TIDMCLG
RNS Number : 3667M
Clipper Logistics plc
28 July 2017
Clipper Logistics plc
Final Results for the year ended 30 April 2017
Clipper Logistics plc ("Clipper", "the Group", or "the
Company"), a leading provider of value-added logistics solutions
and e-fulfilment and returns management services to the retail
sector, is pleased to announce its Full Year Results for the year
ended 30 April 2017.
Financial Highlights for the year ended 30 April 2017
-- Group revenue increased by 17.2% from GBP290.3
million to GBP340.1 million.
-- Group EBIT(1) increased by 21.8% from GBP14.7
million to GBP17.9 million.
-- Group profit after tax for the financial year
increased by 20.6% from GBP10.3 million to GBP12.5
million.
-- Earnings per share increased by 20.5% to 12.5p
(2016: 10.3p).
-- Cash generated from operations increased by 25.2%
from GBP20.5 million to GBP25.7 million.
-- Dividend per share increased by 20.0% to 7.2p
(2016: 6.0p).
(1) Group EBIT is defined as operating profit, including the
Group's share of operating profit in equity-accounted investees,
before amortisation of intangible assets arising on consolidation
and any exceptional or non-recurring items.
Percentages are calculated based on the underlying numbers as
presented in the Financial Statements, not on the rounded figures
above.
Operational Highlights for the year ended 30 April 2017
-- Entered into a joint venture with John Lewis, Clicklink Logistics Limited, which operates
a shared user, retailer- focused Click and Collect solution to capitalise on rapid transition
to in-store collections.
-- Significant new contracts commenced with high profile retailers, including those with Halfords,
Inditex, John Lewis and Links of London.
-- The full year benefit was realised from contracts that went live during the previous year
with Browns, M&Co, Pep&Co and Ireland's largest retailer.
-- Organic growth in activities with ASOS, Morrisons, Wilko and Zara.
-- Clipper's returns management services brand Boomerang saw another successful year with approximately
89% of product successfully returned to prime stock at first pass.
-- Maintained excellent service levels throughout the 2016 Black Friday to Cyber Monday peak
trading period.
-- Developed our business in mainland Europe with the commencement of operations for Smiffys
and Westwing.
-- Strengthened the team with key strategic appointments of a Chief Operating Officer, a Group
Human Resources Director, an Engineering and Technology Director and a new Managing Director
in Germany.
Post Year End Highlights
-- Completed the acquisitions of Tesam Distribution Limited and RepairTech Limited, both of which
will be immediately earnings-enhancing, and will extend the breadth of our service offering.
-- Further bolstered the senior management team with the appointment of a new Senior Operations
Director in UK Logistics.
-- Strong pipeline of new business opportunities with existing new customers.
Steve Parkin, Executive Chairman of Clipper commented:
"The Group is proud of its track record of consistently
developing effective solutions to address the changing needs of
retailers in today's continually evolving consumer landscape. Our
latest set of full year results reflects the trust and confidence
that our customers have in our ability to enable them to achieve
their service proposition to their own customers, through the
provision of relevant and cost-effective services. Clipper's
strategy of driving organic growth and seeking targeted,
complementary acquisitions continues to enhance shareholder
value.
As we move into our new financial year, we have a strong
pipeline of new business opportunities, and we look forward to
updating shareholders as these crystallise over the coming months.
Clicklink, our Click and Collect solution owned jointly with John
Lewis, now provides a multi-user platform which is gaining
significant traction with other retailers. In addition, the recent
acquisitions of Tesam and RepairTech broaden both our customer base
and our suite of services, and will be immediately
earnings-enhancing."
Forward looking statements
This announcement contains forward looking statements. These
have been made by the Directors in good faith using information
available up to the date on which they approved this report. The
Directors can give no assurance that these expectations will prove
to be correct. Due to the inherent uncertainties, including both
business and economic risk factors underlying such forward looking
statements, actual results may differ materially from those
expressed or implied by these forward looking statements. Except as
required by law or regulation, the Directors undertake no
obligation to update any forward looking statements whether as a
result of new information, future events or otherwise.
ENQUIRIES
Clipper: +44 (0)11 3204 2050
Steve Parkin, Executive
Chairman
Tony Mannix, Chief
Executive Officer
David Hodkin, Chief
Financial Officer
Bell Pottinger LLP: +44 (0) 20 3772 2500
David Rydell
Dan de Belder
Chairman's Statement
As Chairman of Clipper Logistics plc, I am pleased to present
our 2017 financial results following the third anniversary of our
listing on the Main Market of the London Stock Exchange in June
2014.
Our third year as a listed company has seen a continuation of
our historical track record of achieving significant organic
growth. Our focus on delivering cost-effective, innovative
solutions to our blue-chip client base, predominantly in the retail
sector, and our continued investment in quality people to implement
sector-leading projects, mean that we are confident in our ability
to continue this momentum.
The Group has achieved a strong financial performance for the
year under review, and has seen significant new contracts commence
with high profile retailers, including those with Halfords and
Links of London. In addition, our commercial vehicles division
continues to perform very well.
We have formalised our joint venture with John Lewis, for the
provision of a dedicated Click and Collect service focused on
addressing the specific requirements of retailers. The joint
venture entity, Clicklink Logistics Limited, is owned on a 50/50
basis by John Lewis and Clipper, and during the year Clicklink has
extended its service coverage to the entire Waitrose estate. We are
extending the service to other retailers on a shared-user platform,
and initial indications of uptake are encouraging.
Following the end of the financial year, we announced the
acquisition of Tesam Distribution Limited (in May 2017), and the
acquisition of RepairTech Limited (in June 2017). Both these
acquisitions are expected to be immediately earnings-enhancing, and
demonstrate our ability to target acquisitions which extend the
breadth of both our customer base and our service offering, and
enhance returns to our shareholders. I would like to take this
opportunity to welcome the colleagues and management teams of both
businesses to the Group.
Our goal remains the identification of key trends in the sectors
we serve, and the development of new services, processes and
solutions that address the challenges faced by our customers. Our
unrivalled understanding of the dynamics of the whole retail
sector, and in particular e-retail and multi and omni-channel
retailing, provides the Group with exceptionally strong strategic
positioning for the future.
We remain confident of our ability to evolve and develop, and to
continue to deliver strong returns to our shareholders.
Group results
Group revenues increased by 17.2% to GBP340.1 million for the
year to 30 April 2017 (2016: GBP290.3 million) and Group EBIT
increased by 21.8% to GBP17.9 million (2016: GBP14.7 million).
Diluted earnings per share were 12.3 pence for the year to 30
April 2017 (2016: 10.3 pence), an increase of 19.4%.
Basic earnings per share were 12.5 pence (2016: 10.3 pence), an
increase of 20.5%.
Net debt was GBP25.1 million at the year end (2016: GBP18.8
million), in line with our expectations, after planned investment
in capital projects to support new contracts (much of which
involves a back-to-back commitment from customers to reimburse this
capital over the duration of their contract). Net debt is defined
as borrowings, less cash, cash equivalents and non-current
financial assets (see note 20 to the Financial Statements).
People and Board
Clipper Logistics plc is led by an excellent management team
that has been at the core of the business for many years.
The team has a well-established track record of identifying
areas for innovation and value-added services within the sectors we
serve, and for delivering on commitments to our customers.
I would like to take this opportunity to thank all the employees
of the Group for their commitment and contribution to the Group's
performance.
Sean Fahey has decided to retire from the Group and stepped down
as a director with effect from 28 April 2017. I would particularly
like to thank Sean for his significant contribution to the growth
of the Group over the last 25 years.
Governance
The Group is proud of its commitment to high levels of corporate
governance. Alongside the executive management team of Tony Mannix
(CEO), David Hodkin (CFO) and me, the Company benefits from the
combined experience of its Non-Executive Directors: Ron Series
(appointed Senior Independent Non-Executive Director in July 2017),
Stephen Robertson and Mike Russell.
Paul Hampden Smith was Senior Independent Non-Executive Director
during the year ended 30 April 2017, but stood down on 12 July
2017.
Dividends
The Board is recommending a final dividend of 4.8 pence per
share, making a total dividend in respect of the year ended 30
April 2017 of 7.2 pence per share (2016: 6.0 pence), an increase of
20.0%.
The proposed final dividend, if approved by shareholders, will
be paid on 29 September 2017 to shareholders on the register at the
close of business on 8 September 2017.
Outlook
The Group continues to be one of the leading providers of
value-added logistics and e-fulfilment solutions to the retail
sector in the UK. The further development of our new Click and
Collect proposition, together with recent contract wins and a
strong new business pipeline, place the Group in an excellent
position to achieve further growth, both in the UK and
internationally.
In addition, the acquisitions of Tesam Distribution Limited and
RepairTech Limited after the end of the financial year are expected
to be immediately earnings-enhancing in the year to 30 April
2018.
I look forward to working with all of the Group's stakeholders
as we continue to develop the business.
Operating and Financial Review
Overview of results
The Group continued to make excellent progress in the financial
year to 30 April 2017.
Group revenue
Within the value-added logistics services segment, the Group
benefited from:
-- the full-year impact of contract wins secured in the previous financial year including: Browns,
M&Co, Pep&Co and Ireland's largest retailer, although this is partly offset by the full-year
impact of the losses of Claire's Accessories, Atterley Road and Michael Lewis in the previous
financial year;
-- organic growth and new business activities on existing contracts, including ASOS, John Lewis
pre-retail activities, Morrisons, Wilko and Zara, in part driven by the ongoing shift in retail
trends towards online trading which continues to bring particularly strong organic growth
to e-fulfilment customers;
-- the part-year impact of operations commenced during the year to 30 April 2017, including Halfords,
Inditex, Links of London, Kidly, Pretty Green, SilkFred, Smiffys and Westwing, and significant
changes to the services provided to John Lewis out of the new Ancillary Distribution Centre
in Northampton. These are partly offset by the part-year impact of the loss of the Ted Baker
contract. The full-year impact of these activities will be realised in the year to 30 April
2018, together with the part-year impacts of contracts either recently commenced or currently
in the pipeline and due to go live during the remainder of calendar year 2017 and early calendar
year 2018; and
-- a significant increase in Click and Collect revenues. In the first half of the year, the geographical
coverage of the collaboration with John Lewis increased from circa 33% of Waitrose stores
to 100% by August 2016. On 1 November 2016, the Click and Collect activity was transferred
to Clicklink Logistics Limited ("Clicklink"), a joint venture with John Lewis. The joint venture
is equity accounted and the revenue is no longer consolidated into the Group total. However,
in the second half of the year, Clipper did provide resources to Clicklink which are recharged
and are included in Group revenue. The equity accounting treatment is explained later in this
review.
Revenue growth in commercial vehicles was driven by:
-- a GBP5.5 million (10.8%) increase in new vehicle sales. The number of new units sold increased
by 12.3% year-on-year, but the average selling price fell slightly by 1.3% due to the mix
of vehicles sold; and
-- a GBP0.4 million increase in aftersales revenues, comprising servicing, body shop and parts
sales.
Group revenue increased by 17.2% to GBP340.1 million, with
strong growth in all business areas:
Revenue Year to Year to %
30 April 30 April Change
2017 2016
GBPm GBPm
----------------------------------- --------- --------- --------
E-fulfilment & returns management
services 129.9 97.6 +33.0%
Non e-fulfilment logistics 121.9 108.4 +12.5%
----------------------------------- --------- --------- --------
Total value-added logistics
services 251.8 206.0 +22.2%
Commercial vehicles 91.5 85.6 +6.9%
Inter-segment sales (3.2) (1.3)
----------------------------------- --------- --------- --------
Group revenue 340.1 290.3 +17.2%
----------------------------------- --------- --------- --------
Percentages are calculated based on the underlying numbers as
presented in the Financial Statements, not on the rounded figures
in the table above.
