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General Category => Investment Ideas => Topic started by: kab60 on October 17, 2019, 03:50:30 AM

Title: CLG.L - Clipper Logistics PLC
Post by: kab60 on October 17, 2019, 03:50:30 AM
Came across this Company recently. I think it's a very interesting (and cheap) way to play the ecommerce trend without the risk of betting on just one horse, and the economics are quiet terrific (+30 pct. ROCE, so despite high growth a healthy dividend). I need to do more work but already took a position last week since all that's going on around brexit can make British stocks quiet volatile. I'd love to hear if anyone else has taken a look.

Anyway, Clipper Logistics is a well-run, high ROIC business benefiting from secular growth (ecommerce), massive TAM and a solid track record with the founder - owning 25 pct. of the Company - as Chairman overseeing capital allocation.

Company description: Founded by chairman Steve Parkin in 1992, Clipper Logistics is a specialist logistics player that handles logistics, warehousing and returns management for traditional retailers as well as some of the biggest ecommerce players in the UK like Asos, Zara and PrettyLittleThing (boohoo) as well as helping Amazon - among others - in continental Europe.

While the traditional retail customer-segment is more mature, profits in the e-fulfillment division has grown at a plus +30 pct. CAGR since 2011 (mostly organically). Clipper Logistics also has a small commercial vehicle business which historically has been a decent cash cow but is immaterial to the thesis.

Thesis point 1:
Trading at 6,6 FY2020 ev/ebitda estimates or 11 P/E due to brexit fears, accounting technicalities and an unprofitable JV which should be at an inflection point, Clipper Logistics is a way of playing the ecommerce boom. Instead of betting on the gold diggers (ecommerce/retail), Clipper Logistics is a bet on the shovel salesman (logistics - warehousing, returns management (branded Boomerang), technical services (refurbishing returns from Amazon among others).

Thesis point 2: Clipper Logistics has an attractive business model with high returns on invested capital (leased warehouses), high cash conversion, little working capital needs and low risk growth since most of the revenue stems from open book contracts (67% of UK
Logistics customers), which means the costs incurred by Clipper Logistics are charged to the customer plus a management fee.

Thesis point 3: Profits in fiscal year 2019 (ended April) were disappointing due to various issues that are non-material to the long term thesis or one-time in nature:

1) Re-classification of a customer contract has shifted profits of £3m from fiscal year 2019 to 2020 (one-time)
2) The commercial vehicle segment declined - profit down to £1,1m vs. 2,5m prior year
3) Lower gains from real estate sales and services than previous year (£3.1m in 2019 versus £6,4m in 2018)
4) Clicklink, a JV since 2015 with retailer John Lewis for Click and Collect services (3rd parties as Superdry and Urban Outfitters onboard and expanding) has been slow to get to profitability but a price increase in H2 2019 and increased activity should help it get it to profitability in 2020 (grew revenue approx 15 pct. in 2019)

Bottom line: Earnings were flat in fiscal 2019, while analysts peg them to grow EPS 43 pct. in fiscal 2020 according to Sentieo.

Thesis point 4: Clipper Logistics is pretty much valued as a no-growth Company, but the somewhat funny mix of assets obscures the high growth jewel in e-fullfilment. Or one could call it good co/bad co (though retail actually does okay - while e-fulfilment grew revenues 47 pct. in fiscal 19, non e-fulfilment logistics grew 4,4 pct.)

Thesis point 5: Optionality from European expansion. Clipper Logistics generates most of its business in the UK but has a growing presence in Poland and Germany to service continental Europa. That gives the Company a lot of optionalty. If they execute the growth runway is massive (at only 230m GBP marketcap it’s a midcap with 6.600 employees) due to the growth of etailers and omnichannel which increases the complexity of logistics operations and espescially returns management.

Risks:
Macroeconomic outlook, Brexit as well as high street retail. While this is mostly a play on e-fullfillment, the mature part of Clipper has high exposure to high street retail and thus there’s a risk of declining volumes or customers getting into financial trouble (though risk of bad debt should be low since Clipper has a right of lien over its customers’ inventory). If customers opt to move outside of the UK due to Brexit, Clipper already offers a solution.

