Clipper Logistics to build on a strong year, extends ASOS contract

By

Nigel TAYLOR

Published
Jun 7, 2021

Clipper Logistics showed Monday how well the business navigated a choppy trading year and is now set on a course for solid gains over the next couple of years.

In its post-close trading update for the year ended 30 April, the logistics solutions, e-fulfilment and returns management services company said it had "again demonstrated the strength and resilience” of its model and the ability “to deliver a strong performance in the rapidly changing e-commerce and retail environment".  
 
Executive chairman Steve Parkin said: “We have enabled retailers to overcome challenges and adapt quickly by rethinking the way to operate both their online and bricks and mortar channels".

The result has been an “accelerated number of contract wins” in the UK and Mainland Europe, the latter including a three-year extension to its ASOS contract.

“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”, he noted.

Those upgrades came on the back of a “strong performance” throughout FY21 that saw full year core earnings (EBIT) performing in line with expectations, up 53% year-on-year to £31.6 million on an underlying basis.

Clipper also expects FY21 revenue to jump 39% year-on-year to £698 million, driven by a combination of organic growth and new contract wins. EBIT is also expected to be in line with the market consensus of £40.2 million, 39% higher than the £29 million achieved in FY20.
 
Clipper noted that the shift to online accelerated during the year due to the pandemic and expects to see “continuing momentum in e-fulfilment activities post pandemic”. 

But it also highlighted that its 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”.

Meanwhile, its 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. 

There’s was also a new contract win with Farfetch in the Netherlands in April, together with “strong” e-commerce growth in mainland Europe. It also noted that it has "supported a number of retailers in delivering into Europe efficiently, post-Brexit".
 
And that extended returns management services contract for ASOS will see the retailer "further consolidate its mainland European returns into Clipper's facility".