Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
Wincanton plc
Annual Report and
Financial Statements
31 March 2024
Company registration number: 04178808
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Wincanton plc
Annual Report and Financial Statements
for the year ended 31 March 2024
Contents
Strategic Report
1
Directors’ Remuneration Report
24
Directors’ Report
32
Statement of Directors’ responsibilities in respect of the Strategic Report,
the Directors’ Report and the financial statements
35
Independent auditor’s report to the members of Wincanton plc
36
Consolidated income statement
47
Consolidated statement of comprehensive income
48
Consolidated balance sheet
49
Consolidated statement of changes in equity
50
Consolidated statement of cash flows
51
Notes to the consolidated financial statements
52
Wincanton plc Company balance sheet
87
Wincanton plc Company statement of changes in equity
88
Notes to the Wincanton plc Company financial statements
89
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
1
Strategic Report
The Directors are pleased to present the Annual Report and Financial Statements of Wincanton plc (the Company) for the year ended
31 March 2024.
Principal activities
Wincanton plc and its subsidiaries (together, the Group) is a leading British supply chain solutions company, providing business critical
services for UK companies.
As disclosed in Note 30 to the Group financial statements, Wincanton plc is now a wholly owned subsidiary of GXO Logistics, Inc., as
of 29 April 2024.
Business review
This has been a transformational year for Wincanton. The business completed milestone investments into technology, including the
acquisition of the Invar Group, including UK and European entities (Invar), a leading UK based specialist in warehouse software,
automation and controls. The Group also acquired exclusive evergreen UK and Ireland software rights for digital freight management
technologies from Zeus, one of the fastest growing logistic-tech innovators in Europe. Both investments accelerate Wincanton’s
strategic roadmap to becoming the leading supply chain technology partner to UK businesses.
Landmark new business implementations for customers including Sainsbury’s and Marshalls, as well as major new business wins
across the Group, including Tata Chemicals Europe and Jet2, have helped deliver a resilient revenue and profit performance in a
continuing context of significant macro-economic headwinds. Meanwhile, our long term customer relationships continue to flourish
with extensions and expansions of multiple contracts, including IKEA, Rheinmetall BAE Systems Land, Howdens, Jewson and Jollyes.
Wincanton has continued to build within its foundation markets of Grocery & Consumer and General Merchandise, whilst targeting
significant growth in markets well placed to benefit from structural trends in eFulfilment and Public & Industrial.
The acquisition of Invar represents a key milestone in Wincanton's strategic roadmap to create sustainable supply chain value through
technology and automation. Invar adds the people and technology to the Group that will enable the delivery of more robotics and
automation projects at pace for customers. Several projects are already underway, focusing on autonomous mobile robot (AMR)
deployment across Wincanton’s existing blue chip customer base.
Wincanton further developed EyeQ this year, the Group’s digital transport planning and optimisation product. The acquisition of Zeus’
software rights will enable Wincanton to enhance EyeQ through the integration of proven, market leading technology in sub-
contraction management.
The Group has reported revenue of £1,406.6m for the year ended 31 March 2024 (2023: £1,462.0m). Revenues from core activities
(excluding closed book transport) were 0.2% lower year on year as the Group made sustained progress in exiting unprotected closed
book transport contracts. The Group’s full year underlying profit before tax was £58.5m (2023: £62.1m), ahead of market expectations
and delivered against an external background characterised by acute macro-economic uncertainty with the pressures of high inflation
and increased interest rates constraining consumer budgets and creating a volume based recession.
The Group made a statutory loss before tax of £44.9m (2023: Profit £38.2) driven by material transactions. These include the
impairment of closed book transport, which the Group commenced the strategic exit in the prior year, impairment of Cygnia, driven
by ongoing macroeconomic headwinds, and the two-person home delivery network, as a result of the loss of a key customer; the
onerous contract provision relating to the customer loss in the two-person home delivery network; acquisition related costs and costs
relating to the sale of Wincanton plc. See Note 3 ‘Alternative performance measures’ for further narrative on these exceptional costs.
In the second half of FY24 the Group became the target of an acquisition bid from CMA-CGM and subsequently GXO Logistics, Inc.
The final cash offer from GXO Logistics, Inc. of 605p for each Wincanton share represented a 104% premium to the closing price of
297p on the last business day before the commencement of the offer period. GXO Logistics, Inc. recognised the significant value
inherent in Wincanton’s business and the bid offered an opportunity to realise that value for Wincanton shareholders. The enterprise
valuation of approximately £960m is testament to the Group’s compelling strategy, operational excellence, strong customer
relationships and talented team.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
2
Strategic Report (continued)
Sector performance
2024
£m
2023
£m
Change
%
eFulfilment
278.1
254.1
9.4
Grocery & Consumer
499.8
512.5
(2.5)
General Merchandise
381.8
410.2
(6.9)
Public & Industrial
246.9
285.2
(13.4)
1,406.6
1,462.0
(3.8)
The Group’s operating sectors delivered a resilient performance and generated revenues in line with market expectations. eFulfilment
achieved strong revenue growth whilst the foundation sectors, Grocery & Consumer and General Merchandise, mitigated softer retail
volumes with new business wins and seamless implementations for customers. Public & Industrial delivered significant growth across
defence and infrastructure markets partially compensating for the previously announced HMRC contract loss.
eFulfilment
The consumer-led shift towards eCommerce is a fundamental trend which Wincanton is well placed to service given the Group’s track
record of partnering with the UK’s fastest growing brands.
eFulfilment delivered a strong revenue performance with 9.4% growth year on year. This impressive growth was delivered against a
background of softer retail volumes.
The Group continued to respond to customer demand for shared user services which offer customers the flexibility to effortlessly scale
their operations in line with experienced demand. This customer appetite for shared user services demonstrates growing recognition
of the role collaboration plays in achieving long term sustainable supply chain value.
Grocery & Consumer
A key foundation sector for the Group, Grocery & Consumer achieved a resilient performance in 2023/24 with revenues 2.5% lower
year on year in the context of a retail environment experiencing a marked divergence of value and volume. Consumer baskets
increasingly contained less but costed more. Revenues from core activities were up 5.3% year on year.
The sector delivered a seamless implementation of a major new contract with Sainsbury’s which saw Wincanton become the grocer’s
primary partner for transport across the UK. This landmark agreement further strengthened the Group’s position as a market leading
supply chain partner to UK business. The significant growth with Sainsbury’s offset the Morrisons and Lucozade Ribena Suntory
(LRS) contract losses.
General Merchandise
General Merchandise reported a 6.9% decline in revenue reflecting a nuanced volume landscape across the customer portfolio,
reinforcing the value of the Group’s diversified customer base. Revenues from core activities were 6.6% lower year on year.
The sector benefited from the significant new business win with New Look, signing a three-year contract to provide transport services
from the retailer’s national distribution centre to replenish New Look’s 400 stores across the UK and Republic of Ireland. Wincanton’s
partnership with the retailer included management of Click and Collect. The sector also welcomed Segen, a solar energy and storage
distributor, and JD Sports as new customers and was pleased to renew an existing contract with Seagate.
Public & Industrial
A key strategic growth sector, Public & Industrial remains a significant area of opportunity for the Group and experienced strong
customer revenues across defence and infrastructure end markets where the Group’s customer portfolio includes BAE Systems,
Thales, Tata Chemicals Europe, Alstom and EDF.
Overall, sector revenues were 13.4% lower year on year against a strong prior year comparator which included the inland border
contract with HMRC. Revenues from core activities were 8.8% lower year on year.
The sector signed significant new business including a three-year contract extension and expansion with defence engineering
company Rheinmetall BAE Systems Land (RBSL), a ten-year warehousing and logistics agreement with Tata Chemicals Europe and
recently a new public sector contract with Supply Chain Coordination Limited (SCCL) to support with the post-pandemic management
of PPE.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
3
Strategic Report (continued)
Overall results
Wincanton delivered a robust financial and operational performance in a challenging external environment. However, the Group
reported a loss in the year of £39.6m (2023: profit £33.2m). This loss was driven by the costs incurred to sell Wincanton plc, material
impairments and onerous contract provisions recognised in the period. The Group reported an operating profit before non-underlying
items of £64.6m for the year ended 31 March 2024 (2023: £70.8m).
The Group continued its strategic shift away from closed book transport contracts with open book warehouse and transport contracts
representing 79.0% of total revenue (2023: 73.5%), which helps to hedge against macro-economic headwinds. These large-scale,
labour-intensive operations also represent a significant opportunity pipeline for investment in robotics and automation.
Revenue of £1,406.6m (2023: £1,462.0m) was 3.8% behind last year, with continued growth in eFulfilment offset by volume downsides
and contract losses in other sectors. New business from customers including Segen and New Look in General Merchandise and Tata
Chemicals Europe in Public & Industrial and an IKEA expansion in eFulfilment have all contributed to partially offset volume declines
and customer churn. Finally, our Grocery & Consumer sector benefited from increased Sainsbury’s capacity largely offsetting the
Morrisons contract loss.
Underlying profit before tax decreased by 5.8% to £58.5m (2023: £62.1m), as expected, and the Group’s underlying profit before tax
margin was 4.2% (2023: 4.2%). The Group’s performance is in line with market expectations which takes into account the HMRC
contract loss, volume downsides seen in the transport network and a shift in our mix towards lower risk open book contracts.
Closing net cash was £20.7m (2023: net cash £13.2m) demonstrating strong cash conversion. There is significant liquidity headroom
enabling further growth and strategic investments, alongside providing protection to potential uncertainties from the macro-economic
environment.
The Alternative Performance Measures (APMs) or underlying results reported in this Annual Report and Financial Statements are
statutory measures adjusted for items which management considers could distort the understanding of performance and comparability
year on year. The definition of non-underlying items and details of the items reported as non-underlying in the current and prior years
are included in Note 3 to the financial statements.
2023 triennial valuation
The Group and the Trustees of the Defined Benefit Pension Scheme reached an agreement on the terms of the 2023 triennial
valuation. Wincanton is pleased to report that as of 31 March 2023 the scheme had an actuarial surplus of £3.9m compared to an
actuarial deficit of £154.3m at 31 March 2020. This significant improvement was driven by the Group’s sustained contributions to the
scheme alongside the strong performance of the scheme’s underlying assets.
Reflecting the scheme’s performance, the Trustees agreed that Group contributions to the scheme would cease from September
2023 and conditions applied to the distribution of shareholder returns would be removed. Scheme members can take comfort from
the health of the scheme, along with additional security offered in the unlikely event of extreme adverse performance of the scheme
or a significant increase in Group leverage.
Over the past five years, 35% of the Group’s free cash flow has been dedicated to reducing the scheme’s deficit. The elimination of
the deficit and corresponding cessation of contributions provides significant capital investment optionality for the Group.
Principal risks and uncertainties
The Board sets the policy for managing risk in the business. It recognises the importance of having effective processes and procedures
for identifying, actively monitoring, mitigating and managing the financial and non-financial risks facing the Group.
The Board has ultimate accountability for the execution of risk management and internal control systems, with the Risk Management
Committee providing assurance regarding the management of Group and operational risks. The Executive Management Team (EMT)
reviews specific financial, reputational, operational, legal/compliance, strategic, and climate change related risks. 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.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
4
Strategic Report (continued)
Principal risks and uncertainties (continued)
The following key risks have been identified by the Group as part of the risk management process:
Risk description
Key controls and mitigations
Pensions
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 alter
the value and lead to a material change in cash contributions,
and/or 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.
The Group has undertaken steps to mitigate its exposure to
financial market movements and macro-economic 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 who is responsible for managing the fund and setting the
investment strategy. This strategy is intended to reduce
investment risk through an appropriate level of matching between
assets and liabilities in the Scheme. Hedging is reviewed to
ensure it mitigates the impact of inflation and interest rate
movements.
The Group and the Trustees engage high quality external fund
managers and actuaries, and have separate legal, covenant and
audit advisers to support and inform their decision making.
Together they have agreed during the 2023 triennial process that
no current contributions to the Scheme are required and have
contingency plans to protect the Scheme in the event of adverse
developments.
The objective is to ensure that the Group meets its commitments
to pensioners and the Scheme and that recovery contributions are
affordable and sustainable for the Group.
Any increase in contribution may reduce the level of investment
the business has at its disposal. Management is exploring longer
term strategies to materially reduce the impact of the Scheme’s
financial impact on the Group.
Recruitment and retention
The Group employs a large workforce from drivers to
warehouse operatives to executive talent. Failure to attract and
retain people with the right skills, competencies and values
needed to operate and grow the business would impact the
long term success of the Group. The labour market remains
competitive; attraction and retention remain a concern given
our current uncertainty regarding ownership.
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. It 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 established relationships with preferred agencies
to provide 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 (SID) visited sites to bring employee feedback into the
boardroom. Talent and development are 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 and further consideration is currently being
given to our retention strategy and potential bespoke actions
deemed necessary to retain key talent during the acquisition
period. The Board and Nomination Committee (which disbanded
on 29 April 2024) closely monitor and review the Board and
executive and senior management strategies for succession
planning and review the Group’s talent pool on a regular basis.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
5
Strategic Report (continued)
Principal risks and uncertainties (continued)
Legal and regulatory compliance
The Group must comply with a wide range of regulations and
legislation 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 lead to
significant operational disruption or result in reputational
damage to the Group and our customers and potential harm to
the Group’s employees or property.
Policies and processes are in place throughout the Group to
ensure systems, operations and central functions comply with
relevant areas of legislation. The governance, risk and
compliance
function
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 reviewing of Group policies, as
a minimum, annually or in response to legislation change.
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 a
renewed focus has been placed on modern slavery and human
trafficking, to ensure our safeguarding measures are fully
implemented across the business. Additional training has also
been rolled out in this area, utilising materials from Stronger
Together, an NGO Wincanton is now working with in this area.
Our code of conduct helps our employees understand their
obligations with regard to legislation and regulation.
Awareness sessions are regularly distributed in different formats
across the business to ensure our colleagues know the legal and
regulatory risks we face and we undertake appropriate colleague
training to ensure legal compliance.
The Group also has a whistleblowing policy supported by a
Speaking Up hotline and portal, training and awareness.
Cyber security
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.
The Group routinely assesses 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. Increased controls have been implemented
through the year.
Awareness sessions are regularly held across the business to
ensure our colleagues remain vigilant.
Significant market changes
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:
changes in customer appetite for 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, as these can be affected
by customer confidence and the geopolitical situation;
which may have a knock-on effect on volume pass-
through; and
loss of long standing and/or key customers whose
contribution to the Group profit is significant.
An embedded strategy process provides the leaders of the
business with market context, competitor insight, emerging
trends and an economic outlook.
An example of this is the identification of the need to digitalise
transport and become more competitive in robotics and
automation. During FY24 Wincanton acquired an evergreen
licence for the UK and Ireland software rights with Zeus, and
acquired Invar.
The Group regularly reviews its wins, losses and renewals
pipeline to ensure that appropriate new business wins are
secured to reach the sales targets.
The Group has clear sector sales targets and development
strategies, with accountability to deliver.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
6
Strategic Report (continued)
Principal risks and uncertainties (continued)
Business continuity management
The Group has 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 a denial of access situation and/or global
pandemics and events.
Risks to our operations include:
labour shortages due to denial of service, 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;
and
liquidity pressure due to delayed receipts, potential customer
failure and availability of financing.
The Group operates a strong programme office which enables
rapid, controlled responses to 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:
a new enterprise-wide business continuity system and
associated processes implemented in the year;
close liaison with customers to adapt processes and
requirements to ensure continuity of service;
the redeployment of resources across business
areas;
interaction with government and industry bodies to
ensure regulatory requirements are understood and
best practice is being adopted;
strong focus on cash management and a close
relationship with financial stakeholders; and
extensive impact analysis and downside scenario testing.
Climate-related risks
The use of fossil fuels and the associated release of greenhouse
gases have led to rising average global temperatures with the
associated physical risks such as flooding and drought.
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 UK and Ireland business,
investment and consumer landscape that may 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;
loss of customers if we are complacent in this area;
and
poor response to climate-related risks leading to
reputational damage and loss of business
The Group has a sustainability strategy which leads on climate
and other environmental risks. We have developed 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 office which enable sustained, positive
action towards our goals and targets; course correction in
response to performance indicators; and new propositions and
opportunities in response to technology developments.
Actions taken include:
setting our own short, medium and long term carbon
emissions targets;
development of long term roadmaps with sector
specific technology solutions;
liaison with customers to propose and develop lower
and zero carbon solutions;
maintaining a carbon neutral two-person home
delivery service through authentic carbon offsetting
using forestry carbon reduction credits only;
engagement with government and industry bodies to
help shape a regulatory and fiscal landscape
conducive to positive climate action; and
establishment of a strategic procurement process with our
value chain and innovation partners.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
7
Strategic Report (continued)
Principal risks and uncertainties (continued)
Significant health, safety or environmental incident
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.
The Group has detailed health, safety and environment
procedures and processes in place and employs health, safety
and environment teams at all business locations. A second-line
health, safety and environment team tracks accident and
incident rates and leading indicators and rolls out seasonal
accident reduction programmes.
Failure to develop appropriate business systems
The Group provides secure, highly available and innovative
technology solutions, which enable our business and those of
our customers. The potential inability to meet the expectations
of
our
business
and
customers
could
impact
our
growth/profitability objectives, and lead to reputational damage
and contractual implications leading to loss of custom,
penalties, fines and/or regulatory action.
The Group continues to develop its IT and technology
products, services and capability aligned with our product
focused business strategy.
Our strategic focus remains on delivering robots, automation
and our transport and supply chain Control Tower products,
whilst rationalising and connecting our application portfolio to
ensure we have the right technology solution. Active
decommissioning and replacement of legacy systems reduce
risk.
Our organisational structure has been strengthened to support
the delivery of our strategy.
Managing customer contracts and delivery of service
Commercial contractual terms within our day to day
operations can be complex and require a high level of
familiarity with the detail.
Changes within our customers operations must be reflected
throughout our contractual relationship.
Colleagues’ pay and conditions have traditionally been
managed locally which has resulted in a payroll which is
complex and difficult to operate.
Support from the operational and legal teams is available to
site management to ensure contract terms are understood
and clearly handed over to new and/or promoted colleagues
performing the role of contract management on sites.
A centralised contract management system has been
introduced to increase oversight.
Training has been rolled out to operational teams to ensure
awareness of the need to keep contractual arrangements
current.
Failure to achieve strategic transformational change
through adoption of robotics, automation and new
product offerings
If Wincanton is unable to sufficiently adopt robotics and
automation, there is a risk to the business of:
not being competitive, leading to losing renewals
and not winning new business; and
customers deploying new technology themselves,
leading to the loss of revenue and margin.
A wide pipeline of projects covering the business to
ensure good coverage.
Engagement of sector managing directors to put
robotics and automation at the forefront of our
service offerings.
Our organisational structure has been strengthened
to support the delivery of our strategy.
Engagement of the sales and solutions teams in
new business opportunities.
Sufficient resource and approach to be able to
proactively handle opportunities at pace.
Acquisition of Invar to bolster the capabilities of the
business.
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Annual report and financial statements
for the year ended 31 March 2024
8
Strategic Report (continued)
Principal risks and uncertainties (continued)
Economic effects such as inflation, customer confidence
and spending
The Group operates across a broad range of markets and
sectors which have been impacted by the current inflationary and
interest rate pressures.
These pressures may stem from:
increased competition for renewals and new business
as customers increase their focus on costs;
reduced volumes as markets contract from reduced
consumer spending;
a challenge to our existing business models with a
transfer of risk towards closed book contracts;
increased costs resulting from key supplier failures;
and
loss of revenues and profit from customer failure.
An embedded strategy process which provides the leaders of the
business with market context, competitor insight, emerging
trends and an economic outlook.
