Wincanton plc

views updated

Wincanton plc

Cale House
Station Road
Wincanton, Somerset BA9 9AD
United Kingdom
Telephone: ( + 44) 1963-828-282
Fax: ( + 44) 1963-828-288
Web site:

Public Company
Employees: 16,632
Sales: £745 million ($1.06 billion) (2002)
Stock Exchanges: London
Ticker Symbol: WIN
NAIC: 541614 Process, Physical Distribution, and Logistics Consulting Services; 488999 All Other Support Activities for Transportation

Wincanton plc is one of the United Kingdoms leading logistics companies focused on three core markets: warehousing, fleet management, and supply chain systems. The companys warehousing operations consist of 52 automated and nonautomated chilled and ambient temperature warehouses across the United Kingdom, ranging from 1,500 square meters to 30,000 square meters in size; about half of these warehouses are temperature-controlled facilities, representing nearly 250,000 square meters in the companys total operating capacity of nearly 800,000 square meters. The companys Fleet Management operation oversees a fleet of nearly 4,000 tractors and 5,000 trailers, about 40 percent of which are directly owned by Wincanton. The company, which had long been a milk carrier for the Milk Marketing Board and others, now offers temperature-controlled, fluid, bulk, and dry freight distribution services for customers ranging from Air Products and BP Castrai, to Dairy Crest, Heinz, and Texaco, and many of the United Kingdoms major grocery retail groups. The companys Supply Chain Systems operation offers IT and related services for fleet optimization, warehouse management systems, customer-systems interfaces, and other logistics and warehousing systems.

Wincanton was part of Unigate, renamed Uniq in 2000, before being demerged as an independent, publicly listed company in 2001. Wincanton is headed by Chairman Victor W. Benjamin and, since October 2002, CEO Paul Bateman, formerly of the Teseo supermarket group. Batemans appointment was seen by many as a signal that Wincanton intends to extend its U.K.-centric operations onto the European mainland.

Unigate Offshoot in the 1920s

Named for its location in the town of Wincanton, well known for its racetrack, Wincanton traces its origins back to the early years of food distribution conglomerate Unigate Pic. When that company, which changed its name to Uniq in 2000 after shedding its dairy business, decided to separate its distribution and logistics operations into two separate, publicly listed entities, Wincanton plc was launched as an independent company with a listing on the London Stock Exchange. Yet Wincanton had long since established a name for itself as one of the United Kingdoms leading logistics companies.

Unigate started operations in the 1880s when brothers Charles and Leonard Gates took over their fathers store in Guildford, Surrey, which was originally a grocery store, with strong liquor and beer sales. The Gates brothers added coffee and tea sales before deciding to exit liquor sales altogethergoing so far as to pour their existing stock into the street. Instead, the Gates brothers decided to go into the dairy business, adding a milk separator and adopting the name West Surrey Dairy in 1885. That company grew into West Surrey Central Dairy Company, with creameries located throughout England and Ireland by the turn of the century.

Distribution operationscarrying raw milk from the farms to the companys dairies, and from the dairies to its customersquickly became a part of the companys business. West Surrey began adding other products, such as powdered milk, which led to the creation of its Cow & Gate brand in 1908. After going public in 1917, the company changed its name to Cow & Gate Co. in 1929.

By then, the companys distribution operations had grown to a sufficient scale to create a dedicated distribution subsidiary, which was launched in Sherborne, Dorset, in 1925. In 1927, that business was moved to one of Cow & Gates locations in Wincanton, where it became known as Wincanton Transport & Engineering. Wincantons early mandate was to provide maintenance services for Cow & Gates dairy operations and its growing distribution fleet. Cow & Gates continued expansion, especially as the company became a leading producer of infant formulas, led Wincanton to expand its operations to include managing the companys warehouses as well.

The Logistics of Growth in the 1970s

Cow & Gate merged with United Dairies, a leading producer of dairy products in the United Kingdom, to form Unigate Ltd. in 1959. Under Unigate, the Wincanton subsidiary saw its status grow, as it grew into a full-fledged engineering and transportation business responsible not only for supporting Unigates diversifying operations, but also for developing its own growth outside of Unigate. A major development came with Wincantons own diversification, as it added a fleet of tanker trucks and began transporting milk for the government-controlled Milk Marketing Board. Those operations led the company into other areas of liquids transport, including fuel transportation. Meanwhile, Unigates diversification into the retail sector, as it built up a number of retail brands, including the Kibbys supermarket chain, a network of Uni-Wash laundromats, and a chain of clothing shops, boosted Wincantons own warehousing and distribution operations.

