Wincanton PLC (LSE:WIN) said it has lost a contract with HM Revenue and Customs (HMRC) for inland customs facilities with another provider taking over following a re-tendering process.
The logistics group added it is “extremely disappointed” by the decision after what it said has been acknowledged as a strong performance over the past two years.
The contract will be transferred in June 2023 with the impact to be felt in the full year 2024.
Along with customer volumes and consumer spending being reduced generally due to the economic situation, results for the year to end March 2024 will now be "materially below" market forecasts of around £63mln, Wincanton said in a statement.
Trading in the year to end this March (2023) has been in line with expectations, it said, with revenue growth of approximately 3% and profit before tax growth of over 5%.
Net cash at the 2023 year-end will be between zero and £10mln.
Wincanton noted that it remains a strategic government commercial partner with major contracts with HMRC, Defra, the Department for Health and Social Care and the Cabinet Office, while technology development for both warehouse automation and Transport Control Towers is continuing.
Liberum said the short-term pressure on earnings is clearly disappointing, but the medium-term outlook remains positive.
The broker has reduced its share price target to 400p from 500p but its recommendation remains ‘buy’.
Shares today were down 25% at 230p.
-- adds share price, broker comment --