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CLG Clipper Logistics Plc

837.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Clipper Logistics Plc LSE:CLG London Ordinary Share GB00BMMV6B79 ORD 0.05P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 837.00 834.00 836.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Clipper Logistics plc Final Results (3667M)

28/07/2017 7:00am

UK Regulatory


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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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