TIDMCLG
RNS Number : 9444A
Clipper Logistics plc
07 June 2021
Clipper Logistics plc
Year End Trading update
Strong performance in FY21 and continuing momentum with upgrades
to guidance for FY22 and FY23
Acquisition of Wippet B2B marketplace to extend reach into life
sciences vertical
ASOS contract extension in Europe
Clipper Logistics plc ("Clipper", the "Group" or the "Company"),
a leading provider of value-added logistics solutions, e-fulfilment
and returns management services to the retail sector, today
provides a post-close trading update for the year ended 30 April
2021 ("FY21").
Steve Parkin, Executive Chairman commented: "FY21 has been an
unprecedented year which demonstrates again the strength and
resilience of our model and the ability of Clipper to deliver a
strong performance in the rapidly changing e-commerce and retail
environment. We have enabled retailers to overcome challenges and
adapt quickly by rethinking the way to operate both their online
and bricks and mortar channels. Additionally, we have entered the
life sciences sector in support of the NHS and care sectors,
providing fulfilment of vital supplies. The uniqueness of our full
end to end solutions combined with our agile and able culture has
accelerated our contract wins in the UK and Mainland Europe which
is testament to our expertise and execution of our strategy. We are
very well positioned to further accelerate growth by capitalising
on the structural shift to online and to position Clipper as a
global e-commerce and retail logistics enabler. As such, we are
pleased to upgrade our guidance for both FY22 and FY23".
"Our key priority throughout this year has been to ensure the
safety of our staff and their families and on behalf of the Board I
would like to thank all our colleagues across the Group for their
commitment and dedication to deliver a very strong year."
YEAR END TRADING UPDATE
The Group has continued to perform strongly throughout FY21 and
full year EBIT (IAS17 basis) is expected to be in line with
expectations of GBP31.6m, an underlying increase of 53% on the
GBP20.6m achieved in FY20 (excluding the negative goodwill which
arose in FY20). We expect revenue for FY21 of GBP698m, 39% ahead of
the prior year driven by a combination of organic growth and new
contract wins.
EBIT on an IFRS16 basis is expected to be in line with the
market consensus of GBP40.2m, 39% higher than the GBP29.0m achieved
in FY20 (again excluding the negative goodwill arising in the prior
year).
The structural shift to online accelerated during the year due
to the pandemic and we expect to see continuing momentum in
e-fulfilment activities post pandemic. Non e-fulfilment also
performed strongly driven by new contract wins as retailers looked
to outsource, collaborate, and share costs, which plays well to
Clipper's shared-user network in its role as an enabler of
retail.
The Company's strong track record of providing innovative
solutions, and supporting online retailers in driving growth, cost
efficiency and excellent customer service has strategically
positioned us well to seize further opportunities. Feedback across
our customer base has highlighted the strong level of support we
have been able to provide due to our agility and ability to offer
adaptable working solutions and services in short timescales.
Our core e-fulfilment and returns management services saw a
significant number of new contract wins during the year including
River Island, Mountain Warehouse, Joules, Revolution Beauty and JD
Sports in the UK. We have extended into a new geography with a new
contract with FarFetch in the Netherlands which commenced in April
2021, as well as recording strong e-commerce growth in mainland
Europe and have supported a number of retailers in delivering into
Europe efficiently, post Brexit.
The Group continues to have a strong new business pipeline and
we look forward to updating the market in due course.
CLIPPER EXTENDS ITS PRESENCE IN THE LIFE SCIENCES VERTICAL
To further support and extend its reach into the life sciences
vertical, Clipper is delighted to announce the acquisition of
Wippet Ltd.
Wippet will launch an online B2B marketplace to service the
broader health care sector in the UK. This new investment is
aligned to the Company's strategic intent to extend its penetration
into the life sciences sector, which we have previously highlighted
as a potential significant growth opportunity for the Company.
Wippet will launch in September 2021 as a B2B online marketplace
initially targeting buyers from the fragmented elderly care market,
which is a sector worth up to GBP2.5 billion per annum, alongside
vendors who sell to more than 5,500 care homes across the UK.
Orders through the B2B platform can either be fulfilled by
Clipper or directly by the vendor. Over time there are potential
opportunities to expand the Wippet platform internationally, and
also to extend the marketplace platform to other sectors.
Wippet will offer the convenience of a single-portal access to
category-specific and specialised products in a highly fragmented
market. Vendors to the Wippet portal will benefit from easier
access and reduced costs to their target customers.
Wippet will be led by a highly experienced management team with
Matt Oxley as Managing Director. Matt has previously held executive
positions in major healthcare organisations.
EXTENSION OF ASOS CONTRACT IN EUROPE
In addition to its UK operation, the Company already provides
returns management services for ASOS' mainland Europe operation at
its Poznan facility in Poland. We are pleased to announce a new
three year extension to our contract which will see ASOS further
consolidate its mainland European returns into Clipper's facility.
As a result we will grow our ASOS headcount from 350 full-time
equivalents (FTE) to 700 FTEs at the Poznan site.
This extended contract with ASOS demonstrates the strength of
our European management team which underpins our European growth
ambitions. We are encouraged by the immediate growth in volumes in
recent weeks.
OUTLOOK
The Board remains confident in Clipper's prospects for the new
financial year and over the medium term and expects that the
current momentum from new and existing contract wins will continue
given the acceleration in the structural shift to online:
-- as a market leader in e-fulfilment and returns management services,
we expect further continued growth in this area;
-- we expect to benefit from the mega-trend towards outsourcing
as retailers seek to share resources and collaborate to improve
service, reduce costs, and focus on their core business. This
plays to Clipper's strength in providing shared user infrastructures;
-- we expect continuing growth in demand for Click & Collect services
as the UK high street re-opens.
The Group looks forward to further expansion in Europe as bricks
and mortar retail reopens, and online retail continues to grow.
Given the continued strong trading momentum and pipeline of
contracts wins, we expect EBIT (under both IAS 17 and IFRS 16) for
FY22 and FY23 to be ahead of Company-compiled consensus
(https://www.clippergroup.co.uk/analyst-consensus/) by mid-single
digit percentages in both years.
Underpinning the Group's ambition to become a global leader in
end to end ecommerce and retail, the Company continues to explore
potential M&A opportunities in both mainland Europe and North
America.
BALANCE SHEET AND LIQUIDITY
Given the strong trading momentum and cash conversion, Clipper
has reduced net debt (IAS 17 basis) from GBP45.1m (30 April 2020)
to GBP17.0m (30 April 2021), a net debt / EBITDA ratio of 0.4x,
representing significant headroom against its net debt covenant of
2.5x.
Steve Parkin, Executive Chairman of Clipper, added "Clipper
continues to demonstrate its agility and ability to focus on
providing innovative solutions in a rapidly evolving and dynamic
environment. As the Company continues to scale up both in the UK
and in Mainland Europe, over 70% of our revenue is now derived from
online retail. Given our trading momentum and upgraded guidance for
both FY22 and FY23 we look to the future with confidence."
-Ends-
ENQUIRIES:
Clipper: +44 (0)113 204 2050
Steve Parkin, Executive Chairman
Tony Mannix, Chief Executive
Officer
David Hodkin, Chief Financial
Officer
Greg Lawless, IR & Comms
Director
Public Relations Advisers:
Buchanan: +44 (0) 207 466 5000
David Rydell
Stephanie Watson
Hannah Ratcliff
"This announcement contains inside information as defined in
Article 7 of the retained EU law version of the Market Abuse
Regulation No 596/2014 ("UK MAR") and has been announced in
accordance with the Company's obligations under Article 17 of UK
MAR."
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END
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