We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| 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 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCLG
RNS Number : 0854W
Clipper Logistics plc
30 July 2018
FOR IMMEDIATE RELEASE 30 July 2018
Clipper Logistics plc
Preliminary Results for the year ended 30 April 2018
Clipper Logistics plc ("Clipper", the "Group", or the "Company"), a leading provider of value-added logistics solutions, e-fulfilment and returns management services to the retail sector, is pleased to announce its Preliminary Results for the year ended 30 April 2018.
Financial Highlights for the year ended 30 April 2018
Hot Features
Premium
-- Group revenue increased by 17.6% from GBP340.1 million to GBP400.1
million.
-- Group EBIT(1) increased by 16.3% from GBP17.9 million to GBP20.9
million.
-- Group profit for the financial year increased by 14.6% from GBP12.5
million to GBP14.3 million.
-- Earnings per share increased by 13.6% to 14.2p (2017: 12.5p).
-- Cash generated from operations was GBP24.5 million (2017: GBP25.7
million).
-- Dividend per share increased by 16.7% to 8.4p (2017: 7.2p).
(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.
Percentages are calculated based on the underlying numbers as presented in the preliminary results, not on the rounded figures above.
Operational Highlights for the year ended 30 April 2018
-- Commenced significant new contracts with high profile retailers
including Edinburgh Woollen Mill, River Island, M&S and ASOS.
-- Acquired RepairTech Limited in June 2017. This was immediately
earnings-enhancing and successfully amalgamated with Servicecare
to create a new Technical Services operation.
-- Acquired Tesam Distribution Limited in May 2017. This was immediately
earnings-enhancing and successfully integrated into UK logistics
by the year end.
-- Successfully opened our first facility in Poland where we have
already secured three new contract wins.
-- Significant growth in activity with many of our customers including
Asda, Morrisons, Philip Morris, Wilko and s.Oliver.
-- Commenced our first cross-border Technical Services operation,
leveraging our existing UK relationship with Amazon to perform
a similar operation for Amazon in Germany.
-- Development of a Team Clipper cultural programme enabling staff
to understand their contribution to the success of the business
and designed to augment continuous improvement, communication
and engagement.
-- Launched our Fresh Start programme, working alongside a number
of charity partners with the aim of providing work and career
opportunities for those who may otherwise have challenges entering
the job market.
-- Our commercial vehicles business continues to perform strongly.
Post Year End Highlights
-- Commenced a large e-fulfilment operation for boohoo.com subsidiary
Pretty Little Thing.
-- Committed to a new site at Crick, UK in order to handle the increased
scope of Halfords operations. We have committed to an additional
site in Poznan, Poland to house one of the three new contracts
secured in the year ended 30 April 2018, with construction scheduled
for completion in 2018.
Steve Parkin, Executive Chairman of Clipper commented:
"The Group is proud of its historical track record of delivering significant organic revenue growth and integrating strategic, value-additive acquisitions. Our latest set of full year results show continued strong EBIT growth, growth achieved through remaining true to each of our core strategic principles: expanding the customer base, developing complementary services for customers, continuing to expand in Europe and identifying and seeking targeted, complementary acquisitions. We are excited by the new people initiatives we have launched in the year, including Team Clipper and Fresh Start, the former demonstrating our commitment to our people and the latter demonstrating our commitment to Corporate Social Responsibility. We are conscious of the wider forces affecting the UK retail sector; whilst this means that we have to bring an element of caution into our planning, recent contract wins, together with a strong pipeline of new business activity and the further evolution of our Click and Collect proposition, leave the Group well positioned to achieve further growth both in the UK and internationally."
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 Buchanan: +44 (0) 20 7466 5000 David Rydell Stephanie Watson
Chairman's Statement
As Chairman of Clipper Logistics plc, I am pleased to present our 2018 financial results following the fourth anniversary of our listing on the Main Market of the London Stock Exchange in June 2014.
The financial year ended 30 April 2018 has seen a continuation of our historic track record of achieving significant organic revenue growth, complemented by the addition of strategic, value-enhancing acquisitions.
The Group is focused on developing innovative, cost-effective solutions that address the needs of our blue-chip client base, predominantly in the retail sector. We continue to invest in quality people to implement sector-leading projects, and this, together with our ability to identify key trends and developments in the sectors we serve, means that we are confident in our ability to continue this momentum.
The Group has achieved another strong financial performance in the year under review, and has commenced significant new contracts with high profile retailers including Edinburgh Woollen Mill, River Island, M&S and ASOS, for whom we have introduced returns management services in Poland. In addition, we have seen significant growth in activity with many of our customers including Asda, Morrisons, Philip Morris, Wilko, Zara and s.Oliver. Further, our commercial vehicles business continues to perform strongly.
During the year, we announced the acquisition of Tesam Distribution Limited in May 2017, and the acquisition of RepairTech Limited in June 2017. Both of these acquisitions have been immediately earnings-enhancing. These acquisitions demonstrate our ability to identify complementary businesses that extend the breadth of both our customer base and our service offerings, and enhance returns to shareholders. I would like to welcome the colleagues and management of both businesses to the Group.
We will continue to identify key trends in the sectors we serve, and develop new services, processes and solutions that address the needs and challenges of our customers. Clipper's unique understanding of the dynamics of the retail sector, and in particular the e-commerce sector including returns management and click and collect, provides the Group with exceptionally strong strategic positioning for the future.
In the logistics sector, we have a high proportion of revenue from open book or minimum volume guarantee contracts, whilst in the commercial vehicles sector much of our profit and cash streams come from servicing and parts activities which are extremely stable. These contract mechanics provide a good degree of protection to the Group's earnings and cashflows.
Consequently, the Group is well positioned to continue to deliver strong returns to our shareholders, despite the challenges that some parts of the retail sector are experiencing.
We are mindful of the wider economic climate, and in particular of the headwinds facing our customers in the retail sector. We continue to monitor the situation closely and engage with our customers to find new ways to pro-actively assist them.
Group results
Group revenue increased by 17.6% to GBP400.1 million for the year ended 30 April 2018 (2017: GBP340.1 million), and Group EBIT increased by 16.3% to GBP20.9 million (2017: GBP17.9 million).
Diluted earnings per share were 14.1 pence for the year ended 30 April 2018 (2017: 12.3 pence), an increase of 14.6%.
Basic earnings per share were 14.2 pence (2017: 12.5 pence), an increase of 13.6%.
Net debt was GBP31.7 million at the year end (2017: GBP25.1 million), in line with our expectations. We continue to invest in capital projects to support both new contracts and growth of existing contracts, much of which involves a commitment from customers to reimburse this capital over the duration of the contract. Net debt is defined as borrowings, less cash, cash equivalents and non-current financial assets (see note 20).
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 proven track record of identifying key trends within the sectors we serve, and developing relevant cost-effective solutions that address those needs.
Further, we have a proven ability to identify strategic acquisitions that enhance Group performance and shareholder value.
I would like to take this opportunity to thank all the employees of the Group for their continued commitment and contribution to the Group's performance.
Governance
The executive management team comprises Tony Mannix (Chief Executive Officer), David Hodkin (Chief Financial Officer) and myself, and the Group benefits from the combined experience of Ron Series (Senior Independent Director), Stephen Robertson and Mike Russell, our Non-Executive Independent Directors.
Paul Hampden Smith stood down from the role of Senior Independent Director on 12 July 2017.
Dividends
The Board is recommending a final dividend of 5.6 pence per share, making a total dividend in respect of the year ended 30 April 2018 of 8.4 pence (2017: 7.2 pence), an increase of 16.7%.
The proposed final dividend, if approved by shareholders, will be paid on 1 October 2018 to shareholders on the register at the close of business on 7 September 2018.
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. Recent contract wins, together with a strong pipeline of new business activity and the further evolution of our Click and Collect proposition, place the Group in an excellent position to achieve further growth both in the UK and internationally. Indeed, Clipper's approach of adopting a hands-on, long-term and pro-active relationship with its retail clients allows it to continue to grow during these changing retail market conditions.
I look forward to working with all of the Group's stakeholders as we continue to drive the Group forward.
Steve Parkin
Executive Chairman
Operating and Financial Review
Overview of Group performance for the year ended 30 April 2018
The Group continued to make good progress in the financial year ended 30 April 2018.
Group revenue
Group revenue increased by 17.6% to GBP400.1 million, with strong growth in all business areas:
Unaudited
Year ended Year ended
30 April 30 April
2018 2017
Revenue GBPm GBPm % change
-------------------------------------------- ------------ ------------ ----------
E-fulfilment & returns management services 159.4 129.9 +22.7%
------------ ------------ ----------
Non e-fulfilment logistics 139.1 121.9 +14.1%
-------------------------------------------- ------------ ------------ ----------
Total value-added logistics services 298.5 251.8 +18.6%
------------ ------------ ----------
Commercial vehicles 103.6 91.5 +13.2%
------------ ------------ ----------
Inter-segment sales (2.0) (3.2)
-------------------------------------------- ------------ ------------ ----------
Group revenue 400.1 340.1 +17.6%
-------------------------------------------- ------------ ------------ ----------
Percentages are calculated on the underlying numbers as presented in the preliminary results, not on the rounded figures in the table above.
Within the value-added logistics services segment, the Group benefited from:
-- the full-year impact of operations commenced during the year ended
30 April 2017, including: British American Tobacco (for Vype),
Halfords, Inditex, Links of London, Kidly, Pretty Green, Secret
Sales, SilkFred, Smiffys, Thread 35 and Westwing; and significant
changes to the services provided to John Lewis. These are partly
offset by the full-year impact of the Hobbycraft and Ted Baker
contracts, which ceased during the year ended 30 April 2017, and
incremental operational costs resulting from growth and start-up
on a small number of contracts which have since been renegotiated
to give more favourable terms to Clipper going forwards;
-- volume growth and extension of services on existing contracts,
including Antler, ASOS returns, Asda, Bench, Browns, Haddad, Morrisons,
Philip Morris, Wilko and Zara in the UK, and s.Oliver in Germany,
in part driven by particularly strong organic growth in the e-fulfilment
market due to the ongoing shift in retail trends towards online
trading, whilst contract packing opportunities in the tobacco
sector have declined;
-- the part-year impact of operations commenced during the year ended
30 April 2018, including: Crosswater, Edinburgh Woollen Mill,
M&S returns operations and River Island in the UK; ASOS returns
in Poland; and Superdry and Urban Outfitters in the Clicklink
joint venture. The impact of these activities will not be fully
realised until the year ending 30 April 2019;
-- significant growth in the current period from the acquisitions
of Tesam and RepairTech, completed in May 2017 and June 2017 respectively;
and
-- a contribution from property related advisory services, an area
that will continue to deliver returns as the Group leverages its
growing property portfolio.
