Clipper Logistics delivers double-digit growth on back of new contracts

Sebastian McCarthy
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Clipper Logistics struck an upbeat tone this morning after posting double-digit growth in the six months to October, having secured a number of major contracts amid the continued rise in demand for click-and-collect services.

The figures

In the six months to the end of October group revenue reached £227.9m, climbing 14.1 per cent when compared with the same period one year ago. Pre-tax profits also jumped 16.9 per cent to £9.3m over the same timeframe.

Meanwhile, earnings per share rose to 7.2p, rising from 6.3p in the first half of the 2018 financial year.

However, cash generated from operations fell from £12.6m in the first-half of 2018 to £10.1m.

The company hiked its interim dividend by 14.3 per cent to 3.2p per share, rising from 2.8 per share in the first six months of 2018.

Why it's interesting

Buoyed by the continued rise in demand for click-and-collect services, Clipper Logistics has secured a number of major contracts in the last six months with retailers such as Sports Direct and Halfords.

Since its float in 2014 the company, which works with retailers to move products from warehouses to stores, has seen sustained levels of growth on the back of changing consumer habits.

Yet despite its fast-growing performance, the firm has met a number of challenges in 2018, with chairman Steve Parkin warning in July that there was an “element of caution” amid the “the wider forces affecting the UK retail sector”.

Today’s results nonetheless showed continued growth in the firm’s e-fulfilment operations with some of its major customers, such as Asda and Asos.

What Clipper said:

Steve Parkin, executive chairman of Clipper, said: "The Group continues to be exceptionally well-placed to benefit from the continuing migration to online retailing and the increasing propensity for consumers to choose click-and-collect services when placing orders online.

Our recent contract wins, including Sports Direct and an extended relationship with Halfords, provide significant earnings momentum into the second half of the current financial year and beyond.

We have a strong new business pipeline and look forward to continuing to update shareholders as we convert these opportunities."