Clipper Logistics to float on the stock market
09 May 2014
The third party logistics firm, which has a strong pedigree in fashion logistics and e-fulfillment, will sell shares on the stock market to reward its existing investors.
In a statement to potential investors, Clipper Logistics said ‘the Offer will give the executive management team as well as other minor shareholders an opportunity for the partial realisation of their investment in the Group'.
The company's profit (adjusted EBIT) for the year ended 30 April 2014 is estimated to have been £9.6 million, an increase of 10.3% on the previous year.
This was built in part on outstanding performance in the non-food eCommerce sector. E-fulfillment logistics services revenue for the year to April 2011 was £16.4m, and this almost doubled to £29.6m for the year to April 2013.
Clipper's customers include ASOS, The John Lewis Partnership, Asda, SuperGroup, Morrisons, New Look and Tesco.
The company also highlighted the importance of returns management to eCommerce as well as its own expertise in the area.
"Management estimates that 25% to 40% of all clothing and footwear purchases in the UK are returned. Retailers need to rework the product into a saleable state very quickly to reduce working capital investment and maintain margins."
Clipper’s statement read: ‘Management estimates that 25% to 40% of all clothing and footwear purchases in the UK are returned. Retailers need to rework the product into a saleable state very quickly to reduce working capital investment and maintain margins.
‘The Group has a strong track record of managing this process for customers, including managing the returns operation for ASOS, the UK’s leading online fashion retailer.’
Clipper executive chairman Steve Parkin said: "We are extremely excited about this next phase in the Company’s development. With our detailed understanding of the e-fulfillment and returns markets, and the evolving needs of customers in these areas, we have increased market share with customer loyalty based on delivering a high quality service. The IPO is the next landmark in the exciting development of Clipper, providing a platform for management to accelerate growth.”
The company says it has a high degree of contractual certainty which underpins its financial stability.
Its statement continued ‘Approximately 70% of the Group’s logistics division revenue for the year ended 30 April 2013 was generated from open book and minimum volume guarantee contracts, providing the Group with a high degree of profit and cash flow predictability and operational stability.
‘The contracts that Clipper enters into with its customers have an average duration of three to five years. Open book contracts provide Clipper with protection against cost fluctuations, since all costs incurred by Clipper are directly recharged to the customer alongside a management fee. This management fee can be enhanced through gainshare mechanisms, whereby Clipper receives a proportion of the cost reductions that are delivered to the customer and through key performance indicator-linked reward mechanisms’.