Revenue growth in commercial vehicles was driven by:
-- a GBP12.5 million (22%) increase in new vehicle sales. The number
of new units sold actually decreased by 11% year-on-year, but
the average selling price for the vehicles increased by 37% due
to the product mix of vehicles sold; and
-- a slight (3%) decrease in aftersales revenues, comprising servicing,
body shop and parts sales.
Group EBIT
The Group grew EBIT strongly in all segments and business activities:
Unaudited
Year ended Year ended
30 April 30 April
2018 2017
EBIT GBPm GBPm % change
-------------------------------------------- ------------ ----------- ----------
E-fulfilment & returns management services 11.9 10.2 +16.0%
------------ ----------- ----------
Non e-fulfilment logistics 14.8 12.4 +18.9%
------------ ----------- ----------
Central logistics overheads (5.7) (4.8)
-------------------------------------------- ------------ ----------- ----------
Total value-added logistics services 21.0 17.8 +17.6%
------------ ----------- ----------
Commercial vehicles 2.5 2.3 +4.6%
------------ ----------- ----------
Head office costs (2.6) (2.2)
-------------------------------------------- ------------ ----------- ----------
Group EBIT 20.9 17.9 +16.3%
-------------------------------------------- ------------ ----------- ----------
Percentages are calculated on the underlying numbers as presented in the Preliminary results, 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 further below.
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 16.3% to GBP20.9 million for the year ended 30 April 2018, primarily as a result of the revenue drivers mentioned above. EBIT grew in all business areas.
A more detailed discussion by operating segment is included later in this narrative.
Net interest charges
Net interest charges for the year ended 30 April 2018 increased by 20.8% to GBP2.0 million (2017: GBP1.6 million), the increase being attributable to the increased average net debt following the two acquisitions earlier in the year.
PBTA
PBTA is defined as profit before income tax, before amortisation of intangible assets arising on consolidation. Whilst not considered a KPI by management, this measure is used by market analysts. PBTA was GBP19.1 million for the year ended 30 April 2018, an increase of 17.4% (2017: GBP16.2 million).
Taxation
The effective rate of taxation of 20.5% (2017: 22.3%) is higher than the average standard UK rate of corporation tax applicable in the year of 19.0% (2017: 19.9%) principally due to certain expenditure incurred which is disallowable for tax purposes and the higher effective rate of tax to which the German and Polish businesses are subject.
Profit after tax
The profit after tax for the year ended 30 April 2018 was GBP14.3 million (2017: GBP12.5 million), an increase of 14.6%.
Earnings per share
Earnings per share were 14.2 pence for the year ended 30 April 2018 (2017: 12.5 pence). Adjusted to remove amortisation of intangible assets arising on consolidation, earnings per share were 15.2 pence (2017: 12.6 pence).
Current trading and outlook
In the year ending 30 April 2019, we expect:
-- revenue to benefit from the full-year effects of:
-- the two acquisitions completed in the year ended 30 April 2018;
and
-- the contracts brought on line in the year ended 30 April 2018.
As noted previously, the Group secured a number of significant
contract wins in the year ended 30 April 2018.
-- to deliver EBIT growth from operations which have either recently
commenced, including those with Pretty Little Thing out of our
new facility in Sheffield, UK, or those Technical Services activities
which have recently commenced in Kempen, Germany, or other known
new activities which are at various other stages of planning (including
additional volume with Zara) and a new contract with Westwing,
which extends significantly the services we are providing for
them, although this will not commence until late in calendar year
2018. The annualised impact of these activities will not be fully
delivered until the year ending 30 April 2020;
-- growth with existing customers, either organically - particularly
with those in e-commerce - or through new service lines for those
customers;
-- growth from conversion of some of the opportunities on our new
business pipeline. There is a strong new business pipeline in
the Group. These opportunities will be converted through a focus
on retail specialisms and provision of cost-effective, value-added
solutions. Some of these new business activities will not reach
full-year run-rate until the year ending 30 April 2020 and beyond;
and
-- further revenues and EBIT to be generated from property advisory
services.
The organisational structure of the Group has recently been revised, allowing the Group 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 have been 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 ending 30 April 2019.
The Board is confident of continued progress in the year ending 30 April 2019. It notes weaker economic conditions, particularly in certain parts of the retail sector where there are widely reported headwinds. However, the Group expects to achieve another year of positive momentum with overall growth in revenues and earnings.
Operating segment and business activity overview
Logistics
E-fulfilment & returns management services
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. This business activity also includes:
-- the contribution from Click and Collect activities;
-- RepairTech, acquired on 15 June 2017. RepairTech is now fully
integrated into the Group and has been amalgamated with Servicecare
into the Technical Services division, managed by one management
team;
-- the returns aspects of Tesam, acquired on 24 May 2017; and
-- our recently commenced Polish operations for Westwing (e-fulfilment)
and ASOS (returns).
Clipper's ability and agility, particularly in respect of omni-channel, multi-channel, returns management, Click and Collect and mechanisation already mentioned in this preliminary statement, have enabled the Group to significantly grow revenues and earnings, and to once again outperform market growth (the UK e-commerce market grew by 12% in the calendar year 2017).
Revenues from e-fulfilment & returns management services increased by 22.7% from GBP129.9 million for the year ended 30 April 2017 to GBP159.4 million for the year ended 30 April 2018, with EBIT growing by 16.0% from GBP10.2 million to GBP11.9 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 e-fulfilment, and to be a thought leader in the provision of value-added services across the sector.
The financial growth in the year ended 30 April 2018 in e-fulfilment & returns management services has been achieved across many service lines and with many customers, for a number of reasons:
-- operations commenced for new customers in the year ended 30 April
2017 reaching full-year maturity: British American Tobacco (for
Vype), Inditex, Kidly, Secret Sales, SilkFred, Smiffys, Thread
35 and Westwing;
-- the full-year impact of new operations started in the year ended
30 April 2017 for existing customers, including those ancillary
distribution activities we started for John Lewis in Northampton,
UK;
-- organic growth with existing customers, including ASOS, Asda,
Browns, Morrisons (Nutmeg), s.Oliver, Wilko and Zara, as we and
our customers benefit from the continued market growth in the
e-commerce sector;
-- newly commenced activities in 2018, including an additional ASOS
returns facility in Poland, M&S returns, River Island, Superdry
and Urban Outfitters. These recently commenced operations are
anticipated to reach full run-rate in the year ending 30 April
2019; and
-- those stepped increases in e-fulfilment and returns revenues as
a result of the Tesam and RepairTech acquisitions.
Since the year end, a new operation has commenced with Pretty Little Thing, albeit slightly later than expected, another is due to commence with Westwing shortly and Zara has announced its intention to transfer a significant additional activity into Clipper.
Non e-fulfilment logistics
Non e-fulfilment logistics operations include receipt of inbound product, warehousing, picking, packing and distribution of products on behalf of customers in traditional bricks and mortar retail. 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 as well as property-related advisory services linked to optimising the Group's warehousing arrangements. Non e-fulfilment aspects of the Tesam operation are consolidated into the non e-fulfilment business activity from the date of acquisition, 24 May 2017. The integration of Tesam into Clipper has now been completed and it is now managed in exactly the same way as any other site within the logistics division.
Revenue from non e-fulfilment operations grew by 14.1% for the year ended 30 April 2018, from GBP121.9 million to GBP139.1 million, with EBIT increasing by 18.9%, from GBP12.4 million to GBP14.8 million. This growth has been achieved as result of:
-- the full-year effect of the activities commenced in the prior
year with Halfords, Links of London, Pretty Green and John Lewis;
-- organic volume growth and extensions to service offerings with
existing customers, including Antler, Asda, Haddad, Morrisons
and Philip Morris;
-- part-year contributions from new activities commenced in the current
year, including Crosswater and Edinburgh Woollen Mill. These activities
will contribute a full year of performance to the year ending
30 April 2019;
-- disposals of property, plant and equipment;
-- those part-year contributions from non e-fulfilment activities
at Tesam; and
-- a significant contribution to revenue and EBIT from property related
advisory services, an area that will continue to deliver returns
as the Group leverages its growing property portfolio.
The growth has been partly offset by:
-- the full-year impact of the Hobbycraft and Ted Baker contracts
which ceased in the prior year;
-- organic decline in tobacco contract packing revenues; and
-- incremental operational costs resulting from growth and start-up
on a small number of contracts which have since been renegotiated
to give more favourable terms to Clipper going forwards.
Already in the year ending 30 April 2019, we have secured an extension to our contract with Halfords in terms of both contract length and the scope of activities. We shall be performing these new activities from a newly-leased warehouse facility in Crick, UK.
Central logistics overheads
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.
Central logistics overheads grew by GBP0.9 million (17.7%), from GBP4.8 million in the year ended 30 April 2017 to GBP5.7 million in the year ended 30 April 2018.
We have directed additional strategic investment to the logistics overheads base in the year ended 30 April 2018, particularly in solutions delivery. Also, the central logistics overheads have risen in the year due to increased share based payment charges (see below). In the prior year the reporting structure within the central logistics management team was strengthened, preparing the business for future growth, and so there is a full-year impact of this cost in the current year; organisational improvements have continued in the current year with the streamlining of the Technical Services division and the restructuring of the Business Solutions team. Whilst some 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, and we expect those stepped increases in share based payment charges experienced in recent years to slow as a result of these costs having now reached full run-rate (see further below).
Commercial vehicles
The commercial vehicles business, Northern Commercials (Mirfield) Limited, operates Iveco and Fiat commercial vehicle dealerships 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.
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.
Key customers of Northern Commercials include Access Hire Nationwide, Allied Bakeries, 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.
-- The MOT pass rate at Northern Commercials' dedicated Test station
in Brighouse is 99.4% (target: 98.0%).
-- Dealers are set a target of five days per annum for technician
training. Northern Commercials was fully compliant in the year.
