16th Mar 2006 07:00
Wincanton PLC16 March 2006 For Immediate Release 16 March 2006 Wincanton plc ("Wincanton" or "the Group") Pre-Close Update and Actuarial Valuation Pre close update Wincanton today issues the following pre-close season update for the twelvemonths ending 31st March 2006: As anticipated at the half year, Wincanton will make good progress in the yearto 31st March 2006, with results in line with expectations. Our markets remainhighly competitive but the Group's development pipeline continues to give causefor encouragement. The promising levels of new business activity noted in the first half have beensustained through the second half, particularly in the UK & Ireland. Theintegration of our recent French acquisition has gone well and we are buildingmomentum in our Continental European operations. Our ability to make net profit progress has again been dependent on the rate ofnew business wins relative to contract losses and terminations. We expect thenew financial year to bring similar challenges, but the Group has significantlyenhanced its customer, service and geographic portfolio in recent years and iswell-placed to build further on its track record of growth. Actuarial valuation Wincanton has recently finalised, in consultation with the pension fund trusteesand scheme actuary, a series of measures to address both the actuarial pastservice deficit and the level of future service cost of the Group's definedbenefit scheme, following the results of the triennial actuarial valuation as at31st March 2005. The measures in respect of the cost of future service accrualremain subject to consultation with employees. An incremental cash contribution of £40m (approximately £28m net of corporationtax) will be made in two instalments, one before the end of the currentfinancial year and the second early in the new financial year. Following theup-front contribution, the actuarial past service deficit, which has increasedprimarily as a consequence of increased longevity assumptions, will beapproximately £70m (approximately £49m net of deferred tax). The net cost of theup-front contribution is expected to be substantially covered by a programme ofdisposal of surplus freehold properties which began in 2005/06. The past servicedeficit will be further addressed through an increase in incremental cashcontributions, with effect from April 2006, from £2m per annum currently to £8mper annum. The pensions charge to operating profit is expected to benefit progressivelyfrom the measures proposed in respect of the costs of future service accrual,although this is expected to be more than offset in 2006/07 by the impact ofincreased longevity assumptions and the current very low levels of bond yields. Graeme McFaull, Wincanton Group Chief Executive, commented: "We expect the year to 31st March 2006 to be another year of progress forWincanton. We are addressing the past service deficit of the Group's pension fund prudentlyand progressively, through a combination of Wincanton's strong organic cashflowand surplus asset disposals. We remain confident in our ability to build further on the leading pan-Europeanbusiness platform established in recent years." For further information please contact: Wincanton plcGraeme McFaull, Chief Executive 01249 710 000Gerard Connell, Group Finance DirectorCharles Carr, Group Marketing and Communications Director Buchanan CommunicationsCharles Ryland / Jeremy Garcia 020 7466 5000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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