Contract renewals/execution. With mid-single digit EBIT-margins and high organic growth, Clipper doesn’t seem to charge excessively for its services, but there’s a risk that customers decide to inhouse logistics or find another provider. 3PL-players like DSV Panalpina has a logistics business as well, and it’s a high-growth market which is bound to attract competition, so it’ll come down to execution (long relationships with players like Asda, ASOS, John Lewis, Morrisons and Superdry as well as winning new ones gives some comfort they won’t drop the ball). They losts two customers in fiscal 2019 (Whistles and Go Outdoors), while they notified a big customer of their intent to terminate a large contract (which they say should immediately improve profitability in 2020). Since fiscal year end 2019 they have commenced activities with four other customers.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on November 20, 2019, 12:39:33 AM
Stock up 20 pct. due to preliminary approach from PE firm Sun European Partners. Some 35 pct. up since writeup. Fantastic IRR, but I think it would suck if they sold. Think it's my best idea for a long term growth story. Unfortunately the founder/Chairman, who owns 25 pct., seems to be onboard.

https://news.sky.com/story/clipper-logistics-founder-fashions-300m-takeover-bid-11865145
https://otp.tools.investis.com/clients/uk/clipper/rns/regulatory-story.aspx?cid=834&newsid=1346039
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on December 05, 2019, 01:35:04 AM
Michael Burry/Scion flagged a position. It's a 6 pct position for me after the runup but I do consider adding. At 300 it is still cheap for such a high quality business with a large TAM, and if it gets taken private there might be a bit more upside. Berenberg has a 320 target, and it traded at 450 before. Can't say I'm a expert in merger/risk arbitrage, but it seems interesting in that I for once really like the business and wouldn't mind holding at 300.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: Spekulatius on December 05, 2019, 03:54:26 AM
Thanks for the update. I put it on my watchlist when you posted, because it looked interesting, but never got around to look into this closer before it ran away.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on December 05, 2019, 04:19:58 AM
They also released prelim results today. Underlying EBIT up 26 pct.

https://otp.tools.investis.com/clients/uk/clipper/rns/regulatory-story.aspx?cid=834&newsid=1350394

Commenting on the results, Steve Parkin, Executive Chairman of Clipper, said:

"The Group continues to see impressive revenue and EBIT performance in the first six months of the year, largely driven by the particularly strong growth in e-fulfilment and returns management and an improving contribution from our Clicklink Joint Venture."

"A number of new operations have commenced in the period with major customers including Hope & Ivy, Simba Sleep, SLG, Shop Direct and M&S. Our business continues to perform well in Europe, with revenue growth in Poland of 111.6% and Germany of 33.4%. This is supported by a solid new business pipeline in the UK where we continue to offer value-add e-commerce and logistics services, including automation programmes, as we trial robotic technologies with a number of customers."

"As retailers increasingly collaborate to minimise their route-to-market costs, Clipper, given its presence and infrastructure in retail logistics, is ideally placed to facilitate consolidation on behalf of retailers."

"Trading has continued to be positive post-period end, with the key Black Friday trading weekend seeing record daily volumes in certain sites, and we expect full year earnings to be broadly in line with the board's expectations. Notwithstanding the difficulties facing the UK high street and the uncertainties of the UK political environment in the current year, Clipper remains positive about the longer-term outlook and believe the Group is well positioned to achieve further growth in both the UK and internationally."
Title: Re: CLG.L - Clipper Logistics PLC
Post by: CookingByTheNumbers on December 05, 2019, 07:54:01 PM
Michael Burry/Scion flagged a position. It's a 6 pct position for me after the runup but I do consider adding. At 300 it is still cheap for such a high quality business with a large TAM, and if it gets taken private there might be a bit more upside. Berenberg has a 320 target, and it traded at 450 before. Can't say I'm a expert in merger/risk arbitrage, but it seems interesting in that I for once really like the business and wouldn't mind holding at 300.