During FY24, Wincanton acquired an evergreen licence for the
UK and Ireland with Zeus, and acquired Invar, providing
Wincanton with the ability to deliver cost effective and
sustainable solutions.
Wincanton continues to exit unprotected closed book contracts
and include volume protection measures in all other contracts.
The Group regularly reviews key customer and supplier
performance. The business model is weighted towards open
book contracts which provide Wincanton with protection from
cost escalation clauses.
During FY24, Wincanton took out debt insurance to protect
against customer failure.
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Annual report and financial statements
for the year ended 31 March 2024
9
Strategic Report (continued)
Business model
Wincanton boasts nearly a century of experience across the logistics and supply chain industry. Today, the Group specialises in the
provision of outsourced warehousing and transport services in the UK and Ireland, supported by deep expertise in robotics and
automation and supply chain integration.
The Company’s mission to create value across the ecosystem for customers, colleagues, communities, suppliers and stakeholders
is achieved through the synergistic alignment of our four key assets: people, warehouses, transport and technology. This value
creation framework is underpinned by our values, innovative approach and commitment to becoming the UK’s most effective and
trusted logistics company.
Wincanton’s business model is people focused, with an average of 19,225 colleagues across the UK and Ireland. The Group continues
to foster an inclusive, diverse and supportive working environment to allow colleagues to perform to the best of their ability. Clear
strategic direction and focused resource allocation enable the team to deliver its core strategic priorities.
Wincanton acts as a brand ambassador for its customers enabled by the Group’s customer-centric approach and trusted expertise
which gives customers the competitive edge in their chosen markets. The Group’s blue chip customer base and established
contractual structures provide it with financial resilience and a business model characterised by high levels of cash generation,
investment in innovation and shareholder returns.
Our strategy
Our strategy has been developed with technology, productivity and our team at its heart. It is being successfully delivered, positioning
Wincanton at the forefront of competitive technology and operational excellence. The goal is to profitably grow the business, allowing
us to compete at the highest levels as a trusted partner to our customers.
Our purpose: Great people delivering sustainable supply chain value.
Our strategic ambitions
Our strategic ambitions keep us focused and help us measure our progress.
Growth ambitions: we look to profitably grow the business by developing our products and services, building new
relationships, diversifying into different products and services and building on our market leading position in our foundation
sectors.
People ambitions: we aim to provide an inclusive environment that supports our colleagues to be safe at work, and enables
them to do their best for our customers and have the opportunity to have a positive impact on social value, while having
fulfilling careers.
Technology ambitions: we design and deliver best in class warehouse automation, helping customers to navigate the supply
chain challenges of tomorrow. We offer the broadest range of digital transport benefits, providing our customers with real
time updates, powerful data insights and the most sustainable transport solutions.
Sustainability ambitions: we have set ambitious goals to achieve net-zero by 2040, including to be carbon neutral for all our
own non-transport operations from 2025.
Our key strategic priorities
Our key strategic areas of focus drive positive gains across the business.
Great people who care about colleagues, customers, and communities: embed an inclusive culture, supporting the
performance and growth of our colleagues, to attract and retain the most talented people in the supply chain industry.
Great technology to transform our industry: develop innovative warehouse automation and digital transport solutions to
deliver sustainable, resilient, and future proof operations for our customers.
Great operations delivering value for our customers: enhance our focus on safety to deliver an efficient operating model,
with excellence at its core; becoming more agile and easier for customers to engage with, while supporting our continued
growth.
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Strategic Report (continued)
Sustainability
Protecting our futures
Innovation and transparency drive Wincanton’s sustainability strategy to ensure that we have a clear path to protect our customers,
our business, our people, and our planet.
Wincanton’s net-zero commitments and our people strategy combine to ensure that our communities and the environment are
brought together to enable us to deliver genuine social value.
By incorporating a culture of care into all aspects of our business, we are safeguarding the health, safety and wellbeing of our
colleagues and stakeholders, our local communities and our natural environment.
We encourage involvement at all levels. Driven by our ESG Committee and management team, our champion groups across the
organisation represent all operational functions and locations, including environment, health and safety and diversity and inclusion.
These groups are all linked by a common purpose to reduce our environmental impact and deliver social value. By using the United
Nations Sustainability Development Goals (UN SDGs) as a framework, we focus our projects on enhancing our local communities by
involving stakeholders in continual improvement initiatives and social value activities.
Full details of our UN SDGs are available on our website at www.wincanton.co.uk/sustainability/governance/esg-reporting/
The road to net-zero by 2040
Our environmental programme is overseen by the Head of Sustainability, who co-ordinates an environmental working group to guide
our programme. This team provides updates on progress to the Executive Management Team and to the ESG steering groups. Every
operation nominates an environment champion who is empowered to promote and drive continuous improvement in environmental
performance and colleague engagement at their sites.
Monthly management reports include detailed carbon reports for each business sector and contract, as well as performance against
our headline sustainability targets, such as our commitments to achieve net-zero emissions by 2040 and to double our recycling rates
from residual waste by 2025.
Our environmental management system (EMS) is certified to ISO 14001 and available across the business. The EMS describes how
we manage a range of key environmental parameters, enabling us to take prompt actions where necessary and to identify and exploit
performance improvement opportunities wherever they arise.
In 2024, we continued to collaborate closely with industry partners and customers to develop sustainability projects covering our
contract operating locations. These projects are designed to reduce our environmental impacts and ensure that we continue to make
progress towards our sustainability targets.
Greenhouse gas emissions and energy use
We continue to utilise the Achilles ‘Carbon Reduce’ process for certification to ISO 14064 which has given us the appropriate external
scrutiny of our scope 1 and 2 and material scope 3 emissions.
Our 2023 climate risk disclosure and emissions performance were again rated ‘B’ by CDP (formerly known as the Carbon Disclosure
Project). This rating indicates that we are a company ‘managing carbon’ and demonstrates that we are 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 GHG Protocol Corporate Accounting and Reporting Standard for
operational control. Carbon factors used are as per Defra conversion factors for company reporting 2023, 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.
We record and publish energy and fuel use for managed supplies, which includes all supplies 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 deliberately excluded any scope 1
and 2 emissions sources regardless of materiality.
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Strategic Report (continued)
Sustainability (Continued)
Greenhouse gas emissions and energy use (Continued)
We recognise that scope 3 emissions are material to interpreting our emissions performance and that when we set a science based
target, we will need to include scope 3 emissions in that target. We have included scope 3 emissions in our Annual Report and we
have been reporting them in our CDP submission for over five years and in our PPN 06/21 carbon reduction plan (CRP) available on
our website. Our scope 3 emissions are calculated from spend reports and from journey data provided from our Winsight digital
transport suite and represent the ‘downstream transport and distribution’, primarily sub-contract road freight, and ‘business travel’
categories of scope 3 emissions. Additional, quantified scope 3 categories are available in our CRP on our website.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 2024 was 185 tonnes of carbon dioxide equivalent (tCO2e) per £m of revenue.
Our scope 1 emissions reduced significantly reflecting the deployment of fuel usage initiatives driven by more efficient fleet and
planning optimisation; use of increased volumes of hydrotreated vegetable oil (HVO) and electric vehicles; and lower year on year
transport volumes. The resilient top-line revenue performance was achieved despite these lower transport volumes through
inflationary price increases; more carbon efficient sub-contract activities; and the Group's robust open book contractual model. This
resulted in a significant reduction in carbon intensity.
Within the context of our ESG policy which aligns our ESG programme to the most relevant UN SDGs, 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, as our customers continue to define and refine their own net-zero carbon plans.
2040 commitment to net-zero carbon emissions
Our energy use and carbon emissions figures are as follows:
Energy use
Energy use (MWh)
2023/24
2022/23
2021/22
2020/21
2019/20
Scope 1 transport
1,025,192
1,252,200
1,175,113
1,145,210
1,207,317
Scope 1 non-transport
38,100
72,171
149,718
134,995
120,207
Scope 2 electricity, transport
662
-
-
-
-
Scope 2 electricity, non-transport
77,485
80,916
83,943
80,562
83,767
Total energy
1,141,439
1,405,287
1,408,774
1,360,767
1,411,291
Carbon emissions
Carbon emissions (tCO2e)
2023/24
2022/23
2021/22
2020/21
2019/20
Scope 1 transport
234,907
297,956
278,295
275,512
295,547
Scope 1 non-transport
7,948
15,830
36,504
32,879
28,810
Scope 2 electricity, transport
149
-
-
-
-
Scope 2 electricity, non-transport
17,433
17,079
19,401
20,398
23,229
Total scope 1 and 2 emissions
260,437
330,865
334,200
328,789
347,586
Scope 1 and 2 carbon intensity (tCO2e/£m)
185
225
235
270
290
Scope 3 emissions
67,039
71,435
-
-
-
Less than 1% of total scope 1 and 2 emissions relate to operations outside the UK. Scope 3 emissions are provided for the past two
years, but we have not stated prior years because of internal system changes that occurred during 2021/22 preventing like-for-like
calculation.
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 own net-zero carbon plans.
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Strategic Report (continued)
Sustainability (continued)
2040 commitment to net-zero carbon emissions (Continued)
Wincanton has communicated its net-zero strategy and targets to each of its customers and provided net-zero roadmaps for transport
and fleet, warehouse and infrastructure and packaging and waste. The communication of our net-zero vision and roadmaps continues
to evolve as technology and the investment landscape change.
Our operational emissions are primarily from diesel transport fuel and, until it is feasible to adopt wholesale renewable fuels or
widespread electrification of our fleets, we are optimising our use of diesel through a variety of continuous improvement measures
and deployment of our Winsight suite and EyeQ platform to optimise the efficiency of our network operation.
We continue to operate a small number of biomethane trucks and this year we have used 4.3 million litres of certified HVO as a drop-
in replacement fuel for diesel.
Our company car fleet is targeted to be all electric by 2026 and to date 56% of the fleet is pure electric vehicles with no open orders
for internal combustion engine vehicles. During FY24, we have operated 50 electric commercial vehicles up to 16.7 tonnes on our
premium home delivery fleet. We are planning to collaborate with multiple customers on more trials and deployments of a variety of
electric vehicles as availability increases and electricity price volatility reduces.
As we try to shape our net-zero future, we have engaged with a number of innovation consortia working on catenary electric road
systems, and battery electric trucks and charging infrastructure. We are participating in the Innovate UK ‘Zero Emissions HGV and
Infrastructure Demonstration’ (ZEHID) funding programme and hope to be operating battery electric trucks over 40 tonnes no later
than March 2026.
We have committed 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
then purchase authentic carbon credits to offset residual emissions from 2025. We have been evaluating and collaborating on the
installation of rooftop solar photovoltaic systems across our own estate and have completed the first ‘landlord-led’ installation this year
with plans for further projects beyond this.
This year we have purchased further carbon credits to allow us to maintain a carbon neutral premium home delivery operation. These
purchased carbon credits were entirely forestry credits relating to Verra and Gold Standard certified projects in Columbia and India.
We retired a mix of these forestry credits and our remaining Indian renewable energy credits to enable our 2024 ‘carbon neutral’
declaration for our premium home delivery operation. This was self-assessed using our carbon accounting process which is certified
to ISO 14064.
In future, our international carbon offset projects will be sourced from afforestation and reforestation projects only, such as the ones
in Columbia and India. These projects deliver environmental and social value to communities in developing economies which,
potentially, make a further contribution to the UN SDGs against which we have chosen to make progress.
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 at 36.3%, making our target 72.6% by 2025, and have achieved 58% against a 2024 interim year end target
of 63%. Our challenge related to some larger than expected year end stock to waste decisions that reduced our ability to recycle.
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. The UK plastic packaging tax was introduced in April 2022 and we moved to higher recycled content in
applications where it was appropriate, choosing to reduce plastic packaging volumes through technical innovation in other
applications, the goal being reduced overall use of new plastic. We will continue to innovate on packaging to support our customers,
meet our targets and comply with legislation such as the extended producer responsibility regulations which went live during the year.
Although we have set a long term net-zero carbon target and some interim sub-targets, we have not yet committed to a formal science
based target (SBT). We evaluated an SBT during 2023 and while we recognise that this has become a standardised approach for
many companies, decarbonisation trajectories for the freight transport sector remain unclear. We aim to complete our SBT submission
pack during FY25 and achieve a verified SBT during FY26. 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 alternative fuels and electrification technologies
and infrastructure, potentially including hydrogen, become more widespread and commercially available.
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Strategic Report (continued)
Sustainability (continued)
Social values
With inclusion at heart, we continue to enhance our work environment and enrich the communities that we operate in. We do this by
developing and caring for our colleagues and others, providing training and employment opportunities to local people and
strengthening our strategic partnerships to deliver greater social value.
We focus our activities around four core pillars:
looking after ourselves and others: contributing to a society that considers all aspects of health, safety and wellbeing, with a
focus on a culture of care;
embedding an inclusive culture: to be recognised as a leader in diversity and inclusion;
enriching our communities: supporting and engaging with the communities in which we operate; and
strengthening social value partnerships: making a positive and innovative impact through our suppliers and partners.
To drive positive action in this space, in April 2023 we also launched our Group-wide Million Hours Mission. By working together with
our people, suppliers and customers we have set ourselves an ambitious challenge to deliver one million hours of social value by the
end of 2025, enriching the communities that we operate in. Engaging with the community is an important part of embedding our
inclusive culture. Throughout the year we have successfully supported many local community groups and charities, hosted wellbeing
events and championed inclusivity awareness activities. This has resulted in over 304,000 social value hours recorded as part of our
Million Hours Mission, and, therefore, we are confident of achieving our million hour target in 2025.
Gender pay reporting
We track gender pay reporting in line with The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Our 2024 Gender
Pay Gap Report can be found on our website at www.wincanton.co.uk/investors/corporate-governance/Corporate-disclosures-and-
policies/
Governance
Our Board is accountable for the delivery and success of our sustainability strategy. An ESG Committee chaired by the CEO was in
place during the reporting period to focus on strategy, target setting, performance and communication.
The ESG Committee, which met during the year, was supported by working groups, which meet regularly to roll out ESG initiatives
and to address the communication around the programme of work, including climate-related matters.
The environmental working group consists of relevant representatives from operations and the Group’s head office with different areas
of expertise and stakeholder interactions relating to sustainability and climate change.
The Audit Committee had oversight of non-financial disclosures and assurance, including reporting in line with leading ESG
frameworks. It also oversaw and evaluated the Company’s approach and controls relating to the prevention and detection of fraud
and bribery, including overseeing the effectiveness of whistleblowing mechanisms.
We have sustainability targets in our remuneration structures, applicable to our senior management.
We have set the necessary measures and targets to manage our ESG performance and ensure transparent and consistent reporting.
We use standardised measurement systems aligned to the Global Reporting Initiative (GRI), to enable our stakeholders to better
monitor our ESG performance over the long term and provide transparency on methodology.
Our governance position relies heavily on the rollout of appropriate policies with associated compliance training and awareness
sessions run throughout the business, for example modern slavery; GDPR; IT acceptable use; and Speaking Up.
Our ESG materiality assessment aligns with our principal business risks and is also aligned with our selected UN SDGs and GRI
reporting.
Wincanton’s Code of Conduct and our compliance programme help colleagues make the right choices.
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures
Climate-related change will have long term impacts on our customers, markets and operations. We manage these climate risks for
the long term benefit of our stakeholders. We have continued to enhance our climate governance, deliver our targets and communicate
our net-zero strategy to our customers at each relationship milestone.
We have integrated our climate-related disclosures throughout this Annual Report, which are consistent with the climate change
requirements of section 414A and 414CB of the Companies Act 2006, and have summarised them in the table below. This year we
completed qualitative climate scenario modelling of risks, opportunities and resilience. The results are included in this Annual Report.
In addition to the table and disclosures in this report, 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 long term supply chain partner of net-zero solutions for fleet, property and waste.
As a Group, we have publicly reported our GHG (carbon) emissions since 2014. Our carbon accounting and reporting are certified to
ISO 14064-1:2018 using the Achilles ‘Carbon Reduce’ process. The Group will continue to refine its disclosures to enhance our
reporting for stakeholders with further quantitative scenario analysis planned during FY25.
Wincanton reference
Page(s)
Governance
A description of the company’s
governance arrangements in
relation to assessing and
managing climate-related risks
and opportunities;
Our ESG Committee focused on strategy, target setting, performance and
communication. This management committee was chaired by the Chief
Executive Officer and included a Non-executive Director to provide
additional Board interface.
13
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
and this year we emphasised the need to identify business opportunities
presented by climate change.
3 to 8
Risk
management
A description of how the
company identifies, assesses,
and manages climate-related
risks and opportunities and
a description of how processes
for identifying, assessing, and
managing climate-related risks
are integrated into the
company’s overall risk
management process
More details can be found in the risk report and in the tables below. Further
details on climate-related principal risks are given with additional comments
on opportunity identification and integration into business strategy and
financial models.
17 to
19
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures (continued)
Wincanton reference
Page(s)
Strategy
A description of—
(i) the principal climate-related
risks and opportunities arising in
connection with the company’s
operations, and
(ii) the time periods by reference
to which those risks and
opportunities are assessed
Details of climate-related risks are included in the disclosure of
principal risks and uncertainties and the tables below. We have
focused on general summaries of ‘physical’ and ‘transition’ risks
with management of ‘transition’ risks providing the main
opportunities for differentiation with our customers.
3 to 8 and
17 to 19
A description of the actual and
potential impacts of the principal
climate-related risks and
opportunities on the company’s
business model and strategy
We have made a commitment to net-zero carbon emissions. We
deploy processes and technologies to reduce our own and our
customers’ environmental impact for the long term. Details are
provided in our ESG report.
10 to 12
An analysis of the resilience of
the company’s business model
and strategy, taking into
consideration different climate-
related scenarios
Wincanton partnered with an expert consultancy to develop a range
of qualitative scenarios in which to evaluate physical and transition
risks and opportunities relative to three temperature scenarios over
the short, medium and long term. 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 the evolution and integration of our
scenario planning. Some of the output of this analysis is presented
in tables 1, 2 and 3 below.
17 to 19
Metrics and
targets
A description of the key
performance indicators used to
assess progress against targets
used to manage climate-related
risks and realise climate-related
opportunities and of the
calculations on which those key
performance indicators are
based.
Climate-related opportunities are considered monthly as part of
our strategy review process.
19
Our scope 1, 2 and 3 GHG
emissions
The environmental section in the ESG report. KPIs for scope 1
and 2 emissions are reported in Annual Reports. Selected scope 3
emissions are provided in this Annual Report with further detail and
explanation on our ESG reporting web page.
11
A description of the targets used
by the company to manage
climate-related risks and to
realise climate-related
opportunities and of performance
against those targets
Our ESG targets are included in the sustainability section of this
Annual Report and Accounts. ESG related remuneration targets are
included in the Annual Bonus for the Executive Management Team,
specifically relating to health and safety; diversity and inclusion; and
carbon intensity.
11
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures (continued)
Wincanton’s senior leadership identified, through a facilitated workshop and follow up discussions, the following climate-related
physical and transition risks as the most relevant.
In setting and monitoring delivery of Wincanton’s strategy, the Board and leadership team consider climate-related risks and
opportunities across the:
Short term – 1 to 3 years
Medium term – 3 to 7 years
Long term – 7 to 25 years
Each risk and opportunity are ranked based on their determined likelihood and impact. These are defined below:
Likelihood is the chance of the event concerned occurring:
Rare <5%
Unlikely >5% and 20%
Moderate >20% and <50%
Likely >50% and <80%
Almost certain >80%
Impact is measured predominately relating to either the reduction or increase to operational income:
Very low – less than 1% of operating income
Low – 1% to 2.5% of operating income
Moderate – 2.5% to 5% of operating income
High – 5% to 10% of operating income
Very high – more than 10% of operating income
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures (continued)
Table 1 – Physical risks by temperature scenario and time horizon
Rank
ID
Risk type
Risk title
Likelihood
Impact
Scenario
Location
Time horizon
1
PR5
Acute
physical
Risk that increased frequency
and/or severity of extreme
weather events (e.g. flooding,
storms) result in damage to
Wincanton’s facilities (e.g.
warehouses, data centres),
disrupting operations and
increasing operating costs.
