Year ahead Q&A: Adrian Colman, group FD, Wincanton

What have been the biggest challenges for your business over the past year, and what role did finance play in addressing them?

Closing the pension scheme to future accrual was a significant but necessary action for the group to take to mitigate the future volatility of the pension deficit and the income statement charge to give greater financial certainty to the business. Finance played an integral part in the modelling of the solution, information to be provided into the consultation process with colleagues and accounting for the impact of the closure in the financial statements.

What are the key political and economic risks/opportunities you face in the year ahead?

Like most businesses, Wincanton seeks stability in the political and economic outlook as this is usually the best environment for our customers to make investment decisions and outsourcing decisions that can provide us with opportunities for growth. Lower oil prices and lower fuel costs are better for our customers and help them unlock funds for investment.

Which capex projects will you be focusing on in 2015, and how will these be financed?

Wincanton is a relatively capex-light business as it chooses to utilise most of its property and fleet assets under finance leases. We would expect some significant fleet renewals to take place via this route and also some additions to the fleet, principally in the construction sector to deal with the strong growth that this sector is experiencing. We will also see some information systems infrastructure upgrades and some investment in our records management business.

What business-friendly policies do we want the next government to undertake to improve the environment for UK corporates?

The continued push to reduce red tape is welcomed by Wincanton as this helps us manage the costs in our business, remain competitive to win business, and deliver value to our customers. The recent reductions in the corporation tax rate should be sustained as these have helped to contribute to make the UK an attractive place for overseas investment.

Advice for other FDs for the coming year?

Diligent forecasting, tight cost control and a focus on cash are still paramount as the recovery appears fragile in a number of areas of the economy.

Adrian Colman, group FD, Wincanton
Colman was appointed group FD in January 2013, having served as Psion’s finance chief. Wincanton has increased its underlying operating margin to 4.4%, from 4.2%, while net debt has been reduced due to a focus on generating cash and working capital management.