Clipper Logistics plc
Annual Report and Accounts 2014
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Clipper Logistics plc Annual Report and Accounts 2014
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Contents
Strategic Report
Who We Are
At a Glance
Group Structure
2014 Highlights
Our Business Model
Our Key Strengths
Segmental Highlights
Chairman’s Statement
Operational and Financial Review
Risk Management
Corporate Social Responsibility
Governance
Board of Directors and Senior Management
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Directors’ Remuneration Report
- Directors’ Remuneration Policy
- Implementation Report on Remuneration
Directors’ Report
Statement of Directors’ Responsibilities in respect of the Group Financial Statements
Group Financial Statements
Independent Auditor’s Report - Group
Group Income Statement and Statement of Comprehensive Income
Group Statement of Financial Position
Group Statement of Changes in Equity
Group Statement of Cash Flows
Notes to the Group Financial Statements
Company Financial Statements
Statement of Directors’ Responsibilities in respect of the Company Financial Statements
Independent Auditor’s Report - Company
Company Balance Sheet
Notes to the Company Balance Sheet
Directors and Advisors
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Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Strategic Report
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Clipper Logistics plc Annual Report and Accounts 2014
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Strategic Report | Governance | Financial Statements
Who We Are
Clipper is a retail logistics specialist, which
provides value-added, consultancy-led
services to its blue chip client base.
Clipper is a UK leader in its markets,
with a long-standing customer base in:
- e-fulfi lment
- fashion
- high-value logistics
A profi table and cash generative
commercial vehicles business complements
the Group’s logistics activities.
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Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
At a Glance
The Group is a retail logistics specialist, providing value-
added services to its blue chip customer base.
It is a UK market leader in e-commerce (including
e-fulfi lment and returns management), fashion, and
high value logistics. A consultancy-led approach is taken
with both existing and prospective clients to develop
innovative solutions.
A platform has been established in Germany to enable the
Group to benefi t from anticipated future growth in European
online retailing, and support the ambitions of UK customers
who plan to expand into Europe.
A profi table and cash generative commercial vehicles
business complements the Group’s logistics activities.
The Group operates from 38 locations comprising over
5 million square feet. It now has over 2,500 employees,
excluding agency staff.
The Group operates from
38 locations
comprising over
5 million sq. ft.
and now has over
2,500 employees
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Strategic Report | Governance | Financial Statements
Group Structure
Composition of the Group
Reporting Segments
Clipper Logistics plc (“Clipper” or the
The results of the Group are reported
“Company”) provides value-added logistics
in the following segments:
services in the UK.
- Value-added logistics services,
comprising:
The Company has the following wholly
- E-fulfi lment logistics, including returns
owned subsidiaries:
management services;
- Clipper Geist Logistics GmbH & Co.
- Non e-fulfi lment logistics, including
KG, which provides logistics services in
the results of the Group’s German
Germany;
operations;
- Northern Commercials (Mirfi eld) Ltd
- Central logistics overheads, being those
(“Northern Commercials”), which is a
costs of the business which are not
commercial vehicle operation; and
allocable in a meaningful way to the
- Genesis Specialised Product Packing Ltd
above operating segments, including
(“Genesis”), which provides an eBay store
directorate, advertising and promotion,
offering to enable Clipper to assist its retail
accounting and IT, and the solutions
customers with the sale of excess stock.
development team;
The above entities, along with a number of
- Commercial vehicles; and
dormant subsidiaries, comprise the “Group”.
- Head offi ce costs, representing the costs
of the Chairman, CFO, Non-Executive
Directors and plc compliance costs.
Restructure ahead of IPO
Prior to the fl otation of Clipper Logistics plc
on the London Stock Exchange, it and its
former parent company, Clipper Group
Holdings Ltd, undertook a restructuring
exercise in preparation for the IPO.
The key elements of this restructuring
were as follows:
- Clipper Logistics plc formerly traded as
Clipper Logistics Group Ltd, and was a
wholly owned subsidiary of Clipper Group
Holdings Ltd;
- In April 2014, Clipper Logistics Group
Ltd acquired its fellow subsidiaries
from Clipper Group Holdings Ltd which
comprised 100 per cent of the issued
share capital of Northern Commercials
(Mirfi eld) Ltd and Genesis Specialised
Product Packing Ltd, and 75% of Clipper
Geist Logistics GmbH & Co. KG; with the
remaining 25% being acquired from the
minority shareholder, also in April;
- On 15 May 2014, Clipper Logistics Group
Ltd was re-registered as a public limited
company, with the name Clipper
Logistics plc.
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Clipper Logistics plc Annual Report and Accounts 2014
2014 Highlights
Operational Highlights for the Year to 30 April 2014:
- Signifi cant new contracts with customers including
SuperGroup, ASOS and Antler;
- Strong growth in retail e-commerce market driving
revenues with existing customers, as well as providing
opportunities for new contract wins;
- New “Boomerang” brand introduced to focus on
value-added returns management services;
- Acquisition of R. Geist Spedition GmbH & Co. KG
completed in October 2013 to enhance operations in
Germany, providing a platform to benefi t from growth
in European online retailing and support UK customers’
ambitions to expand into Europe; and
- Integration of Northern Commercials (Mirfi eld) Ltd and
Stormont Truck and Van Ltd in August 2013 realised cost
reductions and created a platform for market share
and profi t growth
Post Year End Highlights:
- Clipper Logistics plc admitted to the premium segment
of the London Stock Exchange on 4 June 2014; and
- Strong business pipeline ensures organic growth
within the value-added logistics services division will
continue into the 2015 fi nancial year.
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Strategic Report | Governance | Financial Statements
2014 Highlights
continued
2014 Financial Highlights:
Group revenue increased by 25.2%
to £201.2m
Statutory Group profi t for the period £2.8m
(2013: £3.8m), after deduction of discontinuing costs of £2.3m
(2013: £2.1m) and exceptional costs of £2.5m (2013: £0.4m)
Group Adjusted EBIT1
increased by 10.0% to £9.6m
Adjusted EBIT from e-fulfi lment logistics
operations up 49.4% to £3.7m
due to new contract wins and existing customer growth
Non e-fulfi lment logistics Adjusted EBIT up
15.8% to £9.2m
Investment in additional central logistics
overheads of £1.8m to further support growth into 2015
Commercial vehicles Adjusted EBIT up
25.4% to £1.8m due to business integration and
depot rationalisation
Adjusted earnings per share2 increased
to 6.6p (2013: 5.7p)
A new £30m bank debt facility was put in place
at IPO to facilitate targeted acquisition strategy
1 Adjusted EBIT is defi ned as operating profi t excluding discontinuing and exceptional costs.
2 Adjusted earnings per share is based on profi t attributable to ordinary equity holders adjusted by adding back discontinuing
and exceptional costs, and adjusting for the tax thereon.
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Clipper Logistics plc Annual Report and Accounts 2014
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Strategic Report | Governance | Financial Statements
Our Business Model
Value-added Logistics Services
65% of the UK logistics division’s revenue in
Commercial Vehicles
Clipper focuses on the provision of
the year to 30 April 2014 was on open book
The commercial vehicles business operates
consultancy-led, value-added logistics
contract terms. Under the terms of these
Iveco and Fiat franchises. It sells new and
services. It works closely with existing
contracts, all costs incurred in providing
used vehicles, provides servicing and repair
and prospective clients to develop
services (people, property, plant and
facilities, and sells parts.
tailored solutions to meet their specifi c
equipment, packaging, etc) are recharged
logistics needs.
to customers together with a management
Whilst revenues from new vehicle sales can
fee. The contract mechanisms provide
vary due to wider economic conditions,
The Company is focused on the fashion
Clipper’s customer base with total
margins on new vehicle sales tend to be
and non-food retail sectors, and provides
transparency, and make for solid long-
relatively low. Margins on aftersales activities
services under formalised contractual
term relationships with clients, whilst
(i.e. servicing and parts) are much higher,
arrangements to a major blue chip
protecting Clipper from cost infl ation, mix
so that in the year to 30 April 2014, whilst
customer base including SuperGroup,
changes and, largely, volume downsides,
aftersales activities accounted for 41% of
The John Lewis Partnership, ASOS, Asda,
whilst allowing the Company to benefi t
revenue, they accounted for 91% of gross
Morrisons, and Tesco.
from increasing activity levels. Gainshare
profi t generation (gross profi t after directly
mechanisms and KPI-based incentives also
attributable costs).
Its market-leading position in providing
allow Clipper to enhance profi ts, through
solutions in the e-commerce sector,
innovation and excelling in service delivery.
Since most commercial vehicles are
including returns management, places the
required by law to be inspected every six
Company in a strategically strong position
14% of the UK logistics division’s revenue in
weeks, this gives rise to stable profi t and
given the structural changes taking place
the year to 30 April 2014 was derived from
cash streams from this part of the Group.
in retailing, with the increasing proportion
minimum volume guarantee contracts,
of retail sales represented by online sales,
which protect Clipper from volume
and the move to multi-channel and
downsides, whilst allowing the Company to
omni-channel retail distribution models.
benefi t from growing activity levels.
Further, credibility gained in the provision
Thus, the business model within the logistics
of logistics services in relation to high value
division in the UK provides a high degree
products represents a real barrier to entry to
of profi t resilience, with just 21% of revenue
this segment of the market.
derived from more traditional, closed
book arrangements.
The Company’s focus on the retail sector
ensures that it is able to offer best-practice,
In Germany, all business is currently
lowest-cost services to its blue chip
conducted on closed-book terms, although
customer base.
it is anticipated that as e-commerce
activities develop these are likely to be on
open book terms as such arrangements are
mutually benefi cial for both the retailer and
the Group.
79% of the
UK logistics
division’s revenue
in the year to 30 April 2014
was derived from
open book or
minimum volume
guarantee
contracts
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Clipper Logistics plc Annual Report and Accounts 2014
Our Key Strengths
1 Highly attractive exposure to online retail
3 Long-standing, blue chip and growing
6 Clear growth strategy
The penetration of e-based sales in the
customer base
The Group has a very clear strategy
UK is one of the highest in the world. The
The Group has a wide portfolio of blue chip
for future growth. This includes:
trend towards a greater proportion of retail
customers both in the UK and Germany,
- Continued organic expansion of the
activity being conducted online is expected
many of whom have been clients for
customer base;
to continue; research indicates that by
many years.
2022 one-third of all sales in the UK will be
conducted online.
4 High degree of contractual certainty
Returns management is expected to
underpins fi nancial predictability and
become the “battle-ground for competitive
stability
advantage” amongst retailers, with returns
Substantially the whole of the Group’s
in the UK averaging between 25%-40%.
UK logistics business is subject to formal
Clipper has introduced a new brand,
contractual arrangements. For the year
“Boomerang”, to capitalise upon this
to 30 April 2014, 79% of revenue from UK
opportunity, leveraging from its already
logistics’ customers was on open book
market leading proposition in online
or minimum volume guarantee terms,
fulfi lment.
providing a high degree of profi t and
cashfl ow certainty, and protection against
cost infl ation, mix changes and, largely,
2 Innovative retail specialist
volume downsides.
As a retail specialist, Clipper is a UK
market leader in fashion and non-food
multichannel logistics.
5 Real barriers to change
The specialised nature of the services
The Group has a track record of
provided by Clipper, particularly in the
innovation, including the development of:
e-commerce and high value product
- Consolidation centres, where products
sectors, represents real barriers to change,
destined for multiple retail outlets are
as evidenced by the high levels of customer
consolidated, before being delivered
retention experienced by the Group.
to the destination. Examples include
Meadowhall Shopping Centre in
Many implementation projects involve
Sheffi eld and Regent Street in London;
the development of bespoke software,
integration and other solutions, resulting in
Clipper playing a central role in the delivery
of the retailer’s customer proposition.
- Port deconsolidation supply chain models,
where facilities are located near a port
of entry for deconsolidation and onward
distribution through the supply chain; and
- The ‘Boomerang’ brand for returns
management;
Clipper operates a consultancy-led business
model, targeting value-added benefi ts for
its customers. Strategic-level discussions
focused on providing solutions to particular
challenges ensure that Clipper is central to
its clients’ strategies.
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- European expansion – the acquisitions
of the Beständig group of companies
in 2008 together with the more recent
acquisition of R. Geist Spedition GmbH &
Co. KG in October 2013, have created
a platform in Germany from which the
aspirations of both German retailers to
move online, and UK retailers to expand
into continental Europe, can
be supported;
- Innovative retail solutions, including for
example returns management services,
which is expected to be a fast-growing
area of retail activity. The Boomerang
returns solutions brand was introduced
in the 2014 fi nancial year to capitalise
on the opportunities presented to the
Group in assisting retailers to deal with this
challenging logistical issue; and
- Considering potential acquisitions which
are complementary to the Group’s
activities.
7 Complementary commercial
vehicles business
Northern Commercials has over 1,700
customers and is not heavily dependent
on the logistics division of the Group.
Its profi tability is driven by high-margin
aftersales activity, which is underpinned by
legal requirements governing the inspection
of commercial vehicles.
Northern Commercials provides Clipper
with fl exibility over fl eet procurement, and
margins on servicing activity are retained
within the Group.
The business is robustly profi table and
cash generative.
Strategic Report | Governance | Financial Statements
Segmental Highlights
E-fulfi lment operations
Within this sector Clipper handles high value
E-fulfi lment operations include the receipt,
products, including tobacco, alcohol and
warehousing, stock management, picking,
high value clothing, and also undertakes
packing and despatch of products on
traditional retail support services including
behalf of customers to support their online
processing, storage and distribution of
trading activities, as well as a range of
products, particularly fashion, to high street
ancillary support services.
retailers.
At no time does Clipper take ownership
of customers’ products. The Company
Central logistics overheads
has recently introduced a new brand,
Central logistics overheads are the costs
‘Boomerang’, under which returns of
of support services specifi c to the value-
products sold online are managed on
added logistics services segment, but
behalf of retailers.
which are impractical to allocate between
the sub-segment activities.
Clipper expects to continue to experience
rapid growth in this segment refl ecting
continuing migration to online retailing due
Commercial vehicles
to the structural changes taking place in
The commercial vehicle business, Northern
the retail sector.
Commercials, operates Iveco and Fiat
commercial vehicle dealerships from
six locations, together with three
Non e-fulfi lment operations
sub-dealerships. It sells new and used
Non e-fulfi lment operations include receipt,
vehicles, provides servicing and repair
warehousing, stock management, picking
facilities, and sells parts. Vehicles sold and
and distribution of products on behalf of
serviced range from small light commercial
customers. Clipper does not take ownership
vans, through to articulated tractor units.
of customers’ products at any time.
Segmental Highlights:
Year to
30 April 2014
£m
Year to
30 April 2013
£m
%
Change
E-fulfi lment logistics revenue
E-fulfi lment logistics Adjusted EBIT
Non e-fulfi lment logistics revenue
Non e-fulfi lment logistics Adjusted EBIT
Central logistics Adjusted EBIT
Total logistics revenue
Total logistics Adjusted EBIT
Commercial vehicles revenue
Commercial vehicles Adjusted EBIT
46.0
3.7
89.6
9.2
(4.2)
135.6
8.7
66.8
1.8
29.6
+55.5%
2.5
+ 49.4%
69.3
+ 29.3%
7.9
(2.4)
98.9
8.0
62.9
1.4
+15.8%
+37.1%
+8.3%
+6.1%
+25.4%
Adjusted EBIT as shown above excludes discontinuing and exceptional costs.
Percentages are calculated based on the underlying numbers as presented in the Financial Statements,
not on the rounded fi gures in the table above.
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Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Chairman’s Statement
Steve Parkin, Executive Chairman
I am pleased to write as Chairman of Clipper Logistics
plc following the successful Initial Public Offering on the
London Stock Exchange in June 2014. The demand for the
listing was high, and we are delighted to attract blue chip
institutional and retail investors as shareholders. The business
is growing through our ability to demonstrate real value-add
services for our large client base and we are confi dent of
maintaining this level of momentum.
The Group has seen a strong performance throughout
the year under review with a number of high profi le new
contracts being signed including major brands such as
SuperGroup, Tesco and ASOS.
Our desire to constantly identify new methods and
technology that ease the operational burdens of our
clients is the driving force behind the business. The Group’s
unrivalled understanding of the e-fulfi lment and returns
market, along with the ever-evolving needs of customers
in these areas will ensure we retain and expand our market
share. Clipper is rightfully excited about the years to come
and is proud of the quality of service it continues to provide.
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Strategic Report | Governance | Financial Statements
Group revenues increased by
25.2% to
£201.2 million
for the year to 30 April 2014
Group Adjusted EBIT*
increased by
10.0% to
£9.6 million
for the year to 30 April 2014
Chairman’s Statement
continued
Results
Governance
Group revenues increased by 25.2% to
Following its IPO, the Group is proud of its
£201.2 million for the year to 30 April 2014,
commitment to high levels of corporate
and Group Adjusted EBIT increased by
governance as a listed company.
10.0% to £9.6 million, in line with the profi t
Alongside the executive management
estimate included in the IPO Prospectus.
team of Tony Mannix (CEO), David Hodkin
Continued strong cash generation enabled
benefi ts from the combined experience of
the Group to pay a dividend of £6.3 million
its Non-Executive Directors: Paul Hampden
(CFO) and Sean Fahey (CIO) the Company
during the year.
Smith (Senior Independent Non-Executive
Director), Stephen Robertson, Ron Series
We anticipate paying circa 40-60% of after
and Mike Russell.
tax profi ts as dividends going forward, given
the strong cash profi le of the business.
People and Board
Look ahead
The Group is in an enviable position;
being amongst the leading providers of
Clipper Logistics plc is led by an excellent
value-added and e-fulfi lment solutions to
management team that has been at the
the retail sector in the UK, the business is
core of the business for many years.
growing in line with its strategy and is poised
for further growth in the medium term,
Having guided the Group through periods
both in the UK and internationally.
of signifi cant change in the UK retail
industry, the management team’s proven
I look forward to working with all of the
ability to continue to steer the business
Group’s stakeholders as we continue to
along its path of organic growth through
deliver on the next phase of the business’s
customer focus, technical innovation
development.
and growing brand awareness is well
established.
I would like to take this opportunity to
thank all the employees of the Group for
their commitment and contribution to the
Group’s performance.
*Adjusted EBIT is defi ned as operating profi t excluding discontinuing and exceptional costs.
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Clipper Logistics plc Annual Report and Accounts 2014
Operational and
Financial Review
1. Overview of results
We have reported additional
The Group made excellent progress
all business areas including e-fulfi lment
comparatives in the Group Financial
in the fi nancial year to 30 April 2014.
logistics, non e-fulfi lment logistics and
Statements as required for a fi rst time
commercial vehicles, as demonstrated
adopter of IFRS, but the following
Group revenues increased by 25.2% to
by the following table:
comments focus only on the results for the
£201.2 million, with strong growth in
year to 30 April 2014 and, where relevant,
to the fi rst year of comparatives.
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Revenue
E-fulfi lment logistics
Non e-fulfi lment logistics
Total logistics
Commercial vehicles
Inter-segment sales
Year to
30 April 2014
£m
Year to
30 April 2013
£m
46.0
89.6
135.6
66.8
(1.2)
29.6
69.3
98.9
62.9
(1.1)
%
change
+55.5%
+29.3%
+37.1%
+6.1%
Group revenue
201.2
160.7
+25.2%
Percentages are calculated based on the underlying numbers as presented in the Financial Statements,
not on the rounded fi gures in the table above.
Within the logistics segment,
Revenue growth in commercial vehicles
the Group benefi ted from:
was driven by:
- the full-year impact of contract wins
- an increase in the volume of new vehicle
secured in the previous fi nancial year
sales, with sales of 2,447 units, compared
including, amongst others, Wilkinsons,
to 1,782 in the year to 30 April 2013; and
American Golf, Claire’s Accessories,
Hobbycraft and Morrisons Nutmeg;
- a modest increase in after-sales revenues.
- organic growth on existing contracts,
including Tesco, Asda, The John Lewis
Partnership, New Look, Sainsbury’s, and
Morrisons transport; and
- the part-year impact of contracts won
during the year to 30 April 2014, including
ASOS, SuperGroup and Antler, as well
as a range of other new contract wins.
The full year benefi t of these contracts
will be realised in the year to 30 April
2015, together with the part-year benefi ts
of contracts currently in the pipeline and
due to go live during the remainder of
calendar year 2014 and early calendar
year 2015.
Strategic Report | Governance | Financial Statements
Operational and
Financial Review
continued
Group Adjusted EBIT
project delivery and senior management
The Group also grew Adjusted EBIT strongly
resource in order to deliver signifi cant
in all segments, and invested in additional
organic growth into the future:
Group Adjusted EBIT
E-fulfi lment logistics
Non e-fulfi lment logistics
Central logistics overheads
Total logistics
Commercial vehicles
Head offi ce costs
Group Adjusted EBIT
Year to
30 April 2014
£m
Year to
30 April 2013
£m
%
change
+49.4%
+15.8%
+8.3%
+25.4%
2.5
7.9
(2.4)
8.0
1.4
(0.7)
8.7
+10.0%
3.7
9.2
(4.2)
8.7
1.8
(0.9)
9.6
Group Adjusted EBIT is defi ned as Group operating profi t excluding discontinuing and exceptional costs.
Percentages are calculated based on the underlying numbers as presented in the Financial Statements,
not on the rounded fi gures in the table above.
Group Adjusted EBIT increased by 10.0%
Similarly, revenue derived from minimum
Within this sector the Group handles
to £9.6 million in the year to 30 April 2014,
volume guarantee contracts is fi xed at a
high value products, including tobacco,
and the Group is well placed to achieve
minimum level, so that a shortfall in activity
alcohol and high value clothing, and
further EBIT growth in the coming fi nancial
levels would give rise to a lower cost base,
also undertakes traditional retail support
year due to the full year benefi ts of recent
and a higher reported margin.
services including processing, storage and
contract wins, coupled with a very strong
distribution of products, particularly fashion,
new business pipeline.
Accordingly, Adjusted EBIT is a more
to high street retailers.
relevant measure of fi nancial performance.
Adjusted EBIT is the core metric by which
Central logistics overheads include the
the management team assesses corporate
E-fulfi lment operations include the receipt,
costs of the Directors of the logistics
performance, as the high proportion
warehousing, stock management, picking,
business, the project delivery and IT support
of open book and minimum volume
packing and despatch of products on
teams, sales and marketing, accounting
guarantee contracts within the UK logistics
behalf of customers to support their online
and fi nance, and human resources, that
division distorts reported margins.
trading activities, as well as a range of
cannot be allocated in a meaningful way
ancillary support services.
to business units and segments. We invested
This is due to an element of management
signifi cantly in such resources during the
fees on certain contracts being fi xed in the
The Company has recently introduced
year, particularly in operational support, and
short term, so that an increase in revenue
a new brand, ‘Boomerang’, under
solution design and implementation, in view
in periods of increased activity will not
which returns of products sold online
of the very high levels of organic growth
necessarily give rise to a proportionate
are managed on behalf of retailers.
being experienced by the business.
increase in profi t, resulting in lower reported
margins. Conversely in periods of reduced
Non e-fulfi lment operations include receipt,
activity levels, reported margins would
warehousing, picking and distribution of
typically increase.
products on behalf of customers.
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Operational and
Financial Review
continued
Whilst some additional infrastructure will
Of the exceptional costs of £2,516,000
inevitably be required as the business
charged to profi t and loss in the year to 30
continues to grow, the investment in central
April 2014, £1,981,000 related to the costs
logistics overheads will be of more modest
of the IPO. The balance related to depot
proportions.
closure costs (£363,000), redundancy costs
on reorganisation (£162,000), and aborted
The commercial vehicle business, Northern
contract exit costs (£10,000).
Commercials (Mirfi eld) Ltd, operates Iveco
and Fiat commercial vehicle dealerships
from six locations, together with three sub-
Net interest charges
dealerships. It sells new and used vehicles,
Net interest charges for the year to 30
provides servicing and repair facilities, and
April 2014 were £851,000, a reduction of
sells parts. Vehicles sold and serviced range
£151,000 from the £1,002,000 incurred
from small light commercial vans, through
in the previous year, refl ecting the cash
to articulated tractor units.
generative nature of the Group’s operations.
Head offi ce costs represent the cost of
the Executive Chairman, Chief Financial
Taxation
Offi cer, Non-Executive Directors and plc
The effective rate of taxation of 27.9%
compliance costs.
(2013: 27.5%) is higher than the standard
rate of corporation tax of 22.84% (2013:
The profi t after tax for the year to 30 April
23.92%) principally due to the relatively high
2014 was £2,846,000 (2013: £3,774,000),
proportion of expenditure disallowable for tax
as set out on page 76. This is stated after
purposes. As the discontinuing head offi ce
charging £2,297,000 (2013: £2,137,000)
costs include some disallowable items such
of discontinuing costs, and £2,516,000
as customer entertaining and sponsorship,
(2013: £392,000) of exceptional costs.
the effective rate of tax is expected to
reduce in the year ended 30 April 2015.
As such, adjusted profi t after tax for the
year to 30 April 2014 (which excludes the
discontinuing costs, exceptional costs
Earnings per share
and the tax associated with those costs,
As set out in note 22 to the Financial
and which the Board believes is therefore
Statements, during the year to 30 April 2014
a more meaningful measure of the
there was a group reorganisation involving
performance of the Group) was
both an issue and a subdivision of shares.
£6,540,000 (2013: £5,690,000).
In addition, there was a large amount of
The discontinuing costs relate to remuneration
non-recurring costs. Consequently, the basic
of a retiring director, consultancy and
measure of earnings per share is signifi cantly
professional fees in respect of potential
distorted by these factors. Adjusting earnings
investment opportunity appraisals, the
to exclude discontinuing and exceptional
costs of operating the Chairman’s private
costs and the tax effect thereon, gives
offi ce, and certain advertising, sponsorship
adjusted earnings of £6,540,000 for the year
and entertaining expenditure which will
to 30 April 2014 (2013: £5,690,000).
not be borne by the Group post-Admission
(“Admission” being defi ned as 4 June 2014,
the date on which Clipper Logistics plc was
admitted to the premium segment of the
London Stock Exchange).
20
Strategic Report | Governance | Financial Statements
Operational and
Financial Review
continued
Adjusted earnings per share were
Cash fl ow
Net debt
6.6 pence for the year to 30 April 2014
The Group reorganisation undertaken as
As shown in note 20 to the Financial
(2013: 5.7 pence).
part of the preparation for the IPO outlined
Statements, the Group’s net external debt
On an unadjusted basis, earnings per share
reported cashfl ows, due to the continued
£3,860,000 (2013: £2,683,000). At the
were 2.8 pence (2013: 3.8 pence).
existence of balances due to and from the
same time, the net balance owing to the
above, has caused some distortion in
at 30 April 2014, on a statutory basis, was
Group’s former parent company, Clipper
former parent company was £14,181,000
Group Holdings Ltd. From the new fi nancial
(2013: £2,335,000).
Capital expenditure
year onwards, such distortions will not
Of total capital expenditure of £5,139,000
continue.
(2013: £5,615,000), £3,135,000 (2013:
On 2 May 2014, bank and hedging facility
agreements which had been entered
£4,196,000) related to new logistics
Net cash fl ow from operating activities was
into by the former parent company were
contracts or increases in capacity;
£11,617,000 (2013: £8,084,000). Prior to
novated to the Company. Subsequent
£1,771,000 (2013: £1,420,000) was to
the reorganisation of the Group, dividends
to this, the Group’s banking facilities were
replace or maintain existing assets and
totalling £6,349,000 (2013: £2,800,000)
restructured, effective from the date of
£233,000 (2013: £nil) related to business
were paid to the former parent company.
Admission.
combinations (see note 28).
The Group’s business model gives rise to
If the novation and restructuring of the
high levels of cash generation. In the UK
former group’s bank facilities had occurred
logistics business, Clipper is typically paid in
at 30 April 2014, and balances with the
the month in which services are delivered
former parent company settled, the
on open book and minimum volume
Group’s net debt would have changed
guarantee contracts, giving rise to a typically
as in the table below.
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.