Almost
certain (5)
High (4)
Primary
4°C
UK
Short to medium
term
Secondary
2.5°C
disorderly
2=
PR1
Acute
physical
Risk that increased frequency
and/or severity of extreme
weather events (e.g. flooding,
storms) result in damage to
transport networks and
Wincanton’s vehicles,
disrupting operations, and
increasing operating costs.
Likely (4)
Moderate (3)
Primary
4°C
UK
Medium to long
term
Secondary
2.5°C
disorderly
2=
PR3
Acute
physical
Risk that increased frequency
and/or severity of extreme
weather events (e.g. extreme
heat, fires) impact employee
safety and productivity, leading
to decreased output.
Likely (4)
Moderate (3)
Primary
4°C
UK
Short term
Secondary
2.5°C
disorderly
3
PR6
Acute
physical
Risk that increased frequency
and/or severity of extreme
weather events impact
Wincanton's customers' supply
chains, resulting in business
uncertainty and decreased
revenue.
Likely (4)
Low (2)
Primary
4°C
Global
Short/medium/
long term
4
PR2
Chronic
physical
Risk to physical structures,
facilities and vehicles (e.g.
warehouses and offices, roads,
power supplies) from increased
chronic subsidence, resulting in
increased maintenance and
repair costs.
Unlikely (2)
Moderate (3) 4°C
UK
Short term
5
PR4
Chronic
physical
Risk of suppliers being
impacted by the physical
impacts of climate change,
leading to shortages in raw
materials/components for
Wincanton’s electric vehicles
and automation/robotics,
decreasing output.
Unlikely (2)
Low (2)
4°C
Global
Long term
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures (continued)
Table 2 – Transition risks by temperature scenario and time horizon
Rank
ID
Risk type
Risk title
Likelihood
Impact
Scenario
Location
Time horizon
1
TR4
Policy and
legal
Risk of a ban on the sale of
petrol and diesel vehicles
and the introduction of low
emission zones requiring
electric vehicle adoption,
including a transitional
period requiring alternative
fuel powered vehicles,
increasing costs during this
period.
Almost
certain (5)
Moderate (3)
Primary
1.5°C
UK
Short to
medium term
Secondary
2.5°C
disorderly
2=
TR5
Markets
Risk of increasing volatility
in electricity prices, leading
to fluctuating
operating costs for
Wincanton’s transportation,
warehousing and value-add
services, harming business
resilience.
Likely (4)
Moderate (3)
2.5°C disorderly
UK
Short term
2=
TR1
Policy and
legal
Risk of an increased burden
from carbon tax
mechanisms, such as road
tolling and/or a carbon tax
on fuel/cross-border
logistics, increasing
Wincanton’s operating costs
and reducing profitability.
Likely (4)
Moderate (3)
1.5°C
UK
Medium term
3
TR3
Markets
Risk of reduced demand for
services due to a shift in
customer preferences away
from traditional transport
and towards greener
transportation alternatives
offered by peers, reducing
Wincanton’s market share
and revenue.
Moderate (3)
Moderate (3)
Primary
1.5°C
UK
Short to
medium term
Secondary
2.5°C
disorderly
4
TR2
Reputation
Risk of increased
administrative and
compliance costs as
Wincanton gets captured by
further disclosure and
reporting requirements, and
mandatory standards,
increasing Wincanton’s
overhead costs.
Likely (4)
Low (2)
1.5°C
UK
Medium to
long term
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Strategic Report (continued)
Sustainability (continued)
Climate-related financial disclosures (continued)
Table 3 – Opportunities by temperature scenario and time horizon
Rank
ID
Risk type
Risk title
Likelihood
Impact
Scenario
Location
Time horizon
1
O2 Resource
efficiency
Opportunity to harness green-
led resource efficiency across
transportation leading to a
reduction in operating costs by
greening Wincanton's fleet e.g.
switching to a fully electric
truck fleet.
Likely (4)
High (4)
1.5°C
UK
Short to
medium term
2=
O1 Resource
efficiency
Opportunity to harness green-
led resource efficiency across
Wincanton’s warehousing and
value-add services leading to a
reduction in operating costs by
using renewable energy
sources, i.e. solar panels.
Likely (4)
Moderate (3)
Primary
2.5°C
disorderly
UK
Short term
Secondary
1.5°C
Long term
2=
O6 Resource
efficiency
Opportunity to harness
automation, robotics, and low
carbon data management
practices to reduce
Wincanton’s operating costs
by improving efficiency.
Likely (4)
Moderate (3)
Primary
1.5°C
UK
Short to
medium term
Secondary
2.5°C
disorderly
3=
O5
Products
and
services
Opportunity to leverage
Wincanton's scale and
partnerships to boost lower
carbon innovations and
industry collaborations,
improving business resilience.
Moderate (3)
Moderate (3)
2.5°C disorderly
UK
Medium to
long term
3=
O3
Products
and
services
Opportunity to gain a larger
share of the market by
diversifying Wincanton’s
offerings to incorporate
sustainable practices and
greener services than peers,
tapping into a growing market
of environmentally conscious
customers, increasing
revenue.
Moderate (3)
Moderate (3)
1.5°C
UK
Short term
4
O4 Resource
efficiency
Opportunity to reduce
operating costs by improving
business circularity and
increase recycling rates,
through Wincanton’s value-add
services.
Moderate (3)
Very Low (1)
Primary
1.5°C
UK
Short term
Secondary
2.5°C
disorderly
Long term
On page 6 Wincanton have summarised the actions taken to mitigate the identified climate-related risks.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
20
Strategic Report (continued)
Sustainability (continued)
Non-financial and sustainability 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 strategic report section of the Annual Report on pages 1 to 23. Details of our business model can be found on
page 9, principal risks and our response to them are on pages 4 to 8.
Stakeholder engagement
As a leading supply chain partner for UK business, our customers are at the heart of everything we do, and our long term relationships
deliver consistent returns.
Our suppliers play an important role in helping our business deliver for our customers. We form strong, sustainable and trusted
partnerships and look to secure excellent value for money, whilst minimising risks in our supply chain.
The health, safety and wellbeing of our colleagues and our communities continue to be of paramount importance. See social values
on page 13, where we reflect on how we are enriching our local communities, and employee engagement on page 33.
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.
The Wincanton Board considers it has fulfilled its responsibilities under Section 172(1) of the Act. It recognises the need to reflect the
views of and impact on the Group’s key stakeholders in its discussions and in the decisions it takes.
This year such decisions have involved the Group's Pension Scheme, new business opportunities and offers to acquire the Group:
Group Pension Scheme
The Board approved a proposal between Wincanton and the Group Pension Scheme Trustee that no further contributions
would be currently payable into the Scheme as a consequence of the 2023 Triennial valuation. One of the key elements of
this valuation and related covenants was that prior conditions around shareholder distributions were removed. The interests
of stakeholders including current and future members of the Scheme, who could be reassured of its stability, shareholders
and the Group’s lenders were taken into consideration, as were the long term consequences of this decision (specifically the
releasing of capital for reinvestment in the business).
New business opportunities
Consideration of community and environmental impact was a factor in the decision of the Board to approve submission of a
bid for a total waste management services contract relating to the disposal of end-of-life PPE purchased by government
bodies during the pandemic. The wider stakeholder group was also considered with the proposal designed to deliver the
lowest economic cost to the taxpayer, having strong operational compliance built in, aligning with Wincanton’s commitment
to maintaining high standards of business conduct.
Acquisition of the business
The decision to engage with proposed offers for the Group and to ultimately approve the progression of an offer through to
acquisition involved careful consideration of the interests of shareholders, wider stakeholders and employees, whilst acting
fairly between members and taking account of the long term consequences of such a decision. The Board followed the high
standards set by the UK Takeover Code, the UK Corporate Governance Code and other relevant legislation and guidance.
All shareholders had an equal opportunity to vote on the offers and to question the Board at the court and general meetings
held. Individual consultation took place with major shareholders. The Wincanton Board was pleased to recommend the offer
from GXO Logistics, Inc. which delivered very substantial shareholder value, at a level significantly above the Company’s
pre-offer period all-time share price high. GXO Logistics, Inc. expects the Wincanton management and employees will benefit
from greater opportunities as a result of being part of an enlarged Group.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
21
Strategic Report (continued)
Corporate governance
We aim to comply with the 2018 UK Corporate Governance Code, so far as is practicable.
Board leadership and company purpose
Code principle
How we aim to comply
A
A successful company is led by an effective and entrepreneurial
board, whose role is to promote the long term sustainable success
of the company, generating value for shareholders and
contributing to wider society.
See our section 172(1) statement on page 20.
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.
The Board met during the year to review the purpose,
values and strategy. During the year, the values were
reviewed to align with the outcome of a series of
cultural workshops undertaken in conjunction with
Brands with Values.
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.
The Board set a series of strategic objectives and
measured performance against these as part of its
strategic review. The Board has also established a
framework of internal controls which are assessed
regularly through second and third line compliance and
audit activity. During the year both the Audit Committee
and the Risk Management Committee met four times.
D
In order for the company to meet its responsibilities to
shareholders and stakeholders, the board should ensure effective
engagement with, and encourage participation from, these parties.
See employee engagement on page 33, stakeholder
engagement on page 20, and our section 172(1)
statement on page 20.
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 on
our website www.wincanton.co.uk/
sustainability/the-wincanton-way/
The workforce can raise concerns via line
management, employee forums and a dedicated
Speaking Up hotline.
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 ensures that directors receive
accurate, timely and clear information.
The Senior Independent Director (SID) held an annual
discussion with the rest of the Board to ensure the
Chair’s effectiveness was kept under review. The SID
would feed back any areas of concern from this
process. There were no concerns in this regard.
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.
During the reporting period the Board comprised six
Non-executive Directors and two Executive Directors.
The roles of CEO and Chair are clearly defined and
separate from each other.
H
Non-executive directors should have sufficient time to meet their
board responsibilities. They should provide constructive challenge
and strategic guidance, offer specialist advice and hold
management to account.
In addition to being available at the Annual General
Meeting, Non-executive Directors attended Board
meetings each month plus any ad hoc meetings to deal
with time-sensitive business.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
22
Strategic Report (continued)
Corporate governance (continued)
Composition, succession and evaluation
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 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, and
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 annual Board evaluation.
This year all were found to be working well.
J
Appointments to the board should be subject to a formal,
rigorous and transparent procedure, and an effective
succession plan should be maintained for the 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, and cognitive and personal strengths.
During the reporting period appointments to the
Board of Wincanton were made on the
recommendation of the Nomination Committee,
chaired by Sir Martin Read CBE.
Due consideration was given to the outcome of the
annual Board evaluation, the review of skills,
experience and diversity and informed succession
planning.
K
The board and its committees should have a combination of
skills, experience and knowledge. Consideration should be
given to the length of service of the board as a whole and
membership regularly refreshed.
The skills of each Board member, the composition of
the Board as a whole and the tenure of each Director
were reviewed annually by the Nomination
Committee.
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.
An external evaluation was held every three years
with an internal evaluation in the intervening years.
This year, the Board engaged in an internal self-
assessment exercise. The Chair held individual
assessment calls with each NED and the SID
appraised the Chair’s performance (as mentioned
above).
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 was assisted by the Audit Committee to
ensure that the Board presented a fair, balanced and
understandable assessment of the Company’s
position and prospects.
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 35.
O
The board should establish procedures to manage risk, oversee
the 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.
See the risk section in the Strategic Report on pages
3 to 8.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
23
Strategic Report (continued)
Corporate governance (continued)
Remuneration
Code principle
How we comply
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.
Wincanton’s remuneration policies were designed
with consideration of wider workforce remuneration
and related policies, as well as the alignment of
incentives and rewards with the Company’s culture.
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.
The Remuneration Policy was put before shareholders
for approval at the 2023 AGM.
R
Directors should exercise independent judgement and discretion
when authorising remuneration outcomes, taking account of
company and individual performance, and wider circumstances.
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
applied in the 2023/24 remuneration outcomes, see
page 25.
For more information, see our website www.wincanton.co.uk/investors/corporate-governance/Corporate-disclosures-and-policies/
Future developments
We have a well defined and ambitious investment plan that will see us grow the business over the coming years. The foundations are
in place to enable us to do so, whilst retaining the balance between servicing our existing and potential customers, sustainability and
delivering strong financial performance. The implications of the acquisition of the Group by GXO Logistics, Inc. have been discussed
in the going concern disclosures; see Note 1 to the financial statements.
Strategic Report signed on behalf of the Board
James Wroath
Chief Executive Officer
19 June 2024
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
24
Directors’ Remuneration Report
Introduction to the Directors’ Remuneration Report for the year ended 31 March 2024
This is the annual introductory statement to the Directors’ Remuneration Report for the year ended 31 March 2024. Following the
Company’s acquisition by GXO Logistics, Inc. which completed on 29 April 2024, the former independent Non-executive Directors
have resigned and the Remuneration Committee which served during the year ended 31 March 2024 has been decommissioned.
Accordingly, Tom Hinton has been nominated by the Directors of Wincanton plc in his capacity as Chief Financial Officer to make the
introductory statement to the Directors’ Remuneration Report for 2024.
During the financial year:
There were no substantial changes in the process relating to Directors’ remuneration.
Discretion was exercised in relation to Directors’ remuneration by the Remuneration Committee during the period; please
refer to page 25 below.
Decisions were made in relation to Directors’ remuneration in respect of the change of control; details are set out below.
The Company operated an annual bonus plan and a Long Term Incentive Plan during the year ended 31 March 2024 in accordance
with the terms of those plans as summarised in last year’s Directors’ Remuneration Report.
Any determinations made by the Remuneration Committee in connection with the acquisition of Wincanton plc by GXO Logistics, Inc.
were made following the year ended 31 March 2024 and shortly prior to the completion of the transaction.
Directors’ Remuneration Report
This report contains the material required to be set out as the Directors’ Remuneration Report for the purposes of Schedule 8 of The
Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (the DRR regulations).
The auditor has reported on certain parts of the Directors’ Remuneration Report and stated whether, in its opinion, those parts have
been properly prepared in accordance with the Companies Act 2006. Those parts of the Directors’ Remuneration Report which have
been subject to audit are clearly indicated.
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 2024
and 31 March 2023.
James Wroath1
Tom Hinton2
31 March
31 March
31 March
31 March
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Salary
531
495
371
227
Taxable benefits
12
11
8
11
Pension-related benefits
21
20
15
9
Total fixed pay
564
526
394
247
Annual Bonus
426
144
297
70
LTIP
945
–
–
n/a
Total variable pay
1,371
144
297
70
Total
1,935
670
691
317
1
The 2021 LTIP was due to vest on 30 July 2024. In previous reports an estimate outturn was used which followed the regulation methodology due
to the timing of the report and the vesting date. Due to the acquisition by GXO Logistics, Inc., the actual vesting amount is known. On this basis
the LTIP has been calculated as 156,186 options multiplied by a share price of 605p.
2
Tom Hinton joined the Board on 15 August 2022. The 2023 figures include remuneration paid from that date.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
25
Directors’ Remuneration Report (Continued)
Taxable benefits and pension-related benefits
Benefits include a company car benefit, healthcare, and critical illness cover.
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 each of the Executive Directors. This is aligned to the pension available to the wider workforce.
Incentive outturns
Year ended 31 March 2024 Annual Bonus
James Wroath and Tom Hinton had a maximum bonus opportunity of 100% of salary. The performance measures were underlying
profit before tax (PBT) (70% of weighting) and delivery of strategic objectives (30% of weighting). All strategic objectives were based
on quantitative targets.
The performance targets for these measures are not disclosed as they contain information which, in the opinion of the Directors, is
commercially sensitive in respect of the Company.
Objectives and achievements for the Executive Directors:
Metric
Weighting
CEO
Weighting
CFO
CEO pay out
CFO pay out
CEO pay out
(% of
weighting)
CFO pay out
(% of
weighting)
Profit
70%
70%
63%
63%
90%
90%
ESG (safety LTIFR)
5%
5%
4.17%
4.17%
93%
93%
ESG (DEI)
5%
5%
2.25%
2.25%
45%
45%
ESG (carbon)
5%
-
5%
-
100%
-
Cash
5%
10%
5%
10%
100%
100%
Revenue growth
10%
10%
0%
0%
0%
0%
Pay out
(% max bonus/salary)
100%
100%
79.42%
79.42%
2021 LTIP
In July 2021 a Long Term Incentive Plan (LTIP) award of 150% of salary was granted to James Wroath, based 50% on relative TSR
performance vs the FTSE All-Share Index (excluding Investment Trusts) and 50% based on EPS performance over the three financial
years to 31 March 2024.
Measure
Threshold
(25% vesting
of relevant
portion)
Maximum
(100% vesting
of relevant
portion)
Actual
performance
achieved
Vesting (% of
maximum) before
Committee
discretion
Vesting (% of
maximum) after
Committee
discretion
Underlying EPS growth
(50% of award)
5% p.a. growth
10% p.a.
growth
4.1% p.a.
growth
0% (out of 50%)
100%1
Relative TSR (50% of
award)
Median
Upper quartile
Above upper
quartile (85th
percentile)
100% (out of 50%)
100% (no change)
Total LTIP vesting
100% of award
1 The Committee, before it was decommissioned, completed an assessment of the performance conditions carefully. It recognised the exceptional
performance by management which has created the opportunity for significant value creation for shareholders through the recommended cash offer
for Wincanton by GXO Logistics, Inc.
For the TSR performance condition, applying to 50% of the award, Wincanton’s performance was measured against the constituents of the FTSE
All-Share (excluding Investment Trusts). The six month average share price before the start and end of the performance period, both for Wincanton
and the comparator group, was used.
For the EPS performance condition, applying to the remaining 50% of the award, the application of the EPS performance condition has failed to
recognise the exceptional value created. In the view of the Committee, this has led to a misalignment of the reward outcome with the overall
performance experienced by shareholders. Accordingly, to provide a stronger link between reward and performance and alignment of interest to the
shareholder outcome, the Committee has applied discretion to allow the 50% EPS element to vest by reference to the TSR performance condition
outcome. With this use of Committee discretion, as permitted under the policy, the entire award (EPS and TSR elements) has achieved the
performance conditions and vested on completion.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
26
Directors’ Remuneration Report (Continued)
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 2024
and 31 March 2023.
Fees
£’000
2024
2023
Gill Barr
63
61
Anthony Bickerstaff
63
61
Mihiri Jayaweera
52
50
Debbie Lentz
57
50
Stewart Oades1
John Pattullo OBE2
37
24
61
-
Sir Martin Read CBE
208
202
Total
505
483
1
Stewart Oades stepped down on 31 October 2023.
2 John Pattullo joined the Board on 1 November 2023.
Directors’ interests
The interests (all being beneficial) of the Directors in the Company’s Ordinary Shares are set out below:
Director
Owned
31 March 2024
Owned
31 March 2023
James Wroath
33,737
30,439
Tom Hinton
989
98
Sir Martin Read CBE
58,016
58,016
Gill Barr
8,000
8,000
Anthony Bickerstaff
8,000
8,000
Mihiri Jayaweera
8,000
8,000
Debbie Lentz
10,022
10,022
Stewart Oades
John Pattullo OBE1
n/a
8,000
20,024
Nil
1
John Pattullo joined the Board on 1 November 2023.
