comply
I
The Board, supported by the Company Secretary, should ensure that it
has the policies, processes, information, time and resources it needs in
order to function effectively and efficiently.
The Directors are provided with appropriate
documentation approximately one week in advance
of each Board or Committee meeting. Papers include a
trading update, and reports on people matters, health
and safety, regulatory and governance matters, financial
performance, and papers where a decision or approval
is required.
The Board reviews the support provided to it along
with the processes followed and the value of the Board
papers as part of the Board evaluation. This year all were
found to be efficient. The Board evaluation outcome
can be found on page 69.
Composition, succession and evaluation
Code Principle
How we comply
J Appointments to the Board should be subject to a formal, rigorous
and transparent procedure, and an effective succession plan should
be maintained for Board and senior management. Both appointments
and succession plans should be based on merit and objective criteria
and, within this context, should promote diversity of gender, social
and ethnic backgrounds, cognitive and personal strengths.
As at the date of this report, the majority of members
on the Board are Non-executive. There are six Non-
executive Directors , pending the appointment of
a new CFO, and one Executive Director.
Appointments to the Board of Wincanton are made
on the recommendation of the Nomination Committee
with due consideration given to the outcomes of the
annual Board evaluation, the review of skills, experience
and diversity and informed succession planning.
See Board diversity data on page 67.
K The Board and its Committees should have a combination of skills,
Changes to the Board are set out on page 67.
experience and knowledge. Consideration should be given to the length
of service of the Board as a whole and membership regularly refreshed.
L Annual evaluation of the Board should consider its composition,
diversity and how effectively members work together to achieve
objectives. Individual evaluation should demonstrate whether each
Director continues to contribute effectively.
See biographies of Board members on pages 56 to 57.
See Skills matrix on page 68.
An external evaluation is held every three years, the last
one completed was in 2019.
This year, the Board has undertaken a rigorous self-
evaluation exercise via questionnaires and discussion,
to assess the performance of the Board, its Committees
and individual Directors.
See the outcome of the evaluation in the Nomination
Committee report on page 69.
The Chair held individual assessment calls with
each Non-executive Director and the SID appraised the
Chair’s performance.
054 – Wincanton plc Annual report and accounts 2022
Audit, risk and internal control
Code Principle
How we comply
M The Board should establish formal and transparent policies and
procedures to ensure the independence and effectiveness of internal
and external audit functions and satisfy itself on the integrity of
financial and narrative statements.
The Board has established formal and transparent
policies and procedures relating to external and Internal
Audit functions and the management of risk. The Board
is assisted by the Audit Committee to ensure that the
Board presents a fair, balanced and understandable
assessment of the Company’s position and prospects.
The work of the Audit Committee is set out in its report
on pages 70 to 74.
N The Board should present a fair, balanced and understandable
assessment of the company’s position and prospects.
See the Statement of Directors’ Responsibilities in the
Directors’ Report on page 95.
O The Board should establish procedures to manage risk, oversee the
See Risk Report in Strategic Report on page 44.
internal control framework, and determine the nature and extent of the
principal risks the Company is willing to take in order to achieve its long
term strategic objectives.
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Remuneration
Code Principle
P Remuneration policies and practices should be designed to support
strategy and promote long term sustainable success. Executive
remuneration should be aligned to Company purpose and values,
and be clearly linked to the successful delivery of the Company’s long
term strategy.
Q A formal and transparent procedure for developing policy on executive
remuneration and determining Director and senior management
remuneration should be established. No Director should be involved
in deciding their own remuneration outcome.
R Directors should exercise independent judgement and discretion
when authorising remuneration outcomes, taking account of Company
and individual performance, and wider circumstances.
How we comply
Our remuneration policies have been designed with
consideration of wider workforce remuneration and
related policies as well as the alignment of incentives
and rewards with our culture.
The Remuneration Policy was put to shareholders
in 2020 and received 96.45% approval.
Account is taken of the outcome of remuneration
decisions, both for the individual elements and in
totality, with reference to the Group’s performance
to consider whether discretion should be applied.
Discretion was not considered necessary in the 2021/22
remuneration outcomes.
For more information, see page
For more information, see our website
Wincanton plc Annual report and accounts 2022 – 055
Board of Directors
A well managed, open
and questioning team
Dr. Martin Read CBE
Chair
James Wroath
Chief Executive Officer
Stewart Oades
Senior Independent Director
Gill Barr
Independent Non-executive
Director
Committee membership
Committee membership
Committee membership
Committee membership
N R
N
A N
N R
Experience
Stewart became a Non-
executive Director of Wincanton
in November 2014 and was
appointed as the Senior
Independent Director in July
2015. He is the dedicated
Non-executive Director for
Employee Engagement.
Stewart is currently Chair of
John Good & Sons Limited, a
freight forwarding and travel
industry leader, and is also a
Non-executive Director of Forth
Ports Limited.
Reasons for reappointment
Stewart’s prior position as
President of the Freight
Transport Association and his
director roles at companies
including XPO, Clipper, DHL,
Christian Salvesen plc and Exel
plc give him invaluable industry
experience and connections
throughout the wider
transport sector.
Experience
Gill was appointed as a Non-
executive Director of Wincanton
in September 2017 and is
currently a Non-executive
Director of PayPoint plc and
N Brown Group plc. She was
previously a Non-executive
Director of construction group
Morgan Sindall plc and of
developer McCarthy & Stone.
She was Group Marketing
Director of The Co-operative
Group and Marketing Director
of John Lewis. Gill spent
seven years at Kingfisher plc
where she held a variety of
senior marketing, business
development and strategy roles.
Reasons for reappointment
Gill’s Executive and Non-
executive experience brings
a valuable focus on the end
customer and B2B environment.
She is also an experienced
Remuneration Committee Chair.
Experience
James was appointed Chief
Executive Officer in September
2019. He was formerly Head
of North America with LSG
Sky Chefs, the airline catering
division of Lufthansa AG, best
known as one of the world’s
largest airline and rail catering
and hospitality companies.
Before joining LSG in 2015,
James worked for Kuehne
+ Nagel as the Senior Vice-
President in North America for
both Contract Logistics and
Overland Transportation, as
well as Managing Director in
the UK for their Drinks Logistics
business. Prior to this, he was
Head of Distribution for Scottish
& Newcastle plc.
Reasons for reappointment
James has relevant prior
experience and extensive
knowledge of supply chain
management and, having
spent two years with Wincanton,
has gained valuable listed
company experience.
Experience
Chair of the Nomination
Committee and Member of
the Remuneration Committee,
Martin joined Wincanton as
Chair in August 2018. He is
Chair of the UK Government’s
Senior Salaries Review Body
and a member of the Council
of Shakespeare’s Globe where
he sits on the Audit and Risk
Committee. Martin is a former
Chair of Laird plc, the Low
Carbon Contracts Company,
the Electricity Settlements
Company and the Remuneration
Consultants Group. He has
served on the Boards of Lloyd’s,
Invensys, Aegis Group, British
Airways, Siemens Holdings,
Boots, ASDA and the UK
Government Efficiency and
Reform Board. He was Chief
Executive of International IT
Services company Logica from
1993 to 2007.
Reasons for reappointment
As an experienced Executive and
Chair, Martin brings invaluable
leadership qualities and business
understanding to the Board.
Martin’s extensive remuneration
knowledge also adds value to
the Remuneration Committee.
056 – Wincanton plc Annual report and accounts 2022
Committee membership key
A
N
R
Audit Committee
Nomination Committee
Remuneration Committee
Committee Chair
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Debbie Lentz
Independent Non-executive
Director
Mihiri Jayaweera
Independent Non-executive
Director
Anthony Bickerstaff
Independent Non-executive
Director
Committee membership
Committee membership
Committee membership
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A N
NA
Experience
Mihiri joined the Board as a
Non-executive Director in April
2020. Until October 2019, she
was Group Head of Strategy
and a member of the Group
Executive Committee of TP
ICAP Group, the FTSE 250
professional intermediaries’
firm, operating in financial,
energy and commodities
markets internationally. She
was previously a consultant
at Trivedi Capital, a private
equity investment advisory
firm based in London. She has
also held positions at Nomura
International, Lehman Brothers
and UBS Investment Bank.
Reasons for reappointment
Mihiri brings expertise
in corporate finance and
financial markets to the
Wincanton Board.
Experience
Debbie became a Non-executive
Director of Wincanton in June
2019. She is currently President
of Global Supply Chain and
a member of the Executive
Management Team at RS Group
plc, a global multichannel
provider of industrial and
electronic products and
solutions. Formerly Chief Supply
Chain Officer at Toys ‘R’ Us
from 2014 to 2017, she held
senior management positions
in customer service, logistics,
product supply, procurement,
manufacturing and IT at Kraft
Foods Group, in both North
America and Europe as well
as at Nabisco Food Company.
Reasons for reappointment
As a working Executive Debbie
is very aware of operational and
supply chain issues and their
relevance to the Wincanton
Group. She provides particular
customer insight for the
Board and deep knowledge
of ESG programmes.
Experience
Anthony (Tony) Bickerstaff
became a Non-executive
Director of Wincanton in
September 2020, and Chair
of the Audit Committee in
March 2021. He was appointed
Chief Financial Officer (CFO)
of Cadent Gas Limited, the
UK’s largest gas distribution
network, in February 2022.
Prior to this he was CFO of
Costain Group plc, the FTSE
All-Share smart infrastructure
solutions company. Before
joining Costain, Tony held a
number of senior management
and financial positions at Taylor
Woodrow. He was also a Non-
executive Director and Chair of
the Audit and Risk Committee
at Low Carbon Contracts
Company Limited and Electricity
Settlements Company Limited
from November 2014 to
October 2020.
Reasons for reappointment
Through his Executive
responsibilities in a listed
company environment, Tony
has experience of public
procurement, commercial
contracting and mergers
and acquisitions, all of which
are relevant to Wincanton’s
business and strategy. Tony
is an experienced Audit
Committee Chair.
Wincanton plc Annual report and accounts 2022 – 057
Governance structure
Our governance structure
To assist in the discharge of its duties and responsibilities, the Board has
established a number of committees, including the Audit Committee,
the Remuneration Committee and the Nomination Committee.
The Wincanton governance framework
Shareholders
As owners of the Company, the shareholders appoint the Directors and delegate to them collectively the responsibility
for the long term sustainable success of the Company within a framework of good governance.
The Board
The Board’s role is to provide effective leadership and guide the business towards achieving its strategy and objectives, taking
account of the risks and opportunities. It also ensures the business is focused on building and maintaining healthy relationships
with its stakeholders. It is ultimately responsible for endorsing and applying a robust corporate governance structure. To assist
in discharging its duties, some areas of responsibility are delegated to the Committees of the Board.
The Audit Committee
The Audit Committee leads on reviewing
the Group’s external and Internal Audits,
the risk management process and the
effectiveness of the Group’s systems of
internal control.
The Committee ensures that the Board
presents a fair, balanced and understandable
assessment of Wincanton’s position
and prospects. This is underpinned by
processes to help with independent and
effective internal and external auditing.
The Nomination Committee
The Nomination Committee leads on
the Board succession planning; the
recruitment of new members; and
evaluating composition and diversity
to ensure Board effectiveness.
The Remuneration Committee
The Remuneration Committee
leads on designing remuneration
policy, determining Board and senior
management remuneration and the
review of the wider workforce pay and
associated policies.
Read more on page 70
Read more on page 66
Read more on page 75
The Executive Management Team (EMT)
The EMT meets regularly, and led by the Chief Executive, comprises senior leadership who have management responsibility for the
operations of the business and the central support functions.
The Risk Management
Committee
Provides assurance regarding the
management of operational and
Group risks.
The Financial Assurance
Committee
Provides assurance regarding the
management of financial risks.
The ESG Committee
To focus on ESG strategy,
target setting, performance
and communication.
058 – Wincanton plc Annual report and accounts 2022
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Our Executive Management Team
The Executive
Management Team has
been reorganised and is
fully resourced to focus
on the delivery of our
strategy and financial
performance.
1. James Wroath
3. James Clarke
5. Richard Gifford
7. Paul Durkin
1
2
3
4
5
6
7
8
Chief Executive Officer
James was appointed Chief
Executive Officer in September
2019. He was formerly Head of
North America with LSG Sky
Chefs, the airline catering division
of Lufthansa AG, best known as
one of the world’s largest airline
and rail catering and hospitality
companies. Before joining LSG in
2015, James worked for Kuehne +
Nagel as the SVP in North America
for both Contract Logistics and
Overland Transportation, as
well as Managing Director in
the UK for their Drinks Logistics
business. Prior to this, he was Head
of Distribution for Scottish
& Newcastle plc.
2. Sally Austin
Chief People Officer
Sally joined Wincanton in August
2019 as Chief People Officer
and a member of the Executive
Management Team. Sally was
previously the Group HR Director
with Costain Group plc, a British
technology-based construction
and engineering company, where
she held a variety of HR roles
and became Group HR Director
in 2014. Prior to Costain, Sally
began her career in HR at BAE
Systems followed by Coopervision
and latterly Eaton Corporation
where she held a number of HR
management roles across Europe,
the Middle East and Africa.
Externally Sally is a Foundation
Governor at Warwick Independent
Schools Foundation and Chair
of Governors for King’s High
School, Warwick.
Interim Chief Financial Officer
James joined Wincanton in
March 2017 as Group Financial
Controller, but has also been
Group Transformation Director
and Group Operational Finance
Director. Previously James
was a Finance and Commercial
Director with Mitie Group plc,
the British facilities management
and energy company, where he
also held a number of senior
group roles including Group
Financial Controller. He is also
a non-executive of the Building
Services Research and Information
Association (BSRIA) since 2019.
James is a Chartered Accountant.
4. Daniel Porte
Strategy Director
Daniel joined Wincanton in
January 2021 as Strategy Director
and a member of the Executive
Management Team. Daniel was
most recently VP Strategy – North
America (LSG Group) leading
key strategic projects, including
M&A projects as well as driving
the region’s strategic initiatives.
He also held other senior roles
within the LSG Group in the UK
and Europe including Director
Supply Chain Optimisation UK.
Daniel holds an MBA degree
(Diplom-Kaufmann) from the
University of Mainz, Germany,
with a specialty in accounting
and information technology.
Chief Information Officer
Richard was appointed Chief
Information Officer in April 2017
and is responsible for driving
the IT and digitised strategy of
the business while also ensuring
that IT continues to support
successful growth and operational
requirements. He was formerly CIO
of Carillion plc, driving the digital
programmes in their Construction
and Group Services businesses.
Prior to joining Carillion, Richard
began his career with Whitbread
plc and has worked in other large
plc and public sector organisations.
6. Ian Keilty
Chief Operating Officer
Ian joined Wincanton in November
2018 as Managing Director – Retail
and Consumer, and was appointed
Chief Operating Officer in April
2020. He was previously Vice
President, European Supply Chain,
at Sysco and Chief Operating
Officer at Brakes, the UK’s leading
foodservice supplier. Ian has also
held various positions on the
operating boards and executive
committees at Booker Group plc
and Iceland Stores. Prior to this Ian
worked in engineering and supply
chain roles for Mars, British Gas
and Nissan, and holds an MBA from
London Business School.
Chief Customer
and Innovation Officer
Paul was appointed Chief
Customer and Innovation Officer in
June 2021. Previous to this Paul led
Wincanton’s eFulfilment business,
responsible for developing our
direct to customer propositions
and growth. Over the past
ten years Paul has established
Wincanton as a market leader
in home delivery and eFulfilment
services with clients such as
IKEA, M&S, Wickes and Screwfix.
Before joining Wincanton Paul
worked for Tibbett and Britten
and latterly DHL Supply Chain,
leading supply chain operations
for blue chip clients in the UK
and Asia. Paul has a passion for
developing people and chairs the
CILT’s ASPIRE foundation, which
provides funded education and
training opportunities for those
in transport and logistics.
8. Lyn Colloff
Company Secretary
Lyn was appointed Company
Secretary in April 2020. She was
formerly Company Secretary at
Cobham plc for over ten years
and brings a wealth of experience
to Wincanton. Lyn is a qualified
Chartered Secretary and worked
exclusively in the financial services
sector before joining Cobham from
the Financial Services Authority
(now the Financial Conduct
Authority). Lyn achieved an MBA at
Aston University in 2004 and now
chairs the Company Secretary’s
Forum of the CGI, the Chartered
Governance Institute.
Wincanton plc Annual report and accounts 2022 – 059
Governance structure continued
The work of the Board
How the Board monitors culture
The Board recognises that corporate culture
affects all the Company’s stakeholders,
and that a healthy corporate culture is an
important factor in the successful delivery
of the Company’s strategy.
While it is the role of management to articulate the culture, to identify gaps
between actual and desired culture and to drive cultural change, the Board
has a responsibility to monitor and evaluate progress in this area.
Wincanton’s Board monitors the culture of the Company in various ways:
– through its site visits
– through its discussions with management and employees across
the business on those visits, both formally and informally pre- and
post-meetings
– by reviewing various direct and indirect culture metrics included in
the People, Health and Safety, Audit and Compliance reports included
on each Board meeting agenda
– by evaluating how the Executive Directors and EMT live the desired
behaviours
– by monitoring how effectively the desired culture is communicated
to the wider workforce.
The Board’s current approach to monitoring culture is therefore embedded
into its work. However, given the increasing challenges brought about by
the labour challenges we face as a business and our increased focus on social
value, the format of reporting to the Board is being reviewed. It is proposed
to design a dashboard which will better enable the Board to monitor a more
holistic view of culture as part of the strategic work in the year.
060 – Wincanton plc Annual report and accounts 2022
The role of the Board
The Board is collectively responsible for the
long term performance of the Company,
and is made up of the Company’s two
most senior Executives, namely the CEO
and the CFO (referred to collectively as
the ‘Executive Directors’) and a number
of independent Directors, known as the
‘Non-executive Directors’.
These independent Directors include the
Board Chair and the Senior Independent
Director, whose roles are explained below.
There is always a majority of Non-executive
Directors on the Board.
The Board develops and promotes its
collective vision of the Company’s purpose,
culture and values and keeps the Company’s
business strategy, performance and risk
profile under regular review. The Board
meets frequently during the year to make
and review major business decisions,
and to monitor and test the operational
performance of the Group.
Between official Board meetings, there
is also regular contact between Board
members, and between the Board and
management to ensure the Group’s business
is being properly progressed.
Overview of the Board’s
responsibilities
To facilitate the Board’s work, there is a
schedule of matters which are reserved
exclusively for the Board to decide. These
matters are set out overleaf and feed into
the annual programme of Board activities.
The Schedule of Matters Reserved is
reviewed annually to ensure it remains
fit for purpose and sets the parameters
for management.
Where appropriate, the Board receives
recommendations in relation to matters
delegated to the Committees of the Board
which conduct their work in accordance
with their respective terms of reference.
During the year, the Chair and Non-executive
Directors met once without the Executive
Directors being present. The Senior
Independent Director and the Non-executive
Directors met once without the Chair
being present.
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Matters Reserved for the Board:
– develops, reviews and assesses delivery
of the Group’s strategy to generate
value for shareholders and contribute
to wider society
– establishes and promotes the Group’s
purpose, values and culture
– reviews and approves the Group’s annual
budget and three year financial plan
– approves the Group’s Annual Report
– maintains and reviews the Group’s
controls and approves the Group’s
material contracts
– engages with the Group’s shareholders
and stakeholders
– approves the payment of a dividend to
shareholders at the half year and full year
in line with the Group’s dividend policy
– ensures that the workforce policies
and practices are consistent with the
Group’s values and supports its long
term sustainable success, enabling the
workforce to raise any matters of concern.
The Schedule of Matters Reserved and
the Committee terms of reference
can be viewed on our website
www.wincanton.co.uk/investors/corporate-
governance/board-responsibilities/.
Board Committees
The Board sets the Committees’ terms
of reference which are reviewed annually
by the Committee and the Board. These
are available on the Group’s website
www.wincanton.co.uk/investors/corporate-
governance/board-committees.
Membership of each Committee
is determined by the Board on the
recommendation of the Nomination
Committee and in consultation with
the appropriate Committee Chair. The
membership, role and duties discharged
in the year ended 31 March 2022 for each
Committee are set out in the respective
Committee reports in this Report.
Board activity in the year
The Board held ten scheduled meetings
during the year at which it considered all
matters of a routine nature, structured
through clear agenda setting, written
reports and presentations from both
internal members of staff and external
advisers and consultants. In addition there
were three ad hoc meetings of the Board
to deal with non-routine, time-sensitive
business and one full day strategy meeting.
Attendance
Directors are expected to attend all scheduled meetings and their attendance during the 2021/22 financial year is set out below.
Appointed
Committees
Role
Status
Total meetings in year
Dr. Martin Read CBE
August 2018
B N R
Chair
James Wroath
Tim Lawlor*
Gill Barr
September 2019
September 2015
B N
B
September 2017
B N R
Anthony Bickerstaff**
September 2020
B A N
Mihiri Jayaweera
Debbie Lentz
Stewart Oades
April 2020
June 2019
November 2014
B A N
B N R
B A N
* Mr Lawlor stepped down from the Board on 28 February 2022.
CEO
CFO
NED
NED
NED
NED
NED
Ind
Exec
Exec
Ind
Ind
Ind
Ind
Ind
Board
14
14/14
14/14
13/13
14/14
14/14
14/14
14/14
14/14
Audit
Nomination Remuneration
4
–
–
–
–
4/4
4/4
–
4/4
5
5/5
5/5
–
5/5
4/5
5/5
5/5
5/5
5
5/5
–
–
5/5
–
–
5/5
–
** Mr Bickerstaff was unable to attend one Nomination Committee meeting due to an unavoidable schedule conflict.
Key:
B Board
R Remuneration Committee N Nomination Committee
A Audit Committee
Wincanton plc Annual report and accounts 2022 – 061
Governance structure continued
Activities of the Board
Board activity in the year continued
A review of operational and financial performance and oversight of the health, safety and wellbeing of our colleagues are standing items at
each Board meeting. Other topics considered and items covered by the Board during the year included:
STRATEGY
Continued oversight of the strategy implementation
Continued development of the ESG strategy including setting up a new ESG Committee
Oversight of the development of the Information Technology strategy and approach to Cyber Security
Technology in logistics – external presentation
Contract and property approvals with values in excess of the delegated authority of Management
Oversight of the acquisition and integration of the Cygnia business
Review of the transport model
Contract reviews and deep dives into our sectors
Review of the operating model in light of the implementation of Oracle Cloud
Further development of the People strategy with a strong focus on equality, diversity and inclusion
Oversight of the further development of succession plans and talent development programmes
Review of employee engagement activities, led by the SID
FINANCE
Continued strengthening of the financial control environment
Approval of the budget and three year plan
Approval of the half year and full year financial results, including dividends
Continued oversight of the implementation of the cloud based finance and HR system
Consideration of Group funding
Oversight of long term strategy for the Group’s pension schemes
GOVERNANCE AND RISK
Continued emphasis on embedding risk management into business activities
Continued development of risk methodology, scoring and reporting
Monitoring of contract approvals to ensure financial returns forecast have been achieved
Policy approvals in line with matters reserved to the Board, including the Modern Slavery Statement and new Sanctions policy
Review of compliance with each of the Board Committees’ terms of reference
Link to strategy
Our products and services
Our markets
Our operating model
Our people
062 – Wincanton plc Annual report and accounts 2022
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Board engagement
…with our stakeholders
The Board recognises that to meet its
responsibilities to shareholders and
stakeholders, it is important to ensure
effective engagement with, and encourage
participation from, these parties. The way
in which the Board factors the needs and
concerns of the Company’s stakeholders into
its discussions and decisions in accordance
with section 172 of the Companies Act 2006
is described in greater detail on page 34.
The Group’s website not only contains
important stakeholder information
(including current and past Annual Reports
and Accounts, share price, Stock Exchange
announcements, circulars and shareholder
documentation), but also our press releases
and thought leadership articles, giving
stakeholders insight into the vital work
we do for the economy, and how we are
delivering supply chain value both now
and for the future.
…with our shareholders
The Company maintained effective
dialogue with shareholders during the year
to ensure that the strategy and business
model are understood, and to discuss any
developments in either the Company or the
sectors we operate in that might affect our
shareholders’ views on their investment. The
main topics of discussion with our investors
this year have been driver shortages and
costs, the growth opportunities within
eFulfilment and our innovation activity. The
financial discussions tended to focus on the
investment opportunities that our strong
balance sheet offers.
There are regular meetings between
Executive Directors and institutional
shareholders, fund managers and analysts
and the Board receives feedback on this
engagement to enable the Directors to
form a view of the priorities and concerns of
stakeholders. Brokers’ reports and analysts’
briefing notes are regularly distributed to
all Directors, and form part of the Board
agenda at half year and year end.
The Chair of the Board and the
Remuneration Committee Chair
have communicated with larger
shareholders during the year. There was
recently a consultation with our major
shareholders specifically with regard
to CEO remuneration.
Capital Markets Day
Investors and analysts will have the
opportunity to engage with the Board and
management directly at a Capital Markets
Day, planned for 7 July 2022. Shareholders
will be invited to join the Board and
management of Wincanton at The WEB in
Rockingham to see our innovation in action
and have a tour of our WEB facility.
Annual General Meeting
The AGM, scheduled this year for
12 July 2022, provides an opportunity
for shareholders to receive the financial
results for the financial year, ask questions
of the Board and receive an update on the
current performance.
…with our employees
Wincanton is a people business, and
employees are key stakeholders. Stewart
Oades is our designated Non-executive
Director for workforce engagement.
Wincanton chose this method of
engagement as the most effective given
the various employee forums and listening
groups already established. It was felt that
a designated Non-executive Director would
be best placed to raise the visibility of the
workforce’s views, to be considered in the
Board’s discussions and decision-making
processes. A formal feedback session is
scheduled into the Board’s annual work
plan, with ongoing dialogue during the
year between Mr Oades and the Chief
People Officer.
Last year we set an objective to obtain
greater breadth and depth of employee
engagement, by increasing the number of
engagement events with Mr Oades, and
receiving input from a wider range of roles
across the business. Over the past year he
has held seven events, across four locations,
two of which were held virtually.
Discussion topics have been broad-ranging
and included onboarding, communications,
training and development opportunities,
and flexible working arrangements and
shift patterns. You can read more about
the outcome of these engagement events
on page 64.
…with the business
Over the course of the year, members of the
EMT and their direct reports are invited to
attend Board meetings to present an update
on the current performance and future
focus of their areas of responsibility, and to
respond to the Board’s questions directly.
The Board appreciates the value of
visiting operational sites to maintain its
understanding of the business. This first
hand knowledge enables the Directors to
better guide and challenge management
through its discussions. Facilitated by the
Company Secretary, each of these visits
includes a formal presentation by that site’s
management team to set the scene prior to
a site tour, and time is factored in to engage
informally with the local teams. There are
three such visits already scheduled for the
coming year.
Wincanton plc Annual report and accounts 2022 – 063
Governance structure continued
Employee engagement Q&A
Stewart Oades, Non-executive Director with responsibility for workforce
engagement, responds to questions about his work this year.
Q What do your engagement sessions
look like, and what do you talk about?
A Each session is designed to involve
colleagues at differing levels of
experience, grade and role, to stimulate
good discussion. I introduce and position
each session then open the forum for
constructive discussion. I ensure the
participants understand that these
sessions are not to communicate
grievances directly to the Board, but
rather they are an opportunity for
colleagues to offer their thoughts
on the business as a whole, what works,
what could be improved and so on.
We have covered topics such as
community engagement, training and
development, site leadership, customer
expectations, employee recognition
mechanisms, recruitment processes,
employee communications and
even uniforms.
Q What have you learned from these
engagement sessions? What will you
do with that knowledge?
A The format of the engagement
sessions has developed during the year
as we have been able to get back to some
face to face meetings and have learned
what works well. Smaller groups work
better; colleagues from multiple sites at
one session reduce the amount of time
spent on local issues and result in a more
balanced session.
I have been very encouraged to hear
from groups that are largely positive,
enthusiastic and engaged with the
business. It is heartening for me
personally and others at the sessions to
hear about success stories and to share
best practice with colleagues. Of course
our workforce have frustrations which
have been expressed in a constructive
manner, and indicate a level of trust
that they feel comfortable to raise
at these sessions. The frustrations
brought to my attention have been
broadly consistent with other indicators
of employee satisfaction.
As a result of this year’s engagement we
are going to be launching MyPlace, our
Group-wide intranet, in order to improve
communication channels and provide
colleagues with easy access to company
news, policies, vacancies and so on. We
will also be exploring further ways to
understand and enhance a consistent
culture across our locations so that all
colleagues have the same, inclusive
experience regardless of their place
of work.
We have brought a high level of focus
on the critical role that our first line
managers fulfil and the importance
of effective recruitment, training and
development of these colleagues.
Colleague retention and reduced turnover
is an important issue and we continue
to look to identify opportunities to
improve this issue. I am confident that
the Executive team are responding
proactively to the points raised through
these forums.
Q What are the next steps?
A We must continue to focus on the
participation of a broad range of
employees – not just geographically but
by experience, role and sector. Our aim is
to continue to receive input and opinion
from colleagues into what the Board
should focus upon to make Wincanton
a better place to work and a more
successful business.
Visit wincanton.co.uk/
why-wincanton/our-people
Q How has the Wincanton Board
approached its responsibilities towards
workforce engagement?
A The Corporate Governance Code
suggests three core options for
companies to use: a dedicated Non-
executive Director, a worker Director
and an advisory panel. We chose the
dedicated NED option, and I am very
pleased to take on this role as the link
between the Board and the workforce.
The Board recognised that there were
already various workforce engagement
groups in place and functioning well, and
it was felt that the NED option would
complement and support this existing
infrastructure. I set up a calendar of
sessions over the year to meet diverse
groups of employees at different
sites. I report back to the main Board
summarising this work annually. Between
those formal reports, I am in touch with
the Chief People Officer to raise issues
and clarify points raised at those sessions,
and naturally I relate the voice of the
workforce into our Board discussions as
appropriate at each Board meeting. This
year, in particular, much of the feedback
has been around our retention rates and
our training for first time line managers
and managers generally.
064 – Wincanton plc Annual report and accounts 2022
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Division of responsibilities
The Chair
The Chair, Dr. Martin Read CBE, is
responsible for leadership of the Board and
ensures the Board carries out all aspects of
its responsibilities effectively. In particular
the Chair is responsible for setting the
Board’s agenda, ensuring that adequate time
is available for discussion of all agenda items
and facilitating effective communication
with shareholders. Dr. Read was deemed
independent on appointment.
Senior Independent Director (SID)
Stewart Oades is the Senior Independent
Director on the Board. His role is to act as a
sounding board for the Chair and perform an
intermediary role to other Directors, where
necessary. The Senior Independent Director
leads the appraisal and review of the
Chair’s performance and he is available to
shareholders if they have reason for concern
that contact through the normal channels
of the Chair and Chief Executive Officer has
failed to resolve.
Non-executive Directors
Non-executive Directors (including the Chair
and SID) have a number of responsibilities,
including constructively challenging the
Group’s strategy, helping to develop possible
alternative strategies and appointing,
setting remuneration for and (where
necessary) replacing Executive Directors.
The Code requires there to be an
appropriate combination of Executive and
Non-executives, in particular independent
Non-executives, on the Board. A good
balance of Executive and Non-executive
Directors ensures there is healthy discussion
and challenge for effective decision-making.
All the Non-executive Directors were
deemed to independent on appointment
and continue to be so. They were each
appointed on the basis of their capabilities,
skills, experience and backgrounds thereby
providing enriched diversity to support the
discussions on the Board. You can read their
biographies on pages 56 to 57. Collectively
they add value and provide independent
oversight and challenge across all corporate
and commercial aspects with their
contributions and external perspective. Non-
executive Directors challenge management
and hold them to account; they assist and
guide in the development of Group strategy;
offer advice and engage with the wider
business and its employees as appropriate.
Each Non-executive Director is appointed for
an initial fixed term of three years, subject to
annual re-election by shareholders at the AGM.
Their appointment term may be renewed
by mutual agreement with due regard to
the Code, their performance, contribution,
and their ongoing independence. They are
expected to dedicate sufficient time to their
role to discharge their obligations effectively.
Appointment dates for Board members are
set out in the Attendance table on page 59.
The Chief Executive Officer (CEO)
The Board delegates the day to day
operation of the Group’s business to the CEO
whose duties include to propose the Group’s
strategy to the Board for approval and then
deliver it, to ensure that the Governance,
Risk and Compliance framework of controls
is applied throughout the organisation and
to act as a role model for the Company’s
employees, setting out clearly the Board’s
expectations about the Company’s culture,
values and the behaviours expected of
every employee.
The Executive Management Team (EMT)
The CEO is supported by his Executive
Management Team (EMT). The EMT
comprises the senior leadership team
that report directly to the CEO and have
management responsibility for the business
operations and support functions. The EMT
meets monthly and relevant matters are
reported to Board meetings by the CEO
and, as appropriate, the CFO and other
EMT members.
External directorships
The Chair and Non-executive Directors
hold appointments as directors on a
small number of other companies, as
detailed in their biographies on pages 56
to 57. It is considered that the Chair and
Non-executive Directors allocate sufficient
time and commitment to fulfil their duties
to the Company.
The Board acknowledges that Executive
Directors may wish to undertake external
Non-executive Director roles outside of
the Company. It is recognised that such
opportunities broaden their development,
widen their commercial experience and
so benefit the Company. To protect the
interests of the Company, each Executive
Director is restricted to one Non-
executive role at any one time. During
the year and to the date of this report, no
external appointments were held by the
Executive Director.
Annual re-election of Directors
In accordance with the Code and the
Company’s Articles of Association, all
Directors are subject to election or re-
election by shareholders at the AGM. All the
Directors, being eligible, will put themselves
forward for annual re-election at the
Company’s AGM.
Conflicts of interest
Directors are required to notify the
Company of any situation that could give
rise to a conflict or potential conflict of
interest and compromise independent
and objective decision-making. The
Board regularly monitors and reviews all
notifications recorded in the register and
considers any situational conflicts at each
Board meeting. Where any conflict arises,
the Board determines whether or not a
Director can vote or be a party to discussions
in accordance with the Company’s Articles
of Association.
