Wincanton PLC Update on Pension Scheme (9880M)
September 20 2023 - 2:00AM
UK Regulatory
TIDMWIN
RNS Number : 9880M
Wincanton PLC
20 September 2023
20 September 2023
LEI: 213800Z5WTW8QKOHWQ82
This announcement contains inside information.
WINCANTON PLC
("Wincanton" or "the Group")
Update on Pension Scheme
Wincanton, a leading supply chain partner for UK business, is
pleased to announce it has reached an agreement with the Group's
Pension Scheme Trustee (the "Trustee") on the terms of the 2023
Triennial Valuation (the "2023 valuation").
Highlights:
-- As at 31 March 2023, the valuation of the Group's defined
benefit pension scheme showed an actuarial surplus of GBP3.9m,
compared to an actuarial deficit of GBP154m at 31 March 2020.
-- The strength of the Scheme means that it is well positioned
to meet its obligations to both deferred members and current
pensioners; with members' liabilities fully backed by assets on
current market assumptions.
-- The significant improvement in the Scheme is a reflection of
the Trustees' stewardship and collaboration with the Group during a
period of macro-economic turbulence.
-- The Group and the Trustees have agreed that no further
contributions are currently payable into the Scheme as a
consequence of the 2023 valuation.
-- Prior conditions around shareholder distributions have been removed.
Further detail:
The key elements of the 2023 valuation and related covenants are
set out below:
-- With the Scheme now approaching a self-sufficient position,
no further contributions into the Scheme by the Group will be
required between 30 September 2023 and the completion of the 2026
valuation. Previously, contributions for the year ending 31 March
2024 would have been GBP23.6m and GBP25m per annum from April 2024
to March 2027, growing in line with the Retail Prices Index.
-- There will be no conditions associated with the payment of
dividends or the execution of share buybacks. Previously, Wincanton
was required to provide additional 50% matching payments to the
Scheme where aggregated shareholder distributions (dividend and
buyback) grew more than 10% year-on-year and on a full matching
basis if distributions grew more than 15% per annum.
-- GBP12m of Letters of Credits can now be released in line with
the original Contingent Funding agreement as they were required
only if contributions above GBP25m per annum were needed.
-- If the Scheme experiences severe adverse performance, such
that the Technical Provisions deficit of the Scheme exceeds an
agreed threshold for two consecutive measurement dates (or if Group
financial leverage exceeds agreed trigger points), Wincanton will
review contribution requirements or establish contingent assets to
protect the Scheme. The current expectation is that either of these
are extremely unlikely, due to the substantial headroom between the
current position and the agreed thresholds. This mechanism ensures
the protection of members' benefits under extreme market or company
events.
The significant improvement in the position is the result of
Group contributions, a strong return on assets and positive market
changes.
The Board will continue to review the performance of and options
for the Scheme, in line with the Group's capital allocation
framework.
Tom Hinton, Chief Financial Officer, Wincanton, said:
"We are delighted with the outcome of the 2023 Triennial
Valuation, which is the result of a well-executed investment
strategy by the Scheme Trustees and strong cash generation from the
Group enabling consistent contributions into the Scheme in recent
years."
"Scheme members can take comfort in the funding level and
security of the Scheme, with their benefits backed by a strong
portfolio of assets."
"The agreement will significantly improve the Group's free cash
flow and we look forward to providing a further update on
Wincanton's capital allocation at our Interim Results in
November."
-Ends-
For further information please contact:
Wincanton plc Tel: +44 1249 710
000
James Wroath, Chief Executive Officer
Tom Hinton, Chief Financial Officer
Headland Tel: +44 20 3805
4822
Susanna Voyle / Henry Wallers
E: wincanton@headlandconsultancy.com
About Wincanton
Wincanton is a leading British supply chain solutions company.
The Group provides business critical services including storage,
handling and distribution; high volume eFulfilment; retailer 'dark
stores'; two-person home delivery; fleet and transport management;
and network optimisation for many of the UK's best-known
companies.
The Group is active across a range of markets including food and
consumer goods; retail and manufacturing; eCommerce; the public
sector; major infrastructure; building materials; fuel; and
defence. With almost 100 years' heritage, Wincanton's 20,300-strong
team operates from more than 170 sites across the country,
responsible for 8,500 vehicles.
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