Just curious, where are seeing that Burry flagged position?
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on December 05, 2019, 09:30:26 PM
https://otp.tools.investis.com/clients/uk/clipper/rns/regulatory-story.aspx?cid=834&newsid=1349065
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on December 27, 2019, 05:09:19 AM
Sold my position. Bidder was granted another month to put forth a bid, stock didn't really react even though I figure it is a small negative. Think it'll go through, but I'll take my gain now and go big if deal does not materialize and it plunges.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on January 24, 2020, 06:53:39 AM
Deal didn't go through on the 14th. Stock held up until yesterday and Today. I'm back in Today.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on March 17, 2020, 03:32:34 AM
This thing held up well but has finally been slaugthered. Retail is obviously screwed, but I just wanted to share this from a Berenberg report on Clippers' open book contracts and why those are valuable at a time like this:

Anyone that might be interested should read their accounts/reports - data providers like Sentieo screw up net debt since it includes leases etc. EV is around 200m verus 400m reported.

The majority of Clipper’s logistics revenue (c64% at the time of the IPO, now over 70%)
derives from contracts that are open book in nature, meaning that costs incurred by the
group are directly recharged to the customer, plus a management fee.

This then facilitates
good governance for customers as the process provides transparency on the costs that
Clipper occurs on behalf of them, while also protecting Clipper from volume, mix and cost
fluctuations. This is particularly important with fashion retail customers given the
unpredictable nature of revenues, which are driven by weather and short-term fashion
trends. This volatility is exacerbated in the e-commerce environment, so the open book
contract mechanism provides protection against this volume and mix volatility.

Clipper can also earn additional management fees through gain-share mechanisms which
share the benefit of cost reductions achieved, or through reward mechanisms linked to
achieving and over-performing contracted KPIs. As a result, management focuses on EBIT
as a KPI for open book contracts rather than margin percentage, since the latter will be
distorted by contract mechanisms.

Approximately 14% of logistics revenue derives from minimum volume guarantee
contracts, which protect Clipper against volume shortfalls. The remainder of Clipper’s
logistics revenue is generated from more traditional closed book contracts, where revenue
is volume driven, and profits are therefore dependent on managing your cost base against
activity levels, creating higher operational gearing.

Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on March 26, 2020, 01:27:54 PM
So this is mostly me talking to myself and keeping notes, but Company sent this out the other day - basically confirms that they aren't very affected by coronavirus so far due to the above mentioned open book contracts. I don't know many other business with such a large TAM, such a high growth rate, just a high ROIC and such a low valuation (and apparently rejecting a PE suitor two months ago for twice the price of where it trades today). With a large founder at the helm. They've gotten some criticism recently for still operating their warehouses when something like online apparel sales isn't necessarily urgent. Understand the criticism but it's probably near impossible to refuse to handle their customers' logistics without a government order in hand:

The Board is continuing to monitor the overall impact of COVID-19 on the business, both in terms of its operations and the effect on its customers. The Company will update the market in due course when the position becomes clearer. However, it should be noted that the Group’s contract mechanisms in the logistics sector both in the UK and Europe provide a good degree of profit protection and cash generation in the event of volume reductions, and this has resulted in only a modest impact on the Company’s performance to date.

The Company is expecting net debt at its 30 April 2020 year end to be c.£42.0 million, slightly more than 1x EBITDA (pre-IFRS16 adjustments). At that level, it would have headroom of over £30.0 million in its banking facilities, and very substantial headroom against its net debt covenant of 2.5x EBITDA.

In addition, Clipper is owed £29.0 million from its open book customers in respect of capital expenditure funded on their behalf and due to be repaid over the balance of their contracts. Such asset funding only takes place where a customer’s credit status warrants this. The Company’s ‘look through’ year-end net debt, adjusting for these sums, is therefore expected to be c. £13.0 million.