The Board is satisfied that potential
conflicts have been effectively managed
throughout the year.
Board support and the role
of the Company Secretary
All the Directors have unfettered
access to the advice and services
of the Company Secretary.
The Board and its Committees are
supported by the Company Secretary
who ensures that the Directors are able to
discharge their duties and responsibilities
in an effective and efficient manner. This
means making sure that there are robust
and clear Board policies, processes and
information in place and that time and
resources have been appropriately allocated.
It also means ensuring that meetings are
efficiently managed and that there are clear
communication flows within the Board and
its Committees and between the Board and
senior members of Wincanton’s team.
The Company Secretary keeps Board
members briefed on corporate governance
and assists with ensuring all decisions
are made in accordance with the
Matters Reserved, see page 60.
In addition, the Company provides the
Directors with access to independent
professional advice at the Company’s
expense, as and when required.
Wincanton plc Annual report and accounts 2022 – 065
Nomination Committee report
Dear shareholder
I am pleased to introduce the report of the
Nomination Committee and to highlight its
main points.
Tim Lawlor, our CFO, left us at the end of
the financial year to take on a similar role
at Countryside Partnerships plc. He has
played a major role in the development of
Wincanton over the last six years and we
thank him for his loyalty and commitment
to the business. We have employed the
search firms Egon Zehnder and Independent
Search Partners to assist us in appointing
his replacement. In the meantime, we are
pleased that James Clarke, our Finance
Director, UK & Ireland, has stepped up to
be Interim CFO.
This year, we carried out an internal Board
evaluation. I am pleased to say that our
Board is functioning well. There is an
open and questioning environment, good
diversity of experience and thought, and the
Board operates well as a team. The exercise
highlighted a few points for us to address
and these will be progressed in the new
financial year. Further details of the process
and the conclusions of the Board evaluation
are set out in the report below.
We place great emphasis on management
succession and talent identification within
the business. Given their importance,
these topics are addressed twice yearly at
Board rather than Nomination Committee
meetings. Our governance structure
reflects this. Succession planning for Board
members continues to be carried out by the
Nomination Committee.
We have formally adopted a Board Diversity
Policy. This is in addition to the Diversity
Policy that is applicable across the wider
Group. The constitution of our Board fully
reflects these policies.
I would like to thank the members of the
Committee and those who have supported
its work for their contribution over the
last year.
Nomination Committee
report
I am pleased to say that our Board
is functioning well.
Dr. Martin Read CBE
Nomination Committee Chair
Committee membership
Member
Dr. Martin Read CBE
Gill Barr
Anthony Bickerstaff
Mihiri Jayaweera
Debbie Lentz
Stewart Oades
James Wroath
Role
Chair
NED
NED
NED
NED
NED
ED
Status
Appointment date
Independent
August 2018
Independent
September 2017
Independent
September 2020
Independent
April 2020
Independent
June 2019
Independent
November 2014
Executive
February 2021
The above table sets out the Committee membership as at 31 March 2022. It shows
the role and independence of the members and the date they were appointed to the
Committee. Appointments to the Committee are made for a term of three years and
may be renewed for a further two terms. The Committee’s composition meets the
requirements of the Code.
Attendance for all Board and Committee meetings is set out on page 61.
Dr. Martin Read CBE
Chair
19 May 2022
066 – Wincanton plc Annual report and accounts 2022
3
2
1
0
5
4
3
2
1
0
Board Directors’ age diversity (years)
as at 31 March 2022
Plc Board gender diversity
as at 31 March
Average
age
60 yrs
Female:
Male:
2022 – 43%
2021 – 38%
2022 – 57%
2021 – 62%
46–50
51–55
56–60
61–65
66–70
71–75
The average age of Board members has increased from 58.25 years
to 60 years following Tim Lawlor stepping down.
Board tenure
as at 31 March 2022
Average
tenure
3.4 yrs
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L3838+
4343+
L5050+
2929+
L2929+
2727+
Executive Management
Team gender diversity
(excludes EDs on
the Board)
as at 31 March
Female:
Male:
2022 – 29%
2021 – 50%
2022 – 71%
2021 – 50%
Senior Management
Group gender diversity
(below EMT)
as at 31 March
Female:
Male:
2022 – 27%
2021 – 29%
2022 – 73%
2021 – 71%
0–2
years
2–5
years
5+
years
The average tenure of Board members has increased from 2.8 years
to 3.4 years following Tim Lawlor stepping down.
Role of the Committee
The Board has the responsibility for ensuring
the Group attracts, retains and incentivises
the best talent to support its strategy and
long term vision for sustainable success. The
Board has delegated the oversight for Board
succession planning to the Nomination
Committee. The Committee is responsible
for reviewing the annual performance
evaluation outcomes for the areas under its
remit. The outcomes of the Board evaluation
process feed into the discussions around
succession planning.
The Committee reviews Board composition,
balance and committee membership.
It considers the independence of Board
members, any potential conflicts that have
been declared and time commitments.
The framework of the Nomination
Committee’s duties and responsibilities is
set out in its terms of reference which are
reviewed annually by the Committee and
the Board. These terms of reference can
be viewed on the Company’s website. The
work carried out by the Committee during
the year is set out below. The Committee
reports to the Board on all items of business
considered at its meetings.
CFO recruitment
Tim Lawlor announced his intention to resign
on 16 November 2021 to take up the role of
CFO at Countryside Partnerships plc. The
Board of Wincanton wishes to thank him for
his hard work, commitment and contribution
to the Group over the last six years. Tim left
the business on 18 March 2022.
The Committee delegated the initial stages
of the project to replace the CFO to the CEO,
the Chair of the Board, the Audit Committee
Chair and the Chief People Officer (CPO). A
role specification was agreed and we briefed
the search firms Egon Zehnder (EZ) and
Independent Search Partners. The Company
confirms that neither firm has undertaken
any other work for the Board of the Group
during the FY 2021/22. Both firms drew up a
long list of external candidates and the initial
interviews were undertaken by the CEO
and the CPO, alongside internal candidates
who expressed an interest in the role. The
full Nomination Committee was involved
throughout this process.
Wincanton plc Annual report and accounts 2022 – 067
+
57
57
+
+
L
+
62
62
+
+
I
I
+
71
71
+
+
L
+
50
50
+
+
I
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73
73
+
+
L
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71
71
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+
I
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Nomination Committee report continued
Board skills and experience
Pensions
5
Finance
11
Environmental
4
City/investor
14
Legal
8
Sales &
Marketing
7
Remuneration
8
People
11
Skills and experience matrix
The skills review undertaken last year assessed
the experience of the Board members in a
number of areas deemed particularly relevant
to Wincanton’s business. Each Director was
awarded points ranging between zero for low
and three points for high level experience.
The maximum possible score for each skill
was, therefore, 21 points. The results of this
analysis were set out in last year’s report and
accounts and have not changed. However, we
have set out the results differently this year
to highlight the diverse experience and skills
on the current Board. The skills matrix will
continue to be reviewed each year.
Chief Executive
9
Executive
8
Mergers &
Acquisitions
12
Logistics
11
Automation
4
Retail
11
Information
Technology
9
E-retail
9
068 – Wincanton plc Annual report and accounts 2022
CFO recruitment continued
A short list of candidates who met the
job specification and would fit with the
culture of the business were interviewed
by the Chair of the Board and the Audit
Committee Chair. Early in the process, the
Remuneration Committee Chair, the Chair
of the Board and the CPO were in contact
regarding remuneration considerations
and the Remuneration Committee Chair
has remained engaged in the process
throughout. The recruitment process
is still ongoing at the time of this report.
In the meantime, James Clarke was
appointed as Interim CFO whilst the
recruitment process was underway. James
is an experienced member of the Group’s
finance team having held a number of roles
at Wincanton since 2017 and he was the
Finance Director, UK & Ireland immediately
prior to stepping up.
Board evaluation
The Board and its Committees continuously
monitor their own performance and seek
to improve their effectiveness. Informally
this happens through the open channels of
communication between members with the
support of the senior management team
and the Company Secretary. In line with the
Code requirements, a formal effectiveness
evaluation exercise is undertaken annually,
either internally or through an externally
led process.
The Board evaluation process
This year, an internal evaluation process
was facilitated by the Company Secretary.
This process gathered feedback from all
Directors, the Secretary and the CPO. A
questionnaire was used which particularly
focused on the actions and themes arising
from the previous year’s evaluation.
Questions were designed to elicit how
effectively the Board considered the
actions from the previous year had been
achieved. In addition to scored answers,
free text response questions were posed
to draw out Board members’ comments
on overall effectiveness, in line with the
Code and the guidance published by the
Financial Reporting Council. Responses
were submitted anonymously to encourage
candid feedback.
Board evaluation outcome
The results of the Board evaluation were
positive and affirmed that the Board is well
managed, open and questioning and that
the members function well as a team.
The key actions from the evaluation are
as follows:
– it was felt that the recent visits to
Wincanton operated sites had been very
insightful but that they could be improved
by the opening of each site visit with a
more detailed presentation from the
site manager before the site tour and by
leaving more time to meet colleagues
– the Committee discussed presentations
from external advisers received over the
past 12 months. It was concluded that
future presentations should better set
out the objectives to be gained from
the session
– the setting up of an ESG Committee was
agreed, to be chaired by the CEO and
to include a permanent Non-executive
member and any other Non-executives
who wished to attend. The Committee
will focus on strategy, target setting,
performance and communication
– the new approach to the strategic agenda
was felt to be effective. There will be a
particular focus on the People cog of the
strategy in the coming year, in support
of the Group’s Social agenda.
Priorities for 2022/23
An external evaluation will be held in
2022/23. The last external evaluation took
place in 2019 and was conducted by Condign
Board Consulting.
Performance of the Chair
The performance of the Chair was assessed
by the Senior Independent Director with
feedback from the Executive and Non-
executive Directors, plus the Secretary.
It was considered that Dr. Read remains
an effective Chair, as supported by the
outcome of the Board evaluation.
Performance of
individual Directors
The Chair reviewed the performance and
contribution of each of the Non-executive
Directors individually. These reviews
confirmed that each Board member
continues to make an effective contribution
to the Board and the various Committees
on which they serve.
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Board Diversity Policy
The Board is committed to diversity in its
broadest sense. It recognises that a diverse
Board is likely to lead to better decision-
making as a result of the varied background,
experience, ways of thinking, gender and
ethnicity of its members.
The Board believes that its own membership
is an important factor in delivering the
Wincanton Group’s diversity and inclusion
commitments. As a people-driven business,
Wincanton places particular emphasis on
developing a diverse and inclusive culture,
which reflects its employee population
and the communities in which it operates.
The Board Diversity Policy takes account
of the voluntary targets for gender and
ethnic diversity as set out in the Hampton-
Alexander Review and Parker Review
respectively. We aim to continue to exceed
the target of 33% female representation
on the Main Board and maintain a minimum
of one Board Director (either Executive or
Non-executive) from an ethnic minority
background. We only engage with search
agencies that understand the Board’s
aims and share the diversity values of the
Group when identifying candidates for
Board appointments, including candidates
with little or no previous FTSE-listed
Board experience.
Non-executive Director (NED)
training and awareness
Through the year, the NEDs undertake
various training and awareness sessions.
The Secretary retains a record of the
sessions completed to evidence that the
NEDs are taking their continued professional
development obligations seriously. To
supplement this individual self-development
by the NEDs, the Secretary and members
of her Governance, Risk and Compliance
team undertook a risk awareness session
with each Director on a one to one basis in
the year. These sessions had two objectives:
firstly to raise awareness with the Board
members of the legal and regulatory risk
posed to the Group; and secondly to identify
any areas of development needed for
each Director. Directors gave their opinion
on areas of risk identified through their
experiences elsewhere and these insights
have been factored into the Group’s risk
management and assurance workplan.
Wincanton plc Annual report and accounts 2022 – 069
Audit Committee report
Audit Committee
report
The work of the Committee has reflected the
changing risk landscape as businesses move out
of the effects of the pandemic.
Anthony Bickerstaff
Audit Committee Chair
Committee membership
Member
Role
Status
Appointment date
Anthony Bickerstaff
Committee Chair
Independent
September 2020*
Stewart Oades
Mihiri Jayaweera
NED
NED
Independent
November 2014
Independent
April 2020
* Chair with effect from 1 March 2021.
The table above shows the Audit Committee membership as at 31 March 2022, the role
and independence of the members and the date of their appointment to the Committee.
Appointments to the Committee are made for a term of three years and may be renewed
for a further two terms.
Attendance for all Board and Committee meetings is set out on page 61.
For the purposes of the Code, the Board is satisfied that Anthony Bickerstaff has recent
and relevant financial experience and that the Committee’s composition meets the
requirements of the Code.
070 – Wincanton plc Annual report and accounts 2022
Dear shareholder
I am pleased to present the Audit
Committee’s report for the year ended
31 March 2022.
The Committee supports the Board
in fulfilling its corporate governance
responsibilities and has continued to
ensure that robust and effective risk
management processes and internal
controls remain in place. The framework of
the Committee’s duties and responsibilities
is set out in its terms of reference, which
are reviewed annually by the Committee
and the Board. The terms of reference
can be viewed on the Company’s website
www.wincanton.co.uk/investors/corporate
governance/board-committees/.
Wincanton has had a successful year, despite
the problems arising from Covid-19, supply
chain disruption, driver shortages and
economic factors, including inflation.
The focus of the Committee’s financial
review activities has been:
– the half year and full year results
– monitoring the significant judgements
made in the Group’s financial reporting
– consideration and recommendation
of the interim and final dividends to
shareholders.
The Committee has also considered the
integration and accounting treatment of the
acquisition of the Cygnia entities. Further
details of the activities this year are provided
in the report below.
Following the External Auditor BDO’s first
full financial year with Wincanton, the
annual evaluation of audit effectiveness
has been completed and is described in
this report.
As the risk landscape continues to change
as businesses move out of the worst of the
effects of the pandemic, the Committee
has overseen the continued strengthening
of risk management across the business as
a whole. This has involved the development
of a heat map, deep dives into individual
operational and Group risks and refinement
of the risk appetite statement. Read
more about our risk management on
pages 44 to 51.
There has been a particular focus for the
Committee on cyber security which has been
identified as a principal risk for the Group
and is considered a heightened risk given
the Russian/Ukraine conflict. We have also
strengthened our controls and processes
around sanctions and money laundering for
the same reason.
I have been heavily involved in the
recruitment process of our new CFO and the
process is ongoing at the time of this report.
Focus in 2022
In the coming year, the Committee will
ensure that the new Head of Internal Audit
and CFO provide a good continuity of
support to the business as they settle in to
their respective roles.
The Committee will continue to monitor
the impact of macro events on the Group,
particularly global conflicts, the effects of
inflation and other external cost pressures.
There will be a continued focus on enhancing
the assurance around the Group’s climate
change strategy and its reporting.
The Committee will continue to ensure
that robust internal controls and risk
management systems are in place
and effective and that best practice is
implemented. Deep dives will be conducted
as appropriate to include cyber security and
the Oracle Cloud implementation.
The Committee welcomes constructive
engagement on any of the areas under
its remit. I will be available at the AGM
and can be contacted through the
Company Secretary.
Role of the Committee
The Audit Committee assists the Board in
fulfilling its oversight responsibilities by:
– monitoring and reviewing the content
and integrity of the Company’s financial
statements and narrative reporting,
including review of the significant financial
reporting judgements contained therein
– considering the appropriateness of
adopting the going concern basis of
accounting, identifying any material
uncertainties and reviewing the
methodology and robustness of the
viability assessments undertaken
– reviewing the Company’s internal and
external controls, risk management
framework and the quality of the internal
and external audit processes
– reviewing certain Group policies including
Non-audit Services, Tax, Treasury, Anti-
Bribery and Corruption, Share Dealing,
Speaking Up, including the procedures in
place for whistleblowing and Sanctions
– overseeing the engagement with the
External Auditor and reviewing and
monitoring their independence and
making recommendations to the Board
regarding their remuneration and terms
of engagement.
The Committee reports to the Board its
activities and how it has discharged its
responsibilities, and any matters where
it considers action or improvement is
needed, including recommendation of
remedial actions.
The Group’s Chief Financial Officer, Group
Financial Controller, Head of Internal Audit
and the External Auditor attend and report
to each Audit Committee meeting. The Chair
of the Board and the Chief Executive Officer
also regularly attend the Audit Committee
meetings by invitation.
The Committee has unrestricted access to
Company documents, management, Internal
Audit, the Company Secretary, the External
Auditor and any other advisers, as and
when required.
Anthony Bickerstaff
Audit Committee Chair
19 May 2022
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Systems of internal control
and risk management
The Committee monitors and reviews the
Group’s systems of internal control and risk
management on behalf of the Board.
The Wincanton finance manual sets out the
Group’s policies, procedures and controls
and is regularly updated to ensure that
there is continuous improvement to the
Company’s control environment.
The Group’s systems and controls are designed
to ensure that exposure to significant risk is
reduced and mitigated to the fullest extent
possible, with acknowledgement that not all
risk can be eliminated.
Details of the Group’s principal risks
and uncertainties, its systems for risk
management and control, and statement
following the viability assessment are set
out on page 48 of the Strategic Report.
The Audit Committee receives regular updates
on the development and operation of the Risk
Management Framework and during the year
received reports on the continued development
of the Group Risk Register to better align with
the Group strategy, which includes a rolling
programme of deep dives into individual risks,
and on the update of methodology for risk
reporting and administration.
Audit Committee
effectiveness evaluation
The effectiveness of the Audit Committee
was considered as part of the Board and
Committee Evaluation, the process for which
is described in detail on page 69.
Positive results were received in response
to the Audit Committee related questions
in the evaluation, with the quality and
presentation of the information received
from management scoring particularly
highly. Actions for the Committee as a result
of the evaluation include a further review of
the length of Committee papers to increase
efficiency, and a review of the agenda setting
process to allow wider input at an earlier stage.
The members of the Audit Committee receive
regular opportunities for training to ensure
their knowledge of current best practice
is up to date, as is the case for all Board
members. They all play a full role in ensuring
the Committee meets its objectives and
responsibilities, and there is no over-reliance
on any particular Committee member.
Wincanton plc Annual report and accounts 2022 – 071
Audit Committee report continued
Activities this year
During the year, the Committee held four scheduled meetings to deal with procedural matters as required. The Audit Committee also met
privately with the External Auditor and separately with the Head of Internal Audit after three of those four meetings.
May 2021 – meeting 1
May 2021– meeting 2 November 2021
January 2022
Year end
Review of final draft preliminary
announcement
Review of final draft Annual Report
and Accounts
Going Concern:
Review of methodology of the
process used to compile the going
concern and viability statements,
including modelling of severe but
plausible downside scenarios, and
stress testing
Review of accounting estimates,
judgements areas and compliance,
including financial reporting and
accounting policy
Approval of accounting
judgements report
Review of Non-audit fees report
for approval
Consideration of final dividend
recommendation proposal and
recommendation to the Board
External Audit:
Review of annual year end report
to the Audit Committee incl. draft
audit opinion including Auditor
independence & objectivity and
compliance with ethical and
professional guidance)
Review of Risk Management Report
Review of Internal Controls report
Financial Control Environment
& Assurance update
Receipt of Speaking Up
(whistleblowing) Register update
Year end approvals
Annual Report and Accounts
including External Auditor’s
year end report summary
for sign off
Review of Stock Exchange
Announcement of
preliminary results
for sign off
Half year:
Review of draft Half Year Statement
for recommendation to the Board
Review of the half year going
concern statement
Consideration of governance,
themes and planning for the
Annual Report and Accounts
Review of accounting estimates,
judgements areas and compliance,
including financial reporting and
accounting policy
Review of accounting estimates,
judgements areas and
compliance, including financial
reporting and accounting policy
Finalisation of accounting process
for Cygnia acquisition for sign off
Consideration of interim dividend
proposal and recommendation
to the Board
External Audit:
Review of half year report to
the Audit Committee including
letter of representation, Auditor
independence and objectivity
and compliance with ethical and
professional guidance
Review of External Auditor fee for
recommendation to the Board
Consideration of process for
External Auditor effectiveness
evaluation
Review of Non-audit Fees Policy
and Report
External Audit:
Review of External Auditor
annual audit plan
Annual effectiveness evaluation
Approval of Auditor terms
of engagement
Review of Risk Management Report
Risk Management Update and
approval of half year risk disclosure
statement
Review of fraud controls report
Review of Risk
Management Report
Group Risk deep dives
Review of Committee
annual workplan
Annual review of Treasury
& Tax policy
Receipt of Speaking Up
(whistleblowing) Register update
Receipt of Speaking Up
(whistleblowing) Register update
Priorities for next year include:
– ensuring continuity of support to the
business and the Committee from the
new Head of Internal Audit and CFO
when appointed
– monitoring and reviewing processes
and controls in light of the fast moving
geo-political and regulatory environment
– continued oversight of the Group’s risk
management systems, continuing with
deep dives into specific Group Risks
against the backdrop of developing
macro-economic events
– ongoing focus on further strengthening
internal controls and ensuring that they
continue to be applied whilst at the same
time addressing the efficiency of operations
and delivery of service to our customers
– continuing to monitor the delivery of the
Oracle Cloud Enterprise Resource Planning
(ERP) solution, implemented to substantially
reduce risk and improve control across
Finance, People and Procurement processes
whilst reducing current infrastructure and
future upgrade costs
– monitoring and implementing as appropriate
best practice in good governance and
internal controls for Audit Committees.
072 – Wincanton plc Annual report and accounts 2022
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Internal Audit Function
The Group’s Internal Audit (IA) function
independently reviews and tests the
effectiveness of the internal controls and
risk management systems through an
annual IA programme, to ensure the Group
complies with corporate governance and
regulatory responsibilities.
The Head of Internal Audit and Assurance
reports to the Audit Committee Chair and has
direct access to the Chief Executive Officer and
Chief Financial Officer. In addition to attendance
at all Audit Committee meetings, the Head
of Internal Audit reports regularly on Internal
Audit reviews to the Executive Management
Team and the Risk Management Committee.
The Internal Audit reports produced
consider the extent to which systems of
internal control and risk management are
designed, operate effectively, manage or
mitigate key risks, and safeguard assets or
limit liabilities.
The IA role and the scope of its work
are regularly reviewed to ensure it
remains independent, fit for purpose and
addresses business changes and regulatory
requirements. The formal Audit Charter is
reviewed for approval by the Committee
annually. This year the IA team completed its
planned number of audits, with audit report
grades showing a year on year improvement.
Significant financial judgements and key sources of estimation uncertainty
Area of focus
Role of the Committee
Conclusion
Pensions: Defined
Benefit Scheme
The Committee considered the key assumptions used in calculating
the pension asset and obligation and related income statement
items. These have been based on reports produced by the external
investment manager and the Scheme actuary.
Provisioning
The Committee considered the management judgement applied in
determining the amount and timing of provisions, reviewing reports
on the provisions held, including property, insurance, legal claims
and other, during the year and as part of the year end process.
A key source of estimation uncertainty arises in relation to the
insurance provision, and the determination of the assessment
of claims incurred but not received (IBNR).
Goodwill and
other impairment
reviews
The Committee has reviewed management’s approach to impairment
reviews, including the key estimates and judgements made. They
have challenged the cash flows, and projected financial information
in light of the historical results and the current industry conditions.
Acquisition and
fair value
The Group acquired 100% of the equity shares in Caledonia Bidco
Limited and its subsidiaries which include Cygnia Logistics Limited.
Management, supported by an external team, have undertaken
a purchase price allocation exercise to identify and measure any
acquired intangible assets separately from goodwill.
Revenue
recognition
The Committee has considered management reports on the following:
– accounting for new and modified contracts under IFRS 15, in
particular: the assessment of whether promises in contracts
constitute performance obligations; whether the services are distinct;
and whether they have been priced at a standalone selling price
– the assessment of start up costs in determining if they relate to an
upfront fee or should be spread over the contract term
– the monthly assessment of accrued and deferred revenue to ensure
revenue is accounted for in the correct period, as the contracts and
invoicing arrangements vary considerably and differ depending on
the customer.
Alternative
performance
measures
and non-
underlying items
The use of alternative performance measures and disclosure of non-
underlying items requires significant judgement given that these
measures are used in addition to statutory performance measures
and that no accounting standard defines specifically what items
should or what items should not be presented as non underlying.
Going concern
and viability
The Committee has considered if the Group has access to
sufficient resources to continue as a going concern. It has reviewed
management’s assessment of going concern and long term viability,
including the availability of committed facilities and the associated
financial covenants. The Committee has given particular attention to
the downside scenarios applied and the disclosures made in respect
of the going concern and viability statements.
The Committee concluded that the valuation of
the assets and the assumptions made about the
discount rate, mortality, Consumer Price Index and
Retail Price Index were appropriate and that the
disclosures in the Annual Report were appropriate.
The Committee receives regular updates on
legal claims and the level of provisions assessed
by management. The Committee satisfied itself
that the level of provisions was appropriate.
The Committee concluded that the key
judgements and assessments used are
appropriate and reasonable. There is sufficient
headroom and no goodwill impairment is
required. The Committee satisfied itself that
the impairment provisions made relating
to other assets were appropriate.
The Committee was satisfied with the purchase
price allocation and related disclosures regarding
the acquisition.
The Committee concluded that management have
a robust process in identifying new contracts and
undertake detailed reviews of significant contracts
to identify the appropriate accounting treatment.
Similarly, management’s appropriateness of the
recognition of revenue was considered satisfactory.
The Committee considered management’s
presentation of non-underlying items to ensure
that alternative performance measures have not
been given undue prominence and are clearly
reconciled to statutory information, and assessed
the reasonableness of the assumptions. The
Committee agreed with the recommendations
made by management.
The Committee concluded that it is appropriate to
prepare the accounts on a going concern basis and
recommend approval of the viability statement
together with the associated disclosures.
Wincanton plc Annual report and accounts 2022 – 073
Audit Committee report continued
Internal Audit Function continued
The Committee noted how greater
collaboration between the IA team and the
wider business, along with the IA team’s
approach and assistance whilst performing
fieldwork had resulted in faster resolution of
issues and positive feedback from the business.
The Internal Audit plan has been developed
alongside the risk management process
each audit mapped into the relevant Group.
Risk register includes reviews of key risks,
cyclical audits of basic areas of process and
site control environment reviews. In addition
there is a specific plan for financial and non-
financial reviews of commercial contracts.
The IA plan includes contingency time to
allow for investigation of emerging risks.
Internal Audit Effectiveness Evaluation
The UK Corporate Governance Code and
the Institute of Internal Auditors call for a
regular quality assessment of the IA function.
Wincanton assesses effectiveness annually,
this year by questionnaire completed by
the Committee, members of the Board, the
EMT and managers of those areas that had
been audited during the year. Very positive
results were returned regarding the skill
and consultative approach of the IA team,
and noting their clear communication and
reporting. Areas to develop in the coming
year include increasing the awareness
throughout the business of IA’s role as
the third line of defence, and the use of
technologies to increase efficiency.
The Head of Internal Audit left the Company
in February 2022 to take up a position
with another company, and pending the
recruitment of a permanent replacement
there has been an Interim Head of Internal
Audit in place. The team has also recently
been supplemented by an additional
member to focus primarily on the audit of
commercial contracts.
External Auditor
External Auditor Effectiveness and
Independence Evaluation
The Audit Committee evaluates the
effectiveness and independence of the
External Auditor and its audit process
annually in respect of performance and
conduct, taking into consideration relevant
UK professional and regulatory requirements.
As reported in our Annual Report and
Accounts for 2021, this year was the first
evaluation of BDO as Wincanton’s statutory
auditor, following their appointment in 2020.
The evaluation process included:
– an effectiveness questionnaire open to
all members of the Audit Committee, all
other members of the Board, the Company
Secretary and the Group Financial Controller
– feedback was sought on the year
end process and scope of the audit,
communication between respective
074 – Wincanton plc Annual report and accounts 2022
teams, evidence of independence,
challenge and insight and the auditor’s
commitment to audit quality
– the review of feedback from the central
Finance team directly involved in the
external audit for year ending March 2021
– an effectiveness discussion as scheduled
annually at the Audit Committee.
Whilst the results made reference as
expected to this being the Auditor’s first
full year, the new engagement team and
unfamiliarity both with the Company and
its working practices, the Committee
were satisfied that the External Auditor is
independent, objective and was effective
in the external audit process.
The Audit Committee has considered the
latest Financial Reporting Council (FRC)’s
Audit Quality Inspection and Supervision
report on BDO for the 2020/21 period which
included the FRC’s findings on a sample
of BDO audits inspected and firm-wide
procedures, in line with recommended
governance practice for Audit Committees.
The Audit Committee have discussed the
findings with the BDO engagement partner
and was provided with an overview of actions
already undertaken in response to the FRC
report. BDO has publicly reaffirmed that
quality is its absolute priority and expressed
its confidence that the steps being taken will
result in sustained improvements.
The Committee Chair has continued their
dialogue with the External Auditor outside
of scheduled meetings in order to provide
more detailed feedback and strengthen the
service provided from the audit firm as the
engagement moves into its second year.
Auditor independence
The Committee requires the External
Auditor to give an annual confirmation of
the actions it has taken to ensure objectivity
and independence, including where non-
audit services are provided.
For the audit of these financial statements the
External Auditor has confirmed compliance
with the firm’s ethics and independence
policies, partner and staff compliance with
their ethics and independence manual,
including prohibition on holding Company
shares. BDO has assured the Group their
ethics and independence manual is fully
consistent with the professional practice rules
of the FRC, the auditor’s regulator.
Every significant new engagement
undertaken for the Company is
subject to acceptance procedures,
requiring consultation with the Senior
Statutory Auditor.
Sophia Michael has remained the Senior
Statutory Auditor since her appointment
in July 2020.
Non-audit services
The FRC Ethical Standard sets out the
permissible non-audit services that External
Auditors can perform, and BDO ensures that
any requests from the Company to provide
non-audit services, to any BDO office, are
considered in the context of the Company’s
policy and the FRC’s ethical standards.
The Company’s Non-audit Services Policy is
intended to put in place appropriate controls
for the approval and engagement of any
non-audit assignments according to the
nature and value of the work, to safeguard
audit objectivity and independence.
Ratio of audit to non-audit work
L8080+
8888+
as at 31 March (£m)
Audit fees:
2022 – 0.59
2021 – 0.5
Non-audit fees:
2022 – 0.08
2021 – 0.1
Non-audit fees solely represent the External
Auditor’s review of the half year financial
statement. The level of non-audit fees and
the ratio to audit fees is not considered to
give rise to any impairment of the auditor’s
independence or objectivity.
Full disclosure of audit and non-audit fees
paid in the year ended 31 March 2022 are
set out in Note 4 ‘Operating profit’ to the
financial statements on page 120.
Audit Committee consideration
of the fair, balanced and
understandable statement
This Annual Report and Accounts is subject
to a verification process undertaken by
section contributors and independent
reviewers, and, at the request of the Board,
an overall review by the Audit Committee.
In conjunction with these verifications and
considering its own discussions during the
year, the Committee forms an opinion on
whether the Annual Reports and Accounts
as a whole is consistent and balanced. The
Committee then recommends approval of
the Report to the Board.
The statement of Directors’ responsibilities
can be found on page 95.
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Directors’ remuneration report
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Dear shareholder
I am pleased to present the Remuneration
Committee (the Committee) report for
the financial year ended 31 March 2022
on behalf of the Board.
Remuneration and its
strategic context
The Committee seeks to ensure a clear
link between Executive Directors’ pay, the
delivery of Group strategy and enhancement
of shareholder value.
Wincanton remains committed in its chosen
markets to driving growth throughout the
business through innovation and adopting
new technologies. Despite the challenging
economic environment created by the driver
shortages and the continued economic
impact of Covid-19, Wincanton continues
to win in the market with a relentless focus
on the delivery of our strategy.
Outturns for the year
Wincanton has had a successful year,
despite the continuing problems arising
from Covid-19 and supply chain disruption.
Growth in underlying profit before tax
increased by 23.1% to £58.1m in the year
ended 31 March 2022 which also represents
significant growth on the pre-pandemic
profit before tax level of £52.8m in the
year ending 31 March 2020.
During the year, encouraging progress
has been made in delivering against
our strategic objectives, including the
considerable strengthening of our
capabilities in eFulfilment through the
opening of our state of the art automated
eFulfilment facility in Rockingham and
our acquisition of Cygnia.
I would like to congratulate our colleagues
for their role in driving another successful
year for the Company and thank them for
their continued diligence and commitment.
Annual Bonus awards for the year were
based 75% on underlying profit before tax
and 25% on the achievement of strategic
objectives. In light of the acquisition of
Cygnia, the underlying profit before tax
targets were increased from those set at
the start of the year in order to ensure the
targets were no easier to satisfy than those
set at the start of the year. Performance
against these targets resulted in an Annual
Bonus outcome of 66% for James Wroath.
Wincanton plc Annual report and accounts 2022 – 075
Remuneration
Committee report
The Committee seeks to ensure a clear link between
Executive Directors’ pay, the delivery of Group
strategy and enhancement of shareholder value.
Gill Barr
Remuneration Committee Chair
The Remuneration Committee’s report set out on pages 75 to 91 provides detailed
explanation of its delegated responsibilities and its work during the year. The Company’s
remuneration structure has been designed to support strategy as well as promote long
term sustainable success.
Contents
Committee Chair introduction
At a glance – outturn and Policy Implementation
Report on Remuneration
Directors’ Remuneration Policy – A Summary
Committee membership
Page
75
80
82
89
Member
Gill Barr
Role
Status
Appointment date
Committee Chair
Independent
September 2017
Debbie Lentz
NED
Independent
June 2019
Dr. Martin Read CBE
Chairman
Independent
August 2018
The table above shows the Remuneration Committee membership as at 31 March 2022,
the role and independence of the members and the date of their appointment to the
Committee. Appointments to the Committee are made for a term of three years and may
be renewed for a further two terms. Attendance for all Board and Committee meetings is
set out on page 61.