Group EBIT
The Group grew EBIT strongly in all segments and business
activities:
EBIT Year to Year to %
30 April 30 April Change
2017 2016
GBPm GBPm
----------------------------------- --------- --------- --------
E-fulfilment & returns management
services 10.2 8.3 +23.4%
Non e-fulfilment logistics 12.4 10.7 +15.7%
Central logistics overheads (4.8) (4.7)
----------------------------------- --------- --------- --------
Total value-added logistics
services 17.8 14.3 +24.6%
Commercial vehicles 2.3 2.3 +3.5%
Head office costs (2.2) (1.9)
----------------------------------- --------- --------- --------
Group EBIT 17.9 14.7 +21.8%
----------------------------------- --------- --------- --------
Percentages are calculated based on the underlying numbers as
presented in the Financial Statements, not on the rounded figures
in the table above.
EBIT is the primary Key Performance Indicator ("KPI") by which
the management team assesses corporate performance. EBIT is
assessed against Board approved budgets. A further KPI is net debt,
which is discussed on page 33 of the Company's 2017 Annual Report
and Accounts (available to download from
www.clippergroup.co.uk/report-accounts/).
EBIT margin (%) is not considered by the Directors to be a key
metric since the high proportion of open book and minimum volume
guarantee contracts within the UK logistics division distorts
reported margins. This is due to an element of management fees on
certain contracts being relatively fixed in the short term, so that
an increase in revenue in periods of increased activity will not
necessarily give rise to a proportionate increase in profit,
resulting in lower reported margins. Conversely in periods of
reduced activity levels, reported margins would typically increase.
Similarly, revenue derived from minimum volume guarantee contracts
is fixed at a minimum level, so that a shortfall in activity levels
would give rise to a lower cost base, and a higher reported margin.
In addition, within the commercial vehicles segment, the level of
high value, relatively low margin new vehicle sales also distorts
reported margins.
Accordingly, EBIT is a more relevant measure of financial
performance than EBIT margin (%).
Group EBIT increased by 21.8% to GBP17.9 million for the year
ended 30 April 2017. The Group expects to achieve further EBIT
growth in the coming financial year due to the full-year benefits
of contracts brought on line in the year to 30 April 2017, the
commencement of activities on further new contracts, organic
growth, a strong new business pipeline and the impact of post-year
end acquisitions. The acquisitions of Tesam Distribution Limited
("Tesam") and RepairTech Limited ("RepairTech") were completed
shortly after the year end (see note 29 to the Group Financial
Statements).
E-fulfilment & returns management services include the
receipt, warehousing, stock management, picking, packing and
despatch of products on behalf of customers to support their online
trading activities, as well as a range of ancillary support
services including returns management, branded as Boomerang, under
which returns of products are managed on behalf of retailers.
E-fulfilment EBIT also includes the contribution from Click and
Collect activities. In the first half of the year under review,
this activity was a profit centre within the Clipper entity and so
was directly consolidated into Group EBIT. The activity was
transferred to the Clicklink joint venture on 1 November 2016 and
so the Group's share of Clicklink's profits was equity accounted in
the second half of the year. Under equity accounting, the Group
recognises its share of the post tax profit of the entity as one
figure in the income statement. RepairTech, acquired on 15 June
2017, will be consolidated into the E-fulfilment & returns
management services business activity from that date.
Non e-fulfilment operations include receipt, warehousing,
picking, packing and distribution of products on behalf of
customers. Within this business activity, the Group handles high
value products, including tobacco, alcohol and designer clothing,
and also undertakes traditional retail support services including
processing, storage and distribution of products, particularly
fashion, to high street retailers. Tesam will be consolidated into
the Non e-fulfilment business activity from the date of
acquisition, 24 May 2017.
Central logistics overheads include the costs of the directors
of the logistics business, the project delivery and IT support
teams, sales and marketing, accounting and finance, and human
resources, that cannot be allocated in a meaningful way to business
units. There has been additional investment in such resources
during the year ended 30 April 2017, as mentioned in the 2016
Annual Report, particularly in operational delivery and automation.
The central logistics overheads have increased in the year due to
share based payment charges. In the year, the reporting structure
within the central logistics management team has been enhanced,
preparing the business for future growth. Whilst incremental
investment is likely to be required in the logistics overheads base
as the business continues to grow, we do not expect significant
stepped increases in the overheads base in the foreseeable future,
other than in respect of share based payment charges (see
below).
The commercial vehicles business, Northern Commercials
(Mirfield) Limited, operates Iveco and Fiat commercial vehicle
dealerships from six locations, together with three
sub-dealerships. It sells new and used vehicles, provides servicing
and repair facilities, and sells parts. Vehicles sold and serviced
range from small light commercial vans, through to articulated
tractor units.
Head office costs represent the cost of the Executive Chairman,
Chief Financial Officer, Deputy Chief Financial Officer, Group
General Counsel, Non-Executive Directors and plc compliance costs.
The year-on-year increase in head office costs is attributable to
incremental share based payment charges and the costs associated
with the acquisition of Tesam.
Share based payment charges totalling GBP0.8 million (2016:
GBP0.5 million) have been charged to central logistics overheads,
commercial vehicles and head office costs as appropriate in respect
of the Sharesave Plan and the Performance Share Plan ("PSP") (see
note 23 to the Group Financial Statements). Since listing on the
London Stock Exchange in June 2014, the Group invites certain
employees to participate in an annual iteration of the PSP and all
employees to participate in an annual iteration of the Sharesave
Plan. Each scheme vests over a three year period. As a result, the
year ended 30 April 2017 included a full year of charges in respect
of options granted in the year ended 30 April 2015 and the year
ended 30 April 2016, together with a part year of charges in
respect of options granted in the year ended 30 April 2017; the
prior year only incurred a full year of charges in respect of
options granted in the year ended 30 April 2015 and part year
charges in respect of options granted in the year ended 30 April
2016.
Net interest charges
Net interest charges for the year to 30 April 2017 increased by
16.1% to GBP1.6 million (2016: GBP1.4 million), the increase being
attributable to an increase in assets financed under hire purchase
contracts in the value-added logistics services operating
segment.
Taxation
The effective rate of taxation of 22.3% (2016: 21.2%) is higher
than the average standard UK rate of corporation tax applicable in
the year of 19.9% (2016: 20.0%) principally due to certain
expenditure incurred which is disallowable for tax purposes and the
higher rate of effective tax to which the German business is
subject.
Profit after tax
The profit after tax for the year to 30 April 2017 was GBP12.5
million (2016: GBP10.3 million), an increase of 20.6%.
Earnings per share
Earnings per share were 12.5 pence for the year to 30 April 2017
(2016: 10.3 pence).
Capital expenditure and fixed assets
Of total tangible and intangible fixed asset additions of
GBP20.2 million (2016: GBP16.2 million), GBP19.4 million (2016:
GBP15.5 million) related to the logistics services segment and
GBP0.8 million (2016: GBP0.7 million) related to the commercial
vehicles segment. A large proportion of expenditure in the year
ended 30 April 2017 was incurred at the Northampton shared-use
facility where John Lewis is the anchor customer. Capital
expenditure of GBP1.5 million was incurred on the Click and Collect
collaboration with John Lewis in the first half of the year when
this operation sat within the Clipper entity. On 1 November 2016,
when the operation was transferred into Clicklink, those assets
acquired earlier in the year were sold by Clipper to Clicklink at
their fair value, accounting for GBP1.2 million of the GBP2.3
million proceeds from sale of non-current assets in the year.
Clipper's outstanding capital expenditure commitment at 30 April
2017 was GBP4.7 million, significantly reduced from the equivalent
figure of the prior year (2016: GBP16.7 million).
Cash flow
Cash generated from operations was GBP25.7 million (2016:
GBP20.5 million), an increase of 25.2%.
The Group's business model gives rise to high levels of cash
generation. In the UK logistics business, Clipper is typically paid
in the month in which services are delivered on open book and
minimum volume guarantee contracts, giving rise to a typically
negative investment in working capital, whilst in the commercial
vehicles business working capital is substantially funded by the
manufacturer through stocking facilities for new vehicles, and
trade credit terms for parts supplied. Net cash generated from
working capital in the year ended 30 April 2017 was GBP2.0 million
(2016: GBP0.6 million).
GBP1.95 million was subscribed for share capital on the
formation of the Clicklink joint venture in the year ended 30 April
2017 (2016: GBPnil). A further GBP1.45 million loan was advanced to
Clicklink on its formation. This loan is disclosed as a non-current
financial asset (see note 27 to the Group Financial
Statements).
No deferred consideration was paid in the year (2016: GBP2.2
million).
There has been significant investment in the fixed assets base
this year, as noted above, particularly on open-book contracts.
However, providing the commercial terms are acceptable, Clipper
typically funds a significant proportion of such capital
expenditure using hire purchase and finance leases, and so not all
of the fixed asset investment actually results in a cash outflow.
Cash capital expenditure, including intangible assets, for the year
ended 30 April 2017 was GBP4.6 million compared to GBP5.9 million
in the year ended 30 April 2016.
In line with the stated dividend payment policy, a final
dividend for the year ended 30 April 2016 of GBP4.0 million (4.0
pence per share) and an interim dividend of GBP2.4 million (2.4
pence per share) for the year ended 30 April 2017 were paid in the
year to 30 April 2017. These compare to a final dividend for the
year ended 30 April 2015 of GBP3.2 million (3.2 pence per share)
and an interim dividend of GBP2.0 million (2.0 pence per share) for
the year ended 30 April 2016, both paid in the year to 30 April
2016.
Net debt
In addition to EBIT, net debt is considered a KPI for the Group.
As with EBIT, net debt is assessed against Board-approved
budgets.
The Group had GBP25.1 million of net debt outstanding at 30
April 2017 (2016: GBP18.8 million) (see note 20 to the Group
Financial Statements), in line with the Board's expectations. The
increase in net debt compared with the prior year was driven
primarily by the need to invest in capital assets to service
significant new contracts. Where an open book customer has a strong
credit rating, Clipper will often fund the initial capital
requirements on the condition that the customer commits to repaying
us over the term of the contract, together with finance charges and
a management fee.
The Group opened the year with GBP6.1 million of bank loans. The
Group repaid GBP6.0 million of bank loans in the year, but took out
GBP2.0 million of funding loans in respect of capital expenditure.
The Group ends the year with GBP2.1 million of bank loans. Net bank
debt at 30 April 2017 was GBP2.1 million (2016: GBP7.9
million).
Logistics
E-fulfilment & returns management growth
Clipper's ability and agility, particularly in respect of
omni-channel, multi-channel, returns management, Click and Collect
and mechanisation already mentioned in this Annual Report, have
enabled the Group to significantly grow revenues and earnings, and
to once again outperform market growth (the UK e-commerce market
grew by 17% in the calendar year 2016). Revenues from e-fulfilment
& returns management services increased by 33.0% from GBP97.6
million for the year to 30 April 2016 to GBP129.9 million for the
year to 30 April 2017, with EBIT growing by 23.4% from GBP8.3
million to GBP10.2 million over the same period. This is a
particularly pleasing performance as two of the principles
underpinning the Group's core strategies are to be a market leader
in the e-commerce sector, and to be a thought leader in the
provision of value-added services across the sector.
