News / E-commerce revenue up, but traditional services bring Clipper more profit

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Clipper Logistics’ e-commerce service revenues have surpassed traditional freight forwarding services, during another strong half-year performance by the UK logistics operator.

Chairman Steve Parkin congratulated his team on the results for the six months to October, adding the company was “exceptionally well placed” to benefit from e-commerce growth.

“We continue to be well-placed to benefit from continuing migration to online retailing and the increasing propensity for consumers to choose click-and-collect services,” he said.

“And we are excited about the future growth of our European operations, as the contracts with s.Oliver, Asos and Westwing evolve.”

E-fulfillment and returns management services revenues surged 40.7%, year on year, to £107.1m, generating an ebit profit of £6.2m, up 17.1% year on year.

The company put this growth down to new customer wins, including services for M&S, River Island and Asos in Poland, and Mr Parkin added: “Our recent contract wins also include Sports Direct and an extended relationship with Halfords.

“[These are] providing significant earnings momentum into the second half of the current financial year and beyond.”

Despite the growth in e-commerce revenue, non-e-fulfillment activities remained more profitable, generating £7.3m (up 16.4%) from £76.1m (up 15.8%) income.

The company again pointed to new contracts as a factor, including from Levi Strauss, but Mr Parkin’s main focus appeared to be on e-fulfillment and its click and collect offering, Clicklink.

“It’s well-positioned to enhance earnings as new clients are added and enhanced rates agreed with key customers as the service’s benefits become evident to retailers,” he said.

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

However, the company also admitted it had encountered “teething problems” with the introduction of new systems and processes that had resulted in some inefficiencies.

Furthermore, it pointed to “labour-related” cost challenges on certain closed-book contracts as providing headwinds.