Group net debt as at 30 April 2014
Actual Group net debt per note 20 to the Financial Statements
New bank loans
Repayment to former parent company
Receipt from former parent company
Cash & cash
equivalents
£’000
Current
borrowings
£’000
Non-current
borrowings
£’000
Net
debt
£’000
5,360
12,500
(15,267)
1,086
(4,960)
(2,500)
-
-
(4,260)
(3,860)
(10,000)
-
-
Adjusted net debt
3,679
(7,460)
(14,260)
(18,041)
21
Clipper Logistics plc Annual Report and Accounts 2014
Operational and
Financial Review
continued
2. Logistics division
Market overview, size and growth
Online sales in the UK are predicted to grow
Omni-channel represents the latest
of market and market trends
to £125 billion in 2022, by which point one
evolution of multichannel retailing, whereby
Traditional bricks and mortar retail still
third of sales in the UK are forecast to be
retailers offer consumers fl exibility not only on
constitutes the majority of retail sales in the
conducted online.
UK. However, the growth of online retailing
and the desire for major retail brands to
the method of order placement (as is the
case with multichannel) but also in respect
of the choice of delivery destination – for
have as many different touch points with
Structural growth in online,
example, the consumer might place an
their customers as possible means that
multichannel retailing
order online and choose to have the order
multichannel retailing will be a dynamic
The UK has one of the highest rates of
delivered to that retailer’s high street store,
driver of change for both the retail and
internet and smartphone penetration in
or at a ‘click and collect’ site in a third party
logistics markets in the near future. An
Western Europe and this level of penetration
location, rather than their home address.
increasing number of distribution channels
is expected to increase further in coming
This development adds even greater
are now required to meet the demands of
years. The proportion of online sales as a
complexities to the logistical requirements
the consumer, including shopping at stores,
percentage of total retail sales in the UK
of retailers.
home delivery, click and collect as well
is already one of the highest in the world.
as the return of purchased items. The fact
that the penetration of internet-based sales
This trend is fundamentally altering the
Returns management demands of retailers
in the UK economy is one of the highest
logistical requirements of retailers, who
increasingly complex
in the world leads the Directors to believe
must meet the challenges of multichannel
Returns management is an increasingly
that the UK is at the forefront of the logistics
retailing (whereby customers place
important area for retailers. It is estimated
challenges being posed to retailers by the
orders across a variety of sales channels,
that 25% to 40% of all clothing and
growth in online retail.
for example retail stores, online stores,
footwear purchases in the UK are returned.
mobile stores and telephone sales), which
Historically, customers would return the
The retail sector is undergoing structural
demands complex warehousing, order
product to the store where the purchase
changes, and as a market leader in
processing and stock management systems
was made, but as online retail has
the provision of services to support
in order to deliver a high quality service to
developed, customers are demanding
retailers’ online and returns management
consumers. Further, non-food retailers are
choice in their method of return, for
challenges, the Group is strategically well
expected to invest approximately £5 billion
example posting the product back to the
placed to capitalise on the very signifi cant
in making the transition from multichannel
retailer, or taking it into a high street store or
growth expected in this sector of the market.
to “omni-channel” retailing over the next
a collection point.
According to market research, the UK’s
e-commerce market has grown from £0.8
billion in 2000 to £78 billion in 2012 (£62.4
billion excluding travel) and is set to reach
£107 billion in 2014 (17% annual increase)
with double-digit growth forecast until
around 2017.
The online retail market continued to see
steady growth in February 2014, recording
a 14.3% year on year increase.
fi ve years.
The UK’s e-commerce
market has grown from
£0.8 billion in
2000 to £78
billion in 2012
Retailers are becoming increasingly
concerned to ensure that returns
management is handled effectively so that
their brands are not damaged by customers
using social media. In addition, rectifi cation
during the returns management process
can add value and enhance margin for
the retailer.
22
Strategic Report | Governance | Financial Statements
Operational and
Financial Review
continued
This represents a stock management and
Revenues from e-fulfi lment activities,
Revenue from non e-fulfi lment operations
processing challenge for retailers, since
including returns management, increased
grew by 29.3% for the year ended 30 April
traditional warehouses have been designed
by 55.5% from £29.6 million for the year to
2014, from £69.3 million to £89.6 million,
to receive and process large quantities of
30 April 2013 to £46.0 million for the year to
with Adjusted EBIT increasing by 15.8%, from
identical product, rather than to receive
30 April 2014. We are particularly pleased
£7.9 million to £9.2 million. Future growth
individual units of product. Equally, such
with this performance, as our strategy has
in more traditional, value-added logistics
returned units will inevitably require some
been to become a market leader in the
services remains central to our future strategy
degree of inspection, rectifi cation, cleaning
e-commerce sector, and to be a thought
too, and we were pleased to welcome
or repair before going back into available
leader in the provision of value-added
SuperGroup, Hobbycraft, and Antler,
stock, or may even be deemed unfi t for
services across the sector.
amongst others, to Clipper during the year.
prime sale. Returns can in addition lead to
signifi cant levels of working capital tied up
To address the latest challenges imposed
in stock.
on retailers by returns management as
Retail consolidation centres
outlined above, Clipper has successfully
Clipper is a market leader in retail
Retailers therefore need to rework the
introduced the “Boomerang” brand and
consolidation centres, which allow multiple
product into a saleable state very quickly
concept during the year, and we are
deliveries to be made to retail outlets from a
to reduce working capital investment and
particularly pleased to welcome ASOS as
single, localised centre, providing benefi ts in:
maintain margins. The Group has a strong
the fi rst new customer using those services.
- retail space availability, as the need
track record of managing this process for
customers, including managing the returns
for on-site stock rooms is obviated;
- a wider range of stock being available
operation for ASOS, the UK’s leading online
Non e-fulfi lment logistics is central
to the end customer; and
fashion retailer.
to our future strategy too
- reduced emissions, of increasing
The Group will continue to develop
importance in city centres in particular
Further, the power of social media and
and deliver truly value-added services
consumer review websites enhances the
to address the needs of retailers in more
importance of returns management as the
traditional areas of logistics services,
returns experience represents the fi nal touch
including receipt of inbound product,
point between a retailer and the consumer
storage, store-readiness of product,
– a badly handled customer experience
and distribution to retail destinations.
in respect of the returns process may be
quickly communicated by that customer
The Group will continue to innovate
to a large number of people, particularly
to deliver best in class solutions for its
via social media, which has the potential to
customers.
harm a retailer’s future sales prospects.
The recently opened port-centric facility
The above structural, continuing market
at our Wynyard site, with Asda George as
changes have enabled the Group to make
its core client supported by a ten-year
very signifi cant advances in its revenues
contractual commitment, has gained
and earnings.
traction with other clients such as Antler.
23
Clipper Logistics plc Annual Report and Accounts 2014
Operational and
Financial Review
continued
Multi-user operations
We are in active discussions with a number
The Group encourages the use of multi-user
of UK retailers about their international
sites, where a multiplicity of customers are
logistics requirements, as well as with existing
served from a single location.
German-based customers about their
This facilitates the sharing of specialised
online activity, and returns management.
evolving needs, particularly in relation to
resources, and assists in optimising and
balancing demand on people and
facilities, in turn allowing the Group to
Investment in key personnel
provide cost-effective solutions.
The Group differentiates itself by providing
consultancy-led, value-added services to
its actual and prospective client base. We
Acquisition of R. Geist Spedition GmbH
have established ourselves as a thought
& Co. KG
leader within the logistics sector, and
Clipper Logistics GmbH acquired the
this is evidenced both by our customers’
whole of the issued share capital of
buy-in to our innovative approach, and
R. Geist Spedition GmbH & Co. KG (“Geist”)
by independent brand health reviews
in October 2013.
conducted by an independent market
research consultancy.
This follows the acquisition in December
2008 of the trade and assets of the
The Group is central to the achievement
Beständig group of companies out of
by its customers of their own objectives
administration, by the Group’s former
and goals.
parent company.
Accordingly, we invest in recruiting, training
The German entities were subsequently
and developing people who are specialists
reorganised such that all trading activities
in their relevant fi elds. These include
were undertaken by Clipper Geist Logistics
information technology, solution design,
GmbH & Co. KG from 1 March 2014.
facilities specifi cation, implementation and
management, ecommerce and returns
On 16 April 2014, the Company acquired
management, and project management
from Clipper Group Holdings Ltd, at book
and implementation resource.
value, its entire investment in other members
of the Group, which included 75% of
During the 2014 fi nancial year, due to
Clipper Geist Logistics GmbH & Co. KG.
the very signifi cant organic growth being
On 30 April 2014 the Company acquired
experienced by the business driven by
the remaining 25% of Clipper Geist Logistics
its strategic positioning, we invested in
GmbH & Co. KG in exchange for the issue
additional resources both to deliver the
of 800,000 ordinary shares.
short term business wins, but also to provide
an infrastructure capable of continuing to
The acquisition of Geist provides the
deliver signifi cant growth going forwards.
Group with a platform from which it can:
Accordingly, central logistics costs increased
- service the needs of German-based
from £2.4 million to £4.2 million as a result
retailers who wish to move online;
of this investment. Whilst further resources
- support the European expansion plans of
will be required as the business continues
UK-based retailers;
to grow, the investment in 2014 provided
- continue to evolve its service offering to
a signifi cantly enhanced infrastructure
existing and prospective customers.
capable of delivering the short to medium
term requirements of the business.
24
Strategic Report | Governance | Financial Statements
Operational and
Financial Review
continued
3. Commercial vehicle division
4. Current trading and outlook
The commercial vehicles business delivered
The Group secured a number of signifi cant
a signifi cantly improved Adjusted EBIT of
contract wins in the year to 30 April 2014,
£1.8 million (2013: £1.4 million), an increase
the full year benefi t of which will be realised
of 25.4% on the previous year.
in the year to 30 April 2015. These wins
included high profi le brands, for example
Stormont Truck and Van Ltd was integrated
SuperGroup and ASOS.
into Northern Commercials in August 2013.
This consolidation achieved cost reductions
As we look ahead to the 2015 fi nancial
in central and administrative functions,
year, we have a very strong new business
but has also provided a focused platform
pipeline. We continue to win new contracts
for market share growth in all areas of the
within both e-fulfi lment logistics and non
country in which we operate.
e-fulfi lment logistics, both in the UK and
Europe, through our focus on our retail
Northern Commercials operates from
specialisms and provision of cost-effective,
six dealership locations, and has three
value-added solutions. We look forward
sub-dealers. Dealerships are located in
to updating shareholders on these new
Brighouse, Manchester, Northampton,
contracts when they are formalised.
Dunstable, Tonbridge and Brighton. Thus,
the business operates across the north
Since the year end we have signed a
of England and Wales (with sub-dealers
fi ve year contract extension with Tesco,
supporting this geographic territory), through
to provide additional services to support
the midlands, and into the south-east.
their on-line clothing strategy. In Germany,
we have signed a fi ve year contract
The business sold 2,447 new vehicles in the
extension with s.Oliver.
year, and 416 used vehicles. Key customers
include Asda, Ryder, Dawsons, Allied
Our returns management service, marketed
Bakeries, Clancy Dochra, the Variety Club,
under the “Boomerang” brand, continues
and a host of other household names.
to gain traction with retailers in both the UK
and Europe, and we are confi dent that this
The business achieved a number of
represents a major area of growth
important key performance measures in
going forward.
the year:
- Assistance non-stop: Northern
The commercial vehicles business is
Commercials achieved the best
expected to continue to deliver steady
response time of all Iveco dealers in the
growth in profi tability in the year to
UK, averaging 40.2 minutes to arrive to
30 April 2015.
provide assistance to breakdowns;
- vehicles off-road: Northern Commercials
The Board is confi dent in the Group’s
was the number one dealer, with an
prospects for the full year ahead. Current
average of 0.7 days off-road for repairs,
trading is in line with our strategic plan, and
compared to an Iveco target of 1.8 days;
we are confi dent of achieving another
- MOT pass rate: 98.9% of vehicles
period of excellent fi nancial performance
achieved an initial pass; and
in the year to 30 April 2015.
- parts service: 97% of parts required by
customers were delivered within 24 hours.
25
Clipper Logistics plc Annual Report and Accounts 2014
Risk management
The Group adopts a formal risk identifi cation and
management process designed to ensure that risks are
properly identifi ed, prioritised, evaluated and mitigated
to the extent that is possible, in order that the Group can
achieve its strategic objectives and enjoy long-term success.
Risk Management Process
The Group adopts the following process:
The Board and senior management team
are collectively responsible for managing
risk across the Group. Risks are reviewed
regularly and risk registers are updated at
least four times a year.
1. Identify risk:
Identify key risks by category
(including changes since the last review)
5. Review, monitor and report risk
management process:
Review and monitor risk
management process, and report
to Board and Audit Committee
2. Rate risk:
Rate each risk (by evaluating and
assigning a score to each risk)
4. Execute risk mitigation:
Execute agreed risk mitigation
and process improvements
3. Identify risk mitigation:
Identify mitigating actions required
for each risk
The Group has identifi ed the following key risks as a result of the risk management process:
Strategic:
Risk
Mitigation
Reputation
Clipper’s potential to win new business is
infl uenced by its reputation for successfully
implementing major customer projects.
Reputational damage from failed project
implementations may have an adverse
impact on Clipper’s ability to win new
business, and thus limit the Group’s long
term growth and success.
Employees
Failure to develop and retain key staff
may prevent the Group from delivering
its objectives.
Clipper has developed effective project management and governance techniques
to ensure that the Company works closely with customers using highly trained and
experienced internal staff, to ensure successful project delivery.
All projects are reviewed and evaluated on a weekly basis by the relevant operational
board members.
In addition, independent ‘Brand Health’ reviews are undertaken regularly to monitor
customer perception of, and satisfaction with, the Company.
The Group offers comprehensive training and experiential learning, and keeps in close
contact with employees via fl at structures and effective employee engagement.
The Group also ensures that it has competitive terms and conditions, and can respond
fl exibly to the needs of employees.
26
Strategic Report | Governance | Financial Statements
Risk management
continued
Operational:
Risk
Mitigation
Loss of operational delivery
During periods of major project and
merger activity, the focus could move
away from operational delivery, thus
harming the Group’s relationships with
customers.
Failure to achieve contractual KPIs
Failure to achieve contractual KPIs may
result in the loss of existing contracts.
Failure to maintain and enhance
customer relationships
Failure to maintain and enhance
customer relationships may lead to the
non-renewal of contracts, and/or may
prevent the Group from winning new
work with existing customers.
Loss of an operational site
through disaster
Loss of an operational site as a result
of fi re, fl ood or other disaster would
have the potential to seriously disrupt
operations.
Financial:
Risk
Liquidity
Inadequate cash resources could
leave the Group unable to fund its
growth plans, thus affecting future
fi nancial performance.
Credit risk
Customer default or insolvency could
result in a bad debt.
Dedicated start-up and project teams are used in order to minimise disruption to
the operation during such times. Contractual Key Performance Indicators (KPIs) are
reviewed regularly to ensure operational effectiveness at all times.
Reporting measures are in place to measure contractual KPI performance in a timely
manner, to ensure compliance, or immediate corrective action.
The Group holds formal monthly reviews with key customers as well as maintaining
frequent close informal contact with customers. This enables corrective action to be
taken quickly in response to customer feedback. In addition, regular brand health
reviews are carried out which give customers the opportunity to comment anonymously
on any aspect of the customer/Company relationship and service delivery. The Group
can then take corrective action if required, based on this feedback.
Regular safety audits and inspections and remedial action seek to limit this risk.
In the event of a serious incident, each site has a business continuity plan which would
come into immediate operation.
Mitigation
As part of the IPO process, the Group undertook an assessment of its funding
requirements in the context of its growth plans, and entered into new facilities with
its bank to ensure that expected future growth plans can be funded within these
new facilities.
The Group will continue to undertake further reviews of funding requirements as its
growth plans evolve.
Credit checks are performed on all new potential customers, and credit terms and
limits are set accordingly. These are reviewed regularly, and adjusted if necessary.
Standard terms of trade give the Company a general lien on the customer’s stock for
amounts owed.
Where customer contracts negate the Company’s standard terms protections against
non-payment of amounts due are written into the contract.
27
Clipper Logistics plc Annual Report and Accounts 2014
Corporate Social Responsibility
The Group recognises the importance of
As a founding member of the Novus Trust
We encourage team working by involving
Corporate Social Responsibility (“CSR”),
we help develop the curriculum, present
employees in open days and inter-site
and our impact on the environment
guest lectures and offer students holiday
competitions, as well as organised themed
and our people, their development,
jobs, work placements and permanent
events on special occasions.
commitment and relationships with our
employment opportunities for two to three
customers, the community and other
graduates each year.
stakeholders are central to our plans.
Community events
Equal Opportunities
The Group is committed to an Equal
Opportunities Policy. Supported by training,
People development
At both corporate and local level we actively
policies and our 5 Point Code of Behaviour
At every level we provide excellent
encourage our sites to participate in good
we aim to ensure that no employee is
opportunities for our employees.
causes through direct funding, provision
discriminated against, directly or indirectly,
We provide unemployed people in local
of resource and/or encouraging our
on the grounds of colour, race, ethnic
communities with the opportunity for
employees to organise fundraising events.
and national origins, sexual orientation or
training, qualifi cations and jobs via our
Recent examples include a sponsored
gender, marital status, disability, religion or
Clipper Academy programmes. Existing
Dragon Boat Race for Martin House,
belief, or on the grounds of age.
employees develop via driver CPC
sponsored cycle rides for Transaid and site
qualifi cations, NVQs, apprenticeship and
events for Children in Need, Red Nose Day,
The above is refl ected in our truly diverse
Potential Team Development Programmes.
Cancer Research and local charities.
workforce. We are happy to consider
requests for fl exible working and wherever
Our staff can then apply to join our
We support various local forums and
possible will agree shift patterns which
Corporate First Line and Middle
sponsor community activities such as a
facilitate a balance between work and
Management Levels 2 and 3 Aspire
children’s football team.
family life.
Programmes. We support relevant
professional qualifi cations and have
We are also members of the Disability
invested in a Group Training and
Employee engagement
Forum.
Development Manager to internally deliver
To encourage employees to give us their
management training courses and develop
best we aim to provide a competitive level
an in-house senior leadership programme.
of pay and other benefi ts relative to job and
Health and safety
skill level, including the provision of retail
The Group seeks to protect employees from
discount schemes, company contribution to
accidents and injuries at work. Our health
Schools and universities
a pension scheme and life/accident cover.
and safety structure is supported by IOSH
Many of our distribution centres network
qualifi ed representatives and Health and
with local schools and colleges to offer
We encourage alignment with Group
Safety Committees at each site. Each site
site visits or support career events. Clipper
goals via open communication. We have
receives at least two safety audits each
is represented on the Employer Liaison
an annual conference for our senior staff,
year. Serious incidents are escalated and
Committee of the Logistics Institute of
site employee forums, health and safety
accident statistics are monitored. Accidents
Hull University.
committees, team briefs, our Company
are reported and investigated. Health and
newsletter ‘Evolve’ and highly visual
safety matters are reported and monitored
To encourage a greater number and
notice boards.
at Board level.
higher calibre of students to enter the
logistics sector we have partnered with
We recognise employee contribution and
Health and safety training is prevalent
Huddersfi eld University.
loyalty via our Employee of the Month
throughout the business – from initial
Scheme, Driver of the Year Award and Long
induction training, through risk assessed
Service awards.
task training (e.g. manual handling, fork lift
truck and use of knives) to management
awareness programmes.
28
Strategic Report | Governance | Financial Statements
Corporate Social Responsibility
continued
Environment
Waste recycling
CSR policy
We recognise the Group’s activities have an
The Group considers the best use of
The Group recognises the importance of
impact on the environment but we believe
raw materials using recycled/recyclable
environmental protection and is committed
we can improve our environmental footprint
products where applicable. Waste is sorted
to conducting business ethically, responsibly
and save energy. This is important to both
into plastics, paper/cardboard, wood
and in compliance with laws, regulations
the Group and our stakeholders.
and metal. It is then recycled, reused or
and codes of practice applicable to our
compacted on site.
Our Carbon Management Reduction
Programme aims to reduce energy
consumption and emissions of greenhouse
Commercial
gasses from our warehouses and transport
Wherever possible we work with our
business activities. The CSR and related
policies are reviewed and amended where
appropriate.
fl eets.
To this end:
customers to build environmental
Gender breakdown
considerations into our recommended
solutions. This is particularly evident with
- we are applying the latest environmental
our pioneering retail consolidation centres
standards as and when we upgrade our
which greatly reduce fi nal mile deliveries,
estate;
congestion and associated emissions when
delivering to shopping centres.
- we are investing in low energy lighting
and testing the advent of LED lighting;
- we investigate fuel use, route planning
and best design of vehicles across the
fl eet to become more effi cient and
minimise emissions. We participate in
the ECO Stars Fleet Recognition Scheme
which recognises fl eet operators who use
lower polluting vehicles and effective fuel
management – becoming the fi rst multi
regional member of this scheme;
- we promote environmental awareness via
training, including training van and LGV
drivers in Safe and Fuel Effi cient Driving
– using the latest simulator technology,
which in turn avoids fuel use associated
with the training; and
- we encourage employees to use ‘green’
transport. Our company car lists offer the
use of newer, lower emission vehicles and
our sites promote the use of car sharing.
Male Female
Board of Directors
Senior Management
Group
100%
79%
64%
0%
21%
36%
Approved by the Board and signed
on its behalf by:
David Hodkin
Chief Financial Offi cer
28 August 2014
29
Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Governance
30
31
Clipper Logistics plc Annual Report and Accounts 2014
Board of Directors
The following table lists the names, positions and dates of birth of the current members of the Board:
Name
Position
Steven (Steve) Nicholas Parkin
Antony (Tony) Gerard Mannix
David Arthur Hodkin
Sean Eugene Fahey
Paul Nigel Hampden Smith
Stephen Peter Robertson
Ronald (Ron) Charles Series
Michael (Mike) John Russell
Executive Chairman
Chief Executive Offi cer
Chief Financial Offi cer
Chief Information Offi cer
Senior Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Date of Birth
17 December 1960
1 August 1963
14 February 1961
28 March 1970
1 December 1960
17 November 1954
27 August 1951
19 January 1951
The business address of each Director is Gelderd Road, Leeds, West Yorkshire LS12 6LT.
Steve Parkin, Executive Chairman
Tony Mannix, Chief Executive Offi cer
David Hodkin, Chief Financial Offi cer
Steve, a fashion logistics specialist, founded
Tony was appointed Chief Executive Offi cer
David joined the Group as Group Chief
the Group in 1992. As Executive Chairman,
of the Group in May 2014. Tony joined
Financial Offi cer in 2003. David has held a
Steve is responsible for the strategic
Clipper in 2006 as Managing Director of the
variety of board level roles prior to joining
direction of the Group. Steve has extensive
UK logistics division. Tony has over 25 years’
Clipper, including Group Finance Director
experience of retail logistics particularly in
experience in the logistics sector, and has
of Symphony Group plc, Finance Director of
fashion. He holds and pursues strategic
held a number of senior roles with Roseby’s
Kunick Leisure Ltd, and a number of senior
level discussions with major retailers.
plc (which became part of Homestyle
roles in Magnet Ltd. David is a
In addition, Steve drives the Group’s
Group plc) becoming Logistics Director.
member of the Chartered Institute of
acquisition strategy. Steve is the chairman
Tony has particular experience of operating
Management Accountants.
of the Nomination Committee.
in complex retail logistics environments,
including the design and specifi cation of
both distribution centres and warehouse
management systems. Tony began his
career in logistics with the Burton Group,
after working in the construction industry
following his graduation with a degree in
Architectural Engineering.
Sean Fahey, Chief Information Offi cer
Sean joined Clipper in 1992, initially as the
director responsible for accounting and IT.
Sean has extensive experience of designing
32
Strategic Report | Governance | Financial Statements
Board of Directors
continued
and implementing complex logistics
solutions, based on many years of direct
operational management experience,
which complement his skills as an IT
specialist. As the Group has grown, Sean
has held positions of Development Director,
Project Director, and now has responsibility
for the IT, projects and implementation
functions as Chief Information Offi cer,
along with his responsibilities on the Board.
Stephen Robertson, Independent Non-
Executive Director
Stephen joined the Group as Non-Executive
Director on 16 May 2014. Stephen has
many years of experience in the retail
industry and has held executive positions at
Kingfi sher plc, WH Smith plc and Woolworths
Group plc. Stephen was previously a
director of the British Retail Consortium and
is currently an Advisory Board Member
of Retail Week. Stephen’s current non-
executive directorships include Timpson
Group plc and Hargreaves Lansdown
plc. Stephen is a member of the Audit
Paul Hampden Smith, Senior Independent
Non-Executive Director
Paul joined the Group as Senior
Independent Non-Executive Director on
Committee.
16 May 2014. Paul retired from his role as
Group Finance Director of Travis Perkins plc
in 2013, following 25 years with the group.
During that time, the group enjoyed tenfold
growth and Paul oversaw a signifi cant
number of acquisitions ranging from £1
million to £1 billion in size. During the last
ten years, Paul has held non-executive
directorships on the boards of DX Services
plc, Redrow plc, Bellway plc and Pendragon
plc. Paul was also appointed as Chairman
plc. Most recently, he has held executive
positions at iSOFT Group Ltd (listed on the
Australian Securities Exchange), SIAC Group
and Viridan Group and was involved in the
successful restructuring of Nakheel PJSC,
the real estate arm of Dubai
World. Ron is currently appointed as non-
executive director at Offi ce Team. Ron is a
member of the Remuneration Committee
and the Nomination Committee.
Mike Russell, Independent Non-Executive
Director
Mike Russell was appointed Non-Executive
Director of Clipper’s former parent
company with effect from 3 January
2011, and was appointed Non-Executive
Director of the Company on 16 May 2014.
He qualifi ed as a Chartered Certifi ed
Accountant with a subsidiary of Imperial
Chemical Industries, following which he
held the position of Finance Director of
a subsidiary of Allied Lyons plc. He joined
Asda Stores Ltd as Chief Accountant in
1986 and subsequently became Finance
Director of the Stores Division. He was
of the Audit Committee in each of these
Ron Series, Independent Non-Executive
appointed Group Finance Director of Nurdin
non-executive roles. Paul is the chairman of
Director
& Peacock plc, a FTSE 250 company, in
the Audit Committee and is a member of
Ron joined the Group as Non-Executive
early 1996 prior to the sale of the business
the Remuneration Committee.
Director on 16 May 2014. Over the past
to Booker plc. From 1997 to 2011 he was
20 years, Ron has held executive and
an executive director of Prize Food Group,
non-executive positions with a number of
a private equity-backed business, initially as
companies with international operations
Group Finance Director and, from 2005, as
in transport, logistics, shipping, real estate
Chief Executive Offi cer. Mike is chairman
and information technology. Included
of the Remuneration Committee and a
among them are Tuffnells Parcel Express
member of the Audit Committee and the
where he was chairman during its ownership
Nomination Committee.
by 3i and UK-listed companies such as
Davies and Newman plc and LEP Group
33
Clipper Logistics plc Annual Report and Accounts 2014
Corporate Governance Report
Chairman’s introduction
Compliance with the UK Corporate
The Board delegates to management the
Governance Code 2012
day-to-day running of the business within
Dear Shareholder,
The Board is committed to maintaining
defi ned risk parameters. Board meetings
Clipper listed its Ordinary Shares on
high standards of corporate governance
are scheduled to coincide with key events
the main market of the London Stock
and maintaining a sound framework for the
in the corporate calendar and in future this
Exchange on 4 June 2014 (“Admission”
control and management of the Group.
will include the interim and fi nal results and
date). The Listing Rules of the Financial
annual general meeting.