Remuneration Committee report continued
Outturns for the year continued
Tim Lawlor stepped down from the Board
on 28 February 2022 and as a result, was not
eligible to receive an Annual Bonus for FY22.
LTIP awards vesting in the year were based
60% on EPS growth and 40% on TSR
performance relative to the FTSE All-Share
Index (excluding investment trusts).
EPS growth in the period was 6.8% p.a.
and TSR outperformance of the Index
was 12.4% p.a., resulting in overall vesting
of 61.8% of maximum.
We considered the amounts carefully in the
context of the Group’s performance, and
the current environment, and determined
that the amounts were a fair reflection of
performance in this past financial year.
Salary review
During the year, the Committee undertook a review of James Wroath’s salary as
part of our annual review cycle, taking into account a wide range of factors including
both individual and Group performance. As part of this, we engaged with our largest
shareholders, covering approximately 72% of our shareholder base, who were supportive
of the proposed salary adjustment based on the following rationale:
– on appointment, James’ salary was set below the level of his predecessor reflecting
that this was his first CEO role. In line with best practice, his pension was set at the wider
workforce rate
– James has now been in the role for two and a half years, and has become an established
CEO with a strong track record at Wincanton. Over this period, he has successfully led
Wincanton’s sustained success and progress, including navigating challenging external
headwinds such as Covid-19 and pressures on the global supply chain
– he has overseen a period of significant growth, both organically and through
acquisitions, which is reflected in the value that has been delivered to our shareholders.
In his time since appointment Wincanton has achieved total shareholder returns of
c.80% compared to a return of c.37% in the FTSE SmallCap over the same period.
– we consider that he has a high level of marketability, particularly in light of his
experience working in both the UK and the US.
While benchmarking was not the primary driver of the decision, in considering the
appropriateness of this adjustment the Committee reviewed FTSE SmallCap market data
which took into account market capitalisation, revenue and headcount. The adjustment we
are making positions our CEO around median against this FTSE SmallCap group, which the
Committee considers to be appropriate based on the size and complexity of the Company.
Following consultation, the Committee determined that a salary adjustment, representing
a 15% salary adjustment plus the 4% wider workforce salary increase, should be made.
James Wroath
Wider
workforce salary
increase
Additional
salary
adjustment
FY23 salary
(effective
1 July 2022)
4.0%
15.0%
£515,865
FY22 salary
£433,500
While the Committee is aware of and recognises sensitivities around salary increases, we
believe the adjustment is strongly in the interests of Wincanton for the reasons outlined
above. The salary adjustment is intended to be one-off in nature based on the context
set out above.
I was pleased with the strong support for our proposal from the shareholders we
consulted with. I continue to be delighted with the recognition of the performance and
high calibre of our management team, and I would like to thank all shareholders for taking
the time to engage and for the feedback provided.
076 – Wincanton plc Annual report and accounts 2022
Incentives for FY23
There are no significant changes to the
overall incentive framework for FY23.
Wincanton is a people-powered business,
employing around 20,000 people across
the UK, and our workforce values are a key
part of supporting our success. For FY23,
a quantitative diversity and inclusion metric
has been added, reflecting our values as a
company that aspires and works proactively
to achieve a diverse workforce across all
levels of our business. The Annual Bonus
measures will therefore be based 70%
on underlying profit before tax, 5% on a
quantitative diversity and inclusion metric
and 25% on other strategic objectives.
The maximum Annual Bonus opportunity
will remain at 100% of salary for the CEO.
The 2022 LTIP Award levels will remain
unchanged at 150% of salary for the CEO.
Performance measures will continue to be
based 50% EPS and 50% on relative TSR.
In the forthcoming year, we will be
conducting a review of our Remuneration
Policy as part of the normal three year
cycle in which further consideration
will be given to the operation of the
remuneration framework, including a review
of the performance measures used in the
incentives. We anticipate that this review
will include further consideration of the way
in which our sustainability agenda links to
our incentive framework.
Remuneration arrangements for
former CFO
As announced on 16 November 2021, Tim
Lawlor stepped down as a Director and
Chief Financial Officer of the Company
on 28 February 2022 and continued to be
employed by the Company until 18 March
2022. In line with the approved Directors’
Remuneration Policy, Tim Lawlor did not
receive an Annual Bonus for FY22 and all
unvested awards under the Deferred Annual
Bonus and Long Term Incentive Plan lapsed
in full. No payment in lieu of notice was
made. Further details of Tim Lawlor’s leaving
arrangements can be found on page 85.
Resolutions proposed at the AGM
The Annual Report on Remuneration will be
presented to shareholders for an advisory
vote at the forthcoming AGM.
I hope that our shareholders will continue
to support the decisions we have made.
Gill Barr
Remuneration Committee Chair
19 May 2022
Consideration of wider workforce
pay and conditions
Wincanton is a people-powered business,
with dedicated teams at the heart of the
service we aim to deliver to our customers.
We are therefore committed to ensuring the
pay and conditions of our workforce allow
our colleagues to achieve their full potential
and provide a great customer experience.
Remuneration below the Board
– Salary levels are set in line with market
requirements and the workforce salary
environment is taken into consideration
when reviewing salary increases for EDs
and the EMT.
– All employees are eligible to participate
in the Wincanton plc Pension Scheme.
– The Company provides a range of benefits
for employees. These are accessed online
through a benefits and communication
platform that also keeps colleagues
updated with Company information.
– Strong individual, business line and
Company performance is incentivised
and recognised through our Annual
Bonus schemes and, for our most senior
employees, the LTIP.
– Recognition of great performance and
outstanding achievements through
our new Company-wide, peer to peer
recognition platform ‘A Little Thank You’,
alongside our ‘Wincanton Way’ and ‘Driver
of the Year’ awards. The Driver of the Year
competition is a highly celebrated annual
event that recognises the very best skill,
talent, professionalism and knowledge
from drivers across the business. We did
not hold the Driver of the Year event last
year but it will be back in 2022.
– Employee ownership in the Company
and alignment with the delivery of the
Group strategy is encouraged through
participation in the Share Incentive
Plan (SIP).
Workforce engagement
Under the leadership of the Senior
Independent Director, a process is in place to
engage with all employees through a series
of site based meetings to ensure employee
opinion is considered in informing Board
decision-making. These meetings provide
the opportunity to inform the attendees
on matters considered of interest to them
including board strategy, remuneration
strategy, diversity and inclusivity, corporate
values and communication. During the
year we held a mixture of face to face and
Teams sessions.
We have a number of initiatives in place to
allow us to listen to the views of our staff
and act upon them to ensure Wincanton
is a great place to work.
These include:
– listening group meetings with all major
employee stakeholders and steering
groups for other key colleagues including
general managers and drivers, in addition
to our regular departmental and Group-
wide meetings
– the EMT hosts regular business
briefings to update managers on the
Group’s business performance and
new innovations, as well as providing
opportunities for managers to raise
questions through our Q&A sessions
– regular PULSE engagement surveys.
Please refer to page 64 for details of how we
have responded to points raised from these
engagement sessions.
The continuing impact of Covid-19
– We have continued with many of the
initiatives we started through the
early stages of the pandemic, such as
our wellbeing initiatives, including the
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development of iSmile, an app that
enables us to communicate directly
with colleagues.
– We have developed a number of training
programmes over the past year to support
our colleagues on wellbeing issues.
Not all about pay
We are committed to making Wincanton
a great place to work where our employees
feel safe, appreciated and engaged. We
foster and embrace employee diversity and
inclusion and encourage our people to live
our values. We work hard to ensure that
employees of all backgrounds, genders
and ethnicities are valued equally and are
offered the same opportunities within an
inclusive workplace. We have continued our
support to the CBI Change the Race: Ratio
to show our corporate commitment.
At Wincanton, we place great importance
on providing development opportunities
for all our employees to build their
careers. Employees are able to enhance
their skills through a portfolio of
training and development opportunities
including apprenticeship, graduate and
leadership programmes.
Pay ratio
The CEO pay ratio table shows the ratio of pay between the CEO of Wincanton and
Wincanton’s UK employees. The ratio compares the total remuneration of the CEO against
the total remuneration of the median UK employee and those who sit at the 25th and 75th
percentiles.
Year
2020
2021
2022
Method
Option B
Option B
Option B
Employees
Salary
Total pay and benefits
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
63:1
38:1
57:1
49:1
32:1
47:1
41:1
22:1
35:1
25th percentile pay
Median pay
75th percentile pay
£19,603
£20,214
£23,763
£24,567
£30,726
£32,586
Wincanton’s CEO pay ratios have been calculated using Option B, based on the availability
of data at the time the Annual Report was published. This uses the most recent gender pay
data to identify the three employees that represent our 25th, 50th and 75th percentile
employees. The total remuneration for these individuals has then been calculated based
on all components of pay for 2021/22, including base salary, performance-based pay,
pension and benefits. The Committee considers that this provides an outcome that
is representative of the employees at these pay levels.
Where an identified employee was part-time, their figures have been converted to a
full-time equivalent. No other adjustments were necessary and no elements of employee
remuneration have been excluded from the pay ratio calculation.
The date by reference to which the Company determined the 25th, 50th and 75th
percentile employees was 31 March 2022.
The year-on-year increase in the pay ratio reflects both that in 2021 the CEO had a
proportion of total remuneration paid impacted by the pandemic, and that in 2022 the
CEO has a greater amount of performance pay. This has meant the ratios have moved
back toward the level of 2020, with some improvement. The Committee believes that
the median pay ratio is consistent with the remuneration policies of the Company,
and consider wider workforce pay and conditions in determining CEO remuneration
as outlined at the top of this page.
Wincanton plc Annual report and accounts 2022 – 077
Remuneration Committee report continued
Consideration of wider workforce pay and conditions continued
Gender pay
Hourly rate of pay
Bonus pay
This year our mean and median gender
pay gaps of 6% and 9% respectively show
year on year improvement across both
measures. The median gender pay gap is
lower than the national figure published
by the Office for National Statistics,
in October 2021, of 15.4%.
The proportion of women in the upper two
quartiles of pay has also improved year on
year while we have seen a stabilisation of
the proportion in the lower two quartiles.
The bonus pay gap has widened in
comparison to 2020/21 with the mean gap
at 51% and the median bonus gap at 32%.
The proportion of the employee population
receiving a bonus has though increased
for both males and females, although no
management bonus was paid in the period
under review due to the pandemic.
Diversity and Inclusion
As a people-driven business, Wincanton
places particular emphasis on developing
a diverse and inclusive culture.
Wincanton was proud to support National
Inclusion Week this year at our customer
focused ‘It’s All About Inclusion’ Conference
on 30 September, at the WEB, our state
of the art eFulfilment centre. The event
was host to speakers from organisations
including HS2, Nestlé and B&Q and themes
such as disability, inclusive procurement
and inclusive leadership were discussed
alongside workshops focusing on race,
mental health and women in logistics.
For more information on how we are
leading the way on Diversity and Inclusion
see page 33.
Mean
Median
2021/22: 6% (2020/21: 10%)
2021/22: 51% (2020/21: (21%))
2021/22: 9% (2020/21: 10%)
2021/22: 32% (2020/21: (8%))
Key Committee activities
in the year
Pay and reporting
– Consider exit arrangements for the
outgoing CFO.
– Consider pay recommendations for the
CEO and Executive Management Team.
– Approve incentive outcomes for Executive
Directors and Executive Management
Team, including the consideration of
impact of the Cygnia acquisition.
– Consider incentive grants to Executive
Directors and other senior management,
including performance measures
and targets.
– Monitor performance for unvested
LTIP awards.
– Approve vested share awards and leaver
treatment.
– Review all employee reward.
Governance, reporting, stakeholders
– Review of Executive Director
remuneration arrangements against
governance changes and good practice.
– Consider the Group HR strategy and
compliance with Policy.
– Approval of remuneration reporting.
– Annual review of Committee’s terms
of reference.
– Shareholder consultation.
Committee responsibilities
and composition
The Committee is responsible for ensuring
that the remuneration of Directors
and senior management supports the
delivery of the strategic goals of the
Group without encouraging undesirable
risk-taking behaviour. This is achieved
through the Committee approving all
aspects of Executive Director and Executive
Management Team remuneration, and
monitoring pay arrangements for the
wider workforce.
The terms of reference set out the full
responsibilities of the Committee, and
are available on the Group’s website at
www.wincanton.co.uk
The Committee comprises three members
including Gill Barr as Committee Chair,
Dr. Martin Read CBE, and Debbie Lentz.
All Committee members have been
on the Committee throughout the
reporting period.
There were five Committee meetings held
during the year.
During the year, all members of the
Committee were independent Non-
executive Directors, and were selected to
represent a broad range of backgrounds and
experience to provide balance and diversity.
The Chief Executive Officer, Chief Financial
Officer and Chief People Officer may attend
the Committee’s meetings by invitation to
provide advice and assistance on specific
matters. The Company Secretary acts as
Secretary to the Committee. No attendee
is present when their own remuneration is
being discussed.
Further details of Committee membership
and attendance at meetings are shown in the
Corporate Governance report on page 61.
078 – Wincanton plc Annual report and accounts 2022
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UK Corporate Governance Code: Provision 40
When considering the proposed operation of the Remuneration Policy for FY23, the Committee was mindful of the following factors set out
in the Code:
Clarity
The Committee welcomes open and frequent dialogue with shareholders on the approach to remuneration. During the
year, the Committee consulted with major shareholders in relation to the CEO FY23 salary.
We refreshed and simplified our approach to remuneration disclosure in 2019.
Simplicity
Our remuneration arrangements for Executive Directors, as well as those throughout the organisation, are simple
in nature and well understood by both participants and shareholders.
Risk
The Committee considers that the structure of incentive arrangements does not encourage inappropriate risk-taking.
Under the Annual Bonus and LTIP, discretion may be applied where formulaic outturns are not considered reflective
of underlying Company or individual performance.
Annual Bonus deferral, the LTIP holding period and our shareholding requirement, including post-cessation shareholding
requirement, provide a clear link to the ongoing performance of the business and the experience of our shareholders.
Malus and clawback provisions apply to both the Annual Bonus and LTIP.
Predictability
Our Remuneration Policy contains details of threshold, target and maximum opportunity levels under our Annual Bonus
and LTIP, with actual outcomes dependent on performance achieved against predetermined measures and target ranges.
This is illustrated by the scenario charts included within the approved Remuneration Policy.
Discretion provisions under the Annual Bonus and LTIP allow the Committee to adjust the formulaic outcomes where
considered appropriate, including where the outcome is not considered appropriate in the context of circumstances
that were unexpected or unforeseen at the start of the relevant period.
Proportionality
The Committee’s ability to apply discretion ensures appropriate outturns in the context of long term Company performance.
The rebalancing of the incentive package to the long term, the holdings periods, and the strengthening of our bonus deferral
all provide greater alignment between Executive Directors’ remuneration outcomes and long term Company performance.
Our performance measures and target ranges under the Annual Bonus and LTIP are aligned to Company strategy.
Alignment
to culture
Wincanton is a people-powered business, with dedicated teams at the heart of the service we aim to deliver to our
customers. Consideration of the pay and conditions of our workforce is therefore an important perspective for
considering executive pay.
All employees are entitled to participate in the pension scheme. The pension level for the CEO and new Executive
Director appointments has been set at the rate provided to the wider workforce. Strong individual, business line and
Company performance is incentivised and recognised through our Annual Bonus schemes and, for our most senior
employees, the LTIP.
Wincanton plc Annual report and accounts 2022 – 079
Remuneration Committee report continued
‘At a glance’ – Year ended 31 March 2022 outturns
Element
Salary
Year ended 31 March 2022 outturn
Salaries effective 1 July 2021:
CEO
CFO
£433,500
£341,700
Pension and
benefits
– Pension contribution of 4% of salary for the CEO, James Wroath and 15% of salary for the former CFO, Tim Lawlor.
– Benefits provided in line with approved policy.
Annual Bonus
For the year ended 31 March 2022, the maximum bonus opportunity was 100% of salary for the CEO.
Profit before tax (75%):
Strategic objectives and achievements (25%):
Threshold
Target
Maximum
Actual
– CEO outturn: 66%.
Underlying PBT
£m
55.2
56.7
59.5
58.1
Strategic objectives
Achievement
CEO: 10%/25%
– 50% of the bonus above 50% of the maximum will be deferred into shares (£34,718 for the CEO).
– No Annual Bonus was payable to the former CFO.
LTIP
Minimum vesting
TSR 40%
TSR in line
with index
EPS 60%
6% p.a.
growth
Wincanton outturn
6.8% p.a. growth
Index +12.4%
Maximum vesting
(Full vesting)
TSR equal to
index +10% p.a.
11% p.a.
growth
Outturn
100%
36.3%
Total vesting: 61.8% of maximum
Single total figure
of remuneration
£’000
Salary
Pension & benefits
Relocation benefits
Annual Bonus
LTIP
Total
James Wroath (CEO)
Tim Lawlor (Former CFO)
Year ended
31 March 2022
Year ended
31 March 2021
Year ended
31 March 2022
Year ended
31 March 2021
431
42
26
286
371
1,156
404
38
85
250
–
777
337
63
–
–
–
400
300
62
–
223
177
762
080 – Wincanton plc Annual report and accounts 2022
‘At a glance’ – Implementation for the year ended 31 March 2023
Element
Salary
Summary of implementation for the year ended 31 March 2023
– Salary adjustment of 15% plus the 4% wider workforce salary increase for the CEO implemented with effect from 1
July 2022.
James Wroath
Salary from 1 July 2022
£515,865
Increase
15% + 4%
Pension and
benefits
– Pension contribution of 4% of salary for James Wroath, in line with the wider workforce.
– Benefits include company car or car allowance and private medical insurance.
Annual Bonus
– Maximum opportunities:
• CEO: 100% of salary
• for FY23, an equality, diversity and inclusion metric has been added.
– The Annual Bonus measures will therefore be based 70% on underlying profit before tax, 5% on a diversity and inclusion
target and 25% on other on strategic objectives.
– In line with the Policy, 50% of any bonus earned above 50% of maximum will be deferred into Company shares for
two years.
– The Committee retains the ability to operate discretion to override the formulaic bonus outcome where it is not
reflective of underlying Company performance.
– Malus and clawback provisions apply.
LTIP
The LTIP award for 2022 will continue with targets based on EPS and TSR.
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Relative TSR vs. FTSE All-Share
excluding investment trusts
EPS
– Maximum opportunities:
• CEO: 150% of salary.
Weighting
50%
50%
Threshold Vesting
(25% of maximum)
Maximum Vesting
Median
Upper quartile or above
5% p.a. growth
10% p.a. growth
Shareholding
requirements
– Awards vesting will be subject to a two year post-vesting holding period.
– Malus and clawback provisions apply.
– CEO: 200% of salary.
– Executive Directors are required to hold full incumbent shareholding requirement (or actual shareholding on departure
if lower) for one year post-departure.
– This requirement applies to shares acquired from incentives vesting from the adoption of the revised policy.
The following pages 82 to 86 provide details of how Wincanton’s Remuneration Policy was implemented during the financial year ending
31 March 2022 and how it will be implemented in FY23.
Wincanton plc Annual report and accounts 2022 – 081
Remuneration Committee report continued
Remuneration Report
Single total figure of remuneration – Executive Directors (audited)
The following audited table sets out the single total figure of remuneration for Executive Directors for the years ended 31 March 2022 and
31 March 2021.
Salary
Relocation benefits2
Taxable benefits
Pension-related benefits
Total fixed pay
Annual Bonus
LTIP3
Total variable pay
Total
James Wroath
Tim Lawlor1
31 March
2022
£’000
31 March
2021
£’000
31 March
2022
£’000
31 March
2021
£’000
431
26
25
17
499
286
371
657
1,156
404
85
26
12
527
250
–
250
777
337
–
14
49
400
–
–
–
400
300
–
17
45
362
223
177
400
762
1 Tim Lawlor stepped down from the Board on 28 February 2022 and left the Group on 18 March 2022. The figures above include remuneration paid to
18 March 2022.
2 James Wroath remained subject to both UK and US tax during FY21 and due to timing differences between UK and US tax years an additional gross up
benefit of £84,728.50 arose in respect of the US tax liabilities. This benefit may reverse in future years.
3 James Wroath 2019 LTIP is due to vest on 2 September 2022. The value included in the single figure for the year ended 31 March 2022 follows the regulation
methodology which prescribes that it should be an estimate based on the average share price over the last quarter of FY22 (£3.65). Using this methodology,
£141,348 of the value, for James Wroath was due to share price growth. For the year ended 31 March 2021, the LTIP figure for Tim Lawlor has been updated
for the actual share price on the date of vesting of the 2018 LTIP (£4.11). Tim Lawlor’s 2019 LTIP lapsed upon his cessation of employment at Wincanton.
Salaries
Following strong support received from shareholders during consultation, the Committee determined that a salary adjustment, representing
a 15% salary adjustment plus the wider workforce salary increase, should be applied to James Wroath, reflecting:
– on appointment, James’ salary was set below the level of his predecessor reflecting that this was his first CEO role. In line with best practice,
his pension was set at the wider workforce rate
– James has now been in the role for two and a half years, and has become an established CEO with a strong track record at Wincanton.
Over this period, he has successfully led Wincanton’s sustained success and progress, including navigating challenging external headwinds
such as Covid-19 and pressures on the global supply chain
– he has overseen a period of significant growth, both organically and through acquisitions, which is reflected in the value that has been
delivered to our shareholders. In his time since appointment, Wincanton has achieved total shareholder returns of c.80% compared to
a return of c.37% in the FTSE SmallCap over the same period
– we consider that he has a high level of marketability, particularly in light of his experience working in both the UK and the US.
While benchmarking was not the primary driver of the decision, in considering the appropriateness of this adjustment the Committee
reviewed FTSE SmallCap market data which took into account market capitalisation, revenue and headcount. The adjustment made positions
the CEO around median against this FTSE SmallCap group, which the Committee considers to be appropriate based on the size and complexity
of the Company.
James Wroath
Salary during
2021/22
Salary
Increase
Salary from
1 July 2022
4% + 15%
salary
adjustment
£433,500
£515,865
Taxable benefits and pension-related benefits
Benefits include a company car benefit, healthcare and, for James Wroath for FY22 only, US tax advice support related to his relocation.
The tax advice support provided was £25,729 on a gross basis. The value of the company car allowance provided during the year was £25,000
for James Wroath, a portion of which was used to participate in Wincanton’s company car scheme under which he was provided with a fully
electric vehicle as part of Wincanton’s net zero initiative.
The Company contributes to the pension scheme on behalf of Executive Directors, and provides a salary supplement in lieu of such
contributions where the value exceeds the HMRC annual allowance. During the year, the Company paid a contribution equivalent to 4%
of salary for James Wroath. This is aligned to the pension available to the wider workforce.
082 – Wincanton plc Annual report and accounts 2022
Incentive outturns
Year ended 31 March 2022 Annual Bonus
For FY22, James Wroath had a maximum bonus opportunity of 100% of salary. The performance measures were underlying profit before tax
(PBT) and delivery of strategic objectives and achievements as detailed below.
The underlying profit before tax and cash flow targets were adjusted from those set at the start of the year to reflect the acquisition of Cygnia
to ensure the targets were no easier to satisfy.
Underlying PBT performance (75% of Annual Bonus):
Underlying PBT target
Proportion of maximum payable
Strategic objectives and achievements for James Wroath (25% of Annual Bonus):
Threshold
Target
Maximum
Actual
£55.2m
£56.7m
£59.5m
£58.1m
25%
50%
100%
75%
Objective
Health and Safety
Net wins
Cash flow
Weighting Target
Achievement
Outcome
5% Ensure a Lost Time Frequency Rate of 0.37 or below LTIFR of 0.33
Annualised net sales wins of £75m, with no dilution
to the Group margin
15%
Net sales wins lower than £75m
5% Deliver an average net debt of £70m for FY22
Average net debt lower than £40m
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Total (maximum 25%)
25%
Following consideration of the above, the Committee awarded Annual Bonuses as follows:
Objective
Underlying PBT outturn (% of bonus)
Strategic objectives outturn (% of bonus)
Overall outturn (% of opportunity)
5%
0%
5%
10%
Weighting James Wroath
75%
25%
56%
10%
66%
The Committee considered the amounts carefully in the context of the Group’s performance, and current environment, and determined
that the amounts were a fair reflection of performance in the past financial year. The approach aligns with that taken for the wider
management population.
In line with the Remuneration Policy, 50% of the bonus above 50% of the normal maximum will be deferred into shares (£34,718 for the CEO).
Tim Lawlor stepped down from the Board on 28 February 2022 and was not eligible to receive an Annual Bonus for FY22.
2019 LTIP
In September 2019, a Long Term Incentive Plan (LTIP) award of 87.5% of salary was granted to James Wroath, based on underlying EPS growth
performance and relative TSR performance vs. the FTSE All-Share Index (excluding investment trusts).
The performance targets and actual performance are shown in the table below:
Measure
Threshold (25% of
maximum vesting)
Maximum
Actual performance achieved
Underlying EPS growth (60%)
6% p.a. growth
11% p.a. growth
6.8% p.a. growth
Relative TSR (40%)
Total LTIP vesting
TSR equal to index
TSR equal to index +10% p.a
TSR equal to Index +12.4%
p.a.
Vesting
(% of maximum)
36.3%
100%
61.8%
The 2019 LTIP award granted to Tim Lawlor lapsed.
Scheme interests awarded in the year ended 31 March 2022 (audited)
LTIP awards made in the year ended 31 March 2022
LTIP awards of 150% and 100% of salary were made to James Wroath and Tim Lawlor respectively during the year, as set out below.
James Wroath
30 July 2021
Date of award
Share
price 1
£4.16
No. of nil cost options
granted under the LTIP
Face value of award (£)
Percentage vesting at
threshold performance
Performance period
end date
156,186
650,249
25%
31 March 2024
Former CFO
Tim Lawlor2
30 July 2021
£4.16
82,074
341,699
25%
31 March 2024
1 Average share price over the three business days preceding the date of grant.
2 The award made under the 2021 LTIP to Tim Lawlor lapsed in full.
The awards are subject to 50% based on relative TSR performance vs. the FTSE All-Share Index (excluding investment trusts), with 25% vesting
at median and 100% vesting at upper quartile. The remaining 50% is based on basic underlying EPS, measured on point to point growth.
Threshold vesting for EPS is 5% growth per annum and maximum is 10%.
Wincanton plc Annual report and accounts 2022 – 083
Remuneration Committee report continued
Deferred Annual Bonus Awards
In line with the Remuneration Policy, 50% of the FY21 bonus above 50% of maximum was deferred into shares, as set out below.
James Wroath
Former CFO
Tim Lawlor2
Date of award
30 July 2021
Share
price 1
£4.16
30 July 2021
£4.16
No. of nil cost options
granted under the LTIP
4,542
4,050
Face value of award (£)
18,910
Vesting date
30 July 2023
16,861
30 July 2023
1 Average share price over the three business days preceding the date of grant.
2 The award to Tim Lawlor lapsed in full.
Incentive framework for FY23
Annual Bonus
For FY23, the maximum bonus opportunity will be 100% of salary for James Wroath, in line with the approved Remuneration Policy. 50%
of any bonus paid above 50% of maximum will be deferred into shares for two years.
For FY23, a diversity and inclusion metric has been added, reflecting our values as a company that aspires and works proactively to achieve a
diverse workforce across all levels of our business. The Annual Bonus measures will therefore be based 70% on underlying profit before tax,
5% on a quantitative diversity and inclusion metric and 25% on other strategic objectives. Actual targets are considered commercially sensitive
and therefore will be disclosed retrospectively.
LTIP
It is intended that an LTIP award of 150% will be made to James Wroath. The performance targets are set out below:
Relative TSR vs. FTSE All-Share excluding investment trusts
EPS
Weighting
50%
50%
Threshold
(25% of max)
Maximum
Median
Upper quartile or above
5% EPS growth p.a.
10% EPS growth p.a.
In line with the approved Remuneration Policy, a two year holding period will apply to awards post-vesting.
Single total figure of remuneration – Non-executive Directors (audited)
The following table sets out the single total figure of remuneration for Non-executive Directors for the years ended 31 March 2022 and
31 March 2021.
£’000
Gill Barr
Anthony Bickerstaff1
Mihiri Jayaweera
Debbie Lentz
Stewart Oades
Dr. Martin Read CBE
Fees
2022
2021
59
59
49
49
59
55
28
45
46
55
193
180
1 Anthony Bickerstaff joined the Board on 1 September 2020.
Fees
The base fee paid to the Non-executive Directors have been reviewed and increased by 4% in line with the wider workforce with effect from
1 July 2022.
Role
Chairman fee
Non-executive Director base fee
Additional Senior Independent Director fee
Additional Remuneration/Audit Committee Chairman fee
Fee from
1 July 2021
Fee from
1 July 2022
£193,800
£201,552
£48,960
£50,918
£10,200
£10,608
£10,200
£10,608
084 – Wincanton plc Annual report and accounts 2022
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Payments to past Directors (audited)
There have been no payments to past Directors.
Payments for loss of office (audited)
As announced on 16 November 2021, Tim Lawlor stepped down as a Director and Chief Financial Officer of the Company on 28 February 2022
and continued to be employed by Wincanton until 18 March 2022. Mr Lawlor continued to receive his contractual salary, pension and benefits
until 18 March 2022, the value of which has been included in the single figure table. He also received payment in respect of accrued holiday
entitlement (less all necessary deductions).
As a leaver due to resignation, Mr Lawlor was not eligible to receive a Bonus for the financial year ending 31 March 2022. Unvested Deferred
Annual Bonus awards (relating to the FY20 and FY21 bonus) and unvested awards under the LTIP (2019, 2020 and 2021 LTIP) lapsed in full.
He will be subject to a post-cessation shareholding requirement, where he will be required to hold 61,113 shares for a one year period until
18 March 2023, relating to LTIPs vesting following introduction of the post-cessation shareholding requirement on 1 April 2020.
No payments in lieu of notice were made.
Share ownership and share interests (audited)
Executive Directors are subject to shareholding requirements. James Wroath is required to accrue and then maintain a holding of shares
with a value of 200% of salary respectively within five years of appointment, as assessed by the Committee from time to time.
At 31 March 2022, James Wroath held shares to the value of £117,116 representing 27% of salary.
Post-cessation shareholding policy
Departing Executive Directors will normally be required to hold Company shares for a period of time following cessation of their roles as
Executive Director. The policy took effect from 1 April 2020 and will apply to shares delivered or acquired from Annual Bonus deferral and
LTIP vesting from this date.
Under this policy:
– Executive Directors will be required to hold shares to the value of 100% of their incumbent shareholding requirement (or their actual
shareholding, excluding personal investment, on cessation if lower)
– this shareholding will apply for one year post-departure
– shares no longer subject to performance conditions (e.g. deferred Annual Bonus or LTIP shares within the holding period) will count towards
the requirement on a net of tax basis
– the Committee retains discretion to operate this policy flexibly and waive part or all of the policy, for example in compassionate circumstances
– there are systems now in place to monitor and enforce the requirement. Each Executive Director who is subject to a withholding
requirement has vested shares held within a nominee account. This account is managed by the Group’s Share Plan Administrator meaning
the shares could be withheld should the need arise.
Total share interests as at 31 March 2022
Shares
Nil cost options
Options
Director
James Wroath
Tim Lawlor1
Dr. Martin Read CBE
Gill Barr
Anthony Bickerstaff
Mihiri Jayaweera
Debbie Lentz
Stewart Oades
Owned/vested
31 March 2022
Owned/vested
31 March 2021
30,341
207,006
58,016
8,000
8,000
8,000
10,022
20,024
10,000
184,147
58,016
4,000
4,000
4,000
4,000
30,024
Unvested and
subject to
continued
employment
4,542
–
–
–
–
–
–
–
Vested but
unexercised
–
–
–
–
–
–
–
–
Unvested and
subject to
performance
671,642
–
–
–
–
–
–
–
Vested but
unexercised
Unvested and
subject to
performance
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Tim Lawlor stepped down from the Board on 28 February 2022 and left the Group on 18 March 2022. Total share interests for Tim Lawlor are shown as at 18 March 2022.
There were no changes in the Directors’ personal holdings between 1 April 2022 and the date of this report.
Wincanton plc Annual report and accounts 2022 – 085
Remuneration Committee report continued
Share ownership and share interests (audited) continued
Share plan interests as at 31 March 2022
Date of award
Vest date
Share
price at
date of
award 1
No. of
shares
under
award as at
1 April 2021
Shares
awarded
during
the year
No. of
shares
vested
during
the year
No. of
shares
lapsed
during
the year
No. of
shares
exercised
during
the year
Option
exercise
price
James Wroath
LTIP
LTIP
LTIP
Deferred Annual
Bonus 2020
Deferred Annual
Bonus 2021
Tim Lawlor
LTIP
LTIP
LTIP
LTIP
Deferred Annual
Bonus 2020
Deferred Annual
Bonus 2021
2 Sep 2019
2 Sep 2022
30 Jul 2020
30 Jul 2023
30 Jul 2021
30 Jul 2024
Nil
Nil
Nil
£2.26
£1.82
£4.16
164,546
350,910
–
–
–
156,816
–
–
–
30 Jul 2020
1 March 2022
N/A
£1.82
38,381
–
38,381
30 Jul 2021
30 July 2023
N/A
£4.16
–
4,542
–
553,837
161,358
38,381
–
–
–
–
–
–
24 Jul 2018
24 Jul 2021
12 Jul 2019
12 Jul 2022
30 Jul 2020
30 Jul 2023
30 Jul 2021
30 Jul 2024
Nil
Nil
Nil
Nil
£2.74
£2.64
£1.82
£4.16
113,504
119,763
173,813
–
–
–
–
82,074
30 Jul 2020
1 March 2022
N/A
£1.82
66,484
–
30 Jul 2021
30 July 2023
N/A
£4.16
–
4,050
43,131
70,373
–
–
–
–
–
119,763
173,813
82,074
66,484
4,050
473,564
86,124
43,131
516,557
1 Three day average share price immediately preceding the date of award.
–
–
–
–
–
–
–
–
–
–
–
–
–
No. of
shares
under
award at
31 March
2022
164,546
350,910
156,816
–
4,542
676,814
–
–
–
–
–
–
–
Service agreements
All Executive Directors are appointed on the basis of a 12 month rolling period, subject to election and annual re-election by the Company’s
shareholders at the AGM. Details of employment contracts for the Executive Directors are summarised in the table below:
Director
Date of appointment
to the Board
Date of current contract
James Wroath
2 Sep 2019
8 May 2019
Notice period
(Company)
12 months
Notice period
(Director)
6 months
Unexpired term as at
31 March 2020
Rolling 12 months
The Chairman and Non-executive Directors are appointed under letters of appointment. All Directors are subject to re-election every three
years, however all Directors currently put themselves forward for annual re-election at each AGM. Details of appointment dates and terms for
the Chairman and Non-executive Directors are summarised in the table below.
