News / Partnership with John Lewis gives Clipper Logistics half-year results a boost

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Clipper Logistics today reported first-half EBIT had increased 23.2% to £7.6m, on revenues of £164.9m, with growth bolstered by a click and collect joint-venture with retailer John Lewis.

The results indicated an upward trend in profitability for the London Stock Exchange-listed group, with the rate of EBIT growth up on both last year’s six-month performance (18.1%) and its full year results for the period ending April 2016 (21%), and ahead of the revenue growth rate of 16.5%.

Steve Parkin, executive chairman of Clipper, said the results were in line with board expectations, adding that the firm had seen a 67% surge in operating cash flow, up to £12.3m from £7.4m the year before.

The group said this increase was partly down to increased activity in the logistics sector and partly to a change in policy by a commercial vehicle manufacturer whereby vehicles previously delivered directly to major fleet customers are now recognised in the group’s inventories prior to sale.

“Revenue and profit growth has been strong in all areas,” said Mr Parkin.

E-fulfilment and returns activity reported 21.7% growth in EBIT, to £4.2m, on revenues of £58.9m. For non-e-fulfilment activities, EBIT was 18.9% higher at £5m on revenues of £61.3m, which were 9.7% ahead year-on-year.

“Our position in the high-growth area of e-fulfilment and associated services, has been enhanced further by the recent formalisation of a joint-venture with John Lewis to provide click and collect services dedicated to the needs of high street retailers,” Mr Parkin added.

The venture, announced last year,  underwent a major expansion in September to include the entire Waitrose UK store estate, from 30% previously. The non-exclusive service has also been made available by Clipper to other retailers.

Alongside the John Lewis partnership, the group also reported strong organic growth, particularly in the e-commerce sector, on existing contracts, including those with Browns and Pep&Co. It also began operations with Gallaher, Links of London and expanded its John Lewis operation to the retailer’s Northampton facility.

“The new-business pipeline continues to be strong, and we expect the positive momentum from existing and new contracts to continue into the second half of the year,” said Mr Parkin.

Clipper also reported growth of 20.4% in EBIT to £1.3m on sales of £45.6m for its commercial vehicles business, Northern Commercials, which sells new and used vehicles and provides servicing and repair facilities.

The company added that trading had remined strong in the second half, with a “very successful Black Friday to Cyber Monday trading period for clients”, and further said there had been no “significant upward pressure on its cost base”.

“The high proportion of open-book contracts within its UK logistics operation provides a high degree of protection against any future potential cost inflation,” it added.