Midway through 2018, Clipper Logistics (CLG) surprised the market in its full-year release with a cautionary tone from management over future contract conversion rates. Happily, this has yet to play out. Analysts at Numis said contract wins had been “encouraging” during the first half and “create significant forward profit momentum” for the e-fulfilment division. During the reported period Clipper Logistics began a new e-fulfilment operation for Pretty Little Thing in Sheffield, and maintained organic growth with existing customers such as Asda, Asos and Wilko. Together, this helped drive a 17.1 per cent increase in operating profit from e-fulfilment to £6.2m. This also includes a £0.7m loss from Clicklink, but this is expected to reverse during the second half due to the seasonality of the business.
Although contract wins were steady, this was tempered by a weaker performance elsewhere. Operating profit in non e-fulfilment logistics increased by 16.4 per cent to £7.3m, but strip out the benefit of property-related advisory fees and this figure would have declined. Management said this was due to lower activity levels on a closed-book contract with a key retailer as it reshapes and restructures its network, together with lower tobacco activity. Recent contract wins, including with Sports Direct and Halfords, should support earnings through the second half.
Analysts at Numis expect pre-tax profits of £22m during the year to April 2019, giving EPS of 16.9p, compared with £18.9m and 14.8p in FY2018.
| CLIPPER LOGISTICS (CLG) | ||||
| ORD PRICE: | 290p | MARKET VALUE: | £294m | |
| TOUCH: | 290-293p | 12-MONTH HIGH: | 494p | LOW: 252p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 40p* | NET DEBT: | 103% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 200 | 7.93 | 6.3 | 2.8 |
| 2018 | 228 | 9.27 | 7.2 | 3.2 |
| % change | +14 | +17 | +14 | +14 |
| Ex-div: | 13 Dec | |||
| Payment: | 7 Jan | |||
| *Includes intangible assets of £37.6m, or 37p a share | ||||