Following completion of the acquisition of the entire share capital of the Company by GXO Logistics, Inc. in April 2024, the Directors’ beneficial
interests in the Company’s Ordinary Shares are now nil.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
27
Directors’ Remuneration Report (Continued)
Share plan interests
Date of award
Vest date
Option
exercise
price
Share
price at
date of
award 1
No. of
shares
under
award at
31 March
2023
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
No. of
shares
under
award at
31 March
2024
James Wroath
LTIP
2 Sep 2019
2 Sep 2022
Nil
£2.26
101,689
–
–
–
–
101,689
LTIP
30 Jul 2020 30 Jul 2023
Nil
£1.82
350,910
–
350,910
202,125
–
148,785
LTIP
30 Jul 2021 30 Jul 2024
Nil
£4.16
156,816
–
–
–
–
156,816
LTIP
15 Jul 2022 15 Jul 2025
Nil
£3.62
213,461
–
–
–
–
213,461
LTIP
31 Jul 2023 30 Jul 2026
Nil
£2.43
–
331,172
–
–
–
331,172
Deferred Annual
Bonus 2021
30 Jul 2021 30 Jul 2023
n/a
£4.16
4,542
–
–
–
–
4,542
Deferred Annual
Bonus 2022
15 Jul 2022 15 Jul 2024
n/a
£3.62
9,577
–
–
–
–
9,577
836,995
331,172
350,910
202,125
–
966,042
Tom Hinton
LTIP
15 Aug 2022 15 Aug 2025
Nil
£3.81
113,287
–
–
–
–
113,287
LTIP
31 Jul 2023 30 Jul 2026
Nil
£2.43
–
208,000
–
–
–
208,000
113,287
208,000
–
–
–
321,287
1 Three day average share price immediately preceding the date of award.
Share Incentive Plan (SIP)
Director
Purchase
date
Date of release
of free shares
Purchased
shares
Free
shares 1
Share price
in pence 2
James Wroath
2023/24
2029
676
159
2.98
Tom Hinton
2023/24
2029
676
159
2.98
1
Free shares became available to the participant after five years from the date of purchase.
2
Average share price of purchases through the year.
Unaudited information
The members of the Remuneration Committee during the year were:
Gill Barr (Chair to 1 November 2023)
Debbie Lentz (Chair from 1 November 2023)
Sir Martin Read CBE
The position of Chair was changed during the year but all members served on the Committee during the year to 31 March 2024.
The CEO, CFO 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.
During the year the Committee was 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 was achieved through the
Committee approving all aspects of Executive Director and EMT remuneration, and monitoring pay arrangements for the wider
workforce. In addition, the Committee ensured that the Company’s Remuneration Policy and its implementation were consistent with
the six factors set out in provision 40 to the Code.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
28
Directors’ Remuneration Report (Continued)
External advisers
During the year, external advisers attended Committee meetings upon invitation to provide advice and support to the Committee.
Korn Ferry was appointed as adviser to the Committee on 31 July 2023 following a competitive tender process.
Korn Ferry is represented on the Board 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 Korn Ferry provides objective and independent remuneration advice and has no conflicts of interest with the Company
that may impair its independence.
Total fees payable to Korn Ferry for advice provided to the Committee during the year amounted to £76,875. Fees are charged on a
time and materials basis. Deloitte LLP also provided advisory work in relation to controls review, internal audit services, share scheme
and taxation advice in the period.
Implementation of Policy in the year ended 31 March 2025
The details of how the Policy will be implemented for the year ended 31 March 2025 will be determined by the new owners GXO
Logistics, Inc.
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 the year ended
31 March 2023 to the year ended 31 March 2024, and the increase in dividends related to each of those financial years.
31 March 2024
31 March 2023
Difference
Item
£m
£m
£m
Remuneration of all employees1
757.6
751.1
6.5
Dividend
16.2
15.3
0.9
1 Includes all personnel expenses, as set out in Note 6 to the consolidated financial statements.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
29
Directors’ Remuneration Report (Continued)
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. FTSE SmallCap and FTSE All-Share excluding Investment Trusts – value of £100 invested on
31 March 2014
0
100
200
300
400
500
600
700
800
31 Mar 2014 31 Mar 2015 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 31 Mar 2021 31 Mar 2022 31 Mar 2023 31 Mar 2024
Value (£)
Total Shareholder Return
WINCANTON
FTSE ALL SHARE EX INV TRUSTS
FTSE SMALL CAP
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
30
Directors’ Remuneration Report (Continued)
Performance graph and CEO remuneration table (Continued)
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
Chief Executive Officer
Chief Executive Officer
single figure of total
remuneration
£’000
Annual Bonus outturn
(% of maximum)
LTIP vesting
(% of maximum)
2024
James Wroath
1,935
79%
100%
2023
James Wroath
670
28%
0%
2022
James Wroath
1,156
66%
62%
2021
James Wroath
777
59%
n/a
2020
James Wroath1
621
56%
n/a
2020
Adrian Colman1
554
58%
59%
2019
Adrian Colman
1,541
65%
84%
2018
Adrian Colman
1,933
56%
98%
2017
Adrian Colman
2,008
73%
100%
2016
Adrian Colman2
1,653
61%
100%
2016
Eric Born2
3,750
–
100%
2015
Eric Born
2,051
56%
100%
2014
Eric Born
1,264
68%
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.
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
the financial years FY24 back to FY21 compared to the change for all colleagues.
FY24
FY23
FY22
FY21
Base
salary/
fees
Taxable
benefits
Annual
bonus
Base
salary/
fees
Taxable
benefits
Annual
bonus
Base
salary/
fees
Taxable
benefits
Annual
bonus
Base
salary/
fees
Taxable
benefits
Annual
bonus
(%
change)
(%
change)
(%
change)
(%
change)
(%
change)
(%
change)
(%
change)5
(%
change)
(%
change)
(%
change)5
(%
change)
(%
change)
James Wroath1
7%
9%
196%
15%
-78%
-50%
7%
54%
14%
-20.6%
-54.1%
-31.7%
Tom Hinton
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Gill Barr
4%
4%
–
–
7%
–
–
-1.8%
–
–
Anthony Bickerstaff2
4%
4%
–
–
111%
–
–
n/a
–
–
Mihiri Jayaweera3
4%
4%
–
–
9%
–
–
n/a
–
–
Debbie Lentz9
13%
4%
–
–
9%
–
–
17.9%
–
–
Stewart Oades4
4%
4%
–
–
7%
–
–
-1.8%
–
–
Sir Martin Read CBE
4%
4%
–
–
7%
–
–
-5.3%
–
–
Other employees5
1%
-4%
155%
1%
-4%
-43%
1%
14%
17%
0.4%
2.3%
11.6%
1
The FY21 value for James Wroath represents 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
Stewart Oades left the Board on 31 October 2023.
5 The calculation of the average change in salary for employees excludes joiners and leavers during the year.
6
John Pattullo joined the Board on 1 November 2024, his fees did not change during his tenure.
7
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-19 pandemic.
8 A comparison has not been provided for Tom Hinton in FY24 as he joined 15 August 2022 which was part of the way through the previous
comparator year, FY23.
9 Debbie Lentz was appointed as the Chair of the Remuneration Committee in the year.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
31
Directors’ Remuneration Report (Continued)
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
Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
2024
Option B
78:1
71:1
65:1
2023
Option B
32:1
25:1
19:1
2022
Option B
57:1
47:1
35:1
2021
Option B
38:1
32:1
22:1
2020
Option B
63:1
49:1
41:1
Employees
25th percentile pay
Median pay
75th percentile pay
Salary
£24,182.16
£26,410.10
£29,088.56
Total pay and benefits
£24,748.75
£27,078.16
£29,827.52
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 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 2023/24, 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.
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 2024.
The year on year change in the pay ratio reflects the positive variable remuneration outturn for the CEO in 2024. If the ratio was
determined based on basic salary only the outturn would be 22:1 (25th ), 20:1 (median) and 18:1 (75th). The Committee considers
wider workforce pay and conditions in determining CEO remuneration.
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 2023 AGM and the binding resolution for approval of the Directors’ Remuneration Policy at the 2023 AGM:
Resolution
Votes for
%
Votes against
%
Total votes
% of issued share
capital voted
Votes
withheld
Annual Report on
Remuneration
87,032,099
99.15
749,622
0.85
87,781,721
70.48
35,602
Directors’
Remuneration
Policy
84,988,112
97.26
2,395,863
2.74
87,383,975
70.16
433,348
Directors’ Remuneration Policy
The Directors’ Remuneration Policy for the Executive and Non-executive Directors for the three year period expiring at the
Company’s 2026 AGM, and which was approved by shareholders at the 2023 AGM, can be found within the Company’s Annual
Report and Accounts for 2023 which is available on the Company’s website at www.wincanton.co.uk
This report was reviewed and approved by the Board on 19 June 2024 and signed on its behalf by:
Tom Hinton
Chief Financial Officer
19 June 2024
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
32
Directors’ Report
The Directors present their Annual Report and the audited financial statements of the Company for the year ended 31 March 2024.
The Company is required to prepare a fair review of the business during the year ended 31 March 2024 and of the position at the end
of the financial year and a description of the principal risks and uncertainties facing the Company (known as a Strategic Report). The
purpose of the Strategic Report is to enable shareholders to assess how the Directors have performed their duty under Section 172(1)
of the Companies Act 2006. The information that fulfils the requirement of the Strategic Report can be found on pages 1 to 23.
Directors
The persons serving as Directors during the year and to the date of this report are shown below:
J Wroath (Chief Executive Officer)
T Hinton (Chief Financial Officer)
I Kielty (Chief Operating Officer) (appointed 1 June 2024)
M Read (Chair) (resigned 29 April 2024)
G Barr (Independent Non-executive Director) (resigned 29 April 2024)
A Bickerstaff (Independent Non-executive Director) (resigned 29 April 2024)
M Jayaweera (Independent Non-executive Director) (resigned 29 April 2024)
D Lentz (Independent Non-executive Director) (resigned 29 April 2024)
J Pattullo (appointed 1 November 2023) (Independent Non-executive Director) (resigned 29 April 2024)
S Oades (Senior Independent Director) (resigned 31 October 2023)
As a result of the acquisition of the Group by GXO Logistics, Inc., the Independent Non-executive Directors resigned their positions
as of 29 April 2024.
Results and dividends
The results for the year and the Company’s financial position at the end of the year are shown in the attached financial statements.
The income statement showed an underlying profit of £58.5m (2023: £62.1m), and a statutory loss of £39.6m (2023: profit £33.2m).
During the year the following dividends were paid:
2024
£m
2023
£m
Final dividend for the prior financial year of 8.8p
(2023: 8.0p) per share
10.8
9.9
Interim dividend for the current financial year of 4.4p
(2023: 4.4p) per share
5.4
5.4
Total dividends paid
16.2
15.3
As a result of the acquisition of the Group by GXO Logistics, Inc., the Directors do not propose the payment of a final dividend in
respect of the financial year ended 31 March 2024.
Political and charitable donations
No political donations were made during the year (2023: £nil). During the year ended 31 March 2024, the Company contributed
£43,075 (2023: £35,785) to charitable and community programmes.
Going concern
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Further information is disclosed in Note 1 to the Group financial statements.
Share capital and reserves
Details of the issued share capital of the Company are shown in Note 23 to the financial statements. Movements in the share capital
and reserves are shown in the consolidated statement of changes in equity on page 50.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
33
Directors’ Report (Continued)
Employee information
The average number of employees of the Group is disclosed in Note 6 of the Group financial statements.
Employment policies are designed to provide equal opportunities irrespective of race, caste, national origin, religion, age, disability,
gender, marital status, sexual orientation or political affiliation.
The Company’s policy is to ensure that disabled applicants for employment are given equal access to training, career development
and promotional opportunities. In the event of existing employees becoming disabled, all reasonable means would be explored to
achieve retention in employment in the same or an alternative capacity, including arranging appropriate training.
Employee engagement
Under the leadership of John Pattullo, Non-executive Director, a process was 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.
A number of key themes and focus areas were identified as part of this year’s programme of site meetings, including health and
safety, Group communications and progression opportunities. There was a consistent and strong focus on health and safety across
the business, including in areas of wellbeing activity. In terms of Group communications, information about corporate initiatives was
not as consistent as hoped across frontline managers, which has led to the development of a managers’ memo to be issued each
month with key corporate updates for team briefings. Following the discussions on progression opportunities, which are in line with a
focus the Company had already placed on this area, the talent and development team has reviewed the recruitment process and a
line manager training and development framework has been put in place.
Wincanton has a number of initiatives in place to allow the views of our staff to be heard and acted upon 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 Executive Management Team (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;
•
the Chief Executive Officer (CEO), Chief Operating Officer (COO) and Chief People Officer (CPO) plan to attend four sites
per year for direct engagement with colleagues and all members of the Senior Management Group (SMG) visit sites to build
stronger relationships with the operations; and
•
regular ‘Your Pulse’ engagement surveys and a network of local engagement champions.
Year
FY23/24
FY22/23
FY21/22
Employee engagement (scored 1 – 10)
7.0
6.9
6.9
Streamlined Energy and Carbon Reporting
The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 require quoted
and large unquoted companies to disclose their annual energy use and greenhouse gas emissions, and related information. This
information can be found within the Strategic Report.
Stakeholder engagement
Directors consider all our stakeholders as key to achieving success. These include our suppliers, customers, employees and also the
local communities that we operate within. We consider both current and prospective stakeholders in our engagements.
For further information on how the Board engages with our stakeholders, see our section 172(1) statement within the Strategic Report.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
34
Directors’ Report (Continued)
Disclosure of information to the auditor
The Directors who held office at the date of approval of this Annual 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.
Auditor
BDO LLP has indicated its willingness to continue in office as auditor of the Company.
Post balance sheet events
On 29 April 2024, Wincanton plc, including its subsidiaries was acquired by GXO Logistics, Inc. As a result of the transaction, the
Group was de-listed from the premium listing segment of the Official List and the cancellation of the admission to trading of Wincanton
Shares on the London Stock Exchange’s main market for listed securities was also effected.
As part of the above transaction Wincanton plc issued 1,437,048 shares on 26 April 2024. This increased the total number of shares
to 125,980,718. The additional shares were used to settle the outstanding LTIP schemes, see Note 26 ‘Equity compensation benefits’.
See Note 30 to the Group financial statements for further details.
Matters of strategic importance
Certain information is not shown within the Directors’ Report as it is instead included within the Strategic Report in accordance with
section 414C(11) of the Companies Act 2006. It has been done in respect of financial risk management.
On behalf of the Board
Lyn Colloff
Company Secretary
19 June 2024
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
35
Statement of Directors’ responsibilities in respect of the Strategic Report, the
Directors’ Report and the Financial Statements
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to
prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting
Practice), 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 Company and of the profit or loss of the Company for that year. In preparing these financial statements,
the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
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
the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
The Directors approved the responsibility statement on 19 June 2024.
Tom Hinton
Chief Financial Officer
19 June 2024
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
36
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 2024 and of the Group’s loss 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 2024 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 material
accounting information. 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 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) (ISA (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 Directors.
Independence
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 4 years,
covering the years ended 31 March 2021 to 31 March 2024. 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;
-
A review of the Directors’ reverse stress test assessment including the likelihood of such a scenario materialising;
-
A review of the Directors’ assessment of the impact of the acquisition of the company by GXO Logistics, Inc. (“GXO”) which
was completed following the year end, on the trading and cashflows of the Group and Parent Company within the forecast
going concern period including, their assessment of the intentions of GXO and the impact on any change of control clauses
included in the Group’s financing, customer and supplier arrangements; and
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
37
Independent auditor’s report to the members of Wincanton plc (Continued)
Conclusions relating to going concern (Continued)
-
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.
Overview
Coverage
97% (2023: 94%) of Group profit before tax
97% (2023: 97%) of Group revenue
98% (2023: 90%) of Group total assets
Key audit matters
2024
2023
Revenue recognition - accrued income and new and modified
contract terms
Valuation of certain defined benefit pension scheme assets
Measurement of the gross defined benefit pension scheme
obligation
Materiality
Group financial statements as a whole
£2.6m based on 4.5% of underlying profit before tax (2023: £2.8m based on 4.5%
of underlying profit before tax).
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 in addition to
the Parent Company. 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 a BDO member firm in Guernsey, all full scope audits, specified procedures and desktop review procedures
were completed by the group audit team.
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Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
38
Independent auditor’s report to the members of Wincanton plc (Continued)
An overview of the scope of our audit (Continued)
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 instruction, along with key communications on materiality levels and risks associated to the specific
audit procedures; and
-
Review of the final reporting received.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements
included:
-
Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately disclose climate-related risks within the annual report;
-
Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change
affects this particular sector; and
-
Review of the minutes of Board and Audit Committee meetings and other papers related to climate change and performed
a risk assessment as to how the impact of the Group’s commitment as set out in the Strategic Report may affect the financial
statements and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in Directors’ going concern assessment, impairment assessment and the
recognition of deferred tax assets. .
We also assessed the consistency of management’s disclosures included as Other Information with the financial statements and
with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by climate-
related risks.
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
39
Independent auditor’s report to the members of Wincanton plc (Continued)
An overview of the scope of our audit (Continued)
Key audit matters (Continued)
Key audit matter
How the scope of our audit addressed the key audit matter
Revenue
Recognition
–
Accrued Income
and
new
and
modified
contract terms
Group Revenue
is
£1,406.6m
(2023:
£1,462.0m)
Contract
receivables,
contract
assets
and
contract
fulfilment assets
are disclosed in
Note 16 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 to revenue which are
necessary to record revenue 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, accounting for new
contracts entered into during the
year may require judgements to be
made
regarding
promises
in
contracts
that
are
treated
as
performance obligations. As such
we consider that accounting for new
contracts gives rise to a significant
risk of error in revenue recognition.
Given the significance of the above
areas to the income statement,
revenue recognition was considered
to be an area of focus for our audit
and a key audit matter.
Our procedures included.
Testing a sample of accrued income balances on open book
and closed book contracts and agreeing the amounts
recorded to post year end invoice and, where settled at time
of audit, to cash receipts, 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
based on our risk criteria 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 – Revenue
Recognition, 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 and
recorded in accordance with IFRS 15.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
40
Independent auditor’s report to the members of Wincanton plc (Continued)
An overview of the scope of our audit (Continued)
Key audit matters (Continued)
Key audit matter
How the scope of our audit addressed the key audit matter
Valuation
of
certain defined
benefit pension
scheme assets
As disclosed
in note 25, the
Group has
£845.8m (2023:
£891.1m) of plan
assets which are
included in the
measurement of
the net defined
benefit
asset
recorded on the
Group
balance
sheet
The quantum of the Group’s plan
assets recorded in the net defined
benefit
pension
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
£483.7m (2023: £517.6m) of liability
driven investments and £85.3m
(2023: £99.6m) of private debt
assets, the latter being determined
with reference to the latest net asset
valuations which occur at a date
prior to the financial year end.
Given
the
subjectivity
in
the
valuation of the liability driven
assets and the private debt assets,
these were considered to be an
area of focus for our audit and a 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 internal valuation experts to assist us in sourcing
relevant market data to assess whether 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 Management’s
assessment of 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 financial year
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
41
Independent auditor’s report to the members of Wincanton plc (Continued)
An overview of the scope of our audit (Continued)
Key audit matters (Continued)
Key audit matter
How the scope of our audit addressed the key audit matter
Measurement of
the
gross
defined benefit
pension
scheme
obligation
As disclosed
in note 25, the
Group
has
recorded a gross
defined
benefit
obligation
of
£767.1m (2023:
£776.4m) in the
measurement of
the net defined
benefit
pension
asset
recorded
on
the
Group
balance sheet.
