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25 Feb 2021 | 12:10

Clipper Logistics upgrades expectations after contract wins

(Sharecast News) - Clipper Logistics said on Thursday that it expects results to exceed current market views in the year to 30 April 2022 and beyond following "major" new contract wins with River Island and Mountain Warehouse. The company said that together, the new contracts represent a "significant step change" in activity levels and will enhance earnings for the next financial year, which begins on 1 May.

The contracts will increase revenue by more than £40m on a full-year basis, and will be immediately earnings-enhancing from go-live.

Clipper has agreed in principle a new five-year open book contract with high street fashion retailer River Island to provide a comprehensive suite of logistics services at the company's existing distribution centre in Milton Keynes. Clipper already handles returns for River Island at the group's Ollerton distribution centre.

The company has also signed a new 10-year open book contract with outdoor retailer Mountain Warehouse to provide a full range of multi-channel logistics services. The new contract is expected to begin in spring.

Clipper chairman Steve Parkin said: "We are delighted to welcome two iconic retailers to the ever-growing family of Clipper customers. Both contracts are a clear indication of the collaboration and use of shared resources that will define the retail logistics supply chain into the future.

"These contracts enhance our command of the end-to-end service proposition in online retail, and demonstrate that Clipper is also well-positioned to continue to support high street retail as it recovers from lockdown. Our strategy to focus on providing innovative solutions in both the online and traditional bricks and mortar retail landscapes continues to drive value for both our customers and shareholders."

House broker Shore Capital said: "This is a significant uplift in revenues and the company also recently announced a European contract win with luxury fashion platform with FarFetch, which shows both the broad growth across the group and continued momentum from new business wins, which are yet to be factored into our SC forecasts for FY2022 and beyond.

"We await further guidance from the company given its April year-end."

At 1300 GMT, the shares were up 7.5% at 577p.
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