The commercial vehicles business delivered EBIT of GBP2.5 million in the year ended 30 April 2018 (2017: GBP2.3 million), an increase of 4.6% on the previous year.
The business sold 1,786 new vehicles in the year ended 30 April 2018, 226 fewer than in the prior year (2017: 2,012), and 358 used vehicles (2017: 393), 35 fewer than in the prior year. However, due to a change in mix of vehicles sold, there was a 37% increase in the average selling price of new vehicles in the year ended 30 April 2018, being GBP38,799 compared with GBP28,225 in the prior year. Likewise, the average selling price of a used vehicle was GBP11,497 compared with GBP10,794 in the prior year, an increase of 7%. Servicing saw a 2% increase in revenue from the year ended 30 April 2017 to the year ended 30 April 2018, bodyshop revenues were down 3% and parts revenues were down 6%.
Head office costs
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, together with the costs of the new Group office at Central Square, Leeds.
Head office costs grew by GBP0.3 million (14.4%), from GBP2.2 million in the year ended 30 April 2017 to GBP2.6 million in the year ended 30 April 2018. The year-on-year increase in head office costs is attributable to three main factors: the overhead of the new Central Square office, share based payment charges (see below) and the costs associated with the acquisition of the two new subsidiaries.
Share based payment charges
Share based payment charges totalling GBP1.2 million (2017: GBP0.8 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). 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 2018 share based payment charges include:
-- nine months of charges in respect of options granted in the year
ended 30 April 2015;
-- a full year of charges in respect of options granted in the years
ended 30 April 2016 and 2017; and
-- three months of charges in respect of options granted in the year
ended 30 April 2018.
The prior year share based payment charge was not at full run-rate as it only effectively included 27 months of charges, being:
-- a full year of charges in respect of options granted in the years
ended 30 April 2015 and 2016; and
-- three months of charges in respect of options granted in the year
ended 30 April 2017, and the charge benefited from a release of
accruals made in prior years in respect of certain leavers from
the PSP pool.
Balance sheet and cash flow
Capital expenditure and fixed assets
Of total tangible and intangible fixed asset additions of GBP13.0 million (2017: GBP20.2 million), GBP12.3 million (2017: GBP19.4 million) related to the logistics services segment, and GBP0.7 million (2017: GBP0.9 million) related to the commercial vehicles segment. Approximately GBP7.7 million of the additions were purchased in cash and GBP5.3 million through finance leases. Notable asset purchases in the year ended 30 April 2018 included new mezzanine floors at Ollerton and Northampton, site set up costs in Poland, the fit out of the new Central Square office and investments in the accounting and multi-user warehouse management systems. A large proportion of expenditure in the year ended 30 April 2017 was incurred at the Northampton shared-use facility.
In the year ended 30 April 2018, we disposed of assets with a net book value of GBP4.5 million, on which we generated a profit on disposal of GBP2.2 million. Substantially all of the GBP4.5 million net book value related to the disposal of a freehold property which the Group had acquired earlier in the period as part of the purchase of Tesam. In the prior year, GBP1.2 million of the GBP2.3 million proceeds from sale of non-current assets related to sales from Clipper to Clicklink on formation of the joint venture entity.
Clipper's outstanding capital expenditure commitment at 30 April 2018 was GBP17.9 million, significantly increased from the equivalent figure of the prior year (2017: GBP4.7 million), reflecting the continued growth in new and existing customer contracts.
Cash flow
Cash generated from operations was GBP24.5 million (2017: GBP25.7 million).
The business continues to be highly cash generative. Under the UK logistics business model, 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 invested in working capital in the year ended 30 April 2018 was GBP3.2 million (2017: net cash generated from working capital of GBP2.0 million).
There are a number of cash flows disclosed outside of cash flow from operations which occur regularly, although the magnitude of these can change significantly year-on-year. These cash flows include dividends, drawdown and repayment of bank loans, sales and purchase of fixed assets (including repayments on assets purchased under finance leases), corporation tax payments and interest payments. Taking each of these in turn:
-- Dividends paid in the year ended 30 April 2018 amounted to GBP7.6
million, an increase of 19.1% on the prior year (2017: GBP6.4
million), and in line with our stated dividend policy.
-- Cash flows arising from the drawdown and repayments of bank loans
were an GBP8.2 million inflow in the year ended 30 April 2018
(2017: GBP6.0 million outflow), the drawdown being used to fund
the acquisitions of Tesam and RepairTech (see below).
-- Cash purchases of fixed assets amounted to GBP7.7 million in the
year ended 30 April 2018 (2017: GBP4.6 million), with a further
GBP7.4 million cash used to repay finance leases (2017: GBP5.7
million). Sales of fixed assets generated GBP6.7 million in the
year ended 30 April 2018 (2017: GBP2.3 million), as we realised
cash on the sale of freehold property, as detailed above.
-- Corporation tax of GBP4.0 million was paid in the year ended 30
April 2018 (2017: GBP3.2 million), the increase being driven by
the overall increased profitability of the Group.
-- Interest paid increased by GBP0.3 million to GBP1.9 million in
the year ended 30 April 2018 (2017: GBP1.6 million), primarily
due to increased borrowing levels following the two acquisitions
in the year.
Whilst the timing and magnitude of dividends, tax payments and interest payments can be predicted with relative certainty, the timing of drawdowns on bank loans and fixed asset-related cash flows is much more dependent on specific one-off projects, and so can quite easily fall into one financial period or the next.
Overall cash flow for the year ended 30 April 2018 was also impacted by three significant non-ordinary course cash flows: firstly, there was the acquisition of Tesam for a cash consideration of GBP9.6 million (net of cash acquired); secondly, there was the acquisition of RepairTech for a cash consideration of GBP2.2 million (net of cash acquired); and thirdly, there was the raising of GBP1.6 million of cash from share issues in the year ended 30 April 2018:
-- Having passed our three year anniversary of listing on the London
Stock Exchange ("Listing") in the year ended 30 April 2018, the
first of our Sharesave share schemes vested (these vest over a
three year period). As a result, there were 981,217 shares issued
in the year to employees, generating GBP1.4 million.
-- A further GBP0.25 million was generated when Numis Securities
Limited, Clipper's corporate broker, exercised share options issued
to it on Listing.
Significant one-off cash flows which arose in the prior year (ended 30 April 2017) but which did not recur in the year ended 30 April 2018 included GBP1.95 million subscribed for share capital on the formation of the Clicklink joint venture and a GBP1.45 million loan advanced to Clicklink on its formation. The loan was increased by GBP0.5 million in the year ended 30 April 2018 to support the working capital growth requirements of Clicklink. This loan is disclosed as a non-current financial asset (see note 27).
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 GBP31.7 million of net debt outstanding at 30 April 2018 (2017: GBP25.1 million) (see note 20), an increase of GBP6.6 million, in line with the Board's expectations. The increase in net debt was driven primarily by the acquisitions of Tesam and RepairTech which together required GBP11.8 million (net of cash acquired), although this was partly offset by GBP6.7 million of proceeds from the sale of fixed assets.
It is also worth noting that 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 this over the term of the contract, together with finance charges and a management fee. At 30 April 2018, Clipper has GBP22.4 million of capital contracted to be recovered from open book customers over the remaining term of the customer contracts.
David Hodkin
Chief Financial Officer
Director's Statement on the Basis of Preparation - Preliminary Announcement
Whilst the financial information included in this preliminary statement has been prepared on the basis of the requirements of IFRSs in issue, as adopted by the European Union and effective at 30 April 2018, 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 2018 have been extracted from the Group's draft Financial Statements for the year then ended.
The financial information contained within the preliminary announcement for the year ended 30 April 2018 was approved by the Board on 29 July 2018 and has been agreed with the Company's auditor for release.