Note 25
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 pension 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 have taken independent
actuarial advice in respect of the
appropriateness
of
these
assumptions.
As such, this was considered to be
an area of focus for our audit and a
key audit matter.
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 whether 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
42
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
2024
2023
2024
2023
Materiality
£2.6m
£2.8m
£2.05m
£1.45m
Basis for
determining
materiality
4.5% of
underlying profit
before tax
4.5% of
underlying profit
before tax
1% of total assets
1% of total assets
Rationale for the
benchmark applied
Underlying
profit before tax
was 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
Underlying
profit before tax
was 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.
Total assets was
considered to be
the most
appropriate
measure as the
Parent Company is
a holding company
that does not trade
Total assets was
considered to be
the most
appropriate
measure as the
Parent Company
is a holding
company that
does not trade
Performance
materiality
£1.82m
£1.96m
£1.43m
£1.02m
Basis
for
determining
performance
materiality
70% of overall
materiality
70% of overall
materiality
70% of overall
materiality
70% of overall
materiality
Rationale for the
percentage applied
for
performance
materiality
70 % of overall
materiality was
considered to
be appropriate
taking into
consideration
factors
including the
aggregation risk
within our
testing.
70 % of overall
materiality was
considered to
be appropriate
taking into
consideration
factors including
the aggregation
risk within our
testing.
70 % of overall
materiality was
considered to be
appropriate taking
into consideration
factors including the
aggregation risk
within our testing.
70 % of overall
materiality was
considered to be
appropriate taking
into consideration
factors including
the aggregation
risk within our
testing.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
43
Independent auditor’s report to the members of Wincanton plc (Continued)
Our application of materiality (Continued)
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, apart from the Parent
Company whose materiality is set out above, based on a percentage of between 60% and 90% (2023: 60% 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 £1.45m to £2.15m (2023: £1.68m to £2.52m). In the audit of each component, we further applied performance materiality
levels of 70% (2023: 70%) 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 Board that we would report to them all individual audit differences in excess of £90,000 (2023: £100,000). We
also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual Report
and Financial Statements 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.
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
44
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:
Non-compliance with laws and regulations
Based on:
Our understanding of the Group and the industry in which it operates;
Discussion with management and those charged with governance, the Group’s legal counsel and the Audit Committee;
and
Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations,
We considered the significant laws and regulations to be the applicable accounting framework, the Companies Act 2006, applicable
UK law and the principles of the UK Corporate Governance Code.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the
amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws
and regulations to be the Road Transport regulations, Employment Law, pensions and UK tax legislation.
Our procedures in respect of the above included:
Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and
regulations;
Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and
regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Involvement of tax specialists in the audit; and
Review of legal expenditure accounts to understand the nature of expenditure incurred;
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
45
Independent auditor’s report to the members of Wincanton plc (Continued)
Auditor’s responsibilities for the audit of the financial statements
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the Group’s policies and procedures relating to:
o
Detecting and responding to the risks of fraud; and
o
Internal controls established to mitigate risks related to fraud.
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted
by these; and
Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition and management
override of controls.
Our procedures in respect of the above included:
Identifying and testing journal entries, in particular any manual journal entries posted to revenue or expense accounts,
those with unusual account combinations and journals posted by unexpected users by agreeing to supporting
documentation;
Review of minutes of Board meetings throughout the year and post year end to identify any known or suspected instances
of fraud;
Review of internal audit reports for reference of any internal control failures;
Challenging assumptions and judgements made by management in their significant accounting estimates and judgements,
in particular, the assessment of performance obligations in customer contracts, the valuation of defined benefit pension
assets, the measurement of the gross defined benefit pension obligation (as set out in the key audit matters section of the
report), impairment assessments, the measurement of other provisions and going concern; and
The procedures in the key audit matters section above in relation to revenue recognition.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, who
were all deemed to have appropriate competence and capabilities and remained 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
46
Independent auditor’s report to the members of Wincanton plc (Continued)
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.
Sophia Michael (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
19 June 2024
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
47
Consolidated income statement
For the year ended 31 March 2024
2024
2023
Note
Underlying
£m
Non-
underlying
£m
Total
£m
Underlying
£m
Non-
underlying
£m
Total
£m
Revenue
2
1,406.6
-
1,406.6
1,462.0
–
1,462.0
Net operating costs
3, 4
(1,342.0)
(103.4)
(1,445.4)
(1,391.2)
(23.9) (1,415.1)
Operating profit/(loss)
4
64.6
(103.4)
(38.8)
70.8
(23.9)
46.9
Financing income
7
6.6
-
6.6
3.6
–
3.6
Financing cost
7
(12.7)
-
(12.7)
(12.3)
–
(12.3)
Profit/(loss) before tax
58.5
(103.4)
(44.9)
62.1
(23.9)
38.2
Income tax credit/(expense)
8
(14.1)
19.4
5.3
(9.7)
4.7
(5.0)
Profit/(loss) attributable to equity shareholders
of Wincanton plc
44.4
(84.0)
(39.6)
52.4
(19.2)
33.2
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
48
Consolidated statement of comprehensive income
For the year ended 31 March 2024
Note
2024
£m
2023
£m
Profit/(loss) for the year
(39.6)
33.2
Other comprehensive income/(loss)
Items which will not subsequently be reclassified to the income statement
Remeasurements of net defined benefit asset
25
(52.1)
(22.4)
Income tax relating to items that will not subsequently be reclassified to profit or loss
8
13.0
4.2
(39.1)
(18.2)
Items which are or may subsequently be reclassified to the income statement
Net foreign exchange gain/(loss) on investment in foreign subsidiaries
(0.4)
0.2
(0.4)
0.2
Total other comprehensive loss for the year, net of income tax
(39.5)
(18.0)
Total comprehensive income/(loss) attributable to equity shareholders of Wincanton plc
(79.1)
15.2
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
49
Consolidated balance sheet
At 31 March 2024
Note
2024
£m
2023
£m
Non-current assets
Goodwill and intangible assets
10
127.5
105.4
Property, plant, equipment and vehicles
11
25.5
28.8
Right-of-use assets
13
148.8
176.2
Deferred tax assets
14
4.7
–
Trade and other receivables
16
11.2
–
Employee benefits
25
80.6
116.6
Total non-current assets
398.3
427.0
Current assets
Inventories
15
2.0
1.8
Trade and other receivables
16
214.4
170.6
Income tax receivable
–
4.6
Cash and cash equivalents
17
28.7
13.2
Total current assets
245.1
190.2
Total assets
643.4
617.2
Current liabilities
Income tax payable
(1.1)
–
Lease liabilities
19
(41.4)
(37.5)
Trade and other payables
20
(387.4)
(289.6)
Provisions
21
(24.1)
(11.3)
Total current liabilities
(454.0)
(338.4)
Net current liabilities
(208.9)
(148.2)
Total assets less current liabilities
189.4
278.8
Non-current liabilities
Borrowings and other financial liabilities
18
(8.0)
–
Lease liabilities
19
(166.5)
(168.9)
Employee benefits
25
(1.9)
(1.9)
Provisions
21
(47.0)
(32.0)
Deferred tax liabilities
14
–
(16.9)
Total non-current liabilities
(223.4)
(219.7)
Net (liabilities)/assets
(34.0)
59.1
Equity
Issued share capital
23
12.5
12.5
Share premium
12.9
12.9
Merger reserve
3.5
3.5
Translation reserve
(0.7)
(0.3)
Own shares
(5.4)
(5.6)
Retained profit/(loss)
(56.8)
36.1
Total (deficit)/equity
(34.0)
59.1
These financial statements were approved by the Board of Directors on 19 June 2024 and were signed on their behalf by:
Tom Hinton
Chief Financial Officer
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
50
Consolidated statement of changes in equity
For the year ended 31 March 2024
Note
Issued
share
capital
£m
Share
premium
£m
Merger
reserve
£m
Translation
reserve
£m
Own
shares
£m
Retained
(losses)/
earnings
£m
Total
equity/
(deficit)
£m
Balance at 1 April 2022
12.5
12.9
3.5
(0.5)
(2.2)
37.4
63.6
Profit for the year
–
–
–
–
–
33.2
33.2
Other comprehensive income/(loss)
–
–
–
0.2
–
(18.2)
(18.0)
Total comprehensive income
–
–
–
0.2
–
15.0
15.2
Share based payment transactions
26
–
–
–
–
(3.4)
(0.7)
(4.1)
Tax on share based payment
transactions
8
–
–
–
–
–
(0.3)
(0.3)
Dividends paid to shareholders
9
–
–
–
–
–
(15.3)
(15.3)
Balance at 31 March 2023
12.5
12.9
3.5
(0.3)
(5.6)
36.1
59.1
Balance at 1 April 2023
12.5
12.9
3.5
(0.3)
(5.6)
36.1
59.1
Loss for the year
–
–
–
–
–
(39.6)
(39.6)
Other comprehensive loss
–
–
–
(0.4)
–
(39.1)
(39.5)
Total comprehensive loss
–
–
–
(0.4)
–
(78.7)
(79.1)
Share based payment transactions
26
–
–
–
–
0.2
0.6
0.8
Tax on share based payment
transactions
8
–
–
–
–
–
1.4
1.4
Dividends paid to shareholders
9
–
–
–
–
–
(16.2)
(16.2)
Balance at 31 March 2024
12.5
12.9
3.5
(0.7)
(5.4)
(56.8)
(34.0)
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
51
Consolidated statement of cash flows
For the year ended 31 March 2024
Note
2024
£m
2023
(Restated)1
£m
Cash flows from operating activities
Profit/(loss) before tax
(44.9)
38.2
Adjustments for:
– depreciation and amortisation
46.9
52.2
– research and development expenditure credit
(0.1)
(0.2)
– net financing costs
7
6.1
8.7
– impairments
12
43.9
19.1
– (profit)/loss on disposal of property, plant and equipment
(3.2)
1.9
– (profit)/loss on derecognition of lease liabilities
(0.5)
2.4
– Gain on disposal of businesses
3
–
(0.4)
– share based payment transactions
0.8
(0.4)
49.0
121.5
(Increase)/decrease in trade and other receivables
(44.1)
37.2
(Increase)/decrease in inventories
(0.1)
0.8
Increase/(decrease) in trade and other payables
76.6
(33.5)
Increase/(decrease) in provisions
29.4
(0.6)
Increase in employee benefits before pension deficit payment
1.1
0.9
Income taxes received/(paid)
3.5
(8.8)
Net cash flows from operating activities before pension deficit payment
115.4
117.5
Pension deficit payment
(11.3)
(20.1)
Net cash flows from operating activities
104.1
97.4
Cash flows from Investing activities
Proceeds from sale of property, plant and equipment
4.3
2.0
Purchase of business net of cash acquired
24
(11.6)
–
Additions of property, plant, equipment and vehicles
11
(12.8)
(14.7)
Additions of computer software
10
(7.9)
(1.8)
Net Cash flows used in investing activities
(28.0)
(14.5)
Cash flows from Financing activities
Increase/(decrease) in borrowings
8.0
(25.0)
Own shares acquired
–
(3.7)
Capital repayments of lease liabilities
(39.0)
(42.5)
Equity dividends paid
9
(16.2)
(15.3)
Interest paid on lease liabilities
7
(8.5)
(6.2)
Interest paid on borrowings
(4.9)
(5.7)
Net Cash flows used in financing activities
(60.6)
(98.4)
Net increase/(decrease) in cash and cash equivalents
15.5
(15.5)
Cash and cash equivalents at beginning of the year
13.2
28.7
Cash and cash equivalents at end of the year
28.7
13.2
Represented by:
– Cash and cash equivalents
17
26.4
10.4
– restricted cash, being deposits held by the Group's captive insurer
17
2.3
2.8
28.7
13.2
1 The comparatives of ‘Capital repayments of lease liabilities’ and ‘Interest paid on lease liabilities’ have been restated due to a prior year
adjustment as explained in Note 1 ‘Accounting policies’
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
52
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 is Methuen Park, Chippenham, SN14 0WT and its registered number is 04178808. 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.
Standards, amendments and interpretations effective or adopted in the year
New and amendments to accounting standards issued by the IASB and adopted in the year ended 31 March 2024 did not have a
material impact on the results or financial position of the Group.
Standards and amendments that are issued but not yet applied by the Group
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not
mandatory for 31 March 2024 reporting periods and have not been early adopted by the Group. These standards, amendments and
interpretations are not expected to have a material impact on the results or financial position of the Group in future reporting periods.
Prior year restatements
Cash flow statement disclosure prior period adjustment
The lease repayments in the consolidated statement of cash flow for the year ended 31 March 2023 has been restated to separately
disclose the capital repayment of lease obligations and Interest paid on lease liabilities in the financing activities to be in accordance
with IFRS 16. This results in the previously disclosed £48.7m as capital repayment being bifurcated into capital repayment of lease
obligations of £42.5m and interest paid on lease liabilities of £6.2m. There is no other impact from this restatement on any other
primary statements.
Prior period adjustment of note 3 Alternative performance measures (APMs)
Within the notes to the financial statements the income statement is subdivided into cost of sales, administrative expenses and other
income. An error was identified in the table presented for the year ended 31 March 2023 as such the table has been restated in these
financial statements. The administrative expense has reduced by £14.2m to £38.6m whilst the cost of sales balance has increased
by £13.5m to £1,382.4m and other income has reduced by £0.7m to £5.9m. There is no impact on the Income Statement for the year
ended 31 March 2023 and no impact on reported equity as at 1 April 2022.
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 million. They are prepared on the historical cost basis except where assets or liabilities are required to be stated at their
fair value, as stated in the accounting policies.
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 the financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those 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 discussed with the Audit Committee the development, selection, application and disclosure of the Group’s critical
accounting estimates and judgements.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
53
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
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 Note 3 ‘Alternative
performance measures’;
•
in performing assets with finite live impairment assessments, the determination of cash generating units and the assumptions
used to determine the recoverable amount as detailed in Note 12 ‘Impairment’; and
•
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 25 ‘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 21 ‘Provisions’.
The judgements which have had a significant effect on the amounts recognised in the financial statements in relation to the insurance
provision are 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 provisions to assist in determining the reserving position.
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.
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 £18.8m (2023: £19.0m) compared to an actuarial range of £11.2m to
£22.0m (2023: £14.7m to £18.0m), with the scope of the actuarial review being increased to include more recent, immature years.
Management has taken into consideration the actuarial review, the development of larger claims since the actuarial review, and
historical development patterns of the claims in determining the level of provision held.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
54
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
Key sources of estimation uncertainty (Continued)
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 12 ‘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.
Onerous provisions
An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the
economic benefits expected to be received under it. The present obligation under an onerous contract is recognised and measured
as a provision, see Note 21 ‘Provisions’. Unavoidable costs under a contract are defined as being the least net cost of exiting the
contract, this is the lower of the cost to exit or fulfil the contract. This assessment is performed after an impairment review has been
performed.
The calculation of both the direct costs to fulfil the contract and the expected recoverable amount requires the Directors to estimate
the future costs and revenue expected to directly arise from the contract. Where a resultant loss is identified it is recorded as an
onerous contract provision.
Other sources of estimation uncertainty
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, goodwill impairment testing and reviews of
property, plant and equipment. However, in our view, climate change does not represent a key estimation uncertainty. For further
details of the Group’s assessment of climate change risks refer to the Risk report and to the strategic report.
Going concern
The consolidated financial statements have been prepared on a going concern basis. In determining the appropriate basis of the
Financial Statements, the Directors are required to consider whether the Group can continue in operational existence for the
foreseeable future, being at least 12 months from the date of approval of the Financial Statements.
Note 27 ‘Financial instruments’ to the Group Financial Statements includes the Group’s objectives, policies and processes for
managing its capital, its financial risk management objectives and its exposure to foreign exchange, credit and interest rate risk.
Further details of the Group’s net debt at 31 March 2024 are included in Note 27 ‘Financial instruments’.
The Group Statement of Financial Position shows total current assets of £245.1m and net current liabilities of £208.9m. At the year
end, the Group had a committed Revolving Credit Facility (“RCF”) of £175m (of which £8m was drawn) and an overdraft facility of
£5.0m (none of which was drawn).
As disclosed in note 30, the company was acquired by GXO on 29 April 2024. The UK Competition and Markets Authority (“CMA”) is
to complete the review of the acquisition and until clearance is obtained both GXO and Wincanton continue to be run independently.
In considering the going concern of the group, the Directors have considered the ability of the group to meet its obligations as they
fall due as a standalone business and, separately, ability of the group to meet its obligation as they fall due as part of GXO. In
connection with the GXO acquisition, a waiver for the change of control restrictions in the RCF agreement has been agreed with the
Group’s lenders.
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; and
•
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.
The Group operates comfortably within these covenants with significant headroom and indicates adequate liquidity post downside
scenarios modelled by the Directors. The below table summarises the covenant headroom, see note 27 for further details.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
55
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
Going concern (Continued)
Covenant
Calculation
Ratio
2024
2023
Leverage ratio
Consolidated net borrowings (A)/consolidated EBITDA (B)
<3.0:1
0.4
0.5
Interest cover
Consolidated EBITDA (B)/consolidated net finance charges (C)
>3.5:1
15.7
17.1
Fixed charge cover
Consolidated EBITDA (B) plus operating lease costs (D)/consolidated net
finance charges (C) plus operating lease costs (D)
>1.4:1
4.1
2.6
The Group’s borrowing facilities are due to expire in March 2027. The Group’s forecast and projections show the Group should be
able to operate without the need for any increase in borrowing facilities. The Directors have assessed the future funding requirements
of the Group and the Company and compared them to the bank facilities which are available. The assessment includes a detailed
review of financial and cash flow forecasts for at least 12 months from the date of approval of the Financial Statements. The Directors
considered a range of potential downside scenarios within the key markets the Group serves and how these might impact on the
Group’s cash flow. The Directors also considered what mitigating actions the Group could take to limit any adverse consequences.
The Directors’ assessment of the acquisition by GXO on the Group’s financing and commercial arrangements, includes the impact of
the change of control on customer and supplier contracts, the stated intentions of GXO set out in the shareholder scheme circular
dated 14 March 2024, and statements made by GXO management since the acquisition, including GXO first quarter’s earning call.
Based on their assessment, the Directors have not identified any material uncertainties relating to events or conditions that may cast
significant doubt on the group’s ability to continue as a going concern or its ability to realise its assets or discharge its liabilities in the
normal cause of business.
Wincanton conducted a comprehensive review of its customer contracts to identify change of control rights and determine if positive
actions, such as seeking consent, were necessary. In cases where action was required, Wincanton contacted the relevant customers
in line with contractual obligations. For suppliers, Wincanton generally does not include change of control clauses in its contracts. A
review of the top 30 suppliers, representing 37% of their supply base, confirmed the continued supply of essential services like agency
labour and fuel. Additionally, Wincanton reviewed longer-term commitments, such as leases and HP agreements for fleet, securing
consents from most lenders to ensure ongoing financing arrangements.
Furthermore, the Directors acknowledge that there is a possible scenario in which the outcome of the CMA review does not permit
GXO to continue to own the group and that GXO are instructed to dispose of all or part of the business in a timeline that the CMA will
dictate.
The Directors have considered the unlikely scenario that all or part of the Group is required to be sold in the going concern period
because of the CMA’s ruling. The Directors’ view is that whilst the identity and intention of any new owner in this scenario is unknown,
given the limited impact on the business arising from the change of control following the GXO acquisition, no material uncertainties
arise that require disclosure in these financial statements.
Having undertaken the above reviews, the Directors are of the opinion that the Company and the Group have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing
the Financial Statements.