Conduct Authority, including the UK
The UK Corporate Governance Code 2012
The Board has adopted a formal schedule
Corporate Governance Code (the
(the “Code”) applies to fi nancial years
of matters reserved for its approval and has
“Code”), have only therefore applied
beginning on or after 30 September 2012.
delegated other specifi c responsibilities to
to the Company since that date. In the
A copy of the Code can be found at
its Committees. This schedule sets out key
months leading up to the listing, the Board
www.frc.co.uk.
implemented a number of measures
aspects of the affairs of the Company which
the Board does not delegate, including key
to ensure compliance with the Code,
This Report, which incorporates reports from
strategic, operational and fi nancial issues.
in particular, provisions relating to the
the Audit and Nomination Committees on
composition of the Board and its principal
pages 38 to 43 together with the Strategic
All Directors have access to the advice and
Committees. On Admission, the Board
Report on pages 4 to 29, the Directors’
services of the Company Secretary who
committed itself to the highest standards
Remuneration Report on pages 44 to 65
has responsibility for ensuring compliance
of corporate governance and to maintain
and the Directors’ Report on pages 66 to 69,
with the Board’s procedures. All the Directors
a sound framework for the control and
describes how the Company has applied
have the right to have their opposition to or
management of the Group. Since the
the relevant principles of the Code.
concerns over any Board decision noted
Company only recently listed, it is not
practicable to expect full compliance
with the provisions of the Code, therefore
The role of the Board
in the minutes. The Board has adopted
guidelines by which Directors may take
independent professional advice at the
the Company did not comply with the
As at the Admission date, the Board consists
Company’s expense in the performance
nine provisions of the Code for the year
of 4 Non-Executive Directors and 4 Executive
of their duties.
ended 30 April 2014. Accordingly, this
Directors. Biographies of all members of the
report includes a description of how the
Board appear on pages 32 and 33.
Company has applied the principles
Confl icts of interests
and provisions of the Code since 4 June
The Board is responsible for leading and
In line with the requirements of the
2014 and how it intends to apply those
controlling the Group and has overall
Companies Act, each Director has notifi ed
principles throughout the remainder of
authority for the management and
the Company of any situation in which
2014 and into 2015.
conduct of the Group’s business, strategy
he or she has, or could have, a direct or
and development. The Board is also
indirect interest that confl icts, or possibly
responsible for ensuring the maintenance
may confl ict, with the interests of the
of a sound system of internal control and
Company (a situational confl ict). These were
risk management (including fi nancial,
considered and approved by the Board in
operational and compliance controls and
accordance with the Company’s Articles of
for reviewing the overall effectiveness of
Association and each Director informed of
systems in place) and for the approval of
the authorisation and any terms on which it
any changes to the capital, corporate and/
was given. The Board has formal procedures
or management structure of the Group.
to deal with Directors’ confl icts of interest.
The Board reviews and, where appropriate,
approves certain situational confl icts of
interest that were reported to it by Directors,
and a register of those situational confl icts
is maintained and will be reviewed by the
Board going forward.
Steve Parkin
Executive Chairman
34
Strategic Report | Governance | Financial Statements
Corporate Governance Report
continued
Directors’ indemnities
Directors when necessary. The Senior
Information, meetings and attendance
The Articles of Association of the Company
Independent Director should be available
The Board has a full programme of Board
require it to indemnify offi cers of the
to shareholders if they have concerns which
meetings planned for 2014 and 2015. At
Company, including offi cers of wholly-
contact through the normal channels of
these meetings, the Board will review the
owned subsidiaries, against liabilities arising
the Chairman, CEO or other Executive
Group’s long-term strategic direction and
from the conduct of the Group’s business, to
Directors has failed to resolve or for
fi nancial plans and monitor on a regular
the extent permitted by law. The Group has
which such contact is inappropriate. Paul
basis the Group’s performance against
therefore purchased directors’ and offi cers’
Hampden Smith has been appointed Senior
an agreed strategy and business plan.
liability insurance during the year.
Independent Director.
In addition, the Board will agree key
objectives for the Group on an annual basis
Board Committees
Board balance and independence
and will then monitor performance against
Subject to those matters reserved for its
The Code recommends that at least
these objectives.
decision, the Board has delegated to
half the Board of Directors of UK listed
its Audit, Nomination and Remuneration
companies, excluding the chairman,
The Board has an agreed procedure for
Committees certain authorities. There are
should comprise Non-Executive
dealing with confl icts of interest in relation
written terms of reference for each of these
Directors determined by the Board to be
to matters which are scheduled for Board
Committees, available on request from the
independent in character and judgement
consideration.
Company Secretary, and separate reports
and free from relationships or circumstances
for each Committee are included in this
which may affect, or could appear to
The Chairman is responsible for ensuring
Annual Report and Accounts from pages
affect, the director’s judgement.
that the Directors receive accurate,
38 to 65.
timely and clear information. Prior to
The Board regards all of the Non-Executive
each scheduled Board meeting, a pack
Directors as Independent Non-Executive
is circulated in respect of each fi nancial
Role of the Chairman and Chief Executive
Directors within the meaning of the Code
period, which includes an update on key
The Board is chaired by Steve Parkin. The
and free from any business or other
performance targets, trading performance
Chairman is responsible for the effective
relationship that could materially interfere
against budget and includes detailed
leadership of the Board, having regard
with the exercise of their independent
fi nancial data and analysis. Board packs
for the interests of all stakeholders and
judgement. The Board believes that
are generally distributed seven days prior to
promoting high standards of corporate
the current directorate will enhance
each meeting to provide suffi cient time for
governance. Tony Mannix is the Chief
considerably its ability to develop the
Directors to review their papers in advance.
Executive Offi cer and is responsible
Group’s operations.
for implementing the Board’s strategy
and leading the senior management
If Directors are unable to attend a Board
meeting for any reason, they nonetheless
receive the relevant papers and are
team. The role is distinct and separate to
Role of the Company Secretary
consulted prior to the meeting and their
that of Chairman and clear divisions of
Paul White is the Company Secretary.
views made known to the other Directors.
accountability and responsibility have
The role of the Company Secretary is to
been agreed by the Board.
develop, implement and maintain good
corporate governance practices. This
Development
includes supporting the Chairman and
In preparation for Admission, all Directors
Role of the Senior Independent Director
Non-Executive Directors as appropriate,
received an induction briefi ng from the
(SID)
managing Board and Board Committee
Group’s legal advisor, DWF, on their duties
The Code recommends that the Board of
meetings, ensuring that appropriate levels
and responsibilities as Directors of a
Directors of a Company with a premium
of directors’ and offi cers’ insurance is in
publicly quoted company. In addition, the
listing on the Offi cial List should appoint
place and that the Group is compliant with
new Non-Executive Directors received full
one of the Non-Executive Directors to be
statutory and regulatory requirements.
presentations, including the IPO roadshow.
the Senior Independent Director to provide
a sounding board for the Chairman and
to serve as an intermediary for the other
35
Clipper Logistics plc Annual Report and Accounts 2014
36
Strategic Report | Governance | Financial Statements
Corporate Governance Report
continued
Board evaluation
In the meantime, the forthcoming Annual
Given that a majority of the Non-Executive
General Meeting will be the fi rst since
Directors were only appointed in the months
the Company re-registered as a public
immediately preceding the listing in June
company on 15 May 2014. Accordingly, all
2014, the Board believes that a meaningful
the Directors will be offering themselves for
evaluation of the Board can only take place
election at the AGM to be held at Clipper
after it has been working together for a
Logistics, Gelderd Road, Leeds, LS12 6LT on
reasonable time. An evaluation policy will
29 September 2014 at 11.00am full details
be developed and implemented before
of which are set out in the notice of meeting
the end of 2014. The Senior Independent
accompanying this Annual Report.
Director, Paul Hampden Smith, will evaluate
the performance of the Chairman, who
As noted above, the current Board has been
has been in post since inception of the
in post for only a short period of time and
Company.
Election of Directors
so a formal evaluation of the performance
of the Board, its principal Committees and
the individual Directors would be of limited
value. However, pending the development
The Board can appoint any person to be
and implementation of a formal evaluation
a Director, either to fi ll a vacancy or as an
process during 2014, the Board is satisfi ed
addition to the existing Board provided
that each Director remains competent to
that the total number of Directors does
discharge his responsibilities as a member
not exceed 12, the maximum prescribed
of the Board.
in the Company’s Articles of Association.
Any Director so appointed by the Board
shall hold offi ce only until the next following
External appointments
annual general meeting and shall then be
The Executive Directors may accept
eligible for election by the shareholders.
outside appointments provided that such
appointments do not in any way prejudice
In accordance with the Articles of
their ability to perform their duties as
Association, at every annual general
Executive Directors of the Company.
meeting of the Company one-third of the
None of the Executive Directors currently
Directors or the number nearest to but
hold any such outside appointments.
not exceeding one-third shall retire from
offi ce. The Directors to retire shall be fi rst
The Non-Executive Directors’ appointment
those who wish to retire, and then those
letters are not specifi c about the maximum
who have been longest in offi ce since their
time commitment, recognising that there
last appointment or re-appointment. When
is always the possibility of an additional time
a Director retires at an Annual General
commitment and ad hoc matters that may
Meeting in accordance with the Articles, the
arise from time to time, particularly when the
Company may, by ordinary resolution at the
Group is undergoing a period of increased
meeting, fi ll the offi ce being vacated by re-
activity. The average time commitment
electing the retiring Director. If the Company
inevitably increases where a Non-Executive
does not fi ll the vacancy at the meeting,
Director assumes additional responsibilities
the retiring Director shall nevertheless be
such as being appointed to a Board
deemed to have been re-elected, except
Committee or as a Non-Executive
in the cases identifi ed by the Articles. The
Director on the boards of any of the
Company intends to continue this practice
Company’s subsidiaries.
but will review it regularly.
37
Clipper Logistics plc Annual Report and Accounts 2014
Nomination Committee Report
Committee Chairman’s introduction
Composition
Diversity
The UK Corporate Governance Code
Whilst the Group pursues diversity, including
The Nomination Committee is responsible
recommends that a majority of the
gender diversity, throughout the business,
for identifying and nominating candidates
members of a nomination committee
and the Board endorses the aspirations of
for the approval of the Board to fi ll Board
should be independent Non-Executive
the Davies Review on Women on Boards,
vacancies and to keep under review
Directors. The Nomination Committee
the Board is not committing to any specifi c
the balance of skills, knowledge and
is chaired by Steve Parkin and its other
targets. Instead, the Board will engage
experience on the Board to ensure the
members are Ron Series and Mike Russell.
executive search fi rms who have signed up
orderly evolution of the membership of the
The Nomination Committee will meet not
to the voluntary code of conduct setting
Board and to make recommendations to
less than twice a year.
the Board on composition and balance.
out the seven key principles of best practice
to abide by throughout the recruitment
process and will continue to follow a policy
The Nomination Committee will be
Roles and responsibilities
of appointing talented people at every level
proactive in discharging these
The Nomination Committee assists the
to deliver high performance. The Board will
responsibilities, cognisant of the importance
Board in discharging its responsibilities
also ensure that its own development in this
of succession planning and the need to
relating to the composition and make-
area is consistent with its strategic objectives
align Board and executive leadership skills
up of the Board and any Committees
and enhances Board effectiveness.
to the Group’s long-term strategy.
of the Board. It is also responsible for
periodically reviewing the Board’s structure
Prior to the publication of the prospectus,
and identifying potential candidates to
Remuneration Committee
the Board met on 16th May 2014 to
be appointed as Directors or Committee
The Directors’ Remuneration Report can be
consider the appointments of new
members as the need may arise. The
found on pages 44 to 65. This Report has
Directors. Accordingly, Paul Hampden
Nomination Committee is responsible for
been prepared in accordance with the
Smith, Mike Russell, Stephen Robertson and
evaluating the balance of skills, knowledge
new regulations governing the way in which
Ron Series were appointed to the Board
and experience and the size, structure and
Directors’ remuneration is voted upon and
with effect from 16 May 2014.
composition of the Board and Committees
includes details of the role and composition
of the Board, retirements and appointments
of the Remuneration Committee.
of additional and replacement Directors
and Committee members and makes
appropriate recommendations to the Board
Audit Committee
on such matters.
The Audit Committee report can be found
on pages 40 to 43.
What the Nomination Committee
did in 2014
Relations with shareholders
Following consultation by Steve Parkin,
As part of the IPO roadshow in 2014, the
Chairman, with the sponsor and major
Board met a large number of investors in
shareholders regarding its composition, a
the United Kingdom. The meetings involved
Nomination Committee was established by
the Chairman, Chief Executive Offi cer and
a resolution of the Board dated 16th May
Chief Financial Offi cer.
2014, at which meeting terms of reference
were considered and adopted.
38
As part of its future investor relations
programme, the Group will aim to maintain
an active dialogue with its key stakeholders
including institutional investors to discuss
issues relating to the performance of
the Group including strategy and new
developments. The Non-Executive Directors
are available to discuss any matter
stakeholders might wish to raise.
Investor relations activity and a review of
the share register are standing items on
the Board’s agenda. Reports from analysts
and brokers are circulated to the Board.
The Chairman and Non-Executive Directors
are available to attend investor relations
meetings or to request meetings with
investors or analysts independent of the
Group’s management if required.
Annual General Meeting
The Company’s fi rst Annual General
Meeting since Admission will take place on
29 September 2014 at 11.00am, at Clipper
Logistics, Gelderd Road, Leeds, LS12 6LT
and the chairmen of each of the Board’s
Committees will be present to answer
questions put to them by shareholders.
The Annual Report and Accounts and
Notice of the Annual General Meeting will
be sent to shareholders at least 20 working
days prior to the date of the meeting.
To encourage shareholders to participate in
the AGM process, the Company proposes
to offer electronic proxy voting through the
CREST service and all resolutions will be
proposed and voted on at the meeting on
an individual basis by shareholders or their
proxies. Voting results will be announced
through the Regulatory News Service and
made available on the Company’s website.
By order of the Board.
Steve Parkin
Executive Chairman
Strategic Report | Governance | Financial Statements | 39
39
Clipper Logistics plc Annual Report and Accounts 2014
Audit Committee Report
Committee Chairman’s introduction
Composition
The ultimate responsibility for reviewing and
The Code recommends that an Audit
approving the Annual Report and Financial
The Audit Committee was established by
Committee should comprise at least 3,
Statements and the half-yearly reports
a resolution of the Board dated 16 May
or in the case of smaller companies, 2
remains with the Board.
2014, at which meeting terms of reference
independent Non-Executive Directors (other
were considered and adopted. The Board
than the chairman) and that at least 1
The Board has requested that the Audit
further resolved to appoint Mike Russell
member should have recent and relevant
Committee advise them in ensuring that
and Stephen Robertson to the Audit
fi nancial experience. The Audit Committee
the Financial Statements, when taken
Committee under my chairmanship.
is chaired by Paul Hampden Smith and
as a whole, are fair, balanced and
Under its terms of reference, the Audit
its other members are Mike Russell and
understandable and provide the information
Committee is required to meet at least
Stephen Robertson. By virtue of their former
necessary for shareholders to assess the
three times in each year at appropriate
executive roles, details of which are set out
Group’s performance, business model
times in the reporting and auditing cycle.
on page 33, the Directors consider that
and strategy.
Following Admission, the Audit Committee
Paul Hampden Smith and Mike Russell have
has met twice.
recent and relevant fi nancial experience.
The primary function of the Audit
the Code in this regard. The Chief Financial
As explained above, the Audit Committee
Committee is to assist the Board in fulfi lling
Offi cer and Company Secretary attend
met twice following Admission. In June,
its responsibilities to protect the interests
meetings of the Audit Committee
the Audit Committee discussed with the
The Company is therefore compliant with
Activities of the Audit Committee
of the shareholders with regard to the
by invitation.
integrity of the fi nancial reporting, audit,
risk management and internal controls.
external auditor the audit planning report,
with particular reference to signifi cant risks
highlighted in the planning document,
Roles and responsibilities
together with the audit scope and timetable.
In this report, I explain how the Audit
The Audit Committee assists the Board in
In August, the Audit Committee discussed
Committee has discharged these
discharging its responsibilities with regard to:
the progress of the audit and reviewed the
responsibilities, with specifi c reference
- Agreeing the scope of the annual audit
draft auditors report. On 28 August 2014, the
to the requirement of the UK Corporate
and the annual audit plan and monitoring
Audit Committee reviewed and approved
Governance Code, (the “Code”) to
the same;
for consideration by the Board the fi nancial
address signifi cant fi nancial statement
- Monitoring, making judgements and
results for the year ended 30 April 2014.
reporting issues and to explain how the
recommendations on the fi nancial
As part of that review process, the members
Audit Committee assessed external audit
reporting process and the integrity and
of the Audit Committee were provided with
effectiveness and safeguards in relation
clarity of the Group’s Financial Statements;
a draft of the full Annual Report enabling
to the provision by the auditor of
- Considering the appointment of the
them to ensure that the numbers therein
non-audit services.
Group’s Auditors and their remuneration
are consistent with those in the Financial
including reviewing and monitoring
Statements or are sourced from appropriate
independence and objectivity and
data. More importantly, the Audit Committee
agreeing and monitoring the extent of the
assessed whether the words used were
non-audit work that may be undertaken;
consistent with their understanding of the
and
Group’s business obtained through Board
- Reviewing and monitoring the adequacy
and Audit Committee meetings and other
and effectiveness of the internal control
interaction they had had with management,
and risk management policies.
using their experience to assess whether
The Audit Committee will give due
fair, balanced and understandable. This
consideration to laws and regulations, the
additional review by the Audit Committee,
provisions of the Code and the requirements
supplemented by advice received from
the Annual Report taken as a whole is
of the Listing Rules.
external advisors during the drafting process
assisted the Board in determining that the
report is fair, balanced and understandable
at the time that it is approved. The Audit
40
Strategic Report | Governance | Financial Statements
Audit Committee Report
continued
Committee considered the appropriateness
Assessment of effectiveness of
The Audit Committee has authority to
of preparing the Financial Statements
external audit
take independent advice as it deems
on a going concern basis, including
The Audit Committee oversees the
appropriate in order to resolve issues on
consideration of forecast plans and
relationship with the external auditors and
auditor independence. No such advice has
supporting assumptions and concluded
considers the re-appointment of the Group’s
to date been required.
that the Group’s fi nancial position was such
auditors, Ernst & Young LLP, before making a
that it continued to be appropriate for the
recommendation to the Board to be put to
Financial Statements to be prepared on a
shareholders.
Independence assessment by the
going concern basis.
Audit Committee
As Admission occurred after the Group’s
Based on the fact that the audit
fi nancial year end, on 4 June 2014, Ernst
engagement partner rotation policy has
Signifi cant issues considered in relation
& Young LLP had already been appointed
been complied with, and separate external
to the Financial Statements
as auditor, and the audit plan agreed.
fi rms are engaged for taxation advisory
The Audit Committee, together with the
However, the Audit Committee met
services, the Audit Committee is satisfi ed
Board considered what were the signifi cant
subsequent to Admission, and approved the
that the independence of Ernst & Young LLP
risks and issues in relation to the Financial
audit plan for the year ended 30 April 2014
is not impaired.
Statements and how these would be
and reviewed the auditor’s fi ndings and
addressed.
management representation letters.
Furthermore, Ernst & Young LLP has
provided an independence report to
Revenue Recognition
Prior to recommending the appointment
the Audit Committee, in which they have
- The Group has a multiplicity of complex
of Ernst & Young LLP at the forthcoming
confi rmed that they are independent,
contract mechanisms. As a result there
AGM to the Board, the Audit Committee
that their objectivity is not compromised,
could be a risk of misstatement of
conducted a review of the external auditor’s
and that they have complied with the
revenue.
performance and ongoing independence
Auditing Practices Board’s Ethical Standards
- To mitigate this risk, the revenue
taking into consideration input from
(including in relation to the supply of non-
recognition methodology adopted is
management, consideration of responses
audit services).
kept under regular review to ensure that
to questions from the Audit Committee
it remains appropriate.
and the audit fi ndings reported to the Audit
The Audit Committee noted that Ernst
Committee. Based on this information,
& Young LLP had been appointed
Accounting for the re-organisation
the Audit Committee concluded that the
as Reporting Accountants for the IPO
of the Group
external audit process had been effi ciently
transaction prior to their appointment as
- Prior to Admission, in April 2014, a
run and that Ernst & Young LLP continued to
external auditor for the Group.
reorganisation of the Group was carried
prove effective in its role as external auditor.
out. As a result of this corporate restructure,
the preparation of the Financial
The Audit Committee has assessed the
performance and independence of the
Statements became more complex than
Independence safeguards
external auditor and recommended to the
would ordinarily be the case.
In accordance with best practice and
Board the re-appointment of Ernst & Young
- The accounting and related disclosures
professional standards, external auditors
LLP as auditor until the conclusion of the
were therefore subject to additional
are required to adhere to a rotation policy
AGM in 2015.
reviews by the Audit Committee and
whereby the audit engagement partner
Chief Financial Offi cer.
is rotated after 5 years. The current audit
engagement partner was appointed in
Internal audit
Classifi cation of discontinuing
2014. The external auditors are also required
The Board has considered the benefi ts that
head offi ce costs
periodically to assess whether, in their
an internal audit function might bring to the
- Certain costs have been classifi ed as
professional opinion, they are independent
Group. They have concluded that, due to
discontinuing post Admission.
and those view are shared with the Audit
the tight fi nancial controls in place across
- We have considered and reviewed the
Committee.
treatment of such costs to ensure that
they are correctly classifi ed and disclosed
in the Financial Statements.
the Group, and the close management of
fi nancial matters by the Executive Directors,
an internal audit function would not currently
provide additional assurance.
41
Clipper Logistics plc Annual Report and Accounts 2014
Audit Committee Report
continued
In terms of operational matters, the
- An annual Board review of corporate
The Board, with advice from the Audit
specialised nature of the Group’s activities
strategy, including a review of material
Committee, is satisfi ed that effective systems
means that a non-specialist internal audit
business risks and uncertainties facing the
for internal control and risk management are
function would not provide additional comfort
business;
in place which enable the Group to identify,
over the Group’s operational management.
- Established organisational structure with
evaluate and manage key risks, and which
The Board will continue to evaluate this
clearly defi ned lines of responsibility and
accord with the guidance of the Turnbull
matter, and the Audit Committee will formally
levels of authority;
Committee on internal control updated
consider the issue annually.
- Documented policies and procedures; and
by the FRC in 2005. These processes have
- Regular review by the Board of fi nancial
been in place throughout the fi nancial
budgets, forecasts and covenants with
year and up to the date of approval of the
Internal control and risk management
performance reported to the Board
Financial Statements. Further details of risk
The Board is responsible for the overall
monthly.
system of internal controls for the Group and
management frameworks and specifi c
material risks and uncertainties facing the
for reviewing its effectiveness. It carries out
In reviewing the effectiveness of the system
business can be found on pages 26 and 27.
such a review at least annually, covering
of internal controls, the Audit Committee
all material controls including fi nancial,
will, going forward, receive self-assurance
operational and compliance controls and
statements from the Operational Directors
Whistleblowing
risk management systems.
and senior managers responsible for the
The Group has in place a Whistleblowing
principal business units confi rming that
Policy which encourages employees to report
The system of internal controls is designed
controls and risk management processes
any malpractice or illegal acts or omissions
to manage rather than eliminate the risk
in their business units have been operated
or matters of similar concern by other
of failure to achieve business objectives
satisfactorily. These returns will be reviewed
employees or former employees, contractors,
and can only provide reasonable and
by the Audit Committee and challenged
suppliers or advisors using a prescribed
not absolute assurance against material
where appropriate. The CFO will be
reporting procedure. The Whistleblowing
misstatement or loss.
responsible for compiling and maintaining
Policy is complemented by an Anti-bribery
a risk register to monitor all of the risks
and Corruption Policy, and a Gifts and
Operating policies and controls are in place
facing the business. The key risks will then be
Entertainment Policy.
and have been in place throughout the
summarised for review and approval by the
fi nancial year under review, and cover a
Audit Committee for inclusion in the Annual
These policies facilitate the reporting of
wide range of issues including fi nancial
Report. In addition, the Audit Committee
any ethical wrongdoing or malpractice
reporting, capital expenditure, information
will also regularly review the fi nancial and
or suspicion which may constitute ethical
technology, business continuity and
accounting controls.
management of employees.
wrongdoing or malpractice. Examples
include bribery, corruption, fraud, dishonesty
In respect of the Group’s fi nancial reporting,
and illegal practices which may endanger
Detailed policies ensure the accuracy and
the fi nance department is responsible for
employees or third parties.
reliability of fi nancial reporting and the
preparing the Group Financial Statements
preparation of the Financial Statements,
using a well-established consolidation
There have been no instances of
including the consolidation process. The key
process and ensuring that accounting
whistleblowing during the year under review.
elements of the Group’s ongoing processes
policies are in accordance with International
for the provision of effective internal control
Financial Reporting Standards. All fi nancial
and risk management systems, in place
information published by the Group is subject
Accountability
throughout the year and at the date of this
to the approval of the Audit Committee.
The Board is required to present a fair,
report, include:
balanced and understandable assessment
- Regular Board meetings to consider
There have been no changes in the Group’s
of the Company’s fi nancial position and
matters reserved for the Directors’
internal controls during the fi nancial year
prospects. The responsibilities of the Directors
consideration;
under review that have materially affected,
and external auditor are set out on pages 70
- Regular management reporting, providing
or are reasonably likely to materially affect,
and 74 respectively.
a balanced assessment of key risks and
the Group’s control over fi nancial reporting.
controls;
42
Paul Hampden Smith
Chairman, Audit Committee
43
Clipper Logistics plc Annual Report and Accounts 2014
Directors’
Remuneration Report
Committee Chairman’s introduction
This report contains the material required
to be set out as the Directors’ Remuneration
On behalf of the Board, I am pleased to
Report for the purposes of Part 4 of
present the fi rst Directors’ Remuneration
The Large and Medium-sized Companies
Report which Clipper has prepared
and Groups (Accounts and Reports)
following its Admission in June 2014.
(Amendment) Regulations 2013, which
amended The Large and Medium-sized
The year to 30 April 2014 was a very
Companies and Groups (Accounts
signifi cant year for Clipper, covering
and Reports) Regulations 2008
the period in which the Company was
(“the DRR regulations”).
preparing for its IPO. As set out more
fully in the Strategic Report, the Group’s
Section 1 represents the Directors’
operating and fi nancial performance
Remuneration Policy. This Policy will take
remained strong and provides a good
effect, subject to the approval of the
platform for future growth.
shareholders, immediately after the
By reporting on a fi nancial year during
2014 AGM.
which the Company was unlisted, the
Section 2 contains the implementation
Remuneration Report for this year inevitably
sections of the Remuneration Report
shows a position of transition in terms of
(“Implementation Report”). The auditors
the payments made to Directors. The
have reported on certain parts of the
Remuneration Report also sets out the
Implementation Report and stated whether,
proposed Directors’ Remuneration Policy
in their opinion, those parts have been
which, if approved at our 2014 AGM,
properly prepared in accordance with the
will apply to all payments made to our
Companies Act 2006. Those parts of the
Directors for up to three years from
Implementation Report which have been
that date.
subject to audit are clearly indicated.
44
45
Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Directors’
Remuneration Report
continued
In anticipation of Admission, the Remuneration
the increases awarded to the workforce as
Committee undertook a review of the Group’s
a whole, as well as the performance of the
Remuneration Policy for senior management,
Group and the individual.
including the Executive Directors, in order
to ensure that it is appropriate for the listed
- Pension contributions and benefi ts in
company environment.
kind are generally unchanged from
pre-Admission levels.
Overall, the Directors’ Remuneration Policy
maintains a high level of consistency with
- Executive Directors and senior managers
the Group’s outlook on pay from before
will be eligible to participate in an annual
Admission, acknowledging that many roles
incentive plan (“AIP”), which will be
within the senior management team have
subject to the achievement of stretching
not fundamentally changed. However,
performance conditions which will be set
while ensuring that no more is paid than
by the Remuneration Committee at the
is necessary, the new policy does take
beginning of each fi nancial year. In the
account of the changes in the Group’s
year to 30 April 2015 the AIP performance
structure brought about by Admission, and
condition will be based on Adjusted EBIT
appropriate but not excessive annual and
targets. AIP outcomes will be paid in cash
long-term incentives have been introduced.
and will be capped at 50% of base salary
for the Executive Directors.