Organic growth in activities with ASOS, Morrisons, Wilko and
Zara, the full-year impact of those operations commenced in the
year ended 30 April 2016 - Browns, Click and Collect (including
Clicklink), Pep&Co and Ireland's largest retailer - and the new
operations commenced in the year ended 30 April 2017 - Inditex,
John Lewis returns and forward orders activity, Kidly, SilkFred,
Smiffys and Westwing - have all contributed favourably to the
growth in this business activity year-on-year. Partly offsetting
this is the full-year impact of contract losses of Claire's
Accessories and Atterley Road in the previous financial year.
This business activity saw the launch of a collaboration with
John Lewis in September 2015 providing John Lewis with a Click and
Collect service which is absolutely focused on the requirements of
the retailer: it is fully integrated with the retailer systems, has
full track-and-trace, has timed delivery schedules and provides
ease of same-day returns through Boomerang. The operation comprises
automated parcel sortation and transport distribution services, and
initially served 115 Waitrose stores, 33% of the total Waitrose
store estate. The remaining 67% of the Waitrose store estate was
added from August 2016. This operation was transferred into
Clicklink, a joint venture entity, on 1 November 2016 in order to
formalise the arrangement and to enable the opening up of the
network to third party customers. Clicklink has already commenced
performing certain activities for other third party customers and
these income streams are expected to increase significantly over
the coming months as Clicklink is in advanced discussions with a
number of customers.
Despite the increasingly challenging logistics demands of the
Black Friday to Cyber Monday weekend in the UK outlined previously,
Clipper delivered another successful 2016 Black Friday to Cyber
Monday trading period for its clients and maintained excellent
service levels throughout. In order to mitigate some of the labour
challenges around this weekend, one of the roles of Clipper's new
Engineering and Technology Director is to increase Clipper's
investment in automation, thereby decreasing Clipper's reliance on
agency labour providers through the peak trading period.
Clipper had been providing e-commerce fulfilment services to
Tesco in a property leased by Tesco in Daventry. As a result of
space elsewhere in its property portfolio, Tesco opted to relocate
the activity into its Fenny Lock site from August 2016. The
compensation received for the early termination of our contract
means Clipper's profit and loss account for the year ended 30 April
2017 was not adversely impacted by this. The Daventry lease has now
been assigned to Clipper and the Group fulfils the new Halfords
contract out of this site.
In this business activity, since the year end on 30 April
2017:
-- Wilko has committed to taking incremental space
at Ollerton, Browns has committed to taking incremental
space at Enfield, and Smiffys has committed to
taking incremental space at Kempen;
-- agreement has been reached with M&S to provide
certain services out of Clipper's Ollerton facility;
-- ASOS has signed up for certain services out of
Clipper's Poznan facility in Poland; and RepairTech
has been acquired. The key management team has
been retained and will continue to manage the
operations.
Non e-fulfilment logistics is central to the Group's future
strategy too
The Group will continue to develop and deliver truly value-added
services to address the needs of retailers in traditional bricks
and mortar logistics, including receipt of inbound product,
storage, store-readiness of product, and distribution to retail
destinations. This business activity also includes transport and
high value logistics activities.
Revenue from non e-fulfilment operations grew by 12.5% for the
year ended 30 April 2017, from GBP108.4 million to GBP121.9
million, with EBIT increasing by 15.7%, from GBP10.7 million to
GBP12.4 million.
Within non e-fulfilment, the full-year effect of the contracts
secured in the prior year with M&Co and Pep&Co, contributed
to revenue and EBIT growth, as did organic growth on existing
contracts with Haddad, John Lewis pre-retail activities, M&S,
and Philip Morris. The transport operations at Rotherham and
tobacco contract packing operations at Brighouse also performed
particularly strongly, partly as a result of one-off Tobacco
Product Directive work. This strong business growth was partly
offset by the part-year impact of the loss of the Hobbycraft and
Ted Baker contracts, lost during the year to April 2017 and the
full-year effect of the loss of the Michael Lewis and H&M
contracts, lost in the prior year.
Additionally, in the year to 30 April 2017 operations began:
-- on a forward orders activity for John Lewis in
the new Northampton Ancillary Distribution Centre;
-- on new storage activities for Halfords, with subsequent
agreement reached on a new eight year contract
for warehousing activities, including e-commerce;
and
-- under new contracts with Links of London and Pretty
Green.
In this business activity, since the year end on 30 April 2017
we have commenced a new transport activity with Crosswater.
Tesam, acquired shortly after the year end, will be reported
within this business activity from the year ending 30 April 2018.
The key management team has been retained and will continue to
manage the operations.
Investment in key personnel
The Group differentiates itself by providing consultancy-led,
value-added services to its actual and prospective client base.
Clipper is now established as a thought leader within the logistics
sector, and this is evidenced both by customers' buy-in to
Clipper's innovative approach, and by brand health reviews
conducted by an independent market research consultancy.
The Group is central to the achievement by its customers of
their own objectives and goals.
Accordingly, the Group invests in recruiting, training and
developing people who are specialists in their relevant fields.
These include information technology, solution design, facilities
specification, implementation and management, e-commerce and
returns management, and project management specialists.
In the year ended 30 April 2017, there were significant changes
to the senior team within the logistics business including the
appointment of a new Chief Operating Officer, a new Group Human
Resources Director and an Engineering and Technology Director (all
non-statutory director roles) and a new Managing Director in
Germany. Since the year end, the Group has further bolstered its
senior management team with the appointment of a new Senior
Operations Director in UK Logistics following the retirement of the
incumbent. The appointment of a new Managing Director at
Servicecare took effect in April 2016. These strategic appointments
have been implemented to improve the service offering to existing
customers and to deliver new opportunities to meet the growth
aspirations of the Board.
The Group has a Senior Leadership Development Programme to
enhance the skills of its senior team, and to assist with
succession planning.
Commercial vehicles
The commercial vehicles business delivered EBIT of GBP2.3
million in the year to 30 April 2017 (2016: GBP2.3 million), an
increase of 3.5% on the previous year.
Northern Commercials operates from six dealership locations and
has three sub-dealers. Main dealerships are located in Brighouse,
Manchester, Northampton, Dunstable, Tonbridge and Brighton. Thus,
the business operates across the north of England and into Wales,
through the midlands, and into the south-east.
The business sold 2,012 new vehicles in the year to 30 April
2017 (2016: 1,792), and 393 used vehicles (2016: 443). However, due
to a change in mix of vehicles sold, the average selling price of a
new vehicle in the year to 30 April 2017 was GBP28,225 compared to
GBP28,608 in the prior year, a decrease of 1.3%. Conversely, the
average selling price of a used vehicle was GBP10,794 compared to
GBP10,653 in the prior year, an increase of 1.3%. Servicing saw
increases in revenue between the year ended 30 April 2016 and the
year ended 30 April 2017, with a 4.0% increase in the number of
hours sold, and parts sales increased by 2.0%.
Key customers of Northern Commercials include Access Hire
Nationwide, Allied Bakeries, Asda, Clancy Docwra, Dawson Rental,
Leeds Commercial, Ryder, Variety Club (the Children's Charity), and
many other household names.
The business is measured by manufacturers on certain key
performance measures throughout the year:
-- Through its Product Improvement Publications,
Iveco notifies dealers of certain recall improvements.
The dealer is then measured on the proportion
of those recall improvements which have been actioned
as vehicles pass through the workshop. Northern
Commercials successfully actioned 93.3% of recall
improvements in the year, compared to the Iveco-set
target of 80%.
-- MOT pass rate at Northern Commercials' dedicated
Test station in Brighouse of 100% (target: 98%).
-- Assistance Non-Stop: Northern Commercials averaged
41 minutes to arrive in providing breakdown assistance
compared to a network target of 48 minutes.
-- Dealers are set a target of five days per annum
for technician training. Northern Commercials
was fully compliant in the year.
Current trading and outlook
As noted previously, the Group secured a number of significant
contract wins in the two years ended 30 April 2017, the full-year
benefit of which will not be realised until the years to 30 April
2018 and 30 April 2019.
Looking ahead to the 2018 financial year, there is a strong new
business pipeline in the Group. Since the year end, additional
contracts have been won within both E-fulfilment & returns
management services and Non e-fulfilment logistics, both in the UK
and Europe, through a focus on retail specialisms and provision of
cost-effective, value-added solutions. These contract wins will
more than compensate for the contract losses mentioned earlier in
this report. Shareholders will be updated once these new contracts
have been agreed.
Recent key appointments leave the Group ideally positioned to
proactively and reactively scale-up its activities as necessary.
The recent management changes have already seen us able to
cross-fertilise Clipper's, Servicecare's and Germany's customers
and activities and will allow us to generate further synergistic
opportunities in the future.
The recent acquisitions of Tesam and RepairTech are expected to
be immediately earnings enhancing. Across the two acquisitions,
there is significant customer overlap with the existing Clipper
Group portfolio and so the Group expects to enhance its reputation
with these customers, and also to leverage existing customers with
additional service lines.
The commercial vehicles business is expected to continue its
steady growth in profitability in the year to 30 April 2018.
The Board is confident in the Group's prospects for the full
year ahead. Current trading is in line with the Directors'
strategic plan, and the Board is confident of achieving another
period of excellent financial performance in the year to 30 April
2018.
By order of the Board
Steve Parkin, Executive Chairman
27 July 2017
Directors' Statement on the Basis of Preparation -
Announcement
Whilst the financial information included in this announcement
has been prepared on the basis of the requirements of IFRSs in
issue, as adopted by the European Union and effective at 30 April
2017, this statement does not itself contain sufficient information
to comply with IFRS.
These financial results do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The
Group Income Statement, Group Statement of Comprehensive Income,
Group Statement of Financial Position, Group Statement of Changes
in Equity, and Group Statement of Cash Flows, and selected notes
for the year ended 30 April 2017 have been extracted from the
Group's audited Financial Statements for the year then ended.
The financial information contained within the preliminary
announcement for the year ended 30 April 2017 was approved by the
Board on 27 July 2017. Statutory accounts for the year ended 30
April 2017 were approved on the same date and will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting. The auditors have reported on these Financial Statements.
Their report was unqualified and did not contain a statement under
s.498 (2) or (3) of the Companies Act 2006.
Statement of Directors' Responsibilities in respect of the
Annual Report and Accounts
The Directors are responsible for preparing the Annual Report
and the Group and Parent Company Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent
Company Financial Statements for each financial year. Under that
law they are required to prepare the Group Financial Statements in
accordance with IFRS as adopted by the EU and applicable law and
have elected to prepare the Parent Company Financial Statements in
accordance with UK Accounting Standards, including FRS 101 Reduced
Disclosure Framework.
Under company law, the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Parent Company and of
their profit or loss for the period. In preparing each of the Group
and Parent Company Financial Statements, the Directors are required
to:
-- select suitable accounting policies and then apply
them consistently;
-- make judgements and estimates that are reasonable
and prudent;
-- for the Group Financial Statements, state whether
they have been prepared in accordance with IFRS
as adopted by the EU;
-- for the Parent Company Financial Statements, state
whether applicable UK accounting standards have
been followed, subject to any material departures
disclosed and explained in the Parent Company
Financial Statements;
-- and prepare the Financial Statements on the going
concern basis unless it is inappropriate to presume
that the Group and the Parent Company will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Parent Company and enable them
to ensure that its Financial Statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, directors' report,
directors' remuneration report and corporate governance statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
-- the Financial Statements, prepared in accordance
with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company
and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report and Directors' Report includes
a fair review of the development and performance
of the business and the position of the issuer
and the undertakings included in the consolidation
taken as a whole, together with a description
of the principal risks and uncertainties that
they face.
We consider the Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group's position and
performance, business model and strategy.