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 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 Group financial statements
from or up to the date that control passed.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated Group financial statements.
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 as incurred in the period.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
56
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
Intangible assets (Continued)
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
6 to 10 years
Trademarks
5 years
Acquired software
3 to 5 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.
Licence agreements to use cloud software are treated as service contracts and expensed in the Group income statement, unless the
Group has both a contractual right to take possession of the software at any time without significant penalty, and the ability to run the
software independently of the host vendor. In such cases the licence agreement is capitalised as software within intangible assets.
Costs to configure or customise a cloud software are expensed alongside the related service contract, unless they create a separately
identifiable resource controlled by the Group, in which case they are capitalised.
Amortisation is charged to the income statement on a straight-line basis over the following estimated useful lives:
Computer software costs
3 to 5 years
Major software projects may be amortised over lives of up to ten years.
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 an item of property, plant,
equipment and vehicles. The estimated useful lives are as follows:
Freehold buildings
50 years
Leasehold improvements
remaining life of lease
Plant and equipment, furniture and fittings
5 to 25 years
Office machinery and computers
3 to 5 years
Motor vehicles
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, equipment and
vehicles. 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
57
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
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.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, restricted cash and call deposits. 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.
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.
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
58
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
Employee benefits (Continued)
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.
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, taking into account historical settlement amounts and other
third party evidence. The Group also applies 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, sundry claims and settlements. A restructuring provision is recognised only when a
constructive obligation exists, with the amount recognised based on the estimated liability.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
59
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
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.
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 cash generating unit (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.
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
60
Notes to the consolidated financial statements (Continued)
1. Accounting policies (Continued)
Revenue recognition (Continued)
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. 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
61
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.
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 ‘Alternative performance measures (APMs)’.
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:
2024
£m
2023
£m
eFulfilment
278.1
254.1
Grocery and Consumer
499.8
512.5
General Merchandise
381.8
410.2
Public and Industrial
246.9
285.2
1,406.6
1,462.0
Revenue from open book contracts totalled £1,107.8m (2023: £1,073.9m) and from closed book contracts £298.8m (2023:
£388.1m).
Revenue of £282.8m (2023: £305.6m) and £261.8m (2023: £164.3m) 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 £1,380.5m (2023: £1,445.4m) in respect of customers based in the UK.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
62
Notes to the consolidated financial statements (Continued)
2. Contract revenue and costs (Continued)
Contract costs
The following table shows the carrying amount of the assets recognised from costs incurred to obtain contracts or fulfil contracts:
2024
£m
2023
£m
Costs to obtain contracts
0.9
0.7
Costs to fulfil contracts
8.7
2.6
9.6
3.3
Costs to obtain contracts relate to sales bonuses paid as a result of obtaining contracts. 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 the contracts obtained. In the year ended 31 March 2024, the amortisation charged of costs to
obtain contracts was £0.4m (2023: £0.4m). The amortisation charged of costs to fulfil contracts was £2.3m (2023: £1.1m). An
impairment loss of £1.3m (2023: £0.1m loss) was recorded in the year in relation to the costs capitalised, see Note 12 ‘Impairment’.
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 considers 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. These relate to an acquisition event and are 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; and
•
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, equipment and vehicles and right-of-
use assets and amortisation of finite-life intangible assets. This measure also excludes the impact of impairment of non-current
assets. See Note 27 ‘Financial instruments’ for a reconciliation of underlying operating profit to underlying EBITDA.
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 27). Free cash flow is defined as the
movement in net debt before pension payments, dividends and the acquisition of own shares.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
63
Notes to the consolidated financial statements (Continued)
3. Alternative performance measures (APMs) (Continued)
Details of additions to non-current assets, which are all held in the UK, are included in Notes 10, 11 and 13.
A reconciliation between statutory IFRS operating profit/(loss) and underlying operating profit is given below.
2024
2023
Underlying
£m
Non-
underlying
£m
Total
£m
Underlying
(Restated)1
£m
Non-
underlying
£m
Total
(Restated)1
£m
Revenue
1,406.6
–
1,406.6
1,462.0
–
1,462.0
Cost of sales
(1,332.9)
– (1,332.9)
(1,382.4)
– (1,382.4)
Gross profit
73.7
–
73.7
79.6
–
79.6
Other income and gains on disposal of assets
3.2
–
3.2
5.5
0.4
5.9
Administrative expenses
(12.3)
(103.4)
(115.7)
(14.3)
(24.3)
(38.6)
Operating profit/(loss)
64.6
(103.4)
(38.8)
70.8
(23.9)
46.9
1 Certain comparatives have been restated due to a prior year adjustment as explained in Note 1 ‘Accounting policies’
Non-underlying items
Note
2024
£m
2023
£m
Costs relating to sale of Wincanton plc
a
(19.3)
–
Restructure and impairment of transport related assets
b
(4.6)
(19.5)
Impairment charges
c
(41.8)
–
Onerous contract provision
d
(25.3)
–
Cloud computing configuration and customisation costs
e
(2.2)
(3.2)
Acquisition related costs
f
(6.5)
(0.5)
Settlement of litigation
g
(1.8)
–
Amortisation of acquired intangibles
h
(1.9)
(1.1)
Gain on disposal of business
i
–
0.4
(103.4)
(23.9)
a) Costs relating to sale of Wincanton plc
During FY24 the Board received two offers to acquire Wincanton plc, firstly from Ceva Logistics and secondly from GXO Logistics
Inc. Significant incremental costs were incurred in FY24 to respond to the offers including completion of the requisite due diligence
processes. Costs incurred include corporate broker advisory fees, legal fees and other advisory fees.
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. Further costs are to be incurred in FY25 as the sale process to GXO Logistics Inc completed on 29 April 2024. Further
costs are expected to be recognised in FY25 as the transaction continues.
b) Restructure and impairment of transport related assets
In the prior year, the Group commenced a strategic restructure of its transport operations recognising an impairment and a
restructuring charge of £19.5m to the income statement. Further costs of £4.6m have been incurred in the year due to the ongoing
exit of closed book transport contracts. Costs relate to a further impairment loss of £2.1m recognised against PPE and right-of-use
assets and £1.8m of onerous contracts for committed fleet orders which are surplus to requirements. The net charge also includes
£0.7m (2023: £0.4m) of redundancy related costs as the Group continues to exit closed book contracts.
c) Impairment charges
Impairment charges of £41.8m relate to the Cygnia CGU and two-person home delivery network CGU. The charge comprises
£7.2m relating to tangible fixed assets, £1.3m contract assets, £2.6m intangible assets and £30.8m right-of-use assets, see note 12
for further details.
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.
d) Onerous contract provisions
Onerous contract provisions relate to provisions recognised for customer contracts and supplier contracts where the future
economic benefit expected to be obtained is less than the costs incurred to fulfil the contracts, principally related to the two-person
home delivery network. For further details of the determination of the two-person home delivery network provision, see Note 21
‘Provisions’.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
64
Notes to the consolidated financial statements (Continued)
3. Alternative performance measures (APMs) (Continued)
d) Onerous contract provisions (Continued)
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 of the Group in the year.
e) Cloud computing configuration and customisation costs
Following the IFRS Interpretation Committee agenda decision published in April 2021, the Group has been undertaking a major
systems implementation for new cloud computing software, resulting in costs of £2.2m (2023: £3.2m) being recognised as an
expense in FY24. The project is expected to conclude in FY25 with an immaterial cost to be recognised.
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.
f) Acquisition related costs
On 8th March 2024 the Group acquired Invar Group, a specialist in automated warehouse solutions. See note 24. £5.0m of the non-
underlying cost is the FY24 earn-out consideration payable to shareholders based on results up to 31 March 2024. The earn-out is
payable in H1 FY25 and has been recognised as an expense as required by IFRS3 Business combinations. As part of the
acquisition, the Group has incurred acquisition related costs including professional fees and integration costs.
Costs incurred in connection with acquisitions are presented as non-underlying as they are not reflective of underlying performance.
g) Settlement of litigation
During the year the Group received a claim relating to a customer contract that ceased in 2018, which was settled in October 2023.
Claims relating to historic contracts are irregular and are not reasonably expected to recur. Due to the nature of these costs they
have been presented as non-underlying.
h) Amortisation of acquired intangibles
As part of the acquisition of Cygnia in 2021 the Group has recorded finite-life intangible assets identified as part of the purchase
price allocation accounting in line with IFRS 3 Business combinations. The amortisation of these finite-life intangibles is presented in
non-underlying with a total expense in the period of £1.9m (2023: £1.1m). The inclusion of these costs in non-underlying is
consistent presentation with the prior period.
i) Gain on disposal of businesses
In the year ended 31 March 2023, £0.4m 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.
4. Operating profit/(loss)
Note
2024
£m
2023
£m
The following items have been charged/(credited) in arriving at operating profit/(loss):
Auditor’s remuneration:
Audit fees for statutory audit services:
– parent Company
0.3
0.2
– subsidiary undertakings
0.6
0.6
Non-audit fees:
– fees paid to the auditor and its associates for assurance services
0.1
0.1
Amortisation: acquired intangibles
10
1.9
1.1
Amortisation: software intangibles
10
1.1
1.6
Depreciation: property, plant, equipment and vehicles
11
7.2
8.4
Impairment charges: intangibles
10, 12
2.6
4.0
Impairment charges: right-of-use assets
12, 13
31.7
15.1
Impairment charges: property, plant, equipment and vehicles
11, 12
8.3
–
Depreciation: right-of-use assets
13
36.7
41.1
Short term leases:
– plant and equipment
19
23.6
23.4
– land and buildings
19
0.6
2.0
Profit on disposal of freehold property, less costs
(2.8)
–
Government grants and other support
5
(0.1)
(0.2)
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
65
Notes to the consolidated financial statements (Continued)
5. Government grants and other support
During the year, the Group has recognised a credit of £0.1m (2023: £0.2m), net of fees, in other income in respect of RDEC claims
for the years ended 31 March 2023. The Group has submitted a claim under the Research and Development Expenditure Credit
(RDEC) scheme for expenditure incurred in the year ended 31 March 2023 on qualifying research and development. The credit due
to the Group is equal to 13.0% of qualifying expenditure (2023: 13.0%) and is given as a taxable credit payable as cash or as an
offset against corporation tax liabilities.
6. Personnel expenses, including Directors
Note
2024
£m
2023
£m
Wages and salaries
667.2
640.2
Share based payments (including IFRS 2 fair value charges)
26
0.9
0.7
Social security contributions
68.0
70.5
Contributions to defined contribution pension arrangements
25
21.5
38.6
757.6
750.0
2024
2023
Average number of persons employed by the Group (including Directors) during the year
Warehouse
10,327
10,773
Transport
5,804
6,012
Administration
3,094
3,220
Total
19,225
20,005
Directors’ emoluments
2024
£’000
2023
£’000
Salaries
902.1
722.2
Bonus
723.4
251.5
Other benefits
19.1
21.6
Pension-related benefits
35.6
29.4
Non-executive Directors’ fees
505.1
483.3
Total emoluments
2,185.4
1,508.0
The aggregate of the amount of gains made by James Wroath and Tom Hinton on exercise of share options during the year was
£14,442. (2023: £nil). The element of the share based payment expense attributable to the two Directors was £0.3m (2023: £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 24 to 31.
7. Net financing costs
Note
2024
£m
2023
£m
Interest income
0.7
0.2
Interest on the net defined benefit pension asset
25
5.9
3.4
6.6
3.6
Interest expense
(5.8)
(5.5)
Interest on lease liabilities
(8.5)
(6.2)
Unwinding of discount
1.6
(0.6)
(12.7)
(12.3)
Net financing costs
(6.1)
(8.7)
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
66
Notes to the consolidated financial statements (Continued)
8. Income tax (income)/expense
Recognised in the income statement
2024
£m
2023
£m
Current tax expense
Current year
2.9
4.8
Adjustments for prior years
0.6
–
3.5
4.8
Deferred tax (income)/expense
Current year
(8.2)
0.4
Adjustments for prior years
(0.6)
(0.2)
(8.8)
0.2
Total income tax (income)/expense
(5.3)
5.0
2024
£m
2023
£m
Reconciliation of total income tax (income)/expense
Profit/(loss) before tax
(44.9)
38.2
Income tax (credit)/charge using the UK corporation tax rate of 25% (2023: 19%)
(11.2)
7.3
Non-deductible (income)/expenditure
(0.2)
0.1
Recognition of tax losses
–
(0.4)
Non-taxable expense included in non-underlying items
6.1
0.1
Tax incentives – super capital allowances
–
(1.9)
Adjustments for prior years:
– current tax
0.6
–
– deferred tax
(0.6)
(0.2)
Total tax (income)/expense for the year
(5.3)
5.0
Recognised in other comprehensive income
2024
£m
2023
£m
Items which will not subsequently be reclassified to the income statement:
Remeasurements of defined benefit pension liability
(11.4)
(2.0)
Impact of change in UK corporation tax rate
–
1.4
Current tax on contributions on defined benefit pension schemes
(1.6)
(3.6)
Total recognised in other comprehensive income
(13.0)
(4.2)
Recognised directly in equity
2024
£m
2023
£m
Current tax on share based payment transactions
–
(0.1)
Deferred tax on share based payment transactions
(1.4)
0.4
Total recognised directly in equity
(1.4)
0.3
In line with the Finance Bill 2021 the main UK corporation tax rate increased to 25% (2023: 19%) from the 1st April 2023.
The total tax (income)/expense above includes a tax credit on non-underlying items of £2.1m (2023: £4.7m).
Global Minimum Top-Up tax (Pillar Two)
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions the Group operates. The legislation will be
effective for the Group’s financial year beginning 1 April 2024. The Group is in scope of the enacted or substantively enacted
legislation and has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. The assessment of the
potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country reporting and financial
statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax rates in the jurisdictions
in which the Group operates are above 15%. Therefore the Group does not expect a material exposure to Pillar Two income taxes
in those jurisdictions.
The Group has implemented the temporary exception to the accounting requirements for deferred taxes in IAS 12, so that the
deferred tax assets and liabilities related to Pillar Two income taxes are neither recognise nor disclosed in the financial report.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
67
Notes to the consolidated financial statements (Continued)
9. Dividends
Dividends paid in the year comprise:
2024
£m
2023
£m
Final dividend for the year ended 31 March 2023 of 8.8p per share (2022: 8.0p)
10.8
9.9
Interim dividend for the year ended 31 March 2024 of 4.4p per share (2023: 4.4p)
5.4
5.4
Total dividends paid
16.2
15.3
As a result of the acquisition of the Group by GXO Logistics, Inc, the Directors do not propose the payment of a final dividend in
respect of the financial year ended 31 March 2024.
10. Goodwill and intangible assets
Note
Goodwill
£m
Acquired
intangibles
£m
Computer
software
costs
£m
Total
£m
Cost
At 1 April 2022
99.9
59.2
10.4
169.5
Effect of movements in foreign exchange
0.1
–
–
0.1
Additions
–
–
1.8
1.8
Disposals
–
–
(0.9)
(0.9)
At 31 March 2023
100.0
59.2
11.3
170.5
At 1 April 2023
100.0
59.2
11.3
170.5
Effect of movements in foreign exchange
(0.1)
–
–
(0.1)
Additions
–
–
7.9
7.9
Acquisitions
24
20.2
–
–
20.2
Disposals
–
–
(0.1)
(0.1)
At 31 March 2024
120.1
59.2
19.1
198.4
Amortisation and impairment losses
At 1 April 2022
(2.5)
(53.0)
(3.3)
(58.8)
Charge for year
(1.1)
(1.6)
(2.7)
Impairment
–
–
(4.0)
(4.0)
Disposals
–
–
0.4
0.4
At 31 March 2023
(2.5)
(54.1)
(8.5)
(65.1)
At 1 April 2023
(2.5)
(54.1)
(8.5)
(65.1)
Charge for year
–
(1.9)
(1.1)
(3.0)
Impairment
–
(2.4)
(0.2)
(2.6)
Disposals
–
–
(0.2)
(0.2)
At 31 March 2024
(2.5)
(58.4)
(10.0)
(70.9)
Carrying value
At 31 March 2022
97.4
6.2
7.1
110.7
At 31 March 2023
97.5
5.1
2.8
105.4
At 31 March 2024
117.6
0.8
9.1
127.5
Assets under construction of £0.7m (2023: £1.3m) are included within computer software costs.
The total amortisation charge of £3.0m (2023: £2.7m) is recognised in the income statement within net operating costs.
Details of the impairment testing carried out are included in Note 12 ‘Impairment’.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
68
Notes to the consolidated financial statements (Continued)
11. Property, plant, equipment and vehicles
Note
Property
£m
Plant,
equipment
and vehicles
£m
Total
£m
Cost
At 1 April 2022
20.2
103.5
123.7
Additions
0.8
13.9
14.7
Disposals
–
(12.6)
(12.6)
At 31 March 2023
21.0
104.8
125.8
At 1 April 2023
21.0
104.8
125.8
Additions
–
12.8
12.8
Acquisitions
24
–
0.2
0.2
Disposals
(0.9)
(7.0)
(7.9)
At 31 March 2024
20.1
110.8
130.9
Depreciation and impairment losses
At 1 April 2022
(14.8)
(83.0)
(97.8)
Charge for year
(1.6)
(6.8)
(8.4)
Disposals
–
9.2
9.2
At 31 March 2023
(16.4)
(80.6)
(97.0)
At 1 April 2023
(16.4)
(80.6)
(97.0)
Charge for year
(1.2)
(6.0)
(7.2)
Impairment
(0.1)
(8.2)
(8.3)
Disposals
0.7
6.4
7.1
At 31 March 2024
(17.0)
(88.4)
(105.4)
Carrying amount
At 31 March 2022
5.4
20.5
25.9
At 31 March 2023
4.6
24.2
28.8
At 31 March 2024
3.1
22.4
25.5
Within plant, equipment and vehicles £1.4m (2023: £5.0m) relates to assets under construction.
The carrying amount of property comprises:
2024
£m
2023
£m
Freehold
0.6
0.9
Leasehold improvements
2.5
3.7
3.1
4.6
Capital commitments for the Group at the end of the financial year for which no provision has been made are £5.2m (20231:
£10.3m).
1 The prior year comparative has been updated to include additional long term fleet purchase contracts with a value of £9.3m that were not
previously included.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
69
Notes to the consolidated financial statements (Continued)
12. 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.
The recoverable amount of the CGU, to which significant goodwill has been allocated, 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 in respect of the cash flow forecasts used in the impairment
assessments of non-current assets including goodwill. However, there has been no material impact identified on the impairment
judgements and estimates. 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:
2024
2023
%
%
Estimated long term growth rate
2
1.2
Discount rate
9.2
10.6
Management determined the growth rates based on expectations for market development and these are consistent with external
forecasts and historical trends. Management estimates discount rates using pre-tax rates that reflect the market assessment as at
the balance sheet date of the time value of money. The pre-tax discount rate is derived from the Group’s post-tax weighted average
cost of capital. Risk free rates are based on government bond rates and equity risk premia are based on forecasts by recognised
bodies.
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 £831.2m (2023: £568.0m). The Group has
conducted sensitivity analysis on the impairment testing. Management believes 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 or group of assets may be impaired. Impairment tests are performed by comparing the carrying amount of assets held in a
CGU with its recoverable amount. Management considers contracts with the same customer 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 9.2% (2023: 10.6%) unless otherwise stated below.
Estimates for value in use calculations include discount rates, long term growth rates and expected future cash flows. These are
based on past experience and expectations of future changes in the market. Cash flow projections are based on the Group’s
budget, the results of which are reviewed by the Board. The projections are extrapolated to five years based on management’s
expectations and, where relevant, beyond five years using estimated long term growth rates.