Group Income Statement
For the year ended 30 April
Unaudited
2018 2017
Group Group
Note GBP'000 GBP'000
---------------------------------------------------- ----- ---------- ----------
Revenue 3 400,115 340,127
----- ---------- ----------
Cost of sales (283,324) (241,097)
---------------------------------------------------- ----- ---------- ----------
Gross profit 116,791 99,030
----- ---------- ----------
Other net gains 6 2,398 405
----- ---------- ----------
Administration and other expenses (98,358) (81,964)
---------------------------------------------------- ----- ---------- ----------
Operating profit before share of equity-accounted
investees, net of tax 4 20,831 17,471
----- ---------- ----------
Share of equity-accounted investees, net of
tax (889) 217
---------------------------------------------------- ----- ---------- ----------
Operating profit 6 19,942 17,688
---------------------------------------------------- ----- ---------- ----------
EBIT 20,854 17,928
---------------------------------------------------- ----- ---------- ----------
Less: amortisation of other intangible assets 4 (1,094) (177)
---------------------------------------------------- ----- ---------- ----------
share of tax and finance costs of equity-accounted
investees 4 182 (63)
---------------------------------------------------- ----- ---------- ----------
Operating profit 6 19,942 17,688
----- ---------- ----------
Finance costs 8 (2,014) (1,657)
----- ---------- ----------
Finance income 9 38 21
---------------------------------------------------- ----- ---------- ----------
Profit before income tax 17,966 16,052
----- ---------- ----------
Income tax expense 10 (3,685) (3,586)
---------------------------------------------------- ----- ---------- ----------
Profit for the financial year 14,281 12,466
---------------------------------------------------- ----- ---------- ----------
Basic earnings per share 11 14.2p 12.5p
----- ---------- ----------
Diluted earnings per share 11 14.1p 12.3p
---------------------------------------------------- ----- ---------- ----------
Group Statement of Comprehensive Income
For the year ended 30 April
Unaudited
2018 2017
Group Group
Note GBP'000 GBP'000
-------------------------------------------------- ------ ---------- ---------
Profit for the financial year 14,281 12,466
---------- ---------
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 (106) (57)
---------------------------------------------------------- ---------- ---------
Total comprehensive income for the financial
year 14,175 12,409
---------------------------------------------------------- ---------- ---------
Group Statement of Financial Position
At 30 April
Unaudited
2018 2017
Group Group
Note GBP'000 GBP'000
------------------------------------------------ ----- ---------- ---------
Assets:
----- ---------- ---------
Non-current assets
------------------------------------------------ ----- ---------- ---------
Goodwill 12 25,951 23,252
------------------------------------------------ ----- ---------- ---------
Other intangible assets 12 11,267 1,498
------------------------------------------------ ----- ---------- ---------
Intangible assets 12 37,218 24,750
----- ---------- ---------
Property, plant and equipment 14 44,998 38,899
----- ---------- ---------
Interest in equity-accounted investees 15 1,278 2,167
----- ---------- ---------
Non-current financial assets 27 1,950 1,450
----- ---------- ---------
Deferred tax assets 10 - 353
------------------------------------------------ ----- ---------- ---------
Total non-current assets 85,444 67,619
------------------------------------------------ ----- ---------- ---------
Current assets
----- ---------- ---------
Inventories 16 22,099 29,972
----- ---------- ---------
Trade and other receivables 17 73,430 47,728
----- ---------- ---------
Cash and cash equivalents 18 2,275 862
------------------------------------------------ ----- ---------- ---------
Total current assets 97,804 78,562
------------------------------------------------ ----- ---------- ---------
Total assets 183,248 146,181
------------------------------------------------ ----- ---------- ---------
Equity and liabilities:
----- ---------- ---------
Current liabilities
----- ---------- ---------
Trade and other payables 19 102,402 85,068
----- ---------- ---------
Financial liabilities: borrowings 20 9,219 7,389
----- ---------- ---------
Short-term provisions 21 78 127
----- ---------- ---------
Current income tax liabilities 2,540 2,187
------------------------------------------------ ----- ---------- ---------
Total current liabilities 114,239 94,771
------------------------------------------------ ----- ---------- ---------
Non-current liabilities
----- ---------- ---------
Financial liabilities: borrowings 20 26,664 19,973
----- ---------- ---------
Long-term provisions 21 1,486 1,367
----- ---------- ---------
Deferred tax liabilities 10 1,541 -
------------------------------------------------ ----- ---------- ---------
Total non-current liabilities 29,691 21,340
------------------------------------------------ ----- ---------- ---------
Total liabilities 143,930 116,111
------------------------------------------------ ----- ---------- ---------
Equity shareholders' funds
----- ---------- ---------
Share capital 22 51 50
----- ---------- ---------
Share premium 1,710 80
----- ---------- ---------
Currency translation reserve (139) (33)
----- ---------- ---------
Other reserve 84 84
----- ---------- ---------
Merger reserve 6,006 6,006
----- ---------- ---------
Share based payment reserve 2,745 2,038
----- ---------- ---------
Retained earnings 28,861 21,845
------------------------------------------------ ----- ---------- ---------
Total equity attributable to the owners of the
Company 39,318 30,070
------------------------------------------------ ----- ---------- ---------
Total equity and liabilities 183,248 146,181
------------------------------------------------ ----- ---------- ---------
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 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
-------------------------------------- --------- ---------- ------------- ---------- ----------
Profit for the year - - - - -
--------- ---------- ------------- ---------- ----------
Other comprehensive income/(expense) - - (106) - (106)
--------- ---------- ------------- ---------- ----------
Equity settled transactions - - - - -
--------- ---------- ------------- ---------- ----------
Share issue 1 1,630 - - 1,631
--------- ---------- ------------- ---------- ----------
Dividends - - - - -
-------------------------------------- --------- ---------- ------------- ---------- ----------
Balance at 30 April 2018 (unaudited) 51 1,710 (139) 84 1,706
-------------------------------------- --------- ---------- ------------- ---------- ----------
Share
based
Brought Merger payment Retained Carried
forward reserve reserve earnings forward
Group Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- --------- ---------- --------- ---------- ----------
Balance at 1 May 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
-------------------------------------- --------- ---------- --------- ---------- ----------
Profit for the year - - - 14,281 14,281
--------- ---------- --------- ---------- ----------
Other comprehensive income/(expense) (106) - - - (106)
--------- ---------- --------- ---------- ----------
Equity settled transactions - - 707 357 1,064
--------- ---------- --------- ---------- ----------
Share issue 1,631 - - - 1,631
--------- ---------- --------- ---------- ----------
Dividends - - - (7,622) (7,622)
-------------------------------------- --------- ---------- --------- ---------- ----------
Balance at 30 April 2018 (unaudited) 1,706 6,006 2,745 28,861 39,318
-------------------------------------- --------- ---------- --------- ---------- ----------
.
Group Statement of Cash Flows
For the year ended 30 April
Unaudited
2018 2017
Group Group
Note GBP'000 GBP'000
-------------------------------------------------- ------ ---------- ---------
Profit before tax from operating activities 17,966 16,052
------ ---------- ---------
Adjustments to reconcile profit before tax
to net cash flows:
------ ---------- ---------
- Depreciation and impairment of property,
plant and equipment 6 6,394 4,725
------ ---------- ---------
- Amortisation and impairment of intangible
assets 6 1,621 548
------ ---------- ---------
- Gain on disposal of property, plant and
equipment 6 (2,203) (260)
------ ---------- ---------
- Share of equity-accounted investees, net
of tax 15 889 (217)
------ ---------- ---------
- Consideration received 21 - 557
------ ---------- ---------
- Exchange differences (198) (238)
------ ---------- ---------
- Finance costs 8 & 9 1,976 1,636
------ ---------- ---------
- Movement in derivative financial instruments 6 - (10)
------ ---------- ---------
- Share based payments charge 23 1,219 832
------ ---------- ---------
Working capital adjustments:
------ ---------- ---------
- (Increase) in trade and other receivables
and prepayments (23,785) (7,895)
------ ---------- ---------
- Decrease/(increase) in inventories 8,816 (3,049)
------ ---------- ---------
- Increase in trade and other payables 11,801 12,989
-------------------------------------------------- ------ ---------- ---------
Operating activities:
------ ---------- ---------
- Cash generated from operations 24,496 25,670
------ ---------- ---------
- Interest received 38 3
------ ---------- ---------
- Interest paid (1,932) (1,606)
------ ---------- ---------
- Income tax paid (3,968) (3,234)
-------------------------------------------------- ------ ---------- ---------
Net cash flows from operating activities 18,634 20,833
-------------------------------------------------- ------ ---------- ---------
Investing activities:
------ ---------- ---------
- Purchase of property, plant and equipment (6,849) (4,028)
------ ---------- ---------
- Proceeds from sale of property, plant and
equipment 6,658 2,112
------ ---------- ---------
- Purchase of intangible assets (844) (551)
------ ---------- ---------
- Proceeds from sale of intangible assets 3 167
------ ---------- ---------
- Investment in joint venture 15 - (1,950)
------ ---------- ---------
- Acquisition of subsidiary undertakings net
of cash acquired 28 (11,773) -
-------------------------------------------------- ------ ---------- ---------
Net cash flows from investing activities (12,805) (4,250)
-------------------------------------------------- ------ ---------- ---------
Financing activities:
------ ---------- ---------
- Drawdown of bank loans 9,017 -
------ ---------- ---------
- Debt issue costs paid (101) -
------ ---------- ---------
- Finance leases advanced in respect of prior
year purchases of property, plant and equipment - 4,879
------ ---------- ---------
- Shares issued 22 1,631 24
------ ---------- ---------
- Dividends paid 7 (7,622) (6,400)
------ ---------- ---------
- Non-current financial assets advanced 27 (500) (1,450)
------ ---------- ---------
- Repayment of bank loans (812) (5,995)
------ ---------- ---------
- Repayment of capital on finance leases (7,366) (5,677)
-------------------------------------------------- ------ ---------- ---------
Net cash flows from financing activities (5,753) (14,619)
-------------------------------------------------- ------ ---------- ---------
Net increase in cash and cash equivalents 76 1,964
-------------------------------------------------- ------ ---------- ---------
Net cash and cash equivalents at start of
year 862 (1,102)
-------------------------------------------------- ------ ---------- ---------
Net cash and cash equivalents at end of year 18 938 862
-------------------------------------------------- ------ ---------- ---------
Notes to the UNAUDITED PRELIMINARY RESULTS
1. General information
The results comprise those of Clipper Logistics plc and its subsidiaries for the year ended 30 April 2018 and does not constitute the Group's statutory accounts for the years ended 30 April 2018 or 2017,
The financial information set out above does not constitute the company's statutory accounts for the years ended 30 April 2018 or 2017. The financial information for 2017 is derived from statutory accounts for the year ended 30 April 2017 which have been delivered to the registrar of companies. The auditor has reported on the 2017 accounts: their report was (i) unqualified; (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their audit report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 30 April 2018, will be finalised on the basis of the financial information presented by the Directors in this unaudited preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
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, 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 2017.
In the current year, amendments to IAS7 and 12 and those arising from the annual improvements to IFRSs 2014-2016 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:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------- ---------- ---------
E-fulfilment & returns management services 159,350 129,854
---------- ---------
Non e-fulfilment logistics 139,144 121,930
-------------------------------------------- ---------- ---------
Value-added logistics services 298,494 251,784
-------------------------------------------- ---------- ---------
Commercial vehicles 103,598 91,515
---------- ---------
Inter-segment sales (1,977) (3,172)
-------------------------------------------- ---------- ---------
Revenue from external customers 400,115 340,127
-------------------------------------------- ---------- ---------
Non e-fulfilment logistics revenue includes GBP4,200,000 (2017: GBPnil) in respect of property-related advisory services.
Geographical information - revenue from external customers:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------- ---------- ---------
United Kingdom 351,409 302,730
---------- ---------
Germany 21,059 16,103
---------- ---------
Rest of Europe 27,647 21,294
--------------------------------- ---------- ---------
Revenue from external customers 400,115 340,127
--------------------------------- ---------- ---------
Geography is determined by the location of the end customer. In the year ended 30 April 2018 the Group had no customers that accounted for greater than 10% of the total Group revenue (2017: one).
The revenue all arose in the value-added logistics services segment as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------- ---------------- ---------
Revenue from largest single customer Not applicable 35,179
-------------------------------------- ---------------- ---------
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.
