Stellar year for retail logistics firm as revenues top £400m

The success of online retailing has seen West Yorkshire listed firm Clipper Logistics report a year of huge growth, reaching revenues of £400m and pre-tax profits of £17.9m.

Reporting on the year to 30 April, the listed firm noted many highlights and contract wins which has seen revenues rise 17% from £340m in 2017 to £400m this year and pre-tax profits rise from £16m to £17.9m.

During the year, the firm started significant new contracts with high profile retailers including Edinburgh Woollen Mill, River Island, M&S and ASOS.

It acquired Tesam Distribution  in May 2017 and RepairTech in June 2017, which were both “immediately earnings-enhancing.”

Clipper Logistics opened its first facility in Poland, with three new contract wins now secured, during the year and saw significant growth in activity with existing customers including Asda, Morrisons, Philip Morris, Wilko and s.Oliver.

The firm, which is marking is fourth anniversary on the main market, said it launched its cross-border Technical Services operation, leveraging its existing UK relationship with Amazon to perform a similar operation for Amazon in Germany.

It also developed a Team Clipper cultural programme for staff to understand their contribution to the success of the business, as well as its Fresh Start programme, working alongside a number of charity partners with the aim of providing work and career opportunities for those who may otherwise have challenges entering the job market.

Steve Parkin, executive chairman, recognised that the firm is operating in a distressed retail marketplace, stating: “We are conscious of the wider forces affecting the UK retail sector; whilst this means that we have to bring an element of caution into our planning, recent contract wins, together with a strong pipeline of new business activity and the further evolution of our Click and Collect proposition, leave the Group well positioned to achieve further growth both in the UK and internationally.”

Parkin added: “The Group is proud of its historical track record of delivering significant organic revenue growth and integrating strategic, value-additive acquisitions.  Our latest set of full year results show continued strong EBIT growth, growth achieved through remaining true to each of our core strategic principles: expanding the customer base, developing complementary services for customers, continuing to expand in Europe and identifying and seeking targeted, complementary acquisitions. We are excited by the new people initiatives we have launched in the year, including Team Clipper and Fresh Start, the former demonstrating our commitment to our people and the latter demonstrating our commitment to Corporate Social Responsibility.”

Post period end, Clipper commenced a large e-fulfilment operation for boohoo.com subsidiary Pretty Little Thing, with a huge new logistics hub in Sheffield now in operation which will eventually empoloy around 1,200 people.

It also committed to a new site at Crick to handle the increased scope of its Halfords operations. The listed firm also committed to an additional site in Poznan inPoland to house one of the three new contracts secured in the year ended 30 April 2018, with construction scheduled for completion in 2018.

Parkin added: “We will continue to identify key trends in the sectors we serve, and develop new services, processes and solutions that address the needs and challenges of our customers. Clipper’s unique understanding of the dynamics of the retail sector, and in particular the e-commerce sector including returns management and click and collect, provides the Group with exceptionally strong strategic positioning for the future.

“In the logistics sector, we have a high proportion of revenue from open book or minimum volume guarantee contracts, whilst in the commercial vehicles sector much of our profit and cash streams come from servicing and parts activities which are extremely stable. These contract mechanics provide a good degree of protection to the Group’s earnings and cashflows.”