Wincanton began to develop into a full-fledged logistics group in the 1970s, particularly with the addition of temperature-controlled warehousing operations during that decade. By then Wincanton had been split into its two components, Wincanton Engineering Ltd. and Wincanton Transport Ltd. The latter, which took over the distribution fleet, began providing temperature-controlled warehousing for a variety of third-party manufacturers and distribution groups. This activity became one of Wincantons core specialties, as it developed its expertise in the design and construction of warehouses, the creation of automated warehouse systems, and warehouse management. Wincanton also developed competence in temperature-controlled distribution, forming its Wincanton Chilled Distribution division.

Unigate, which had been developing its own diversified range of businessesincluding the Casa Bonita chain of Mexican restaurants in the United States, and poultry processing activities through Turners Turkeys and JP Woodcontributed to Wincantons growth through a series of acquisitions in the mid-1980s. In 1985, the company tacked on Arlington Motor Holdings, bought for £10.5 million, and added Colchester Car Auctions the following year, as Wincanton built up the fleet management side of its expanding logistics business.

Unigate added Jobs Fast Food Distribution in 1987. In 1988, the company paid £10 million to acquire four new companiesCommercial & Trailer, which specialized in tractor-trailer sales; North Shropshire Motor Auctions; Rydale Truck & Coach; and Southern Brosenabling Wincanton to increase its purchasing power. By the beginning of the 1990s, Wincanton had positioned itself as one of the United Kingdoms leading fleet management groups.

Independence in the 21st Century

Wincanton boosted its warehousing operations with the acquisition of J. Whittam Ltd. in 1992. Unigate, meanwhile, had begun a major restructuring programincluding the sale of the companys liquid milk processing operationsin an effort to concentrate its operations on a more narrowly focused range of activities. As part of that restructuring, which was to continue throughout much of the decade, Wincanton absorbed the Unigate Chilled Distribution division, which included its own warehousing and retail distribution operations, in 1992. The merger doubled Wincantons size and resulted in the formation of the newly named subsidiary, Wincanton Distribution Services.

By then, the heavily fragmented U.K. logistics sector was undergoing its first consolidation spree, as the British recession deepened, and as the countrys supermarket and other retail groups were themselves consolidating their sectors. Wincanton joined the consolidation drive in 1993 when it paid £54 million to acquire a smaller competitor, Glass Glover Pic. That company, based in Rotherham, Doncaster, held a warehouse and distribution portfolio similar to that of Wincanton, with operations supporting a number of the United Kingdoms major supermarket groups. Glass Glover, which had been taken private in a management buyout in 1988 and had been preparing to relist in the early 1990s, filled out Wincantons geographic spread with complementary operations focused primarily on the North of England and Scotland. The purchase also made Wincanton the United Kingdoms leading provider of distribution services in the supermarket sector.

Wincanton took another step forward in 1994 when it began construction of its first third-party automated warehouse, tapping in to the growing trend for manufacturers to outsource their logistics operations. Wincantons expertise enabled it to become one of the United Kingdoms leading providers of automated warehousing and related supply chain services, with clients including St. Ivel, Britvic, GlaxoSmithKline, Lit-tlewoods, Nestlé, Mars, and Heinz.

Company Perspectives:

Vision: To be recognised by customers, employees and investors as best in class, the premier supply chain solutions company for customers, the employer of choice for top industry professionals, the sector preference for investors.

Values: Our core values are: Build and maintain close harmony with our CUSTOMERS. Treat every EMPLOYEE with care, respect and integrity. Recruit the best PEOPLE and develop them to their full potential. Harness the flair of the INDIVIDUAL. Ensure that TEAMWORK thrives. Minimise operational effects upon the COMMUNITY and the environment.

Wincanton continued its growth in 1995, adding the Fern Tankers group to boost its liquids distribution operations. That same year, the company attempted to diversify its business, buying the Guard Defence Security Services group. Yet the continuing consolidation of both the logistics and security services markets led Unigate to shed Guard Defence just two years later. Nonetheless, in 1995 Wincanton changed its name to emphasize its transformation into a full-fledged logistics group, becoming Wincanton Logistics Ltd.