Group Income Statement
For the year ended 30 April
2017 2016
Group Group
Note GBP'000 GBP'000
---------------------------------------- ---- ---------- ----------
Revenue 3 340,127 290,325
Cost of sales (241,097) (205,742)
---------------------------------------- ---- ---------- ----------
Gross profit 99,030 84,583
Other net gains 6 405 263
Administration and other expenses (81,964) (70,315)
---------------------------------------- ---- ---------- ----------
Operating profit before share
of equity-accounted investees,
net of tax 4 17,471 14,531
Share of equity-accounted investees,
net of tax 217 -
---------------------------------------- ---- ---------- ----------
Operating profit 6 17,688 14,531
---------------------------------------- ---- ---------- ----------
EBIT 17,928 14,718
Less: amortisation of other intangible
assets 4 (177) (187)
share of tax and finance costs
of equity-accounted investees 4 (63) -
Operating profit 6 17,688 14,531
---------------------------------------- ---- ---------- ----------
Finance costs 8 (1,657) (1,413)
Finance income 9 21 4
---------------------------------------- ---- ---------- ----------
Profit before income tax 16,052 13,122
Income tax expense 10 (3,586) (2,786)
---------------------------------------- ---- ---------- ----------
Profit for the financial year 12,466 10,336
---------------------------------------- ---- ---------- ----------
Basic earnings per share 11 12.5p 10.3p
Diluted earnings per share 11 12.3p 10.3p
---------------------------------------- ---- ---------- ----------
Group Statement of Comprehensive Income
For the year ended 30 April
2017 2016
Group Group
Note GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Profit for the financial year 12,466 10,336
Other comprehensive expense for
the year, net of tax:
To be reclassified to the income
statement in subsequent periods:
Exchange differences on retranslation
of foreign operations (57) (6)
---------------------------------------------- -------- --------
Total comprehensive income for
the financial year 12,409 10,330
---------------------------------------------- -------- --------
Group Statement of Financial Position
At 30 April
2017 2016
Group Group
Note GBP'000 GBP'000
---------------------------------------- ---- -------- --------
Assets:
Non-current assets
---------------------------------------- ---- -------- --------
Goodwill 23,252 23,252
Other intangible assets 1,498 1,646
---------------------------------------- ---- -------- --------
Intangible assets 12 24,750 24,898
Property, plant and equipment 14 38,899 25,564
Interest in equity-accounted investees 15 2,167 -
Non-current financial assets 27 1,450 -
Deferred tax assets 10 353 -
---------------------------------------- ---- -------- --------
Total non-current assets 67,619 50,462
---------------------------------------- ---- -------- --------
Current assets
Inventories 16 29,972 26,252
Trade and other receivables 17 47,728 39,816
Current tax assets - 36
Cash and cash equivalents 18 862 715
---------------------------------------- ---- -------- --------
Total current assets 78,562 66,819
---------------------------------------- ---- -------- --------
Total assets 146,181 117,281
---------------------------------------- ---- -------- --------
Equity and liabilities:
Current liabilities
Trade and other payables 19 85,068 72,183
Financial liabilities: borrowings 20 7,389 6,553
Derivative financial instruments - 10
Short-term provisions 21 127 109
Current income tax liabilities 2,187 1,747
---------------------------------------- ---- -------- --------
Total current liabilities 94,771 80,602
---------------------------------------- ---- -------- --------
Non-current liabilities
Financial liabilities: borrowings 20 19,973 12,931
Long-term provisions 21 1,367 769
Deferred tax liabilities 10 - 202
---------------------------------------- ---- -------- --------
Total non-current liabilities 21,340 13,902
---------------------------------------- ---- -------- --------
Total liabilities 116,111 94,504
---------------------------------------- ---- -------- --------
Equity shareholders' funds
Share capital 22 50 50
Share premium 80 56
Currency translation reserve (33) 24
Other reserve 84 84
Merger reserve 6,006 6,006
Share based payment reserve 2,038 783
Retained earnings 21,845 15,774
---------------------------------------- ---- -------- --------
Total equity attributable to the
owners of the Company 30,070 22,777
---------------------------------------- ---- -------- --------
Total equity and liabilities 146,181 117,281
---------------------------------------- ---- -------- --------
Group Statement of Changes in Equity
For the year ended 30 April
Currency
Share Share translation Other Carried
capital premium reserve reserve forward
Group Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- --------- ------------ --------- ---------
Balance at 1 May 2015 50 48 31 84 213
Profit for the year - - - - -
Other comprehensive
income/(expense) - - (7) - (7)
Equity settled transactions - - - - -
Share issue - 8 - - 8
Dividends - - - - -
----------------------------- -------- --------- ------------ --------- ---------
Balance at 30 April
2016 50 56 24 84 214
----------------------------- -------- --------- ------------ --------- ---------
Profit for the year - - - - -
Other comprehensive
income/(expense) - - (57) - (57)
Equity settled transactions - - - - -
Share issue - 24 - - 24
Dividends - - - - -
----------------------------- -------- --------- ------------ --------- ---------
Balance at 30 April
2017 50 80 (33) 84 181
----------------------------- -------- --------- ------------ --------- ---------
Share
based
Brought Merger payment Retained
forward reserve reserve earnings Total
Group Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- --------- --------
Balance at 1 May 2015 213 6,006 139 10,637 16,995
Profit for the year - - - 10,336 10,336
Other comprehensive
income/(expense) (7) - - 1 (6)
Equity settled transactions - - 644 - 644
Share Issue 8 - - - 8
Dividends - - - (5,200) (5,200)
----------------------------- -------- -------- -------- --------- --------
Balance at 30 April
2016 214 6,006 783 15,774 22,777
----------------------------- -------- -------- -------- --------- --------
Profit for the year - - - 12,466 12,466
Other comprehensive
income/(expense) (57) - - - (57)
Equity settled transactions - - 1,255 5 1,260
Share issue 24 - - - 24
Dividends - - - (6,400) (6,400)
----------------------------- -------- -------- -------- --------- --------
Balance at 30 April
2017 181 6,006 2,038 21,845 30,070
----------------------------- -------- -------- -------- --------- --------
Group Statement of Cash Flows
For the year ended 30 April
2017 2016
Group Group
Note GBP'000 GBP'000
------------------------------------------------------------ ---- --------- ---------
Profit before tax from operating
activities 16,052 13,122
Adjustments to reconcile profit
before tax to net cash flows:
* Depreciation and impairment of property, plant and
equipment 6 4,725 4,580
* Amortisation and impairment of intangible assets 6 548 466
* Gain on disposal of property, plant and equipment 6 (260) (37)
* Share of equity-accounted investees, net of tax 15 (217) -
* Consideration received 21 557 -
* Exchange differences (238) (82)
8 &
* Finance costs 9 1,636 1,409
* Movement in derivative financial instruments 6 (10) (60)
* Amortisation of grants 6 - (1)
* Share based payments charge 23 832 454
Working capital adjustments:
* (Increase)/decrease in trade and other receivables
and prepayments (7,895) (6,372)
* (Increase)/decrease in inventories (3,049) (3,677)
* Increase/(decrease) in trade and other payables 12,989 10,694
------------------------------------------------------------ ---- --------- ---------
Operating activities:
* Cash generated from operations 25,670 20,496
* Interest received 3 4
* Interest paid (1,606) (1,362)
* Income tax paid (3,234) (2,063)
------------------------------------------------------------ ---- --------- ---------
Net cash flows from operating
activities 20,833 17,075
------------------------------------------------------------ ---- --------- ---------
Investing activities:
* Purchase of property, plant and equipment (4,028) (5,383)
* Proceeds from sale of property, plant and equipment 2,112 238
* Purchase of intangible assets (551) (546)
* Proceeds from sale of intangible assets 167 -
* Investment in joint venture 15 (1,950) -
* Acquisition of subsidiary undertaking net of cash
acquired 28 - (2,212)
------------------------------------------------------------ ---- --------- ---------
Net cash flows from investing
activities (4,250) (7,903)
------------------------------------------------------------ ---- --------- ---------
Financing activities:
* Drawdown of bank loans - 6,442
* Debt issue costs paid - (232)
* Finance leases advanced in respect of prior year
purchases of property, plant and equipment 4,879 207
* Shares issued 22 24 8
* Dividends paid 7 (6,400) (5,200)
* Non-current financial assets advanced (1,450) -
* Repayment of bank loans (5,995) (10,141)
------------------------------------------------------------ ---- --------- ---------
Net cash flows from financing
activities (14,619) (12,128)
------------------------------------------------------------ ---- --------- ---------
Net increase/(decrease) in cash
and cash equivalents 1,964 (2,956)
------------------------------------------------------------ ---- --------- ---------
Cash and cash equivalents at start
of year (1,102) 1,854
------------------------------------------------------------ ---- --------- ---------
Cash and cash equivalents at end
of year 18 862 (1,102)
------------------------------------------------------------ ---- --------- ---------
Notes to the Group Statement
1. General information
The results comprise those of Clipper Logistics plc and its
subsidiaries for the year ended 30 April 2017 and does not
constitute the Group's statutory accounts for the years ended 30
April 2017 or 2016, but is derived from those accounts. Both the
Company Financial Statements and the Group Financial Statements
have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards as adopted by the EU
("IFRSs").
Statutory accounts for the years ended 30 April 2017 and 30
April 2016 have been reported on by the auditors who issued an
unqualified opinion in respect of both periods and the auditors'
reports for 2017 and 2016 did not contain statements under 498(2)
or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 30 April 2016 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 30 April 2017, which were approved by the Board on
27 July 2017, will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The Group Financial Statements for the year ended 30 April 2017
were authorised for issue by the Board of Directors on 27 July 2017
and the Group Statement of Financial Position was signed on the
Board's behalf by David Hodkin.
Clipper Logistics plc (the "Company") and its subsidiaries
(together the "Group") provide value-added logistics and other
services to predominantly the retail sector and also operate as
distributors of commercial vehicles.
The Company is limited by share capital, incorporated and
domiciled in the United Kingdom. The address of its registered
office is Clipper Logistics Group, Gelderd Road, Leeds, LS12
6LT.
2. Summary of significant accounting policies
The results for the year have been prepared on a basis
consistent with the accounting policies set out in Clipper's Annual
Report and Accounts for the year ended 30 April 2016.
In the current year, amendments to IAS 1, 16, 27, 28 & 38;
IFRS 10 & 11 and those arising from the annual improvements to
IFRSs 2012-2014 cycles have been adopted. There has been no
material impact, although there have been some minor changes to
disclosure.
3. Revenue
Revenue recognised in the income statement is analysed as
follows:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------- -------- --------
E-fulfilment and returns management
services 129,854 97,598
Non e-fulfilment logistics 121,930 108,390
------------------------------------- -------- --------
Value-added logistics services 251,784 205,988
------------------------------------- -------- --------
Commercial vehicles 91,515 85,642
Inter-segment sales (3,172) (1,305)
------------------------------------- -------- --------
Revenue from external customers 340,127 290,325
------------------------------------- -------- --------
Geographical information - revenue from external customers:
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------- -------- --------
United Kingdom 302,730 264,219
Germany 16,103 14,234
Rest of Europe 21,294 11,872
--------------------------------- -------- --------
Revenue from external customers 340,127 290,325
--------------------------------- -------- --------
Geography is determined by the location of the end customer.
The Group has one customer that in the year ended 30 April 2017
accounted for greater than 10% of the total Group revenue. For
completeness, the comparative 2016 figure is shown, although it
constituted less than 10% of Group revenue in that year.
The revenue all arose in the value-added logistics services
segment as follows:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------- -------- --------
Revenue from largest single customer
in 2017 35,179 17,390
-------------------------------------- -------- --------
4. Segment information
For the Group, the Chief Operating Decision Maker ("CODM") is
the main Board of Directors. The CODM monitors the operating
results of each business unit separately for the purposes of making
decisions about resource allocation and performance assessment.