Clipper will continue to provide support through utilising and mobilising its Europe-wide sites, personnel and fleet thereby alleviating significant supply chain pressure which benefits retailers and consumers alike.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: grym02 on March 27, 2020, 08:13:36 AM
Interesting idea. Two questions:

- How do CLG's economics (margins, ROICs) compare on e-fulfillment vs. traditional retail logistics?
- What's your estimate of levered and unlevered multiples today? So both P/E or FCF multiple along with EV/EBIT?
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on March 27, 2020, 11:53:14 AM
Interesting idea. Two questions:

- How do CLG's economics (margins, ROICs) compare on e-fulfillment vs. traditional retail logistics?
- What's your estimate of levered and unlevered multiples today? So both P/E or FCF multiple along with EV/EBIT?
Margins are higher on traditionel retail, but margins doesn't matter much here. Their open books contracts means it is basically a cost plus model. So little operating  leverage, but that also means they have little volume risk - pretty great right now. Not sure they disclose invested capital per segment, but not sure it matters much, it is very asset light. They lease their warehouses, no spec, so only when they have a firm contract. So 24m equity end of October, probably will do 40 ebitda per guidance. Versus marketcap of 150m plus some 40m in debt (but most is from contractual capex that customers have to pay back). I'm a bit tipsy, so this all back of envelope.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: gym97 on April 29, 2020, 06:06:32 PM
I found out that Burry owned this and googled his name and found this threat.

Anyways, I own clipper too. Fantastic business. Doesn't take capital, e-commerce side of business can grow double digits for a long time. Brick and mortar side probably still MSD growth given more retailers are outsourcing logistics to specialists like Clipper. Even in this current environment, would expect brick-and-mortar side to see some declines (my ballpark is maybe 30% this year) but based on the announcements over the last few weeks, it sounds like they've been able to offset this by managing more of thier large existing customer logistics, including grocery logistics for M&S and John Lewis (Waitrose grocery I think) I believe. Brick and Mortar is about 40% of EBIT if I recall correctly.

You should try looking at ID Logistics. They are closest comparable based in France at 30x P/E which I think reflects the high quality nature of the company! Otherwise, their main competitors would include DHL and XPO. The third-party logistics (3PL) business is probably the crown jewel of XPO's business.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on April 30, 2020, 03:52:39 AM
I found out that Burry owned this and googled his name and found this threat.

Anyways, I own clipper too. Fantastic business. Doesn't take capital, e-commerce side of business can grow double digits for a long time. Brick and mortar side probably still MSD growth given more retailers are outsourcing logistics to specialists like Clipper. Even in this current environment, would expect brick-and-mortar side to see some declines (my ballpark is maybe 30% this year) but based on the announcements over the last few weeks, it sounds like they've been able to offset this by managing more of thier large existing customer logistics, including grocery logistics for M&S and John Lewis (Waitrose grocery I think) I believe. Brick and Mortar is about 40% of EBIT if I recall correctly.

You should try looking at ID Logistics. They are closest comparable based in France at 30x P/E which I think reflects the high quality nature of the company! Otherwise, their main competitors would include DHL and XPO. The third-party logistics (3PL) business is probably the crown jewel of XPO's business.
Hi gym, thanks for the input and suggestion re ID Logistics. Didn't know about that one. Nice to finally meet a fellow shareholder!

I agree on everything you wrote - I think this is a fabolous little jewel which was underscored by the PE interest in December for anyone in doubt (I luckily made a good bit of money by trading the buyout news). I think it's probably my best GARP idea, which is also why I was a bit sad to see the Company entertaining a bid, but whatever, didn't go through. Lots of competitors - like XPO, DHL and DSV - I'm sure would love to pick them up at these levels.

They won the NHS contract to supply the UK healthcare system with PPE during Covid19 and have basically proven what a resilent model they have. The economics, as you point out, are fantastic, and the open books contracts which I liked before Covid19 are obviously a real star during these times. I'm surprised there's so little interest on here, but anecdotally that's usually a good thing.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on May 20, 2020, 10:17:22 PM
European expansion: https://wbj.pl/p3-poznan-tailored-to-e-commerce/post/127089
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on June 02, 2020, 12:25:57 AM
Smashing Company update. Growth accelerating during Covid19. I really find the lack of interest here interesting - to say the least. It's a royalty on e-commerce with fantastic economics, unlike a lot of other plays disruption risk seems very limited. Some highlights from update here:

Following the initial period of disruption, Clipper has experienced strong levels of activity from both new and existing clients. In particular,  the Company has provided support to online retailers with high e-fulfilment volumes, as some online retailers experienced extremely high levels of demand, regularly outstripping that seen over the Black Friday period last year. We are witnessing volume increases of over 100% on a like-for-like basis with some customers.