Director
Dr. Martin Read CBE
Gill Barr
Anthony Bickerstaff
Mihiri Jayaweera
Debbie Lentz
Stewart Oades
Date of appointment
to the Board
Date of original letter
of appointment
Date of current letter
of appointment
Unexpired term as at
31 March 2022
1 Aug 2018
15 Sep 2017
1 Sep 2020
7 Apr 2020
1 Jun 2019
1 Nov 2014
15 Jul 2018
12 Sep 2017
29 Jul 2020
13 Feb 2020
7 Mar 2019
30 Oct 2014
12 Jul 2021
2 Sep 2020
29 Jul 2020
13 Feb 2020
7 Mar 2019
2 Sep 2020
28 months
18 months
17 months
12 months
2 months
19 months
The Executive Directors’ service contracts and Chairman and Non-executive Directors’ letters of appointment are available for inspection
by shareholders at the Company’s registered office.
Executive Directors’ external appointments
No Executive Directors held any external directorships during the year and do not hold any at the date of this report.
086 – Wincanton plc Annual report and accounts 2022
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Performance graph and CEO remuneration table
The graph below sets out the TSR performance of the Company and of the FTSE SmallCap Index. The SmallCap is considered to be the most
appropriate comparator as the Company is a constituent of this index. The chart also shows TSR for FTSE All-Share excluding investment trusts
as this is the comparator group for measuring TSR performance under the LTIP.
Wincanton TSR vs. the FTSE SmallCap and the FTSE All-Share xIT – Value of £100 invested on 31 March 2012 (£)
700
600
500
400
300
200
100
0
Mar 2012
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Wincanton
FTSE All-Share xIT
FTSE Small Cap
The table below sets out the total remuneration paid and the proportion vesting under Annual Bonus and LTIPs, as a percentage of the
maximum that could have been achieved in each year of the same period as set out in the graph above, for the Chief Executive Officer:
Year ended
31 March
2022
2021
2020
2020
2019
2018
2017
2016
2016
2015
2014
2013
Chief Executive
James Wroath
James Wroath
James Wroath1
Adrian Colman1
Adrian Colman
Adrian Colman
Adrian Colman
Adrian Colman2
Eric Born2
Eric Born
Eric Born
Eric Born
Chief Executive single figure
of total remuneration
£’000
Annual Bonus outturn
(% of maximum)
LTIP vesting
(% of maximum)
1,156
777
621
554
1,541
1,933
2,008
1,653
3,750
2,051
1,264
893
66%
59%
56%
58%
65%
56%
73%
61%
–
56%
68%
69%
62%
n/a
n/a
59%
84%
98%
100%
100%
100%
100%
100%
100%
1 James Wroath was appointed on 2 September 2019, on which date Adrian Colman stepped down as CEO. These figures contain pro rated remuneration in
respect of each Director according to the period served.
2 Adrian Colman was appointed on 1 August 2015. Eric Born resigned on 31 July 2015. These figures contain pro rated remuneration in respect of each
Director according to the period served.
Wincanton plc Annual report and accounts 2022 – 087
Remuneration Committee report continued
Percentage change in remuneration of Directors and employees
The table below sets out the percentage change in salary, benefits and Annual Bonus for the Directors who served on the Board in FY21 and
FY22, compared to the change for all colleagues.
FY22
Base salary/
fees
(% change)
Taxable
benefits
(% change)
Annual
Bonus
(% change)
Base salary/
fees
(% change) 5
FY21
Taxable
benefits
(% change)
–20.6%
-54.1%
Chief Executive1
Tim Lawlor
Gill Barr
Anthony Bickerstaff2
Mihiri Jayaweera3
Debbie Lentz
Stewart Oades
Dr. Martin Read CBE
Other employees4
7%
12%
7%
111%
9%
9%
7%
7%
1%
54%
6%
14%
N/A
–
–
–
–
–
–
–
–
–
–
–
–
14%
17%
–4.8%
–1.8%
n/a
n/a
17.9%
-1.8%
-5.3%
0.4%
Annual
Bonus
(% change)
-31.7%
-7.9%
–
–
–
–
–
–
0%
–
–
–
–
–
–
2.3%
11.6%
1 The CEO values for 2019/20 represent the combined remuneration for James Wroath and Adrian Colman, including remuneration paid to Adrian
Colman in respect of the period between 2 September and 31 October in which he was no longer the CEO. Taxable benefits include relocation fees paid
to James Wroath.
2 Anthony Bickerstaff joined the Board on 1 September 2020.
3 Mihiri Jayaweera joined the Board on 7 April 2020.
4 The calculation of the average change in salary for employees excludes joiners and leavers during the year.
5 All directors volunteered a 20% reduction in salary for a three month period from 1 April 2020 as part of our response to the Covid pandemic.
Relative importance of spend on pay
The table below sets out the change in total remuneration of all employees and dividends paid to shareholders from year ended 31 March 2021
to year ended 31 March 2022, and the increase in dividends related to each of those financial years.
Item
Remuneration of all employees1
Dividend
31 March 2022
£m
707.4
14.9
31 March 2021
£m
632.2
12.9
Difference
£m
75.2
2.0
1 Includes all personnel expenses, as set out in Note 6 to the consolidated financial statements.
External advisers
During the year, external advisers attended Committee meetings upon invitation to provide advice and support to the Committee.
Deloitte LLP were appointed as advisers to the Committee on 9 January 2019 following a competitive tender process.
Deloitte LLP is a founding member of the Remuneration Consultants Group and a signatory to the Code of Conduct for Remuneration
Consultants. For more detail please refer to the website, www.remunerationconsultantsgroup.com. The Committee is comfortable that
Deloitte LLP provides objective and independent remuneration advice and has no conflicts of interest with the Group that may impair
its independence.
Total fees payable to Deloitte LLP for advice provided to the Committee during the year amounted to £83,850. Fees are charged on a time
and materials basis. Deloitte LLP also provided share scheme and taxation advice in the period.
Statement of shareholder voting
The table below sets out the Company voting outcome of the advisory resolution for approval of the Annual Report on Remuneration at the
2021 AGM and the binding resolution for approval of the Directors’ Remuneration Policy at the 2020 AGM:
Resolution
Votes for
%
Votes against
Annual Report on Remuneration
86,603,252
Directors’ Remuneration Policy
88,034,224
98.21
96.45
1,581,730
3.242,796
%
1.79
3.55
Total votes
88,184,982
91,277,020
% of issued share
capital voted
70.81
73.29
Votes
withheld
50,803
68,717
The Directors’ Remuneration Report has been prepared on behalf of the Board by the Remuneration Committee in accordance with the UK
Corporate Governance Code, the Listing Rules and the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment)
Regulations 2013.
088 – Wincanton plc Annual report and accounts 2022
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Directors’ Remuneration Policy
The following section sets out a summary of our Directors’ Remuneration Policy, which was approved at the 2020 AGM. The Policy took
effect from July 2020 and will operate for up to three years until the 2023 AGM. The full Remuneration Policy can be found in the Directors’
Remuneration Report in the 2020 Annual Report and Accounts, which is available on the Company’s website: www.wincanton.co.uk.
The table below sets out the policy in relation to the key components of remuneration.
Executive Directors
Salary
Purpose and link
to strategy
Salaries are set at a sufficient level to recruit and retain individuals of the necessary quality to deliver the
Group’s strategy.
Operation
Base salaries are normally reviewed annually, with changes effective 1 July.
Salaries are typically set after considering:
– the responsibilities of each individual role
– progression within role
– individual performance and experience
– pay and conditions across the workforce
– salary levels in companies of a similar size and complexity.
Any increase will ordinarily be (in percentage of salary terms) in line with those of the wider workforce. Increases
beyond those granted to the wider workforce may be awarded in certain circumstances such as where:
– there is a significant change in responsibility
– the salary of a new hire is deliberately set below market levels with the intention to implement a planned increase
on a phased basis in subsequent years subject to individual performance
– there is a material market misalignment
– there is a significant increase in the scale of the role and/or size, value and/or complexity of the Group.
Where increases are awarded in excess of the wider employee population, the Committee will provide an explanation
in the relevant Annual Report on Remuneration.
Benefits
Purpose and link
to strategy
The Group provides the appropriate benefits for Executive Directors in a business of this size in order to recruit and
retain individuals of the necessary quality to deliver the Group’s strategy.
Operation
Benefits include but are not limited to:
– company car or car allowance
– life assurance
– private medical insurance for the Executive Director and their direct family
– personal accident and travel insurance
– death in service cover.
Additional benefits (including the tax thereon) may be provided if considered appropriate.
Relocation assistance is available on a case by case basis. Assistance may include, but is not limited to, facilitating
and/or meeting the costs of removal and other relocation costs, children’s education, family travel and tax
equalisation arrangements and may extend to facilitating and/or meeting the costs of re-establishing them to their
previous location at the end of the employment or assignment.
Opportunity
Benefits vary by role and individual circumstance and eligibility is reviewed periodically. Benefits are not anticipated
to exceed 10% of salary per annum over the period for which this policy applies. The Committee retains the
discretion to approve a higher cost in exceptional circumstances (e.g. relocation) or in circumstances where
factors outside of the Group’s control have materially changed (e.g. costs of medical premiums). If this occurs, the
Committee will provide details and rationale in the relevant Annual Report on Remuneration.
Wincanton plc Annual report and accounts 2022 – 089
Remuneration Committee report continued
Directors’ Remuneration Policy continued
All employee share plans
Purpose and link
to strategy
The Company encourages voluntary participation in share ownership throughout the Group where share plans
are appropriate.
Operation of all
employee share plans
Under the current all employee share plan arrangements, Executive Directors are entitled to participate in the
Company’s Share Incentive Plan (SIP).
Participants make monthly contributions from their gross salary to buy Partnership Shares. The Company currently
awards one Matching Share for every four Partnership Shares acquired. In addition, any dividends paid in respect
of shares held under the SIP are used to buy Dividend Shares.
In the event that Wincanton were to introduce another all employee plan, the Committee retains the discretion
to allow Executive Directors to participate on the same basis as other employees.
Opportunity
In line with HMRC limits, the rules of the Company’s SIP set out the following maximum levels, which may be
amended from time to time so that they are in line with legislation:
Free Shares – The maximum value of Free Shares per tax year is £3,600.
Partnership Shares bought by employees – The maximum pre-tax salary that can be used to buy Partnership Shares
is £1,800 per annum.
Matching Shares – The Company can match employees’ Partnership Share purchases by giving them additional
shares. The maximum award of Matching Shares is two Matching Shares for each Partnership Share bought. The
Company currently awards one Matching Share for every four Partnership Shares bought.
The maximum opportunity for any other all employee share plans would be in line with limits set for all employees.
Pension
Purpose and link
to strategy
The Group provides the appropriate pension provision for Executive Directors in a business of this size in order
to recruit and retain individuals of the necessary quality to deliver the Group’s strategy.
Operation of pension
arrangements
Executive Directors are entitled to join the defined contribution section of the Wincanton plc Pension Scheme.
In certain circumstances, for example where the annual allowance level set by HMRC is exceeded, the pension
provision will be in the form of a taxable cash supplement.
Opportunity
Pension contributions will be set in line with the average workforce pension contribution (in percentage of salary
terms) for the CEO and for new Executive Directors appointed from 1 April 2020.
Pension contribution of up to 15% of salary for Executive Directors appointed prior to 1 September 2019.
Annual Bonus
Purpose and link
to strategy
The aim of the Annual Bonus is to incentivise and recognise the Executive Directors’ contribution to the delivery of
the Group’s strategy by rewarding achievement of financial and strategic objectives, and to demonstrate alignment
to shareholders.
Operation
Normally 50% of any bonus earned above 50% of maximum is compulsorily deferred into Company shares for two
years, with the balance paid in cash.
Dividends or dividend equivalents may accrue on Deferred Shares that vest and will ordinarily be paid in shares.
Opportunity
The CEO’s Annual Bonus opportunity cannot exceed 100% of salary.
Performance
measure
Reflecting legacy arrangements, the current CFO’s Annual Bonus opportunity cannot exceed 120% of salary.
For a new Executive Director, the Annual Bonus opportunity cannot exceed 100% of salary.
The overall total incentive opportunity (Annual Bonus plus LTIP, excluding exceptional LTIP policy maximum) in any
one year cannot exceed 250% of salary.
No more than 25% of maximum is payable for ‘Threshold’ performance. Normally 50% of maximum is achievable
for ‘Target’ performance.
Annual performance is typically based on achievement of financial targets and personal or strategic objectives.
Normally, the Committee would expect financial measures to represent between 60% and 80% of the total Annual
Bonus, with strategic objectives representing between 20% and 40%. However, the Committee retains discretion
to adjust weightings to align with the business objectives for each year.
At the end of the year the Committee reviews the appropriateness of the formulaic outcome and retains the
discretion to adjust the outcome if considered appropriate taking into account factors including, but not limited to,
the underlying performance of the business and shareholder and stakeholder experience.
Recovery provisions
In certain circumstances, the Committee has the ability to apply malus to unvested deferred bonus awards or
clawback to awards paid.
090 – Wincanton plc Annual report and accounts 2022
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Long Term Incentive Plan (LTIP)
Purpose and link
to strategy
The aim of the LTIP is to incentivise and recognise the performance of Executive Directors in respect of their
contribution to the delivery of the Group’s strategy over the longer term by rewarding strong financial performance
and sustained increase in shareholder value.
Operation
Awards may be granted as nil cost options or conditional share awards.
For LTIP awards granted from 1 April 2019, any share awards that vest are subject to a two year holding period.
Dividends or dividend equivalents may accrue on any shares that vest and will ordinarily be paid in shares.
Opportunity
Maximum award levels for Executive Directors are 150% of salary. The overall total incentive opportunity (Annual
Bonus plus LTIP, excluding exceptional LTIP policy maximum) in any one year cannot exceed 250% of salary.
In exceptional circumstances, for example on recruitment, individual awards may be granted up to 250% of salary.
Performance
measures
No more than 25% of an award may vest for ‘Threshold’ performance.
Performance is normally measured over a period of no less than three years.
The Committee will review the performance measures and weighting for each award to ensure alignment with
Wincanton’s strategy. A significant portion of awards will be based on financial (e.g. EPS growth) and/or shareholder
return (e.g. relative TSR).
Performance measures for awards granted in 2020 will be based on TSR relative to an appropriate comparator group.
Following the end of the performance period the Committee reviews the appropriateness of the formulaic outcome
and retains the discretion to adjust the outcome if considered appropriate taking into account factors including, but
not limited to, the underlying performance of the business and shareholder and stakeholder experience.
Recovery provisions
In certain circumstances, the Committee has the ability to apply malus to unvested LTIP awards or clawback to LTIP
awards paid or subject to the holding period.
Shareholding requirement
Purpose and link
to strategy
Ensures alignment between Executive Directors and shareholders through building a meaningful shareholding in the
Company, including for a period of time post-departure.
Operation
Shareholding guidelines for the CEO are to accrue and then maintain a holding of shares with a value of 200%
of salary as assessed by the Committee from time to time.
Shareholding guidelines for other Executive Directors are to accrue and then maintain a holding of shares with
a value of 150% of their salary.
A post-cessation shareholding policy will operate for departing Executive Directors. The Committee has the
discretion to waive this requirement in certain circumstances (e.g. compassionate circumstances).
Non-executive Directors
Purpose and link
to strategy
The Company seeks to attract and retain a high calibre Chairman and Non-executive Directors by offering market
competitive fee levels.
Operation
Fees are set by reference to responsibilities, expected time commitments and market levels for companies
of a similar size and complexity to Wincanton.
The Chairman receives an annual fee. The Non-executive Directors receive an annual base fee and additional fees
are paid to reflect additional responsibilities, such as chairing a Board Committee.
Neither the Chairman nor the Non-executive Directors participate in any of the Company’s short or long term
incentive arrangements, nor do they receive benefits or pension provision. They are however, reimbursed for
reasonable costs incurred in carrying out their role (and any associated tax incurred on these costs).
The fee of the Chairman is set by the Committee and the fees of the Non-executive Directors are approved
by the Board, on the recommendation of the Chairman and CEO.
Opportunity
Fee levels are reviewed on a periodic basis, and may be increased taking into account factors such as the time
commitment of the role and market levels in companies of a similar size and complexity. Aggregate fees for the
Chairman and Non-executive Directors will not exceed the limit as set out in the Company’s Articles of Association.
Wincanton plc Annual report and accounts 2022 – 091
The rules governing the appointment and
replacement of Directors, and the powers
of the Directors are set out in the Company’s
Articles of Association.
At the 2022 AGM, all of the Directors
will offer themselves for re-election.
The biographical details for all the
Directors are set out on pages 56 and 57.
A copy of the Executive Director’s service
contract is available to shareholders for
inspection at the Company’s registered
office. Details of the letters of appointment
for the Non-executive Directors are set
out in the Directors’ Remuneration Report
on page 86.
Directors’ indemnity and insurance
Directors are ultimately responsible for
the operation, performance and decision-
making of the Company. In doing so, they are
exposed to potentially significant personal
liability under criminal or civil law and the UK
Listing, Prospectus, Disclosure Guidance and
Transparency Rules, which include penalties
such as private or public censure, fines and/
or imprisonment.
In line with normal market practice, it
is considered in the Company’s best
interests to protect the Directors from
the consequences of innocent errors
or omissions. Accordingly, a Directors’
and officers’ liability insurance policy is
maintained at the Company’s expense
and was in place throughout the year.
The policy provides indemnity to Group
employees that serve as Directors or officers
of any Group company, as recommended
by the Code, which includes the Board of
Directors. This insurance policy would not
provide cover in the event that a Director
or officer had knowingly acted fraudulently
or dishonestly. The Company has also
entered into qualifying third party indemnity
arrangements with the Directors, as
permitted by the Companies Act 2006.
Directors’ report
The Company
Wincanton plc (the Company) is a company
incorporated in England and Wales, with
company number 04178808.
Constitution
The Company’s Articles of Association may
only be amended by a special resolution at a
general meeting of shareholders.
Principal activities
Wincanton plc is the ultimate parent
Company of the Group and trades principally
through its subsidiary undertakings which
include no branches. The Company is listed
on the London Stock Exchange main market
with a premium listing. The Group is a
leading provider of logistics and supply chain
solutions in the UK and Ireland.
All subsidiaries of the Company are listed in
Note 32 on pages 143 and 144.
Review of business and
future developments
The business review and details of future
developments are contained within the
Strategic report on pages 16 to 21.
Research and development
The Company continues to look for
innovative solutions to deliver efficient and
sustainable logistic operations. This has led
to development of both traffic management
solutions and continued research into the
efficient and sustainable approaches to
running our fleet of lorries.
Compliance reporting
Directors’ report
The Directors present the Annual Report
together with the audited financial
statements of the Company and the Group,
for the year ended 31 March 2022.
The Directors’ report required by the
Companies Act 2006 comprises the Strategic
report on pages 6 to 51, the Corporate
Governance report on pages 52 to 74 and
Directors’ remuneration report on pages
75 to 91.
Strategic report
The Company is required to prepare a
Strategic report to give a balanced and
fair review of the Group’s business during
the year ended 31 March 2022, to enable
shareholders to assess how the Directors
have performed their duties under section
172 of the Companies Act 2006.
The information that fulfils the
requirements of the Strategic report can be
found on pages 6 to 51 and includes reviews
of the business and financial performance
and the principal risks and uncertainties
facing the Group.
092 – Wincanton plc Annual report and accounts 2022
Within the Strategic report, a summary
review of the Group’s activities during the
financial year along with its future prospects
is contained in the Chair’s statement on page
6. Details of the Group’s business goals,
strategy and model are set out on pages
16 to 21.
A statement on engagement with our
stakeholders and how the Board has
complied with section 172 of the Companies
Act is included on page 34 and page 63.
Corporate governance reporting
During the year ended 31 March 2022,
the Company has complied with the UK
Corporate Governance Code 2018. Details
of the Company’s compliance with the
UK Code, the disclosures required under
the Code and the UK Listing Rules can be
found in the Corporate Governance report
on page 53.
The corporate governance statement
required by Rule 7.2.1 of the FCA’s Disclosure
Guidance and Transparency Rules is set out
on pages 53 to 55.
Management report
For the purposes of Rule 4.1.5R(2) and Rule
4.18 of the FCA’s Disclosure Guidance and
Transparency Rules, this Directors’ report
and the Strategic report on pages 93 to
94 and 16 to 51 together comprise the
Management report.
Accounting policies, financial
instruments and risk
Details of the Group’s accounting
policies, together with details of financial
instruments and financial risks are provided
in Note 1 on pages 109 to 117 and Note
30 on pages 139 to 142 of the Group
financial statements.
Directors
The Directors during the year and to the
date of this report, are:
Executive Directors
– James Wroath, Chief Executive Officer
– Tim Lawlor, Chief Financial Officer
(stepped down 28 February 2022)
Non-executive Directors
– Dr. Martin Read CBE, Chair
– Stewart Oades, Senior
Independent Director
– Gill Barr
– Anthony Bickerstaff
– Mihiri Jayaweera
– Debbie Lentz.
Financial disclosures
Going concern
The financial statements have been
prepared on a going concern basis, as
set out in the Statement of Directors’
Responsibilities on page 95. Having
considered the ability of the Company and
the Group to operate within its existing
facilities and meets its debt covenants, the
Directors have a reasonable expectation that
the Company and the Group have adequate
resources to continue in operational
existence for the foreseeable future.
In determining whether the financial
statements can be prepared on a going
concern basis, the Directors considered the
Group’s business activities, together with
the principal risks and uncertainties likely to
affect its future performance and position.
For further details of this assessment, see
pages 42 and 111.
Results and dividends
The Group profit attributable to equity
shareholders for the financial year
amounted to £47.9m. The preliminary results
will be announced on 20 May 2022, with
the final dividend of 8.00p payable on 5
August 2022.
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Contracts and transactions
The Company is not aware of any significant
agreements to which it is party that take
effect, alter or terminate upon a change of
control of the Company following a takeover.
There is no contractual provision within Mr
Wroath’s service contract in the event of a
change of control and no such provision will
be included in future Executive Directors’
contracts. The Company is not aware of
any contractual or other agreement, which
is essential to its business and should be
disclosed in this Directors’ report.
Events after the balance sheet date
There were no reportable events after the
balance sheet date.
Disclosure of information to auditor
The Directors who held office at the date
of approval of this Directors’ report confirm
that, so far as they are each aware, there
is no relevant audit information of which
the Company’s auditor is unaware; and
each Director has taken all the steps that
they ought to have taken as a Director to
make themselves aware of any relevant
audit information and to establish
that the Company’s auditor is aware
of that information.
Business ethics and combatting
modern slavery
Wincanton has long recognised the
importance of respecting the human
rights of all our stakeholders including our
colleagues, our suppliers and the wider
communities in which we operate. It is core
to how we do business. Our commitment
to this is reflected in our Code of Conduct,
which highlights the importance for all at
Wincanton and all those associated with us,
of behaving morally, legally and ethically,
consistent with our Purpose and Values.
Our Code of Conduct
The Code of Conduct sets out the high
ethical standards expected of all colleagues
and is underpinned by The Wincanton
Way, as well as a corporate governance
structure and a robust risk, controls and
compliance programme. It gives guidance
on how to put these standards into practice.
It incorporates policies on anti-bribery and
corruption; share dealing; confidentiality
and data protection; conflicts of interest;
relationships with stakeholders; political
activity and charitable donations; Speaking
Up: raising serious concerns; and modern
slavery and human trafficking. Our Code
of Conduct applies to everyone who works
for or represents Wincanton: our Directors,
officers and colleagues; those we choose
to work with and those who aspire to work
with us. Our statement on compliance
with the Modern Slavery Act and our Code
of Conduct can be found on our website
at www.wincanton.co.uk.
Substantial shareholdings as at 31 March 2022
The Company has been advised under the Financial Conduct Authority’s Listing Rules and
Disclosure Guidance and Transparency Rules, or has ascertained from its own analysis, the
interests held in the voting rights of the Company’s issued share capital.
Shareholder
Columbia Threadneedle Investments
Aberforth Partners
JPMorgan Asset Management
Schroder Investment Management
Polar Capital
Tellworth Investments
Unicorn Asset Management
Number of
shares held
19,818,386
15,589,566
7,956,526
7,080,229
6,870,366
5,509,427
4,433,000
Holding (% of
issued share capital)
15.91
12.52
6.39
5.68
5.52
4.42
3.56
Wincanton plc Annual report and accounts 2022 – 093
Greenhouse gas emissions
The disclosures concerning greenhouse gas
emissions required by law are included in the
ESG report on page 24.
Charitable donations
During the year ended 31 March 2022, the
Group contributed £22,986 (2021: £14,507)
to charitable and community programmes.
Political donations
No political donations were made during the
year (2021: Nil).
Annual General Meeting
The Company’s AGM will be held on
12 July 2022 and this year will be face
to face at the offices of Herbert Smith
Freehills in London. The Notice of Annual
General Meeting 2022, which contains
full explanations of the business to be
conducted at the AGM, is set out in a
separate Notice addressed to shareholders
and can be found on the Company’s website
www.wincanton.co.uk/investors/
shareholder-information/general-meetings.
Employee disclosures
Wincanton is an inclusive and equal
opportunities employer. The Group is
committed to ensuring that disabled
persons are treated with dignity and
respect and that we act in accordance with
the Equality Act 2010. Wincanton gives
full and fair consideration to applications
for employment by disabled persons
and provides the necessary support to
colleagues in our employment with a
disability. Training, career development and
promotion are equally applied regardless of
disability or any other individual attribute.
Further information about how we engage,
consult with and look after our employees
can be found in the ESG report on pages 28,
in Board Engagement on page 63 and in the
Nomination Committee report on page 66.
On behalf of the Board
Lyn Colloff
Company Secretary
19 May 2022
Directors’ report continued
Equity disclosures
Share capital
The Company’s issued share capital as the
date of this report was 124,543,670 Ordinary
Shares of 10p each. There are no preference
shares or non-voting shares. There are no
shares held in Treasury.
Authority to purchase shares
The Company was authorised at the 2021
AGM to purchase its own shares within
certain limits. During the year ended 31
March 2022, 500,000 shares were purchased
by the Trustee of the Employee Benefit
Trust under this authority to satisfy the
exercise of share options by employees. The
Directors will seek renewal of their authority
to purchase in the market the Company’s
shares at the 2022 AGM.
Shareholders’ rights
Each Ordinary Share of the Company
carries one vote at general meetings of the
Company. There are no restrictions on the
transfer of Ordinary Shares in the capital of
the Company other than certain restrictions,
which may from time to time be imposed
by law. In accordance with the Listing Rules
of the Financial Conduct Authority, certain
employees are required to seek approval
of the Company to deal in its shares.
Employees who participate in the Share
Incentive Plan, whose shares are held in the
Employee Benefit Trust, give directions to
the trustees to vote on their behalf by way
of a Form of Direction.
The Company is not aware of any
agreements between shareholders that
may result in restrictions on the transfer of
securities and/or voting rights.
094 – Wincanton plc Annual report and accounts 2022
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Statement of Directors’
responsibilities
The Directors are responsible for preparing
the Annual Report and Group and parent
Company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare Group and parent Company financial
statements for each financial year. Under
that law, they are required to prepare the
Group financial statements in accordance
with UK-adopted international accounting
standards and applicable law and have
elected to prepare the parent Company
financial statements in accordance with UK
Accounting Standards, including FRS 101
Reduced Disclosure Framework.
Under company law, the Directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and parent Company and of their profit or
loss for that period. In preparing each of
the Group and parent Company financial
statements, the Directors are required to:
– select suitable accounting policies and
then apply them consistently
– make judgements and estimates that are
reasonable, relevant, reliable and prudent
– for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted international
accounting standards
– for the parent Company financial
statements, state whether applicable
UK Accounting Standards have been
followed, subject to any material
departures disclosed and explained in the
parent Company financial statements
– assess the Group and parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern
– use the going concern basis of accounting
unless they either intend to liquidate the
Group or the parent Company or to cease
operations or have no realistic alternative
but to do so.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Company and enable them to
ensure that its financial statements comply
with the Companies Act.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
The Directors approved the above
responsibility statement on 19 May 2022.
James Wroath
Chief Executive Officer
They are responsible for such internal
control as they determine is necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud or
error, and have general responsibility for
taking such steps as are reasonably open
to them to safeguard the assets of the
Group and to prevent and detect fraud
and other irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a Strategic report, Directors’
report, Directors’ remuneration report
and Corporate Governance Statement that
comply with that law and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on
the Company’s website. Legislation in
the UK governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Responsibility statement of the Directors
in respect of the annual financial report
We confirm that to the best of
our knowledge:
– the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole
– the Strategic report and the Directors’
report include a fair review of the
development and performance of the
business and the financial position of
the issuer and the undertakings included
in the consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face.
Wincanton plc Annual report and accounts 2022 – 095
Independent auditor’s report to the members of Wincanton plc
Opinion on the financial statements
In our opinion:
– the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2022
and of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
– the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Wincanton plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31
March 2022 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash flows, the company balance sheet, the
company statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is
consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Directors on 22 July 2020 to audit the financial statements
for the year ended 31 March 2021 and subsequent financial periods. The period of total uninterrupted engagement including retenders and
reappointments is 2 years, covering the years ended 31 March 2021 and 31 March 2022. We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The Non-audit services prohibited by that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
– a review of the forecasts and covenant compliance calculations for the Group for a period of at least 12-months from the date of approval
of the financial statements. This included testing that the forecasts were consistent with the latest Board approved budgets and assessing
the mathematical accuracy of the going concern model;
– detailed enquiries of the Board and management on the reasonableness of the assumptions made in the preparation of these forecasts.
This also included making comparisons of the forecast assumptions to historic results achieved, consideration of current economic risks
and knowledge of the business;
– challenge of the appropriateness of the downside sensitivities, and consideration of whether other scenarios (or specific events) might
be appropriate to incorporate into the assessment;
– testing the covenant calculations, and forecast covenant compliance, against the Group’s facility agreements and other key documents;
– a review of the Directors’ reverse stress test assessment on the Group; and
– consideration of the adequacy of the disclosures in the financial statements against the requirements of the accounting standards and
consistency of the disclosure against the forecasts and reverse stress test assessment that the Directors have considered in performing
their going concern assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
096 – Wincanton plc Annual report and accounts 2022
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Overview
Coverage 1
Key audit matters
100% (2021: 99%) of Group profit before tax
98% (2021: 97%) of Group revenue
100% (2021: 100%) of Group total assets
Revenue recognition
Going concern and covenant compliance
Valuation of certain defined benefit pension scheme assets
Measurement of the gross defined benefit pension scheme obligation
Going concern and covenant compliance was not considered
to be a key audit matter in the current year.
2022
2021
Materiality
Group financial statements as a whole
£2.6m based on 4.5% of underlying profit before tax (2021: £2.2m based on 4.5% of a 3 year
average of underlying profit before tax).
1 These are areas which have been subject to a full scope audit by the group engagement team.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
The Group operates through a number of reporting components of which we identified two to be significant components. All significant
components were subject to full scope audits. Non-significant components were subject to either specified audit procedures and/or desktop
review procedures. With the exception of Specified procedures performed on the Group’s insurance captive by BDO Guernsey, all audits,
specified procedures and desktop review procedures were completed by the group audit team.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude whether
sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as a whole. Our
involvement with component auditors included the following:
– holding meetings at the planning stage and the completion stage of the audit;
– directing the nature and extent of the procedures performed by the component auditor;
– sending group audit instructions, along with key communications on materiality levels and risks associated to the specific audit
procedures; and
– review of final reporting received.
Wincanton plc Annual report and accounts 2022 – 097
Independent auditor’s report to the members of Wincanton plc continued
An overview of the scope of our audit continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Revenue recognition
Group revenue is £1,421.4m
(2021: £1,221.9m)
Contract receivables, contract
assets and contract fulfilment
assets are disclosed in Note 18
to the financial statements.
The accounting policy for
revenue recognition is
included in Note 1 and further
information on revenue is
included in Note 2.
As part of the monthly reporting
process, manual adjustments are
recorded in revenue to ensure that
revenue is recorded in the correct
period, giving rise to accrued income
(contract receivables). We have
identified these manual adjustments
as a significant risk of fraud and error.
Separately, from time to time, the
Group extends, renews or modifies
its contracts with customers.
Accounting for contract modifications
under IFRS 15 – Revenue from
Contracts with Customers (‘IFRS 15’)
is complex and requires judgement
in determining whether additional
services to be provided as part of
a modified or extended contract
have been priced at the standalone
selling price or contain promises
that do not constitute performance
obligations. We consider this gives
rise to a significant risk of error in
revenue recognition.
Separately, we have considered the
appropriateness of the accounting
treatment for significant new contracts
entered into during the year, including
any judgements regarding promises
in contracts that are treated as
performance obligations. We consider
that this gives rise to a significant risk
of error in revenue recognition.
How the scope of our audit addressed the key audit matter
Our procedures included:
– testing a sample of accrued income on open book and closed
book contracts and agreeing the amounts recorded to post
year end invoice and, where possible, cash, as well as agreeing
the service provided to underlying contracts. We tested that
the accrued income amounts selected were recorded in the
appropriate period by obtaining corroborative evidence
to support the timing of revenue recognition, such as. cost
reports or customer correspondence.