Segment performance is evaluated based on operating profit or loss,
both before and after exceptional or discontinuing items. This
measurement basis excludes Group-wide central services and
financing costs which are not allocated to operating segments.
For management purposes, the Group is organised into two main
reportable segments:
-- Value-added logistics services; and
-- Commercial vehicles, including sales, servicing
and repairs.
Within the value-added logistics services segment, the CODM also
reviews performance of three separate business activities:
-- E-fulfilment & returns management services;
-- Non e-fulfilment logistics; and
-- Central logistics overheads, being the costs of
support services specific to the value-added logistics
services segment, but which are impractical to
allocate between the sub-segment activities.
These three separate business activities comprise one segment,
having similar economic characteristics in terms of profitability
and costs, customers and operating environment.
Inter-segment transactions are entered into under normal
commercial terms and conditions and on an arm's length basis that
would also be available to unrelated third parties.
The following tables present profit information for continuing
operations regarding the Group's business segments for the two
years ended 30 April 2017:
Earnings before interest & tax ("EBIT"):
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
E-fulfilment & returns management services 10,232 8,291
Non e-fulfilment logistics 12,431 10,742
Central logistics overheads (4,832) (4,718)
-------------------------------------------- -------- --------
Value-added logistics services 17,831 14,315
Commercial vehicles 2,342 2,263
Head office costs (2,245) (1,860)
-------------------------------------------- -------- --------
Group EBIT 17,928 14,718
-------------------------------------------- -------- --------
Amortisation of other intangible assets:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
E-fulfilment & returns management services (156) (156)
Non e-fulfilment logistics (21) (31)
Central logistics overheads - -
-------------------------------------------- -------- --------
Value-added logistics services (177) (187)
Commercial vehicles - -
Head office costs - -
-------------------------------------------- -------- --------
Group total (177) (187)
-------------------------------------------- -------- --------
Share of tax and finance costs of equity-accounted
investees:
2017 2016
Group Group
GBP'000 GBP'000
------------------- -------- --------
Net finance costs (9) -
Income tax expense (54) -
------------------- -------- --------
Group total (63) -
------------------- -------- --------
Operating profit and profit before income tax:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
Operating profit:
E-fulfilment & returns management services 9,796 8,135
Non e-fulfilment logistics 12,410 10,711
Central logistics overheads (4,832) (4,718)
-------------------------------------------- -------- --------
Value-added logistics services 17,374 14,128
Commercial vehicles 2,342 2,263
Head office costs (2,245) (1,860)
-------------------------------------------- -------- --------
Group operating profit before share
of equity-accounted investees 17,471 14,531
Share of equity-accounted investees,
net of tax 217 -
-------------------------------------------- -------- --------
Operating profit 17,688 14,531
-------------------------------------------- -------- --------
Finance costs (1,657) (1,413)
Finance income 21 4
-------------------------------------------- -------- --------
Profit before income tax 16,052 13,122
-------------------------------------------- -------- --------
The segment assets and liabilities at the balance sheet date are
as follows:
Segment Segment
assets liabilities
At 30 April 2017: GBP'000 GBP'000
---------------------------------------- -------- ------------
Value-added logistics services 99,077 (46,442)
Commercial vehicles 45,889 (40,120)
---------------------------------------- -------- ------------
Segment assets/(liabilities) 144,966 (86,562)
---------------------------------------- -------- ------------
Unallocated assets/(liabilities):
* Cash and cash equivalents 862 -
* Financial liabilities - (27,362)
* Deferred tax 353 -
* Income tax assets/(liabilities) - (2,187)
---------------------------------------- -------- ------------
Total assets/(liabilities) 146,181 (116,111)
---------------------------------------- -------- ------------
Segment Segment
assets liabilities
At 30 April 2016: GBP'000 GBP'000
---------------------------------------- -------- ------------
Value-added logistics services 73,858 (39,288)
Commercial vehicles 42,672 (33,773)
---------------------------------------- -------- ------------
Segment assets/(liabilities) 116,530 (73,061)
---------------------------------------- -------- ------------
Unallocated assets/(liabilities):
* Cash and cash equivalents 715 (1,817)
* Financial liabilities - (17,677)
* Deferred tax - (202)
* Income tax assets/(liabilities) 36 (1,747)
---------------------------------------- -------- ------------
Total assets/(liabilities) 117,281 (94,504)
---------------------------------------- -------- ------------
Capital expenditure, depreciation and amortisation by segment in
the year ended 30 April was as follows:
Capital expenditure:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------- -------- --------
Value-added logistics services 19,386 15,500
Commercial vehicles 851 661
-------------------------------- -------- --------
Total 20,237 16,161
-------------------------------- -------- --------
Capital expenditure comprises additions to property, plant and
equipment (note 14) and intangible assets (note 13).
Depreciation:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------- -------- --------
Value-added logistics services 4,012 3,883
Commercial vehicles 713 697
-------------------------------- -------- --------
Total 4,725 4,580
-------------------------------- -------- --------
Amortisation:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------- --------- ---------
Value-added logistics services 539 447
Commercial vehicles 9 19
-------------------------------- --------- ---------
Total 548 466
-------------------------------- --------- ---------
Non-current assets held by each geographical area are made up as
follows:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------- -------- --------
United Kingdom 62,409 46,194
Germany 4,617 4,268
Rest of Europe 240 -
Deferred taxation assets 353 -
-------------------------- -------- --------
Total 67,619 50,462
-------------------------- -------- --------
5. Staff costs
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
Wages and salaries 84,462 72,662
Social security costs 7,791 6,766
Pension costs for the defined contribution
scheme 1,474 1,371
Share based payments 832 454
-------------------------------------------- -------- --------
Total 94,559 81,253
-------------------------------------------- -------- --------
The average monthly number of employees during the year was made
up as follows:
2017 2016
Group Group
Number Number
------------------------- ------- -------
Warehousing 2,402 2,097
Distribution 416 406
Service and maintenance 396 387
Administration 526 490
------------------------- ------- -------
Total 3,740 3,380
------------------------- ------- -------
Key management compensation (including Executive Directors):
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
Wages and salaries 2,680 2,589
Social security costs 370 378
Pension costs for the defined contribution
scheme 336 398
Share based payments 793 381
-------------------------------------------- -------- --------
Total 4,179 3,746
-------------------------------------------- -------- --------
Directors' emoluments:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------- -------- --------
Aggregate emoluments excluding share
based payments on unvested awards 1,309 1,259
Pension costs for the defined contribution
scheme 48 86
-------------------------------------------- -------- --------
Total 1,357 1,345
-------------------------------------------- -------- --------
The number of Directors who were accruing benefits under a Group
Pension Scheme is as follows:
2017 2016
Group Group
Number Number
---------------------------- ------- -------
Defined contribution plans 3 3
---------------------------- ------- -------
6. Group operating profit
This is stated after charging:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------------------ -------- --------
Depreciation of property, plant and
equipment - owned assets 2,023 2,484
Depreciation of property, plant and
equipment - leased assets 2,702 2,096
Amortisation of intangible assets (included
within administration and other expenses) 548 466
------------------------------------------------ -------- --------
Total depreciation and amortisation
expense 5,273 5,046
------------------------------------------------ -------- --------
Operating lease rentals:
* Vehicles, plant and equipment 8,876 7,808
* Land and buildings 18,069 15,474
------------------------------------------------ -------- --------
Auditor's remuneration:
KPMG LLP:
* Group audit fees 142 125
* Other services - -
------------------------------------------------ -------- --------
Ernst & Young LLP:
* Group audit fees - 30
* Other services - -
------------------------------------------------ -------- --------
Total auditor's remuneration:
* Audit of the Group Financial Statements 60 60
* Audit of the subsidiaries 82 95
* Non-audit fees - -
------------------------------------------------ -------- --------
Total fees paid to the Group's auditors 142 155
------------------------------------------------ -------- --------
Operating profit is stated after crediting:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Other net gains:
* Profit on sale of property, plant and equipment 260 37
* Dealership contributions 135 165
* Fair value adjustment to derivative financial
instruments 10 60
* Amortisation of grants - 1
-------------------------------------------------------- -------- --------
Total net gains 405 263
-------------------------------------------------------- -------- --------
7. Dividends
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------------ -------- --------
Final dividend for the prior year of
4.0 pence (2016: 3.2 pence) per share 4,000 3,200
Interim dividend for the year of 2.4
pence (2016: 2.0 pence) per share 2,400 2,000
------------------------------------------ -------- --------
Total dividends paid 6,400 5,200
------------------------------------------ -------- --------
Proposed final dividend for the year
ended 30 April 2017 of 4.8 pence (2016:
4.0 pence) per share 4,813 4,000
------------------------------------------ -------- --------
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting and has not been
included as a liability in these Financial Statements. The proposed
dividend is payable to all shareholders on the Register of Members
on 8 September 2017. The payment of this dividend will not have any
tax consequences for the Group.
8. Finance costs
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------- -------- --------
On bank loans and overdrafts 438 533
On hire purchase agreements 766 394
Amortisation of debt issue costs 97 78
Commercial vehicle stocking interest 299 370
Other interest payable 57 38
----------------------------------------- -------- --------
Total interest expense for financial
liabilities measured at amortised cost 1,657 1,413
----------------------------------------- -------- --------
9. Finance income
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------- -------- --------
Bank interest - 3
Other interest 3 1
Amounts receivable from related parties 18 -
----------------------------------------- -------- --------
Total interest income for financial
assets measured at amortised cost 21 4
----------------------------------------- -------- --------
10. Income tax expense
(a) Tax charged in the income statement:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------------- -------- --------
Current income tax:
UK and foreign corporation tax 3,620 3,066
Amounts under/(over) provided in previous
years 90 (28)
------------------------------------------- -------- --------
Total income tax on continuing operations 3,710 3,038
------------------------------------------- -------- --------
Deferred tax:
Origination and reversal of temporary
differences (144) (231)
Amounts under/(over) provided in previous
years 48 21
Impact of change in tax laws and rates (28) (42)
------------------------------------------- -------- --------
Total deferred tax (124) (252)
------------------------------------------- -------- --------
Tax expense in the income statement
on continuing operations 3,586 2,786
------------------------------------------- -------- --------
(b) Tax relating to items charged or credited to other
comprehensive income:
There are no tax consequences of any of the items included in
other comprehensive income.
(c) Reconciliation of income tax charge:
The income tax expense in the income statement for the year
differs from the standard rate of corporation tax in the UK. The
differences are reconciled below:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------------ -------- --------
Profit before taxation from continuing
operations 16,052 13,122
Standard rate of corporation tax in
UK 19.92% 20.00%
Tax on profit on ordinary activities
at standard rate 3,198 2,624
Share of equity-accounted investees,
already net of tax (43) -
Expenses not allowable for tax purposes 212 169
Tax under/(over) provided in previous
years 138 (7)
Difference in tax rates overseas 109 42
Utilisation of previously unrecognised
tax losses - -
Deferred tax rate difference (28) (42)
------------------------------------------ -------- --------
Total tax expense reported in the income
statement 3,586 2,786
------------------------------------------ -------- --------
(d) Deferred tax in the income statement:
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------------------- -------- --------
Deferred tax on accelerated capital
allowances 152 (123)
Deferred tax on other temporary differences (276) (129)
--------------------------------------------- -------- --------
Total (124) (252)
--------------------------------------------- -------- --------
The UK corporation tax rate reduced from 20% to 19% with effect
from 1 April 2017. Legislation to reduce the rate to 17% with
effect from 1 April 2020 was substantively enacted at 30 April
2017. A rate of 17% (2016: 18%) has been applied in the measurement
of the Group's UK deferred tax assets and liabilities in the
year.
