Shares in Clipper (CLG) clipped ahead by around 1% to 819p after the Leeds-headquartered logistics specialist reported a jump in annual profit driven by ‘high’ demand for its e-fufilment services and hiked the total dividend by 14.4%.
Clipper said it is trading in line with upgraded guidance having made a strong start to the year to next April, while insisting its pipeline of new opportunities ‘remains buoyant’ and that ‘further momentum with new contract wins is expected during the year’.
ONLINE BOOM
For the year to April 2021, Clipper’s pre-tax profit rose from £20.1 million to £26.7 million on revenue up an impressive 39.1% to £696.2 million as the pandemic accelerated the structural shift to buying goods and services online.
The company experienced a sharp increase in sales and profit thanks to doing more work for existing customers including ASDA, ASOS (ASC:AIM), John Lewis, Morrisons (MRW) and Wilko, winning new clients such as Revolution Beauty (REVB:AIM) and Unipart, and gaining scale in areas beyond its historical focus on the retail sector.
Following this strong performance and with cash generated from operations having increased by 44% to £86.9 million, confident Clipper recommended a final dividend of 7.1p per share, taking the year’s total dividend up 14.4% to 11.1p.
THE EXPERT’S VIEW
‘A smart business won’t limit itself to a finite pool of clients, hence why Clipper has been pushing hard to expand beyond retail’, explained AJ Bell financial analyst Danni Hewson.
‘The latest financial results show good progress in the heathcare industry. Equally, they also show geographical expansion beyond the UK with progress in mainland Europe.
‘Costs have understandably gone up. A growing business must spend money to make money, and the logistics sector has seen considerable wage inflation due to fierce competition for drivers.
‘There are a lot of moving parts to Clipper as its operations are not simply about putting stuff on a truck to deliver to the customer, and then taking items back that aren’t wanted. The hallmarks of a strong business include the ability to run an efficient business, capture opportunities to make more money from clients, and keep moving forward with new initiatives. Clipper seems to have all these traits.’