– we selected a sample of manual journal entries to revenue and
tested that the item was appropriately accounted for through
corroboration to supporting documentation and explanations
by management.
– for a sample of renewed, extended or modified contracts,
selected by reference to the amount of revenue recorded
for that contract in the year, we obtained and reviewed a
copy of the contract and management’s contract checklist,
challenging where appropriate any conclusions drawn,
including judgements regarding the existence of performance
obligations and whether the transaction price was considered
to be reflective of the standalone selling price of the additional
promised goods or services in accordance with IFRS 15. In
assessing whether the transaction price was reflective of the
standalone selling price, we reviewed the contract for any
significant discounts or rebates.
– for a sample of new contracts, selected by reference to the
amount of revenue recorded for that contract in the year,
we obtained a copy of the contract and management’s
contract checklist and accounting paper (where available). We
reviewed the Group’s assessment of the accounting for the
new contracts in accordance with IFRS 15, challenging where
appropriate the conclusions drawn, including judgements
regarding the existence of performance obligations and the
point at which revenue should be recognised.
Key observations:
As a result of performing the procedures above, we found
that the recognition of revenue relating to manual period end
adjustments and new, renewed, extended or modified contracts
was acceptable.
098 – Wincanton plc Annual report and accounts 2022
An overview of the scope of our audit continued
Key audit matters continued
Key audit matter
Valuation of certain
defined benefit pension
scheme assets
As disclosed in Note 28, the
Group has £1,208.3m (2021:
£1,211.9m) of plan assets
which are included in the
measurement of the net
defined benefit liability/
asset recorded on the
Group balance sheet.
The quantum of the Group’s plan
assets recorded in the net defined
benefit liability/asset on the Group’s
balance sheet is significant in the
context of the financial statements.
Some of the asset valuations, which
are determined with the assistance
of the investment fund managers,
are highly subjective, in particular
£784.4m (2021: £635.3m) of liability
driven investments and £114.1m
(2021: £115.4m) of private debt
assets, the latter being determined
in reference to the latest net asset
valuations which occur at a date prior
to the financial year end. Therefore,
this was considered to be an area
of focus for our audit and a key
audit matter.
Measurement of the
gross defined benefit
pension scheme
obligation
As disclosed in Note 28, the
Group has recorded a gross
defined benefit obligation of
£1,091.3m (2021: £1,161.1m)
in the measurement of the
net defined benefit pension
liability/asset recorded on
the Group balance sheet.
Note 28 includes details of
the Group’s assessment of
the sensitivity of the present
value of the scheme obligation
to changes in actuarial
assumptions.
The quantum of the Group’s gross
defined benefit pension scheme
obligation recorded in the net defined
benefit liability/asset on the Group’s
balance sheet is significant in the
context of the financial statements.
The measurement of the gross
defined benefit obligation is based
on actuarial assumptions. which
have a high degree of estimation
uncertainty, with a range of possible
reasonable outcomes. The Directors
take independent actuarial advice
in respect of the appropriateness of
these assumptions and in auditing the
gross defined benefit pension scheme
obligation we also involved our own
experts. As such, this was considered
to be an area of focus for our audit and
a key audit matter.
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How the scope of our audit addressed the key audit matter
Our procedures included:
– assessing the competence of the investment fund managers
by obtaining and reviewing relevant controls reports to
understand the controls they have in place over valuation
and to identify any control findings which might impact the
reliability of the valuations.
– for the liability driven investments, testing a sample of the
valuations to either quoted market prices, where available,
or by using our valuation experts to assist us in sourcing
relevant market data to determine that the valuations
were appropriate.
– for private debt assets, we assessed the appropriateness
of using the latest available net asset valuations, which occur
prior to the financial year end, by considering the movements
in relevant published benchmarks from the latest valuation
date to the financial year end. This work was performed with
the assistance of our valuation experts.
– we also considered any significant valuation movements
between the date of the most recent audited financial
statements of the private debt funds and the valuation date
to assess the level of volatility in the portfolio of private
debt assets.
Key observations:
As a result of performing the procedures above, we found
that the valuations of the liability driven assets and the private
debt assets, included in the valuation of total plan assets
were acceptable.
Our procedures included:
– we tested the underlying data used in the calculation of the
gross defined benefit obligation to supporting documentation.
– with the use of our internal actuarial experts, we challenged
the appropriateness of the actuarial assumptions used by
the Group in calculating the gross defined benefit pension
obligation. This included benchmarking assumptions such
as the discount rate, retail price index (RPI) and consumer
price index (CPI) against those used for similar schemes and
considering where each of these assumptions sit within an
acceptable range of possible positions.
Key observations:
As a result of performing the procedures above, we found that
the measurement of the gross defined benefit pension scheme
obligation was acceptable.
Wincanton plc Annual report and accounts 2022 – 099
Independent auditor’s report to the members of Wincanton plc continued
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements
Parent company financial statements
Materiality
2022
£m
£2.6m
2021
£m
£2.2m
Basis for determining
materiality
4.5% of underlying
profit before tax
Rationale for the
benchmark applied
Underlying profit before
tax is considered to be
the most appropriate
performance measure
as it removes the
impact of certain one-
off non-underlying
items impacting the
underlying performance
of the Group and is
also a key measure for
stakeholders.
4.5% of a 3 year average
of underlying profit
before tax
Underlying profit before
tax is considered to be
the most appropriate
performance measure
as it removes the
impact of certain one-
off non-underlying
items impacting the
underlying performance
of the Group and is
also a key measure for
stakeholders.
2022
£m
£1.89m
2021
£m
£1.85m
1% of total assets
1% of total assets
Total assets is
considered to be the
most appropriate
measure as the Parent
Company is a holding
company that does
not trade.
Total assets is
considered to be the
most appropriate
measure as the Parent
Company is a holding
company that does
not trade.
Performance materiality
£1.82m
Basis for determining
performance materiality
70% of overall
materiality
£1.496m
68% of overall
materiality
Higher percentage as
compared to 2021 as
second year audit with
greater understanding
of the business.
£1.26m
68% of overall
materiality
£1.32m
70% of overall
materiality
Higher percentage as
compared to 2021 as
second year audit with
greater understanding
of the business.
Component materiality
We set materiality for each component of the Group based on a percentage of between 48% and 87% (2021: between 42% and 90%) of Group
materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged
from £1.25m to £2.25m (2021: £0.98m to £1.98m). In the audit of each component, we further applied performance materiality levels of 70%
(2021: 68%) of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately
mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £90,000 (2021: £80,000).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
100 – Wincanton plc Annual report and accounts 2022
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual Report and
Accounts other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and
longer-term viability
– The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page 93; and
– The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers
and why the period is appropriate set out on page 48.
Other Code provisions
– Directors’ statement on fair, balanced and understandable set out on page 95;
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– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out
on page 46;
– The section of the annual report that describes the review of effectiveness of risk management and internal
control systems set out on page 44 and 45; and
– The section describing the work of the audit committee set out on page 72.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
– the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the
Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we
are required to report
by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
– the Parent Company financial statements and the part of the Directors’ remuneration report to be audited are
not in agreement with the accounting records and returns; or
– certain disclosures of Directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
Wincanton plc Annual report and accounts 2022 – 101
Independent auditor’s report to the members of Wincanton plc continued
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates, and
considered the risk of acts by the Group that were contrary to applicable laws and regulations, including fraud. These included but were not
limited to the Companies Act 2006, Financial Conduct Authority regulations including the UK Listing Rules, the principles of the UK Governance
Code, pensions and tax legislation.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:
– the nature of the industry, control environment and business performance including the design of the Group’s remuneration policies,
key drivers for Directors’ remuneration and performance targets;
– the results of our enquiries of management, internal audit and the Audit Committee about their own identification of the risk of
irregularities;
– any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures; and
– the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and
any potential indicator of fraud. We also discussed the potential for non-compliance with laws and regulations.
We focused on laws and regulations that could give rise to a material misstatement in the financial statements. We also considered the
susceptibility of the financial statements to misstatement as a result of fraud, and believed that the areas in which fraud might occur
were related to revenue recognition and management override of controls.
Our tests included, but were not limited to:
– identifying and testing journal entries, in particular any journal entries posted to revenue, those with unusual account combinations
and journals posted by unexpected users;
– enquiries with management, the Audit Committee and enquiries of internal legal counsel to identify any known or suspected
non-compliance or fraud;
– review of minutes of Board meetings throughout the year to identify any non-compliance with laws and regulations, and fraud, not already
disclosed by management;
– review of tax compliance and involvement of our tax experts in the audit;
– review of internal audit reports for reference of any internal control failures; and
– challenging assumptions and judgements made by management in their significant accounting estimates and judgements, the assessment
of performance obligations in customer contracts, the valuation of defined benefit pension assets, the measurement of the gross defined
benefit pension obligation, the measurement of other provisions and going concern, and
– the procedures in the key audit matters section above in relation to revenue recognition and accounting estimates.
102 – Wincanton plc Annual report and accounts 2022
Auditor’s responsibilities for the audit of the financial statements continued
Extent to which the audit was capable of detecting irregularities, including fraud continued
We communicated relevant identified laws and regulations and potential fraud risks to all engagement and component team members,
who were all deemed to have appropriate competence and capabilities, to remain alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected
in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
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Sophia Michael (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
19 May 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Wincanton plc Annual report and accounts 2022 – 103
Consolidated income statement For the year ended 31 March 2022
Revenue
Net operating costs
Share of results of joint venture
Operating profit
Financing income
Financing cost
Profit/(loss) before tax
Income tax (expense)/credit
Profit/(loss) attributable to equity shareholders
of Wincanton plc
Earnings per share
– basic
– diluted
2022
Non-
underlying
£m
Total
£m
–
1,421.4
(3.3)
(1,360.0)
–
(3.3)
–
–
(3.3)
0.6
–
61.4
1.1
(7.7)
54.8
(6.9)
Underlying
£m
1,421.4
(1,356.7)
–
64.7
1.1
(7.7)
58.1
(7.5)
2021
Non-
underlying
(Restated)1
£m
Total
(Restated)1
£m
–
1,221.9
(1.0)
(1,171.2)
–
(1.0)
–
–
(1.0)
0.4
0.1
50.8
2.4
(7.0)
46.2
(7.1)
Underlying
£m
1,221.9
(1,170.2)
0.1
51.8
2.4
(7.0)
47.2
(7.5)
50.6
(2.7)
47.9
39.7
(0.6)
39.1
40.8p
40.3p
38.6p
38.2p
32.0p
31.7p
31.5p
31.2p
Note
2
4
15
4
7
7
8
9
9
1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
104 – Wincanton plc Annual report and accounts 2022
Consolidated statement of comprehensive income For the year ended 31 March 2022
Profit for the year
Other comprehensive income/(loss)
Items which will not subsequently be reclassified to the income statement
Remeasurements of net defined benefit asset
Income tax relating to items that will not subsequently be reclassified to profit or loss
Items which are or may subsequently be reclassified to the income statement
Net foreign exchange loss on investment in foreign subsidiaries
Other comprehensive income/(loss) for the year, net of income tax
Total comprehensive income/(loss) attributable to equity shareholders of Wincanton plc
Note
28
8
2022
£m
47.9
2021
(Restated)1
£m
39.1
47.6
(14.7)
32.9
(65.3)
12.4
(52.9)
(0.1)
(0.2)
32.8
80.7
(53.1)
(14.0)
1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
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Wincanton plc Annual report and accounts 2022 – 105
Consolidated balance sheet At 31 March 2022
Non-current assets
Goodwill and intangible assets
Property, plant, equipment and vehicles
Right-of-use assets
Investments, including those equity accounted
Employee benefits
Current assets
Inventories
Trade and other receivables
Income tax receivable
Cash at bank and in hand
Assets classified as held for sale
Total current assets
Current liabilities
Income tax payable
Borrowings and other financial liabilities
Lease liabilities
Trade and other payables
Provisions
Net current liabilities
Total assets less current liabilities
Non-current liabilities
Borrowings and other financial liabilities
Lease liabilities
Employee benefits
Provisions
Deferred tax liabilities
Net assets/(liabilities)
Equity
Issued share capital
Share premium
Merger reserve
Translation reserve
Own shares
Retained profits/(losses)
Total equity/(deficit)
2022
£m
2021
(Restated)1
£m
Note
11
12
14
15
28
17
18
20
19
21
22
23
24
21
22
28
24
16
26
110.7
25.9
189.0
–
117.0
442.6
2.6
207.4
–
28.7
238.7
–
238.7
84.6
21.0
129.3
0.2
50.8
285.9
1.4
190.2
0.6
30.6
222.8
0.9
223.7
(3.3)
–
(26.6)
(323.6)
(12.7)
–
(9.7)
(32.3)
(303.7)
(15.1)
(366.2)
(360.8)
(127.5)
(137.1)
315.1
148.8
(25.0)
(176.5)
(2.5)
(30.6)
(16.9)
(9.0)
(113.4)
(2.6)
(23.9)
(1.6)
(251.5)
(150.5)
63.6
(1.7)
12.5
12.9
3.5
(0.5)
(2.2)
37.4
63.6
12.5
12.9
3.5
(0.4)
(1.0)
(29.2)
(1.7)
1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
These financial statements were approved by the Board of Directors on 19 May 2022 and were signed on their behalf by:
James Wroath
Chief Executive Officer
106 – Wincanton plc Annual report and accounts 2022
Consolidated statement of changes in equity For the year ended 31 March 2022
Issued share
capital
£m
Share
premium
£m
Note
Merger
reserve
£m
Translation
reserve
£m
Balance at 1 April 2020
Profit for the year (restated)1
Other comprehensive loss
Total comprehensive loss (restated)1
Share based payment transactions
Deferred tax on share based payment transactions
Dividends paid to shareholders
Balance at 31 March 2021 (restated)1
Balance at 1 April 2021
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/income
Share based payment transactions
Current tax on share based payment transactions
Deferred tax on share based payment transactions
Dividends paid to shareholders
Balance at 31 March 2022
29
8
10
29
8
8
10
12.5
12.9
3.5
–
–
–
–
–
–
–
–
–
–
–
–
12.5
12.9
12.5
12.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3.5
3.5
–
–
–
–
–
–
–
(0.2)
–
(0.2)
(0.2)
–
–
–
(0.4)
–
(0.1)
(0.1)
–
–
–
–
Own shares
£m
(1.5)
–
–
–
0.5
–
–
(0.4)
(1.0)
Retained
(losses)/
earnings
£m
Total
equity/
(deficit)
£m
(12.5)
39.1
(52.9)
(13.8)
0.1
0.5
(3.5)
(29.2)
14.7
39.1
(53.1)
(14.0)
0.6
0.5
(3.5)
(1.7)
(1.0)
(29.2)
(1.7)
–
–
–
(1.2)
–
–
–
47.9
32.9
80.8
(0.3)
0.3
0.1
(14.3)
37.4
47.9
32.8
80.7
(1.5)
0.3
0.1
(14.3)
63.6
12.5
12.9
3.5
(0.5)
(2.2)
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1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
Wincanton plc Annual report and accounts 2022 – 107
Consolidated statement of cash flows For the year ended 31 March 2022
Operating activities
Profit before tax
Adjustments for:
– depreciation and amortisation
– research and development expenditure credit
– net financing costs
– impairments
– profit on disposal of property, plant and equipment
– gain on derecognition of lease liabilities
– profit on disposal of Containers and Pullman businesses
– share of results of joint venture
– write down of trade investment
– share based payment transactions
Increase in trade and other receivables
(Increase)/decrease in inventories
Increase in trade and other payables
Decrease in provisions
Increase in employee benefits before pension deficit payment
Income taxes paid
Cash generated before pension deficit payment
Pension deficit payment
Cash flows from operating activities
Investing activities
Proceeds from sale of property, plant and equipment
Purchase of business, net of cash acquired
Net cash outflow from disposal of Containers and Pullman businesses
Interest received
Additions of property, plant, equipment and vehicles
Additions of computer software
Cash flows from investing activities
Financing activities
Increase/(decrease) in borrowings
Repayment of borrowings acquired
Own shares acquired
Payment of lease liabilities
Equity dividends paid
Interest paid on borrowings
Interest paid on lease liabilities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Represented by:
– cash at bank and in hand
– bank overdrafts
2022
£m
2021
(Restated)1
£m
Note
54.8
46.2
7
13
3
15
12
11
27
10
20
20
43.8
(0.6)
6.6
0.4
(0.1)
1.2
(0.9)
–
–
0.3
105.5
(7.9)
(1.1)
15.9
(1.7)
0.9
(3.3)
108.3
(18.5)
89.8
2.9
(13.6)
–
–
(10.7)
(0.5)
(21.9)
9.9
(14.0)
(1.8)
(37.7)
(14.3)
(3.1)
(5.2)
41.1
(1.0)
4.6
2.3
(0.7)
–
(0.4)
(0.1)
0.1
0.6
92.7
(64.8)
0.6
66.5
(0.3)
1.5
(5.7)
90.5
(18.3)
72.2
4.5
–
(0.2)
0.1
(8.2)
(1.4)
(5.2)
(62.0)
–
–
(35.1)
(3.5)
(2.6)
(3.8)
(66.2)
(107.0)
1.7
27.0
28.7
28.7
–
28.7
(40.0)
67.0
27.0
30.6
(3.6)
27.0
1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
108 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements
1. Accounting policies
Statement of compliance
Wincanton plc (the Company) is a company incorporated in the United Kingdom and domiciled and registered in England and Wales. The
Company provides supply chain solutions in the UK and Ireland and is a public company limited by shares. The address of the Company’s
registered office and its registered number are shown on page 152. The consolidated financial statements include those of the Company
and its subsidiaries (together referred to as the Group).
The consolidated financial statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting
standards (Adopted IFRS) and the legal requirements of the Companies Act 2006, as applicable to companies reporting under those standards.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted international
accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK-
adopted international accounting standards in its consolidated financial statements on 1 April 2021. There were no impacts or changes in
accounting policies arising from this transition.
Standards, amendments and interpretations effective or adopted in the year
The following standards and amendments became effective or were available for early adoption in the year but did not have a material impact
on the consolidated financial statements:
– Interest Rate Benchmark Reform Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16; and
– Amendments to IFRS 16 Leases: Covid-19 Related Rent Concessions.
Standards and amendments that are issued but not yet applied by the Group
At the date of authorisation of these financial statements, the following Standards and Amendments were in issue but are not yet effective
and in some cases have not yet been adopted by the UK:
– Amendments to IAS 1 Classification of Liabilities as Current or Non-Current and Deferral of Effective Date Amendment
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– Annual Improvements to IFRS 2018–2020
– Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract
– Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
– Amendments to IFRS 3 Reference to Conceptual Framework
– Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies
– Amendments to IAS 8 Definition of Accounting Estimates
– IFRS 17 Insurance Contracts
– Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
None of the above Standards and Amendments are expected to have a material effect on the Group’s financial reporting.
Prior year restatement
Change in accounting policy – Software-as-a-Service (SaaS) arrangements
Following the IFRS Interpretations Committee (IFRIC) agenda decision published in April 2021, the Group has reviewed its accounting
policy regarding the configuration and customisation costs incurred when implementing a SaaS arrangement. These costs were previously
capitalised, but the accounting policy has been changed to expense these costs given the latest IFRIC guidance.
The Group’s revised policy aligns with the IFRIC agenda decision whereby:
– in SaaS arrangements where the Group controls the underlying software, configuration and customisation costs are capitalised as part
of bringing the identified intangible asset into use
– where the Group does not control the underlying software, but the related configuration and customisation costs are not distinct from
access to the software, these costs are expensed over the SaaS contract term
– in all other circumstances, configuration and customisation costs are recognised as an expense as incurred, except in the limited instances
where these costs result in a separately identifiable intangible asset.
During the previous financial year, the Group commenced the implementation of a new cloud based ERP and Human Resources system, and
at 31 March 2021 costs of £2.2m had been capitalised. The above change in accounting policy has been applied retrospectively and results in a
prior period restatement to the 31 March 2021 primary statements, to recognise these costs as a non-underlying expense within net operating
expense. No costs had been incurred prior to 1 April 2020 and as such there was no impact to the balance sheet as at 31 March 2020, hence
a balance sheet at that date has not been presented.
The effect on the 31 March 2021 balance sheet is a reduction in both intangible assets and retained earnings of £2.2m. The effect on the
31 March 2021 cash flow statement is a decrease in cash flows from operating activities of £2.2m, and a corresponding reduction in cash
outflows due to investing activities of £2.2m.
Wincanton plc Annual report and accounts 2022 – 109
Notes to the consolidated financial statements continued
1. Accounting policies continued
Basis of preparation
The Group financial statements are stated in pounds sterling, which is the Company’s functional and presentational currency, rounded to the nearest
hundred thousand. They are prepared on the historical cost basis except where assets or liabilities are required to be stated at their fair value.
The accounting policies set out below have been applied consistently to all periods presented in these Group financial statements.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Group financial statements under Adopted IFRS requires management to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and/or in future periods if applicable.
Management discusses with the Audit Committee the development, selection, application and disclosure of the Group’s critical accounting
estimates and judgements.
Critical judgements in applying the Group’s accounting policies
The following are key judgements that the Directors have made in the process of applying the Group’s accounting policies and that have
the most significant effect on the amounts recognised in the financial statements:
– the presentation of selected items as non-underlying and the use of underlying measures as described in see Note 3 ‘Alternative
Performance Measures’
– the determination of whether any claims against the Group give rise to a possible, probable or remote outflow of economic benefit as
detailed in Note 24 ‘Provisions’ and Note 25 ‘Contingent liabilities’
– the determination of whether goods and services promised in the Group’s contracts with customers represent distinct performance
obligations, and the associated timing of revenue recognition for long term contracts. See Note 1 ‘Accounting policies’, revenue recognition.
Key sources of estimation uncertainty
The Group’s key sources of estimation uncertainty in the reporting period that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are shown below:
Defined benefit pension scheme
Details of the Group’s defined benefit arrangements are set out in Note 28 ‘Employee benefits’, including the assumptions made, risk factors and
tables showing the sensitivity of the pension scheme obligations to changes in actuarial assumptions. The effects of changes in the actuarial and
demographic assumptions underlying the Scheme’s obligations, together with experience gains or losses and the return on assets excluding amounts
recognised in net financing costs, are classified as remeasurements in the defined benefit liability and recognised in other comprehensive income.
Insurance provisions
Provisions are liabilities of uncertain timing or amount and therefore judgement is applied in making a reliable estimate of the quantum and
timing. Further information about the assumptions and risk factors is given in Note 24 ‘Provisions’.
The judgements which have had a significant effect on the amounts recognised in the financial statements in relation to the insurance provision were
those relating to the estimation of the provision for claims outstanding, including reported claims and claims incurred but not reported (IBNR).
The Group takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. An external actuary is appointed to
undertake an annual assessment of certain of the provisions required. The Group adopts a reserving position by applying a measurement basis
which on some policy years is in excess of the external actuary’s best estimate due to developments since the date of the actuary’s report.
Given the uncertainty in establishing claims provisions, actual results may differ from the historical pattern on which these estimates are based
and the cost of settling individual claims may exceed that assumed. It is likely that the final outcome will prove to be different from the original
liability established.
The estimation of the provision for claims IBNR is generally subject to a greater degree of uncertainty than the estimation of the cost of
settling claims already notified to the Group, where more information about the claim event is available. Claims IBNR may often not be
apparent to the insured for a considerable period after the loss event, and classes of business where the IBNR proportion of the total provision
is high will typically display greater variations between initial estimates and final outcomes.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the accounting
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future underwriting periods. It is reasonably possible, on the basis of existing knowledge, that outcomes within the next
financial year that are different from the assumption could require a material adjustment to the carrying amount of the asset or liability affected.
110 – Wincanton plc Annual report and accounts 2022
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1. Accounting policies continued
Insurance provisions continued
Given the diversity of claim types, their size, the range of possible outcomes and the time involved in settling these claims it is impractical
to provide sensitivity analysis on one single measure and its potential impact on the overall insurance provision. Provisions covered by the
actuarial review at the balance sheet date were £18.9m (2021: £5.0m) compared to an actuarial range of £10.9m to £14.4m (2021: £3.2m
to £4.7m), with the scope of the actuarial review being increased to include more recent, immature years. Management have taken into
consideration the actuarial review, the development of larger claims since the actuarial review, and historic development patterns of the
claims in determining the level of provision held.
Other sources of estimation uncertainty
Impairment of assets
Determining whether the Group’s assets are impaired requires an estimation of the value in use of the cash generating units (CGUs) to which the
assets have been allocated. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the CGUs
and a suitable discount rate in order to calculate present value. Note 13 ‘Impairment’ provides information on the assumptions used in the value
in use calculations and the amount by which the recoverable amount exceeds the respective carrying amount for each group of CGUs.
Business combinations
When accounting for business combinations using the acquisition method there are key estimates made in determining the fair value of
the opening balance sheet and intangible assets. For the acquisition of Cygnia these included the estimated future cash flows and suitable
discount rate used to value the acquired intangibles. See note 27 for the identifiable assets, liabilities and contingent liabilities acquired
measured at fair value as at the acquisition date.
Climate change
Climate change is a global challenge and has been identified as a principal risk for the Group. The potential impact of climate change has
been considered in a number of areas including our assessments of going concern and viability, goodwill impairment testing and reviews of
property, plant and equipment. However, in our view, climate change does not represent a material estimation uncertainty. For further details
of the Group’s assessment of climate change risks refer to the risk report and to the ESG and sustainability section of the strategic report.
Going concern
The Directors have concluded that it is reasonable to adopt a going concern basis in preparing the financial statements. In adopting the going
concern basis, the Directors have considered Wincanton’s business activities, together with factors likely to affect its future development and
performance, as well as Wincanton’s principal risks and uncertainties.
The adoption of the going concern basis is based on an expectation that the Group will have adequate resources to continue in operational
existence for at least 12 months from the signing of the annual financial statements. For the purpose of this going concern assessment,
the Directors have considered an 18 month period from the balance sheet date, aligned with the business forecasting outlook period, to
30 September 2023. The Group has reported a profit before tax of £54.8m for the year ended 31 March 2022 (2021: £46.2m as restated),
net current liabilities of £127.5m (2021: £137.1m) and net assets of £63.6m (2021: net liabilities £1.7m as restated).
The Group’s committed facilities at 31 March 2022 comprise a syndicated Revolving Credit Facility (RCF) of £175.0m, which matures in March
2026. The Group had £150.0m undrawn amounts against the RCF facility as at 31 March 2022. The RCF requires the Group to comply with the
following three financial covenants at 30 September and 31 March each financial year:
– leverage ratio: Consolidated total net borrowings of no more than 3.0 times consolidated EBITDA for the preceding 12 month period
– interest cover: Consolidated EBITDA for the preceding 12 month period is not less than 3.5 times higher than consolidated net finance
charges for the preceding 12 month period
– fixed charge cover: Consolidated EBITDA plus operating lease costs for the preceding 12 month period is not less than 1.4 times higher
than consolidated net finance charges plus operating lease costs for the preceding 12 month period.
See Note 30 for the covenant assessment as at 31 March 2022 which shows we have significant headroom across all of the covenants.
In arriving at the conclusion on going concern, the Directors have given due consideration to whether the funding and liquidity resources
above are sufficient to accommodate the principal risks and uncertainties faced by the Group.
The Directors have reviewed the financial forecasts across a range of scenarios. Wincanton has modelled a base case based on revenue and
profit run rates at the end of March 2022 that forms the basis of the budget for the year ended 31 March 2023 and three year plan.
The severe but plausible downside case assumes a deterioration in trading performance, with a 10% reduction in profit before tax resulting primarily
from a reduction in budgeted trading from a major customer. This scenario also assumes a deterioration in working capital performance compared to
the base case as a result of delayed cash receipts, as well as a further material unplanned cash outflow linked to a general commercial dispute. On top
of these downsides, an adverse working capital outflow was assumed to occur in the year ended 31 March 2023 to simulate the timing impact of a
high inflationary environment on cash collection within our open book contracts, where receipts are normally collected in arrears.
These downsides would be partly offset by the application of further mitigating actions to the extent they are under management’s control,
including deferrals of capital and other discretionary expenditure, as well as management bonus payment deferral and claiming against
insurance cover to offset any commercial dispute.
Wincanton plc Annual report and accounts 2022 – 111
1. Accounting policies continued
Going concern continued
In both scenarios, the Group has sufficient liquidity and adequate headroom in the committed facilities set out above to meet its liabilities
as they fall due throughout the forecast period and the Group complies with the financial covenants under the RCF at 30 September and 31
March throughout the forecast period.
The Group has carried out reverse stress tests against the downside case to determine the performance levels that would result in a breach
of covenants. For a breach in covenants to occur during the relevant period, the Group would need to experience a sustained drop in EBITDA
(-50%) versus the downside case throughout the period. The Directors do not consider this scenario to be plausible given the ability of the
Group to continue its operations through the recent pandemic, the customer contract security within the Group and the buoyant nature of
many of the markets within which the Group operates.
Our assessment of the developments in Ukraine and the broader region is that they are not likely to give rise to a material financial impact on the Group,
since the Group does not have any operations outside of the United Kingdom and Ireland. As a result, aside from the modelling of higher costs resulting
from a rising inflationary environment, it has not been deemed necessary to include any further impact of the war in Ukraine within our forecasts.
The Directors have also considered the impact of climate related matters on the Group’s going concern assessment and do not expect this
to have a significant impact on the going concern assessment throughout the forecast period.
Since performing their assessment, there have been no subsequent changes in facts and circumstances relevant to the Directors’ assessment
of going concern.
Basis of consolidation
The consolidated Group financial statements include the financial statements of the Company and its subsidiary undertakings made up to the
balance sheet date. Businesses acquired or disposed of since then have been accounted for using acquisition accounting principles from or up to
the date that control passed.
Subsidiaries are those entities controlled by the Group. Control is achieved when the Company has power over the investee; is exposed to, or has
rights to, variable return from its involvement with the investee; and has the ability to use its power to affect its returns. The Company reassesses
whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control
listed above. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial
statements of subsidiaries are included in the consolidated financial statements from or up to the date that control passed.
The results, assets and liabilities of joint ventures are incorporated in these financial statements using the equity method of accounting,
in accordance with IFRS 11 Joint Arrangements and IAS 28 Investments in Associates and Joint Ventures. Under the equity method, a joint
venture is initially recognised in the consolidated balance sheet at cost and adjusted thereafter to recognise the Group’s share of the profit or
loss and other comprehensive income of the joint venture. Intra-group balances, and any unrealised gains and losses or income and expenses
arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from
transactions with joint ventures are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same
way as unrealised gains, but only to the extent that there is no evidence of impairment.
Intangible assets
Goodwill
All business combinations are accounted for by applying the acquisition method. Identifiable assets, liabilities and contingent liabilities
acquired are measured at fair value at acquisition date. The consideration transferred is measured at fair value and includes the fair value
of any contingent consideration.
Where the consideration transferred exceeds the fair value of the net assets, liabilities and contingent liabilities acquired, the excess is
recorded as goodwill. The costs of effecting an acquisition are charged to the income statement in the period in which they occurred.
Goodwill is stated at cost less any impairment losses. Goodwill is allocated to groups of CGUs and is tested annually for impairment.
Other intangible assets
Intangible assets arising under a business combination (acquired intangible assets) are capitalised at fair value as determined at the date
of acquisition and are stated at that fair value less accumulated amortisation and impairment losses.
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of acquired intangible assets from
the date they are acquired as follows:
Customer relationships
Trademarks
Acquired software
six to ten years
five years
three to five years
The cost of computer software purchased or developed inhouse which has the capacity to generate economic benefits for a period in excess of one year
is capitalised as an intangible asset. Amortisation is charged to the income statement on a straight-line basis over the following estimated useful lives:
Computer software costs
three to five years
Major software projects may be amortised over lives of up to ten years.
112 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued S
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1. Accounting policies continued
Property, plant, equipment and vehicles
Items of property, plant, equipment and vehicles are stated at cost or deemed cost less accumulated depreciation and impairment losses.
The cost of tangible assets includes directly attributable costs, including appropriate commissioning costs.
Subsequent expenditure
The Group recognises in the carrying amount of an item of property, plant, equipment and vehicles the costs incurred in replacing part
of such an item if it is probable that the future economic benefits will flow to the Group and when the cost can be measured reliably.
All other such costs, including the derecognition of the replaced part of the item, are expensed in the income statement as incurred.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of each part of an item of property,
plant and equipment. The estimated useful lives are as follows:
Freehold buildings
Leasehold improvements
Plant and equipment, furniture and fittings
Office machinery and computers
Motor vehicles
50 years
remaining life of lease
5 to 25 years
3 to 5 years
5 to 10 years
The range of useful economic lives given reflects the fact that assets held for specific contracts are depreciated over the lives of those
contracts. Climate change is not considered to have a significant impact on the useful lives of items of property, plant and equipment.
Freehold land is not depreciated. The residual value of tangible assets, if significant, is reassessed annually.
Right-of-use assets
Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability adjusted for any lease payments
made at or before the commencement date, estimated asset retirement obligations, lease incentives received and initial direct costs.
Subsequently, right-of-use assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and are
adjusted for certain remeasurements of the lease liability. Depreciation is calculated on a straight-line basis over the length of the lease.
Right-of-use assets are presented within non-current assets on the face of the balance sheet.
Assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is met only when: the sale is highly probable; the asset is available for immediate sale in its present condition;
and management are committed to the sale which is expected to complete within one year from the date of classification. Assets held for
sale are measured at the lower of carrying amount and fair value less costs to sell.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and includes expenditure
incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling
price in the ordinary course of business, less selling expenses.
Trade and other receivables
Trade and other receivables are stated at their fair value on initial recognition and subsequently at amortised cost, i.e. less any
impairment losses.
Receivables that have been sold in accordance with a non-recourse trade receivable financing agreement are derecognised at the date sold.