(e) Deferred tax in the statement of financial position:
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------- -------- --------
Deferred tax liabilities:
Accelerated capital allowances (512) (356)
Other timing differences (204) (213)
----------------------------------------- -------- --------
Deferred tax asset:
Share based payments 873 309
Provisions and other timing differences 196 58
----------------------------------------- -------- --------
Net deferred tax asset (liability) 353 (202)
----------------------------------------- -------- --------
(f) Deferred tax movement:
Group
GBP'000
----------------------------------------- --------
At 1 May 2015 (642)
Credited to income statement 252
Credited to share based payment reserve 190
Foreign currency adjustment (2)
----------------------------------------- --------
At 30 April 2016 (202)
----------------------------------------- --------
Credited to income statement 124
Credited to share based payment reserve 429
Foreign currency adjustment 2
----------------------------------------- --------
At 30 April 2017 353
----------------------------------------- --------
11. Earnings per share
Basic earnings per share amounts are calculated by dividing
profit for the year attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares
outstanding during the year. Diluted earnings per share amounts are
calculated by dividing the profit attributable to ordinary equity
holders of the Company by the weighted average number of ordinary
shares outstanding during the year plus the weighted average number
of ordinary shares that would be issued on conversion of all the
potentially dilutive instruments into ordinary shares.
The following reflects the income and share data used in the
earnings per share computation:
2017 2016
Group Group
GBP'000 GBP'000
---------------------------------------- -------- --------
Profit attributable to ordinary equity
holders of the Company 12,466 10,336
---------------------------------------- -------- --------
2017 2016
Group Group
----------------------------------------- -------- --------
Basic weighted average number of shares
(thousands) 100,011 100,000
Basic earnings per share 12.5p 10.3p
----------------------------------------- -------- --------
Diluted weighted average number of
shares (thousands) 101,710 100,823
Diluted earnings per share 12.3p 10.3p
----------------------------------------- -------- --------
12. Intangible assets
Contracts
and Computer
Goodwill licences software Total
Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- --------- --------- --------
Cost:
At 1 May 2015 23,252 1,933 1,514 26,699
Additions - 98 448 546
Disposals - - - -
Foreign currency adjustment - - 5 5
----------------------------- -------- --------- --------- --------
At 30 April 2016 23,252 2,031 1,967 27,250
----------------------------- -------- --------- --------- --------
Additions - - 551 551
Disposals - - (263) (263)
Foreign currency adjustment - 7 16 23
----------------------------- -------- --------- --------- --------
At 30 April 2017 23,252 2,038 2,271 27,561
----------------------------- -------- --------- --------- --------
Accumulated amortisation:
At 1 May 2015 - 786 1,094 1,880
Charge for the year - 187 279 466
Disposals - - - -
Foreign currency adjustment - 1 5 6
----------------------------- -------- --------- --------- --------
At 30 April 2016 - 974 1,378 2,352
----------------------------- -------- --------- --------- --------
Charge for the year - 177 371 548
Disposals - - (96) `(96)
Foreign currency adjustment - 2 5 7
----------------------------- -------- --------- --------- --------
At 30 April 2017 - 1,153 1,658 2,811
----------------------------- -------- --------- --------- --------
Net book value:
----------------------------- -------- --------- --------- --------
At 1 May 2015 23,252 1,147 420 24,819
----------------------------- -------- --------- --------- --------
At 30 April 2016 23,252 1,057 589 24,898
----------------------------- -------- --------- --------- --------
At 30 April 2017 23,252 885 613 24,750
----------------------------- -------- --------- --------- --------
The average remaining useful life of contracts and licences at
30 April 2017 is 5.4 years (2016: 6.5 years)
13. Impairment test for goodwill
The carrying amount of goodwill has been allocated to each cash
generating unit ("CGU") as follows:
2017 2016
Group Group
GBP'000 GBP'000
-------------------------------- -------- --------
Value-added logistics services 17,326 17,326
Commercial vehicles 5,926 5,926
-------------------------------- -------- --------
Total 23,252 23,252
-------------------------------- -------- --------
A CGU is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. The recoverable
amount of a CGU is determined based on value-in-use
calculations.
The value-in-use calculations have used pre-tax cash flow
projections based on the Board approved business plans for the
three years ending 30 April 2020.
The business plans for the value-added logistics services
segment take into account the annualised impact of contract wins in
the year ended 30 April 2017 as well as confirmed new and ceasing
contracts. The key judgement is the assumed new contract wins
during the business plan period, which has been based on historical
experience.
Subsequent cash flows are extrapolated using an estimated
long-term growth rate of 2.5% (2016: 2.5%) to 2027 (2016: 2026).
The cash flows have then been discounted using a pre-tax risk
adjusted discount rate of between 9 and 11% (2016: 9 and 11%). The
forecasts of foreign operations are translated at the exchange rate
ruling at the year end.
The Directors have concluded that no reasonably foreseeable
change in the key assumptions would give rise to an impairment.
14. Property, plant and equipment
Plant,
machinery,
Leasehold Motor fixtures
property vehicles & fittings Total
Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- --------- ----------- --------
Cost:
At 1 May 2015 3,851 3,836 26,224 33,911
Additions 391 1,875 13,349 15,615
Disposals (16) (680) (259) (955)
Foreign currency adjustment 5 68 209 282
----------------------------- --------- --------- ----------- --------
At 30 April 2016 4,231 5,099 39,523 48,853
----------------------------- --------- --------- ----------- --------
Additions 198 777 18,711 19,686
Disposals (142) (1,123) (3,429) (4,694)
Foreign currency adjustment 6 129 232 367
----------------------------- --------- --------- ----------- --------
At 30 April 2017 4,293 4,882 55,037 64,212
----------------------------- --------- --------- ----------- --------
Accumulated depreciation:
At 1 May 2015 1,759 1,965 15,572 19,296
Charge for the year 313 784 3,483 4,580
Disposals (16) (488) (250) (754)
Foreign currency adjustment 5 34 128 167
----------------------------- --------- --------- ----------- --------
At 30 April 2016 2,061 2,295 18,933 23,289
----------------------------- --------- --------- ----------- --------
Charge for the year 353 861 3,511 4,725
Disposals (142) (794) (1,907) (2,843)
Foreign currency adjustment 5 26 111 142
----------------------------- --------- --------- ----------- --------
At 30 April 2017 2,277 2,388 20,648 25,313
----------------------------- --------- --------- ----------- --------
Net book value:
----------------------------- --------- --------- ----------- --------
At 1 May 2015 2,092 1,871 10,652 14,615
----------------------------- --------- --------- ----------- --------
At 30 April 2016 2,170 2,804 20,590 25,564
----------------------------- --------- --------- ----------- --------
At 30 April 2017 2,016 2,494 34,389 38,899
----------------------------- --------- --------- ----------- --------
Included within property, plant and equipment are amounts held
under finance lease contracts. At 30 April 2017, the net book value
of these assets was GBP27,314,000 (30 April 2016: GBP10,638,000).
Total additions include GBP13,697,000 (2016: GBP8,172,000) under
finance lease contracts.
Additions to plant, machinery, fixtures & fittings include
GBP1,824,000 (2016: GBP2,823,000) in respect of assets in the
course of construction.
15. Investment in equity-accounted investees
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------- -------- --------
Brought forward - -
Subscription for share capital 1,950 -
Share of profit after tax for the period 217 -
----------------------------------------- -------- --------
Carried forward 2,167 -
----------------------------------------- -------- --------
The Company owns 50% of the issued capital and voting rights of
Clicklink Logistics Limited ("Clicklink"), a company incorporated
in Great Britain and registered in England and Wales. Clicklink
provides services in respect of the sortation, fulfilment and
delivery of one-man orders to Click and Collect customer collection
points in the United Kingdom. On 1 November 2016 the Company
subscribed for 1,000,000 A ordinary shares of GBP1 each in
Clicklink, for aggregate consideration of GBP1,950,000. Clicklink
commenced trading on 1 November 2016 and has a 31 January financial
period end.
Summarised financial information from Clicklink's audited
accounts for the 13 week trading period ended 31 January 2017 is
set out below:
31 January
2017
GBP'000
---------------------------------------------- ----------
Current assets 7,874
Non-current assets 4,677
Current liabilities (5,312)
Non-current liabilities (2,905)
---------------------------------------------- ----------
Equity attributable to owners of the company 4,334
---------------------------------------------- ----------
13 weeks
ended
31 January
2017
GBP'000
-------------------------------------- -----------
Revenue 6,624
Operating profit 560
Interest payable and similar charges (18)
Income tax expense (108)
-------------------------------------- -----------
Profit for the period 434
-------------------------------------- -----------
16. Inventories
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------------- -------- --------
Component parts and consumable stores 4,459 4,319
Commercial vehicles 3,225 3,768
Commercial vehicles on consignment 22,288 18,165
--------------------------------------- -------- --------
Total inventories net of provision
for obsolescence 29,972 26,252
--------------------------------------- -------- --------
See below for the movements in the provision for
obsolescence:
Group
GBP'000
---------------------- --------
At 1 May 2015 17
Charged for the year 39
Utilised (47)
---------------------- --------
At 30 April 2016 9
---------------------- --------
Charged for the year 114
Utilised (36)
---------------------- --------
At 30 April 2017 87
---------------------- --------
The cost of inventories recognised as an expense amounted to
GBP91,072,000 (2016: GBP 82,398,000).
Included within commercial vehicles is GBP768,000 (2016:
GBP930,000) relating to assets held under hire purchase
agreements.
17. Trade and other receivables
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------------- -------- --------
Trade receivables 24,297 19,316
Less: provision for impairment of receivables (340) (328)
----------------------------------------------- -------- --------
Trade receivables - net 23,957 18,988
----------------------------------------------- -------- --------
Other receivables 2,708 2,971
Amounts receivable from related parties
(see note 27) 522 -
Prepayments and accrued income 20,541 17,857
----------------------------------------------- -------- --------
Total trade and other receivables 47,728 39,816
----------------------------------------------- -------- --------
See note 26 on credit risk of trade receivables, which explains
how the Group manages and measures credit quality of trade
receivables that are neither past due nor impaired.
See below for the movements in the provision for impairment:
Group
GBP'000
----------------------------- --------
At 1 May 2015 256
Charged for the year 124
Foreign currency adjustment 2
Utilised (54)
----------------------------- --------
At 30 April 2016 328
----------------------------- --------
Charged for the year 227
Foreign currency adjustment 1
Utilised (216)
----------------------------- --------
At 30 April 2017 340
----------------------------- --------
Concentrations of credit risk with respect to trade receivables
are limited due to the Group's customer base being large, unrelated
and blue chip. Due to this, management believes there is no further
credit risk provision required in excess of normal provision for
doubtful receivables. The average credit period taken on sale of
goods or services is 22 days (2016: 20 days).
An impairment review has been undertaken at the balance sheet
date to assess whether the carrying amount of financial assets is
deemed recoverable. The primary credit risk relates to customers
which have amounts due outside of their credit period. A provision
for impairment is made when there is objective evidence of
impairment which is usually indicated by a delay in the expected
cash flows or non-payment from customers.
