Clipper Logistics makes strong start to new financial year


Clipper Logistics PLC (LSE:CLG, FRA:3UC) said it has made a strong start to the new financial year and is trading in line with its recently upgraded guidance.

The logistics solutions, e-fulfilment and returns management services provider said its pipeline of new opportunities remains buoyant and further momentum with new contract wins is expected during the year.

READ: Clipper Logistics lands contract in Ireland with Life Style Sports

The group benefited from the structural shift to e-commerce during the pandemic and expects to continue growing in the future.

Revenue in the year ending 30 April 2022 will benefit from new contracts started recently, growth with existing customers, while operations that are still at the planning stage will contribute to the balance sheet in the following financial year.

In the year to 30 April 2021, revenue climbed 39% to GBP696mln, with underlying earnings (EBIT) up 52% to GBP31mln.

Cash generated from operations surged 44% to GBP87mln, prompting the board to declare a final dividend of 7.1p per share, meaning the total dividend will be 14.4% higher at 11.1p.

“The market has witnessed significant recent change particularly with the acceleration of the growth in e-fulfilment which now represents 70% of our logistics revenue,” said executive chairman Steve Parkin in a release.

“Our highly deployable asset-light model has enabled us to reinforce our pan-European proposition during the financial year, which together with a strong pipeline of new business activity ensures that the group is in an excellent position to achieve further growth both domestically and internationally.”

According to analysts at AJ Bell, Clipper recognised the importance of handling returns from online orders years ago, a trend that reverted during the pandemic as people were more afraid of going to the Post Office, but it will soon revert to normal.

“A smart business won’t limit itself to a finite pool of clients, hence why Clipper has been pushing hard to expand beyond retail. The latest financial results show good progress in the heathcare industry. Equally, they also show geographical expansion beyond the UK with progress in mainland Europe,” said financial analyst Danni Hewson.

“Costs have understandably gone up. A growing business must spend money to make money, and the logistics sector has seen considerable wage inflation due to fierce competition for drivers,” she added.

“There are a lot of moving parts to Clipper as its operations are not simply about putting stuff on a truck to deliver to the customer, and then taking items back that aren’t wanted. The hallmarks of a strong business include the ability to run an efficient business, capture opportunities to make more money from clients, and keep moving forward with new initiatives. Clipper seems to have all these traits.”

Shares rose 0.3% to 814.6p on Wednesday morning, having rocketed 95% since August 2020.

–Adds analyst comment, shares–


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