The aim of the Directors’ Remuneration
Policy is to provide an appropriate pay
- If approved by shareholders at the AGM,
structure for the Executive Directors to
long-term incentives will be delivered
ensure their retention and to continue to
through the Performance Share Plan
focus them on delivering strong fi nancial
(“PSP”). The Remuneration Committee’s
performance. The Group has a strong ‘team
intention is to grant Executive Directors
culture’ and accordingly there is consistency
PSP awards annually, with the value of
in how packages are structured across the
shares subject to awards being capped
whole senior management team, with the
at 150% of base salary per annum, with
intention being that all Executive Directors
an award of 100% for the fi rst grant. The
and senior managers should participate
performance conditions for initial awards
in the same annual incentive plan and
will require the achievement of stretching
long-term incentive plan from Admission,
earnings per share (EPS) growth targets
and with all of the team being incentivised
over 3 fi nancial years commencing with
on the same performance measures.
the fi nancial year ending 30 April 2015.
While market practice amongst FTSE
- Clawback provisions can be applied to
SmallCap companies has been considered
AIP and PSP outcomes, consistent with
in setting the Directors’ Remuneration Policy,
best practice.
the Company has viewed this information
as a reference point and not as an infl exible
- Within our policy we have also been clear
framework to be followed without
as to the maximum caps which the new
robust challenge.
reporting regulations require that we state
for each element of pay - we will operate
Key aspects of the Policy include:
within these caps for the duration of the
- Base salaries will be reviewed as
policy period. It should be noted that any
appropriate following Admission, but no
caps higher than current levels of pay are
more frequently than annually.
only there to provide suitable fl exibility
In reviewing base salaries, the policy is for
and will not lead to an automatic
any increases to take close account of
infl ationary impact.
46
Strategic Report | Governance | Financial Statements
Directors’
Remuneration Report
continued
Format of the Report and matters
The Remuneration Committee believes
to be approved at our AGM
it is important that all of these votes are
The regulations governing the Directors’
passed by shareholders to ensure that
remuneration reports of listed companies
our Directors’ Remuneration Policy can
require that we split our report into two
operate as intended. The Policy has been
sections: the Policy Report sets out
proposed to achieve a very high degree
the Group’s forward-looking Directors’
of consistency of treatment for all of the
Remuneration Policy and the separate
senior management team. Consistency of
Implementation Report gives details of
treatment and alignment within our team
the payments made to Directors in the
is something which the Remuneration
year ended 30 April 2014, as well as other
Committee regard as very important to
required disclosures.
ensure that the strong team culture within
the Group continues. This culture is a key
At our 2014 AGM there will be a number
reason why the Group has performed so
of votes on remuneration matters:
positively to date, and we believe that
- a vote on the Directors’ Remuneration
appropriately structured remuneration
Policy as set out in Part A of this
arrangements for our senior management
Remuneration Report;
team can make a positive contribution to
- a vote on the remaining implementation
drive continued good performance.
sections of this Remuneration Report,
as set out in Part B;
The Remuneration Committee hopes
- a vote to approve the PSP;
that you will support our approach to
- a vote to approve the all-employee
the challenges that we will face on
Sharesave Plan; and
remuneration matters as we transition
- a vote to authorise the participation of
to a listed company. The Remuneration
three of our Executive Directors in the PSP
Committee is confi dent that the
in accordance with the requirements of
Remuneration Policy is the correct one for
the Takeover Panel for “Concert Parties”,
the Group in its next stage of development
and to give the same approval in
and hopes that it can rely on the support
respect of the Sharesave Plan.
of shareholders for all of the remuneration-
related resolutions at the 2014 AGM.
Mike Russell
Chairman, Remuneration Committee
47
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
The Directors’ Remuneration Policy as set out
in this section of the Remuneration Report
will take effect for all payments made to
Directors from the date of the AGM, which
will be held on 29 September 2014.
Element and purpose
Policy and operation
Maximum
Base salaries will be reviewed
each year by the Remuneration
Committee.
The Remuneration Committee
does not strictly follow data but
uses it as a reference point in
considering, in its judgment,
the appropriate level of salary
having regard to other relevant
factors including corporate and
individual performance and any
changes in an individual’s role
and responsibilities.
Base salary is paid monthly in
cash.
The Executive Directors may
receive a car allowance or
company car, fuel allowance,
private family medical cover
and insurance benefi ts.
The Remuneration Committee
reserves discretion to introduce
new benefi ts where it concludes
that it is appropriate to do so,
having regard to the particular
circumstances and to market
practice.
Where appropriate, the Group
will meet certain costs relating to
Executive Director relocations.
In the normal course of
events, the Executive Directors’
salaries would not normally
be increased by more than
the average awarded to staff
generally. However, given
the need for a formal cap
under the DRR regulations, the
Remuneration Committee has
further limited the maximum
salary which it may award to
£450,000 for the Executive
Chairman, and for all other
Executive Directors to the
median salary level plus
10% for that role in the FTSE
SmallCap.
It is not possible to prescribe
the likely change in the cost
of insured benefi ts or the cost
of some of the other reported
benefi ts year-to-year, but
the provision of benefi ts will
operate within an annual limit
of £100,000 (plus a further
100% of base salary in the
case of relocations).
The Remuneration Committee
will monitor the costs in
practice and ensure that
the overall costs do not
increase by more than the
Remuneration Committee
considers appropriate in all the
circumstances.
Base salary
This is the core element
of pay and refl ects the
individual’s role and
position within the Group
with some adjustment
to refl ect their capability
and contribution.
Benefi ts
To provide benefi ts
valued by recipients.
48
Performance
measures
N/A
N/A
49
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
continued
Element and purpose
Policy and operation
Maximum
Pension
To provide retirement
benefi ts.
Annual Incentive Plan
(“AIP”)
To motivate executives
and incentivise delivery
of performance over a
one-year operating cycle,
focusing on the short- to
medium-term elements
of our strategic aims.
The maximum employer’s
contribution is limited to 15%
of base salary.
The maximum level of AIP
outcomes is 50% of base
salary p.a. for the duration of
this Policy.
Executive Directors can receive
pension contributions to
personal pension arrangements,
or if a Director is impacted
by annual or lifetime limits on
contribution levels to qualifying
pension plans, the balance can
be paid as a cash supplement.
AIP levels and the
appropriateness of measures
are reviewed annually at the
commencement of each
fi nancial year to ensure they
continue to support our strategy.
Once set, performance
measures and targets will
generally remain unchanged
for the year, except to refl ect
events such as corporate
acquisitions or other major
transactions where the
Remuneration Committee
considers it to be necessary in
its opinion to make appropriate
adjustments.
AIP outcomes are paid in cash
following the determination
of achievement against
performance measures and
targets.
Malus and clawback provisions
apply to the AIP as explained
in more detail in the notes to
this table.
Performance
measures
N/A
The performance measures
applied may be fi nancial or
non-fi nancial and corporate,
divisional or individual and
in such proportions as the
Remuneration Committee
considers appropriate.
Details of the proposed
performance measures for
the year ending 30 April 2015
are set out in the notes to
this table.
Attaining the threshold level
of performance for any
measure will not produce a
pay-out of more than 20%
of the maximum portion of
overall AIP attributable to that
measure, with a sliding scale
to full pay-out for maximum
performance.
However, the AIP remains a
discretionary arrangement
and the Remuneration
Committee retains a standard
power to apply its judgment
to adjust the outcome of
the AIP for any performance
measure (from zero to any
cap) should it consider that to
be appropriate.
50
Strategic Report | Governance | Financial Statements
Directors’ Remuneration Policy
continued
Element and purpose
Policy and operation
Maximum
Long-Term Incentives (“LTI”)
To motivate and incentivise
delivery of sustained
performance over the
long-term, and to promote
alignment with shareholders’
interests, the Group intends
to operate a Performance
Share Plan (“PSP”).
Shareholders’ approval for
the PSP is being sought at
the 2014 AGM.
The PSP allows for awards over
shares with a maximum value
of 150% of base salary per
fi nancial year.
The Remuneration Committee
expressly reserves discretion
to make such awards as it
considers appropriate within
these limits.
Awards under the PSP may be
granted as nil-cost options or
conditional awards of shares
which vest to the extent
performance conditions are
satisfi ed over a period of at
least three years.
Under the PSP rules, vested
awards may also be settled
in cash.
The PSP rules allow that the
number of shares subject to
vested PSP awards may be
increased to refl ect the value of
dividends that would have been
paid in respect of any dividend
dates falling between the grant
of awards and the vesting of
awards. Whilst this feature will not
operate for awards to be made
in 2014, the Remuneration
Committee retains discretion to
introduce this feature during the
period of this policy.
Malus and clawback provisions
apply to PSP awards and are
explained in more detail in the
notes to this table.
Performance
measures
The Remuneration Committee
may set such performance
conditions on PSP awards
as it considers appropriate
(whether fi nancial or non-
fi nancial and whether
corporate, divisional or
individual).
Details of the proposed
performance measures for
the initial awards are set out in
the notes to this table.
Once set, performance
measures and targets will
generally remain unaltered
unless events occur which,
in the Remuneration
Committee’s opinion, make
it appropriate to substitute,
vary or waive the
performance conditions
in such manner as the
Remuneration Committee
thinks fi t.
Performance periods may
be over such periods as the
Remuneration Committee
selects at grant, which will
not be less than (but may be
longer than) 3 years.
No more than 25% of
awards vest for attaining
the threshold level of
performance conditions.
Share Ownership
Guidelines
To further align the interests
of Executive Directors with
those of shareholders.
Executive Directors are
expected to retain all of the
ordinary shares vesting under
the PSP, after any disposals
for the payment of applicable
taxes, until they have achieved
the required level
of shareholding.
100% of salary for all Executive
Directors.
N/A
The Remuneration Committee
reserves the power to amend
(but not reduce) these levels in
future years.
51
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
continued
Element and purpose
Policy and operation
Maximum
Performance
measures
Consistent with normal
practice, such awards are
not subject to performance
conditions.
The Sharesave Plan is an
all-employee share plan
established under the HMRC
tax-advantaged regime and
follows the usual form for
such plans.
The exercise price of the
options is usually equal to the
market price of the shares
at the date of invitation to
participate less a maximum
discount of 20%.
Executive Directors are able
to participate in all-employee
share plans on the same terms
as other Group employees.
The maximum amount that
can be invested in the plan will
not exceed the statutory limit
from time to time (currently
£500 pcm).
The options vest on the
third anniversary of the
commencement of the
savings period.
Fees are paid monthly in cash.
N/A
Any increases made will be
appropriately disclosed.
The fees paid to Non-Executive
Directors aim to be competitive
with other fully listed companies
of equivalent size and
complexity.
The fees payable to the
Non-Executive Directors are
determined by the Board.
Non-Executive Directors will
not participate in any new
share incentive arrangements
from Admission, although
commitments made under
pre-Admission plans will
continue to be honoured.
All-employee share plans
To encourage share
ownership by employees,
thereby allowing them to
share in the long-term success
of the Group and align their
interests with those of the
shareholders.
Shareholders’ approval
is being sought at the
2014 AGM for the Clipper
Sharesave Plan (“Sharesave
Plan”).
Non-Executive Director fees
To enable the Group to recruit
and retain Non-Executive
Directors of the highest
calibre, at the appropriate
cost.
52
Strategic Report | Governance | Financial Statements
Directors’ Remuneration Policy
continued
Notes to the Policy table
The Remuneration Committee selected
4. Stating maximum amounts for the
1. AIP performance measures to apply
this performance condition as it provides a
Remuneration Policy
in the Financial Year to 30 April 2015 (for
signifi cant level of growth in earnings which is
The DRR regulations and related investor
information and not part of the Directors’
a key measure of success for the Group.
guidance encourages companies to
Remuneration Policy)
disclose a cap within which each element
The proposed performance measures
3. Malus and Clawback.
of the Directors’ Remuneration Policy will
and targets for the fi nancial year to 30
Malus (being the forfeiture of unvested
operate. Where maximum amounts for
April 2015 will be based on Adjusted EBIT.
awards) and clawback (being the ability
elements of remuneration have been set
The Remuneration Committee selected
of the Company to claim repayment of
within the Directors’ Remuneration Policy,
Adjusted EBIT as the performance measure
paid amounts as a debt) provisions apply
these will operate simply as caps and are
for the AIP for the year ending 30 April 2015
to the AIP and PSP if, in the opinion of the
not indicative of any aspiration.
as it is regarded as a key performance
Remuneration Committee, any of the
indicator for the Group and focuses on
following has occurred:
5. Travel and hospitality
the underlying operating profi tability of the
- There has been a material misstatement
While the Remuneration Committee does
business by removing non-recurring items.
of the Group’s fi nancial results which has
not consider it to form part of benefi ts in
led to an overpayment;
the normal usage of that term, it has been
Given the competitive nature of the Group’s
- The assessment of performance targets
advised that corporate hospitality (whether
sectors, the specifi c performance targets for
is based on an error or inaccurate or
paid for by the Group or another company)
the AIP are considered to be commercially
misleading information or assumptions;
and business travel for Directors (and
sensitive and accordingly are not disclosed.
- Circumstances warranting summary
exceptionally their families) may technically
Following the conclusion of the current
dismissal in the relevant period; or
come within the applicable rules and so the
fi nancial year, the Remuneration
- Any other act or omission that has had
Remuneration Committee expressly reserves
Committee will consider whether it is
a suffi ciently signifi cant impact on the
the right for the Remuneration Committee
feasible to disclose the performance
reputation of the Group to justify the
to authorise such activities within its agreed
targets for the current fi nancial year on
operation of malus/clawback.
policies.
a retrospective basis.
2. Performance conditions for PSP awards
plans may be subject to clawback for up
remuneration for Directors from the policy
in 2014 (for information and not part of
to three years post payment or vesting as
on remuneration of other employees
Amounts in respect of awards under both
6. Differences between the policy on
the Directors’ Remuneration Policy)
appropriate.
The fi rst awards under the PSP are to be
made shortly following the AGM, subject to
the approval of the PSP by the Company’s
shareholders.
The performance measures and targets
for the fi rst PSP awards to be made in 2014
will be based on EPS performance for
the fi nancial year ending 30 April 2017,
summarised as follows:
EPS - Financial year ending 30 April 2017
PSP Award
12p
100%
Where the Group’s pay policy for Directors
differs to its pay policies for groups of
employees’ this refl ects the appropriate
market rate position for the relevant roles.
The Company takes into account pay levels,
bonus opportunity and share awards applied
across the Group as a whole when setting
the Directors’ Remuneration Policy.
Between 10p and 12p
Pro-rata on straight-line basis between 25% and 100%
10p
Less than 10p
25%
0%
53
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
continued
Recruitment Remuneration Policy
For an internal appointment, any variable
All buy-outs, whether under the AIP, PSP or
The Group’s recruitment Remuneration
pay element awarded in respect of the
otherwise, will take account of the service
Policy aims to give the Remuneration
prior role may either continue on its original
obligations and performance requirements
Committee suffi cient fl exibility to secure the
terms or be adjusted to refl ect the new
for any remuneration relinquished by
appointment and promotion of high-calibre
appointment as appropriate.
the individual when leaving a previous
executives to strengthen the management
employer. The Remuneration Committee
team and secure the skill sets to deliver our
For external and internal appointments, the
will seek to make buy-outs subject to
strategic aims.
Remuneration Committee may agree that
what are, in its opinion, comparable
the Company will meet certain relocation
requirements in respect of service and
In terms of the principles for setting a
expenses as it considers appropriate.
performance. However, the Remuneration
package for a new Executive Director,
Committee may choose to relax this
the starting point for the Remuneration
For external candidates, it may be
requirement in certain cases (such as
Committee will be to apply the general
necessary to make additional awards or
where the service and/or performance
Directors’ Remuneration Policy for Executive
to buy-out awards forfeited by the individual
requirements are materially completed,
Directors as set out above and structure a
on leaving a previous employer.
or where such factors are, in the view of
package in accordance with that Policy.
For the avoidance of doubt, buy-out
the Remuneration Committee, refl ected
Consistent with the DRR regulations, the
awards are not subject to a formal cap.
in some other way, such as a signifi cant
caps contained within the Policy for fi xed
Details of any recruitment-related or buy-out
discount to the face value of the awards
pay do not apply to new recruits, although
awards will be appropriately disclosed.
forfeited) and where the Remuneration
the Remuneration Committee would not
Committee considers it to be in the
envisage exceeding these caps in practice.
For any buy-outs the Company will not
interests of shareholders.
pay more than is, in the view of the
The AIP and PSP will operate (including
Remuneration Committee, necessary and
A new Non-Executive Director would
the maximum award levels) as detailed
will in all cases seek, in the fi rst instance, to
be recruited on the terms explained
in the general policy in relation to any
deliver any such awards under the terms of
above in respect of the main policy
newly appointed Executive Director.
the existing AIP and PSP. It may, however, be
for such Directors.
necessary in some cases to make buy-out
awards on terms that are more bespoke
than the existing AIP and PSP.
54
55
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
continued
Service contracts
Executive Directors
Non-Executive Directors
The Remuneration Committee’s policy
Each Non-Executive Director is engaged
is that each Executive Director’s service
for an initial period of three years.
agreement should be of indefi nite duration,
These appointments can be renewed
subject to termination by the Company
following the initial three year term. These
or the individual on 12 months’ notice.
engagements can be terminated by either
The service agreements of all Executive
party on three months’ notice.
Directors comply with that policy. The
service agreements reserve the right for
The Non-Executive Directors cannot
the Company to make a payment in
participate in the Company’s share
lieu of notice to an Executive Director for
schemes from Admission, are not entitled
the amount of base salary plus benefi ts
to any pension benefi ts and are not entitled
for the notice period. Such sums may
to any payment in compensation for early
be paid in instalments and would cease
termination of their appointment.
if the individual fi nds an alternative role.
Contracts do not contain change of
For each Non-Executive Director the
control provisions.
effective date of their latest letter of
appointment is:
The Remuneration Committee reserves
Paul Hampden Smith
16 May 2014
fl exibility to alter these principles if necessary
Stephen Robertson
16 May 2014
to secure the recruitment of an appropriate
Ron Series
candidate and, if appropriate, introduce a
Mike Russell
16 May 2014
16 May 2014
longer initial notice period (of up to 2 years)
reducing over time.
The date of each Executive Director’s
contract is:
Steve Parkin
Tony Mannix
David Hodkin
Sean Fahey
30 May 2014
30 May 2014
30 May 2014
30 May 2014
56
Strategic Report | Governance | Financial Statements
Directors’ Remuneration Policy
continued
Termination policy summary
It is appropriate for the Remuneration
termination and any treatments that the
Committee to consider treatments on
Remuneration Committee may choose to
a termination having regard to all of the
apply under the discretions available to it
relevant facts and circumstances available
under the terms of the AIP and PSP plans.
at that time. This policy applies both to any
The potential treatments on termination
negotiations linked to notice periods on a
under these plans are summarised below:
Incentives
Annual Incentive Plan
(“AIP”)
Performance Share Plan
If a leaver is deemed to be a
‘good leaver’; for example,
leaving through death or
otherwise at the discretion of
the Remuneration Committee
Remuneration Committee
has discretion to determine
AIP awards.
Will receive a pro-rated award
subject to the application of the
performance conditions at the
end of the normal performance
period.
Remuneration Committee
retains standard discretions to
either vary time pro-rating or
to allow vesting at the date
of cessation (determining the
performance conditions at
that time).
If a leaver is deemed to be
a ‘bad leaver’; for example,
leaving for disciplinary reasons
or to join a competitor
Other exceptional cases;
e.g. change in control
No awards made.
All awards will normally lapse.
Remuneration Committee
has discretion to determine
AIP awards.
Will receive a pro-rated award
subject to the application of
the performance conditions at
the date of the event, subject
to standard Remuneration
Committee discretions to vary
time pro-rating.
External appointments
regular updates on overall pay and
Statement of consideration
None of the Executive Directors serve
conditions in the Group, including (but not
of shareholder views
as Non-Executive Directors on any
limited to) changes in base pay and any
The 2014 AGM is the fi rst occasion on
external boards.
staff bonus pools in operation. There will also
which the Company will seek the support
be oversight of the all-employee Sharesave
of its shareholders for matters relating to
scheme which Executive Directors and all
the remuneration of Executive Directors.
Statement of consideration of
other Group employees can participate in
The Remuneration Committee will ensure
employment conditions elsewhere in
on the same terms and conditions.
that it considers all of the feedback which it
the Group
receives from its shareholders during
Pay and employment conditions generally
The Company did not consult with
this process.
in the Group are taken into account when
employees in drawing up this
setting Executive Directors’ remuneration.
Remuneration Report.
The Remuneration Committee receives
57
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Remuneration Policy
continued
Illustrations of application of remuneration policy
Long-term Incentives
Annual Incentive Plan
Total Fixed Pay
Long-term Incentives
Annual Incentive Plan
Total Fixed Pay
£1,091
35%
18%
£706
13%
16%
£483
100%
71%
47%
£271
£609
37%
18%
£395
15%
17%
100%
68%
44%
Minimum
In line with
expectation
Maximum
Minimum
In line with
expectation
Maximum
Executive Chairman - Steve Parkin
CEO - Tony Mannix
£479
38%
19%
£308
15%
18%
£208
£399
38%
19%
£257
15%
17%
£173
100%
67%
43%
100%
68%
43%
Minimum
In line with
expectation
Maximum
Minimum
In line with
expectation
Maximum
CFO - David Hodkin
CIO - Sean Fahey
£1,200
£1,000
£800
£600
£400
£200
£600
£500
£400
£300
£200
£100
0
0
0
£
’
0
0
0
£
’
58
Strategic Report | Governance | Financial Statements
Directors’ Remuneration Policy
continued
The charts on the previous page aim to show how the Remuneration Policy set out above for Executive Directors is applied
using the following assumptions:
- Consists of base salary, benefi ts and pension.
- Base salary is the salary to be paid in the year ending 30 April 2015.
- Value of the ongoing benefi ts received in the year ending 30 April 2014.
- Pension measured as the defi ned contribution or cash allowance
in lieu of Company contributions, as a percentage of salary
(6% for Steve Parkin, 10% for Tony Mannix and Sean Fahey,
15% in the case of David Hodkin).
Minimum
£’000
Steve Parkin
Tony Mannix
David Hodkin
Sean Fahey
Base Salary
405
225
180
150
Benefi ts
54
23
1
8
Pension
24
Total Fixed
483
23
27
15
271
208
173
Based on what the Director would receive if performance
was on-target (excl. share price appreciation and dividends):
- STI: consists of 60% of maximum opportunity by attaining
In line with expectations
on-target performance.
- LTI: consists of the threshold level of vesting (25% vesting),
plus the fair value of full investment in the Sharesave scheme
(£1,200) for all Directors other than Steve Parkin.
Based on the maximum remuneration receivable
(excl. share price appreciation and dividends):
- STI: consists of maximum bonus of 50% of base salary.
- LTI: consists of the face value of awards (100% of salary),
plus the fair value of full investment in the Sharesave scheme
(£1,200) for all Directors other than Steve Parkin.
Maximum
59
Clipper Logistics plc Annual Report and Accounts 2014
Implementation Report
on Remuneration
Audited Information
Single Figure Table
Salary
year ended
30 April:
Benefi ts
year ended
30 April:
Annual bonus
year ended
30 April:
Long-term
incentives year
ended 30 April:
Pension
contributions year
ended 30 April:
Total
year ended
30 April:
£’000
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Steve Parkin
380
255
120
104
Tony Mannix
177
177
David Hodkin
157
150
Sean Fahey
150
150
24
1
23
23
1
22
-
-
-
-
-
10
10
10
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
15
36
23
15
15
36
23
15
515
374
237
246
181
184
188
197
1 Benefi ts comprise of a car allowance or company car,
fuel allowance, private family medical cover, insurance
benefi ts and loans. All Director loan accounts were
repaid by 30 April 2014.
2 No bonus was paid in the year ended 30 April 2014.
This decision was made following consideration of the
process towards IPO. For details of the performance
measures and targets for the fi nancial year ending
30 April 2015, refer to the Notes to the Policy table.
4 David Hodkin’s pension entitlement is paid by way
of an additional allowance, taxed as salary.
3 No LTIP was in operation for the fi nancial years ended
30 April 2014 and 30 April 2013. For details of the LTIP
in operation for the fi nancial year ending 30 April 2015
refer to the Directors’ Remuneration Policy.
5 The above table excludes remuneration of
Executive Directors who resigned prior to the IPO.
Their remuneration is included in the totals shown in
note 5 to the Financial Statements.
Non-Executive Directors’ Fees
Fees
year ended
30 April:
Benefi ts
year ended
30 April:
Total
year ended
30 April:
£’000
2014
2013
2014
2013
2014
2013
Mike Russell
25
28
-
-
25
28
1 Mike Russell was a Non-Executive Director of the former parent company for both the year ended 30 April 2013 and
30 April 2014, and his remuneration was paid by the Company. Since the 30 April 2014 year end, the Company has
appointed three additional Non-Executive Directors, whose fee details are set out in the Implementation of Policy in
the year to 30 April 2015 section.
60
Strategic Report | Governance | Financial Statements
Implementation Report
Implementation Report
on Remuneration
on Remuneration
continued
Directors’ Interests
The interests (all being benefi cial) immediately following Admission and completion of the
Pre-Admission Reorganisation of the Directors in the Company’s securities are set out below:
Steve Parkin
Tony Mannix
David Hodkin
Sean Fahey
Paul Hampden Smith
Stephen Robertson
Ron Series
Mike Russell
Ordinary Shares
34,797,100
1,358,613
1,358,613
7,834,397
100,000
-
-
-
1 All shares are wholly owned by Directors or connected persons (i.e. none are subject to performance conditions
and none are previously vested but as of yet unexercised share options).
61
Clipper Logistics plc Annual Report and Accounts 2014
Implementation Report
on Remuneration
continued
Unaudited Information
Remuneration Committee
Advisors
In anticipation of Admission, the
FIT Remuneration Consultants LLP, signatories
Company established the Remuneration
to the Remuneration Consultants Group’s
Committee. The members of the
Code of Conduct, were appointed by
Remuneration Committee are:
the Remuneration Committee following a
- Mike Russell (Chairman);
- Paul Hampden Smith; and
- Ron Series.
competitive tender process. FIT provides
advice to the Remuneration Committee
on all matters relating to remuneration,
including best practice. FIT provided
The Remuneration Committee’s principal
no other services to the Group and
responsibilities are:
accordingly the Remuneration Committee
- recommending to the Board the
was satisfi ed that the advice provided by
remuneration strategy and framework
FIT was objective and independent. FIT’s
for the Executive Directors and senior
fees in respect of the year ended 30 April
managers;
2014 were £37,000 (ex VAT). FIT’s fees were
- determining, within that framework, the
charged on the basis of the fi rm’s standard
individual remuneration arrangements
terms of business for advice provided.
for the Executive Directors and senior
managers; and
- overseeing any major changes in
employee benefi t structures throughout
the Group.
The Executive Chairman is invited to attend
meetings of the Remuneration Committee,
except when his own remuneration is being
discussed, and the Chief Financial Offi cer
and other Executives attend meetings as
required.
62
Strategic Report | Governance | Financial Statements
Implementation Report
on Remuneration
continued
Implementation of Policy in the year ended 30 April 2015
Executive Directors
Base Salary
Non-Executive Directors
Fees
- Base salaries from Admission were
- The base fee payable to each
as follows: £405,000 for Steve Parkin,
Non-Executive Director is as follows:
£225,000 for Tony Mannix, £180,000
Paul Hampden Smith (Senior Independent
for David Hodkin and £150,000 for
Director and Chair of the Audit
Committee) - £60,000; Stephen Robertson
- £40,000; Ron Series - £40,000; Mike
Russell - £40,000.
Sean Fahey.
Pension
- Contribution rates for Executive Directors
are as follows (expressed as percentages
of base salary): Steve Parkin - 6%,
Tony Mannix - 10%, David Hodkin - 15%.
Sean Fahey - 10%.