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 2018:
Earnings before interest & tax ("EBIT"):
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------- ---------- ---------
E-fulfilment & returns management services 11,874 10,232
---------- ---------
Non e-fulfilment logistics 14,786 12,431
---------- ---------
Central logistics overheads (5,688) (4,832)
-------------------------------------------- ---------- ---------
Value-added logistics services 20,972 17,831
---------- ---------
Commercial vehicles 2,450 2,342
---------- ---------
Head office costs (2,568) (2,245)
-------------------------------------------- ---------- ---------
Group EBIT 20,854 17,928
-------------------------------------------- ---------- ---------
Amortisation of other intangible assets:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------- ---------- ---------
E-fulfilment & returns management services (462) (156)
---------- ---------
Non e-fulfilment logistics (632) (21)
---------- ---------
Central logistics overheads - -
-------------------------------------------- ---------- ---------
Value-added logistics services (1,094) (177)
---------- ---------
Commercial vehicles - -
---------- ---------
Head office costs - -
-------------------------------------------- ---------- ---------
Group total (1,094) (177)
-------------------------------------------- ---------- ---------
Share of tax and finance costs of equity-accounted investees:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------- ---------- ---------
Net finance costs (35) (9)
---------- ---------
Income tax credit/(expense) 217 (54)
----------------------------- ---------- ---------
Group total 182 (63)
----------------------------- ---------- ---------
Operating profit and profit before income tax:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Operating profit:
---------- ---------
E-fulfilment & returns management services 12,483 9,796
---------- ---------
Non e-fulfilment logistics 14,154 12,410
---------- ---------
Central logistics overheads (5,688) (4,832)
--------------------------------------------------- ---------- ---------
Value-added logistics services 20,949 17,374
---------- ---------
Commercial vehicles 2,450 2,342
---------- ---------
Head office costs (2,568) (2,245)
--------------------------------------------------- ---------- ---------
Operating profit before share of equity-accounted
investees 20,831 17,471
---------- ---------
Share of equity-accounted investees, net of tax (889) 217
--------------------------------------------------- ---------- ---------
Operating profit 19,942 17,688
---------- ---------
Finance costs (2,014) (1,657)
---------- ---------
Finance income 38 21
--------------------------------------------------- ---------- ---------
Profit before income tax 17,966 16,052
--------------------------------------------------- ---------- ---------
The segment assets and liabilities at the balance sheet date are as follows:
Segment Segment
assets liabilities
At 30 April 2018 (unaudited): GBP'000 GBP'000
----------------------------------- --------- -------------
Value-added logistics services 142,765 (69,601)
--------- -------------
Commercial vehicles 38,208 (34,365)
----------------------------------- --------- -------------
Segment assets/(liabilities) 180,973 (103,966)
----------------------------------- --------- -------------
Unallocated assets/(liabilities):
--------- -------------
- Cash and cash equivalents 2,275 -
--------- -------------
- Financial liabilities - (35,883)
--------- -------------
- Deferred tax - (1,541)
--------- -------------
- Income tax assets/(liabilities) - (2,540)
----------------------------------- --------- -------------
Total assets/(liabilities) 183,248 (143,930)
----------------------------------- --------- -------------
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)
----------------------------------- --------- -------------
Capital expenditure, depreciation and amortisation by segment in the year ended 30 April was as follows:
Capital expenditure:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------- ---------- ---------
Value-added logistics services 12,313 19,386
---------- ---------
Commercial vehicles 725 851
-------------------------------- ---------- ---------
Total 13,038 20,237
-------------------------------- ---------- ---------
Capital expenditure comprises additions to property, plant and equipment (note 14) and intangible assets (note 12).
Depreciation:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------- ---------- ---------
Value-added logistics services 5,701 4,012
---------- ---------
Commercial vehicles 693 713
-------------------------------- ---------- ---------
Total 6,394 4,725
-------------------------------- ---------- ---------
Amortisation:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------- ---------- ---------
Value-added logistics services 1,616 539
---------- ---------
Commercial vehicles 5 9
-------------------------------- ---------- ---------
Total 1,621 548
-------------------------------- ---------- ---------
Non-current assets held by each geographical area are made up as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------- ---------- ---------
United Kingdom 80,789 62,409
---------- ---------
Germany 4,103 4,617
---------- ---------
Rest of Europe 552 240
---------- ---------
Deferred taxation assets - 353
-------------------------- ---------- ---------
Total 85,444 67,619
-------------------------- ---------- ---------
5. Staff costs
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Wages and salaries 102,032 84,462
---------- ---------
Social security costs 9,853 7,791
---------- ---------
Pension costs for the defined contribution scheme 1,768 1,474
---------- ---------
Share based payments 1,219 832
--------------------------------------------------- ---------- ---------
Total 114,872 94,559
--------------------------------------------------- ---------- ---------
The average monthly number of employees during the year was made up as follows:
Unaudited
2018 2017
Group Group
Number Number
------------------------- ---------- --------
Warehousing 3,056 2,402
---------- --------
Distribution 468 416
---------- --------
Service and maintenance 447 396
---------- --------
Administration 560 526
------------------------- ---------- --------
Total 4,531 3,740
------------------------- ---------- --------
Key management compensation (including Executive Directors):
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Wages and salaries 2,873 2,680
---------- ---------
Social security costs 396 370
---------- ---------
Pension costs for the defined contribution scheme 328 336
---------- ---------
Share based payments 1,026 793
--------------------------------------------------- ---------- ---------
Total 4,623 4,179
--------------------------------------------------- ---------- ---------
Directors' emoluments:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------------------------- ---------- ---------
Aggregate emoluments excluding share based payments
on unvested awards 1,214 1,309
---------- ---------
Aggregate gains made by Directors on the exercise
of options 72 -
---------- ---------
Pension costs for the defined contribution scheme 21 48
----------------------------------------------------- ---------- ---------
Total 1,307 1,357
----------------------------------------------------- ---------- ---------
The number of Directors who were accruing benefits under a Group pension scheme is as follows:
Unaudited
2018 2017
Group Group
Number Number
---------------------------- ---------- --------
Defined contribution plans 2 3
---------------------------- ---------- --------
6. Operating profit
This is stated after charging:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------------------- ---------- ---------
Depreciation of property, plant and equipment - owned
assets 2,976 2,023
---------- ---------
Depreciation of property, plant and equipment - leased
assets 3,418 2,702
---------- ---------
Amortisation of intangible assets (included within
administration and other expenses) 1,621 548
-------------------------------------------------------- ---------- ---------
Total depreciation and amortisation expense 8,015 5,273
-------------------------------------------------------- ---------- ---------
Operating lease rentals:
- Vehicles, plant and equipment 10,338 8,876 - Land and buildings 20,940 18,069 --------------------------------- ------- -------
Auditor's remuneration:
- Audit of the Group Financial Statements 69 60
- Audit of the subsidiaries 99 82
---- ----
- Non-audit fees - -
------------------------------------------- ---- ----
Total fees paid to the Group's auditor 168 142
------------------------------------------- ---- ----
Operating profit is stated after crediting:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------------------------------------- ---------- ---------
Other net gains:
---------- ---------
- Profit on sale of property, plant and equipment 2,203 260
---------- ---------
- Dealership contributions 136 135
---------- ---------
- Fair value adjustment to derivative financial instruments - 10
---------- ---------
- Rental income 59 -
------------------------------------------------------------- ---------- ---------
Total net gains 2,398 405
------------------------------------------------------------- ---------- ---------
7. Dividends
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------------------------------- ---------- ---------
Final dividend for the prior year of 4.8 pence (2017:
4.0 pence) per share 4,814 4,000
---------- ---------
Interim dividend for the year of 2.8 pence (2017:
2.4 pence) per share 2,808 2,400
------------------------------------------------------- ---------- ---------
Total dividends paid 7,622 6,400
------------------------------------------------------- ---------- ---------
Proposed final dividend for the year ended 30 April
2018 of 5.6 pence (2017: 4.8 pence)
per share 5,681 4,813
------------------------------------------------------- ---------- ---------
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 preliminary results. The proposed dividend is payable to all shareholders on the Register of Members on 7 September 2018. The payment of this dividend will not have any tax consequences for the Group.
8. Finance costs
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------------------------------- ---------- ---------
On bank loans and overdrafts 547 438
---------- ---------
On hire purchase agreements 926 766
---------- ---------
Amortisation of debt issue costs 114 97
---------- ---------
Commercial vehicle stocking interest 339 299
---------- ---------
Invoice discounting 62 -
---------- ---------
Other interest payable 26 57
----------------------------------------------------------- ---------- ---------
Total interest expense for financial liabilities measured
at amortised cost 2,014 1,657
----------------------------------------------------------- ---------- ---------
9. Finance income
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------------------------- ---------- ---------
Bank interest 2 -
---------- ---------
Other interest 1 3
---------- ---------
Amounts receivable from related parties 35 18
----------------------------------------------------- ---------- ---------
Total interest income for financial assets measured
at amortised cost 38 21
----------------------------------------------------- ---------- ---------
10. Income tax expense
10.1 Tax charged in the income statement:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Current income tax:
---------- ---------
UK and foreign corporation tax 4,249 3,620
---------- ---------
Amounts (over)/under provided in previous years (230) 90
--------------------------------------------------- ---------- ---------
Total income tax on continuing operations 4,019 3,710
--------------------------------------------------- ---------- ---------
Deferred tax:
---------- ---------
Origination and reversal of temporary differences (355) (144)
---------- ---------
Amounts (over)/under provided in previous years (2) 48
---------- ---------
Impact of change in tax laws and rates 23 (28)
--------------------------------------------------- ---------- ---------
Total deferred tax (334) (124)
--------------------------------------------------- ---------- ---------
Tax expense in the income statement on continuing
operations 3,685 3,586
--------------------------------------------------- ---------- ---------
10.2 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.