In total, the new activities brought on since lockdown, coupled with new contracts coming on stream in Q1 FY21, will add a further 1.5 million square feet of space to Clipper's pre-existing 10 million sq. ft. infrastructure.  The Group has also seen a significant increase in its tender pipeline; the annualised revenue of the probability-weighted pipeline stood at over £50 million as at 18 May 2020, a significant increase on the same period last year.

Meanwhile, Clipper's European business continues to grow rapidly, driven by a growing presence in e-fulfilment and returns management. Revenue in Europe grew by 41.3% in FY19 and by a further 33.7% in FY20.

The Company-compiled consensus for EBITA for FY21 is £25.8m. Whilst COVID-19 still presents some risk, the Board believes that EBITA will be comfortably ahead of these expectations.

More here:

https://www.londonstockexchange.com/news-article/CLG/year-end-trading-update-the-effect-of-covid-19/14561118

As I mentioned before, Company screens badly due to leases.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: paperwerks on June 02, 2020, 12:59:41 AM
The stock price was 305 Pence yesterday.

Do you think it was a better buy two months ago at 135 Pence?

Or, does it not matter, and we should just pay up?
Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on June 02, 2020, 01:17:55 AM
Smashing Company update. Growth accelerating during Covid19. I really find the lack of interest here interesting - to say the least. It's a royalty on e-commerce with fantastic economics, unlike a lot of other plays disruption risk seems very limited.

I appreciate all the updates :)

Was just reading that company update. I'm kind of new to the game, but I can't recall the last time I read such a bullish press release.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on June 02, 2020, 01:41:20 AM
The stock price was 305 Pence yesterday.

Do you think it was a better buy two months ago at 135 Pence?

Or, does it not matter, and we should just pay up?
It was a much better buy two months ago, since anyone with insight into their business could figure out they'd do okay. But most stuff was a better buy two months ago, so I'd try and pack that feeling of missing the bus away and asses it at the current level, which I think is a fair price for a great business. Say they do 30m ebita, net debt at 1x, and it trades around 11xebita with what seems like a long runway of double digit growth at a high ROIC. Plus, ClickLink inflecting so a losing segment starts adding to profitability.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on August 10, 2020, 12:38:49 PM
It has been on somewhat of a tear recently. Bullish interview with CEO here: Clipper Logistics' agility highlighted by the pandemic
https://www.proactiveinvestors.co.uk/companies/amp/news/926243?__twitter_impression=true
Title: Re: CLG.L - Clipper Logistics PLC
Post by: Libs on August 10, 2020, 09:50:26 PM
I found out that Burry owned this and googled his name and found this threat.

Anyways, I own clipper too. Fantastic business. Doesn't take capital, e-commerce side of business can grow double digits for a long time. Brick and mortar side probably still MSD growth given more retailers are outsourcing logistics to specialists like Clipper. Even in this current environment, would expect brick-and-mortar side to see some declines (my ballpark is maybe 30% this year) but based on the announcements over the last few weeks, it sounds like they've been able to offset this by managing more of thier large existing customer logistics, including grocery logistics for M&S and John Lewis (Waitrose grocery I think) I believe. Brick and Mortar is about 40% of EBIT if I recall correctly.

You should try looking at ID Logistics. They are closest comparable based in France at 30x P/E which I think reflects the high quality nature of the company! Otherwise, their main competitors would include DHL and XPO. The third-party logistics (3PL) business is probably the crown jewel of XPO's business.
Hi gym, thanks for the input and suggestion re ID Logistics. Didn't know about that one. Nice to finally meet a fellow shareholder!