The Group acts as an intermediate lessor of property assets and equipment. When the Group is an intermediate lessor, it accounts for its
interests in the head lease and the sub-lease separately. The Group accounts for finance leases as finance lease receivables, using the effective
interest rate method.
Cash and cash equivalents and bank overdrafts
Cash and cash equivalents comprise cash balances, restricted cash, call deposits and, for the purpose of the cash flow statement, certain bank
overdrafts. Restricted cash relates to cash deposits held by the Group’s insurance subsidiary with a maximum notice period of 32 days and cannot
be freely transferred to the UK without prior approval. Bank overdrafts that are available for offset, repayable on demand and form an integral
part of the Group’s cash management are included as a component of cash and cash equivalents as presented in the cash flow statement.
In the balance sheet, bank overdrafts are presented within borrowings and other financial liabilities, and are offset against cash when, and only
when, there is a legally enforceable right of set-off and the Group intends either to settle on a net basis or to realise the cash and settle the
overdraft simultaneously.
Trade and other payables
Trade and other payables are stated at their fair value on initial recognition (discounted if material) and subsequently at amortised cost.
Wincanton plc Annual report and accounts 2022 – 113
1. Accounting policies continued
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated into sterling at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on such translation are recognised in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into sterling
at the foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated into sterling at rates
approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are recognised
through other comprehensive income into a separate component of equity. They are released into the income statement upon disposal.
Lease liabilities
The lease liability is initially measured at the present value of the remaining lease payments over the lease term, discounted using the rate
implicit within the lease or, where this is not available, the Group’s incremental borrowing rate. The lease term comprises the non-cancellable
period of the contract, together with periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that
option; and periods following an option to terminate the lease if the lessee is reasonably certain not to exercise that option based on
operational needs and contractual terms.
Subsequently, the lease liability is measured at amortised cost by increasing the carrying amount to reflect interest on the lease liability and
reducing it by the lease payments over the lease term. The lease liability is remeasured when the Group changes its assessment of whether
it will exercise an extension or termination option.
Lease liabilities are shown separately on the balance sheet in current liabilities and non-current liabilities depending on the length of the lease term.
Employee benefits
The Group operates both defined contribution and defined benefit pension arrangements. The assets of these arrangements are held in
separate Trustee administered funds independent of the Group. The investment strategy of the Trustee and Group is to maximise investment
returns, with a key area for management attention being to seek to meet the Group’s funded defined benefit obligations. In accordance with
this strategy certain investments are designated at fair value and are accounted for as set out below. The defined benefit arrangements were
closed to future accrual with effect from 31 March 2014.
Defined contribution arrangements
Obligations for contributions to defined contribution pension arrangements are recognised as an expense in the income statement as incurred.
Defined benefit arrangements
The Group’s net obligation in respect of defined benefit pension arrangements is calculated separately for each plan by estimating the amount of
future benefit that employees have earned in return for their service in prior periods; that benefit is discounted to determine the present value, and
the fair value of any Scheme assets is deducted. The discount rate is the yield at the balance sheet date on AA credit rated bonds that have maturity
dates approximating the terms of the Group’s obligations. The calculation is performed by a qualified actuary using the projected unit method.
Where the calculation results in an asset to the Group, this is limited to the present value of any future refunds from the Scheme or reductions
in future contributions to the Scheme.
Past service costs arising due to plan amendments or curtailments are recognised in the income statement immediately.
Remeasurement gains and losses that arise in calculating the Group’s obligation in respect of a scheme are recognised in full through other
comprehensive income in the statement of comprehensive income.
Share based payment transactions
The Group has applied the requirements of IFRS 2 Share-based Payments to the grants of options made under the Long Term Incentive
Plan (LTIP).
The Group issues options under equity-settled share based incentive schemes to certain employees which are measured at the date of grant as the
fair value of the employee services required in exchange for the grant. The fair value determined is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured by an external valuer using the Binomial, Monte-Carlo or scenario-modelling methods as appropriate. The expected life
assumptions used in the models have been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
A number of shares in the Company are held in trust on behalf of employees who hold options under the Group’s equity-settled share based
incentive schemes. Such shares are held by an employee benefit trust and are treated as treasury shares and shown in the balance sheet
as a deduction from equity.
Other share schemes
Shares awarded on a matching basis to employees participating in the Company’s Share Incentive Plan are purchased at the prevailing market
rate. The shares purchased are held in a separately administered offshore trust for the benefit of the Plan participants.
114 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 1. Accounting policies continued
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value, less attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income
statement over the period of the borrowings on an effective interest basis.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event and it
is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined
by discounting the expected future cash flows.
The Group provides for property provisions on a site by site basis due to the unique nature and location of each site. Provision is made for the best
estimate of the expected dilapidations assessment, and the expected cost of empty or under-utilised properties on short term leases for which
the practical expedient to exclude from IFRS 16 Leases has been applied. Dilapidations are provided for specific individual properties where the
outflow of resources is probable and the amount of the obligation can be reliably estimated. Where significant, amounts are discounted.
The Group provides for insurance claims on an appropriate discounted basis depending on the expected timing of their settlement. Provision
is made for the estimated costs of claims arising from past events based on the advice of the Group’s external insurance advisers.
Other provisions include those for restructuring, onerous contracts, sundry claims and settlements. A restructuring provision is recognised
only when a constructive obligation exists, with the amount recognised based on the estimated liability.
Impairment
The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to
determine whether there is any indication of impairment, including any impacts arising from climate change. If any such indication exists,
the asset’s recoverable amount is estimated. In addition, goodwill is tested for impairment at least annually. The two exceptions above
are dealt with as per the separate applicable accounting policy.
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The Group applies the simplified approach permitted by IFRS 9 Financial Instruments, which requires the application of a lifetime expected
loss provision to trade receivables, contract assets, contract receivables and lease receivables. The provision calculations are based on historic
credit losses for each segment adjusted to reflect current and forecast conditions at the reporting date. This approach is followed unless there
are specific circumstances which would render the receivable irrecoverable and therefore require a specific provision. These circumstances are
specific to each customer and subject to management judgement based upon indicators such as a change in customer credit rating or a change
in payment patterns. A provision is made against trade receivables, contract assets, contract receivables and lease receivables until such time
as the Group believes the amount to be irrecoverable, after which the balance is written off. For amounts owed by subsidiary undertakings,
which are repayable on demand, any expected credit losses are based on the assumption that repayment is demanded at the balance sheet
date and with reference to the subsidiary undertaking’s access to accessible highly liquid assets.
A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other
assets or groups of assets. An impairment loss is recognised whenever the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in the income statement. Impairment losses recognised in respect of CGUs are allocated first to reduce the
amount of goodwill allocated to the applicable CGU and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.
Calculation of recoverable amount
The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value of expected future cash flows,
discounted at the original effective interest rate inherent in the asset. Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU or group of CGUs
to which the asset belongs, such as the majority of right of use assets.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed. An impairment loss in respect of a receivable carried at amortised cost is reversed
only to the extent that the carrying amount does not exceed the carrying amount that would have been determined if no impairment loss
had been recognised and if the reversal can be related objectively to an event occurring after the impairment was recognised.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
Wincanton plc Annual report and accounts 2022 – 115
1. Accounting policies continued
Revenue recognition
The Group’s contracts with customers are typically for the provision of supply chain management services, being transport and warehousing services
(including transportation, planning, home delivery, eFulfilment, warehouse management, operation of automated facilities and co-packing). The Group
recognises revenue from these contracts as the performance obligations to deliver the products and services under these contracts are satisfied. This is
usually over time as the customer simultaneously receives and consumes the benefits provided and normally comprises a single performance obligation,
being a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer.
Revenue is recognised based on the amount of consideration expected to be received in exchange for satisfying the performance obligations
identified in the contracts with customers.
Open book contracts will typically cover costs incurred plus either a fixed or variable management fee. Where the Group has the right to invoice the
customer at an amount that corresponds directly with performance to date, the practical expedient is applied to recognise revenue at that amount.
Where the Group does not have the right to invoice the customer in line with performance to date, the input method using costs incurred
is applied to measure progress of performance to date.
On closed book contracts, revenue is typically earned based on a pre-agreed rate card and is typically per unit, delivery or km travelled. The Group
applies the practical expedient to recognise revenue at the amount the Group has the right to invoice the customer in line with performance to date.
Variable revenue linked to performance measures, such as key performance indicators (KPIs) and gain-share mechanisms, can arise on both
open and closed book contracts. Variable revenue is estimated monthly on a contract by contract basis. Amounts of variable revenue recognised
are not significant and are not deemed materially sensitive. Variable revenue is constrained and only recognised to the extent that it is highly
probable that a significant reversal of the cumulative revenue recognised will not take place. As a result of the constraint, generally, the expected
KPI revenue or penalties are recognised on certain contracts when the performance of those contracts meets or falls short of the targets set, and
expected gain-share revenue is recognised on certain contracts when the impact of any cost saving initiatives has been agreed with the customer.
Payments made to customers that are not for the provision of distinct goods or services, are recognised as a rebate at the latter of: when
revenue is recognised for the related services; or when it is paid or promised to be paid.
The Group does not have any contracts which include a significant financing arrangement and therefore does not adjust its transaction price
for the time value of money.
Where payments are received in advance of revenue being recognised they are included as contract liabilities. Where revenue is recognised
in advance of amounts being invoiced, it is reported as a contract receivable. Where a payment has been made to a customer, which is not
in exchange for goods and services and it is in advance of the goods or services provided to the customer, it is reported as a contract asset.
Contract modifications typically arise by either: an extension to the contract term or an amendment to the rates charged. Where an extension to
the contract provides additional distinct services at a standalone selling price it is treated as a separate contract. Where a modification relates to
a change in rate, although the scope of the contract has not increased, the remaining services provided are distinct from the services transferred
before the modification and therefore these modifications are treated as a termination of the existing contract and the creation of a new contract.
Contract fulfilment assets include costs of obtaining a contract and costs to fulfil a contract. Costs to obtain a contract are those costs
incurred in obtaining a contract that would not have been incurred if the contract had not been obtained, for example sale bonuses.
Incremental costs of obtaining a contract have not been capitalised where the amortisation period for the asset is one year or less.
Costs to fulfil a contract include the costs of setting up and managing projects and/or to transition the operations covered by the customer
contract to the Group. An asset is recognised where those costs are specific to a contract, generate or enhance resources that will be used to
satisfy the performance obligations of the contract and are expected to be recovered. Where fees are received in connection with such costs
and there is no transfer of goods or services to the customer, these fees are deferred and recognised over the term of the contract. Contract
fulfilment assets are recognised over the term of the contract to which they relate.
Expenses
Government grants
Income from government grants is recognised when there is reasonable assurance that the Group has complied with the conditions attached
to the grant and that the grant will be received. Government grants received from the Coronavirus Job Retention Scheme (furlough) are
recognised as a credit against the related staff costs and not as an item of other income.
Income received under the Research and Development Expenditure Credit (RDEC) is recognised as other income.
Lease payments
The Group has elected to apply exemptions for short term leases and leases for which the underlying asset is of low value.
For these leases, payments are charged to the income statement on a straight-line basis over the term of the lease.
Net financing costs
Net financing costs comprise interest payable on borrowings, lease liabilities, and other charges less interest income and the interest on the
net defined benefit pension asset.
Interest payable on borrowings is calculated using the effective interest rate method. The interest expense on lease liabilities is calculated
using the discount rate applied on inception of the lease. Other charges include bank fees, amortisation of bank arrangement fees and
unwinding of discounts.
Interest income includes interest receivable on funds invested and gains on hedging instruments, and these are recognised in the income
statement as they accrue.
116 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 1. Accounting policies continued
Taxation
Tax on profits or losses for the year comprises current and deferred tax and is recognised in the income statement except to the extent that
it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in the relevant component.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are
not provided for: the initial recognition of goodwill and the initial recognition of assets or liabilities that affect neither accounting nor taxable
profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Operating segments
Operating segments are identified on the basis of information that is provided to the Chief Executive Officer (CEO) to allocate capital and
resources and to assess performance. The CEO is a member of the Executive Management Team and the Board, and is the Group’s Chief
Operating Decision-Maker. The Group is structured as a single operating segment with one segment manager who reports to the CEO.
Details of additions to non-current assets, which are all held in the UK, are included in Notes 11, 12, 14 and 28.
Dividends
Dividends are recognised in the period in which they are declared and approved, or paid.
Alternative Performance Measures (APMs)
Underlying results are used in the day to day management of the Group. Definitions and a description of the use of these non-GAAP measures
as shown in Note 3.
2. Contract revenue and costs
Contract revenue
Customer contracts comprise single performance obligations, being a series of distinct goods and services satisfied over time as the services
are substantially the same and have the same pattern of transfer to the customer. They are typically for the provision of supply chain
management services, being transport and warehousing services (including transportation, planning, home delivery, eFulfilment, warehouse
management, operation of automated facilities and co-packing), with revenue generally being recognised over time.
Disaggregation of revenue
Customer contracts are disaggregated by business unit. Further detail is given in the table below:
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eFulfilment
Grocery & Consumer
General Merchandise
Public & Industrial
Containers and Pullman Fleet Services
Revenue from contracts with customers
2022
£m
223.2
517.6
396.4
284.2
–
2021
£m
144.4
447.0
334.3
245.6
50.6
1,421.4
1,221.9
Revenue from open book contracts totalled £1,025.2m (2021: £848.2m) and from closed book contracts £396.2m (2021: £373.7m).
Revenue of £319.5m (2021: £274.7m) and £172.1m (2021: £134.8m) arose from sales to the Group’s two largest single customers, being groups
of companies under common control. No other single customer or group of customers under common control contributed 10% or more to the
Group’s revenue in either the current or prior year.
Revenue includes £1,407.3m (2021: £1,209.9m) in respect of customers based in the UK.
Wincanton plc Annual report and accounts 2022 – 117
2. Contract revenue and costs continued
Contract costs
The following table shows assets recognised from costs incurred to obtain contracts or fulfil contracts:
Costs to obtain contracts
Costs to fulfil contracts
Total
2022
£m
1.2
3.2
4.4
2021
£m
0.9
3.3
4.2
Costs to obtain contracts relate to sales bonuses paid as a result of obtaining contracts. These costs are amortised on a straight-line basis over
the period of the contracts obtained. During the period, the amount of amortisation was £0.2m (2021: £0.1m). Costs to fulfil contracts relate
to project management costs and other costs incurred as a result of setting up and managing projects. These costs are amortised on a straight-
line basis over the period of contract. During the period, the amount of amortisation was £1.1m (2021: £1.1m). There was no impairment loss in
relation to the costs capitalised.
The Group applies the practical expedient in paragraph 94 of IFRS 15 and recognises the incremental costs of obtaining a contract as an
expense in the income statement when incurred, if the amortisation period of the asset which would otherwise have been recognised is
one year or less.
3. Alternative performance measures (APMs)
The alternative performance measures (APMs) or underlying results reported in this Annual Report and Accounts represent statutory
measures adjusted for items which management consider could distort the understanding of performance and comparability year on year.
APMs are used by the Board to assess the Group’s performance and are applied consistently from one period to the next. They therefore
provide additional useful information for shareholders on the underlying performance and position of the Group but should not be viewed
in isolation. Additionally, underlying profit before tax is used in determining Annual Bonus payments and underlying EPS is used as a
key performance indicator for most awards under the LTIP share incentive scheme. These measures are not defined by IFRS and are not
intended to be a substitute for IFRS measures. Wincanton’s underlying measures may not be comparable to similarly titled measures used
by other companies.
The Group presents underlying EBITDA, operating profit, profit before tax and EPS which are calculated as the statutory measures stated
before non-underlying items. These are items which the Directors consider separate disclosure would assist both in a better understanding
of the financial performance achieved and in making projections of future results. A balanced approach to both gains and losses is applied,
to be both consistent and clear in the accounting and disclosure of such items.
The Group identifies items as non-underlying based on the following principles:
– items that are significant in nature. The event or transaction is clearly unrelated to, or only incidentally related to, the trading activities
of the Group or the event or transaction would not reasonably be expected to recur in the foreseeable future; and/or
– items that are significant in size. The event is considered significant in size and therefore distorts the underlying results.
In addition, the Group will always disclose the items below as ‘non-underlying items’ for the following reasons:
– amortisation charges relating to acquired intangible assets. This relates to an acquisition event and therefore irregular in nature. The
intangible assets identified are primarily customer contracts and relationships which are not recognised other than through an acquisition.
In order for the profitability of the contracts acquired to be treated consistently with those of the existing business, the amortisation
charges are presented as non-underlying
– profits or losses arising on the disposal of continuing or discontinued operations. These items are by their nature irregular. There are likely to
be gross impacts that are material even if the net impact is not
– adjustments to amounts previously reported as non-underlying. Where an amount has been initially presented as non-underlying any
adjustment to this amount is also reported as non-underlying
– the tax impact of non-underlying items. The tax impact may not be material on an item, however it is appropriate for the tax treatment to
follow the treatment of the item as non-underlying.
EBITDA refers to earnings (operating profit) before interest, tax, depreciation of property, plant and equipment and right-of-use assets and
amortisation of finite-lived intangible assets. This measure also excludes the impact of impairment of non-current assets.
Other APMs used are net debt and free cash flow, which relate to liquidity. Net debt is the sum of cash and bank balances, bank loans and
overdrafts and other financial liabilities excluding lease liabilities (see Note 30). Free cash flow is defined as the movement in net debt before
pension payments, dividends and the acquisition of own shares.
118 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued S
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3. Alternative performance measures (APMs) continued
A reconciliation between statutory IFRS operating profit and underlying operating profit is given below. Details of underlying EPS can be
found in Note 9.
Revenue
Cost of sales
Gross profit
Other income and gains on disposal of assets
Administrative expenses
Share of results of associate
Operating profit
2022
Non-
underlying
£m
–
–
–
1.4
(4.7)
–
(3.3)
Underlying
£m
1,421.4
(1,339.5)
81.9
4.1
(21.3)
–
64.7
Total
£m
1,421.4
(1,339.5)
Underlying
£m
1,221.9
(1,149.3)
81.9
5.5
(26.0)
–
61.4
72.6
0.8
(21.7)
0.1
51.8
1 Comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
Non-underlying items
Non-underlying items are as follows:
Cloud computing configuration and customisation costs
Acquisition related costs
Amortisation of acquired intangibles
Release of warranty provision
Gain on disposal of businesses
Net profit on disposal of assets including freehold property
Pension Scheme – Guaranteed Minimum Pension (GMP)
2021
Non-
underlying
(Restated)1
£m
–
–
–
1.7
(2.7)
–
(1.0)
2022
£m
(4.1)
(1.0)
(0.6)
1.0
0.9
0.5
–
(3.3)
Total
(Restated)1
£m
1,221.9
(1,149.3)
72.6
2.5
(24.4)
0.1
50.8
2021
(restated)
£m
(2.2)
0.2
–
–
0.4
1.3
(0.7)
(1.0)
a) Cloud computing configuration and customisation costs
Following the IFRS Interpretation Committee agenda decision published in April 2021, the Group has revised its accounting policy regarding
the customisation and configuration costs incurred when implementing a SaaS software arrangement.
The Group is currently undertaking a major systems implementation for new cloud computing software, resulting in costs of £4.1m being recognised
as an expense. In addition, £2.2m of implementation costs were incurred in the year to 31 March 2021 and comparatives have been restated as
detailed in Note 1. The first phase of the implementation has gone live and was achieved on time and to budget. To complete this project over the
next twelve months, a similar cost to this year is expected to be incurred which will be treated as a non-underlying cost.
Due to the size and nature of these costs they are presented as a non-underlying item as they are not reflective of underlying performance.
b) Acquisition related costs
As part of the acquisition of Cygnia, the Group has incurred acquisition related costs, professional fees and integration costs of £1.0m which
have been recognised as an expense as required by IFRS 3 Business combinations.
In the prior year, a balance related to estimated costs of aborted M&A activities was released following the conclusion of these bids.
c) Amortisation of acquired intangibles
As part of the acquisition of Cygnia the Group has recorded finite-life intangible assets identified as part of the purchase price allocation
accounting in line with IFRS 3 Business combinations (see Note 27). The amortisation of these finite-life intangibles is presented in non-
underlying with a total expense in the period of £0.6m.
d) Release of warranty provision
The Group has released the value of a potential claim under a historic warranty provision, dating back to 2015, as any outflow of economic
benefits is now considered to be remote. As the original provision was recognised as a non-underlying item, the write-back has been
recognised in a consistent manner.
Wincanton plc Annual report and accounts 2022 – 119
3. Alternative performance measures continued
e) Gain on disposal of businesses
In the year ended 31 March 2022, £0.9m of contingent consideration was recognised related to the Group’s disposal of its Containers business
in October 2020, which has been recognised as non-underlying consistent with the presentation of the profit on disposal recognised in the
prior year. The contract terms allow for further sums to be received until January 2024.
During the year ended 31 March 2021, the Group disposed of its Containers business for consideration comprising cash plus contingent
consideration based on volumes associated with one contract, and the Group also disposed of its Pullman Fleet Services business. A profit
on disposal of £0.4m was recognised in the prior year on the disposal of these two businesses.
f) Net profit on disposal of assets including freehold properties
Profits and losses arising on the disposal of significant assets are considered non-underlying as these transactions are only incidentally related
to the trading activities of the Group. During the current and prior year the Group disposed of a number of specialist vehicles that were not
required for ongoing operations. A profit on disposal of £0.5m has been recognised in the year (2021: £0.8m).
In addition, in the prior year, £0.5m of transition costs were released following completion of the disposal of two freehold properties.
g) Pension Scheme – Guaranteed Minimum Pension (GMP)
A past service cost of £0.7m was recognised in the prior year as an estimate of the impact of equalising historic pension benefits for men and
women, and this was accounted for as a non-underlying item. This followed the judgement of the High Court of Justice of England and Wales
issued In November 2020.
4. Operating profit
The following items have been charged/(credited) in arriving at operating profit:
Auditor’s remuneration:
Audit fees for statutory audit services:
– parent Company
– subsidiary undertakings
Non-audit fees:
– fees paid to the auditor and its associates for assurance services
Amortisation: acquired intangibles
Amortisation: software intangibles
Depreciation: property, plant, equipment and vehicles
Impairment charges: property, plant, equipment and vehicles
Impairment charges: right-of-use assets
Depreciation: right-of-use assets
Short term leases:
– plant and equipment
– land and buildings
Government grants and other support
Note
2022
£m
2021
£m
0.2
0.5
0.1
0.6
1.0
7.6
–
0.4
34.6
5.1
1.8
(0.5)
0.1
0.3
0.1
–
1.9
7.2
1.7
2.2
32.0
1.7
1.7
(8.0)
11
11
12
13
13, 14
14
5
5. Government grants and other support
The Group has submitted a claim under the Research and Development Expenditure Credit (RDEC) scheme for expenditure incurred on
qualifying research and development for £0.1m. The credit due to the Group is equal to 13.0% of qualifying expenditure (2021: 12.0%) and
is given as a taxable credit payable as cash or as an offset against corporation tax liabilities. During the year, the Group has recognised a
credit of £0.5m (2021: £0.8m), net of fees, in other income in respect of RDEC claims for the years ended 31 March 2020 and 31 March 2021.
No claims were made during the year for financial support from the UK Government relating to Covid-19. During the prior year the Group
received £12.8m in government grants from the Coronavirus Job Retention Scheme (furlough), of which £5.8m was subsequently repaid.
The Group elected to recognise the grant as a credit against the related staff costs and not as an item of other income.
120 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 6. Personnel expenses, including Directors
Wages and salaries
Share based payments (including IFRS 2 fair value charges)
Social security contributions
Contributions to defined contribution pension arrangements
Average number of persons employed by the Group (including Directors) during the year
Warehouse
Transport
Administration
Total
Directors’ emoluments
Salaries
Bonus
Other benefits
Pension-related benefits
Non-executive Directors’ fees
Total emoluments
Note
29
28
S
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a
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g
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p
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G
o
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a
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c
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A
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c
o
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2022
£m
607.1
0.5
63.1
36.7
2021
£m
542.2
1.3
54.7
34.0
707.4
632.2
2022
2021
10,802
6,024
3,326
9,952
5,945
3,248
20,152
19,145
2022
£’000
768
286
67
65
468
2021
£’000
704
473
128
57
459
1,654
1,821
The aggregate of the amount of gains made by Tim Lawlor and James Wroath on exercise of share options during the year was £169,700 (2021:
£173,000). The element of the share based payment expense attributable to the Directors was £0.4m (2021: £0.3m). Contributions were made
for two Directors of the Company to the defined contribution pension scheme. Full details of each individual Director’s emoluments, bonuses,
share options and pension entitlements are given in the Directors’ remuneration report on pages 75 to 88.
7. Net financing costs
Interest income
Interest on the net defined benefit pension asset
Interest expense
Interest on lease liabilities
Unwinding of discount on provisions
Net financing costs
Note
28
24
2022
£m
–
1.1
1.1
(2.1)
(5.2)
(0.4)
(7.7)
(6.6)
2021
£m
0.1
2.3
2.4
(2.8)
(3.8)
(0.4)
(7.0)
(4.6)
Wincanton plc Annual report and accounts 2022 – 121
8. Income tax expense
Recognised in the income statement
Current tax expense/(income)
Current year
Adjustments for prior years
Deferred tax expense/(income)
Current year
Adjustments for prior years
Total income tax expense
Reconciliation of total income tax expense
Profit before tax
Income tax using the UK corporation tax rate of 19% (2021: 19%)
Non-deductible expenditure
Prior year research and development tax credits
Non-taxable income included in non-underlying items
Tax incentives – super capital allowances
Change in UK corporation tax rate
Adjustments for prior years:
– current tax
– deferred tax
Total tax expense for the year
Recognised in other comprehensive income
Items which will not subsequently be reclassified to the income statement:
Remeasurements of defined benefit pension liability
Impact of change in UK corporation tax rate
Total recognised in other comprehensive income
Recognised directly in equity
Current tax on share based payment transactions
Deferred tax on share based payment transactions
Total recognised directly in equity
2022
£m
3.6
4.5
8.1
3.7
(4.9)
(1.2)
6.9
2022
£m
54.8
10.4
0.1
–
–
(1.4)
(1.8)
4.5
(4.9)
6.9
2022
£m
11.8
2.9
14.7
2022
£m
(0.3)
(0.1)
(0.4)
2021
£m
5.0
(1.1)
3.9
3.6
(0.4)
3.2
7.1
2021
£m
48.4
9.2
0.2
(0.2)
(0.6)
–
–
(1.1)
(0.4)
7.1
2021
£m
(12.4)
–
(12.4)
2021
£m
–
(0.5)
(0.5)
The main UK corporation tax rate remained at 19% (2021: 19%). The Finance Bill 2021 increases the corporation tax rate to 25% as from 1 April 2023.
This Bill was substantively enacted on 24 May 2021 and therefore has been incorporated into the deferred tax balance at 31 March 2022.
The Group maintains an immaterial provision against tax risks, which is included within income tax payable.
The total tax expense above includes a tax credit on non-underlying items of £0.6m (2021: £0.4m).
122 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued S
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9. Earnings per share
The basic earnings per share of 38.6p (2021: 31.5p as restated) is calculated based on the profit attributable to the equity shareholders of
Wincanton plc of £48.0m (2021: £39.1m as restated) and the weighted average shares in issue excluding those held within an Employee Benefit
Trust throughout the year as calculated below of 124.1m (2021: 124.0m). The diluted earnings per share calculation is based on there being
1.4m (2021: 1.4m) additional shares deemed to be issued at £nil consideration under the Company’s share option schemes.
Weighted average number of Ordinary Shares (basic)
Issued Ordinary Shares at the beginning of the year¹
Net effect of shares issued and purchased during the year
Weighted average number of Ordinary Shares (diluted)
Weighted average number of Ordinary Shares for the year (as above)
Effect of share options in issue
2022
millions
2021
millions
124.1
–
124.1
124.1
1.4
125.5
123.9
0.1
124.0
124.0
1.4
125.4
1 The number of shares excludes 0.7m Ordinary Shares (2021: 0.4m), being the weighted average number of the Company’s own shares held within
an Employee Benefit Trust.
An alternative earnings per share measure is set out below, being earnings before non-underlying items, including exceptional items,
amortisation of acquired intangibles and related tax where applicable, since the Directors consider that this provides further information
on the underlying performance of the Group:
Underlying earnings per share
– basic
– diluted
Underlying earnings are determined as follows:
Profit for the year attributable to equity shareholders of Wincanton plc
Non-underlying items
Tax impact of non-underlying items
Underlying earnings
2022
pence
40.8
40.3
2021
pence
32.0
31.7
2022
£m
47.9
3.3
(0.6)
50.6
2021
(Restated)1
£m
39.1
1.0
(0.4)
39.7
Note
3
1 The comparatives have been restated due to a change in accounting policy as explained in Note 1 ‘Accounting policies’.
Underlying earnings and underlying earnings per share for the year ended 31 March 2021 include the results of the Containers and Pullman
Fleet Services businesses, which were sold during that year.
10. Dividends
Dividends paid in the year comprise:
Final dividend for the year ended 31 March 2021 of 7.5p per share (2020: £nil)
Interim dividend for the year ended 31 March 2022 of 4.00p per share (2021: 2.85p)
2022
£m
9.4
4.9
14.3
2021
£m
–
3.5
3.5
The Directors are proposing a final dividend of 8.0p per share for the year ended 31 March 2022 (2021: 7.50p) which, if approved by
shareholders, will be paid on 5 August 2022 to shareholders on the register on 15 July 2022, an estimated total of £10m. The proposed final
dividend is subject to approval by shareholders at the Annual General Meeting on 12 July 2022 and in accordance with accounting standards
has not been included as a liability in these financial statements.
The Employee Benefit Trust has waived the right to receive dividends in respect of the shares it holds, see Note 25 ‘Capital and reserves’ for
further detail.
Wincanton plc Annual report and accounts 2022 – 123
Note
Goodwill
£m
Acquired
intangibles
£m
Computer
software
costs
(Restated)1
£m
80.1
(0.2)
–
–
79.9
79.9
–
20.0
–
99.9
(2.5)
–
–
(2.5)
(2.5)
–
–
66.5
–
–
(14.1)
52.4
52.4
–
6.8
–
59.2
(66.5)
–
14.1
(52.4)
(52.4)
(0.6)
–
(2.5)
(53.0)
77.6
77.4
97.4
–
–
6.2
45.6
–
1.1
–
46.7
46.7
0.5
0.4
(37.2)
10.4
(37.6)
(1.9)
–
(39.5)
(39.5)
(1.0)
37.2
(3.3)
8.0
7.2
7.1
Total
£m
192.2
(0.2)
1.1
(14.1)
179.0
179.0
0.5
27.2
(37.2)
169.5
(106.6)
(1.9)
14.1
(94.4)
(94.4)
(1.6)
37.2
(58.8)
85.6
84.6
110.7
11. Goodwill and intangible assets
Cost
At 1 April 2020
Effect of movements in foreign exchange
Additions
Disposals
At 31 March 2021
At 1 April 2021
Additions
Acquired on business combination
27
Disposals
At 31 March 2022
Amortisation and impairment losses
At 1 April 2020
Charge for year
Disposals
At 31 March 2021
At 1 April 2021
Charge for year
Disposals
At 31 March 2022
Carrying value
At 31 March 2020
At 31 March 2021
At 31 March 2022
1 Certain comparatives have been restated due to a required change in accounting policy as explained in Note 1 ‘Accounting policies’.
Assets under construction of £0.6m (2021: £6.7m) are included within computer software costs.
The total amortisation charge of £1.6m (2021: £1.9m) is recognised in the income statement within net operating costs.
Details of the impairment testing carried out is included in Note 13 ‘Impairment’.
124 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 12. Property, plant, equipment and vehicles
Note
Property
£m
Plant,
equipment
and vehicles
£m
27
13
Cost
At 1 April 2020
Additions
Disposals
Transfer to assets held for resale
At 31 March 2021
At 1 April 2021
Additions
Acquired on business combination
Disposals
At 31 March 2022
Depreciation and impairment losses
At 1 April 2020
Charge for year
Impairment of assets
Disposals
Transfer to assets held for resale
At 31 March 2021
At 1 April 2021
Charge for year
Disposals
At 31 March 2022
Carrying amount
At 31 March 2020
At 31 March 2021
At 31 March 2022
Within plant, equipment and vehicles £2.8m (2021: £0.1m) relates to assets under construction.
The carrying amount of property comprises:
Freehold
Leasehold improvements
Total
£m
135.2
8.2
(26.0)
(2.3)
115.1
115.1
10.7
3.7
(5.8)
S
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20.1
4.0
(5.0)
–
19.1
19.1
0.9
0.2
–
115.1
4.2
(21.0)
(2.3)
96.0
96.0
9.8
3.5
(5.8)
20.2
103.5
123.7
(18.3)
(0.9)
–
5.8
–
(13.4)
(13.4)
(1.4)
–
(14.8)
1.8
5.7
5.4
(90.3)
(108.6)
(6.3)
(1.7)
16.2
1.4
(80.7)
(80.7)
(6.2)
3.9
(83.0)
24.8
15.3
20.5
2022
£m
1.2
4.2
5.4
(7.2)
(1.7)
22.0
1.4
(94.1)
(94.1)
(7.6)
3.9
(97.8)
26.6
21.0
25.9
2021
£m
1.6
4.1
5.7
Capital commitments for the Group at the end of the financial year for which no provision has been made are £1.0m (2021: £0.1m).
Wincanton plc Annual report and accounts 2022 – 125
13. Impairment
Impairment tests for goodwill
The carrying value for goodwill is tested for impairment on an annual basis or more frequently if there are indicators that it may be impaired.
Goodwill is allocated to the single operating segment, the Group as a whole, being a CGU.