The ageing analysis of trade receivables was as follows:
Neither
past
due
nor Past due but not
Total impaired impaired
30-60 60-90 > 90
days days days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------- --------- -------- -------- --------
30 April 2017 23,957 22,245 816 64 832
30 April 2016 18,988 17,216 1,006 231 535
--------------- ------- --------- -------- -------- --------
18. Cash and cash equivalents
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------- -------- --------
Cash and cash equivalents 862 715
Bank overdraft - (1,817)
--------------------------------- -------- --------
Total cash and cash equivalents 862 (1,102)
--------------------------------- -------- --------
19. Trade and other payables
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------ -------- --------
Trade creditors 28,760 25,984
Consignment inventory payables 29,230 22,859
Amounts payable to related parties
(see note 27) 171 -
Other taxes and social security 5,372 3,364
Other creditors 5,103 4,338
Accruals and deferred income 16,432 15,638
------------------------------------ -------- --------
Total trade and other payables 85,068 72,183
------------------------------------ -------- --------
20. Financial liabilities: borrowings
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Non-current:
Bank loans 1,330 5,113
Obligations under finance leases or
hire purchase agreements 18,643 7,818
----------------------------------------------------- -------- --------
Total non-current 19,973 12,931
----------------------------------------------------- -------- --------
Current:
Bank overdrafts - 1,817
Bank loans 797 944
Obligations under finance leases or
hire purchase agreements 6,592 3,792
----------------------------------------------------- -------- --------
Total current 7,389 6,553
----------------------------------------------------- -------- --------
Total borrowings 27,362 19,484
----------------------------------------------------- -------- --------
Less: Cash and cash equivalents 862 715
Loans to related party (see note 27) 1,450 -
----------------------------------------------------- -------- --------
Net debt 25,050 18,769
----------------------------------------------------- -------- --------
The maturity analysis of the bank loans at 30 April is as
follows:
2017 2016
Group Group
GBP'000 GBP'000
---------------------------- -------- --------
In one year or less 797 944
Between one and five years 1,330 5,113
After five years - -
---------------------------- -------- --------
Total bank loans 2,127 6,057
---------------------------- -------- --------
The principal lender has security over all assets of the Group's
UK operations. The Group's principal bank facilities total
GBP30,000,000 and consist of:
-- a Revolving Credit Facility of GBP20,000,000 repayable
in January 2021; interest rate 1.75% above LIBOR.
The amount drawn at 30 April 2017 was GBPnil;
-- a committed overdraft of GBP8,000,000. The amount
drawn at 30 April 2017 was GBPnil; and
-- bonds and guarantees of GBP2,000,000.
Items included within bank loans at 30 April 2017 are as
follows:
-- other bank loans - GBP2,491,000 repayable in monthly
or quarterly instalments over periods between
two and 52 months; interest rates fixed at between
3.65% and 4.80%;
-- unamortised debt issue costs of GBP364,000 in
relation to the principal facilities, which have
been deducted from the total outstanding bank
loans.
The amounts which are repayable under hire purchase or finance
lease instalments are shown below:
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------- -------- --------
Fixed rate leases:
Minimum lease payments:
In one year or less 6,631 3,241
Between one and five years 19,008 7,244
After five years - -
--------------------------------- -------- --------
25,639 10,485
--------------------------------- -------- --------
Interest:
In one year or less (830) (366)
Between one and five years (1,194) (483)
After five years - -
--------------------------------- -------- --------
(2,024) (849)
--------------------------------- -------- --------
Principal of fixed rate leases:
In one year or less 5,801 2,875
Between one and five years 17,814 6,761
After five years - -
--------------------------------- -------- --------
23,615 9,636
--------------------------------- -------- --------
Variable rate leases:
In one year or less 791 917
Between one and five years 829 1,057
After five years - -
--------------------------------- -------- --------
1,620 1,974
--------------------------------- -------- --------
Total 25,235 11,610
--------------------------------- -------- --------
It is the Group's policy to acquire certain of its property,
plant and equipment and inventories under finance leases or hire
purchase agreements. The average contract term is 4.5 (2016: 4.0)
years. At 30 April 2017 GBP23,636,000 (2016 GBP10,878,000) of the
Group total of such obligations is denominated in Pounds Sterling
and the remainder is denominated in Euros. The interest on the
variable rate leases is based on a margin above Bank Base Rate or
LIBOR. The Group's obligations under finance leases are secured by
the lessor's charge over the assets.
21. Provisions
Onerous Uninsured
contracts losses Dilapidations Total
Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- --------- ------------- --------
At 1 May 2015 234 - 606 840
Utilised (92) (60) (92) (244)
Charged in year 30 60 192 282
------------------------ ---------- --------- ------------- --------
At 30 April 2016 172 - 706 878
------------------------ ---------- --------- ------------- --------
Utilised (92) (145) (166) (403)
Consideration received - - 557 557
Charged in year 19 145 298 462
------------------------ ---------- --------- ------------- --------
At 30 April 2017 99 - 1,395 1,494
------------------------ ---------- --------- ------------- --------
Provisions have been analysed between current and non-current as
follows:
2017 2016
Group Group
GBP'000 GBP'000
------------- -------- --------
Current 127 109
Non-current 1,367 769
------------- -------- --------
Total 1,494 878
------------- -------- --------
Onerous contracts
Following a reorganisation of the commercial vehicles business
in the year ended 30 April 2013, which included the closure of a
depot, the Group was unsuccessful in its efforts to sub-let the
closed premises. The Directors therefore made a provision in the
year ended 30 April 2014 for the rent that will be payable until
the expiry of the lease in September 2018.
Uninsured losses
The uninsured losses provision is in respect of the cost of
claims (generally for commercial vehicles and employment related)
which are either not insured externally or fall below the excess on
the Group's insurance policies.
Dilapidations
Provisions are established over the life of leases to cover
remedial work necessary at termination under the terms of those
leases. Two key sites have leases that expire 20 and 11 years from
the balance sheet date and a new office lease expires 15 years from
the balance sheet date. All other leases expire in 10 years or
less.
During the year the Company took assignment of a property lease
with 8 years remaining and received compensation from the previous
tenant, reflecting the agreed value of accrued dilapidation
remedial works at the date of handover.
22. Share capital
2017 2016
Company Company
GBP'000 GBP'000
------------------------------------------ -------- --------
Allotted, called up and fully paid:
100,022,968 (2016: 100,005,341) ordinary
shares of 0.05p each 50 50
------------------------------------------ -------- --------
During the year the Company issued 17,627 ordinary shares at a
price of 140.4p per share to satisfy share options. See note 23
below.
23. Share based payments
The Clipper Performance Share Plan ("PSP") was approved by
shareholders on 29 September 2014. The PSP enables selected
directors and employees of the Group to be granted awards in
respect of ordinary shares. Share Awards under the PSP will
ordinarily be structured as nil cost share options with the vesting
of Share Awards being subject to performance conditions measured
over a period of at least 3 years. A summary of the principal terms
of the PSP, including vesting conditions, is contained in the
Directors' Remuneration Report on pages 46 to 59 of the Company's
2017 Annual Report and Accounts (available to download from
www.clippergroup.co.uk/report-accounts/).
The Clipper Sharesave Plan is a share plan for all UK employees
in the Group, and offers them the opportunity to acquire an
interest in shares in the Company on favourable terms within the
long-standing regime allowed by HMRC legislation. All UK staff are
invited to participate on the same terms, and employees who choose
to participate are granted an option over shares in the Company,
with the exercise of that option being funded by the proceeds of a
savings contract taken out by the relevant employee, under which
the employee saves a set amount each month over a set period. The
options granted in the year were offered with a 3-year savings
contract, under which the employee could elect to save between GBP5
and GBP500 per month.
Option movements and weighted average exercise prices ("WAEP")
during the year were as follows:
PSP Sharesave
Date Number WAEP Number WAEP
--------------------------- ---------- ---- ---------- --------
Outstanding 1 May 2015 845,895 nil 1,352,846 140.40p
Granted during the year 519,551 nil 299,609 239.34p
Forfeited during the year - - (127,245) 148.70p
Exercised during the year - - (5,341) 140.40p
--------------------------- ---------- ---- ---------- --------
Outstanding 30 April 2016 1,365,446 nil 1,519,869 159.21p
--------------------------- ---------- ---- ---------- --------
Granted during the year 379,848 nil 311,214 303.74p
Forfeited during the year (151,155) nil (141,985) 169.53p
Exercised during the year - - (17,627) 140.40p
--------------------------- ---------- ---- ---------- --------
Outstanding 30 April 2017 1,594,139 nil 1,671,471 185.44p
--------------------------- ---------- ---- ---------- --------
At 30 April 2017, options over 4,509 (2016: 6,671) of the above
shares were exercisable.
The fair value of the share options is measured at the grant
date, using the Black-Scholes model and taking into account the
terms and conditions upon which the instruments were granted.
The key inputs to the model are:
2017
--------------------------------- -----------
Share price at: 27 January 2017 380.00p
6 February 2017 374.88p
3.5
Expected life of option years
Volatility 35%
Dividend yield 1.68-1.71%
--------------------------------- -----------
The expected life of the options has been estimated as 6 months
beyond vesting date. As there is little historical data the
volatility has been estimated at 35% based on similar quoted
companies. The dividend yield is calculated by applying dividends
paid in the preceding 12 months to the share price at the grant
date.
The cost of the options is recognised over the expected vesting
period. The total charge for the year ended 30 April 2017 relating
to employee share based payment plans was GBP832,000 (2016:
GBP454,000). The fair value of share options at 30 April 2017 to be
amortised in future years was GBP2,052,000 (2016:
GBP1,958,000).
All share based payments in both years are equity settled.
24. Commitments and contingencies
Operating lease commitments - land and buildings:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------ -------- --------
Less than one year 19,191 14,981
Between one and five years 66,367 60,549
More than five years 77,567 83,541
------------------------------ -------- --------
Total minimum lease payments 163,125 159,071
------------------------------ -------- --------
Operating lease commitments - vehicles, plant and equipment:
2017 2016
Group Group
GBP'000 GBP'000
------------------------------ -------- --------
Less than one year 5,844 4,697
Between one and five years 9,443 9,148
More than five years 11 99
------------------------------ -------- --------
Total minimum lease payments 15,298 13,944
------------------------------ -------- --------
25. Capital commitments
2017 2016
Group Group
GBP'000 GBP'000
------------------------------------ -------- --------
Authorised and contracted for 2,011 9,467
Authorised, but not contracted for 2,659 7,279
------------------------------------ -------- --------
Total capital commitments 4,670 16,746
------------------------------------ -------- --------
26. Financial instruments and financial risk management
objectives and policies
In accordance with IAS 39 (Financial Instruments: Recognition
and Measurement) the Group has reviewed all contracts for embedded
derivatives that are required to be separately accounted for if
they do not meet certain requirements. The Group did not identify
any such derivatives.
The Group is exposed to a number of different market risks in
the normal course of business including credit, interest rate and
foreign currency risks.
Credit risk
Credit risk predominantly arises from trade receivables and cash
and cash equivalents. The Group has a customer credit policy in
place and the exposure to credit risk is monitored on an ongoing
basis. External credit ratings are generally obtained for
customers; Group policy is to assess the credit quality of each
customer before accepting any terms of trade.
Internal procedures take into account customers' financial
positions as well as their reputation within the industry and past
payment experience. Cash and cash equivalents and derivative
financial instruments are held with AAA or AA rated banks.
Financial instruments classified as fair value through profit and
loss and available for sale are all publicly traded on the UK
London Stock Exchange. Given the high credit quality of
counterparties with whom the Group has investments, the Directors
do not expect any counterparty to fail to meet its obligations.
At 30 April 2017 there were no significant concentrations of
credit risk (2016: GBPnil). The Group's maximum exposure to credit
risk, gross of any collateral held, relating to its financial
assets is equivalent to their carrying value. All financial assets
have a fair value which is equal to their carrying value, as a
consequence of their short maturity. The Group did not have any
financial instruments that would mitigate the credit exposure
arising from the financial assets designated at fair value through
profit or loss in either the current or the preceding financial
year.