The results of the impairment review carried out at 31 March 2024 indicate the carrying amount of assets exceeded the recoverable
value for CGUs within our transport operations, 2 person home delivery network and Cygnia.
The impairment of assets within the transport operations relates to the impairment of assets that are surplus to requirements due to
the Group’s strategic exit of closed book transport contracts that commenced in FY23. The assets were impaired to their fair value
less costs to sell of £4.7m resulting in an impairment charge of £2.1m. Fair value was determined using recent third party sale
values. In the prior year an impairment of £19.1m was recognised in relation to the exit of closed book contracts.
The impairment of assets within the 2 person home delivery network was driven by the loss of a key customer contract resulting in a
full impairment of the assets within the CGU of £15.0m.
The impairment of assets within the Cygnia CGU is driven by ongoing and forecast macroeconomic challenges within the mid-
sector high volume eFulfilment market. Due to the uncertainty within the Cygnia forecasts, as they are reliant on the growth of UK
discretionary spend, an additional risk factor was added to the Group discount rate for the impairment review. A premium of 3% was
added to the Group’s rate with a resulting 12.2% discount rate used for the Cygnia impairment review. The recoverable amount was
determined to be £9.0m resulting in an impairment loss of £26.8m being recorded.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
70
Notes to the consolidated financial statements (Continued)
12. Impairment (Continued)
The split of the impairment charges between underlying and non-underlying and the allocation to assets is shown in the table below:
2024
2023
Underlying
£m
Non-
underlying
£m
Underlying
£m
Non-
underlying
£m
Plant and equipment
–
8.3
–
–
Right-of-use assets
–
31.7
–
15.1
Intangible assets
–
2.6
–
4.0
Contract assets
–
1.3
0.1
–
Total impairment charges
–
43.9
0.1
19.1
13. Right-of-use assets
Note
Property
£m
Non-
property
£m
Total
£m
At 1 April 2022
140.1
52.5
192.6
Additions
22.6
25.6
48.2
Depreciation
(20.4)
(20.7)
(41.1)
Impairment of assets
12
–
(15.1)
(15.1)
Disposals
–
(8.4)
(8.4)
Carrying amount at 31 March 2023
142.3
33.9
176.2
At 1 April 2023
142.3
33.9
176.2
Additions
10.0
34.9
44.9
Depreciation
(22.0)
(14.7)
(36.7)
Impairment
(26.9)
(4.8)
(31.7)
Disposals
(0.2)
(3.7)
(3.9)
Carrying amount at 31 March 2024
103.2
45.6
148.8
An analysis of the related lease liabilities is set out in Note 19 ‘Lease liabilities’ and Note 27 ‘Financial instruments’.
14. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
2024
£m
2023
£m
2024
£m
2023
£m
2024
£m
2023
£m
Property, plant and equipment
–
–
(4.8)
(4.4)
(4.8)
(4.4)
Intangible assets
–
–
(0.2)
(1.3)
(0.2)
(1.3)
Equity compensation benefits
2.3
0.8
–
–
2.3
0.8
Pension provisions
–
–
(19.7)
(28.6)
(19.7)
(28.6)
Tax losses carried forward
23.3
13.4
–
–
23.3
13.4
IFRS 16 transitional adjustment
3.0
3.0
–
–
3.0
3.0
Other assets
0.8
0.2
–
–
0.8
0.2
29.4
17.4
(24.7)
(34.3)
4.7
(16.9)
Movement in deferred tax assets and liabilities during the current year
At 1 April
2023
£m
Recognised
in income
£m
Acquisitions
recognised in
income
£m
Other
movements
£m
At 31 March
2024
£m
Property, plant and equipment
(4.4)
(0.3)
(0.1)
–
(4.8)
Intangible assets
(1.3)
1.1
–
–
(0.2)
Equity compensation benefits
0.8
0.1
–
1.4
2.3
Pension provisions
(28.6)
(2.5)
–
11.4
(19.7)
Tax losses carried forward
13.4
9.9
–
–
23.3
IFRS 16 transitional adjustment
3.0
–
–
–
3.0
Other assets
0.2
0.6
–
–
0.8
(16.9)
8.9
(0.1)
12.8
4.7
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
71
Notes to the consolidated financial statements (Continued)
14. Deferred tax assets and liabilities (Continued)
The deferred tax liability at 31 March 2024 has been calculated at 25% (2023: 25%). The Finance Bill 2021 increases the
corporation tax rate to 25% as from 1 April 2023.
Deferred tax assets have not been recognised in respect of the following items, due to the uncertainty of their utilisation:
2024
2023
Gross
amount
£m
Unrecognised
deferred tax
asset
Gross
amount
£m
Unrecognised
deferred tax
asset
£m
Irish property losses carried forward
0.7
0.2
0.7
0.2
UK tax losses carried forward
1.7
0.4
3.7
0.9
2.4
0.6
4.4
1.1
15. Inventories
2024
£m
2023
£m
Raw materials and consumables
2.0
1.8
In the year ended 31 March 2024, inventories of £33.0m (2023: £29.1m) were recognised in the income statement within net
operating costs.
16. Trade and other receivables
Note
2024
£m
2023
£m
Current
Trade receivables
111.2
83.5
Contract receivables
52.0
39.1
Contract assets
1.2
1.0
Contract fulfilment assets
2
2.5
3.3
Other receivables
2.6
–
Prepayments
44.9
43.7
Non Current
Contract assets
4.1
–
Contract fulfilment assets
2
7.1
–
225.6
170.6
Customers are normally invoiced on a monthly basis with payment terms of 30 to 60 days.
Trade receivables, contract receivables and contract assets are shown net of allowance for impairment of £2.9m (2023: £4.1m).
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’.
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.
Movement in the allowance for impairment loss
2024
£m
2023
£m
At 1 April
4.1
2.5
Impairment losses recognised on receivables
1.3
2.4
Amounts written off as unrecoverable
(0.1)
(0.2)
Impairment losses reversed
(2.4)
(0.6)
At 31 March
2.9
4.1
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
72
Notes to the consolidated financial statements (Continued)
16. Trade and other receivables (Continued)
Ageing of trade receivables and contract receivables at the balance sheet date
2024
Gross
£m
2023
Gross
£m
Contract receivables
52.0
39.1
Current
105.6
77.3
1 month overdue
4.0
4.7
2 months overdue
0.8
1.2
3+ months overdue
3.7
4.4
Gross trade receivables and contract receivables
166.1
126.7
Allowance for impairment
(2.9)
(4.1)
Trade receivables and contract receivables, net of allowance
163.2
122.6
There were no material individual impairments of trade receivables or contract receivables.
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 (2023: £0.1m).
17. Cash and cash equivalents
2024
£m
2023
£m
Cash and cash equivalents
28.7
13.2
£2.3m (2023: £2.8m) of restricted cash, being deposits held by the Group’s insurance subsidiary, is included in Cash and cash
equivalents above. Details of the Group’s treasury policies are set out in Note 27 ‘Financial instruments’.
18. Borrowings
2024
£m
2023
£m
Bank loans
8.0
–
Bank loans comprise the Group’s revolving credit facility (RCF) which was renegotiated during the year and matures in March 2027.
Details of the contractual maturity is set out in the Liquidity risk section of Note 27 ‘Financial instruments’.
19. 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 is shown in Note 4 ‘Operating profit/(loss)’.
2024
£m
2023
£m
Current
Lease liabilities
41.4
37.5
Non-current
Lease liabilities
166.5
168.9
207.9
206.4
£41.4m (2023: £43.8m) is the potential future lease liability relating to periods following the expiry date of termination options that
are not included in the lease term.
The Group had commitments of £7.6m (2023: £nil) for leases which had not commenced at the year end.
Details of the maturity analysis of discounted lease liabilities recognised on the Group balance sheet are in the liquidity risk section
of Note 27 ‘Financial instruments’.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
73
Notes to the consolidated financial statements (Continued)
19. Lease liabilities (Continued)
The amounts charged to the income statement due to applied IFRS 16 Leases practical expedients are shown below:
2024
2023
Property
£m
Plant and
equipment
£m
Property
£m
Plant and
equipment
£m
Expense relating to short term leases
0.6
23.6
2.0
23.4
20. Trade and other payables
2024
£m
2023
£m
Trade payables
62.4
55.9
Other taxes and social security
55.4
48.1
Other payables
32.2
20.5
Contract liabilities
75.2
45.7
Accruals
162.2
119.4
387.4
289.6
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, £43.1m (2023: £69.3m) has been recognised as revenue during the year. All
movements in the balance relate to normal trading.
21. Provisions
Insurance
£m
Property
£m
Onerous
contracts
£m
Other
provisions
£m
Total
£m
At 1 April 2022
24.1
14.8
–
4.4
43.3
Created
9.4
0.7
–
2.5
12.6
Utilised
(6.2)
(0.3)
–
(0.3)
(6.8)
Released
(5.1)
(0.7)
–
(0.6)
(6.4)
Unwinding of discount
0.4
0.2
–
–
0.6
At 31 March 2023
22.6
14.7
–
6.0
43.3
At 1 April 2023
22.6
14.7
–
6.0
43.3
Created
10.7
5.7
27.1
4.6
48.1
Utilised
(7.3)
(1.0)
–
(6.1)
(14.4)
Released
(4.0)
(2.2)
–
(0.2)
(6.4)
Unwinding of discount
0.3
0.2
–
–
0.5
At 31 March 2024
22.3
17.4
27.1
4.3
71.1
Current
9.3
4.6
7.2
3.0
24.1
Non-current
13.0
12.8
19.9
1.3
47.0
22.3
17.4
27.1
4.3
71.1
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 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. The dilapidation 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
74
Notes to the consolidated financial statements (Continued)
21. Provisions (Continued)
Onerous contract provisions relate to provisions recognised for customer contracts and supplier contracts where the future
economic benefit expected is less than the costs incurred to fulfil the contracts. In the period, the Group recorded an onerous
contract provision of £22.9m in connection with the two-person home delivery network. The provision recorded represents the
directors’ best estimate of the lower of the cost to exit or fulfil the Group’s obligations under contracts with customers. The key
assumptions that have been taken by the directors in determining the value of the provision to record are; no revenue from new
customer contracts has been included in the estimate of future cash inflows and the timing and quantum of the costs of exiting
contracts in the two-person home delivery network, which is inherently uncertain as it partly depends on the outcome of discussions
with the Group’s customers. The cash flows are expected to arise over a period of 4 years from the balance sheet date.
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.
22. 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 the Group is in a strong position to defend these claims and the likelihood of outflow of economic
benefit is not probable, no provision is made.
In FY22, the Group received notification of a potential claim from a former customer. 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. It is not practicable to make an estimate of the potential financial impact until the allegations
made are substantiated. In parallel, the Group continues to work with its insurance providers to confirm coverage if required.
23. Capital and reserves
Share capital
Allotted, called up and fully paid
2024
£m
2023
£m
124,543,670 (2023: 124,543,670 ) Ordinary Shares of 10p each
12.5
12.5
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 2024, the number of the Company’s shares held by the EBT had reduced to 1,483,640
(2023: 1,554,873). This represents 1.2% of called-up share capital at the end of the year (2023: 1.2%). The EBT has waived the
right to receive dividends in respect of the shares it holds. The average cost of the shares held is 366p each (2023: 361p) and, at 31
March 2024, the market value of the shares held was £8.9m (2023: £3.4m).
No share was purchased by the EBT during the year. All of the shares in the EBT are held in respect of the Group’s various equity
compensation schemes as described in Note 28. At 31 March 2024 there were 422,052 (2023: 189,626) shares held in respect of
vested options.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
75
Notes to the consolidated financial statements (Continued)
24. Business combinations
On 8 March 2024, the Group acquired 100% of the equity shares in Invar Group Limited and its subsidiaries (Invar) for cash. Invar is
a specialist in automated warehouse solutions powered by its proprietary software, the Invar Warehousing Software (IWS). IWS is
an intuitive, configurable and scalable software suite which intelligently orchestrates warehouse activity and enables the smooth
integration of wider warehouse technology, particularly robots and automation. The acquisition represents a key milestone in the
Group’s strategic roadmap to create sustainable supply chain value through technology and automation.
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 Invar 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 Group is in the process of establishing the fair value of the assets acquired and the liabilities assumed, therefore the
fair values assigned to the Invar business combination presented below are provisional:
Note
Fair value
£m
Tangible assets
11
0.2
Inventories
0.1
Trade and other receivables
12.5
Cash and cash equivalents
10.9
Income tax payable
(0.4)
Trade and other payables
(18.0)
Fair value of net asset acquired
5.3
Purchase consideration:
Cash paid
22.5
Deferred consideration
3.0
Total purchase consideration
25.5
Excess of purchase consideration over net asset acquired
10
20.2
In addition to the cash purchase consideration paid of £22.5m, deferred consideration of £3.0m is expected to be paid within 12
months, comprising £2.6m withheld to cover a potential liability of the former owners and an estimated £0.4m payable following
agreement of the completion accounts.
The share purchase agreement also provides for earn-out consideration if Invar’s EBITDA exceeds targets for each year ending 31
March 2024 to 2026 and taking into account the amount of revenue secured for the following year for 31 March 2024 and 2026. The
earn-out consideration is also dependent on the recipient remaining in employment at each of the payment dates. As required under
IFRS3, these payments are accounted for as remuneration for post-combination service. They have been presented as non-
underlying costs. The earn-out payment for the year ended 31 March 2024, is currently estimated at £5.0m, the maximum payable
and has been recorded in other payables. The £5m earn-out will be paid in 2024. The remaining maximum amount payable is
£7.5m over the 2 years to 31 March 2026.
The excess of purchase consideration of £20.2m includes amounts paid for goodwill and acquired intangible assets. Due to the
acquisition being completed close to the reporting date, the Group is in the process of determining the fair value of intangible assets
acquired. The excess of purchase consideration over net liabilities acquired has been included in goodwill in the consolidated
balance sheet.
Total acquisition-related costs of £1.2m 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).
Invar’s results have been consolidated into the Group’s results from 8 March 2024. For the period from acquisition to 31 March 2024
Invar’s revenue was £0.9m and contributed an operating profit of £0.2m to the overall Group loss. If the acquisition had taken effect
at the beginning of the reporting period in which the acquisition occurred (1 April 2023) the total revenues of the combined Group for
the year would have been £1,431.4m and an operating loss of £(37.9)m. 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 2023 and should not be taken to
be representative of future results.
In addition to the cash purchase consideration paid of £22.5m above, the Group acquired cash of £10.9m and has recognised
deferred consideration of £3.0m.
The Group completed no business acquisitions in the year ended 31 March 2023.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
76
Notes to the consolidated financial statements (Continued)
25. Employee benefits
2024
£m
2023
£m
Defined benefit surplus
80.6
116.6
Defined benefit deficit
(1.9)
(1.9)
Net defined benefit asset
78.7
114.7
Pension schemes
Employees of Wincanton participated in funded pension arrangements in the UK and Ireland during the year ended 31 March 2024,
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 13 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 2023 by the Scheme actuary, Hymans Robertson, and
was agreed with the Trustee in September 2023 (the 2023 arrangement). Due the Scheme being measured in a surplus position it
was agreed that no further deficit funding contributions are required.
IFRIC 14
The Group is not required to recognise any additional liabilities in relation to funding plans, or limit the recognition of any surpluses,
as any future economic benefits will be available to the Group by way of future refunds.
Contributions
The deficit funding contribution in the year was £11.3m (2023: £20.1m), and no further contributions are required. In addition, other
administration costs of the Scheme were borne directly by the Group and a contribution made towards administration costs
incurred, totalling £1.1m (2023: £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.
2024
£m
2023
£m
Present value of unfunded defined benefit obligations
(1.9)
(1.9)
Present value of funded defined benefit obligations
(765.2)
(774.5)
Fair value of Scheme assets
845.8
891.1
Net defined benefit asset
78.7
114.7
The net defined benefit asset, after taking into account the related deferred tax liability, is £59.0m (2023: £86.0m). Deferred tax is
recognised at 25% (2023: 25%).
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
77
Notes to the consolidated financial statements (Continued)
25. Employee benefits (Continued)
Movements in the present value of the net defined benefit asset/(liability)
31 March 2024
Note
Assets
£m
Obligations
£m
Net
asset
£m
Unfunded
arrangements
£m
Total net
asset
£m
Opening position
891.1
(774.5)
116.6
(1.9)
114.7
Included in income statement:
Administration costs
(1.1)
–
(1.1)
–
(1.1)
Interest on the net defined benefit asset
7
41.9
(35.9)
6.0
(0.1)
5.9
Cash:
Employer contributions
11.3
–
11.3
–
11.3
Benefits paid
(37.6)
37.6
–
–
–
Included in other comprehensive income:
Changes in financial assumptions
–
8.1
8.1
0.1
8.2
Changes in demographic assumptions
–
6.6
6.6
–
6.6
Experience adjustments
–
(7.1)
(7.1)
–
(7.1)
Return on assets excluding amounts included in net financing
costs
(59.8)
–
(59.8)
–
(59.8)
Closing defined benefit asset
845.8
(765.2)
80.6
(1.9)
78.7
31 March 2023
Note
Assets
£m
Obligations
£m
Net
asset
£m
Unfunded
arrangements
£m
Total net
asset
£m
Opening position
1,208.3
(1,091.3)
117.0
(2.5)
114.5
Included in income statement:
Administration costs
(1.4)
–
(1.4)
–
(1.4)
Interest on the net defined benefit asset
7
32.4
(28.9)
3.5
(0.1)
3.4
Cash:
Employer contributions
20.6
–
20.6
–
20.6
Benefits paid
(39.4)
39.4
–
–
–
Included in other comprehensive income:
Changes in financial assumptions
–
324.2
324.2
0.7
324.9
Changes in demographic assumptions
–
14.1
14.1
–
14.1
Experience adjustments
–
(32.0)
(32.0)
–
(32.0)
Return on assets excluding amounts included in net financing
costs
(329.4)
–
(329.4)
–
(329.4)
Closing defined benefit asset
891.1
(774.5)
116.6
(1.9)
114.7
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:
Note
2024
£m
2023
£m
Within underlying operating profit
Administrative expenses
(1.1)
(1.4)
Within finance costs
Interest on the net defined benefit asset
7
5.9
3.4
Recognised in income statement
4.8
2.0
The market value of the Scheme assets held at the end of the year were as follows:
2024
£m
2023
£m
Corporate bonds
155.5
157.5
Secured finance
94.3
95.4
Senior real estate debt
13.8
16.4
Senior private debt and private debt
85.3
99.6
Index-linked gilts (LDI portfolio collateral)
483.7
517.6
Other, including cash
13.2
4.6
Total Scheme assets
845.8
891.1
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
78
Notes to the consolidated financial statements (Continued)
25. Employee benefits (Continued)
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 2024. Where appropriate,
management also take into account movements in external quoted benchmarks (after adjusting for liquidity differences between
such benchmarks and the private debt assets) in order to determine whether a risk adjustment is required in determining the fair
value.
Actuarial assumptions
The principal actuarial assumptions for the Scheme and for the UK unfunded arrangement at the balance sheet date were as
follows:
2024
%
2023
%
Discount rate
4.80
4.75
Price inflation rate – RPI
3.20
3.25
Price inflation rate – CPI
2.45
2.50
Rate of increase of pensions in deferment1
2.45-2.45 2.50–2.50
Rate of increase of pensions in payment1
1.90-3.10 1.90–3.15
1
A range of assumed rates exists due to the application of annual caps and floors to certain elements of service.
The assumptions used for mortality rates for members of these arrangements at the expected retirement age of 65 years are as
follows:
2024
years
2023
years
Male aged 65 today
20.3
20.4
Male aged 45 today
21.5
21.6
Female aged 65 today
22.7
22.8
Female aged 45 today
25.4
25.4
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.