The recoverable amount of the CGU is determined based on value in use calculations. These calculations are cash flow projections based on the
financial budgets and forecasts approved by the Board for the forthcoming financial year and 24 months beyond. The financial budgets and
forecasts have been set on a contract by contract basis, taking account of prior year results and expected developments. The potential impact
of climate change was also considered as this has been identified as a principal risk for the Group, however no adjustments were required
to specifically reflect the effects of climate change. Cash flows beyond those 12 month and further 24 month periods are extrapolated to
perpetuity using the estimated long term growth rates stated below, which do not exceed the long term average growth in the specific
geographical area where the CGU operates.
Key assumptions used for value in use calculations:
Estimated growth rate
Discount rate
2022
%
1.3
10.8
2021
%
1.3
14.0
Management determined the growth rates based on expectations for market development and these are consistent with external forecasts
and historical trends. The methodology for determining the pre-tax discount rates is consistent with the prior year.
The estimated recoverable amount exceeds the carrying amount by approximately £741.6m (2021: £335.4m). The Group has conducted
sensitivity analysis on the impairment testing. Management believe no reasonably possible change in the key assumptions would result
in an impairment.
Impairment tests for assets with finite lives
The Group reviews the carrying amount of non-current assets with finite useful lives when events and circumstances indicate that an asset may be
impaired. Impairment tests are performed by comparing the carrying amount of assets held in a CGU with its recoverable amount. Management
considers each contract to be a CGU, except where resources are shared, in which case they are combined into one CGU. Recoverable amount is
the higher of the fair value less costs of disposal and the value in use. An impairment loss is recognised whenever the carrying amount of a CGU
exceeds its recoverable amount.
Recoverable amounts have been determined as value in use, using estimated future cash flows over the remaining contract term discounted
to their present value using a pre-tax discount rate of 10.8% (2021: 14.0%).
From the CGU impairment reviews performed in the current year, the only impairment of assets required related to specialist leased assets
used for a contract that was terminated prematurely. The residual right-of-use asset was impaired by £0.4m to its value in use amount and
the impairment charge was included in net operating costs. There were no further impairments required in the year ended 31 March 2022.
In the prior year assets were impaired by £2.3m as a result of deteriorating market conditions. The impairment charge was included in net
operating costs.
In addition, a right-of-use asset previously used by the Pullman Fleet Services business but not transferred on disposal was also impaired
by £1.6m. The impairment charge associated with the disposal was reported as a non-underlying item.
The split of the impairment charges between underlying and non-underlying and the allocation to assets is shown in the table below:
Plant and equipment
Right-of-use assets
2022
2021
Underlying
£m
Non-
underlying
£m
Underlying
£m
Non-
underlying
£m
–
0.4
0.4
–
–
–
1.7
0.6
2.3
–
1.6
1.6
126 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 14. Right-of-use assets
At 1 April 2020
Additions
Depreciation
Impairment of assets
Disposals
Carrying amount at 31 March 2021
At 1 April 2021
Additions
Acquired on business combination
Depreciation
Impairment of assets
Disposals
Carrying amount at 31 March 2022
Note
Property
£m
Non-
property
£m
13
27
13
63.6
29.6
(12.2)
(1.6)
(0.3)
79.1
79.1
47.4
30.3
45.9
26.4
(19.8)
(0.6)
(1.7)
50.2
50.2
23.2
0.8
(16.7)
(17.9)
–
–
140.1
(0.4)
(7.0)
48.9
An analysis of the related lease liabilities is set out in Note 22 ‘Lease liabilities’ and Note 30 ‘Financial instruments’.
Total
£m
109.5
56.0
(32.0)
(2.2)
(2.0)
129.3
129.3
70.6
31.1
(34.6)
(0.4)
(7.0)
189.0
S
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15. Investments including those equity accounted
At 31 March 2021 the Group held an investment in a joint venture company, with a carrying value of £0.2m. During the year ended 31 March
2022, the Group’s interest in the joint venture was sold to the other joint venture party, realising an immaterial loss on disposal.
16. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Property, plant and equipment
Equity compensation benefits
Pension provisions
Tax losses carried forward
IFRS 16 transitional adjustment
Other assets
Assets
Liabilities
Net
2022
£m
–
1.1
–
9.2
3.1
0.2
13.6
2021
£m
3.4
1.0
–
–
2.4
0.7
7.5
2022
£m
(1.9)
–
2021
£m
–
–
(28.6)
(9.1)
–
–
–
–
–
–
2022
£m
(1.9)
1.1
(28.6)
9.2
3.1
0.2
2021
£m
3.4
1.0
(9.1)
–
2.4
0.7
(30.5)
(9.1)
(16.9)
(1.6)
Movement in deferred tax assets and liabilities during the current year
Property, plant and equipment
Equity compensation benefits
Pension provisions
Tax losses carried forward
IFRS 16 transitional adjustment
Other assets
At 1 April
2021
£m
Recognised
in income
£m
Business
combination
£m
Other
movements
£m
At 31 March
2022
£m
3.4
1.0
(9.1)
–
2.4
0.7
(1.6)
(3.4)
–
(4.8)
9.2
0.7
(0.5)
1.2
(1.9)
–
–
–
–
–
–
0.1
(14.7)
–
–
–
(1.9)
1.1
(28.6)
9.2
3.1
0.2
(1.9)
(14.6)
(16.9)
Wincanton plc Annual report and accounts 2022 – 127
16. Deferred tax assets and liabilities continued
Movement in deferred tax assets and liabilities during the current year continued
The deferred tax liability at 31 March 2022 has been calculated at 25% (2021: 19%). The Finance Bill 2021 increases the corporation tax rate
to 25% as from 1 April 2023. This Bill was substantively enacted on 24 May 2021 and therefore has been incorporated into the deferred tax
balance at 31 March 2022.
It is management’s expectation that the appropriate deferred tax rate for the pension surplus is 25% rather than 35% as it is expected
the surplus will be reduced over time.
Deferred tax assets have not been recognised in respect of the following items, due to the uncertainty of their utilisation:
Irish property losses carried forward
UK non-trading losses carried forward
17. Inventories
Raw materials and consumables
2022
2021
Gross
amount
£m
Unrecognised
deferred tax
asset
£m
Gross
amount
£m
Unrecognised
deferred tax
asset
£m
2.2
3.3
5.5
0.3
0.8
1.1
2.0
3.1
5.1
2022
£m
2.6
0.3
0.5
0.8
2021
£m
1.4
Raw materials and consumables with a value of £nil (2021: £nil) were written down in the year (see Note 13 ‘Impairment’).
In the year ended 31 March 2022, inventories of £40.5m (2021: £67.6m) were recognised in the income statement within net operating costs.
18. Trade and other receivables
Trade receivables
Contract receivables
Contract assets
Contract fulfilment assets
Prepayments
Lease receivables
Note
2
2022
£m
105.7
41.4
1.3
4.4
53.6
1.0
2021
£m
119.6
33.6
2.4
4.2
28.8
1.6
207.4
190.2
Customers are normally invoiced on a monthly basis with payment terms of 30 to 60 days.
Trade receivables, contract receivables, contract assets and lease receivables are shown net of allowance for impairment of £2.5m (2021: £0.8m).
All receivables are due within one year, except for contract assets of £0.7m (2021: £1.5m) in respect of amounts recoverable from customers
and contract fulfilment assets of £3.0m (2021: £3.1m).
The contract receivables relate to the Group’s rights to consideration for work completed but not billed at the reporting date. They are
transferred to trade receivables when the amounts are invoiced. All movements in contract receivables relate to normal trading.
Contract assets relate to transition payments made to customers and are recognised in revenue as the related performance obligations are satisfied.
Contract fulfilment assets are outlined in Note 2 ‘Contract revenue and costs’.
Lease receivables at 31 March 2022 comprise finance leases of £1.0m relating to a number of sites in which Wincanton acts as a sub-lessor
(2021: £1.6m). Rental income recognised by the Group during the year was £1.2m (2021: £1.3m). Future minimum rentals receivable under
the contracts in place at the year end are as follows:
Within one year
After one year but not more than five years
2022
£m
1.0
–
1.0
2021
£m
1.2
0.4
1.6
The Group has a non-recourse trade receivable financing arrangement in place at the year end. As these receivables have been sold without
recourse they have been derecognised in the table above.
128 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 18. Trade and other receivables continued
Movement in the allowance for impairment loss
At 1 April
Impairment losses recognised on receivables
Amounts written off as unrecoverable
Impairment losses relating to disposed businesses
Impairment losses reversed
At 31 March
Ageing of trade receivables and contract receivables at the balance sheet date
Contract receivables
Current
1 month overdue
2 months overdue
3+ months overdue
Gross trade receivables and contract receivables
Allowance for impairment
Trade receivables and contract receivables, net of allowance
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2021
£m
1.0
0.2
–
(0.4)
–
0.8
2021
Gross
£m
33.6
111.0
5.9
2.7
0.8
154.0
(0.8)
153.2
2022
£m
0.8
2.2
(0.2)
–
(0.3)
2.5
2022
Gross
£m
41.4
94.3
13.2
(0.3)
1.0
149.6
(2.5)
147.1
There were no material individual impairments of trade receivables or contract receivables. Expected credit losses have not been recognised
on receivables as the amounts are immaterial.
Sensitivity analysis
Trade receivables and contract receivables are assessed for impairment using a calculated credit loss assumption. A 10% increase in the
assumed credit risk factor would increase the impairment by £0.1m.
19. Assets classified as held for sale
At 31 March 2021 the Group identified certain vehicles as being surplus to requirement which were classified as held for sale as their value
was expected to be recovered by their sale and not through ongoing use in the business. These assets were disposed of during the year ended
31 March 2022.
20. Cash and cash equivalents
Cash at bank and in hand
Bank overdrafts classified as borrowings
Cash and cash equivalents
2022
£m
28.7
–
28.7
2021
£m
30.6
(3.6)
27.0
£2.8m (2021: £1.8m) of restricted cash, being deposits held by the Group’s insurance subsidiary, is included in cash at bank and in hand above.
Details of the Group’s treasury policies are set out in Note 30 ‘Financial instruments’.
21. Borrowings
Current
Bank overdrafts
Non-current
Bank loans
2022
£m
2021
£m
–
9.7
25.0
25.0
9.0
18.7
For the purposes of the cash flow statement £nil (2021: £6.1m) of bank overdrafts are not available for offset against cash balances and hence
are not reflected within cash and cash equivalents as shown in Note 20 above.
Bank loans comprise the Group’s Revolving Credit Facility (RCF) which was renegotiated during the year and matures in March 2026. Details
of the contractual maturity is set out in the Liquidity risk section of Note 30 ‘Financial instruments’.
Wincanton plc Annual report and accounts 2022 – 129
22. Lease liabilities
The Group leases warehousing facilities, commercial vehicles and other logistics equipment for use in its operations. The amounts charged to
the income statement in the current and prior years are shown in Note 4 ‘Operating profit’.
Current
Lease liabilities
Non-current
Lease liabilities
2022
£m
2021
£m
26.6
32.3
176.5
203.1
113.4
145.7
£21.8m (2021: £16.5m) is the potential future lease liability relating to periods following the expiry date of termination options that are not
included in the lease term.
Details of the maturity analysis of discounted lease liabilities recognised on the Group balance sheet are in the liquidity risk section of Note 30
‘Financial instruments’.
The amounts charged to the income statement due to the practical expedients taken are shown below:
Expense relating to short term leases
Expense relating to low value leases
2022
2021
Property
£m
Plant and
equipment
£m
Property
£m
Plant and
equipment
£m
1.8
–
5.1
–
1.7
–
1.7
–
The Group had commitments of nil (2021: £9.3m) for leases which had not commenced at the year end.
23. Trade and other payables
Current
Trade payables
Other taxes and social security
Other payables
Contract liabilities
Accruals
2022
£m
35.3
52.3
20.0
69.3
146.7
323.6
2021
£m
41.2
53.2
14.8
65.4
129.1
303.7
The contract liabilities primarily relate to the consideration invoiced to customers in advance of the work being completed. Of the total
balance at the beginning of the period, £65.4m has been recognised as revenue during the year. All movements in the balance relate to
normal trading.
24. Provisions
At 1 April 2021
Created
Acquired with business combinations
Utilised
Released
Unwinding of discount
At 31 March 2022
Current
Non-current
130 – Wincanton plc Annual report and accounts 2022
Note
Insurance
£m
Property
£m
Other
provisions
£m
7
24.6
9.8
–
(5.4)
(5.1)
0.2
24.1
7.0
17.1
24.1
9.4
3.2
4.2
(2.0)
(0.2)
0.2
14.8
2.6
12.2
14.8
5.0
2.2
0.6
(0.3)
(3.1)
–
4.4
3.1
1.3
4.4
Total
£m
39.0
15.2
4.8
(7.7)
(8.4)
0.4
43.3
12.7
30.6
43.3
Notes to the consolidated financial statements continued 24. Provisions continued
The Group owns 100% of the share capital of an insurance company which insures certain risks of the Group. The insurance provisions in the
above table are held in respect of outstanding insurance claims, the majority of which are expected to be paid within one to seven years.
Provisions are released when the obligation no longer exists or there is a reduction in management’s estimate of the liability. The discount
unwinding arises primarily on the employers’ liability policy which is discounted over a period of seven years at a rate based on the Group’s
assessment of a risk-free rate. The Group provides standby letters of credit to the fronting insurer for employers’ liability and motor third party
claims totalling £19.7m (2021: £18.6m).
The property provisions are determined on a site by site basis and comprise primarily provisions for dilapidations. Dilapidation provisions
comprise dilapidation estimates made in the normal course of business. Provisions are released when the obligation no longer exists or there
is a reduction in the estimate. There remains a small level of onerous lease provisions relating to short term leases which are utilised over the
relevant lease term, with the majority expected to be utilised over the next year. The dilapidations provisions are expected to be utilised at the
end of the lease term. Estimated costs have been discounted at a rate based on the Group’s assessment of a risk-free rate, with any estimated
income being discounted at a rate reflecting an appropriate level of risk.
Other provisions include the estimated costs of the warranties and indemnities provided on disposal of businesses, together with provision for
sundry claims and settlements where the outcome is uncertain.
25. Contingent liability
From time to time, the Group is notified of legal claims in respect of work carried out and the potential exposure can be material. Where
management believes we are in a strong position to defend these claims and the likelihood of outflow of economic benefit is not probable,
no provision is made.
The Group has received notification of a potential claim from a former customer and is in the early stages of defending this claim. At this time,
the Group considers that it is not probable that any claim will result in an outflow of economic benefit. The Group is actively seeking further
information to substantiate the allegations made. Given the early stage of the legal and commercial process it is not practicable to make an
estimate of the potential financial impact. In parallel, the Group continues to work with its insurance providers to confirm coverage if required.
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26. Capital and reserves
Share capital
Allotted, called up and fully paid
124,543,670 (2021: 124,435,670) Ordinary Shares of 10p each
2022
£m
12.5
2021
£m
12.5
The number of shares detailed above differs from those in Note 9 ‘Earnings per share’ as a result of the inclusion, in the above total, of the
shares held within an Employee Benefit Trust (EBT) and also the effect of weighting for the purpose of the earnings per share calculations.
The holders of Ordinary Shares are entitled to receive dividends as declared from time to time. At general meetings of shareholders each
shareholder (or appointed proxy) present in person is entitled to vote; on a show of hands each person has one vote, and on a poll has one vote
per share. In respect of the Company’s shares that are held by the EBT, all rights are suspended until these shares are reissued.
Capital redemption reserve
During the year ended 31 March 2002, the Company established a Capital Redemption Reserve of £49,998 on redemption of redeemable
preference shares.
Merger reserve
The merger reserve arose from the original acquisition of the then Wincanton group of companies by Wincanton plc, on the demerger from
the previous parent in May 2001, which was accounted for under merger accounting principles available under UK GAAP at that time.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations as well as from any translation of liabilities that hedge the Company’s net investment in foreign subsidiaries.
Own shares
The own shares reserve comprises the cost of the Company’s shares held by the EBT established in Jersey and managed on its behalf by
independent trustees. At 31 March 2022, the number of the Company’s shares held by the EBT had increased to 665,812 (2021: 412,028). The
EBT has waived the right to receive dividends in respect of the shares it holds. The average cost of the shares held is 324p each (2021: 246p) and
at 31 March 2022, the market value of the shares held was £2.6m (2021: £1.6m).
All of the shares in the EBT are held in respect of the Group’s various equity compensation schemes as described in Note 29. At 31 March 2022
there were 189,981 (2021: 62,018) shares held in respect of vested options.
Wincanton plc Annual report and accounts 2022 – 131
27. Business combinations
On 10 September 2021, the Group acquired 100% of the equity shares in Caledonia Bidco Limited and its subsidiaries which include Cygnia
Logistics Limited (Cygnia). Cygnia is a specialist mid-market eCommerce and multichannel eFulfilment provider with expertise spanning the full
breadth of their customers’ requirements, including high volume order fulfilment, returns and carrier management services. The acquisition is
in line with the Group’s strategic focus on eCommerce and provides access to exciting new growth opportunities in the mid-market sector.
The acquisition has been accounted for as a business combination using the acquisition method of accounting in accordance with IFRS 3
Business Combinations and consequently the Cygnia assets acquired, and liabilities assumed, have been recorded by the Group at fair value,
with an excess purchase price over the fair value of the identifiable assets and liabilities being recognised as goodwill.
The fair values assigned to the Cygnia business combination at the acquisition date are:
Tangible assets
Right-of-use assets
Intangible assets
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Deferred tax liability
Financial liabilities – interest bearing borrowings
Provisions
Lease liabilities
Fair value of net liabilities acquired
Purchase consideration:
Cash paid
Amounts eligible for repayment upon settlement of acquired liabilities
Total purchase consideration
Excess of purchase consideration over net liabilities acquired
The estimated fair value and useful lives of intangible assets as at the acquisition date are as follows:
Customer-related intangible assets
Cygnia trade name
Software
Note
12
14
11
16
24
11
Fair value
£m
3.7
31.1
7.2
0.1
7.1
2.4
(4.2)
(1.9)
(14.0)
(5.6)
(30.2)
(4.3)
16.0
(0.3)
15.7
20.0
Fair value
£m
Useful lives
years
4.8
2.0
0.4
7
5
3
The fair value attributed to intangible assets was £7.2m and primarily represents existing customer relationships and contracts. These were
fair valued using the excess earnings method, which uses a number of estimates regarding the amount and timing of future cash flows. The
key assumptions in the cash flows are forecasted revenue, customer attrition rate and forecast profit margins. In accordance with the Group‘s
policy on impairment assessments per Note 1, the assets were assessed for impairment at the year end.
Goodwill amounting to £20.0m was recognised on acquisition and is underpinned by a number of elements, which individually could not be
quantified. Most significant amongst these is the premium attributable to a pre-existing, well-positioned business in the eCommerce and
multichannel eFulfilment markets with a highly skilled workforce and established reputation. Goodwill is not expected to be deductible
for tax purposes.
Total acquisition related costs of £1.0m have been incurred by the Group, which include advisory, legal, integration and other professional
fees. These costs are presented within non-underlying expenses (see Note 3).
Cygnia’s results have been consolidated into the Group’s results from 10 September 2021. For the period from acquisition to 31 March 2022,
Cygnia’s revenue was £22.6m and contributed an operating loss of £0.3m to Group profit. If the acquisition had taken effect at the beginning
of the reporting period in which the acquisition occurred (1 April 2021) the total revenues of the combined Group for the year would have been
£1,439.2m and an operating profit of £60.5m. This information does not purport to represent the results of the combined Group that actually
would have occurred had the acquisition taken place on 1 April 2021 and should not be taken to be representative of future results.
132 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued S
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27. Business combinations continued
In addition to the cash purchase consideration paid of £16.0m above, the Group immediately settled £14.0m of Cygnia’s borrowings comprising
an interest-bearing loan and amounts due to a debt factoring company of £11.8m and £2.2m respectively, and acquired cash of £2.4m.
Purchase consideration of £1.7m was paid into escrow to cover certain indemnities provided by the seller. The Group’s best estimate of the
amounts to be recovered from the seller is £0.3m as highlighted above.
28. Employee benefits
Defined benefit surplus
Defined benefit deficit
Net defined benefit asset
2022
£m
117.0
(2.5)
114.5
2021
£m
50.8
(2.6)
48.2
Pension schemes
Employees of Wincanton participated in funded pension arrangements in the UK and Ireland during the year ended 31 March 2022, details
of which are given below.
The principal Wincanton Scheme in the UK (the Scheme) is a funded arrangement which has two defined benefit sections and two defined
contribution sections, called the Wincanton Retirement Savings Section and the Wincanton Pension Builder Plan. The employees of Wincanton
Ireland Limited are eligible to participate in a separate defined contribution scheme. Assets of these pension arrangements are held in
separate Trustee administered funds independent of Wincanton. The weighted average duration of the funded defined benefit obligation is
approximately 17 years.
In previous years, a small number of employees, who were subject to the statutory earnings cap on pensionable earnings prior to 6 April 2006,
were entitled to participate in an unfunded unapproved arrangement in addition to accruing benefits from the Scheme. There have been no
active members of this arrangement throughout current or comparative years.
The defined benefit sections of the Scheme were closed to future accrual on 31 March 2014. This means that no future service benefit will
accrue but pensions built up to the date of closure have been preserved.
Triennial valuation
The latest formal valuation of the Scheme was carried out as at 31 March 2020 by the Scheme actuary, Hymans Robertson, and was agreed with
the Trustee in September 2020. The annual deficit funding contributions were agreed at £18.9m per annum from 1 April 2020 increasing in line
with the Retail Prices Index over the four years to March 2024, followed by £25.0m per annum from April 2024 increasing annually in line with the
Retail Prices Index to March 2027. Since the last triennial valuation as at 31 March 2020, additional protection has been provided to the Scheme
in the form of a letter of credit of £3.0m increasing by £3.0m each year to a maximum balance of £9.0m. At 31 March 2022 the letter of credit
provided totals £9.0m (2021: £6.0m). The annual deficit funding contributions payable from April 2024 will be reduced by £3.0m if a further letter
of credit or similar is provided.
The agreement is also subject to other provisions agreed with the Trustee, being:
– additional contributions become payable if distributions to shareholders (dividends and share buybacks) grow year on year in excess of
10%. The matching will only be in relation to the distribution amounts above the threshold and are calculated at 50% of the excess or 100%
of any distribution growth above 15%
– additional contribution payments become payable in the event of severe adverse Scheme investment performance where the actual deficit
in the Scheme exceeds an agreed threshold above the expected deficit at the end of two consecutive six month reporting periods
– a one-off payment to the Scheme of £6.0m in any year if both the underlying profit after tax is lower than the level of profit after tax
reported in the 2017/18 financial year and the dividend payout ratio increases to over 40% of profit after tax.
As with the previous agreement, it has been agreed that certain administration expenses would be paid directly by the Group and deducted
from the deficit funding contributions. The expenses, which amount to £0.7m (2021: £0.7m), are not included in the contributions below.
IFRIC 14
The agreement constitutes a minimum funding requirement (MFR) under IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction. IFRIC 14 requires recognition of a funding commitment in excess of the IAS 19 valuation, where
any surplus created cannot be recovered through either a reduction in contributions payable or an unconditional right to a refund.
The Group has recognised a surplus in the Scheme as at 31 March 2022 and has not recognised any liabilities in relation to the MFR, as based
on legal advice received under the Scheme rules, the Group has an unconditional right to the surplus after all benefits have been provided
in full to members.
Wincanton plc Annual report and accounts 2022 – 133
28. Employee benefits continued
Contributions
The deficit funding contribution in the year, net of the above expenses, was £18.5m (2021: £18.3m). In addition, other administration costs of
the Scheme were borne directly by the Group and a contribution made towards administration costs incurred, totalling £0.9m (2021: £0.8m).
In the financial year commencing 1 April 2022, the Group is expecting to make deficit funding contributions of £20.1m, being the annual deficit
contribution of £20.7m less certain administration expenses mentioned above. In addition, other administration costs of the Scheme will be
borne directly by the Group; these are expected to total £0.9m.
Risks
The defined benefit sections of the Scheme expose the Group to various risks: longevity risk (members living longer than expected), inflation
and interest rate risk (higher or lower than expected), and market (investment) risk (lower returns than expected). The Trustee and Group have
taken steps to mitigate these risks through the use of:
– hedging instruments within the investment portfolio; and
– diversification of the investment portfolio.
The Group is not exposed to any unusual, entity specific or Scheme specific risks.
Net defined benefit asset
The assets and liabilities of the defined benefit sections of the Group are calculated in accordance with IAS 19 Employee Benefits (Revised)
and are set out in the tables below.
The calculations under IAS 19 are based on actuarial assumptions which are the best estimates chosen from a range of possible assumptions
about the long term future which, unless by chance, will not necessarily be borne out in practice. The fair value of the assets, which are not
intended to be realised in the short term, may be subject to significant change before they are realised, and the present value of the liabilities
is derived from cash flow projections over long periods and is thus inherently uncertain.
Present value of unfunded defined benefit obligations
Present value of funded defined benefit obligations
Fair value of Scheme assets
Net defined benefit asset
2022
£m
(2.5)
2021
£m
(2.6)
(1,091.3)
(1,161.1)
1,208.3
1,211.9
114.5
48.2
The movement in the net defined benefit asset in the year was primarily the result of the impact of external market factors. Scheme liabilities
are calculated using a discount rate based on high quality corporate bond yields while Scheme assets are hedged against movements in gilt
yields. Credit spreads on corporate bonds increased due to market uncertainty resulting in a reduction in the liabilities, which was not matched
with a corresponding fall in assets as at 31 March 2022.
The net defined benefit asset, after taking into account the related deferred tax liability, is £85.9m (2021: £39.1m). Deferred tax is recognised
at 25% (2021: 19%) as the Group expects the surplus to reduce over time, rather than obtained as a refund of the surplus on winding up.
Movements in the present value of the net defined benefit asset/(liability)
31 March 2022
Opening position
Included in income statement:
Administration costs
Interest on the net defined benefit asset
7
Cash:
Employer contributions
Benefits paid
Included in other comprehensive income:
Changes in financial assumptions
Changes in demographic assumptions
Experience adjustments
Note
Assets
£m
Obligations
£m
Net
asset
£m
Unfunded
arrangements
£m
Total net
asset
£m
1,211.9
(1,161.1)
50.8
(2.6)
48.2
(1.7)
24.1
19.3
(34.6)
–
–
–
–
(23.0)
–
34.6
79.0
2.8
(23.6)
–
(1.7)
1.1
19.3
–
79.0
2.8
(23.6)
(10.7)
–
–
–
–
0.1
–
–
–
(1.7)
1.1
19.3
–
79.1
2.8
(23.6)
(10.7)
Return on assets excluding amounts included in net financing costs
(10.7)
Closing defined benefit asset
1,208.3
(1,091.3)
117.0
(2.5)
114.5
134 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 28. Employee benefits continued
Movements in the present value of the net defined benefit (liability)/asset continued
31 March 2021
Opening position
Included in income statement:
Past service costs
Administration costs
Interest on the net defined benefit asset
7
Cash:
Employer contributions
Benefits paid
Included in other comprehensive income:
Changes in financial assumptions
Changes in demographic assumptions
Experience adjustments
Return on assets excluding amounts included in net financing costs
Note
Assets
£m
Obligations
£m
Net
asset
£m
Unfunded
arrangements
£m
1,157.5
(1,061.0)
96.5
(2.1)
–
(1.6)
26.3
19.1
(40.7)
–
–
–
51.3
(0.7)
–
(23.9)
–
40.7
(149.2)
(11.6)
44.6
–
(0.7)
(1.6)
2.4
19.1
–
(149.2)
(11.6)
44.6
51.3
50.8
–
–
(0.1)
–
–
(0.4)
–
–
–
(2.6)
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Total net
asset
£m
94.4
(0.7)
(1.6)
2.3
19.1
–
(149.6)
(11.6)
44.6
51.3
48.2
Closing defined benefit asset
1,211.9
(1,161.1)
The amounts recognised in the income statement comprise administration costs, past service costs and interest on the net defined benefit
asset/(liability). These charges are included in the following lines in the income statement:
Within underlying operating profit
Administrative expenses
Within non-underlying items
Past service costs
Within finance costs
Interest on the net defined benefit asset
Recognised in income statement
The market value of the Scheme assets held at the end of the year were as follows:
Property and other growth (liabilities)/assets
Corporate bonds
Secured finance
Senior real estate debt
Senior private debt and private debt
Index-linked gilts (LDI portfolio collateral)
Other, including cash
Note
2022
£m
2021
£m
(1.7)
(1.6)
–
(0.7)
7
1.1
(0.6)
2.3
–
2022
£m
(1.7)
173.8
100.1
17.7
114.1
784.4
19.9
2021
£m
2.6
325.1
98.7
23.0
115.4
635.3
11.8
1,208.3
1,211.9
All equities, LDI portfolio collateral, corporate bonds and funds have quoted prices in active markets. The senior real estate and private debt
along with the property assets are illiquid, unquoted assets and trade on a less regular basis.
Senior private debt and private debt includes unquoted investment funds which are measured using the most recent net asset valuations
(NAV), adjusted for cash movements between the latest valuation date and 31 March 2021.
The LDI portfolio currently hedges 100% of the defined benefit scheme’s inflation rate risk and 100% of the interest rate risk (relative to
Scheme assets) through holding a combination of index-linked gilts, interest rate and inflation swaps, gilt total return swaps, gilt repos
and cash. The Scheme does not directly hold any financial instruments issued by the Company.
Wincanton plc Annual report and accounts 2022 – 135
28. Employee benefits continued
Actuarial assumptions
The principal actuarial assumptions for the Scheme and for the UK unfunded arrangement at the balance sheet date were as follows:
Discount rate
Price inflation rate – RPI
Price inflation rate – CPI
Rate of increase of pensions in deferment1
Rate of increase of pensions in payment1
2022
%
2.70
3.85
3.25
2021
%
2.00
3.40
2.80
2.50-3.25 2.50–2.80
2.20-3.65 2.05–3.30
1 A range of assumed rates exists due to the application of annual caps and floors to certain elements of service.
On 25 November 2020, the government and UK Statistics Authority published their joint consultation response on RPI reform, confirming
their intention to align RPI calculation to that already in use for the calculation of CPIH (including housing) with effect from 2030. As a result,
the Group has reduced the post-2030 gap between RPI and CPI to nil, effectively assuming RPI will be aligned with CPI post-2030, resulting
in a single weighted average RPI-CPI gap of 0.6% p.a. at 31 March 2022 (2021: 0.60%).
The assumptions used for mortality rates for members of these arrangements at the expected retirement age of 65 years are as follows:
Male aged 65 today
Male aged 45 today
Female aged 65 today
Female aged 45 today
2022
years
20.7
22.1
23.1
25.5
2021
years
20.7
22.0
23.0
25.5
Sensitivity table
The sensitivities of the present value of the Scheme obligations to changes in the key actuarial assumptions are set out in the following table.
The illustrations consider the result of only a single assumption changing with the others assumed unchanged and includes the impact of the
interest rate and inflation rate hedging. In reality it is more likely that more than one assumption would change and potentially the results
would offset each other; for example, a fall in interest rates will increase the Scheme obligations, but may also trigger an offsetting increase in
market value of certain Scheme assets.
Discount rate
Credit spread
Price inflation – RPI
Mortality rate
(Increase)/
decrease
in liability
£m
Increase/
(decrease)
in assets
£m
41.0
41.0
(47.0)
51.0
(52.0)
(8.0)
10.0
–
Change in
assumption
+0.25%
+0.25%
+0.25%
+ 1 year
Defined contribution schemes
The total expense relating to the Group’s defined contribution schemes in the current year was £36.7m (2021: £34.0m).
136 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 29. Equity compensation benefits
Employees of the Group participate, subject to seniority and length of service, in the Long Term Incentive Plan (LTIP) which involves the grant
of options or conditional awards of shares in the Company.
Grants of options are accounted for in accordance with IFRS 2 Share-based Payments, which requires the fair value of services received
in return for share options granted to be recognised in the income statement over the vesting period. The Group recognised total expenses
of £0.5m (2021: £0.9m) in respect of the costs of equity-settled share based payment transactions during the year. The fair value of these
services is measured by reference to the fair value of the share options granted under each scheme.
The number of options outstanding and exercisable in respect of each scheme at 31 March 2022 is as follows:
Long Term Incentive Plan
July 2017
July 2018
November 2018
July 2019
August 2019
September 2019
July 2020
July 2021
Executive Bonus Plan
July 2021 (Deferred Annual Bonus)
Total number of share options
Outstanding
Exercisable
Option price
pence/share
Date normally
exercisable
12,669
41,367
12,669
41,367
135,945
135,945
239,827
89,286
164,546
873,988
467,708
4,542
–
–
–
–
–
–
2,029,878
189,981
2020–2027
2021–2028
2021–2028
2022–2029
2022–2029
2022–2029
2023–2030
2024–2031
2023–2030
–
–
–
–
–
–
–
–
–
–
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The number and weighted average exercise price of all share options extant under the above schemes are as follows:
Outstanding at 1 April
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at 31 March
Exercisable at 31 March
2022
2021
Weighted
average
exercise price
–
–
–
–
–
–
Options
2,760,156
559,360
(866,035)
(423,603)
2,029,878
189,981
Weighted
average
exercise price
–
–
–
–
–
–
Options
1,978,296
1,512,516
(383,823)
(346,833)
2,760,156
62,018
The weighted average share price at the date of exercise for share options exercised during the period was 381p (2021: 232p). The options
outstanding at 31 March 2022 had an exercise price of £nil and a weighted average remaining contractual life of nine years.
Awards made under the Special Option Plan and LTIP were granted based on the average quoted market price of the Company’s shares for
a period of up to three business days immediately prior to the date of grant. Upon exercise, all options granted under these schemes are
equity-settled.
The terms and conditions of the grants to date under these schemes are as follows:
Wincanton plc Annual report and accounts 2022 – 137
29. Equity compensation benefits continued
Long Term Incentive Plan
The Group introduced a LTIP in 2015, which granted the Executive Directors and certain senior managers long term incentive awards in the
form of nil-cost options.
