Shares in logistics solutions and returns management provider Clipper Logistics (CLG) crashed more than 20% to 318p after missing full year results expectations.
The company reported a revenue increase of 17.6% for the 12 months to 30 April 2018, to £340.1m. That missed market estimates that had anticipated roughly £400m sales.
Pre-tax profit also rose, up just shy of 12% to a fraction off £18m, which is about in line with expectations
But investors are clearly concerned by the lack of overall growth, especially given the inflated share price rating. Even after today's stock slump the company is trading on an historic price to earnings multiple in excess of 22-times.
IN THE DARK ON NEW EXPECTATIONS
New forecasts for the coming year, to April 2019, are not as yet available to Shares.
AJ Bell’s investment director Russ Mould says ‘online retail is not immune from fluctuations in the economy. So although the company still achieved double-digit growth in full year earnings, the numbers were some way short of what was expected’.
Given the company’s clients include struggling retailers such as Marks & Spencer (MKS) and River Island, Clipper is directly exposed to the fragile retail sector.
Executive chairman Steve Parkin mentions in the results the ‘wider forces affecting the UK retail sector’ so is well aware of the issue and may be attempting to manage expectations.
STRONG RUN
For a company that began life in 1992 with just three people and a driver, Clipper has established itself as one of the leading logistics firm with a decent turnover.
Since it floated in 2014, it has shown a great capacity for growth and has picked up some top tier clients including ASOS (ASC) recently as well as Asda and Morrisson (MRW).
However, although the company has targeted online retailers in an attempt to bypass the decline in physical retailers on the high street, UK economic woes will probably impact any type of retailer.