Interest rate risk
The Group adopts a policy of ensuring that there is an
appropriate mix of fixed and floating rates in managing its
exposure to changes in interest rates on borrowings. Interest rate
swaps are entered into, where necessary, to achieve this
appropriate mix.
The interest rate swap taken on by the Company as part of the
novation of bank facilities from the former parent on 2 May 2014,
expired on 31 October 2016.
Interest rate sensitivity
The Group's borrowings are largely denominated in Pounds
Sterling and the Group is therefore exposed to a change in the
relevant interest rate. With all other variables held constant, the
impact of a reasonably possible increase in interest rates of 50
basis points (2016: 50 points) on that portion of borrowings
affected, would be to reduce the Group's profit before tax by
GBP93,000 (2016: GBP99,000).
Foreign currency risk
The Group is exposed to foreign currency risk on sales,
purchases and borrowings that are denominated in currencies other
than Pounds Sterling. The currencies giving rise to this risk are
primarily the Euro and US dollar. The volume of transactions
denominated in foreign currencies is not significant to the
Group.
The exposure to a short-term fluctuation in exchange rates on
the investment in foreign subsidiaries is not expected to have a
material impact on the results of the Group.
Capital management
The Group's main objective when managing capital is to protect
returns to shareholders by ensuring the Group will continue to
trade profitably in the foreseeable future. The Group also aims to
maximise its capital structure of debt and equity so as to minimise
its cost of capital.
The Group manages its capital with regard to the risks inherent
in the business and the sector within which it operates by
monitoring its gearing ratio on a regular basis and adjusting the
level of dividends paid to ordinary shareholders.
The Group considers its capital to include equity and net debt.
Net debt includes short and long-term borrowings (including
overdrafts and lease obligations) net of cash and cash
equivalents.
The Group has not made any changes to its capital management
during the year. The Group has no long-term gearing ratio target.
Borrowings are taken out to invest in the acquisition of
subsidiaries, new sites or depots and are considered as part of
that investment appraisal. Key measures monitored by the Group are
interest cover and net debt compared to earnings before interest,
tax, depreciation and amortisation.
In order to achieve the overall objective, the Group's capital
management, amongst other things, aims to ensure that it meets
financial covenants attached to the borrowings. The Group has
satisfied all such financial covenants in both years.
2017 2016
Group Group
GBP'000 GBP'000
--------------------- -------- --------
EBIT 17,928 14,718
Finance costs (net) 1,636 1,409
--------------------- -------- --------
Interest cover 11.0 10.4
--------------------- -------- --------
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------------------- -------- --------
EBIT 17,928 14,718
Depreciation and impairment of property,
plant and equipment 4,725 4,580
Amortisation and impairment of computer
software 371 279
--------------------------------------------- -------- --------
Earnings before interest, tax, depreciation
and amortisation (EBITDA) 23,024 19,577
Net debt (note 20) 25,050 18,769
--------------------------------------------- -------- --------
Net debt/EBITDA 1.09 0.96
--------------------------------------------- -------- --------
Liquidity risk
Management closely monitors available bank and other credit
facilities in comparison to the Group's outstanding commitments on
a regular basis to ensure that the Group has sufficient funds to
meet the obligations of the Group as they fall due.
The Board receives regular cash forecasts which estimate the
cash inflows and outflows over the next 24-36 months, so that
management can ensure that sufficient financing can be arranged as
it is required. The Group would normally expect that sufficient
cash is generated in the operating cycle to meet the contractual
cash flows as disclosed above through effective cash
management.
Maturity of financial liabilities:
Due Due
between between
Due one two
within and and
one two five
year years years Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- --------
30 April 2016
Fixed rate borrowings 2,980 2,457 5,279 10,716
Floating rate borrowings 3,573 674 4,982 9,229
----------------------------- -------- -------- -------- --------
Total borrowings 6,553 3,131 10,261 19,945
Trade and other payables 70,388 - - 70,388
----------------------------- -------- -------- -------- --------
Total financial liabilities 76,941 3,131 10,261 90,333
----------------------------- -------- -------- -------- --------
30 April 2017
Fixed rate borrowings 6,598 6,013 13,496 26,107
Floating rate borrowings 791 695 134 1,620
----------------------------- -------- -------- -------- --------
Total borrowings 7,389 6,708 13,630 27,727
Trade and other payables 81,681 - - 81,681
----------------------------- -------- -------- -------- --------
Total financial liabilities 89,070 6,708 13,630 109,408
----------------------------- -------- -------- -------- --------
Estimation of fair values
The main methods and assumptions used in estimating the fair
values of financial instruments are as follows:
-- derivatives: interest rate swaps are marked to
market using listed market prices;
-- interest-bearing loans and borrowings: fair value
is calculated based on discounted expected future
principal and interest cash flows; and
-- trade and other receivables/payables: the notional
amount for trade receivables/payables with a remaining
life of less than one year are deemed to reflect
their fair value.
2017 2017 2016 2016
Book Fair Book Fair
value value value value
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ---------
Non-current financial assets 1,450 1,394 - -
Current financial assets:
Cash and cash equivalents 862 862 715 715
Trade and other receivables 47,484 47,484 39,816 39,816
Liabilities:
Bank overdraft - - (1,817) (1,817)
Short-term borrowings (7,389) (7,389) (4,736) (4,736)
Trade and other payables (84,824) (84,824) (72,183) (72,183)
Derivative financial instruments - - (10) (10)
Long-term borrowings (19,973) (19,100) (12,931) (12,588)
---------------------------------- --------- --------- --------- ---------
Long-term borrowings are classified as Level 2 (items with
significant observable inputs) financial liabilities under IFRS 13.
Derivative financial instruments consist of interest rate swaps and
are classified as Level 2 (items with significant observable
inputs) financial liabilities under IFRS 13. There have been no
transfers between Level 1 and Level 2 financial instruments during
the year.
27. Related party disclosures
Clicklink Logistics Limited (see note 15) is a supplier of
logistics services to the Group. The Group provides certain
resources to Clicklink, principally people and vehicles, under the
terms of the joint venture agreement. Amounts charged for these
resources are included in revenue.
Knaresborough Investments Limited, a company controlled by Steve
Parkin, receives management and administration services from the
Group.
Branton Court Stud LLP, in which Steve Parkin is a partner,
receives management and administration services from the Group.
Roydhouse Properties Limited is the landlord of two of the
Company's leasehold properties and is classed as a related party
due to the company having common directors with Clipper Logistics
plc.
Knaresborough Real Estate Limited, a company owned by Steve
Parkin, is the landlord of one of the Group's leasehold properties.
Rent payable under the current lease is at the same rate as that
with the previous landlord.
Southerns Office Interiors Limited supplies office furniture to
the Group and is a customer of the commercial vehicles segment. A
company owned by Steve Parkin is registered as a person with
significant control over Southerns Limited, the ultimate parent of
Southerns Office Interiors Limited.
Guiseley Association Football Club shares a common director with
Clipper Logistics plc.
Harrogate Road Restaurants Limited shares a common director with
Clipper Logistics plc.
The Group rents an aircraft from South Acre Aviation Limited, a
company owned by Steve Parkin. Charges are on an arm's length
basis.
Key management compensation is disclosed in note 5.
Balances owing to or from these related parties at 30 April were
as follows:
2017 2016
Group Group
GBP'000 GBP'000
--------------------------------------- -------- --------
Non-current financial assets:
Clicklink Logistics Limited - interest
bearing loan 1,450 -
Trade and other receivables:
Clicklink Logistics Limited - trading
balance 282 -
Knaresborough Investments Limited 115 -
Branton Court Stud LLP 125 -
Trade and other payables:
Clicklink Logistics Limited 135 -
Southerns Office Interiors Limited 36 -
--------------------------------------- -------- --------
The shareholders in Clicklink Logistics Limited have jointly
made available to that company a term loan facility of GBP3,900,000
of which the Company's 50% share is GBP1,950,000. The facility may
be drawn in up to ten loans. Interest on each loan is calculated at
a margin above 12 month LIBOR and is payable annually. All loans
drawn under the facility are repayable in November 2019.
All other balances owing to or from related parties were settled
by the end of June 2017.
Transactions with these related parties in the year ended 30
April were as follows:
2017 2016
Group Group
GBP'000 GBP'000
----------------------------------------- -------- --------
Items credited to the income statement:
Clicklink Logistics Limited - revenue 4,701 -
Clicklink Logistics Limited - finance
income 18 -
Knaresborough Investments Limited 150 275
Branton Court Stud LLP 125 -
Southerns Office Interiors Limited 7 -
Harrogate Road Restaurants Limited 2 -
Items charged to the income statement:
Clicklink Logistics Limited 410 -
Knaresborough Investments Limited 5 -
Roydhouse Properties Limited 888 885
Knaresborough Real Estate Limited 345 298
Southerns Office Interiors Limited 47 -
Guiseley Association Football Club 25 50
South Acre Aviation Limited 7 19
Purchase of non-current assets
Southerns Office Interiors Limited 136 -
Sale of non-current assets
Clicklink Logistics Limited - items
previously capitalised by the Company 1,173 -
Clicklink Logistics Limited - items
procured but not capitalised by the
Company 3,681 -
----------------------------------------- -------- --------
28. Business combinations
Servicecare Support Services Limited
On 3 December 2014, the Group acquired 100% of the voting shares
of Servicecare Support Services Limited, in exchange for cash
consideration. In the year ended 30 April 2016, deferred
consideration of GBP2,212,000 was paid.
29. Post balance sheet events
Acquisition of Tesam Distribution Limited
On 24 May 2017 the Company acquired the entire issued share
capital of Tesam Distribution Limited ("Tesam"). Tesam is a
provider of a variety of warehousing and distribution services to
the retail sector. The business, which operates from three sites in
and around Peterborough totalling more than 1.1m square feet, was
established in 1984 and employs around 250 people.
In its financial year ended 30 June 2016, Tesam's audited
accounts reported revenue of GBP19.6m, earnings before interest and
tax of GBP1.8m and net assets of GBP3.1m.
The gross consideration paid was GBP11.75m. However the assets
acquired include cash of approximately GBP3.4m and a freehold
property which will be sold post-acquisition and is expected to
realise GBP2.7m net. The net consideration was funded in cash from
the Company's existing cash and bank facilities.
Exercise of options
On 5 June 2017 the Company's broker Numis Securities Limited
("Numis") exercised the share options ("Options") granted to it
pursuant to an Option Deed dated 30 May 2014 which was entered into
by the Company and Numis at IPO. Under the terms of the Option
Deed, upon the exercise of the Options and the payment of the
exercise price of GBP1 per share, 250,000 new ordinary shares of
0.05p each ("New Shares") were issued to Numis. The New Shares rank
pari passu with all existing ordinary shares in issue.
Acquisition of RepairTech Limited
On 15 June 2017 the Company acquired the entire issued share
capital of RepairTech Limited ("RepairTech"). RepairTech is a
specialist provider of consumer electronic repair services based in
Southam, Warwickshire.
RepairTech was established in 1999 by the current Managing
Director, Richard Costello. It is consistently profitable, and
reported underlying earnings before interest and tax of GBP0.6m on
revenues of GBP3.2m in its unaudited financial statements to March
2017.
Consideration is GBP2.5m in cash, with a further GBP0.5m
deferred for 12 months. Assets acquired with the business include
net cash balances of approximately GBP0.3m. The consideration was
funded in cash from the Company's existing cash and bank
facilities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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