Grant date
July 2017
July 2018
November 2018
July 2019
August 2019
Number of
options
granted
710,691
673,934
135,945
506,457
89,286
September 2019
July 2020
164,546
1,153,642
July 2021
550,768
Total
3,985,269
Vesting conditions
Three years of service plus performance metrics weighted 60% on basic underlying EPS
growth and 40% on TSR performance relative to the FTSE All-Share Index (excluding
investment trusts) (the Index). The threshold entry point of 25% vesting for the EPS element
requires 6% growth per annum, with 100% vesting at 11% per annum. The threshold entry
point of 25% vesting for the TSR element requires performance in line with the Index, with
100% vesting at outperformance of 10% per annum (equivalent to 33% over the term of the
option). Vesting will be on a straight-line basis between the threshold and maximum for
both elements.
Three years of service plus performance metrics weighted 100% on TSR performance
relative to the FTSE All-Share Index (excluding investment trusts) (the Index). The threshold
entry point of 25% vesting for the TSR element requires performance in line with the Index,
with 100% vesting at outperformance of 10% per annum (equivalent to 33% over the term
of the option). Vesting will be on a straight-line basis between the threshold and maximum.
Three years of service plus performance metrics weighted 50% on basic underlying EPS
growth and 50% on TSR performance relative to the FTSE All-Share Index (excluding
investment trusts) (the Index). The threshold entry point of 25% vesting for the EPS element
requires 5% growth per annum, with 100% vesting at 10% per annum. The threshold entry
point of 25% vesting for the TSR element requires performance in line with the Index, with
100% vesting at outperformance of 10% per annum (equivalent to 33% over the term of the
option). Vesting will be on a straight-line basis between the threshold and maximum for
both elements.
Contractual
life in years
Ten
Ten
Ten
The grants made under this Plan have EPS and TSR growth performance conditions. The EPS requirement is a non-market based performance
condition and an appropriate model has been used to calculate the fair value of the award linked to EPS. The TSR requirement is a market
based performance condition and the fair value is calculated using a Monte-Carlo pricing model, based on assumptions at the date of
the award.
Share price at grant (p)
Exercise price (p)
Risk-free rate (%)
Expected volatility of Wincanton plc (%)
Expected volatility of Index (%)
Expected life (years)
Dividend yield (%)
Fair value per award under TSR condition (p)
Fair value per award under EPS condition (p)
July
2021
grant
414.0
–
0.12
41.4
40.4
3
2.5
3.01
3.84
Executive Bonus Plan
As part of the Executive Bonus Plan an award was granted in July 2021 that was made part in cash and part in deferred shares for the year
ending 31 March 2021.
Grant date
July 2021
(Deferred Annual Bonus)
Total
Number of
options
granted
8,592
8,592
Vesting conditions
Continued employment within the Group to the date of vest, and a year end personal
performance rating of 3 or above in the year preceding the date of vest
Contractual
life in years
Ten
The grants made under this scheme have non-market based performance conditions. As the grant is at nil cost, the fair value is equivalent
to the share value at the grant date.
138 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued 30. Financial instruments
Financial risk management and treasury policies
The Group, through its activities, is exposed to a range of financial risks. Financial risks are managed through the Group’s centralised treasury
function which acts within clearly defined policies approved by the Board. These policies are designed to reduce the financial risks faced
by the Group relating to liquidity risk, market risk (being interest rates, equity prices and currency exchange rate exposure) and credit risk.
Transactions of a speculative nature are not permitted and the treasury function does not operate as a profit centre.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s policy on funding
capacity is to ensure that there is always sufficient long term funding and short term facilities in place to meet foreseeable peak borrowing
requirements.
The Group has a £175.0m (2021: £141.2m) committed syndicated bank facility which matures in March 2026. At 31 March 2022 £25.0m
(2021: £9.0m) was drawn, leaving unutilised facilities of £150.0m (2021: £132.2m). The Group has uncommitted facilities including a £7.5m
net overdraft facility and £30.0m Receivable Purchase Facility (RPF). £4.1m of the RPF was utilised as at 31 March 2022 (2021: £11.0m).
The Group makes use of cash pooling facilities with a net overdraft facility of £7.5m. The Group is required to present the separate cash
and overdraft balances relating to pooled facilities gross in the balance sheet. The overdraft balance relating to pooled facilities does not
represent a formal overdraft limit available to the Group. The net cash balance available to the Group after deducting the pooled overdraft
facilities is £28.7m (2021: £20.9m).
The Group also holds some restricted cash deposits within its insurance subsidiary as shown in Note 20; these deposits are mostly repayable
on demand, but have a maximum notice period of 32 days and cannot be freely transferred to the UK without prior approval.
S
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The Group’s net cash/(debt) at the balance sheet date was:
Total borrowings and other financial liabilities
Cash at bank and in hand
Net cash excluding lease liabilities
Lease liabilities
Net debt including lease liabilities
Note
21
20
2022
£m
(25.0)
28.7
3.7
2021
£m
(18.7)
30.6
11.9
22
(203.1)
(145.7)
(199.4)
(133.8)
The following are the contractual maturities of non-derivative financial liabilities, including interest payments except for bank loans and
overdraft interest:
31 March 2022
Bank loans and overdrafts
Trade and other payables
Lease liabilities
31 March 2021
Bank loans and overdrafts
Trade and other payables
Lease liabilities
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 5 years
£m
25.0
180.7
192.1
397.8
25.0
180.7
283.3
489.0
–
180.7
49.6
230.3
25.0
–
101.3
126.3
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 5 years
£m
18.7
185.1
145.7
349.5
18.7
185.1
227.4
431.2
9.7
185.1
36.6
231.4
9.0
–
61.9
70.0
Over
5 years
£m
–
–
132.4
132.4
Over
5 years
£m
–
–
128.9
128.9
Lease liabilities over five years include two leases which expire in over 50 years with contractual cash flows of £124.1m (2021: £127.3m).
The Group did not hold any derivative financial instruments during the current or prior year, or at the year end.
Bank loans and overdrafts comprise the Group’s RCF. Interest is charged on this facility based on daily amounts drawn and charged at
the benchmark rate plus a margin. The benchmark rate on the RCF was amended from LIBOR to SONIA in October 2021. There were no
adjustments to the contractual cash flows arising from this transition due to the short term nature of the Group’s borrowings. Commitment
and utilisation fees are also charged. The contractual interest payable on the amounts drawn at 31 March 2022 was £0.1m (2021: £nil). If the
£9.0m drawn at 31 March 2021 remained drawn throughout the year to 31 March 2022, and all other factors remained the same, interest of
£1.5m would be charged for the year with a minimal amount being subject to variations in SONIA.
Wincanton plc Annual report and accounts 2022 – 139
30. Financial instruments continued
Liquidity risk continued
The Group’s committed facilities at 31 March 2022 comprise a syndicated RCF of £175.0m, agreed in March 2022 and maturing in March
2026. The RCF requires the Group to comply with three financial covenants at 30 September and 31 March each financial year and the Group
operates comfortably within these covenants:
Covenant
Leverage ratio
Interest cover
Fixed charge cover
Calculation
Consolidated net borrowings (A)/consolidated EBITDA (B)
Consolidated EBITDA (B)/consolidated net finance charges (C)
Consolidated EBITDA (B) plus operating lease costs (D)/consolidated net finance
charges (C) plus operating lease costs (D)
Ratio
<3.0:1*
>3.5:1
>1.4:1
2022
0.7
38.8
2.7
2021
0.3
29.2
2.8
* Leverage ratio was <2.75:1 under the previous RCF agreement.
A reconciliation of these terms to the reported amounts is as follows:
Reported net cash
Finance lease liability under IAS 17
Cash and deposits held by captive insurer
Guarantees provided
Consolidated net borrowings for covenant reporting (A)
Underlying operating profit
Depreciation, amortisation and impairments
Underlying EBITDA
Adjustment to frozen GAAP (IFRS 16 to IAS 17)
Share based payment charges
Consolidated EBITDA for covenant reporting (B)
Net interest payable
Adjustment to frozen GAAP (remove IFRS 16 interest)
RPF interest
Arrangement fees
Interest on net defined benefit asset
Other discount unwinding
Covenant net finance charges (C)
Operating lease costs for covenant reporting (D)
Analysis of changes in net debt
Bank loans and overdrafts
Financial liabilities arising from financing activities
Cash at bank and in hand
Bank overdrafts classified as cash equivalents
Net cash excluding lease liabilities
Lease liabilities
Net debt including lease liabilities
140 – Wincanton plc Annual report and accounts 2022
2022
£m
(3.7)
15.6
9.2
25.9
47.0
2022
£m
64.7
43.6
108.3
(42.9)
0.5
65.9
2022
£m
6.6
(5.2)
(0.2)
(0.2)
1.1
(0.4)
1.7
2022
£m
35.9
2021
£m
(11.9)
1.3
6.8
22.9
19.1
2021
£m
51.8
43.4
95.2
(37.8)
0.9
58.3
2021
£m
4.6
(3.7)
(0.3)
(0.5)
2.3
(0.4)
2.0
2021
£m
29.6
Note
29
Note
7
7
7
31 March
2020
£m
(77.1)
(77.1)
79.0
(12.0)
(10.1)
(129.7)
(139.8)
Cash
flow
£m
62.0
62.0
(48.4)
8.4
22.0
38.8
60.8
Non-cash
movements
£m
31 March
2021
£m
–
–
–
–
–
(54.8)
(54.8)
(15.1)
(15.1)
30.6
(3.6)
11.9
(145.7)
(133.8)
Cash
flow
£m
(9.9)
(9.9)
(1.9)
3.6
(8.2)
42.9
34.7
Non-cash
movements
£m
31 March
2022
£m
–
–
–
–
–
(25.0)
(25.0)
28.7
–
3.7
(100.3)
(203.1)
(100.3)
(199.4)
Notes to the consolidated financial statements continued S
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30. Financial instruments continued
Market risk
Market risk is the risk that changes in market prices, such as the impact of inflation, interest rates and foreign exchange rates, will affect the
Group’s income or the value of its holdings of financial instruments.
Price inflation risk
The Group is largely protected from the risk of price increases impacting operating costs due to the majority of contracts having been
negotiated on open book terms. Under these contracts, revenue is typically derived from costs incurred plus either a fixed or variable
management fee and the contractual terms ensure any inflation risk is passed on to the customer.
Interest rate risk
The Group monitors market pricing and forward-looking pricing projections to manage interest rate risk. There were no derivatives in place
to fix borrowing costs and all drawn debt at 31 March 2022 and the prior year end was at floating rates. If market conditions are expected
to change then derivatives will be considered to manage the interest rate risk exposure.
Interest rate sensitivity
The following table demonstrates the sensitivity to a change in interest rates of 0.5% (2021: 0.5%) on the Group’s profit before tax and on
its equity. The impact has been calculated by applying the change in interest rates to the weighted average interest rate during the year and
applying this rate to the average borrowings during the year. A variation of 0.5% (2021: 0.5%) represents management’s view of a reasonably
possible change in interest rates. Any impact on equity excludes the possible effect which a change in interest rates may have on the present
value of the Group’s pension obligations, the effects of which are set out in Note 28 ‘Employee benefits’.
0.5% (2021: 0.5%) increase in rates
0.5% (2021: 0.5%) decrease in rates
2022
2021
Effect
on profit
before tax
£m
0.2
(0.2)
Effect
on equity
£m
0.2
(0.2)
Effect
on profit
before tax
£m
0.1
(0.1)
Effect
on equity
£m
0.1
(0.1)
The methods and assumptions used to calculate the possible effect of a change in interest rates are consistent with those used in the prior year.
Currency risk and sensitivity
The Group is a largely UK based business with a small proportion of the Group’s activities denominated in euro. The only non-sterling activity
is in Ireland. In order to protect the sterling value of the balance sheet, the Group finances its investment in Ireland by borrowing in euro.
Transactional exposure is minimal as the vast majority of transactions of the Irish subsidiary are denominated in euro, the relevant functional
currency of the operation. Non-sterling cash balances comprise £2.7m held in euro (2021: £1.6m overdraft) .
Operational foreign exchange risk, where purchases or sales are made in non-functional currency, is hedged on an ad hoc basis by buying
or selling the relevant currency on a forward basis if the amounts involved are material. There was no material sensitivity to changes in foreign
exchange rates at the year end.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers, contract assets and bank balances.
The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Deposits are only made with pre-
approved counterparties. Credit evaluations are performed on all customers requiring credit. The Group does not generally require collateral
in respect of financial assets. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to
credit risk is represented by the carrying amount of each financial asset in the balance sheet of £181.3m (2021: £177.5m). See Note 18 ‘Trade
and other receivables’ for further analysis of trade receivables and the associated allowance for impairment loss.
Wincanton plc Annual report and accounts 2022 – 141
30. Financial instruments continued
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, in order to provide optimal returns
for shareholders, and to maintain an efficient capital structure. The capital structure of the Group consists of net debt (as shown above) and
equity of the Group (issued share capital, reserves and retained earnings).
In doing so, the Group’s strategy is to retain appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve
this strategy and maintain this position, the Group regularly monitors key credit metrics such as net debt to EBITDA, interest cover and fixed
charge cover. Covenant conditions related to external borrowings are as set out in the liquidity risk section above; there were no breaches of
these conditions during the current or prior year. In addition the Group ensures a combination of short term liquidity headroom with a diverse
long term debt maturity profile. As at the balance sheet date the Group’s average debt maturity profile was five years.
In order to maintain or realign the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares, or sell assets to reduce debt.
Fair values versus carrying amounts
The carrying amounts of the Group’s assets and liabilities which meet the definition of financial instruments are classified in the following categories:
Assets carried at amortised cost
Trade and other receivables
Cash and cash equivalents
Financial assets
Liabilities carried at amortised cost
Lease liabilities
Bank loans and overdrafts
Trade and other payables
Financial liabilities
2022
£m
2021
£m
152.6
28.7
181.3
157.2
30.6
187.8
(203.1)
(25.0)
(185.9)
(145.7)
(18.7)
(185.1)
(414.0)
(349.5)
The fair values are considered to be the same as the carrying amounts set out above.
31. Related parties
Identity of related parties
The Group has a controlling related party relationship with its parent Company, Wincanton plc. In addition, the Group has related party
relationships with its Executive and Non-executive Directors and with its subsidiaries and jointly controlled entities.
Transactions with key management personnel
The interests of the Executive and Non-executive Directors in the share capital of the Company, plus full details of the individual Directors’
emoluments, bonuses deferred in shares, share options and pension entitlements, are given in the Directors’ remuneration report on
pages 75 to 88.
Remuneration of key management personnel
The total remuneration of key management personnel of the Group, being the Executive Management Team, is set out below in aggregate for
each of the categories specified in IAS 24 Related Party Disclosures.
2022
£m
3.6
0.1
0.1
0.8
4.6
2021
£m
2.9
0.2
0.2
0.5
3.8
Short term employee benefits
Termination benefits
Post-employment benefits
IFRS 2 share option charge/(credit)
142 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued S
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32. Investment in subsidiaries
The significant subsidiaries as at 31 March 2022 in the Wincanton group of companies, based on the scale of their activities, are as follows:
Wincanton Holdings Limited
Wincanton Group Limited
Wincanton Ireland Limited
Principal activity
Contract logistics services
Contract logistics services
Contract logistics services
Risk Underwriting (Guernsey) Limited
Insurance subsidiary
Onevast Limited
Cygnia Logistics Limited
Online solutions for warehousing space
Supply chain services and solutions
Other subsidiaries as at 31 March 2022:
Caledonia Bidco Limited
C.E.L Group Limited
C.E.L (Engineering) Limited
C.E.L (Logistics) Limited
City Self Storage Limited
Dalepak Limited
Dalepak Holdings Limited
Principal activity
Intermediate holding company
Intermediate holding company
Dormant
Dormant
Non-trading
Dormant
Intermediate holding company
Data and Records Management Limited
Non-trading
East Anglia Freight Terminal (Holdings) Limited
East Anglia Freight Terminal Limited
Glass Glover Group Limited
Glass Glover Management Services Limited
Hanbury Davies Containers Limited
Hanbury Davies Limited
Hanbury Holdings Limited
House of Hill Holdings Limited
House of Hill Limited
Lane Group plc
Minmar (662) Limited
Nair Properties Limited
Product Support (Holdings) Limited
Product Support Limited
Pullman Fleet Services Limited
RDL Distribution Limited
RDL Holdings Limited
R-Log Limited3
Roadtanks Limited
Storeco Limited
Swales Haulage Limited
Trans European Holdings Limited
UDS Properties Limited
W. Carter (Haulage) Limited
W O Bradstreet Limited
Wincanton (No. 1) Limited
Wincanton (No. 2) Limited
Dormant
Dormant
Dormant
Dormant
Dormant
Non-trading
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Non-trading
Dormant
Non-trading
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Non-trading
Dormant
Dormant
Dormant
% of
equity
held 1
100
100
100
100
100
100
% of
equity
held 1
100
100
100
100
100
100
100
100
100
100
100
Country of incorporation
and registered office2
England and Wales
England and Wales
Republic of Ireland9
Guernsey10
England and Wales
England and Wales
Country of incorporation
and registered office2
England and Wales
England and Wales
England and Wales
England and Wales
Republic of Ireland9
England and Wales
England and Wales
Republic of Ireland9
England and Wales
England and Wales
England and Wales
1005
England and Wales
100
100
100
100
100
100
100
100
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
1006
England and Wales
100
100
100
100
100
100
100
100
100
100
100
100
100
100
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Wincanton plc Annual report and accounts 2022 – 143
% of
equity
held 1
1007
1008
100
100
100
100
100
100
100
Country of incorporation
and registered office2
England and Wales
England and Wales
England and Wales
England and Wales
Republic of Ireland9
Republic of Ireland9
England and Wales
England and Wales
England and Wales
32. Investment in subsidiaries and joint ventures continued
Wincanton Air & Ocean Limited
Wincanton High Tech Limited
Wincanton Logistics Limited
Principal activity
Dormant
Dormant
Dormant
Wincanton Pension Scheme Trustees Limited4
Trustee for the Wincanton plc Pension Scheme
Wincanton Records Management (Ireland) Limited Non-trading
Wincanton Trans European (Ireland) Limited
Non-trading
Wincanton Trans European Limited
Dormant
Wincanton UK Limited4
Intermediate holding company
Wincanton Vehicle Rental Limited
Dormant
1 All holdings are of Ordinary Shares except where noted.
2 Registered office is Methuen Park, Chippenham, Wiltshire SN14 0WT except where noted.
3
In dissolution at year end.
4 Direct subsidiaries of Wincanton plc.
5 14,762,245 Ordinary Shares and 10,000,000 6½% cumulative convertible redeemable Preference Shares.
6 6,460,000 Ordinary Shares, 7,140,000 ‘A’ Ordinary Shares and 409,164 Preference Shares.
7 19,393,774 Ordinary Shares and 19,372,074 Deferred Shares.
8 100 Ordinary Shares and 1,699,900 redeemable Ordinary Shares.
9 Registered office: Unit 1, Rosemount Business Park, Ballycoolin Road, Blanchardstown, Dublin 11.
10 Registered office: PO Box 155, Mill Court, La Charroterie, St Peter Port, Guernsey GY1 4ET.
144 – Wincanton plc Annual report and accounts 2022
Notes to the consolidated financial statements continued Wincanton plc Company balance sheet At 31 March 2022
Non-current assets
Investment in subsidiaries
Amounts owed by Group undertakings
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Amounts owed to Group undertakings
Trade and other payables
Income tax payable
Net current liabilities
Total assets less current liabilities
Non-current liabilities
Borrowings
Net assets
Equity
Issued share capital
Share premium
Own shares
Retained earnings
Total equity
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Note
2022
£m
2021
£m
2
3
4
5
6
8
108.9
75.0
183.9
2.6
2.9
5.5
(7.6)
(2.2)
(1.9)
(11.7)
(6.2)
108.9
76.3
185.2
1.1
1.2
2.3
(6.1)
(1.9)
(13.4)
(21.4)
(19.1)
177.7
166.1
(25.0)
152.7
(9.0)
157.1
12.5
12.9
(2.2)
129.5
152.7
12.5
12.9
(1.0)
132.7
157.1
The Company reported a profit for the year ended 31 March 2022 of £11.0m (2021: £18.5m).
The financial statements were approved by the Board of Directors and authorised for issue on 19 May 2022 and were signed on their behalf by:
James Wroath
Chief Executive Officer
Company registration number: 04178808
Wincanton plc Annual report and accounts 2022 – 145
Wincanton plc Company statement of changes in equity For the year ended 31 March 2022
Balance at 1 April 2020
Profit for the year
Other comprehensive income
Total comprehensive income
Share based payment transactions
Deferred tax on share based payment transactions
Dividends paid to shareholders
Balance at 31 March 2021
Balance at 1 April 2021
Profit for the year
Other comprehensive income
Total comprehensive income
Share based payment transactions
Current tax on share based payment transactions
Deferred tax on share based payment transactions
Dividends paid to shareholders
Balance at 31 March 2022
Issued share
capital
£m
Share
premium
£m
Own shares
£m
12.5
12.9
(1.5)
Profit
and loss
£m
117.1
Total equity
£m
141.0
–
–
–
–
–
–
–
–
–
–
–
–
12.5
12.5
12.9
12.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.5
–
–
(1.0)
(1.0)
–
–
–
(1.2)
–
–
–
18.5
–
18.5
0.1
0.5
(3.5)
132.7
132.7
11.0
–
11.0
(0.3)
0.3
0.1
(14.3)
12.5
12.9
(2.2)
129.5
18.5
–
18.5
0.6
0.5
(3.5)
157.1
157.1
11.0
–
11.0
(1.5)
0.3
0.1
(14.3)
152.7
146 – Wincanton plc Annual report and accounts 2022
Notes to the Wincanton plc Company financial statements
1. Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
Company’s financial statements.
Basis of preparation
The separate financial statements of the Company are presented as required by the Companies Act 2006. The Company meets the definition
of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial Reporting Council. Accordingly, the financial
statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
Under section 408(4) of the Companies Act 2006, the Company is exempt from the requirement to present its own profit and loss account.
The profit attributable to the Company is disclosed in the footnote to the Company’s balance sheet.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to
share based payments, financial instruments, capital management, presentation of comparative information in respect of certain assets,
presentation of a cash flow statement and certain related party transactions. Where required, equivalent disclosures are given in the
consolidated financial statements.
The financial statements have been prepared on the historical cost basis except for the remeasurement of certain financial instruments
to fair value. The principal accounting policies adopted are the same as those set out in Note 1 to the consolidated financial statements.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Company financial statements requires the use of certain judgements, estimates and assumptions that affect the
reported amount of assets, liabilities, income and expenses. Estimates and judgements are evaluated continually, and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Key estimation uncertainties are the key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting
date that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next period.
Significant judgements are those that the Company has made in the process of applying the Group’s accounting policies, and that have the
most significant effect on the amounts recognised in the financial statements.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimates
were based, or as a result of new information or more experience.
Key source of estimation uncertainty
Amounts owed by Group undertakings
The Company uses estimates in calculating the recoverable amounts of amounts due from its subsidiaries, which it then uses to assess whether
the amounts due are impaired. The Company performed an impairment review as at the reporting date and concluded that all the amounts
due from its subsidiaries were recoverable.
Investments
Investments in subsidiaries are stated at cost and reviewed for impairment if there are indications that the carrying values may not be
recoverable.
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2. Investment in subsidiaries
Shares in Group undertakings
Cost at beginning and end of year
2022
£m
108.9
2021
£m
108.9
A list of the subsidiaries of Wincanton plc is given in Note 32 ‘Investment in subsidiaries’ to the consolidated financial statements.
3. Amounts owed by Group undertakings
Amounts owed by Group undertakings
2022
£m
75.0
2021
£m
76.3
Amounts owed by Group undertakings are repayable on demand. It has been determined that these amounts owed are not expected to be
repaid within one year. Expected credit losses on amounts owed by Group undertakings are immaterial.
Wincanton plc Annual report and accounts 2022 – 147
Notes to the Wincanton plc Company financial statements continued
4. Trade and other receivables
Prepayments
Deferred tax assets
All receivables are due within one year.
5. Trade and other payables
Other payables
Accruals
2022
£m
1.5
1.1
2.6
2022
£m
1.2
1.0
2.2
2021
£m
0.2
0.9
1.1
2021
£m
1.1
0.8
1.9
6. Borrowings
Borrowings comprise bank loans of £25.0m (2021: £9.0m), all amounts are due after one year. Details of bank loans are given in Notes 21
‘Borrowings’ and 30 ‘Financial instruments’ to the consolidated financial statements.
7. Equity
Allotted, called up and fully paid
124,543,670 (2021: 124,435,670) Ordinary Shares of 10p each
2022
£m
12.5
2021
£m
12.5
Details of the Company’s own shares held within an Employee Benefit Trust are given in Note 26 ‘Capital and reserves’ to the consolidated
financial statements. Details of the Company’s equity compensation benefits are given in Note 29 ‘Equity compensation benefits’ to the
consolidated financial statements.
As permitted by section 408(4) of the Companies Act 2006, the Company has not presented its own profit and loss account. The Directors’
remuneration as disclosed in Note 6 to the consolidated financial statements is incurred by Wincanton plc. The Company has taken the
exemption not to disclose Non-audit fees incurred as these are included in Note 4 ‘Operating profit’ to the consolidated financial statements.
8. Reconciliation of movement in total equity
Profit for the year
Dividends paid to shareholders
Current tax on share based payment transactions
Deferred tax on share based payment transactions
Share based payment transactions
Net movement in shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds
2022
£m
11.0
(14.3)
0.3
0.1
(1.5)
(4.4)
157.1
152.7
2021
£m
18.5
(3.5)
–
0.5
0.6
16.1
141.0
157.1
148 – Wincanton plc Annual report and accounts 2022
Group five year record
As reported under Adopted IFRS
Revenue
Underlying operating profit1
Operating profit
Net financing costs
Underlying profit before tax1
Profit before tax
Underlying profit after tax for the year1
Underlying earnings per share1
Basic earnings per share
Dividend per share
Net cash/(debt)
2022
£m
2021 2
£m
2020 3
£m
2019
£m
2018
£m
1,421.4
1,221.9
1,201.2
1,141.5
1,171.9
64.7
61.4
(6.6)
58.1
54.8
50.6
40.8p
38.6p
51.8
50.8
(4.6)
47.2
46.2
39.7
32.0p
31.5p
12.00p
10.35p
3.7
11.9
61.0
52.0
(8.2)
52.8
43.8
44.7
36.1p
31.1p
3.90p
(10.1)
55.3
54.6
(6.0)
49.3
48.6
41.5
33.5p
34.5p
10.89p
(19.3)
52.9
44.4
(6.5)
46.4
37.9
38.1
30.8p
25.2p
9.90p
(29.5)
1 Alternative Performance Measures: refer to Note 3 to the Group financial statements on pages 118 to 120.
2 Certain comparatives have been restated due to a required change in accounting policy which has resulted in costs previously capitalised now presented
as a non‑underlying expense within net operating profit, as explained in Note 1 to the Group financial statements on page 109.
3 IFRS 16 Leases was adopted on 1 April 2019 using the modified retrospective approach without restating prior year figures.
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Wincanton plc Annual report and accounts 2022 – 149
Shareholder information
Annual Report and Accounts
Copies are available on the website or on request from the Company Secretary.
Shareholder enquiries
The Group’s Registrar is Equiniti. When contacting the Registrar please remember to quote your 11 digit Shareholder Reference.
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: +44 (0) 371 384 2272
Lines are open 8.30am to 5.30pm (UK time), Monday to Friday (excluding public holidays in England and Wales).
Analysis of shareholders
Client
Offering
As at Date
Balance Ranges
1 to 1,000
1,001 to 10,000
10,001 to 50,000
50,001 to 250,000
250,001 to 1,000,000
1,000,001 to Highest
Totals
Wincanton plc
Ordinary Shares of 10p
31 March 2022
Number of Holdings
% of Holders
Number of Shares
% Issued capital
7,453
1,316
136
72
38
22
9,037
82.47%
14.56%
1.50%
0.80%
0.42%
0.24%
2,119,613
3,627,430
2,885,479
8,213,399
18,341,575
89,356,174
100.00%
124,543,670
1.70%
2.91%
2.32%
6.59%
14.73%
71.75%
100.00%
Dividends
Dividends are normally paid twice per year. The Company encourages its shareholders to have dividends paid directly into their bank or
building society account. To set this up for the shares you hold, you should contact the Registrar for a dividend mandate form.
Share dealing service
Wincanton shares may be dealt through the Company’s Registrars. Alternatively please contact your bank, building society or stockbroker
who will be able to assist you in dealing in your shares.
Share price quotation
The Company’s share price is quoted via the Wincanton website www.wincanton.co.uk where it is regularly updated through the day.
Shareholders’ enquiries
If you have an enquiry about the Company’s business or about something affecting you as a shareholder (other than queries regarding
shareholdings which are dealt with by the Registrar) you are invited to contact the Company Secretary.
Unsolicited mail
The Company is obliged to make its Register available to other organisations. Shareholders wishing to limit the amount of unsolicited mail
they may receive as a result should contact the Mailing Preference Service by calling on 0207 291 3310 or online at www.mpsonline.org.uk.
150 – Wincanton plc Annual report and accounts 2022
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Unsolicited investment advice
Shareholders are advised to be wary of unsolicited mail or telephone calls offering free advice, to buy shares at a discount or offering free
company reports.
If you receive any unsolicited investment advice:
– make sure you confirm the correct name of the person and organisation
– check that they are properly authorised by the FCA by calling 0800 111 6768 or by visiting register.fca.org.uk/s and then contacting
the firm using the details on the register
– report the matter to the FCA either by calling 0800 111 6768 or visiting www.fca.org.uk/consumers
– report suspected fraud and internet crime to the police through Action Fraud, which you can contact on 0300 123 2040 or visiting
www.actionfraud.police.uk
– if the calls persist, hang up
– inform our Registrars Equiniti on the shareholder helpline 0371 384 2272.
If you deal with an unauthorised firm, you will not be eligible to receive payments under the Financial Services Compensation Scheme.
If you have already paid money to share fraudsters, you should contact Action Fraud on 0300 123 2040.
More detailed information on this or similar activity can be found on the FCA website www.fca.org.uk/scamsmart/how-avoid-investment-scams.
ShareGift
If you hold only a few shares and feel that it would be uneconomical or simply not worthwhile to sell them, you could consider donating your
shares to charity through ShareGift (Registered Charity 1052686). Donated shares are aggregated and sold by ShareGift, the proceeds being
passed on to a wide range of UK charities. To find out more visit www.sharegift.org or call 020 7930 3737. Alternatively contact the Company’s
Registrar who can help arrange the transfer of your shares.
Wincanton plc website
The Wincanton website www.wincanton.co.uk provides news and information about the services offered by Wincanton as well as useful
information for investors.
Forward-looking statements
The Annual Report and Accounts and Wincanton’s website may contain certain ‘forward-looking statements’ with respect to Wincanton
plc and the Group’s financial condition, results of operations and business, and certain of Wincanton plc’s and the Group’s plans, objectives,
goals and expectations with respect to these items.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as ‘anticipates’,
‘aims’, ‘due’, ‘could’, ‘may’, ‘should’, ‘expects’, ‘believes’, ‘intends’, ‘plans’, ‘targets’, ‘goal’ or ‘estimates’. By their very nature forward-looking
statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. Many of these assumptions, risks and uncertainties relate to factors that are beyond the Group’s
ability to control or estimate precisely. There are a number of such factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in
the economies and markets in which the Group operates; changes in the legal, regulatory and competition frameworks in which the Group
operates; changes in the markets from which the Group raises finance; the impact of legal or other proceedings against or which affect the
Group; changes in accounting practices and interpretation of accounting standards under IFRS, and changes in interest and exchange rates.
Any written or verbal forward-looking statements, made in our Annual Report and Accounts or on Wincanton’s website or made subsequently,
which are attributable to Wincanton plc or any other member of the Group or persons acting on their behalf are expressly qualified in their
entirety by the factors referred to above. Each forward-looking statement speaks only as of the date of our Annual Report and Accounts,
or on the date the forward-looking statement is made. Wincanton plc does not intend to update any forward-looking statements.
Wincanton plc Annual report and accounts 2022 – 151
Company’s legal advisers
DWF LLP
Registered office:
1 Scott Place
2 Hardman Street
Manchester
M3 3AA
Registered number: OC328794
Herbert Smith Freehills LLP
Registered office:
Exchange House
Primrose Street
London
EC2A 2EG
Registered number: OC310989
Pinsent Masons LLP
Registered office:
30 Crown Place
London
EC2A 4ES
Registered number: OC333653
Clyde & Co LLP
Registered office:
The St. Botolph Building
138 Houndsditch
London
EC3A 7AR
Registered number: OC326539
Board of Directors and advisers
Non-executive Directors
Dr. Martin Read CBE (Chair)
Stewart Oades (Senior Independent Director)
Gill Barr
Anthony Bickerstaff
Mihiri Jayaweera
Debbie Lentz
Executive Directors
James Wroath (Chief Executive Officer)
Tim Lawlor (Chief Financial Officer) to 28 February 2022
Secretary and registered office
Lyn Colloff
Tel +44 (0) 1249 710000
company.secretary@wincanton.co.uk
Wincanton plc
Methuen Park
Chippenham
Wiltshire
SN14 0WT
Registered in England & Wales under No. 04178808
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Numis Securities Limited
45 Gresham Street
London
EC2V 7BF
Share Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
152 – Wincanton plc Annual report and accounts 2022
Wincanton plc’s commitment to environmental issues is reflected in
this Annual Report, which has been printed on Chorus Lux Silk, an FSC®
certified material. This document was printed by Park Communications
using its environmental print technology, which minimises the impact
of printing on the environment. Vegetable-based inks have been
used and 99% of dry waste is diverted from landfill. The printer is a
CarbonNeutral® company. Both the printer and the paper mill are
registered to ISO 14001.
WINCANTON.CO.UK
Wincanton plc
Methuen Park
Chippenham
Wiltshire SN14 0WT
United Kingdom
Registered in England & Wales
under No. 04178808
Tel +44 (0)1249 710000
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