Unigate, which was in the process of shedding much of its dairy operations, had begun an aggressive acquisition and diversification drive in the late 1990s. Wincanton benefited from Unigates expansion drive with the addition of chilled foods distribution specialist Rokold European Transport Ltd. in 1998.

The sell-off of the rest of Unigates dairy operations to Dairy Crest in 2000 set the stage for Wincantons independence. Following the sale, Unigate changed its name to Uniqmaintaining the uni of its former name and adding a q for qualityand regrouped around two core divisions, Uniq and Wincanton. By the end of that year, Uniq acknowledged that it intended to demerge its operations, unveiling Wincanton as a separate company.

The demerger took place in 2001, when Wincanton became Wincanton pic, and placed its shares under its own name on the London Stock Exchange. The move offered the perspective of still greater growth for Wincantonfor years the companys reputation had suffered from its position as just a part of Unigate. Now under its own name, Wincanton was able to assert its position as one of the United Kingdoms leading supply chain management companies.

The company quickly signed contracts with such major clients as Safeway, Comet, Somerfield, BP, and B&Q, and extended into Ireland with a contract with Superquinn, by mid-2001. The company also was enjoying the widening trend toward outsourcing logistics operations among the United Kingdoms major retail and manufacturing groups. Wincantons success continued into the following year, as it won the distribution contract for the newly formed First Milk dairy cooperative in August 2002 and, in October 2002, became the primary fuel distributor for Totals U.K. service station operations. Wincanton had a strategic aim to expand onto the European continent, as the trend toward outsourcing there gained momentum. The companys international interests were confirmed by the appointment of former Teseo executive Paul Bateman, who played a role in Teseos own international expansion drive in the 1990s, as company CEO. Wincanton, with more than 75 years in the business, was poised to expand its operation in an effort to become one of Europes leading logistics companies.

Principal Subsidiaries

Wincanton Holdings Limited; Wincanton Group Limited; Wincanton Ireland Limited (Republic of Ireland); UDS Properties Limited.

Principal Competitors

Exel Pic; Tibbett and Britten Group PLC; Securicor PLC; TNT UK Ltd.; TDG PLC; GEO Logistics Ltd.; Kuehne and Nagel UK Ltd.; Allport Ltd.

Key Dates:

Gates brothers found the predecessor to Unigate and the company enters the dairy processing industry.
The growth of the dairy distribution business leads to creation of a dedicated dairy plant and fleet maintenance and management division, Wincanton Transport & Engineering.
Wincanton begins milk distribution operations for the Milk Marketing Board.
Wincanton splits into two divisions, Wincanton Engineering and Wincanton Transport, and the latter forms the basis of the future Wincanton group.
The company acquires Colchester Car Auctions.
The company acquires Commercial & Trailer, North Shropshire Motor Auctions, Rydale Truck & Coach, and Southern Bros.
The company acquires J. Whittam Ltd.; Wincanton merges with Unigate Chilled Distribution, name changes to Wincanton Distribution Services.
The company acquires Glass Glover Plc for £54 million.
The company begins construction of its first automated warehouse.
The company changes its name to Wincanton Logistics and acquires Fern Tankers.
The company acquires Rokold European Transport Ltd.
Unigate sells off its dairy business and is renamed as Uniq Plc.
Wincanton demerges from Uniq as a separate, publicly listed company, Wincanton pic.
Wincanton wins a contract to supply most of Totals fuel tanker transportation in the United Kingdom.

Further Reading

Delivering Excellence, Grocer, June 23, 2001, p. S18.

Good Progress for Wincanton, Evening Mail, June 6, 2002, p. 33.

Gough, Helen, Wincanton Goes It Alone, Dairy Industries International, September 2001, p. 31.

Hailey, Roger, Teseos Bateman Takes Over at Wincanton, Europe Intelligence Wire, October 10, 2002.

Rowe, Janet, The Wincanton Way, Dairy Industries International, December 1999, p. 45.

Williams, Philip, Wincanton Upbeat After Demerger, Birmingham Post, June 7, 2002, p. 23.

M.L. Cohen