10.3 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:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------------------------------- ---------- ---------
Profit before taxation from continuing operations 17,966 16,052
---------- ---------
Standard rate of corporation tax in UK 19.00% 19.92%
---------- ---------
Tax on profit on ordinary activities at standard rate 3,414 3,198
---------- ---------
Share of equity-accounted investees, already net of
tax 169 (43)
---------- ---------
Expenses not allowable for tax purposes 194 212
---------- ---------
Tax (over)/under provided in previous years (232) 138
---------- ---------
Difference in tax rates overseas 117 109
---------- ---------
Deferred tax rate difference 23 (28)
------------------------------------------------------- ---------- ---------
Total tax expense reported in the income statement 3,685 3,586
------------------------------------------------------- ---------- ---------
10.4 Deferred tax in the statement of financial position:
(Charged)/credited
to share
(Charged)/credited Foreign based Carried
Brought to income currency payment forward
forward statement adjustment reserve Acquisitions Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Year ended 30 April
2017
--------- ------------------- ------------ ------------------- ------------- ----------
Tax effect of temporary
differences
due to:
--------- ------------------- ------------ ------------------- ------------- ----------
Share based payments 309 135 - 429 - 873
--------- ------------------- ------------ ------------------- ------------- ----------
Other timing
differences 58 136 2 - - 196
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Deferred tax assets
(gross) 367 271 2 429 - 1,069
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Intangible assets (178) 28 - - - (150)
--------- ------------------- ------------ ------------------- ------------- ----------
Accelerated capital
allowances (356) (156) - - - (512)
--------- ------------------- ------------ ------------------- ------------- ----------
Other timing
differences (35) (19) - - - (54)
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Deferred tax
liabilities
(gross) (569) (147) - - - (716)
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Net deferred tax (202) 124 2 429 - 353
------------------------ --------- ------------------- ------------ ------------------- ------------- ----------
Year ended 30 April
2018 (unaudited)
Tax effect of temporary
differences due to:
------ ------ ------ -------- --------
Share based payments 873 (137) - (155) - 581
------ ------ ------ -------- --------
Other timing differences 196 131 4 - 70 401
-------------------------- ------ ------ ------ -------- --------
Deferred tax assets
(gross) 1,069 (6) 4 (155) 70 982
-------------------------- ------ ------ ------ -------- --------
Intangible assets (150) 231 - - (1,818) (1,737)
------ ------ ------ -------- --------
Accelerated capital
allowances (512) 102 - - (329) (739)
------ ------ ------ -------- --------
Other timing differences (54) 7 - - - (47)
-------------------------- ------ ------ ------ -------- --------
Deferred tax liabilities
(gross) (716) 340 - - (2,147) (2,523)
-------------------------- ------ ------ ------ -------- --------
Net deferred tax 353 334 4 (155) (2,077) (1,541)
-------------------------- ------ ------ ------ -------- --------
The UK corporation tax rate reduced from 20% to 19% with effect from 1 April 2017 and will reduce further to 17% with effect from 1 April 2020. A rate of 17% (2017: 17%) has been applied in the measurement of the Group's UK deferred tax assets and liabilities in the year.
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:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------------------------------- ---------- ---------
Profit attributable to ordinary equity holders of
the Company 14,281 12,466
------------------------------------------------------- ---------- ---------
Unaudited
2018 2017
Group Group
------------------------------------------------------- ---------- ---------
Basic weighted average number of shares (thousands) 100,338 100,011
---------- ---------
Basic earnings per share 14.2p 12.5p
------------------------------------------------------- ---------- ---------
Diluted weighted average number of shares (thousands) 101,358 101,710
---------- ---------
Diluted earnings per share 14.1p 12.3p
------------------------------------------------------- ---------- ---------
12. Intangible assets
Contracts,
customer
relationships Computer
Goodwill and licences software Total
Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- --------------- ---------- ---------
Cost:
--------- --------------- ---------- ---------
At 1 May 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
------------------------------ --------- --------------- ---------- ---------
Additions - - 1,060 1,060
--------- --------------- ---------- ---------
Disposals - - (3) (3)
--------- --------------- ---------- ---------
Acquisitions 2,699 9,580 740 13,019
--------- --------------- ---------- ---------
Foreign currency adjustment - 5 21 26
------------------------------ --------- --------------- ---------- ---------
At 30 April 2018 (unaudited) 25,951 11,623 4,089 41,663
------------------------------ --------- --------------- ---------- ---------
Accumulated amortisation:
--------- --------------- ---------- ---------
At 1 May 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
------------------------------ --------- --------------- ---------- ---------
Charge for the year - 1,094 527 1,621
--------- --------------- ---------- ---------
Disposals - - - -
--------- --------------- ---------- ---------
Foreign currency adjustment - 5 8 13
------------------------------ --------- --------------- ---------- ---------
At 30 April 2018 (unaudited) - 2,252 2,193 4,445
------------------------------ --------- --------------- ---------- ---------
Net book value:
--------- --------------- ---------- ---------
At 1 May 2016 23,252 1,057 589 24,898
------------------------------ --------- --------------- ---------- ---------
At 30 April 2017 23,252 885 613 24,750
------------------------------ --------- --------------- ---------- ---------
At 30 April 2018 (unaudited) 25,951 9,371 1,896 37,218
------------------------------ --------- --------------- ---------- ---------
The average remaining useful life of contracts and licences at 30 April 2018 is 8.5 years (2017: 5.4 years).
13. Impairment test for goodwill
The carrying amount of goodwill has been allocated to each CGU as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------- ---------- ---------
Value-added logistics services 20,025 17,326
---------- ---------
Commercial vehicles 5,926 5,926
-------------------------------- ---------- ---------
Total 25,951 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 2021.
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 2018 as well as confirmed new and ceasing contracts. The key judgment 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 3.3% (2017: 2.5%) to 2028 (2017: 2027). The cash flows have then been discounted using a pre-tax risk adjusted discount rate of between 8.5% and 10.3% (2017: 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,
Freehold Leasehold Motor fixtures
property property vehicles & fittings Total
Group Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ---------- ------------ ---------
Cost:
---------- ---------- ---------- ------------ ---------
At 1 May 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
------------------------------ ---------- ---------- ---------- ------------ ---------
Additions - 3,640 486 7,852 11,978
---------- ---------- ---------- ------------ ---------
Acquisitions 3,860 102 80 771 4,813
---------- ---------- ---------- ------------ ---------
Disposals (3,860) - (768) (651) (5,279)
---------- ---------- ---------- ------------ ---------
Foreign currency adjustment - 7 83 180 270
------------------------------ ---------- ---------- ---------- ------------ ---------
At 30 April 2018 (unaudited) - 8,042 4,763 63,189 75,994
------------------------------ ---------- ---------- ---------- ------------ ---------
Accumulated depreciation:
---------- ---------- ---------- ------------ ---------
At 1 May 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
------------------------------ ---------- ---------- ---------- ------------ ---------
Charge for the year 34 499 844 5,017 6,394
---------- ---------- ---------- ------------ ---------
Disposals (34) - (620) (170) (824)
---------- ---------- ---------- ------------ ---------
Foreign currency adjustment - 3 23 87 113
------------------------------ ---------- ---------- ---------- ------------ ---------
At 30 April 2018 (unaudited) - 2,779 2,635 25,582 30,996
------------------------------ ---------- ---------- ---------- ------------ ---------
Net book value:
---------- ---------- ---------- ------------ ---------
At 1 May 2016 - 2,170 2,804 20,590 25,564
------------------------------ ---------- ---------- ---------- ------------ ---------
At 30 April 2017 - 2,016 2,494 34,389 38,899
------------------------------ ---------- ---------- ---------- ------------ ---------
At 30 April 2018 (unaudited) - 5,263 2,128 37,607 44,998
------------------------------ ---------- ---------- ---------- ------------ ---------
Included within property, plant and equipment are amounts held under finance lease contracts. At 30 April 2018, the net book value of these assets was GBP28,257,000 (2017: GBP27,314,000). Total additions include GBP5,129,000 (2017: GBP13,697,000) under finance lease contracts.
Additions to plant, machinery, fixtures & fittings include GBP1,587,000 (2017: GBP1,824,000) in respect of assets in the course of construction.
15. Investment in equity-accounted investees
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------------- ---------- ---------
Brought forward 2,167 -
---------- ---------
Subscription for share capital - 1,950
---------- ---------
Share of (loss)/ profit after tax for the period (889) 217
-------------------------------------------------- ---------- ---------
Carried forward 1,278 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 year ended 31 January 2018 is set
out below:
31 January 31 January
2018 2017
GBP'000 GBP'000
---------------------------------------------- ------------ ------------
Current assets 6,331 7,874
------------ ------------
Non-current assets 4,359 4,677
------------ ------------
Current liabilities (5,001) (5,312)
------------ ------------
Non-current liabilities (2,962) (2,905)
---------------------------------------------- ------------ ------------
Equity attributable to owners of the company 2,727 4,334
---------------------------------------------- ------------ ------------
13 weeks
Year ended ended
31 January 31 January
2018 2017
GBP'000 GBP'000
---------------------------------------------- ------------ ------------
Revenue 19,730 6,624
---------------------------------------------- ------------ ------------
Operating (loss)/profit (1,933) 560
------------ ------------
Interest payable and similar charges (70) (18)
------------ ------------
Income tax credit/(expense) 396 (108)
---------------------------------------------- ------------ ------------
(Loss)/profit for the period (1,607) 434
---------------------------------------------- ------------ ------------
16. Inventories
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------------------------- ---------- ---------
Component parts and consumable stores 4,901 4,459
---------- ---------
Commercial vehicles 3,199 3,225
---------- ---------
Commercial vehicles on consignment 13,999 22,288
----------------------------------------------------- ---------- ---------
Total inventories net of provision for obsolescence 22,099 29,972
----------------------------------------------------- ---------- ---------
See below for the movements in the provision for obsolescence:
Group
GBP'000
------------------------------ ---------
At 1 May 2016 9
---------
Charged for the year 114
---------
Utilised (36)
------------------------------ ---------
At 30 April 2017 87
------------------------------ ---------
Charged for the year 128
---------
Utilised (103)
------------------------------ ---------
At 30 April 2018 (unaudited) 112
------------------------------ ---------
The cost of inventories recognised as an expense amounted to GBP108,599,000 (2017: GBP91,072,000).
Included within commercial vehicles is GBP941,000 (2017: GBP768,000) relating to assets held under hire purchase agreements.
