Wincanton PLC shrugged off the impact of the HGV driver shortage crisis and surging fuel costs to post 19% higher interim revenues with underlying profits up by 43%.
Broker Liberum said that the group’s exposure to the HGV driver shortage is more modest than widely perceived, while it was mitigating the rising cost of drivers.
James Wroath, chief executive, conceded that it had faced a “perfect storm” due to the impact of the shortage of lorry drivers, but said the logistics firm could can cope.
Speaking to the Standard, Wroath said that greeting drivers had been affected by “Brexit, Covid and surging demand" allied to a workforce that was “already ageing”.
The logistics firm employs around 5,000 of its own drivers and said wages this year had gone up due to the HGV crisis, but added “less than 20% of group revenue is closed book transport of which price increases or exits have been agreed on around 90%”.
Booming demand from eCommerce groups helped revenues rise to £690mln (£578mln) in the six months to end September, 2021, while pre-tax profits rose 31% to £25.1mln.
Wincanton lifted its interim dividend by 40% to 4p.
Liberum added Wincanton's profits are now above pre-pandemic levels, helped by new business wins and strong revenue growth.
"The pivot to faster-growing customer sectors is delivering growth, but so are traditional sectors," it said.
Buy with a target price of 520p is the broker’s recommendation.
Shares rose 1.8% to 388p.