Benefi ts
- Details of the benefi ts received by
Executive Directors are set out in note 1
to the single fi gure table on page 60.
- There is no intention to introduce
additional benefi ts in 2014.
Annual Incentive Plan
for the year to 30 April 2014
- No bonuses were paid for the year to
30 April 2014.
Annual Incentive Plan
for the year to 30 April 2015
- The AIP maximum is 50% of base salary.
- Performance measures for the AIP in the
year to 30 April 2015 are summarised in
note 1 in Notes to the Policy Table.
Performance Share Plan
in the year to 30 April 2015
- Award levels are proposed at 100% of
base salary for each Executive Director.
- The performance measures and targets
for this award are described in note 2 in
Notes to the Policy Table.
63
Clipper Logistics plc Annual Report and Accounts 2014
Implementation Report
on Remuneration
continued
Unaudited Information
Relative importance of spend on pay
The Company was Admitted on 4 June 2014
and no distributions have been made to
shareholders since that date.
The dividend paid by the Company during the
year to 30 April 2014 was to the Company’s
former parent, therefore comparison of profi t
distributed by way of dividend to overall
expenditure on pay is invalidated for the years
to 30 April 2013 and 30 April 2014.
64
Strategic Report | Governance | Financial Statements
Implementation Report
on Remuneration
continued
Comparative Total Shareholder
Admission to the 30 April 2015 fi nancial
Return (“TSR”)
year end.
The DRR regulations require a line graph
showing the TSR on a holding of shares
The DRR regulations also require a
in the Company since Admission to the
table setting out selected details of the
fi nancial year end following Admission, as
remuneration of the Executive Chairman
well as the TSR for a hypothetical holding
over the same period as shown on the TSR
of shares in a broad equity market index
graph. Although, as mentioned above,
for the same period. As Clipper listed after
Clipper listed after the fi nancial year end,
the 30 April 2014 fi nancial year end, it is not
we have still included the details required by
possible to create this graph for this year’s
the DRR regulations for the last 2 fi nancial
Annual Report. Next year’s Annual Report
years as shown in the table below.
will include this graph over the period from
Single fi gure of total
remuneration (£’000)
Annual variable element
award rates against
maximum opportunity
Long term incentive vesting
rates against maximum
opportunity
Year ended 30 April 2014:
Steve Parkin
Year ended 30 April 2013:
Steve Parkin
515
374
0%
0%
n/a
n/a
Executive Chairman’s relative pay
In accordance with the DRR regulations, we
outcome) of the Executive Chairman and
present in the table below the percentage
the average percentage change for all
change in the prescribed pay elements
Group staff between the year ended 30 April
(salary, taxable benefi ts, and annual bonus
2013 and the year ended 30 April 2014.
Year-on-year % change
Salary
Taxable Benefi ts
Annual Bonus
Executive Chairman
All-employees
49%
2%
15%
1%
0%
0%
AGM voting results
As the Company has only recently listed,
This report was reviewed and approved by
there has not yet been an Annual General
the Board on 28 August 2014 and signed on
Meeting (“AGM”) where a resolution to pass
its behalf by order of the Board.
each of the Directors’ Remuneration Policy
and Directors’ Remuneration Report has
Mike Russell
been put forward for voting. In next year’s
Chairman, Remuneration Committee
Annual Report this section will have the
voting breakdown of those two resolutions
from this year’s AGM.
65
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Report
The Directors are pleased to present the
In addition, note 2.24 to the Financial
Directors’ share interests
fi rst Annual Report and consolidated
Statements includes the Group’s objectives,
Particulars of the number of Ordinary Shares
Financial Statements of Clipper Logistics plc
policies and processes for capital and
of the Company in which the Directors were
for the year ended 30 April 2014.
fi nancial risk management, including
benefi cially interested immediately following
The Corporate Governance Report on
market risk, including foreign currency,
Directors’ Remuneration Report on page 61.
information on the Group’s exposures to
Admission on 4 June 2014 are set out in the
pages 34 to 37 and the Corporate
commodity price, interest rate, infl ation
Social Responsibility Report (with regard
and equity price risks; details of its fi nancial
to information about the employment of
instruments and hedging activities; and its
Directors’ indemnities
disabled persons, employee involvement
exposures to credit risk and liquidity risk.
The Articles permit the Board to grant the
and greenhouse gas emissions) are also
incorporated into this report by reference.
Results and dividends
Directors indemnities in relation to their
duties as Directors, including third party
indemnity provisions (within the meaning
The Company has chosen, in accordance
Results for the year are set out in the
of the Companies Act) in respect of any
with section 414C (11) of the Companies
Group Income Statement on page 76.
liabilities incurred by them in connection
Act 2006 to include the disclosure of likely
with any negligence, default, breach of
future developments in the Strategic Report
The Directors are not recommending the
duty or breach of trust in relation to the
(see pages 4 to 29).
payment of any fi nal dividend in respect of
Company. No such indemnities have to
the year ended 30 April 2014.
date been granted.
Financial risk management
An interim dividend of £2.5 million was paid
The Group’s business activities, together
to the Group’s former parent company on
Compensation for loss of offi ce
with the factors likely to affect its future
28 June 2013. Further distributions by the
There are no agreements between the
development, performance and position
Group in the year are set out in note 8 to the
Company and its Directors or employees
are set out in the Operational and Financial
Financial Statements.
Review on pages 18 to 25, along with the
fi nancial position of the Group, its cash fl ows
and liquidity.
Directors
providing for compensation for loss of offi ce
or employment that occurs as a result of a
takeover bid. Further details of the Directors’
service contracts can be found in the
The names and biographies of the current
Directors’ Remuneration Report on pages
Directors of the Company are set out on
44 to 65.
pages 32 and 33 of this Annual Report.
The following Directors are current Directors or served the Company during the year ended 30 April 2014:
Name
Position
Notes
Steven (Steve) Nicholas Parkin
Antony (Tony) Gerard Mannix
David Arthur Hodkin
Sean Eugene Fahey
Michael (Mike) David Badrock
Nigel John Hinds
Paul Nigel Hampden Smith
Stephen Peter Robertson
Ronald (Ron) Charles Series
Michael (Mike) John Russell
66
Executive Chairman
Chief Executive Offi cer
Chief Financial Offi cer
Chief Information Offi cer
Non-Executive Director
Operations Director
Senior Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
-
-
-
-
Resigned 13 May 2014
Resigned 13 May 2014
Appointed 16 May 2014
Appointed 16 May 2014
Appointed 16 May 2014
Appointed 16 May 2014
Strategic Report | Governance | Financial Statements
Directors’ Report
continued
Directors’ and Offi cers’ liability insurance
person or by proxy shall have one vote for
Restrictions on the transfer of shares
Directors’ and Offi cers’ Liability Insurance
every share of which he is the holder. The
There are no restrictions on the transfer of
cover is in place at the date of this report,
Notice of Annual General Meeting specifi es
the Ordinary Shares other than:
having been purchased prior to the IPO. The
deadlines for exercising voting rights and
- the standard restrictions for a UK-quoted
Board remains satisfi ed that an appropriate
appointing a proxy or proxies.
company where any amount is unpaid on
level of cover is in place and a review of
cover will take place on an annual basis.
a share;
- where, from time to time, certain
Deadlines for exercising voting rights
restrictions may become imposed by
attaching to shares
laws and regulations (for example, insider
Articles of Association
The Articles provide a deadline for the
trading laws and marketing requirements
The Articles of Association (adopted by
submission of proxy forms (whether by
relating to close periods); and
special resolution on 15 May 2014) may
an instrument in writing or electronically)
only be amended by special resolution of
of not less than 48 hours before the time
- pursuant to the Listing Rules of the
the shareholders. A copy of the Articles is
appointed for the holding of the meeting or
Financial Conduct Authority whereby
available on request from the Company
the adjourned meeting.
Secretary.
certain Directors, offi cers or employees of
the Company require the approval of the
Company to deal in the Ordinary Shares.
Shares in uncertifi cated form
Change of name
Directors may determine that shares may
On 30 May 2014, the Company entered
On 14 May 2014 the Company changed
be held in uncertifi cated form and title to
into a placing agreement with, amongst
its name from Clipper Logistics Group Ltd to
such shares may be transferred by means
others, the Directors, certain selling
Clipper Logistics Ltd, and on 15 May 2014
of a relevant system or that shares should
shareholders and Numis Securities Ltd
re-registered as a plc.
cease to be so held and transferred.
(“Numis”) in accordance with which subject
to certain customary exceptions:
- the Company has agreed not to dispose
Share capital structure
Variation of rights attaching to shares
of any Ordinary Shares in the Company
Details of the Company’s share capital are
The Articles provide that rights attached
for a period of 365 days following the
set out in note 22 to the Financial Statements
to any class of shares may be varied with
date of Admission without the prior written
on page 116. The Company has a single
the written consent of the holders of not
consent of Numis; and
class of share capital divided into Ordinary
less than three-quarters in nominal value
Shares of 0.05p each. The Ordinary Shares
of the issued shares, or with the sanction of
- the Directors and those selling
are listed on the London Stock Exchange.
a special resolution passed at a separate
shareholders who have retained Ordinary
The rights and obligations attaching to these
general meeting of the holders of those
Shares after Admission have agreed
shares are governed by UK law and the
shares. At every such separate general
not to dispose of any Ordinary Shares in
Company’s Articles of Association.
meeting, the quorum shall be 2 persons
the Company for a period of 365 days
holding or representing by proxy at least
following the date of Admission without
one-third in nominal value of the issued
the prior written consent of Numis.
Voting rights attaching to shares
shares (calculated excluding any shares
Ordinary shareholders are entitled to receive
held in treasury). The rights conferred upon
notice and to attend and speak at any
the holders of any shares shall not, unless
general meeting of the Company. On a
otherwise expressly provided in the rights
show of hands every shareholder present in
attaching to those shares, be deemed to
person or by proxy (or being a corporation
be varied by the creation or issue of further
represented by a duly authorised
shares ranking pari passu with them.
representative) shall have one vote, and on
a poll every shareholder who is present in
67
Clipper Logistics plc Annual Report and Accounts 2014
Directors’ Report
continued
On 30th May 2014 the Executive Directors
at each AGM, one-third of the Directors
Greenhouse gas emissions
and certain persons who held Ordinary
for the time being (or, if their number is not
The Group’s disclosures on greenhouse gas
Shares after the Company’s Admission
a multiple of 3, then the number nearest
emissions can be found in the CSR section
or whose associates held such shares
to but not exceeding one-third) shall retire
of the Strategic Review on page 28 and
entered into an agreement pursuant to
from offi ce. A Director who retires at any
form part of the Directors’ Report.
which they (other than Steve Parkin) each
AGM shall be eligible for re-appointment.
agreed with Mr Parkin that, subject to certain
In addition, any Director appointed by the
usual exceptions, each of them would
Board shall hold offi ce only until the next
Employment Policies
not dispose of shares which in aggregate
following AGM and shall then be eligible for
Arrangements for consulting and involving
equated to:
appointment.
- more than one third of his shares (as held
Group employees on matters affecting
their interests at work, and informing them
immediately following listing) at any time
On 30th May 2014 the Company
of the performance of their employing
during the period commencing on the
entered into an agreement (“Relationship
business and the Group, are developed
date of Admission and ending on the
Agreement”) with Steve Parkin and
in ways appropriate to each business. A
fourth anniversary of that date; and
his nominee company Carlton
variety of approaches is adopted aimed
Court Investments Ltd (the “Principal
at encouraging the involvement of
- the balance of any of such shares not
Shareholders”). Pursuant to that agreement
employees in effective communication
otherwise disposed of in the fi rst period
the Company has agreed with the Principal
and consultation, and the contribution of
between the date commencing on the
Shareholders that the Principal Shareholders
productive ideas at all levels.
fi rst anniversary of Admission and the fi fth
shall be entitled to appoint and remove one
anniversary of Admission.
Director to the Board so long as the Principal
Employment policies are designed to
Shareholders (and/or any of their associates)
provide equal opportunities irrespective
when taken together, hold 25% or more of
of race, caste, national origin, religion,
Authority to purchase own shares
the voting rights over the Company’s issued
age, disability, gender, marital status,
A resolution to authorise the Directors to
shares. Where any Principal Shareholder
sexual orientation or political affi liation.
purchase up to 10% of the Company’s
has already been nominated to the board
Group policy is to ensure that disabled
issued Ordinary Share capital will be
as a Director himself such appointment
applicants for employment are given
proposed at the 2014 AGM.
will reduce the number of persons which
full and fair consideration having regard
the Principal Shareholders are entitled
to their particular aptitudes and abilities,
As at 26 August 2014, being the latest
to nominate for appointment by one.
and that existing disabled employees are
practicable date prior to the publication of
Any person appointed by the Principal
given equal access to training, career
this report, the Company did not hold any
Shareholders to the board may be removed
development and promotion opportunities.
shares in treasury.
by the Principal Shareholders by notice
In the event of existing employees
in writing.
Appointment and replacement of
Directors
Power of Directors
becoming disabled, all reasonable means
would be explored to achieve retention in
employment in the same or an alternative
capacity, including arranging appropriate
Unless determined by ordinary resolution
Subject to the Articles, the Companies
training. Further details in relation to the
of the Company, the number of Directors
Act and any directions given by special
Group’s employment policy is set out in
shall not be less than 2 or more than 12 in
resolution, the business of the Company
the CSR section of the Strategic Report on
number. A Director is not required to hold
shall be managed by the Board who may
page 28.
any shares in the Company by way of
exercise all the powers of the Company
qualifi cation.
to, for example, borrow money; mortgage
or charge any of its undertaking, property
Political donations
The Board may appoint any person to be
and uncalled capital; and issue debentures
The Company has made no political
a Director and such Director shall hold
and other securities, whether outright or as
donations since Admission on 4 June 2014
offi ce only until the next AGM, when he or
collateral security for any debt, liability or
and intends to continue its policy of not
she shall be eligible for appointment by
obligation of the Company.
doing so for the foreseeable future.
the shareholders. The articles provide that
68
Strategic Report | Governance | Financial Statements
Directors’ Report
continued
Major interests in shares
As at 5 August 2014, the Company had been advised, in accordance with the Disclosure
and Transparency Rules of the Financial Conduct Authority, of the following notifi able
interests (whether directly or indirectly held) in 3% or more of its voting rights:
Notifi cation received from
Number of voting rights
%
Carlton Court Investments Ltd1
SOMLIE Ltd2
The Chima Settlement
Unicorn Asset Management
Liontrust Asset Management
Legal and General Investment Management
Artemis Investment Management
Schroder Investment Management
SFM UK Management
River and Mercantile Asset Management
F&C Asset Management
1 Ultimately controlled by Steve Parkin, Executive Chairman.
2 Nominee for Sean Fahey, Chief Information Offi cer.
34,797,100
7,834,397
6,999,999
6,290,000
5,360,188
4,085,000
3,865,984
3,675,000
3,250,000
3,015,000
3,000,000
34.80
7.83
7.00
6.29
5.36
4.09
3.87
3.68
3.25
3.02
3.00
Going concern
- he has taken all the reasonable steps
The Directors consider that all of the
After making enquiries, the Directors have a
that he ought to have taken as a Director
proposed resolutions are in the best interests
reasonable expectation that the Company
to make himself aware of any relevant
of the Company and its shareholders as a
has adequate resources to continue in
audit information and to establish that
whole. It is the Directors’ recommendation
operational existence for the foreseeable
the Group’s auditors are aware of the
that you support the proposed resolutions
future. In making this assessment they have
information.
and vote in favour of them, as each of the
considered the Company and Group
Directors intends to do.
budgets and cash fl ow forecasts for the
The confi rmation is given and should
period to 30 April 2016. The Company has
be interpreted in accordance with the
The Directors’ Report has been approved
considerable fi nancial resources, negligible
provisions of section 418 of the
by the Board of Directors of Clipper
liquidity risk and is operating within a sector
Companies Act 2006.
Logistics plc.
that is experiencing growing demand
for its services. The Directors therefore
Signed on behalf of the Board.
have a reasonable expectation that the
Auditors
Company and the Group have adequate
The auditors, Ernst & Young LLP have
resources to continue in operational
indicated their willingness to continue in
Paul White
existence for the foreseeable future. Thus
offi ce and a resolution seeking to reappoint
Company Secretary
they continue to adopt the going concern
them will be proposed at the Annual
28 August 2014
basis of accounting in preparing the annual
General Meeting.
Financial Statements.
Annual general meeting
Clipper Logistics plc
Registered Offi ce:
Gelderd Road
Audit information
The Company’s Annual General Meeting
Leeds
Each of the Directors at the date of the
will be held at Clipper Logistics, Gelderd
LS12 6LT
approval of this report confi rms that:
Road, Leeds, LS12 6LT on 29 September
- so far as he is aware, there is no relevant
2014 at 11:00. Details of the meeting venue
Company No. 03042024
audit information of which the Group’s
and the resolutions to be proposed are set
auditors are unaware; and
out in a separate Notice of Meeting which
accompanies the Annual Report.
69
Clipper Logistics plc Annual Report and Accounts 2014
Statement of Directors’ Responsibilities
in respect of the Annual Report and
the Group Financial Statements
The Directors are responsible for
The Directors are responsible for keeping
Directors’ Responsibility Statement
preparing the Annual Report and the
adequate accounting records that are
Each of the Directors, whose names and
Group Financial Statements in accordance
suffi cient to show and explain the Group’s
functions are listed on pages 32 and 33
with applicable law and regulations.
transactions and disclose with reasonable
confirm that, to the best of their knowledge:
accuracy at any time the fi nancial position
- the Financial Statements, prepared in
Company law requires the Directors to
of the Group and enable them to ensure
accordance with IFRS as adopted by the
prepare fi nancial statements for each
that its Financial Statements comply with
European Union, give a true and fair view
fi nancial year. Under that law they are
the Companies Act 2006 and Article 4 of
of the assets, liabilities, fi nancial position
required to prepare the Group’s Financial
the IAS Regulation. They are also responsible
and profi t or loss of the Group;
Statements in accordance with International
for safeguarding the assets of the Group
- the Strategic Report and Directors’ Report
Financial Reporting Standards (IFRS) as
and hence for taking reasonable steps for
include a fair review of the development
adopted by the European Union.
the prevention and detection of fraud and
and performance of the business and
Under company law the Directors must not
other irregularities.
the position of the Group, together with
a description of the principal risks and
approve the Financial Statements unless
The Directors are also responsible for
uncertainties that they face; and
they are satisfi ed that they give a true and
preparing a Strategic Report, Directors’
- the Annual Report and Financial
fair view of the state of affairs of the Group
Report, Directors’ Remuneration Report,
Statements, taken as a whole, is fair,
and of the profi t or loss of the Group for
Audit Committee Report and Corporate
balanced, and understandable and
that period. In preparing these Financial
Governance Statement in accordance with
provides the information necessary
Statements, the Directors are required to:
the Companies Act 2006 and applicable
for shareholders to assess the Group’s
- select suitable accounting policies and
regulations, including the requirements
performance, business model
then apply them consistently;
of the of Listing Rules and Disclosure and
and strategy.
- make judgements and accounting
Transparency Rules.
estimates that are reasonable and
Approved by the Board and signed
prudent;
The Directors are responsible for the
on its behalf by:
- state whether applicable IFRSs as
maintenance and integrity of the corporate
adopted by the European Union have
and fi nancial information included on
Steve Parkin
been followed, subject to any material
the Company’s website. Legislation in
Executive Chairman
departures disclosed and explained in the
the UK governing the preparation and
28 August 2014
Financial Statements;
dissemination of fi nancial statements may
- present information, including
differ from legislation in other jurisdictions.
David Hodkin
Chief Financial Offi cer
28 August 2014
accounting policies, in a manner that
provides relevant, reliable, comparable
information;
- provide additional disclosures
when compliance with the specifi c
requirements of IFRS is insuffi cient to
enable users to understand the impact
of particular transactions, other events
and conditions on the Group’s fi nancial
position and performance; and
- prepare the Financial Statements on
the going concern basis unless it is
inappropriate to presume that the
Group will continue in business.
70
71
Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Group Financial Statements
for the year ended 30 April 2014
72
73
Clipper Logistics plc Annual Report and Accounts 2014
Independent
Auditor’s Report - Group
Independent auditor’s report to the members of Clipper Logistics plc
Opinion on the Group
Financial Statements
preparation of the Group Financial Statements
- Revenue recognition, specifi cally to ensure
and for being satisfi ed that they give a true
in the fi rst year as Group auditor that
In our opinion the Group Financial Statements:
and fair view.
appropriate revenue recognition policies
- give a true and fair view of the state of the
were applied;
Group’s affairs as at 30 April 2014 and of its
Our responsibility is to audit and express an
- Accounting for the reorganisation of the
profi t for the year then ended;
opinion on the Group Financial Statements
Group; and
- have been properly prepared in
in accordance with applicable law and
- Classifi cation of certain head offi ce costs
accordance with International Financial
International Standards on Auditing (UK and
as discontinuing costs.
Reporting Standards (‘IFRSs’) as adopted by
Ireland). Those standards require us to comply
the European Union; and
with the Auditing Practices Board’s Ethical
- have been prepared in accordance with
Standards for Auditors.
Our application of materiality
the requirements of the Companies Act
2006 and article 4 of the IAS regulation.
We apply the concept of materiality both in
planning and performing our audit, and in
Scope of the audit of the Financial
evaluating the effect of misstatements on
Statements
our audit and on the Financial Statements.
What we have audited
An audit involves obtaining evidence about
For the purposes of determining whether the
We have audited the Group Financial
the amounts and disclosures in the fi nancial
Financial Statements are free from material
Statements of Clipper Logistics plc for the
statements suffi cient to give reasonable
misstatement we defi ne materiality as the
year ended 30 April 2014 which comprise
assurance that the fi nancial statements are
magnitude of misstatement that makes it
the Group Income Statement and Statement
free from material misstatement, whether
probable that the economic decisions of a
of Comprehensive Income, the Group
caused by fraud or error. This includes an
reasonably knowledgeable person, relying on
Statement of Financial Position, the Group
assessment of: whether the accounting
the Financial Statements, would be changed
Statement of Changes in Equity, the Group
policies are appropriate to the Group’s
or infl uenced.
Statement of Cash Flows, and the related
circumstances and have been consistently
notes 1 to 30. The fi nancial reporting
applied and adequately disclosed; the
We determined materiality for the Group to
framework that has been applied in their
reasonableness of signifi cant accounting
be £0.3 million, which is approximately 5%
preparation is applicable law and IFRSs as
estimates made by the Directors; and
of pre-tax profi t for the year, adjusted for
adopted by the European Union.
the overall presentation of the Financial
exceptional items. This provided a basis for
Statements. In addition, we read all the
determining the nature, timing and extent of
This report is made solely to the Company’s
fi nancial and non-fi nancial information
risk assessment procedures, identifying and
members, as a body, in accordance with
in the Annual Report to identify material
assessing the risk of material misstatement
Chapter 3 of part 16 of the Companies Act
inconsistencies with the audited Financial
and determining the nature, timing and extent
2006. Our audit work has been undertaken
Statements and to identify any information
of further audit procedures.
so that we might state to the Company’s
that is apparently materially incorrect based
members those matters we are required
on, or materially inconsistent with, the
On the basis of our risk assessments, together
to state to them in an auditor’s report and
knowledge acquired by us in the course of
with our assessment of the Group’s overall
for no other purpose. To the fullest extent
performing the audit. If we become aware
control environment, our judgement is that
permitted by law, we do not accept or
of any apparent material misstatements or
performance materiality (that is our tolerance
assume responsibility to anyone other than the
inconsistencies we consider the implications
for misstatement in an individual account or
Company and the Company’s members as
for our report.
a body, for our audit work, for this report, or for
the opinions we have formed.
balance) was 50% of our materiality, namely
£0.15 million. Our objective in adopting this
approach was to ensure that uncorrected
Our assessment of risks of material
and undetected audit differences in the
misstatement
Financial Statements as a whole did not
Respective responsibilities of Directors
We identifi ed the following risks that we
exceed our planning materiality level.
and auditor
believed would have the greatest impact on
As explained more fully in the Statement of
our overall audit strategy; the allocation of
We agreed with the Audit Committee that we
Directors’ Responsibilities set out on page
resources in the audit; and directing the efforts
would report to the Committee all corrected
70, the Directors are responsible for the
of the engagement team:
and uncorrected audit differences in excess
74
Strategic Report | Governance | Financial Statements
Independent
Auditor’s Report - Group
continued
of £15,000, as well as differences below that
of revenue. We undertook cut-off testing
- materially inconsistent with the information in
threshold that in our view warranted reporting
at each operating unit. We tested revenue
the audited Financial Statements; or
on qualitative grounds.
journal entries recorded in the general ledger
- apparently materially incorrect based on, or
and evaluated the rationale for unusual
materially inconsistent with, our knowledge
items where required. We also ensured
of the Group acquired in the course of
An overview of the scope of our audit
that management’s policies for revenue
performing our audit; or
We adopted a risk-based approach in
recognition and the Financial Statement
- is otherwise misleading.
determining our audit strategy. This approach
disclosures were in accordance with
focuses audit effort towards higher risk
accounting standards.
In particular, we are required to consider
areas, such as management judgements
whether we have identifi ed any inconsistencies
and estimates and operating units that are
(b) Accounting for the reorganisation
between our knowledge acquired during
considered signifi cant based upon size,
of the Group
the audit and the Directors’ Responsibility
complexity and risk. Our Group audit scope
We challenged management in respect of
Statement that they consider the Annual
focused on two operating units, which were
the basis of accounting used in accounting for
Report is fair, balanced and understandable
subject to a full scope audit for the year
the reorganisation and the applicability of the
and whether the Annual Report
ended 30 April 2014 performed by the
basis selected.
Group audit team. An additional operating
appropriately discloses those matters that we
communicated to the Audit Committee which
unit was selected for specifi c scope audit
We have audited key evidence of the
we consider should have been disclosed.
procedures where the extent of audit work
transaction that gave rise to the reorganisation,
was based on our assessment of the risks of
and agreed the treatment in the consolidation
Under the Companies Act 2006 we are
material misstatement and of the materiality
and the related Financial Statement disclosures.
required to report to you if, in our opinion:
of those operating units to the Group’s business
- certain disclosures of Directors’ remuneration
operations. Together with the Group functions
(c) Classifi cation of certain head offi ce
specifi ed by law are not made; or
which were also subject to a full or specifi c
costs as discontinuing:
- we have not received all the information
scope audit for the year ended 30 April 2014,
We reviewed management’s assessment
and explanations we require for our audit.
these operating units represent the principal
of costs in respect of those that have been
business units of the Group and account for
categorised as discontinuing head offi ce costs
Under the Listing Rules we are required to review:
100% of the Group’s revenue, 100% of the
as described further in note 4 to the Group
- the Directors’ Responsibility Statement, set
Group’s profi t before tax, and 100% of the
Financial Statements. We have sample tested
out on page 70 within the Director’s Report,
Group’s total assets.
items within this category to confi rm
in relation to going concern; and
the appropriate treatment.
- the part of the Corporate Governance
Audits of these operating units are performed
at a performance materiality level calculated
Statement relating to the Company’s
compliance with the nine provisions of the
with reference to a proportion of the Group
Opinions on other matters prescribed by the
UK Corporate Governance Code specifi ed
materiality appropriate to the relative scale
Companies Act 2006
for our review.
and risk associated with each operating unit.
In our opinion, the information given in the
They are also selected to provide a basis for
Strategic Report and Directors’ Report for the
undertaking audit work to address the risks of
fi nancial year for which the Group Financial
Other matters
material misstatement identifi ed above.
Statements are prepared is consistent with the
We have reported separately on the
Group Financial Statements.
Company Financial Statements of Clipper
The principal ways in which we responded to
the risks identifi ed above included:
Logistics plc for the year ended 30 April
2014 and on the information in the Directors’
Matters on which we are required to report
Remuneration Report that is described as
(a) Revenue recognition
by exception
having been audited.