17. Trade and other receivables
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Trade receivables 43,769 24,297
---------- ---------
Less: provision for impairment of receivables (455) (340)
--------------------------------------------------- ---------- ---------
Trade receivables - net 43,314 23,957
--------------------------------------------------- ---------- ---------
Other receivables 3,461 2,708
---------- ---------
Amounts receivable from related parties (see note
27) 5,785 522
---------- ---------
Prepayments and accrued income 20,870 20,541
--------------------------------------------------- ---------- ---------
Total trade and other receivables 73,430 47,728
--------------------------------------------------- ---------- ---------
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 2016 328
---------
Charged for the year 227
---------
Foreign currency adjustment 1
---------
Utilised (216)
------------------------------ ---------
At 30 April 2017 340
------------------------------ ---------
Charged for the year 328
---------
Foreign currency adjustment 3
---------
Utilised (216)
------------------------------ ---------
At 30 April 2018 (unaudited) 455
------------------------------ ---------
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 31 days (2017: 22 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
Total nor impaired Past due but not impaired
30-60 60-90
days days >90 days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------------- --------- --------- ---------
30 April 2018 (unaudited) 43,314 40,748 1,560 595 411
-------- -------------- --------- --------- ---------
30 April 2017 23,957 22,245 816 64 832
--------------------------- -------- -------------- --------- --------- ---------
18. Cash and cash equivalents
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------- ---------- ---------
Cash and cash equivalents 2,275 862
---------- ---------
Bank overdraft (1,337) -
------------------------------- ---------- ---------
Net cash and cash equivalents 938 862
------------------------------- ---------- ---------
19. Trade and other payables
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------------- ---------- ---------
Trade payables 33,825 28,760
---------- ---------
Consignment inventory payables 18,687 29,230
---------- ---------
Amounts payable to related parties (see note 27) 233 171
---------- ---------
Other taxes and social security 9,520 5,372
---------- ---------
Other payables 5,012 5,103
---------- ---------
Deferred consideration for acquisitions 500 -
---------- ---------
Accruals and deferred income 34,625 16,432
-------------------------------------------------- ---------- ---------
Total trade and other payables 102,402 85,068
-------------------------------------------------- ---------- ---------
20. Financial liabilities: borrowings
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Non-current:
---------- ---------
Bank loans 9,841 1,330
---------- ---------
Obligations under finance leases or hire purchase
agreements 16,823 18,643
--------------------------------------------------- ---------- ---------
Total non-current 26,664 19,973
--------------------------------------------------- ---------- ---------
Current:
---------- ---------
Bank loans 887 797
---------- ---------
Bank overdraft 1,337 -
---------- ---------
Obligations under finance leases or hire purchase
agreements 6,995 6,592
--------------------------------------------------- ---------- ---------
Total current 9,219 7,389
--------------------------------------------------- ---------- ---------
Total borrowings 35,883 27,362
--------------------------------------------------- ---------- ---------
Less:
---------- ---------
Cash and cash equivalents (see note 18) 2,275 862
---------- ---------
Non-current financial assets (see note 27) 1,950 1,450
--------------------------------------------------- ---------- ---------
Net debt 31,658 25,050
--------------------------------------------------- ---------- ---------
The maturity analysis of the bank loans at 30 April is as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
---------------------------- ---------- ---------
In one year or less 887 797
---------- ---------
Between one and five years 9,841 1,330
---------- ---------
After five years - -
---------------------------- ---------- ---------
Total bank loans 10,728 2,127
---------------------------- ---------- ---------
The principal lender has security over all assets of the Group's UK operations. The Group's principal bank facilities were increased in October 2017 and now total GBP40,000,000 consisting of:
-- a Revolving Credit Facility of GBP30,000,000 repayable in January
2021; interest rate 1.75% above LIBOR. The amount drawn at 30
April 2018 was GBP9,000,000;
-- a committed overdraft of GBP8,000,000. The amount drawn at 30
April 2018 was GBP1,337,000; and
-- bonds and guarantees of GBP2,000,000.
In addition to the Revolving Credit Facility above, other items included within bank loans at 30 April 2018 are as follows:
-- other bank loans - GBP2,079,000 repayable in monthly instalments
over periods between 16 and 60 months; interest rates fixed at
between 3.72% and 4.80%; and
-- unamortised debt issue costs of GBP351,000 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:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
--------------------------------- ---------- ---------
Fixed rate leases:
---------- ---------
Minimum lease payments:
---------- ---------
In one year or less 6,822 6,631
---------- ---------
Between one and five years 16,922 19,008
---------- ---------
After five years - -
--------------------------------- ---------- ---------
23,744 25,639
--------------------------------- ---------- ---------
Interest:
---------- ---------
In one year or less (738) (830)
---------- ---------
Between one and five years (853) (1,194)
---------- ---------
After five years - -
--------------------------------- ---------- ---------
(1,591) (2,024)
--------------------------------- ---------- ---------
Principal of fixed rate leases:
---------- ---------
In one year or less 6,084 5,801
---------- ---------
Between one and five years 16,069 17,814
---------- ---------
After five years - -
--------------------------------- ---------- ---------
22,153 23,615
--------------------------------- ---------- ---------
Variable rate leases:
---------- ---------
In one year or less 911 791
---------- ---------
Between one and five years 754 829
---------- ---------
After five years - -
--------------------------------- ---------- ---------
1,665 1,620
--------------------------------- ---------- ---------
Total 23,818 25,235
--------------------------------- ---------- ---------
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 4.7 (2017: 4.5) years. At 30 April 2018 GBP22,756,000 (2017: GBP23,636,000) 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.
Changes in liabilities from financing activities:
Bank Finance
loans leases
GBP'000 GBP'000
--------------------------------------------------------- --------- ---------
Balance at 1 May 2017 2,127 25,235
--------------------------------------------------------- --------- ---------
Changes from financing cash flows
--------- ---------
Drawdown of bank loans 9,017 -
--------- ---------
Repayment of bank loans (812) -
--------- ---------
Payment of finance lease liabilities - (7,366)
--------- ---------
Debt issue costs paid (101) -
--------------------------------------------------------- --------- ---------
Total changes from financing cash flows 8,104 (7,366)
--------------------------------------------------------- --------- ---------
Changes arising from obtaining or losing control of
subsidiaries or other businesses - -
--------------------------------------------------------- --------- ---------
The effect of changes in foreign exchange rates 2 75
--------------------------------------------------------- --------- ---------
Other changes
--------- ---------
New finance leases in respect of additions to property,
plant and equipment - 4,966
--------- ---------
New finance leases in respect of commercial vehicle
inventories - 908
--------- ---------
Bank loans in respect of additions to intangible assets
and property, plant and equipment 381 -
--------- ---------
Finance costs 114 -
--------------------------------------------------------- --------- ---------
Total other changes 495 5,874
--------------------------------------------------------- --------- ---------
Balance at 30 April 2018 (unaudited) 10,728 23,818
--------------------------------------------------------- --------- ---------
21. Provisions
Onerous Uninsured
contracts losses Dilapidations Total
Group Group Group Group
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------- ---------- -------------- ---------
At 1 May 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
------------------------------ ----------- ---------- -------------- ---------
Utilised (92) (213) (206) (511)
----------- ---------- -------------- ---------
Charged in year 10 213 358 581
------------------------------ ----------- ---------- -------------- ---------
At 30 April 2018 (unaudited) 17 - 1,547 1,564
------------------------------ ----------- ---------- -------------- ---------
Provisions have been analysed between current and non-current as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------- ---------- ---------
Current 78 127
---------- ---------
Non-current 1,486 1,367
------------- ---------- ---------
Total 1,564 1,494
------------- ---------- ---------
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 warehouses have leases that expire 19 and 15 years from the balance sheet date and an office lease expires 13 years from the balance sheet date. All other leases expire in 10 years or less.
During the prior year the Company took assignment of a property lease with seven 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
Unaudited
2018 2017
Company Company
GBP'000 GBP'000
---------------------------------------------------- ---------- ---------
Allotted, called up and fully paid:
---------- ---------
101,360,523 (2017: 100,022,968) ordinary shares of
0.05 pence each 51 50
---------------------------------------------------- ---------- ---------
During the year the Company issued 1,087,555 ordinary shares to satisfy employee share options, for aggregate consideration of GBP1,381,000; and 250,000 ordinary shares at a price of 100 pence per share to satisfy an option dated 30 May 2014 which was entered into by the Company and the Company's broker Numis Securities Limited. The new shares rank pari passu with all existing ordinary shares in issue. See also note 23.
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 three years.
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 three-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:
Sharesave
Date PSP number WAEP number WAEP
--------------------------------------- ----------- ----- ---------- --------
Outstanding 1 May 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
--------------------------------------- ----------- ----- ---------- --------
Granted during the year 336,293 nil 561,980 379.74p
----------- ----- ---------- --------
Forfeited during the year (176,429) nil (86,400) 255.16p
----------- ----- ---------- --------
Exercised during the year (106,338) nil (981,217) 140.64p
--------------------------------------- ----------- ----- ---------- --------
Outstanding 30 April 2018 (unaudited) 1,647,665 nil 1,165,834 311.64p
--------------------------------------- ----------- ----- ---------- --------
At 30 April 2018, PSP options over 572,532 (2017: nil) and Sharesave options over 85,783 (2017: 4,509) 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:
Unaudited
2018
------------------------- -----------
Share price at:
-----------
18 January 2018 470.00p
-----------
13 February 2018 407.00p
-----------
Expected life of option 3.5 years
-----------
Volatility 40%
-----------
Dividend yield 1.62-1.87%
------------------------- -----------
The expected life of the options has been estimated as six months beyond vesting date. Volatility has been calculated on a rolling three year period up to the week prior to grant. 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 2018 relating to employee share based payment plans was GBP1,219,000 (2017: GBP832,000). The fair value of share options at 30 April 2018 to be amortised in future years was GBP2,830,000 (2017: GBP2,052,000).
All share based payments in both years are equity settled.
24. Commitments and contingencies
Operating lease commitments - land and buildings:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------ ---------- ---------
Within one year 20,807 19,191
---------- ---------
Between one and five years 59,529 66,367
---------- ---------
After more than five years 56,754 77,567
------------------------------ ---------- ---------
Total minimum lease payments 137,090 163,125
------------------------------ ---------- ---------
Operating lease commitments - vehicles, plant and equipment:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------ ---------- ---------
Within one year 6,597 5,844
---------- ---------
Between one and five years 9,243 9,443
---------- ---------
After more than five years 2 11
------------------------------ ---------- ---------
Total minimum lease payments 15,842 15,298
------------------------------ ---------- ---------
25. Capital commitments
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------- ---------- ---------
Authorised and contracted for 5,500 2,011
---------- ---------
Authorised but not contracted for 12,359 2,659
----------------------------------- ---------- ---------
Total capital commitments 17,859 4,670
----------------------------------- ---------- ---------
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 London Stock Exchange. Given the high credit quality of counterparties with which the Group has investments, the Directors do not expect any counterparty to fail to meet its obligations.
