It began with milk in 1925. Logistics company Wincanton, named after the Somerset town in which it was founded, started with the humble beginnings of milk haulage.
Fast forward 90 years and the company has grown enormously. It works across the different areas of construction and logistics, defence, retail, manufacturing and fuels, with key occupiers including Waitrose, Morrisons, BAE Systems, M&S, Sainsbury’s, B&Q, Heinz, GlaxoSmithKline and Dairy Crest. The company’s own website states: “Put simply, Wincanton stores things and moves them around the country – sometimes further.”
In November, it announced half-year underlying profit increased by 2.9% from 2013’s £24.2m to £24.9m, while revenue grew by 1.6% to £550.9m. This prompted Eric Born, Wincanton chief executive, to state: “These results represent another solid half of operational and financial performance. Wincanton continues to focus on contract renewals and contract wins with existing and new customers. We remain committed to further reducing cost and improving asset efficiency for the benefit of our clients and to improve our performance. The successful refinancing in the period provides a strong financial platform and we are confident that we remain on track to meet our expectations for the current financial year.”
Just as the company itself has evolved – it has 6.3m sq ft across 110 leased sites – so too has the market in which it operates. Those changes are namely with a new attitude to property, and a closeness to the customer and the market. Ian Henderson, who manages the property portfolio across the UK and Ireland after joining Wincanton in 2012, is ahead of those changes.
He says: “What has changed in three years [I have been with the company] is the focus on property, the understanding of the importance of property to the business – the opportunities and also the risks.
“The focus has changed within Wincanton, so suddenly there is an understanding about property. This, of course, benefits Wincanton, but it’s also benefiting the customer because we’ll be taking on a property for a customer and making sure it’s on the right terms, right lease, and the right lease length.”
Henderson adds: “Property is now front and centre at Wincanton, and is the decision-making process. That isn’t because of the recession… it’s just because of the change in focus within the business.”
His past retail experience – having previously worked for BAA, B&Q and Dreams – has helped Henderson in his role.
“I was property director at Dreams. It’s been [good] for Wincanton because there’s a range of experience in terms of having worked directly for the retailers but also working for BAA in a corporate environment so… I also have a landlord perspective and I am able to see both sides of the fence.”
While the need for big warehouses will always be there, Henderson says “there are so many different requirements for so many different customers”.
Henderson says his goal at Wincanton can be summed up in two phases: “The first three-year phase has been about getting the portfolio fit for purpose.” This has meant selling older properties “then basically getting those 110 units, the portfolio fit for purpose and we’re there, almost”.
He continues: “The next three-year phase is how we use that portfolio – I suppose almost to reduce costs but also to challenge ourselves on how we use it.”
Henderson says this could be re-gearing leases: “It could be how we use that space. Maybe it’s putting in mezzanines – doing traditional approaches and asking, are we actually getting the best use out of that space? It could be extending the lease, it could be taking on new space, it could be reducing space, but it’s a continual review of the portfolio.”
This new strategy has been played out in the last couple of months. Wincanton let a 218,000 sq ft logistics unit on RD Park Hoddesdon to Bidvest Logistics, and at the start of the year it also bought 250,000 sq ft in the North West for a retail company on an 18-month lease.
Henderson is cagey about giving more details, but says the length of the lease and the time it took to find the site in six weeks shows just how important it is to be close to the market.
The diverse nature of the company helped it through the recession. And this is set to continue ensuring that the former milk delivery company never turns sour.
