Wincanton PLC (LON:WIN) shares rose on Wednesday supported by news the firm has been awarded contracts by The Weetabix Food Company to provide transport, warehousing and co-packing services starting from February 1.
The FTSE SmallCap firm, Britain’s largest logistics company, said the new partnership is made up of two separate, five-year contracts.
Wincanton said it will take on the operation of four warehouses where goods are stored and co-packed for retail promotion.
In addition, the group will provide a nationwide transport operation for the delivery, management and transfer of finished goods and stock.
Adrian Colman, Wincanton’s CEO, commented: “Our many years of experience in providing integrated supply chain networks puts Wincanton in the best position to help take Weetabix's operations forward and we are keen to bring new ideas to the process."
In a note to clients, analysts at Liberum Capital commented: “No financial details of the contracts have been disclosed. However, we believe the scale of the contracts may be larger than the average Wincanton new business win announcement.”
They added: “Given the timing of the start of the contracts, we would expect no material financial contribution in the current FY (March 2019E), with modest upside to consensus for later years.”
Liberum repeated a ‘buy’ rating and 375p price target on Wincanton shares, with the stock changing hands at 234p each in late morning trading on Wednesday, up 0.9% on Tuesday’s close.
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