We agreed the detailed application of
We have nothing to report in respect of the
revenue recognition policies for a sample of
following:
Stuart Watson (Senior statutory auditor)
contracts and challenged management in
Under the ISAs (UK and Ireland), we are
for and on behalf of Ernst & Young LLP,
respect of the reasonableness of judgements
required to report to you if, in our opinion,
Statutory Auditor, Leeds
made in order to determine the recognition
information in the Annual Report is:
28 August 2014
75
Clipper Logistics plc Annual Report and Accounts 2014
Group Income Statement and
Statement of Comprehensive Income
For the year ended 30 April
Revenue
Cost of sales
Gross profi t
Other net gains
Administration and other expenses
Operating profi t before non-recurring items
Discontinuing costs
Exceptional costs
Operating profi t
Finance costs
Finance income
Profi t before income tax
Income tax expense
Note
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
3
6
4
6
6
10
9
11
201,248
(141,514)
160,703
(110,920)
166,523
(118,565)
164,982
(117,614)
59,734
285
(50,406)
49,783
438
(41,484)
47,958
1,203
(40,494)
47,368
312
(39,432)
9,613
(2,297)
(2,516)
4,800
(952)
101
3,949
(1,103)
8,737
(2,137)
(392)
6,208
(1,005)
3
5,206
(1,432)
8,667
(1,991)
(87)
6,589
(1,419)
55
5,225
(1,405)
8,248
(1,508)
(1,145)
5,595
(1,003)
82
4,674
(1,532)
Profi t for the fi nancial period
2,846
3,774
3,820
3,142
Other comprehensive income for the period,
net of tax:
To be reclassifi ed to the income statement
in subsequent periods:
Exchange differences on retranslation of
foreign operations
(1)
8
26
(14)
Total comprehensive income
2,845
3,782
3,846
3,128
Attributable to:
Equity holders of the Company
Non-controlling interest
Profi t for the fi nancial period
Basic and diluted earnings per share
Adjusted basic and diluted earnings per share*
2,826
20
2,846
2.8p
6.6p
3,766
8
3,774
3.8p
5.7p
3,820
-
3,820
3.9p
5.4p
3,142
-
3,142
3.2p
5.1p
*Earnings per share adjusted for discontinuing and exceptional costs as described in note 7.
76
Strategic Report | Governance | Financial Statements
Group Statement
of Financial Position
At 30 April
Note
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
1 May 2010
Group
£’000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Goodwill
Other intangible assets
Intangible assets
Total non-current assets
CURRENT ASSETS
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial liabilities: borrowings
Short term provisions
Current income tax liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Borrowings
Long term provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
EQUITY SHAREHOLDERS’ FUNDS
Share capital
Share premium
Currency translation reserve
Other reserve
Merger reserve
Retained earnings
Equity attributable to the owners
of the Company
Non-controlling interests
13
14
16
17
18
19
20
21
11
20
21
11
22
23
15,843
19,018
549
19,567
14,835
18,785
592
19,377
12,877
18,785
232
19,017
13,368
18,785
343
19,128
35,410
34,212
31,894
32,496
19,025
28,332
5,360
14,346
22,946
2,849
18,827
20,544
2,231
20,813
20,630
156
52,717
40,141
41,602
41,599
88,127
74,353
73,496
74,095
51,724
19,141
147
318
37,313
5,774
547
530
38,741
6,022
428
689
42,247
4,187
636
803
71,330
44,164
45,880
47,873
4,260
699
366
5,325
2,093
508
672
3,273
625
490
624
963
593
391
1,739
1,947
15,299
18,785
516
19,301
34,600
15,516
20,089
320
35,925
70,525
35,938
9,219
130
179
45,466
1,994
769
357
3,120
76,655
47,437
47,619
49,820
48,586
50
48
36
84
6,006
5,248
11,472
-
8
48
36
51
18,168
8,592
26,903
13
8
48
33
51
18,168
7,569
25,877
-
8
48
8
51
18,168
5,992
24,275
-
Total equity
11,472
26,916
25,877
24,275
TOTAL EQUITY AND LIABILITIES
88,127
74,353
73,496
74,095
Approved by the Board on 28 August 2014 and signed on its behalf by:
D A Hodkin – Chief Financial Offi cer
8
48
21
51
18,168
3,643
21,939
-
21,939
70,525
77
Clipper Logistics plc Annual Report and Accounts 2014
Group Statement
of Changes in Equity
Share
capital
£’000
Share
premium
£’000
Balance at 1 May 2010
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
Balance at 30 April 2011
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
Balance at 30 April 2012
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
Balance at 30 April 2013
Profi t for the year
Other comprehensive income
Share issue - for cash
- on acquisition of minority interest
Increase in ownership interest of subsidiary
Equity settled transactions
Dividends
Balance at 30 April 2014
8
-
-
-
-
8
-
-
-
-
8
-
-
-
-
8
-
-
42
-
-
-
-
50
78
Other
reserve
£’000
51
-
-
-
-
51
-
-
-
-
48
-
-
-
-
48
-
-
-
-
48
51
-
-
-
-
48
-
-
-
-
-
-
-
48
-
-
-
-
51
-
-
-
800
(767)
-
-
84
Currency
translation
reserve
£’000
Carried
forward
£’000
21
-
(13)
-
-
8
-
25
-
-
33
-
3
-
-
36
-
-
-
-
-
-
-
36
128
-
(13)
-
-
115
-
25
-
-
140
-
3
-
-
143
-
-
42
800
(767)
-
-
218
Strategic Report | Governance | Financial Statements
Group Statement
of Changes in Equity
continued
Brought
forward
£’000
Merger
reserve
£’000
Retained
earnings
£’000
Non-
controlling
interest
£’000
Balance at 1 May 2010
128
18,168
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
-
(13)
-
-
-
-
-
-
3,643
3,142
(1)
9
(801)
Balance at 30 April 2011
115
18,168
5,992
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
-
25
-
-
-
-
-
-
3,820
1
19
(2,263)
-
-
-
-
-
-
-
-
-
-
Total
£’000
21,939
3,142
(14)
9
(801)
24,275
3,820
26
19
(2,263)
Balance at 30 April 2012
140
18,168
7,569
-
25,877
Profi t for the year
Other comprehensive income
Equity settled transactions
Dividends
-
3
-
-
-
-
-
-
3,766
-
57
(2,800)
8
5
-
-
3,774
8
57
(2,800)
Balance at 30 April 2013
143
18,168
8,592
13
26,916
Profi t for the year
Other comprehensive income
Share issue - for cash
- on acquisition of minority interest
Increase in ownership interest of subsidiary
Equity settled transactions
Dividends
Investment in subsidiaries charged to merger reserve
-
-
42
800
(767)
-
-
-
-
-
-
-
-
-
-
(12,162)
2,826
(1)
-
-
-
180
(6,349)
-
20
-
-
-
(33)
-
-
-
2,846
(1)
42
800
(800)
180
(6,349)
(12,162)
Balance at 30 April 2014
218
6,006
5,248
-
11,472
79
Clipper Logistics plc Annual Report and Accounts 2014
Group Statement
of Cash Flows
For the year ended 30 April
Profi t before tax from operating activities
Adjustments to reconcile profi t before tax to net cash fl ows:
- Depreciation and impairment of property, plant
and equipment
- Amortisation and impairment of intangible assets
- Gain on disposal of property, plant and equipment
- Exchange differences
- Finance costs
- Share based payments charge
Working capital adjustments:
- (Increase) / decrease in trade and other receivables
and prepayments
- (Increase) / decrease in inventories
- Increase / (decrease) in trade and other payables
Operating activities:
- Cash generated from operations
- Interest received
- Interest paid
- Income tax paid
Note
6
6
6
9 & 10
2014
Group
£’000
3,949
3,685
219
(26)
10
851
180
(4,498)
(3,566)
13,318
14,122
101
(962)
(1,644)
2013
Group
£’000
5,206
2,603
156
(302)
(17)
1,002
57
(2,401)
5,613
(1,297)
10,620
3
(995)
(1,544)
2012
Group
£’000
5,225
2,577
135
(1,202)
88
1,364
19
86
3,885
(3,818)
8,359
55
(1,419)
(1,294)
2011
Group
£’000
4,674
2,619
176
(74)
(30)
921
9
(541)
(4,525)
6,729
9,958
82
(1,092)
(874)
Net cash fl ows from operating activities
11,617
8,084
5,701
8,074
Investing activities:
- Purchase of property, plant and equipment
- Proceeds from sale of property, plant & equipment
- Purchase of intangible assets
- Transfer of subsidiaries from former parent company
- Acquisition of subsidiary undertaking net of cash acquired
(2,557)
172
(176)
(12,162)
(64)
(2,809)
861
(517)
-
-
28a
(1,982)
1,756
(23)
-
-
Net cash fl ows from investing activities
(14,787)
(2,465)
(249)
Financing activities:
- Net advance from (repayment to) former parent company
- New bank loans
- Stocking loans advanced
- Finance leases advanced
- Repayment of bank loans
- Shares issued
- Dividends paid
- Repayment of capital on fi nance leases
11,846
146
1,708
1,941
(266)
42
(6,349)
(2,903)
(1,145)
1,427
504
79
(723)
-
(2,800)
(2,831)
8
6,631
-
474
-
-
-
(2,263)
(2,659)
(558)
404
(4)
-
-
(158)
(325)
-
-
-
(1,800)
-
(801)
(2,529)
Net cash fl ows from fi nancing activities
6,165
(5,489)
2,183
(5,455)
Net increase in cash and cash equivalents
2,995
130
7,635
2,461
Cash and cash equivalents at start of period
2,280
2,150
(5,485)
(7,946)
Cash and cash equivalents at end of period
5,275
2,280
2,150
(5,485)
80
81
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
1. General information
2.1 Basis of preparation
The preparation of the fi nancial information
The Group Financial Statements for the year
Clipper Logistics plc (‘the Company’), a
under IFRSs requires management to make
ended 30 April 2014 were authorised for
public limited company incorporated and
judgments, estimates and assumptions
issue by the Board of Directors on 28 August
domiciled in the United Kingdom, acts as
that affect the application of policies and
2014 and the Group Statement of Financial
parent undertaking for the Clipper group of
reported amounts of assets and liabilities,
Position was signed on the Board’s behalf by
companies. The Company has independent
income and expenses. The estimates and
David Hodkin.
operations in its own right and as at 30 April
associated assumptions are based on
2014 it was a wholly owned subsidiary of
historical experience and other factors that
Clipper Logistics plc (the “Company”)
Clipper Group Holdings Ltd. In April 2014
are believed to be reasonable under the
and its subsidiaries (together the “Group”)
the Group undertook a restructuring. On 16
circumstances, the results of which form
provide value-added logistics and other
April 2014 the Company acquired fellow
the basis of making the judgements about
services to predominantly the retail
subsidiaries from Clipper Group Holdings Ltd
carrying values of assets and liabilities that
sector and also operate as distributors of
which comprised 100% of the issued share
are not readily apparent from other sources.
commercial vehicles.
capital of Northern Commercials (Mirfi eld)
Actual results may differ from these estimates
Ltd and Genesis Specialised Product Packing
The Company is limited by share capital,
Ltd and 75% of the capital of Clipper Geist
The accounting policies which follow set out
incorporated and domiciled in the United
Logistics GmbH & Co. KG (collectively ‘the
those policies which apply in preparing the
Kingdom. The address of its registered offi ce
Clipper Group’). On 30 April 2014 the Group
Financial Statements for the year ended 30
is Clipper Logistics, Gelderd Road, Leeds,
acquired the remaining 25% of share
April 2014.
LS12 6LT.
capital for Clipper Geist Logistics GmbH &
Co. KG. There were no remaining non-
The Group’s Financial Statements have been
The Group’s Financial Statements have
controlling interests from this date. On 4 June
prepared on a historical cost basis.
been prepared in accordance with note
2014 Clipper Logistics plc was admitted to
The Financial Statements are presented in
2.1 Basis of preparation, and note 2.3 Basis
the premium segment of the London Stock
Pounds Sterling and all values are rounded to
of consolidation. The principal accounting
Exchange and Clipper Group Holdings Ltd
the nearest thousand (£000) unless otherwise
policies adopted by the Group are set out
was no longer the parent company.
indicated.
in note 2.
The Group’s Financial Statements have been
prepared in accordance with International
2.2 Going concern
2. Summary of signifi cant
accounting policies
Financial Reporting Standards as endorsed
The Financial Statements have been
by the European Union (IFRS) regulations as
prepared on a going concern basis. In
The principal accounting policies applied
they apply to the Financial Statements of
determining the appropriate basis of
in the preparation of these consolidated
the Group for the year ended 30 April 2014
preparation of the Financial Statements, the
Financial Statements are set out below.
and also in accordance with those parts
Directors are required to consider whether
These policies have been consistently
of the Companies Act 2006 applicable
the Group can continue in operational
applied to all years presented, unless
to companies reporting under IFRS. These
existence for the foreseeable future.
otherwise stated.
Financial Statements for the year ended
30 April 2014 are the fi rst the Group has
Further information in relation to the Group’s
prepared in accordance with IFRS. Refer
business activities, together with the factors
to Note 29 for information on how the
likely to affect its future development,
Group adopted IFRS, including permitted
performance and position is set out in the
exemptions that have been taken from
Strategic Review section of this report on
the general requirement to apply IFRSs
pages 4 to 29.
retrospectively.
82
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
2.2 Going concern (continued)
The Group’s forecasts and projections show
(b) Merger reserve
Note 26 to the Financial Statements
that the Group should be able to operate
As described above, the group
includes the Group’s objectives, policies
without the need for any increase
reorganisation is a combination of entities
and processes for managing its capital, its
in borrowing facilities.
fi nancial risk management objectives and
under common control; and consolidated
using a pooling of interests basis. This treats
its exposure to foreign exchange, credit and
Having undertaken this work, the Directors
the restructured group as if it was formed in
interest rate risk. Further details of the Group’s
are of the opinion that the Company
May 2010 and a merger reserve has been
net debt at 30 April 2014 are included in
and the Group have adequate resources
included to refl ect this, with a balance of
note 20 of the Financial Statements.
to continue in operational existence for
£18,168,000 at this date. In the year ended
The Group Statement of Financial Position
continue to adopt the going concern basis
was made to the reserve to refl ect the
shows total current assets of £52,717,000
in preparing the Financial Statements.
acquisition of the fellow subsidiaries from
the foreseeable future. Accordingly, they
30 April 2014 a charge of £12,162,000
and total current liabilities of £71,330,000.
Net current liabilities at 30 April 2014 were
therefore £18,613,000. On 2 May 2014 the
2.3 Basis of consolidation
Clipper Group Holdings Limited as part of the
group reorganisation.
bank facilities granted by Santander UK plc
(a) Group reorganisation
(c) Consolidations
to Clipper Group Holdings Ltd were novated
The restructuring noted above is a
Subsidiaries are consolidated from the
to the Company. On 4 June 2014 these
combination of entities under common
date of acquisition being the date on
facilities were restructured and extended.
control. IFRS 3 states that it does not apply
which the Group obtains control, and are
Following the restructuring, in addition
to a combination of entities or businesses
consolidated until the date such control
to a fi ve year term loan of £12,500,000
under common control. All of the entities
ceases. Control comprises the power to
amortising quarterly, the Group has access
that make up Clipper Group have
govern the fi nancial and operating policies
to a fi ve year, non-amortising, revolving
remained under common control, in
of the investee so as to obtain benefi t from
credit facility of £12,504,000. On a
each of the years disclosed. Accordingly, the
its activities and is achieved through direct
pro-forma basis, if this restructuring had
consolidated fi nancial information of
or indirect ownership of its voting rights. The
been in place on 30 April 2014, the Group’s
the Clipper Group has been prepared to
fi nancial statements of subsidiaries used
net current liabilities would have been
refl ect the combination of the restructured
in the preparation of the consolidated
£7,613,000 and the undrawn revolving credit
Clipper Group as if it had occurred from
Financial Statements are prepared on the
facility would have been £11,504,000.
1 May 2010.
The Directors have assessed the future
same reporting year as the parent company
and are based on consistent accounting
funding requirements of the Group and
The fi nancial information of the Clipper
policies. All intra Group balances and
the Company and compared them to the
Group for the year ended 30 April 2014
transactions, including unrealised profi ts from
bank facilities which are now available.
and the comparative information has been
them, are eliminated in full.
The assessment included a detailed review
prepared on a basis that combines the
of fi nancial and cash fl ow forecasts for at
results and assets and liabilities of all entities
A change in the ownership interest of
least the 12 month period from the date
within the Clipper Group. The Clipper Group
a subsidiary without loss of control is
of signing the Annual Report. The Directors
has not in the past constituted a separate
accounted for as an equity transaction.
considered a range of potential scenarios
legal group.
within the key markets the Group serves and
how these might impact on the Group’s
cash fl ow. The Directors also considered
what mitigating actions the Group could
take to limit any adverse consequences.
Non-controlling interests represent the equity
in a subsidiary not attributable directly or
indirectly to the parent company and is
presented within equity in the consolidated
statement of fi nancial position separately
from equity attributable to owners of the
parent company.
83
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
The purchase method of accounting is used
2.5 Foreign currency translation
Depreciation is calculated using the straight-
to account for the acquisition of subsidiaries
(a) Functional and presentation currency
line method to allocate their cost to their
by the Group other than those included
Items included in the fi nancial statements
residual values over their estimated useful
in the restructuring referred to above. The
of each of the Group’s entities are measured
lives, as follows:
cost of an acquisition is measured as
using the currency of the
- Leasehold property over the length of
the fair value of the assets given, equity
primary economic environment in which
the lease;
instruments issued and liabilities incurred
the entity operates (‘the functional
- Plant and machinery 5% - 50%
or assumed at the date of exchange, plus
currency’). The combined Financial
per annum; and
costs directly attributable to the acquisition.
Statements are presented in Pounds
- Motor vehicles 12.5% - 25% per annum.
Identifi able assets acquired and liabilities
Sterling, which is the Company’s
and contingent liabilities assumed in a
functional and presentation currency.
Residual values and useful lives are
business combination are measured initially
reviewed, and adjusted if appropriate,
at their fair values at the acquisition date,
(b) Transactions and balances
at each balance sheet date.
irrespective of the extent of any minority
Foreign currency transactions are translated
interest. The excess of the cost of acquisition
into the functional currency using the
An asset’s carrying amount is written down
over the fair value of the Group’s share of the
exchange rates prevailing at the dates of
immediately to its recoverable amount if the
identifi able net assets acquired is recorded
the transactions. Foreign exchange gains
asset’s carrying amount is greater than its
as goodwill. If the cost of acquisition is
and losses resulting from the settlement of
estimated recoverable amount.
less than the fair value of the net assets
such transactions and from the translation
of the subsidiary acquired, the difference
at year-end exchange rates of monetary
Gains and losses on disposals are
is recognised directly in the statement of
assets and liabilities denominated in foreign
determined by comparing the proceeds
comprehensive income.
currencies are recognised in the Statement
with the carrying amount and are
Inter-company transactions, balances
and unrealised gains on transactions
of Comprehensive Income.
recognised within ‘other net gains’ in the
Statement of Comprehensive Income.
between Group companies are eliminated.
2.6 Property, plant and equipment
Unrealised losses are also eliminated but
Property, plant and equipment is stated
2.7 Intangible assets
considered an impairment indicator of the
at historical cost less depreciation and
(a) Goodwill
asset transferred. Accounting policies of
impairment. Historical cost includes
Goodwill represents the excess of the cost
subsidiaries have been changed where
expenditure that is directly attributable to
of an acquisition over the fair value of the
necessary to ensure consistency with the
the acquisition of the items.
Group’s share of the net identifi able assets
policies adopted by the Group.
of the acquired subsidiary/associate at the
Subsequent costs are included in the
date of acquisition. If the cost of acquisition
asset’s carrying amount or recognised
is less than the fair value of the net assets
2.4 Segment reporting
as a separate asset, as appropriate, only
of the subsidiary acquired, the difference
Operating segments are reported in
when it is probable that future economic
is “negative goodwill” and is recognised in
a manner consistent with the internal
benefi ts associated with the item will fl ow to
the Statement of Comprehensive Income
reporting provided to the Company’s
the Group and the cost of the item can be
immediately.
Board of Directors, collectively the Group’s
measured reliably. The carrying amount of
chief operating decision maker, to assess
any replaced part is derecognised. All other
performance and allocate capital
repairs and maintenance are charged to
or resources.
the Statement of Comprehensive Income
during the fi nancial period in which they
are incurred.
84
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
Goodwill on acquisitions of subsidiaries is
2.8 Impairment of non-fi nancial assets
The Group bases its impairment calculation
included in ‘intangible assets’. Goodwill
The Group assesses, at each reporting date,
on detailed budgets and forecast
on acquisitions of associates is included in
whether there is an indication that an asset
calculations, which are prepared separately
‘investments in associates’ and is tested for
may be impaired. If any indication exists, or
for each of the Group’s CGUs to which
impairment as part of the overall balance.
when annual impairment testing for an asset
the individual assets are allocated. These
Separately recognised goodwill is tested
is required, the Group estimates the asset’s
budgets and forecast calculations generally
annually for impairment and carried at
recoverable amount. An asset’s recoverable
cover a minimum period of two years.
cost less accumulated impairment losses.
amount is the higher of an asset’s or cash-
For longer periods, a long-term growth rate
Impairment losses on goodwill are not
generating unit’s (“CGU”) fair value less costs
is calculated and applied to project future
reversed. Gains and losses on the disposal
to sell and its value in use.
cash fl ows after the second year.
of an entity include the carrying amount of
Where the asset does not generate cash
goodwill relating to the entity sold.
fl ows that are independent from other
Goodwill is allocated to cash-generating
assets, the Group estimates the recoverable
2.9 Financial assets
units for the purpose of impairment
amount of the CGU to which the asset
The Group classifi es its fi nancial assets in the
testing. The allocation is made to those
belongs.
cash-generating units or groups of cash-
following categories: at fair value through
profi t or loss and available for sale. The
generating units that are expected to benefi t
When the carrying amount of an asset or
classifi cation depends on the purpose for
from the business combination in which the
CGU exceeds its recoverable amount, the
which the fi nancial assets were acquired.
goodwill arose.
asset is considered impaired and is written
Management determines the classifi cation
down to its recoverable amount.
of its fi nancial assets at initial recognition.
(b) Computer software
Acquired computer software licences are
In assessing value in use, the estimated
(a) Financial assets at fair value
capitalised on the basis of the costs incurred
future cash fl ows are discounted to their
through profi t or loss
to acquire and bring to use the specifi c
present value using a pre-tax discount rate
Financial assets at fair value through profi t
software. These costs are amortised over
that refl ects current market assessments
or loss are fi nancial assets held for trading.
their estimated useful lives (three to fi ve
of the time value of money and the risks
A fi nancial asset is classifi ed in this category
years).
specifi c to the asset. In determining fair
if acquired principally for the purpose of
value less costs to sell, recent market
selling in the short term. Derivatives are also
Costs associated with developing or
transactions are taken into account. If no
categorised as held for trading unless they
maintaining computer software programmes
such transactions can be identifi ed, an
are designated as hedges. Assets in this
are recognised as an expense as incurred.
appropriate valuation model is used.
category are classifi ed as current assets.
Costs that are directly associated with the
These calculations are corroborated by
development of identifi able and unique
valuation multiples, quoted share prices
(b) Available-for-sale fi nancial assets
software products controlled by the Group,
for publicly traded companies or other
Available-for-sale fi nancial assets are non-
and that will probably generate economic
available fair value indicators.
derivatives that are either designated in this
benefi ts exceeding costs beyond one
category or not classifi ed in any of the other
year, are recognised as intangible assets.
An impairment loss is recognised as an
categories. They are included in non-current
Costs include the software development
expense immediately. Where an impairment
assets unless management intends to
employee costs and an appropriate portion
loss subsequently reverses, the carrying
dispose of the investment within 12 months
of relevant overheads.
amount of the asset (or CGU) is increased
of the balance sheet date.
Computer software development costs
amount, but so that the increased carrying
recognised as assets are amortised over
amount does not exceed the carrying
their estimated useful lives (not exceeding
amount that would have been determined
to the revised estimate of its recoverable
three years).
had no impairment loss been recognised for
the asset (or CGU) in prior years. A reversal of
an impairment loss is recognised as income
immediately.
85
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
Investments are initially recognised at fair
2.10 Inventories
The amount of the provision is the difference
value plus transaction costs for all fi nancial
Inventories are stated at the lower of cost
between the asset’s carrying amount and
assets not carried at fair value through
and net realisable value. Cost includes all
the present value of estimated future cash
profi t or loss. Financial assets carried at
costs incurred in bringing each product to
fl ows, discounted at the original effective
fair value through profi t or loss are initially
its present location and condition. Cost is
interest rate.
recognised at fair value and transaction
determined using the fi rst-in, fi rst-out (“FIFO”)
The carrying amount of the asset is reduced
costs are expensed in the Statement of
method. Net realisable value is the estimated
through the use of an allowance account,
Comprehensive Income. Financial assets
selling price in the ordinary course of business,
and the amount of the loss is recognised in
are derecognised when the rights to receive
less applicable variable selling expenses.
the Statement of Comprehensive Income
cash fl ows from the investments have
expired or have been transferred and the
within ‘administrative expenses’.
When a trade receivable is uncollectible,
Group has transferred substantially all risks
2.11 Vehicles on consignment
it is written off against the allowance account
and rewards of ownership.
Vehicles held on consignment from
for trade receivables. Subsequent recoveries
manufacturers are included in the statement
of amounts previously written off are credited
Available-for-sale fi nancial assets and
of fi nancial position where it is considered
against ‘administrative expenses’ in the
fi nancial assets at fair value through profi t or
that the Group enjoys the benefi ts and
Statement of Comprehensive Income.
loss are subsequently carried at fair value.
carries the risks of ownership.
Gains or losses arising from changes in the
2.13 Cash and cash equivalents
fair value of the ‘fi nancial assets at fair value
2.12 Trade receivables
Cash and cash equivalents includes cash
through profi t or loss’ category are presented
Trade receivables are recognised initially at
in hand, deposits held at call with banks,
in the Statement of Comprehensive Income
fair value and subsequently measured at
other short-term highly liquid investments with
within ‘other net gains’ in the period in which
amortised cost using the effective interest
original maturities of three months or less,
they arise.
method, less provision for impairment. A
and bank overdrafts. Bank overdrafts are
provision for impairment of trade receivables
shown within borrowings in current liabilities
Dividend income from fi nancial assets at fair
is established when there is objective
on the Statement of Financial Position.
value through profi t or loss is recognised in
evidence that the Group will not be able to
Cash and cash equivalents are stated net of
the Statement of Comprehensive Income as
collect all amounts due according to the
bank overdrafts in the cash fl ow statement.
part of other income when the Group’s right
original terms of the receivables.
to receive payments is established.
Signifi cant fi nancial diffi culties of the
2.14 Trade payables
The Group assesses at each balance sheet
debtor, probability that the debtor will enter
Trade payables are recognised initially
date whether there is objective evidence
bankruptcy or fi nancial reorganisation, and
at fair value and subsequently measured
that a fi nancial asset or a Group of fi nancial
default or delinquency in payments (more
at amortised cost using the effective
assets is impaired. If any such evidence
than 30 days overdue) are considered
interest method.
exists for available-for-sale fi nancial assets,
indicators that the trade receivable may
the cumulative loss – measured as the
be impaired.
difference between the acquisition cost and
the current fair value, less any impairment
loss on that fi nancial asset previously
recognised in profi t or loss – is removed from
equity and recognised in the Statement of
Comprehensive Income.
Impairment testing of trade receivables is
described in note 2.12.
86
2.15 Borrowings
Borrowings are recognised initially at fair
value, net of transaction costs incurred.
Borrowings are subsequently stated at
amortised cost; any difference between
the proceeds (net of transaction costs)
and the redemption value is recognised in
the Statement of Comprehensive Income
over the period of the borrowings using the
effective interest method.
Borrowings are classifi ed as current liabilities
unless the Group has an unconditional right
to defer settlement of the liability for at least
12 months after the balance sheet date.
2.16 Income tax
Current tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation
authorities, based on tax rates and laws that
are enacted or substantively enacted by the
balance sheet date.