At 30 April 2018 there were no significant concentrations of credit risk (2017: none). 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 (2017: 50 basis points) on that portion of borrowings affected would be to reduce the Group's profit before tax by GBP132,000 (2017: GBP93,000).
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, Polish Zloty 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.
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
---------------------- ---------- ---------
EBIT 20,854 17,928
---------- ---------
Finance costs (net) 1,976 1,636
---------------------- ---------- ---------
Interest cover ratio 10.6 11.0
---------------------- ---------- ---------
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
-------------------------------------------------------------- ---------- ---------
EBIT 20,854 17,928
---------- ---------
Depreciation and impairment of property, plant and
equipment 6,394 4,725
---------- ---------
Amortisation and impairment of computer software 527 371
---------- ---------
Earnings before interest, tax, depreciation and amortisation
("EBITDA") 27,775 23,024
---------- ---------
Net debt (note 20) 31,658 25,050
-------------------------------------------------------------- ---------- ---------
Net debt/EBITDA ratio 1.14 1.09
-------------------------------------------------------------- ---------- ---------
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 between Due between
Due within one and two and
one year two years five years Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ------------ ------------ ---------
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
----------------------------- ----------- ------------ ------------ ---------
30 April 2018 (unaudited)
----------- ------------ ------------ ---------
Fixed rate borrowings 6,971 6,712 10,549 24,232
----------- ------------ ------------ ---------
Floating rate borrowings 2,248 584 9,170 12,002
----------------------------- ----------- ------------ ------------ ---------
Total borrowings 9,219 7,296 19,719 36,234
----------- ------------ ------------ ---------
Trade and other payables 84,972 - - 84,972
----------------------------- ----------- ------------ ------------ ---------
Total financial liabilities 94,191 7,296 19,719 121,206
----------------------------- ----------- ------------ ------------ ---------
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.
-- Trade and other receivables/payables: the notional amounts for
trade receivables/payables with a remaining life of less than
one year are deemed to reflect their fair value.
Unaudited Unaudited
2018 2018 2017 2017
Book value Fair value Book value Fair value
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------ ------------ ------------ ------------
Non-current financial assets 1,950 1,907 1,450 1,394
------------ ------------ ------------ ------------
Current financial assets:
------------ ------------ ------------ ------------
Cash and cash equivalents 2,275 2,275 862 862
------------ ------------ ------------ ------------
Trade and other receivables 73,430 73,430 47,728 47,728
------------ ------------ ------------ ------------
Liabilities:
------------ ------------ ------------ ------------
Bank overdraft (1,337) (1,337) - -
------------ ------------ ------------ ------------
Short-term borrowings (9,219) (9,219) (7,389) (7,389)
------------ ------------ ------------ ------------
Trade and other payables (102,402) (102,402) (85,068) (85,068)
------------ ------------ ------------ ------------
Long-term borrowings (26,664) (25,919) (19,973) (19,100)
------------------------------ ------------ ------------ ------------ ------------
Long-term borrowings 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.
Branton Court Stud LLP, in which Steve Parkin is a partner, receives management and administration services from the Group.
Guiseley Association Football Club, which shares a common director with Clipper Logistics plc, receives sponsorship income from the Group.
Harrogate Road Restaurants Limited, a company which shares a common director with Clipper Logistics plc, receives management and administration services from the Group.
Hamsard 3476 Limited, a company controlled by Steve Parkin, receives property-related services from the Group.
Knaresborough Investments Limited, a company controlled by Steve Parkin, receives management and administration services from the Group.
Knaresborough Real Estate Limited, a company owned by Steve Parkin, is the landlord of one of the Group's leasehold properties.
Roydhouse Properties Limited is the landlord of two of the Company's leasehold properties and has common directors with Clipper Logistics plc.
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.
Trust Electric Heating Limited, a supplier to the Group, shares a common director with Clipper Logistics plc.
In the prior year, the Group chartered an aircraft from South Acre Aviation Limited, a company owned by Steve Parkin.
Key management compensation is disclosed in note 5.
Balances owing to or from these related parties at 30 April were as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
----------------------------------------------------- ---------- ---------
Non-current financial assets:
---------- ---------
Clicklink Logistics Limited - interest bearing loan 1,950 1,450
---------- ---------
Trade and other receivables:
---------- ---------
Clicklink Logistics Limited - trading balance 1,491 282
---------- ---------
Knaresborough Investments Limited - 115
---------- ---------
Branton Court Stud LLP 93 125
---------- ---------
Hamsard 3476 Limited 4,200 -
---------- ---------
Southerns Office Interiors Limited 1 -
---------- ---------
Trade and other payables:
---------- ---------
Clicklink Logistics Limited 168 135
---------- ---------
Southerns Office Interiors Limited 63 36
---------- ---------
Trust Electric Heating Limited 2 -
----------------------------------------------------- ---------- ---------
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 has been fully drawn in two 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.
Transactions with these related parties in the year ended 30 April were as follows:
Unaudited
2018 2017
Group Group
GBP'000 GBP'000
------------------------------------------------------------ ---------- ---------
Items credited to the income statement:
---------- ---------
Clicklink Logistics Limited - revenue 15,738 4,701
---------- ---------
Clicklink Logistics Limited - finance income 35 18
---------- ---------
Branton Court Stud LLP 437 125
---------- ---------
Hamsard 3476 Limited - revenue 4,200 -
---------- ---------
Harrogate Road Restaurants Limited - 2
---------- ---------
Knaresborough Investments Limited 285 150
---------- ---------
Southerns Office Interiors Limited 23 7
---------- ---------
Items charged to the income statement:
---------- ---------
Clicklink Logistics Limited 1,682 410
---------- ---------
Guiseley Association Football Club 67 25
---------- ---------
Hamsard 3476 Limited - -
---------- ---------
Knaresborough Investments Limited 8 5
---------- ---------
Knaresborough Real Estate Limited 361 345
---------- ---------
Roydhouse Properties Limited 865 888
---------- ---------
Southerns Office Interiors Limited 33 47
---------- ---------
South Acre Aviation Limited - 7
---------- ---------
Trust Electric Heating Limited 4 -
---------- ---------
Purchase of non-current assets
---------- ---------
Southerns Office Interiors Limited 70 136
---------- ---------
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 277 3,681 ------------------------------------------------------------ ---------- ---------
28. Business combinations (unaudited)
28.1 Tesam Distribution Limited
On 24 May 2017 the Company acquired the entire issued share capital of Tesam Distribution Limited ("Tesam") in exchange for cash consideration. Tesam operated as a provider of a variety of warehousing and distribution services to the retail sector. With effect from 30 April 2018 the Tesam operations have been hived-up into Clipper Logistics plc.
Purchase consideration and cash flows:
GBP'000
-------------------------------------------------------------- -------
Cash consideration paid 11,750
-------------------------------------------------------------- -------
Total consideration payable 11,750
-------------------------------------------------------------- -------
Analysis of cash flows:
-------------------------------------------------------------- -------
Cash consideration paid in the year 11,750
Net cash acquired with the subsidiary (included in cash flows
from investing activities) 2,177
-------------------------------------------------------------- -------
Net cash flow on the acquisition (9,573)
-------------------------------------------------------------- -------
Acquisition:
Fair value
GBP'000
Assets:
-----------
Property, plant and equipment 4,655
-----------
Customer relationships 8,173
-----------
Software 740
-----------
Trade and other receivables 1,157
-----------
Cash and cash equivalents 2,177
-----------
Liabilities:
-----------
Trade and other payables (3,488)
-----------
Current tax liabilities (147)
-----------
Current provisions (1,036)
-----------
Deferred tax liabilities (1,801)
--------------------------------------------- -----------
Total identifiable net assets at fair value 10,430
--------------------------------------------- -----------
Goodwill arising on acquisition 1,320
--------------------------------------------- -----------
Total consideration 11,750
--------------------------------------------- -----------
The goodwill of GBP1,320,000 comprises the value of expected synergies arising from the acquisition. Goodwill is allocated entirely to the value-added logistics services segment.
None of the goodwill recognised is expected to be deductible for income tax purposes.
From the date of acquisition, Tesam has contributed GBP14,810,000 of revenue and GBP4,871,000 to the profit before tax from continuing operations of the Group.
Professional fees and costs in relation to the acquisition were GBP159,000 and have been charged to the income statement.
28.2 RepairTech Limited
On 15 June 2017 the Company acquired the entire issued share capital of RepairTech Limited ("RepairTech") in exchange for cash consideration. RepairTech is a specialist provider of consumer electronic repair services based in Southam, Warwickshire.
Purchase consideration:
GBP'000
Cash consideration paid 2,500
--------
Deferred consideration paid June 2018 500
--------
Total consideration payable 3,000
--------------------------------------------------------------- --------
Analysis of cash flows:
--------------------------------------------------------------- --------
Cash consideration paid in the year 2,500
--------
Net cash acquired with the subsidiary (included in cash flows
from investing activities) 300
--------------------------------------------------------------- --------
Net cash flow on the acquisition (2,200)
--------------------------------------------------------------- --------
Acquisition:
Fair value
GBP'000
--------------------------------------------- -----------
Assets:
-----------
Property, plant and equipment 159
-----------
Customer relationships 1,384
-----------
Other intangible assets 23
-----------
Inventories 34
-----------
Trade and other receivables 760
-----------
Cash and cash equivalents 300
-----------
Liabilities:
-----------
Trade and other payables (611)
-----------
Current tax liabilities (153)
-----------
Deferred tax liabilities (275)
--------------------------------------------- -----------
Total identifiable net assets at fair value 1,621
--------------------------------------------- -----------
Goodwill arising on acquisition 1,379
--------------------------------------------- -----------
Total consideration 3,000
--------------------------------------------- -----------
The goodwill of GBP1,379,000 comprises the value of expected synergies arising from the acquisition. Goodwill is allocated entirely to the value-added logistics services segment.
None of the goodwill recognised is expected to be deductible for income tax purposes.
Other intangible assets recognised consist of the acquired order book.
From the date of acquisition, RepairTech has contributed GBP3,183,000 of revenue and GBP396,000 to the profit before tax from continuing operations of the Group.
Professional fees and costs in relation to the acquisition were GBP62,000 and have been charged to the income statement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR PGUMPMUPRGBB
(END) Dow Jones Newswires
July 30, 2018 02:01 ET (06:01 GMT)
1 Year Clipper Logistics Chart |
1 Month Clipper Logistics Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
