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".

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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".