Deferred income tax is provided in full,
using the liability method, on temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts in the Financial Statements.
However, the deferred income tax is
not accounted for, if it arises from initial
recognition of goodwill or an asset or liability
in a transaction other than a business
combination that at the time of the
transaction affects neither accounting
nor taxable profi ts or losses.
Deferred income tax is determined using tax
rates (and laws) that have been enacted or
substantially enacted by the balance sheet
date and are expected to apply when the
related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred income tax assets are recognised
to the extent that it is probable that future
taxable profi t will be available against which
the temporary differences can be utilised.
87
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
Deferred income tax is provided on
(c) Share based payments
Provisions are measured at the present value
temporary differences arising on investments
IFRS 2 requires the recognition of equity
of the expenditures expected to be required
in subsidiaries and associates, except where
settled share based payments at fair value
to settle the obligation using a pre-tax rate
the timing of the reversal of the temporary
at the date of the grant and the recognition
that refl ects current market assessments
difference is controlled by the Group and it is
of liabilities for cash settled share based
of the time value of money and the risks
probable that the temporary difference will
payments at the current fair value at each
specifi c to the obligation. The increase in
not reverse in the foreseeable future.
balance sheet date. All equity settled share
the provision due to passage of time is
based payments are ultimately recognised
recognised as interest expense.
Deferred income tax assets and liabilities are
as an expense in the profi t and loss account
offset, only if a legally enforceable right exists
with a corresponding credit to ‘other
to set off current tax assets against current
reserves’.
2.19 Revenue recognition
tax liabilities, the deferred income taxes
Revenue is measured at the fair value of the
relate to the same taxation authority and
If vesting periods or other non-market vesting
consideration received or receivable for the
that authority permits the Group to make a
conditions apply, the expense is allocated
sale of goods and services in the ordinary
single net payment.
over the vesting period based on the best
course of the Group’s activities. Revenue
available estimate of the number of shares
is shown net of value-added tax, returns,
expected to vest. Estimates are revised
rebates and discounts and after eliminating
2.17 Employee benefi ts
(a) Pension obligations
subsequently if there is any indication
sales within the Group.
that the number of shares expected to
Group companies operate various pension
vest differs from previous estimates. Any
The Group recognises revenue when
schemes. The schemes are generally
cumulative adjustment prior to vesting is
the amount of revenue can be reliably
funded through payments to insurance
recognised in the current period. Upon
measured, it is probable that future
companies. The Group has only defi ned
exercise of share options, the proceeds
economic benefi ts will fl ow to the entity and
contribution plans. A defi ned contribution
received net of attributable transaction costs
when specifi c criteria have been met for
plan is a pension plan under which the
are credited to share capital and where
each of the Group’s activities. The amount
Group pays fi xed contributions into a
appropriate, share premium.
of revenue is not considered to be reliably
separate entity.
For defi ned contribution plans, the Group
2.18 Provisions
measurable until all contingencies relating to
the sale have been resolved. In practice this
means that revenue is generally recognised
pays contributions to privately administered
Provisions for items such as dilapidations
as follows:
pension insurance plans on a contractual
and legal claims are recognised when: the
- Value-added logistics services – revenue
or voluntary basis. The Group has no further
Group has a present legal or constructive
is recognised when the service is rendered
payment obligations once the contributions
obligation as a result of past events; it is
- Distribution of commercial vehicles –
have been paid. The contributions are
probable that an outfl ow of resources will
revenue is recognised when goods
recognised as employee benefi t expense
be required to settle the obligation; and the
and/or services are supplied or,
when they are due.
amount has been reliably estimated.
for services under repair contracts,
over the period of the contract.
(b) Profi t-sharing and bonus plans
Where there are a number of similar
The Group recognises a liability and an
obligations, the likelihood that an outfl ow
expense for bonuses and profi t-sharing,
will be required in settlement is determined
2.20 Grants
based on a formula that takes into
by considering the class of obligations as
Grants received in relation to the purchase
consideration the profi t attributable to the
a whole. A provision is recognised even if
of non-current assets are released to the
Company’s shareholders after certain
the likelihood of an outfl ow with respect to
Statement of Comprehensive Income
adjustments. The Group recognises a
any one item included in the same class of
in proportion to the depreciation or
provision where contractually obliged or
obligations may be small.
amortisation charge in respect of
where there is a past practice that has
created a constructive obligation.
those assets.
88
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
2.21 Leases
2.23 Exceptional items
2.25 Critical accounting estimates
Leases in which a signifi cant portion of the
Items that are both material and non-
and assumptions
risks and rewards of ownership are retained
recurring are presented as exceptional items
The Group makes estimates and
by the lessor are classifi ed as operating
within their relevant consolidated Statement
assumptions concerning the future. The
leases. Payments made under operating
of Comprehensive Income category. The
resulting accounting estimates will, by
leases (net of any incentives received from
separate reporting of exceptional items
defi nition, seldom equal the related actual
the lessor) are charged to the Statement of
helps provide a clearer indication of the
results. The estimates and assumptions that
Comprehensive Income on a straight-line
Group’s underlying business performance.
have a signifi cant risk of causing a material
basis over the period of the lease.
adjustment to the carrying amounts of assets
Items which may give rise to classifi cation as
and liabilities within the next fi nancial year
Assets held under fi nance leases, which
exceptional include, but are not limited
are discussed below.
transfer to the Group substantially all the risks
to, restructuring of the business or depot
and benefi ts incidental to ownership of the
network, asset impairments and litigation
(a) Estimated impairment of goodwill
leased item, are capitalised at the inception
settlements.
of the lease, with a corresponding liability
being recognised for the lower of the fair
The Group annually tests whether goodwill
has suffered any impairment, in accordance
with the accounting policy stated above.
value of the leased asset and the present
2.24 Financial risk management
The recoverable amounts of cash-
value of the minimum lease payments.
The Group carries out treasury hedging
generating units have been determined
Lease payments are apportioned between
activities to manage exposures to interest
based on value-in-use calculations. These
the reduction of the lease liability and
rate movements on its core borrowings using
calculations require the use of estimates,
fi nance charges in the income statement
interest rate swaps and forward contracts.
both in arriving at the expected future cash
so as to achieve a constant rate of interest
fl ows and the application of a suitable
on the remaining balance of the liability. The
The Group only uses derivatives for hedging
discount rate in order to calculate the
property, plant and equipment acquired
purposes and they are recognised at fair
present value of these fl ows.
under fi nance leases is depreciated over
value and are re-measured to fair value at
the shorter of the estimated useful life of
each balance sheet date. Where an interest
(b) Income taxes
the asset and the lease term; where the
rate swap qualifi es as an effective hedge
Signifi cant judgement is required in
lease contains an option to purchase which
under IAS 39, movements in fair value are
determining the provision for income
is expected to be exercised, the asset is
shown as an adjustment to the net interest
taxes. There are many transactions and
depreciated over the useful life of the asset.
charge being hedged.
The accounting policy adopted for fi nance
calculations for which the ultimate tax
determination is uncertain during the
leases is also applied to hire purchase
Movements in fair value of derivatives that
ordinary course of business. The Group
agreements.
do not qualify as an effective hedge under
recognises liabilities for anticipated tax
IAS 39 are shown in ‘other net gains’ within
audit issues based on estimates of whether
the Statement of Comprehensive Income.
additional taxes will be due. Where the
2.22 Dividend distribution
The Group identifi es, evaluates and hedges
fi nal tax outcome of these matters is
Dividend distribution to the Company’s
fi nancial risks centrally under policies
different from the amounts that were initially
shareholders is recognised as a liability in the
approved by the Board covering specifi c
recorded, such differences will impact the
Group’s Financial Statements in the period
areas, such as interest rate risk, foreign
income tax and deferred tax provisions in
in which the dividends are approved by the
exchange risk and credit risk.
the period in which such determination
Company’s shareholders.
is made.
Estimates and judgements are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that are
believed to be reasonable under the
circumstances.
89
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
2.26. Borrowing costs
- IAS 27 – ‘Separate Financial Statements
- AIP IFRS 1 – ‘First-time Adoption of
Borrowing costs directly attributable to the
effective for annual periods on or after 1
International Financial Reporting Standards
acquisition, construction or production of
January 2014’;
– Meaning of ‘effective IFRSs’ effective for
an asset that necessarily takes a substantial
- IAS 28 – ‘Investments in Associates and
annual periods on or after 1 July 2014’;
period of time to get ready for its intended
Joint Ventures effective for annual periods
- AIP IFRS 3 – ‘Business Combinations
use or sale are capitalised as part of the cost
on or after 1 January 2014’;
– Scope exceptions for joint ventures
of the respective assets. All other borrowing
- IAS 36 – ‘Recoverable Amount Disclosures
effective for annual periods on or after
costs are expensed in the period they occur.
for Non-Financial Assets – Amendments to
1 July 2014’;
Borrowing costs consist of interest and other
IAS 36 effective for annual periods on or
- AIP IFRS 13 – ‘Fair Value Measurement
costs that an entity incurs in connection with
after 1 January 2014’;
– Scope of paragraph 52 (portfolio
the borrowing of funds.
- IAS 39 – ‘Novation of Derivatives and
exception) effective for annual periods
Continuation of Hedge Accounting –
on or after 1 July 2014’;
Amendments to IAS 39 effective for annual
- AIP IAS 40 – ‘Investment Property –
2.27. Adoption of new and revised
periods on or after 1 January 2014’;
Interrelationship between IFRS 3 and IAS
reporting standards
- IFRIC 21 – ‘Levies effective for annual
40 (ancillary services) effective for annual
The Group has applied all accounting
periods on or after 1 January 2014’;
periods on or after 1 July 2014’; and
standards and interpretations issued by
- IAS 19 – ‘Defi ned Benefi t Plans: Employee
- IFRS 14 – ‘Regulatory Deferral Accounts
the IASB and IFRIC except for the following
Contributions – Amendments to IAS 19
effective for annual periods on or after
standards and interpretations which were in
effective for annual periods on or after 1
1 January 2016’.
issue but not yet effective:
July 2014’;
- IAS 32 (revised) – ‘Offsetting fi nancial assets
Defi nitions of vesting conditions effective
given in the original IASB/IFRIC standards and
- AIP IFRS 2 – ‘Share-based Payment –
The effective dates stated above are those
and fi nancial liabilities – Amendments
for annual periods on or after 1 July 2014’;
interpretations.
to IAS 32 effective for annual periods
- AIP IFRS 3 – ‘Business Combinations –
commencing on or after 1 January 2014’;
Accounting for contingent consideration
As the Group prepares its fi nancial
- IFRS 7 – ‘Financial Instruments: Disclosures
in a business combination effective for
information in accordance with IFRS
(Amendment) – initial application of IFRS 9
annual periods on or after 1 July 2014’;
as adopted by the European Union,
effective for annual periods commencing
- AIP IFRS 8 – ‘Operating Segments –
the application of new standards and
on or after 1 January 2014’;
Aggregation of operating segments
interpretations will be subject to them having
- IFRS 9 – ‘Financial instruments:
effective for annual periods on or after 1
been endorsed for use in the EU via the EU
Classifi cation and measurement effective
July 2014’;
Endorsement mechanism. In the majority
for annual periods commencing on or
- AIP IFRS 8 – ‘Operating Segments –
of cases this will result in an effective date
after 1 January 2018’;
Reconciliation of the total of the reportable
consistent with that given in the original
- IFRS 10 – ‘Consolidated Financial
segments’ assets to the entity’s assets
standard or interpretation but the need for
Statements, effective for annual periods
effective for annual periods on or after 1
endorsement restricts the Group’s discretion
commencing on or after 1 January 2014’;
July 2014’;
to early adopt standards.
- IFRS 11 – ‘Joint Arrangements effective for
- AIP IFRS 13 – ‘Fair Value Measurement
annual periods commencing on or after 1
– Short-term receivables and payables
The Directors do not anticipate that the
January 2014’;
effective for annual periods on or after 1
adoption of the remaining standards and
- IFRS 12 – ‘Disclosure of Interests in other
July 2014’;
interpretations will have a material impact
entities effective for annual periods
- AIP IAS 16 – ‘Property, Plant and Equipment
on the Group’s historical fi nancial information
commencing on or after 1 January 2014’;
and IAS 38 Intangible Assets – Revaluation
in the period of initial application.
- IFRS 15 – Revenue from Contracts with
method – proportionate restatement of
Customers, was issued by the IASB on
accumulated depreciation/amortisation
28 May 2014 and is effective for annual
effective for annual periods on or after 1
periods commencing on or after 1
July 2014’;
January 2017;
90
- AIP IAS 24 – ‘Related Party Disclosures –
Key management personnel effective for
annual periods on or after 1 July 2014’;
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
3. Revenue
Revenue recognised in the income statement is analysed as follows:
E-fulfi lment logistics services
Non E-fulfi lment logistics services
Value-added logistics services
Distribution of commercial vehicles
Inter-segment sales
2014
Group
£’000
46,046
89,557
135,603
66,796
(1,151)
2013
Group
£’000
29,605
69,282
98,887
62,947
(1,131)
2012
Group
£’000
19,307
73,296
92,603
74,735
(815)
2011
Group
£’000
16,448
75,481
91,929
73,710
(657)
Revenue from external customers
201,248
160,703
166,523
164,982
Geographical information - revenues from external customers:
United Kingdom
Germany
Rest of Europe
Total
Geography is determined by the location of the end customer
2014
Group
£’000
186,462
13,112
1,674
2013
Group
£’000
149,246
10,591
866
2012
Group
£’000
153,525
10,231
2,767
2011
Group
£’000
155,017
9,331
634
201,248
160,703
166,523
164,982
91
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
4. Segment information
Within the value-added logistics services
For the Group, the Chief Operating Decision
segment, the CODM also reviews
Maker (“CODM”) is the main Board of
performance of three separate business
Directors. The CODM monitors the operating
activities:
results of each business unit separately for
- E-fulfi lment logistics services
the purposes of making decisions about
- Non E-fulfi lment logistics services
resource allocation and performance
- Central logistics overheads, being the
assessment. Segment performance is
costs of support services specifi c to the
evaluated based on operating profi t or
value-added logistics services segment,
loss, both before and after exceptional
but which are impractical to allocate
items. This measurement basis excludes
between the sub-segment activities
Group-wide central services and fi nancing
costs which are not allocated to operating
Inter-segment transactions are entered
segments.
into under normal commercial terms and
conditions and on an arm’s length basis
For management purposes, the Group
that would also be available to unrelated
is organised into two main reportable
third parties.
segments:
- Value-added logistics services
The following tables present profi t
- Distribution of commercial vehicles,
information for continuing operations
including sales, servicing and repairs
regarding the Group’s business segments
for the four years ended 30 April 2014:
Operating profi t before non-recurring items:
E-fulfi lment logistics
Non E-fulfi lment logistics
Central logistics overheads
Value-added logistics services
Distribution of commercial vehicles
Head offi ce costs – continuing
2014
Group
£’000
3,724
9,163
(4,228)
8,659
1,836
(882)
2013
Group
£’000
2,492
7,910
(2,408)
7,994
1,464
(721)
2012
Group
£’000
1,938
7,740
(1,639)
8,039
1,299
(671)
2011
Group
£’000
1,280
8,140
(2,403)
7,017
1,903
(672)
Group operating profi t before non-recurring items
9,613
8,737
8,667
8,248
92
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
4. Segment information (continued)
Exceptional and discontinuing costs:
E-fulfi lment logistics
Non E-fulfi lment logistics
Central logistics
Value-added logistics services
Distribution of commercial vehicles
Segment total exceptional items
IPO costs1
Head offi ce costs – discontinuing2
2014
Group
£’000
(10)
-
(30)
(40)
(495)
(535)
2013
Group
£’000
(208)
-
-
(208)
(184)
(392)
2012
Group
£’000
-
(51)
(36)
(87)
-
(87)
(1,981)
(2,297)
-
(2,137)
-
(1,991)
2011
Group
£’000
-
(1,121)
(21)
(1,142)
(3)
(1,145)
-
(1,508)
Group total exceptional and discontinuing costs
(4,813)
(2,529)
(2,078)
(2,653)
Operating profi t and profi t before income tax:
Operating profi t:
E-fulfi lment logistics
Non E-fulfi lment logistics
Central logistics overheads
Value-added logistics services
Distribution of commercial vehicles
IPO costs1
Head offi ce costs2
2014
Group
£’000
3,714
9,163
(4,258)
8,619
1,341
(1,981)
(3,179)
2013
Group
£’000
2,284
7,910
(2,408)
7,786
1,280
-
(2,858)
2012
Group
£’000
1,938
7,689
(1,675)
7,952
1,299
-
(2,662)
2011
Group
£’000
1,280
7,019
(2,424)
5,875
1,900
-
(2,180)
Group operating profi t
4,800
6,208
6,589
5,595
Finance costs
Finance income
(952)
101
(1,005)
3
(1,419)
55
(1,003)
82
Profi t before income tax
3,949
5,206
5,225
4,674
1 Professional fees and other costs paid in relation to the Initial Public Offering.
2 Head offi ce costs include a number of items which will not be borne by the Group post-Admission. These consist of certain advertising, sponsorship and corporate
entertaining expenses, remuneration of a retiring Director, consultancy and professional fees in respect of potential investment opportunity appraisals and the costs of
operating the Chairman’s private offi ce.
93
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
The Group has one customer that in the year ended 30 April 2013 accounted for greater than 10% of the total Group revenue.
The revenue from this customer all arose within the value-added logistics services segment as follows:
Revenue
2014
Group
£’000
2013
Group
£’000
-
18,999
2012
Group
£’000
-
2011
Group
£’000
-
The segment assets and liabilities at the balance sheet date are as follows:
At 1 May 2010:
Value-added logistics services
Distribution of commercial vehicles
Segment
assets
£’000
42,082
28,123
Segment
liabilities
£’000
(15,770)
(21,067)
Segment assets/(liabilities)
70,205
(36,837)
Unallocated assets/(liabilities):
- Cash and cash equivalents
- Financial liabilities
- Deferred tax
- Income tax assets/(liabilities)
320
(11,213)
(357)
(179)
Total assets/(liabilities)
70,525
(48,586)
At 30 April 2011:
Value-added logistics services
Distribution of commercial vehicles
Segment
assets
£’000
38,117
35,822
Segment
liabilities
£’000
(13,317)
(30,159)
Segment assets/(liabilities)
73,939
(43,476)
Unallocated assets/(liabilities):
- Cash and cash equivalents
- Financial liabilities
- Deferred tax
- Income tax assets/(liabilities)
156
(5,150)
(391)
(803)
Total assets/(liabilities)
74,095
(49,820)
94
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
4. Segment information (continued)
At 30 April 2012:
Value-added logistics services
Distribution of commercial vehicles
Segment
assets
£’000
38,878
32,387
Segment
liabilities
£’000
(15,034)
(24,625)
Segment assets/(liabilities)
71,265
(39,659)
Unallocated assets/(liabilities):
- Cash and cash equivalents
- Financial liabilities
- Deferred tax
- Income tax assets/(liabilities)
2,231
(6,647)
(624)
(689)
Total assets/(liabilities)
73,496
(47,619)
At 30 April 2013:
Value-added logistics services
Distribution of commercial vehicles
Segment
assets
£’000
43,253
28,251
Segment
liabilities
£’000
(19,023)
(19,345)
Segment assets/(liabilities)
71,504
(38,368)
Unallocated assets/(liabilities):
- Cash and cash equivalents
- Financial liabilities
- Deferred tax
- Income tax assets/(liabilities)
2,849
(7,867)
(672)
(530)
Total assets/(liabilities)
74,353
(47,437)
At 30 April 2014:
Value-added logistics services
Distribution of commercial vehicles
Segment
assets
£’000
44,376
38,391
Segment
liabilities
£’000
(27,249)
(25,321)
Segment assets/(liabilities)
82,767
(52,570)
Unallocated assets/(liabilities):
- Cash and cash equivalents
- Financial liabilities
- Deferred tax
- Income tax assets/(liabilities)
5,360
(23,401)
(366)
(318)
Total assets/(liabilities)
88,127
(76,655)
95
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
4. Segment information (continued)
Capital expenditure, depreciation and amortisation by segment in the year ended 30 April was as follows:
Capital expenditure:
Value-added logistics services
Distribution of commercial vehicles
2014
Group
£’000
4,203
936
2013
Group
£’000
4,604
1,011
2012
Group
£’000
2,025
693
2011
Group
£’000
213
791
Total
5,139
5,615
2,718
1,004
Capital expenditure comprises additions to property, plant and equipment (note 13) and intangible assets (note 14).
Depreciation:
2014
Group
£’000
3,100
585
2013
Group
£’000
2,108
495
2012
Group
£’000
2,087
490
2011
Group
£’000
2,168
450
3,685
2,603
2,577
2,618
2014
Group
£’000
212
7
219
2014
Group
£’000
32,621
2,789
2013
Group
£’000
141
15
156
2013
Group
£’000
32,403
1,809
2012
Group
£’000
113
22
135
2012
Group
£’000
30,195
1,699
2011
Group
£’000
139
38
177
2011
Group
£’000
30,914
1,582
35,410
34,212
31,894
32,496
Non-current assets held by each Geographical area are made up as follows:
Value-added logistics services
Distribution of commercial vehicles
Total
Amortisation:
Value-added logistics services
Distribution of commercial vehicles
Total
United Kingdom
Germany
Total
96
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
5. Staff costs
Wages and salaries
Social security costs
Pension costs for the defi ned contribution
scheme
Share based payments
2014
Group
£’000
52,594
4,839
883
180
2013
Group
£’000
41,743
3,992
737
57
2012
Group
£’000
40,414
3,952
739
19
2011
Group
£’000
39,781
3,995
610
9
Total
58,496
46,529
45,124
44,395
The average monthly number of employees during the period was made up as follows:
Warehousing
Distribution
Service and maintenance
Administration
2014
Group
Number
1,433
379
237
334
2013
Group
Number
1,119
336
216
327
Total
2,383
1,998
Key management compensation (including Executive Directors):
Wages and salaries
Social security costs
Pension costs for the defi ned contribution scheme
Share based payments
2014
Group
£’000
2,411
333
389
180
2013
Group
£’000
2,340
323
397
57
2012
Group
Number
1,001
350
233
327
1,911
2012
Group
£’000
2,171
299
433
19
2011
Group
Number
1,071
364
221
301
1,957
2011
Group
£’000
2,012
257
494
9
Total
3,313
3,117
2,922
2,772
97
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
5. Staff costs (continued)
Directors’ emoluments:
Aggregate emoluments
Pension costs for the defi ned contribution scheme
2014
Group
£’000
1,300
139
2013
Group
£’000
1,155
92
2012
Group
£’000
1,046
125
2011
Group
£’000
1,017
135
Total
1,439
1,247
1,171
1,152
The number of Directors who were accruing benefi ts under a Group Pension Scheme is as follows:
2014
Group
Number
2013
Group
Number
2012
Group
Number
2011
Group
Number
Defi ned contribution plans
5
5
5
5
Emoluments in respect of the highest paid Director:
Aggregate emoluments
Pension costs for the defi ned contribution scheme
Total
2014
Group
£’000
500
15
515
2013
Group
£’000
359
15
374
2012
Group
£’000
327
17
344
2011
Group
£’000
320
15
335
98
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
6. Group operating profi t
This is stated after charging/(crediting):
Depreciation of property, plant and equipment - owned assets
Depreciation of property, plant and equipment - leased assets
Amortisation of intangibles assets (included within
administration & other expenses)
2014
Group
£’000
1,760
1,925
2013
Group
£’000
1,754
849
2012
Group
£’000
1,558
1,019
2011
Group
£’000
1,589
1,029
219
156
135
177
Total depreciation and amortisation expense
3,904
2,759
2,712
2,795
Operating lease rentals
- Plant and machinery
- Land and buildings
Loss arising on the Clipper Group Employee Benefi t Trust
6,672
12,658
-
5,583
9,195
5
5,850
9,020
-
5,421
9,181
5
Auditors’ remuneration:
EY LLP
- Group audit fees
- Tax services
- Corporate fi nance services
Baker Tilly UK Audit LLP & Associates
- Group audit fees
- Tax services
- Corporate fi nance services
Total auditors’ remuneration:
- Audit of the Group Financial Statements
- Audit of the subsidiaries
- Non-audit fees
Total fees paid to the Group’s auditors
Exceptional items:
- Closure of depots
- Redundancy costs on reorganisation
- Aborted contract exit costs
- IPO transaction costs
Total exceptional items
Other net gains:
- Profi t on sale of property, plant and equipment
- Dealership contributions
- Amortisation of grants
Total net gains
135
-
565
6
24
-
50
91
589
730
363
162
10
1,981
2,516
26
259
-
285
-
-
-
78
51
-
20
58
51
-
-
-
75
46
16
20
55
62
-
-
-
72
1
67
20
52
68
129
137
140
184
-
208
-
392
302
136
-
438
-
87
-
-
87
1,202
-
1
1,203
981
164
-
-
1,145
74
203
35
312
99
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
7. Earnings per share
Basic earnings per share amounts are calculated by dividing profi t for the year attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares outstanding during the year.
The following refl ects the income and share data used in the basic earnings per share computation:
Profi t attributable to ordinary equity holders
of the Company
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
2,826
3,766
3,820
3,142
Thousands
Thousands
Thousands
Thousands
Basic weighted average number of shares
99,160
99,158
99,158
99,158
Basic and diluted earnings per share
2.8p
3.8p
3.9p
3.2p
The weighted average number of shares has been calculated assuming all shares were converted from £1 to 0.05p shares as from 1 May 2010 in accordance with IAS 33.28.
Adjusted earnings per share
As set out in note 22, during the year to 30 April 2014 there was a group reorganisation involving both an issue and a subdivision of
shares.
In addition, there was a large amount of non-recurring costs. Consequently, the basic measure of earnings per share is signifi cantly
distorted by these factors.
Adjusting earnings to exclude discontinuing and exceptional costs and the tax effect thereon, gives adjusted earnings of
£6,540,000 for the year to 30 April 2014 (2013: £5,690,000, 2012: £5,361,000, 2011: £5,056,000).
Adjusted earnings per share:
Profi t attributable to ordinary equity holders
of the Company
Discontinuing costs
Exceptional costs
Tax effect at standard rate
Adjusted earnings
2014
Group
£’000
2,826
2,297
2,516
(1,099)
6,540
2013
Group
£’000
3,766
2,137
392
(605)
5,690
2012
Group
£’000
3,820
1,991
87
(537)
5,361
2011
Group
£’000
3,142
1,508
1,145
(739)
5,056
Thousands
Thousands
Thousands
Thousands
Basic weighted average number of shares
99,160
99,158
99,158
99,158
Adjusted basic and diluted earnings per share
6.6p
5.7p
5.4p
5.1p
100
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
8. Dividends and other distributions
Dividends declared and paid by the Company
during the year to former parent company*
Dividends declared and paid by
other Group members
Payments charged to merger reserve in respect
of the transfer of subsidiaries
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
2,500
2,800
1,600
801
3,849
12,162
-
-
663
-
-
-
Total distributions
18,511
2,800
2,263
801
*Dividend per ‘A’ ordinary share
£649.02
£726.91
£415.37
£207.97
9. Finance income
Bank interest
Other interest
Amounts receivable from former parent company
Total interest income for fi nancial assets
measured at amortised cost
10. Finance costs
On bank loans and overdrafts
On hire purchase agreements
Amortisation of debt issue costs
Commercial vehicle stocking interest
Other interest payable
Amounts payable to former parent company
Total interest expense for fi nancial liabilities
measured at amortised cost
2014
Group
£’000
-
1
100
101
2014
Group
£’000
19
292
-
305
38
298
2013
Group
£’000
3
-
-
3
2013
Group
£’000
44
175
-
444
23
319
2012
Group
£’000
4
-
51
55
2012
Group
£’000
115
279
153
311
144
417
2011
Group
£’000
55
-
27
82
2011
Group
£’000
295
246
-
267
56
139
952
1,005
1,419
1,003
101
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
11. Income tax expense
a) Tax charged in the income statement:
Current income tax:
UK & foreign corporation tax
Amounts under (over) provided in previous years
2014
Group
£’000
1,408
3
2013
Group
£’000
1,366
16
Total income tax on continuing operations
1,411
1,382
Deferred tax:
Origination and reversal of temporary difference
Amounts under (over) provided in previous years
Impact of change in tax laws and rates
Total deferred tax
Tax expense in the income statement on
continuing operations
(267)
4
(45)
(308)
30
-
20
50
2012
Group
£’000
1,194
(15)
1,179
227
-
(1)
226
2011
Group
£’000
1,469
29
1,498
(90)
-
124
34
1,103
1,432
1,405
1,532
b) Tax relating to items charged or credited to other comprehensive income:
Deferred tax:
Exchange differences on retranslation
of foreign operations
Changes in tax laws and rates
Total deferred tax
Tax expense in the statement of other
comprehensive income
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
102
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
c) Reconciliation of income tax charge:
The income tax expense in the income statement for the period differs from the standard rate of corporation tax in the UK.