I agree on everything you wrote - I think this is a fabolous little jewel which was underscored by the PE interest in December for anyone in doubt (I luckily made a good bit of money by trading the buyout news). I think it's probably my best GARP idea, which is also why I was a bit sad to see the Company entertaining a bid, but whatever, didn't go through. Lots of competitors - like XPO, DHL and DSV - I'm sure would love to pick them up at these levels.

They won the NHS contract to supply the UK healthcare system with PPE during Covid19 and have basically proven what a resilent model they have. The economics, as you point out, are fantastic, and the open books contracts which I liked before Covid19 are obviously a real star during these times. I'm surprised there's so little interest on here, but anecdotally that's usually a good thing.

Kab

Nice thread, congrats on the returns so far.
How are they able to so successfully compete with such behemoths as XPO and DHL? Is it simply a matter of more nimble management?
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on August 11, 2020, 02:23:45 AM
Thanks. I can't admit to know how exactly they diffentiate themselves, but it's very much a service business which largely comes down to execution, and if you look at their track record they very much seem to know how to execute (that's the impression one gets when looking at their customers, new customer wins etc). While scale is an advantage because it gives one an opportunity to spread IT costs and systems across a wider base and leverage those costs, a lot of the costs are warehouses and warehouse workers where there's less scale benefits. I also think there's some value to being a pureplay provider (agile, a specific segment getting all the attention etc.) versus say a DHL or XPO where 3rd party logistics is just a minor component. Also, while Clipper is a small - but rapidly growing player - in Continenal Europa, they have some of the biggest ecommerce customers in the UK, so I don't think scale is at all an issue.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on August 24, 2020, 01:31:40 AM
Results out this morning, they seem to absolutely crush it.

Group revenue increased by 8.8% from £460.2m to £500.7m.

Group EBIT1 up 19.1% to £24.1m (2019: £20.2m).

Group profit after tax of £16.2m (2019: £13.4m).

Basic earnings per share were 15.9 pence (2019: 13.2 pence), an increase of 20.5%.

Cash generated from operations1 of £31.9m (2019: 28.3m).

Strength of performance and cash generation leads the Board to recommend a final dividend of 6.2p per share, making a total dividend per share of 9.7p for the full year (2019: 9.7p).

Net debt at 30 April 2020 was just over 1xEBITDA, representing very substantial headroom against the net debt covenant of 2.5x.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on August 25, 2020, 09:30:39 AM
Thanks for all the updates kab60!

-

4.9M shares traded today near closing time, with daily avg of about 130k  :o

I don't know if that should mean anything, but it's interesting.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on August 25, 2020, 12:46:40 PM
I just see normal volumes on IBKR, like 80k. Not sure what to make of it either way. The outlook they gave yesterday was obviously very Bullish, so not surprised by the strong trading, but the runup before the ER surprised me a bit. Anyway, haven't sold a share. Think I'll try and hold on for the long run for once instead of flipping due to a quick rerating.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on September 16, 2020, 01:19:55 AM
Interview with CEO Tony Mannix from a couple of weeks back - stock has been on a tear: https://www.proactiveinvestors.com/companies/news/928225/clipper-logistics-breaks-targeted-500m-turnover-milestone-in-full-year-results-928225.html
Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on October 01, 2020, 01:20:07 AM
Shares briefly popped to 511p yesterday, back to 486p now.

"Clipper Logistics Plc is attracting interest from buyout firms as the British company benefits from the rise in online shopping, people with knowledge of the matter said.

Cinven is among private equity firms that have been evaluating the Leeds-based company, according to the people, who asked not to be identified because the information is private. Other potential suitors including CVC Capital Partners have also in the past looked at the firm, the people said."

https://finance.yahoo.com/news/u-k-logistics-firm-clipper-124953448.html
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on October 01, 2020, 01:39:48 AM
I'd be really annoyed if this thing gets taken over. Haven't come across many asset light, midsized secular growers with great profitability rising on the back of increased ecommerce. I think the company can become huge if they just keep grinding at it. But considering the proces last year with another PE suiter, I guess the founder is tired of being public although the valuation has come to better reflect the business recently.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on November 12, 2020, 05:28:15 AM
Trading update for six months ended 31 October 2020: https://otp.tools.investis.com/clients/uk/clipper/rns/regulatory-story.aspx?cid=834&newsid=1428298

"Clipper has continued to see strong trading across the business in the year to date, benefitting particularly from the continued structural shift to e-commerce that has been accelerated during the ongoing Covid-19 pandemic. The Group expects to report revenue for the period of at least £300m, an increase of almost 20% against the prior year comparative period, including e-fulfilment logistics growth of over 30% and non-e-fulfilment logistics growth of approximately 10%.