Change in
assumption
Increase/
(decrease)
in surplus
£m
Discount rate
-1.00%
12.0
Credit spread
+0.25%
18.0
Price inflation – RPI
-0.25%
–
Mortality rate
+ 1 year
(29.0)
Defined contribution schemes
The total expense relating to the Group’s defined contribution schemes in the current year was £21.5m (2023: £38.6m).
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
79
Notes to the consolidated financial statements (Continued)
26. 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 £0.9m (2023: £0.7m) 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 charge for the year does not reflect any acceleration of vesting of the options as a consequence of the acquisition of the
Company as disclosed in Note 30 ‘Post balance sheet events’. Until the acquisition was approved by shareholders on 10 April 2024,
the Directors were not in receipt of information that indicated the length of the vesting period differed from the previous estimates.
The number of options outstanding and exercisable in respect of each scheme at 31 March 2024 is as follows:
Outstanding
Exercisable
Option price
pence/share
Date normally
exercisable
Long Term Incentive Plan
July 2018
8,043
8,043
–
2021–2028
July 2019
58,542
58,542
–
2022–2029
September 2019
101,689 101,689
–
2022–2029
July 2020
253,778 253,778
–
2023–2030
July 2021
404,513
–
–
2024–2031
July 2022
341,612
–
–
2025–2032
July 2022 (Long Term)
213,461
–
–
2027–2034
August 2022
113,287
–
–
2027-2031
July 2023
628,726
–
2026-2033
July 2023 (Long Term)
539,172
–
–
2028-2036
Executive Bonus Plan
July 2022 (Deferred Annual Bonus)
57,852
–
–
2024-2031
July 2023 (Deferred Annual Bonus)
200,053
–
–
2025-2032
2,920,728 422,052
The number and weighted average exercise price of all share options extant under the above schemes are as follows:
2024
2023
Options
Weighted
average
exercise
price
Options
Weighted
average
exercise
price
Outstanding at 1 April
2,294,373
–
2,029,878
–
Granted during the year
1,377,742
–
821,396
–
Lapsed during the year
(622,005)
–
(335,716)
–
Exercised during the year
(129,382)
–
(221,185)
–
Outstanding at 31 March
2,920,728
–
2,294,373
–
Exercisable at 31 March
422,052
–
189,626
–
The weighted average share price at the date of exercise for share options exercised during the period was 270p (2023: 246p). The
options outstanding at 31 March 2024 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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
80
Notes to the consolidated financial statements (Continued)
27. 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 (2023: £175.0m) committed syndicated bank facility which matures in March 2027. At 31 March 2024
£8.0m (2023: £nil) was drawn, leaving unutilised facilities of £167.0m (2023: £175.0m). The Group has an uncommitted facility, a
£5.0m net overdraft facility and had a receivable purchase facility (RPF) with a credit limit total of £28.3m as at 31 March 2024.
£8.8m of the RPF was utilised as at 31 March 2024 (2023: £4.3m).
The Group makes use of cash pooling facilities with a net overdraft facility of £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
overdraft and borrowing facilities is £20.7m (2023: £13.2m).
The Group also holds some restricted cash deposits within its insurance subsidiary as shown in Note 17 ‘Cash and cash
equivalents’; 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.
The Group’s net debt at the balance sheet date was:
Note
2024
£m
2023
£m
Total borrowings and other financial liabilities
18
(8.0)
–
Cash and cash equivalents
17
28.7
13.2
Net cash excluding lease liabilities
20.7
13.2
Lease liabilities
19
(207.9)
(206.4)
Net debt including lease liabilities
(187.2)
(193.2)
The following are the contractual maturities of non-derivative financial liabilities, including interest payments except for bank loans
and overdraft interest:
31 March 2024
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 5
years
£m
Over
5 years
£m
Bank loans and overdrafts
8.0
8.0
–
8.0
–
Trade and other payables
232.7
232.7
232.7
–
–
Lease liabilities
207.9
296.5
43.6
106.4
146.5
448.6
537.2
276.3
114.4
146.5
31 March 2023
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 5 years
£m
Over
5 years
£m
Trade and other payables
175.3
175.3
175.3
–
–
Lease liabilities
206.4
302.6
43.5
103.4
155.7
381.7
477.9
218.8
103.4
155.7
Lease liabilities over five years include two leases which expire in over 50 years with contractual cash flows of £118.9m (2023:
£121.5m).
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. Daily interest is charged on this facility based on amounts drawn and
charged at SONIA rate plus a fixed margin. Commitment and utilisation fees are also charged. The contractual interest payable on
the amounts drawn at 31 March 2024 was £0.1m (2023: £nil).
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
81
Notes to the consolidated financial statements (Continued)
27. Financial instruments (Continued)
Liquidity risk (Continued)
The Group’s committed facilities at 31 March 2024 comprise a syndicated RCF of £175m, maturing in March 2027. 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
Calculation
Ratio
2024
2023
Leverage ratio
Consolidated net borrowings (A)/consolidated EBITDA (B)
<3.0:1
0.4
0.5
Interest cover
Consolidated EBITDA (B)/consolidated net finance charges (C)
>3.5:1
15.7
17.1
Fixed charge cover
Consolidated EBITDA (B) plus operating lease costs (D)/consolidated net
finance charges (C) plus operating lease costs (D)
>1.4:1
4.1
2.6
A reconciliation of these terms to the reported amounts is as follows:
2024
£m
2023
£m
Reported net cash
(20.7)
(13.2)
Finance lease liability under IAS 17
24.8
17.8
Cash and deposits held by captive insurer
4.5
3.9
Guarantees provided
17.7
28.9
Consolidated net borrowings for covenant reporting (A)
26.3
37.4
Note
2024
£m
2023
£m
Underlying operating profit
64.6
70.8
Depreciation, amortisation and impairments
45.0
51.1
Underlying EBITDA
109.6
121.9
Adjustment to frozen GAAP (IFRS 16 to IAS 17)
(47.5)
(48.7)
Share based payment charges
26
0.6
0.4
Consolidated underlying EBITDA for covenant reporting (B)
62.7
73.6
2024
£m
2023
£m
Net interest payable
7
6.1
8.7
Adjustment to frozen GAAP (remove IFRS 16 interest)
(8.5)
(6.2)
RPF interest
(0.8)
(0.5)
Arrangement fees
(0.4)
(0.5)
Captive Insurer interest
0.1
–
Interest on net defined benefit asset
7
5.9
3.4
Other discount unwinding
7
1.6
(0.6)
Covenant net finance charges (C)
4.0
4.3
2024
£m
2023
£m
Operating lease costs for covenant reporting (D)
15.2
39.5
Analysis of changes in net debt
31 March
2022
£m
Cash
flow
£m
Non-cash
movements
£m
31 March
2023
£m
Cash
flow
£m
Non-cash
movements
£m
31 March
2024
£m
Bank loans and overdrafts
(25.0)
25.0
–
–
(8.0)
–
(8.0)
Financial liabilities arising from financing
activities
(25.0)
25.0
–
–
(8.0)
–
(8.0)
Cash and cash equivalents
28.7
(15.5)
–
13.2
15.5
–
28.7
Net cash excluding lease liabilities
3.7
9.5
–
13.2
7.5
–
20.7
Lease liabilities
(206.7)
48.7
(48.4)
(206.4)
47.5
(49.0)
(207.9)
Net debt including lease liabilities
(203.0)
58.2
(48.4)
(193.2)
55.0
(49.0)
(187.2)
Within the Cash flow movement per the above table, Cash and cash equivalents includes £10.9m resulted from the acquisition of
Invar. Detail see Note 24 ‘Business combinations’.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
82
Notes to the consolidated financial statements (Continued)
27. 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 as 79.0% (2023: 73.5%) of contracts
having been negotiated on open book terms. Under these open book 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. RCF is at floating rate. 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% (2023: 0.5%) on the Group’s loss 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% (2023: 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
25 ‘Employee benefits’.
2024
2023
Effect
on loss
before tax
£m
Effect
on equity
£m
Effect
on profit
before tax
£m
Effect
on equity
£m
0.5% increase in rates
(0.8)
(0.8)
(0.3)
(0.3)
0.5% decrease in rates
0.8
0.8
0.3
0.3
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 £11.2m held in Euro and US Dollar
(2023: £2.4m).
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 £201.1m
(2023: £139.1m). See Note 16 ‘Trade and other receivables’ for further analysis of trade receivables and the associated allowance
for impairment loss.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
83
Notes to the consolidated financial statements (Continued)
27. 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 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:
2024
£m
2023
£m
Financial assets carried at amortised cost
Trade and other receivables
172.8
125.9
Cash and cash equivalents
28.7
13.2
201.5
139.1
Financial liabilities carried at amortised cost
Lease liabilities
(207.9)
(206.4)
Bank loans and overdrafts
(8.0)
–
Trade and other payables
(232.7)
(175.3)
(448.6)
(381.7)
The fair values are considered to be the same as the carrying amounts set out above.
28. Related parties
Identity of related parties
As at 31 March 2024 the Group had 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 24 to 31.
Remuneration of key management personnel
The total remuneration of key management personnel of the Group, being the Executive Management Team and Non-executive
directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2024
£m
2023
£m
Short term employee benefits
3.1
3.91
Post-employment benefits
0.1
0.1
IFRS 2 share option charge
0.7
0.6
3.9
4.6
1 The prior year comparative has been increased to include the non-executive director fees.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
84
Notes to the consolidated financial statements (Continued)
29. Investment in subsidiaries and associates
The significant subsidiaries as at 31 March 2024 in the Wincanton group of companies, based on the scale of their activities, are as
follows:
Principal activity
% of
equity
held 1
Country of incorporation
and registered office2
Wincanton Holdings Limited
Contract logistics services
100
England and Wales
Wincanton Group Limited
Contract logistics services
100
England and Wales
Wincanton Ireland Limited
Contract logistics services
100
Republic of Ireland9
Risk Underwriting (Guernsey) Limited
Insurance subsidiary
100
Guernsey3
Invar Controls Limited
Automated warehouse solutions
100
England and Wales
Invar Systems Limited
Automated warehouse solutions
100
England and Wales
Invar Integration Limited
Automated warehouse solutions
100
England and Wales
Invar Integration Europe B.V.
Automated warehouse solutions
100
Netherlands
Onevast Limited
Online solutions for warehousing space
100
England and Wales
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
85
Notes to the consolidated financial statements (Continued)
29. Investment in subsidiaries and associates (Continued)
Other subsidiaries and associates as at 31 March 2024:
Principal activity
% of
equity
held 1
Country of incorporation
and registered office2
Cygnia Logistics Limited
Dormant
100
England and Wales
Caledonia Bidco Limited
Dormant
100
England and Wales
C.E.L Group Limited
Dormant
100
England and Wales
C.E.L (Engineering) Limited
Dormant
100
England and Wales
C.E.L (Logistics) Limited
Dormant
100
England and Wales
City Self Storage Limited
Dormant
100
Republic of Ireland9
Dalepak Limited
Dormant
100
England and Wales
Dalepak Holdings Limited
Dormant
100
England and Wales
Data and Records Management Limited
Dormant
100
Republic of Ireland9
Glass Glover Group Limited
Dormant
100
England and Wales
Glass Glover Management Services Limited
Dormant
1005
England and Wales
Hanbury Davies Limited
Dormant
100
England and Wales
Hanbury Holdings Limited
Dormant
100
England and Wales
Invar Group Limited
Intermediate holding company
100
England and Wales
Invar Polska spółka z ograniczoną
odpowiedzialnością
Automated warehouse solutions
100
Poland10
Lane Group plc
Dormant
100
England and Wales
Nair Properties Limited
Dormant
100
England and Wales
Product Support (Holdings) Limited
Dormant
1006
England and Wales
Product Support Limited
Dormant
100
England and Wales
RDL Distribution Limited
Dormant
100
England and Wales
RDL Holdings Limited
Dormant
100
England and Wales
Roadtanks Limited
Dormant
100
England and Wales
Swales Haulage Limited
Dormant
100
England and Wales
Trans European Holdings Limited
Dormant
100
England and Wales
W. Carter (Haulage) Limited
Dormant
100
England and Wales
Wincanton A&R Limited
Holding company
100
England and Wales
Wincanton Air & Ocean Limited
Dormant
1007
England and Wales
Wincanton High Tech Limited
Dormant
1008
England and Wales
Wincanton Logistics Limited
Dormant
100
England and Wales
Wincanton Pension Scheme Trustees Limited4
Trustee for the Wincanton plc pension
scheme
100
England and Wales
Wincanton Records Management (Ireland)
Limited
Dormant
100
Republic of Ireland9
Wincanton TechCo, Incorporated
Intermediate holding company
100 United States of America
Wincanton TechCo Limited
Intermediate holding company
100
England and Wales
Wincanton Trans European (Ireland) Limited
Dormant
100
Republic of Ireland9
Wincanton Trans European Limited
Dormant
100
England and Wales
Wincanton UK Limited4
Intermediate holding company
100
England and Wales
1
All holdings are of Ordinary Shares except where noted.
2
Registered office is Methuen Park, Chippenham, Wiltshire SN14 0WT except where noted.
3 Registered office: PO Box 155, Mill Court, La Charroterie, St Peter Port, Guernsey GY1 4ET.
4
Direct subsidiaries of Wincanton plc.
5
14,762,245 Ordinary Shares and 10,000,000 6 1/2% 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: C/o DZP, Rondo ONZ 1, 21st floor street, 00-124 Warsaw, Poland.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
86
Notes to the consolidated financial statements (Continued)
30. Post balance sheet events
On 1 March 2024, the board of Wincanton Plc announced the Directors’ intention to recommend a cash offer to acquire the entire
issued and to be issued share capital of Wincanton plc by GXO Logistics, Inc (“GXO”). On 10 April 2024, the Scheme was approved
by the requisite majority of Scheme Shareholders and the Scheme has become effective as of 29 April 2024. The entire issued and
to be issued share capital of the Company is now owned by GXO.
The UK Competition and Markets Authority is to complete its review of the acquisition, until clearance is obtained both GXO and
Wincanton will continue to be run independently.
As part of the above transaction Wincanton plc issued 1,437,048 shares on 26 April 2024. This increased the total number of shares
to 125,980,718. The additional shares were used to settle the outstanding LTIP schemes, see Note 26 ‘Equity compensation benefits’.
Consequently, a share based payment charge of £4.9m has been recognised post year end.
On 30 April 2024, Wincanton plc was de-listed from the London Stock Exchange’s main market for listed securities.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
87
Wincanton plc Company balance sheet
At 31 March 2024
Note
2024
£m
2023
£m
Non-current assets
Investment in subsidiaries
2
108.9
108.9
Deferred tax
2.3
0.8
Amounts owed by Group undertakings
3
85.2
58.3
Total non-current assets
196.4
168.0
Current assets
Trade and other receivables
1.1
1.6
Cash and cash equivalents
3.3
2.0
Income tax receivable
–
0.9
Total current assets
4.4
4.5
Total assets
200.8
172.5
Current liabilities
Amounts owed to Group undertakings
(74.6)
(33.5)
Trade and other payables
4
(16.6)
(1.2)
Total current liabilities
(91.2)
(34.7)
Net current liabilities
(86.8)
(30.2)
Total assets less current liabilities
109.6
137.8
Non-current liabilities
Borrowings
(8.0)
–
Total non-current liabilities
(8.0)
–
Net assets
101.6
137.8
Equity
Issued share capital
5
12.5
12.5
Share premium
12.9
12.9
Own shares
(5.4)
(5.6)
Retained earnings
81.6
118.0
Total equity
6
101.6
137.8
The Company reported a loss for the year ended 31 March 2024 of £22.2m (2023: £4.8m).
The financial statements were approved by the Board of Directors and authorised for issue on 19 June 2024 and were signed on
their behalf by:
Tom Hinton
Chief Financial Officer
Company registration number: 04178808
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
88
Wincanton plc Company statement of changes in equity
For the year ended 31 March 2024
Issued
share
capital
£m
Share
premium
£m
Own
shares
£m
Profit
and
loss
£m
Total
equity
£m
Balance at 1 April 2022
12.5
12.9
(2.2)
129.5
152.7
Profit for the year
–
–
–
4.8
4.8
Other comprehensive income
–
–
–
–
–
Total comprehensive income
–
–
–
4.8
4.8
Share based payment transactions
–
–
(3.4)
(0.7)
(4.1)
Tax on share based payment transactions
–
–
–
(0.3)
(0.3)
Dividends paid to shareholders
–
–
–
(15.3)
(15.3)
Balance at 31 March 2023
12.5
12.9
(5.6)
118.0
137.8
Balance at 1 April 2023
12.5
12.9
(5.6)
118.0
137.8
Loss for the year
–
–
–
(22.2)
(22.2)
Other comprehensive income
–
–
–
–
–
Total comprehensive loss
–
–
–
(22.2)
(22.2)
Share based payment transactions
–
–
0.2
0.6
0.8
Tax on share based payment transactions
–
–
–
1.4
1.4
Dividends paid to shareholders
–
–
–
(16.2)
(16.2)
Balance at 31 March 2024
12.5
12.9
(5.4)
81.6
101.6
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
89
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 loss 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.
Investment in subsidiaries
Investments in subsidiaries are stated at cost and reviewed for impairment if there are indications that the carrying values may not
be recoverable.
2. Investment in subsidiaries
Shares in Group undertakings
2024
£m
2023
£m
Cost at beginning and end of year
108.9
108.9
3. Amounts owed by Group undertakings
2024
£m
2023
£m
Amounts owed by Group undertakings
85.2
58.3
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.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5
Wincanton plc
Annual report and financial statements
for the year ended 31 March 2024
90
Notes to the Wincanton plc Company financial statements (Continued)
4. Trade and other payables
2024
£m
2023
£m
Trade payables
0.8
–
Other payables
1.5
1.0
Accruals
14.3
0.2
16.6
1.2
5. Equity
Allotted, called up and fully paid
2024
£m
2023
£m
124,543,670 (2023: 124,543,670) Ordinary Shares of 10p each
12.5
12.5
Details of the Company’s own shares held within an Employee Benefit Trust are given in Note 23 ‘Capital and reserves’ to the
consolidated financial statements. Details of the Company’s equity compensation benefits are given in Note 26 ‘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 was 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/(loss)’ to
the consolidated financial statements.
6. Reconciliation of movement in total equity
2024
£m
2023
£m
Profit/(loss) for the year
(22.2)
4.8
Dividends paid to shareholders
(16.2)
(15.3)
Tax on share based payment transactions
1.4
(0.3)
Share based payment transactions
0.8
(4.1)
Net movement in shareholders’ funds
(36.2)
(14.9)
Opening shareholders’ funds
137.8
152.7
Closing shareholders’ funds
101.6
137.8
7. Post balance sheet events
On 1 March 2024, the board of Wincanton Plc announced the Directors’ intention to recommend a cash offer to acquire the entire
issued and to be issued share capital of Wincanton plc by GXO Logistics, Inc (“GXO”). On 10 April 2024, the Scheme was approved
by the requisite majority of Scheme Shareholders and the Scheme has become effective as of 29 April 2024. The entire issued share
capital of the Company is now owned by GXO.
The UK Competition and Markets Authority is to complete its review of the acquisition, until clearance is obtained both GXO and
Wincanton will continue to be run independently.
As part of the above transaction Wincanton plc issued 1,437,048 shares on 26 April 2024. This increased the total number of shares
to 125,980,718. The additional shares were used to settle the outstanding LTIP schemes, see note 26 to the consolidated financial
statements.
On 30 April 2024, Wincanton plc was de-listed from the London Stock Exchange’s main market for listed securities.
DocuSign Envelope ID: 50F246D6-095D-43D6-A08B-A2528424ECF5