Clipper Logistics’ shares up 8% on big contract wins

Shares of Leeds-based retail logistics firm Clipper Logistics rose about 8% on Thursday after it announced two major contract wins with River Island and Mountain Warehouse.

Clipper Logistics shares have soared about 100% over the past 12 months.

Clipper said that together, these two new contracts will increase revenue by over £40 million on a full-year basis, and “will be immediately earnings-enhancing from go-live.”

As a result, Clipper said it expects to outperform current market expectations in the year to April 30 2022 and beyond.

“Together, these represent a significant step change in activity levels and will enhance earnings for the next financial year which commences on 1 May 2021,” said Clipper.

“The group has agreed in principle a new five year open book contract with River Island, a leading high street fashion retailer, to provide a comprehensive suite of logistics services at River Island’s existing distribution centre in Milton Keynes.

“Clipper already handles returns for River Island at the group’s Ollerton distribution centre, but this contract represents a significant extension of services, with Clipper set to provide a full range of logistics operations, including warehousing, distribution to high street stores, and e-fulfilment and returns management services.

“The new services are planned to commence in mid 2021.

“Clipper plans to use its sector-leading technology expertise to initiate a transformational programme to drive the customer’s operations forward, developing an integrated omni channel solution, and driving greater efficiency through the use of automation and robotics.

“Clipper will also be implementing a state of the art Warehouse Management System (WMS) solution from Blue Yonder.”

River Island CEO Will Kernan said: “River Island embraces change to make sure our customers can shop with us however and whenever they like in this fast-evolving retail environment.

“We are excited to be extending our existing partnership with a world class logistics operator like Clipper, who have the expertise to deliver a significant, fast-paced programme of change that will support our omni-channel strategy and growth ambitions. 

“Our brilliant distribution centre workforce will remain in place and, with Clipper at the helm, we are confident that our logistics operations will become even more future proof, more efficient and more flexible.”

Clipper also announced a new 10-year open book contract with Mountain Warehouse “to provide a full range of multi-channel logistics services for the Mountain Warehouse business.”

The new Mountain Warehouse contract is expected to commence in spring 2021 with the contract employing 220 people.

“Investment in automation and robotics will increase capacity to facilitate further growth for the customer, and the new contract will operate from Clipper’s existing Peterborough distribution centre,” said Clipper.

“This will be a fast-moving multi-channel logistics operation operating seven days per week. Clipper will provide full end-to-end services to support Mountain Warehouse’s multi-channel operations, including order fulfilment and returns management.”

Marcus Ward, Chief Operating and Financial Officer of Mountain Warehouse, said: “We have been impressed with Clipper’s innovative thinking and track record.

“The engagement from Clipper’s senior team from an early stage and Clipper’s proven ability to meet our high standards, has given us with the confidence to enter into a long term partnership.

“We are really excited to get started.”

Clipper executive chairman Steve Parkin said: “We are delighted to welcome two iconic retailers to the ever-growing family of Clipper customers.

“Both contracts are a clear indication of the collaboration and use of shared resources that will define the retail logistics supply chain into the future.

“These contracts enhance our command of the end-to-end service proposition in online retail, and demonstrate that Clipper is also well-positioned to continue to support high street retail as it recovers from lockdown.

“Our strategy to focus on providing innovative solutions in both the online and traditional bricks and mortar retail landscapes continues to drive value for both our customers and shareholders.

“We will provide a further update on our earnings expectations for FY22 and beyond in due course.”