This continuing growth trajectory has been particularly driven by strong organic growth on the majority of e-fulfilment and returns management activities, as well as new contracts brought onstream in the period including Joules, N Brown, T M Lewin, Revolution Beauty and the NHS.

Continued strong cash generation from operations has resulted in net debt of £27.9m at the period end, comfortably below 1x EBITDA (pre-IFRS 16), and compares to £64.4m at the same point last year and £45.1m at the end of the last financial year.

This good momentum and the existing pipeline of new business opportunities is expected to give the Group continuing strong performance into the second half of the financial year.

Clipper expects to announce its interim results in early December 2020."

Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on December 03, 2020, 12:32:25 AM
Clipper doing its thing and Clicklink turned profitable - H1 results out

Commenting on the results, Steve Parkin, Executive Chairman of Clipper, said:
“The Group has successfully chartered the uncertainty and disruption caused by the pandemic to deliver impressive revenue
growth of 19.8% and underlying EBIT growth of 54.3%. The Group benefited directly from the structural shift and acceleration of
online retail such that our e-fulfilment and returns management division saw underlying EBIT growth of 63.3% which included a
positive contribution from our Clicklink joint venture.

-

One interesting nugget from their presentation is that they're looking at doing bolt-on acquisitions in mainland Europe & North America. NA could be huge potentially. ID Logistics already bought their way into NA and recently commented that they saw a lot of synergies from systems etc. In other news XPO Logistics just announced they'll spinoff their contract logistics business to surface value. These businesses are coveted gems, and I really hope they intend to stay public. But I can see why PE could be attractive since they could get more firepower for M&A by levering up, and they could slash their silly dividend which they just increased.



Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on January 06, 2021, 07:20:58 AM
Trading update for Black Friday & Christmas: https://otp.tools.investis.com/clients/uk/clipper/rns/regulatory-story.aspx?cid=834&newsid=1442067

...experienced unprecedented levels of activity in its logistics operations in both the UK and continental Europe over the Black Friday and Christmas periods.

....for the months of November and December, revenues in its logistics business were 50.0% higher than in the corresponding period of the prior year, with strong growth in both e-commerce related activities and non e-fulfilment services.

Whilst additional revenue will not necessarily have a proportionate impact on operating profit given Clipper's contract mechanisms, this level of activity gives Management an excellent level of confidence in the year ahead.

Steve Parkin, Executive Chairman, said: "Our strategic positioning in supporting the online trading of retailers both in the UK and Europe places us in a strong position to continue to deliver excellent returns to our shareholders. I am immensely proud of the ability of our teams across the business to continue to support our customers' exceptional growth. The strength of both our underlying markets and our new business activity provide us with an excellent level of confidence in the year ahead."

Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on January 06, 2021, 10:46:56 AM
No idea what market thinks of that update, but 50 revenue growth is pretty good... Anyway, what made it an easy bet before and during the start of the pandemic is their open book contracts, which means there is not a lot of operating leverage. So you give up some upside for an extremely resilent model with no volume risk. It is also difficult to figure out how much is a onetime boost from the government contract. Sold one tenth of my position but still have a 13 pct stake. There has been a lot of multiple expansion, which I don't really like, but it's a pretty great business, TAM is huge, there is optionality in Europe and possibly the states, and management is just executing. Will try and hold on, but it's difficult for me. Usually am pretty quick to flip, when market falls in love with one of my ugly ducklings.

Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on January 15, 2021, 12:34:37 AM
Chairman Parker sold a 10 pct. stake in the Company somewhat below market. I think it's pretty clear that he wants liquidity (duh), and I guess it decreases the risk/chance of this getting sold to PE or an industrial buyer, which I like. But it's also pretty clear that he wants out - or wants a really, really big house - which I don't like. I heard from some institutional investors that they've stayed away from Clipper due to the Chairman - there has been some related party transactions, that some people don't like (me neither but I don't think it's material). I think the big opportunity here is Clipper expanding via M&A, and even though Parker still owns 15 pct., I'd clearly prefer a fully-invested Chairman.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: jefke on January 15, 2021, 01:18:30 AM
Yeah, you can put in effort to find an excuse for why maybe it's not a big deal.
But hard to find an optimistic explanation.

PE rumors meant there was a small chance you would get taken out of your position at a premium. But with Parker selling a 10% stake at 565p (he owned about 25% iirc - yesterday's close was 588p), that's not going to happen.

I stumbled upon Clipper thanks to this thread. Bought in at April 2020. Mostly let the position grow, with some occasional small trims. Now I'm thinking of selling more to reduce my position size
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on January 15, 2021, 01:53:14 AM
It has been clear that Parker was a willing seller at the right price for a long time, otherwise they wouldn't have entained a PE firm shortly after I started the thread. Back then the price was closer to 200. Then you recently had the CVC rumours, when the stock was closer to 400 (if I recall correctly). So even though CVC might've offered a premium, I don't think you'd get close to 600.

I'm hoping this thing stays public, so in that regard I'm happy that Parker now has gotten a ton of cash at what looks like a fair price. But if they embark on an international expansion, which I'm really hoping they will, I'd really like him to stay onboard and not sell another chunk. It's not like they have a lot of M&A experience, and he seems to have been central in what they have done so far.

It's pure speculation, but he states in the press release that he intends to stay as a longtime shareholder. He almost got as much out of Clipper at close to 600 as he would've gotten less than two years ago, when they entertained a bid around 300.

As I mentioned, I'd really like them to pursue M&A opportunities in Europe and the US, and perhaps he'll be more willing to take risk after he's taken a large sum of money off the table. Pure speculation, but we'll see.

And 'grats on the fine return so far! I pay 42 pct. taxes, and this has the hallmarks of a longtime compounder, so I'm letting it ride, but it was definately an easier buy and hold at 200 than close to 600.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on January 28, 2021, 09:09:51 AM
Got a new contract for mainland Europe the other day which is quiet significant - adding 30 pct. organic growth to their European operations when it is up and running and entering benelux. There's a huge amount of space for them to go after.

https://www.clippergroup.co.uk/new-e-commerce-operation-for-farfetch-extends-clippers-european-footprint/

lipper Logistics plc (“Clipper” or the “Group”), a leading provider of value-added logistics solutions, e-fulfilment and returns management services, is pleased to announce that it has entered into an agreement with Farfetch to provide pan-European e-fulfilment and returns management services from a new facility in Venray, Netherlands.

Farfetch is the leading global platform for the luxury fashion industry, which sells products from over 1,300 luxury boutiques and brands from around the world on its marketplace. Clipper will be providing e-fulfilment and returns management services from a new site in the Netherlands and will support all of Farfetch’s European activities from that facility.

The new contract will see operations commence in April 2021 and is for an initial term of five years. Clipper anticipates that it will employ 600 personnel at the site, and the facility will have a stockholding capacity of over 2 million units of high-end apparel.
Title: Re: CLG.L - Clipper Logistics PLC
Post by: kab60 on February 25, 2021, 01:01:29 AM
Good news today - couple of interesting points:

Two Major New Contract Wins

Outperformance expected in FY22

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 two major new contract wins with River Island and Mountain Warehouse. 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.

...

Marcus Ward, Chief Operating and Financial Officer of Mountain Warehouse commented: "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."

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, the Group expects to outperform current market expectations in the year to 30 April 2022 and beyond.

https://www.londonstockexchange.com/news-article/CLG/two-major-new-contract-wins/14877860