The differences are reconciled below:
Profi t before taxation from continuing operations
Standard rate of corporation tax in UK
Tax on profi t on ordinary activities at standard rate
Expenses not allowable for tax purposes
Tax under (over) provided in previous years
Difference in tax rates overseas
Utilisation of previously unrecognised tax losses
Deferred tax rate difference
2014
Group
£’000
3,949
22.84%
902
223
7
16
-
(45)
2013
Group
£’000
5,206
23.92%
1,245
100
16
42
-
29
2012
Group
£’000
5,225
2011
Group
£’000
4,674
25.84%
1,350
27.84%
1,301
84
(15)
-
(13)
(1)
132
29
-
(54)
124
Total tax expense reported in the income statement
1,103
1,432
1,405
1,532
d) Deferred tax in the income statement:
Deferred tax on accelerated capital allowances
Deferred tax on other temporary differences
2014
Group
£’000
(261)
(47)
(308)
2013
Group
£’000
(36)
(14)
(50)
2012
Group
£’000
(149)
(77)
(226)
2011
Group
£’000
(170)
136
(34)
The UK corporation tax rate reduced from 28% to 26% with effect from 1 April 2011, from 26% to 24% with effect from 1 April
2012, from 24% to 23% with effect from 1 April 2013, and from 23% to 21% with effect from 1 April 2014. A further reduction
to 20% is effective from 1 April 2015. Accordingly, these rates have been applied in the measurement of the Group’s deferred
tax assets and liabilities as at 30 April 2014.
e) Deferred tax in the statement of fi nancial position:
Deferred tax liability:
Accelerated capital allowances
Deferred tax asset:
Provisions & other timing differences
Net deferred tax liability
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
1 May 2010
Group
£’000
(466)
(727)
(691)
(542)
(372)
100
(366)
55
(672)
67
151
15
(624)
(391)
(357)
103
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
12. Share based payments
The Enterprise Management Incentive Plan
The Unapproved Share Option Scheme
Options granted under the EMI Plan or
(“EMI Plan”) was introduced by Clipper
(“Unapproved Scheme”) was introduced by
Unapproved Scheme would only become
Group Holdings Ltd in January 2004. Under
Clipper Group Holdings Ltd in June 2011.
exercisable on the sale or fl otation of the
the EMI Plan the former parent company
Under the Unapproved Scheme the former
former parent company, and were subject
directors could grant options over shares in
parent company directors could grant
to specifi c performance criteria for each
the former parent company to employees
options over shares in the former parent
award, generally applicable to the senior
of any group company.
company to employees of any group
manager’s employing company. Exercise
company.
of an option is subject to continued
Options were granted with a fi xed exercise
employment.
price equal to the nominal value of the
Options were granted with a fi xed exercise
shares under option at the date of grant.
price equal to the nominal value of the
The fair value of the options granted were
The contractual life of an option is 10
shares under option at the date of grant.
valued using the methodology of an HM
years. Awards under the EMI Plan are
The contractual life of an option is 15 years.
Revenue & Customs approved valuation of
generally reserved for employees at senior
Awards under the Unapproved Scheme
existing shares in 2010, applied to current
management level and above and at 30
are generally reserved for employees at
fi nancial information at the time of grant.
April 2014 two (2013: three, 2012: three,
senior management level and above and
The fair value assumes that all performance
2011: three, 1 May 2010: three) such
at 30 April 2014 four (2013: three, 2012:
criteria are met. The expected life is the
awards had been made to employees of
two, 2011: none, 1 May 2010: none) such
average expected period to exercise.
the Group. There are no reload features.
awards had been made.
Volatility and dividend yield have not
These options would be equity settled.
is no ready market in the former parent
been included in the calculation as there
company’s shares. The weighted average
exercise price of options in issue is £1.00.
A reconciliation of option movements over the year is as follows:
Outstanding at 1 May
Granted
Lapsed
Outstanding at 30 April
Exercisable
2014
Number
2013
Number
2012
Number
2011
Number
394
58
(83)
369
-
336
58
-
394
-
249
87
-
336
-
249
-
-
249
-
The total charge for the year ended 30 April 2014 relating to employee share based payment plans was £180,000 (2013: £57,000, 2012: £19,000, 2011: £9,000, 1 May 2010:
£15,000). All outstanding options were waived in May 2014.
104
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
13. Property, plant and equipment
Group:
COST
At 1 May 2010
Additions
Disposals
Foreign currency adjustment
At 30 April 2011
Additions
Disposals
Foreign currency adjustment
At 30 April 2012
Additions
Disposals
Foreign currency adjustment
At 30 April 2013
Acquisitions
Additions
Disposals
Foreign currency adjustment
At 30 April 2014
Leasehold
property
£’000
Motor
vehicles
£’000
Plant, machinery,
fi xtures & fi ttings
£’000
Total
£’000
3,085
86
(146)
-
3,025
167
(55)
-
3,137
329
(27)
-
3,439
37
586
(58)
(1)
4,003
3,863
304
(1,514)
5
2,658
777
(1,081)
(17)
2,337
1,156
(572)
9
2,931
12
1,215
(528)
(10)
3,620
20,995
27,943
610
(285)
20
1,000
(1,945)
25
21,340
27,023
1,751
(2,779)
(69)
2,695
(3,914)
(86)
20,243
25,717
3,614
(1,170)
37
5,099
(1,769)
46
22,723
29,093
78
2,929
(159)
(34)
127
4,730
(745)
(45)
25,537
33,160
105
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
13. Property, plant and equipment (continued)
Group:
ACCUMULATED DEPRECIATION
At 1 May 2010
Charge for the period
Disposals
Foreign currency adjustment
At 30 April 2011
Charge for the period
Disposals
Foreign currency adjustment
Leasehold
property
£’000
Motor
vehicles
£’000
Plant, machinery,
fi xtures & fi ttings
£’000
1,050
222
(146)
-
1,126
236
(55)
-
2,553
497
(1,199)
3
1,854
375
(795)
(9)
9,041
1,900
(270)
4
10,675
1,966
(2,510)
(23)
Total
£’000
12,644
2,619
(1,615)
7
13,655
2,577
(3,360)
(32)
At 30 April 2012
1,307
1,425
10,108
12,840
Charge for the period
Disposals
Foreign currency adjustment
230
(27)
-
415
(445)
6
1,958
(737)
18
2,603
(1,209)
24
At 30 April 2013
1,510
1,401
11,347
14,258
Charge for the period
Disposals
Foreign currency adjustment
250
(58)
(1)
596
(383)
(6)
2,839
(159)
(19)
3,685
(600)
(26)
At 30 April 2014
1,701
1,608
14,008
17,317
NET BOOK VALUE
At 1 May 2010
At 30 April 2011
At 30 April 2012
At 30 April 2013
At 30 April 2014
2,035
1,899
1,830
1,929
2,302
1,310
804
913
1,530
2,012
11,954
10,665
10,134
11,376
11,529
15,299
13,368
12,877
14,835
15,843
Included within property, plant and equipment are amounts held under fi nance lease contracts. At 30 April 2014 the net book value of these assets was £4,767,000 (30 April 2013:
£2,503,000, 30 April 2012: £2,567,000, 30 April 2011: £4,853,000, 1 May 2010: £3,416,000).
106
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
14. Intangible assets
Group:
COST:
At 1 May 2010
Additions
Disposals
At 30 April 2011
Additions
Disposals
At 30 April 2012
Additions
Disposals
At 30 April 2013
Additions
Disposals
At 30 April 2014
Goodwill
£’000
Contracts and
Licenses
£’000
Computer
Software
£’000
18,785
-
-
18,785
-
-
18,785
-
-
723
-
-
723
-
-
723
-
-
929
4
-
933
23
(59)
897
516
-
Total
£’000
20,437
4
-
20,441
23
(59)
20,405
516
-
18,785
723
1,413
20,921
233
-
-
-
176
-
409
-
19,018
723
1,589
21,330
107
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
14. Intangible assets (continued)
Group:
ACCUMULATED AMORTISATION:
At 1 May 2010
Charge for the period
At 30 April 2011
Charge for the period
Disposals
At 30 April 2012
Charge for the period
At 30 April 2013
Charge for the period
At 30 April 2014
NET BOOK VALUE:
At 1 May 2010
At 30 April 2011
At 30 April 2012
At 30 April 2013
At 30 April 2014
108
Goodwill
£’000
Contracts and
Licenses
£’000
Computer
Software
£’000
-
-
-
-
-
-
-
-
-
-
18,785
18,785
18,785
18,785
19,018
723
-
723
-
-
723
-
723
-
723
-
-
-
-
-
413
177
590
135
(60)
665
156
821
219
1,040
516
343
232
592
549
Total
£’000
1,136
177
1,313
135
(60)
1,388
156
1,544
219
1,763
19,301
19,128
19,017
19,377
19,567
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
15. Impairment test for goodwill
The carrying amount of goodwill has been allocated to cash generating units (“CGU”s) as follows:
Value-added logistics services
Distribution of commercial vehicles
2014
Group
£’000
13,092
5,926
2013
Group
£’000
12,859
5,926
2012
Group
£’000
12,859
5,926
2011
Group
£’000
12,859
5,926
1 May 2010
Group
£’000
12,859
5,926
19,018
18,785
18,785
18,785
18,785
The recoverable amount of a CGU is determined based on value-in-use calculations.
The value-in-use calculations have used pre-tax cash fl ow projections based on the Board approved business plans for the two years
ending 30 April 2016. Subsequent cash fl ows are extrapolated using an estimated long term growth rate of 2.5% to 2025. The cash fl ows
have then been discounted using a pre-tax risk adjusted discount rate of 10%.
The pre-tax adjusted discount rate has been estimated based on other similar sized companies in similar industries.
The Directors have concluded that no reasonably foreseeable change in the key assumptions would give rise to an impairment.
109
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
16. Inventories
Component parts and consumable stores
Commercial vehicles
Commercial vehicles on consignment
2014
Group
£’000
3,427
2,669
12,929
2013
Group
£’000
3,723
2,121
8,502
2012
Group
£’000
4,211
2,953
11,663
2011
Group
£’000
4,016
2,605
14,192
1 May 2010
Group
£’000
3,118
1,799
10,599
Total inventories
19,025
14,346
18,827
20,813
15,516
See below for the movements in the provision for obsolescence:
At 1 May 2010
Charged for the year
Utilised
At 30 April 2011
Charged for the year
Utilised
At 30 April 2012
Charged for the year
Utilised
At 30 April 2013
Charged for the year
Utilised
At 30 April 2014
Group
£’000
101
40
(30)
111
45
(51)
105
65
(66)
104
127
(99)
132
The cost of inventories recognised as an expense amounted to £61,789,000 (2013: £61,760,000, 2012:
£76,072,000, 2011: £69,082,000).
Included within commercial vehicles is £1,071,000 (2013: £1,609,000, 2012: £956,000, 2011: £591,000,
1 May 2010: £282,000) relating to assets held under hire purchase agreements.
110
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
17. Trade and other receivables
Trade receivables
Less: provision for impairment of receivables
2014
Group
£’000
16,378
(349)
2013
Group
£’000
13,010
(172)
2012
Group
£’000
12,471
(81)
2011
Group
£’000
14,372
(77)
1 May 2010
Group
£’000
13,965
(222)
Trade receivables - net
16,029
12,838
12,390
14,295
13,743
Other receivables
Director loan accounts (see note 27)
Prepayments and accrued income
2,636
-
9,667
1,465
1,734
6,909
1,107
771
6,276
834
380
5,121
845
1,446
4,055
Total trade and other receivables
28,332
22,946
20,544
20,630
20,089
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:
At 1 May 2010
Charged for the year
Utilised
At 30 April 2011
Charged for the year
Utilised
At 30 April 2012
Charged for the year
Utilised
At 30 April 2013
Charged for the year
Utilised
At 30 April 2014
Group
£’000
222
92
(237)
77
62
(58)
81
176
(85)
172
331
(154)
349
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 believe 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 25 days (2013: 24 days, 2012: 22 days, 2011: 26 days, 1 May 2010: 30 days).
An impairment review has been undertaken at the balance sheet date to assess whether the carrying amount of fi nancial 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 fl ows or non-payment
from customers.
111
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
17. Trade and other receivables (continued)
The ageing analysis of trade receivables was as follows:
30 April 2014
30 April 2013
30 April 2012
30 April 2011
1 May 2010
18. Cash and cash equivalents
Cash and cash equivalents
Bank overdraft
Neither past due
nor impaired
£’000
15,032
12,242
11,779
13,607
12,994
2014
Group
£’000
5,360
(85)
Past due but not impaired
30-60 days
£’000
60-90 days
£’000
> 90 days
£’000
455
349
374
410
470
190
122
113
109
74
352
125
124
169
205
2013
Group
£’000
2,849
(569)
2012
Group
£’000
2,231
(81)
2011
Group
£’000
156
(5,641)
1 May 2010
Group
£’000
320
(8,266)
Total cash and cash equivalents
5,275
2,280
2,150
(5,485)
(7,946)
19. Trade and other payables
Trade creditors
Other taxes and social security
Other creditors
Accruals and deferred income
2014
Group
£’000
35,876
4,915
3,265
7,668
2013
Group
£’000
24,346
5,233
2,728
5,006
2012
Group
£’000
27,907
4,422
2,892
3,520
2011
Group
£’000
33,085
3,061
1,879
4,222
1 May 2010
Group
£’000
26,114
4,775
1,626
3,423
Total trade and other payables
51,724
37,313
38,741
42,247
35,938
112
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
20. Financial liabilities - Borrowings
NON-CURRENT:
Bank loans
Obligations under fi nance leases
or hire purchase agreements
CURRENT:
Bank overdrafts
Bank loans
Stocking loans
Obligations under fi nance leases
or hire purchase agreements
2014
Group
£’000
2013
Group
£’000
2012
Group
£’000
2011
Group
£’000
1 May 2010
Group
£’000
(216)
(32)
(4,044)
(2,061)
(4,260)
(2,093)
(85)
(177)
(2,686)
(569)
(169)
(978)
-
(625)
(625)
(81)
-
(474)
-
-
(963)
(1,994)
(963)
(1,994)
(5,641)
-
-
(8,266)
(1,800)
-
(2,012)
(1,723)
(1,987)
(1,697)
(1,979)
(4,960)
(3,439)
(2,542)
(7,338)
(12,045)
Total external borrowings
Add cash and cash equivalents
(9,220)
5,360
(5,532)
2,849
(3,167)
2,231
(8,301)
156
(14,039)
320
Net external debt
(3,860)
(2,683)
(936)
(8,145)
(13,719)
Net former parent company balance
(14,181)
(2,335)
(3,480)
3,151
2,826
Net debt
(18,041)
(5,018)
(4,416)
(4,994)
(10,893)
Current fi nancial liabilities:
Prior to the reorganisation, the former parent company arranged a proportion of external borrowings used to fi nance the group. Balances
were lent to and from the former parent company to fund the group activities. Therefore the amounts owed to and from the former parent
company have been disclosed in fi nancial liabilities.
Amounts owed to former parent company
Amounts owed by former parent company
Net former parent company balance
Current external fi nancial liabilities
2014
Group
£’000
(15,267)
1,086
(14,181)
(4,960)
2013
Group
£’000
(7,971)
5,636
(2,335)
(3,439)
2012
Group
£’000
(9,284)
5,804
(3,480)
(2,542)
2011
Group
£’000
(8,583)
11,734
3,151
7,338
1 May 2010
Group
£’000
(2,556)
5,382
2,826
12,845
Current fi nancial liabilities
(19,141)
(5,774)
(6,022)
(4,187)
(9,219)
113
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
20. Financial liabilities - Borrowings (continued)
The maturity analysis of the bank loans at 30 April is as follows:
In one year or less
Between one and fi ve years
After fi ve years
Total bank loans
2014
Group
£’000
177
216
-
393
2013
Group
£’000
169
32
-
201
2012
Group
£’000
2011
Group
£’000
1 May 2010
Group
£’000
-
-
-
-
-
-
-
-
1,800
-
-
1,800
The amounts which are repayable under hire purchase or fi nance lease instalments are shown below:
FIXED RATE LEASES:
MINIMUM LEASE PAYMENTS:
In one year or less
Between one and fi ve years
After fi ve years
INTEREST:
In one year or less
Between one and fi ve years
After fi ve years
PRINCIPAL OF FIXED RATE LEASES:
In one year or less
Between one and fi ve years
After fi ve years
VARIABLE RATE LEASES:
In one year or less
Between one and fi ve years
After fi ve years
2014
Group
£’000
1,451
2,676
-
2013
Group
£’000
978
1,105
-
2012
Group
£’000
2011
Group
£’000
1 May 2010
Group
£’000
891
317
-
1,618
875
-
2,094
2,082
-
4,127
2,083
1,208
2,493
4,176
(192)
(182)
-
(374)
1,259
2,494
-
(84)
(83)
-
(167)
894
1,022
-
(56)
(13)
-
(69)
835
304
-
(219)
(109)
-
(328)
1,399
766
-
(327)
(247)
-
(574)
1,767
1,835
-
3,753
1,916
1,139
2,165
3,602
753
1,550
-
829
1,039
-
2,303
1,868
1,151
322
-
1,473
297
197
-
494
212
159
-
371
Total
6,056
3,784
2,612
2,659
3,973
It is the Group’s policy to acquire certain of its property, plant and equipment and inventories under fi nance leases or hire purchase
agreements. The average contract term is 3.5 (2013: 3.0, 2012: 3.2, 2011: 3.3, 1 May 2010: 3.4) years. At 30 April 2014 £5,998,000 (2013:
£3,712,000, 2012: £2,612,000, 2011: £2,659,000, 1 May 2010, £3,973,000) of the Group total of such obligations are denominated in
sterling and the remainder is denominated in Euros. The interest on the variable rate leases is based on a margin above Bank Base Rate,
FHBR or LIBOR. The Group’s obligations under fi nance leases are secured by the lessor’s charge over the assets.
114
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
21. Provisions
At 1 May 2010
Utilised
Charged in period
At 30 April 2011
Utilised
Charged in period
At 30 April 2012
Utilised
Charged in period
At 30 April 2013
Acquisitions
Utilised
Charged in period
At 30 April 2014
Onerous
contracts
Uninsured
losses
Dilapidations
161
(55)
-
106
(55)
-
51
(51)
-
-
60
(79)
331
312
21
(60)
389
350
(42)
42
350
(97)
97
350
-
(155)
(195)
-
717
(68)
125
774
(595)
338
517
(160)
348
705
-
(264)
93
534
Total
899
(183)
514
1,230
(692)
380
918
(308)
445
1,055
60
(498)
229
846
Provisions have been analysed between current and non-current as follows:
Current
Non-current
2014
Group
£’000
147
699
846
2013
Group
£’000
547
508
1,055
2012
Group
£’000
428
490
918
2011
Group
£’000
636
593
1,230
1 May 2010
Group
£’000
130
769
899
Onerous contracts
the closure of a depot, the Group has
In the year ended 30 April 2011 a provision
As part of the consideration for the
been unsuccessful in its efforts to sub-let
was put in place for legal costs expected
acquisition of the German businesses
the closed premises. The Directors have
to be incurred on behalf of the then parent
in 2008 and 2013, the Group took
therefore decided to make a provision
entity. Any remaining liability has now been
on contracts for some staff, vehicles
in the current year for the rent that will be
indemnifi ed by the shareholders of the
and premises that were surplus to the
payable until the expiry of the lease in
former parent company and consequently
immediate requirements of the business.
September 2018.
the balance of the provision has been
The onerous element of those contracts
released in the year.
has been recognised within the fair value of
Uninsured losses
assets and liabilities acquired. The provisions
The uninsured losses provision is in respect
Dilapidations
were all fully utilised by 30 April 2014.
of the cost of claims (generally for
Provisions are established over the life of
Following a reorganisation of the
related) which are either not insured
termination under the terms of those leases.
commercial vehicles business in the year
externally or fall below the excess on the
Two key sites have leases that expire 23 and
ended 30 April 2013, which included
Group’s insurance policies.
14 years from the balance sheet date.
commercial vehicles and employment
leases to cover remedial work necessary at
All other leases expire in 10 years or less.
115
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
22. Share capital
ALLOTTED, CALLED UP AND FULLY PAID:
3,852 ‘A’ ordinary shares of £1 each
3,851 ‘B’ ordinary shares of £1 each
100,000,000 ordinary shares of 0.05p each
2014
Company
£’000
2013
Company
£’000
2012
Company
£’000
2011
Company
£’000
1 May 2010
Company
£’000
-
-
50
50
4
4
-
8
4
4
-
8
4
4
-
8
4
4
-
8
On 30 April 2014 the following
b) 83,794,000 ordinary shares of 0.05p
shareholding in Clipper Logistics GmbH
transactions occurred:
each were allotted to the then parent
(see note 28). The fair value of the shares
a) The 3,852 ‘A’ ordinary and 3,851 ‘B’
company for cash consideration of
issued was estimated at £800,000 and
ordinary shares of £1 each were
£42,000.
consequently £800,000 was credited to
re-designated as 15,406,000 ordinary
c) 800,000 ordinary shares of 0.05p each
other reserves.
shares of 0.05p each.
were allotted in exchange for the minority
23. Merger reserve
To refl ect the group reorganisation a merger
In the year ended 30 April 2014 a charge
reserve with a balance of £18,168,000 has
of £12,162,000 was made to the reserve
been included in the Group Statement of
to refl ect the acquisition of the fellow
Financial Position at 1 May 2010.
subsidiaries from Clipper Group Holdings Ltd
as part of the group reorganisation.
24. Commitments and contingencies
Operating lease commitments – Land and buildings:
Less than one year
Between one and fi ve years
More than fi ve years
2014
Group
£’000
9,660
35,952
57,816
2013
Group
£’000
9,137
30,863
61,251
2012
Group
£’000
7,445
18,436
15,309
2011
Group
£’000
7,684
19,664
18,665
1 May 2010
Group
£’000
6,162
17,295
14,960
Total minimum lease payments
103,428
101,251
41,190
46,013
38,417
Operating lease commitments – Plant and machinery:
Less than one year
Between one and fi ve years
More than fi ve years
2014
2014
Group
Group
£’000
£’000
2,615
3,750
293
2013
2013
Group
Group
£’000
£’000
3,512
3,479
113
2012
2012
Group
Group
£’000
£’000
3,446
5,089
71
2011
2011
Group
Group
£’000
£’000
3,732
4,652
-
1 May 2010
1 May 2010
Group
Group
£’000
£’000
2,146
1,707
-
Total minimum lease payments
6,658
7,104
8,606
8,384
3,853
116
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
25. Capital commitments
Authorised and contracted for
Authorised, but not contracted for
2014
Group
£’000
295
-
295
2013
Group
£’000
209
-
209
2012
Group
£’000
-
657
657
2011
Group
£’000
1 May 2010
Group
£’000
-
-
-
-
-
-
26. Financial instruments and fi nancial risk management objectives and policies
In accordance with IAS 39 (Financial
At 30 April 2014 there were no signifi cant
Liquidity risk
Instruments: Recognition and Measurement)
concentrations of credit risk (2013: £nil,
Management closely monitors available
the Group has reviewed all contracts for
2012: £nil, 2011: £nil, 1 May 2010: £nil).
bank and other credit facilities in
embedded derivatives that are required to
The Group’s maximum exposure to credit
comparison to the Group’s outstanding
be separately accounted for if they do not
risk, gross of any collateral held, relating
commitments on a regular basis to ensure
meet certain requirements. The Group did
to its fi nancial assets is equivalent to their
that the Group has suffi cient funds to meet
not identify any such derivatives.
carrying value. All fi nancial assets have a
the obligations of the Group as they fall due.
fair value which is equal to their carrying
The Group is exposed to a number of
value. The Group did not have any fi nancial
The Board receives regular cash forecasts
different market risks in the normal course of
instruments that would mitigate the credit
which estimate the cash infl ows and
business including credit, interest rate and
exposure arising from the fi nancial assets
outfl ows over the next 24-36 months, so that
foreign currency risks.
designated at fair value through profi t or
management can ensure that suffi cient
loss in either the current or the preceding
fi nancing can be arranged as it is required.
Credit risk
fi nancial year.
Credit risk predominantly arises from trade
receivables and cash and cash equivalents.
Interest rate risk
The Group would normally expect that
suffi cient cash is generated in the operating
cycle to meet the contractual cash fl ows
The Group has a customer credit policy
The Group adopts a policy of ensuring that
as disclosed above through effective cash
in place and the exposure to credit risk is
there is an appropriate mix of fi xed and
management.
monitored on an ongoing basis. External
fl oating rates in managing its exposure to
credit ratings are generally obtained for
changes in interest rates on borrowings.
Foreign currency risk
customers; Group policy is to assess the
Interest rate swaps are entered into, where
The Group is exposed to foreign currency
credit quality of each customer before
necessary, to achieve this appropriate mix.
risk on sales, purchases and borrowings that
accepting any terms of trade.
Interest rate sensitivity
are denominated in currencies other than
Pounds Sterling. The currencies giving rise to
Internal procedures take into account
The Group’s borrowings are largely
this risk are primarily the Euro and US dollar.
the customers’ fi nancial position as well
denominated in Pounds Sterling and the
The volume of transactions denominated
as their reputation within the industry and
Group is therefore exposed to a change
in foreign currencies is not signifi cant to the
past payment experience. Cash and
in the relevant interest rate. With all other
Group.
cash equivalents and derivative fi nancial
variables held constant, the impact of a
instruments are held with AAA or AA rated
reasonably possible increase in interest
The exposure to a short-term fl uctuation in
banks. Financial instruments classifi ed as fair
rates of 50 basis points on that portion of
exchange rates on the investment in foreign
value through profi t and loss and available
borrowings affected, would be to reduce
subsidiaries is not expected to have a
for sale are all publicly traded on the UK
the Group’s profi t before tax by £23,000
material impact on the results of the Group.
London Stock Exchange. Given the high
(2013: £15,000, 2012: £7,000, 2011:
credit quality of counterparties with whom
£30,000, 1 May 2010: £52,000).
the Group has investments, the Directors do
not expect any counterparty to fail to meet
its obligations.
117
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
26. Financial instruments and fi nancial risk management objectives and policies (continued)
Capital management
The Group considers its capital to include
Estimation of fair values
The Group’s main objective when managing
equity and net debt as noted below.
The main methods and assumptions used
capital is to protect returns to shareholders
Net debt includes short and long-term
in estimating the fair values of fi nancial
by ensuring the Group will continue to trade
borrowings (including overdrafts and
instruments are as follows:
profi tably in the foreseeable future.
lease obligations) net of cash and
- derivatives: forward exchange contracts
The Group also aims to maximise its capital
cash equivalents.
are marked to market using listed market
structure of debt and equity so as to
prices;
minimise its cost of capital.
The Group has not made any changes to
- interest-bearing loans and borrowings: fair
its capital management during the year.
value is calculated based on discounted
The Group manages its capital with regard
The Group has no long-term gearing ratio
expected future principal and interest
to the risks inherent in the business and the
target. Borrowings are taken out to invest
cash fl ows; and
sector within which it operates by monitoring
in new sites or depots and are considered
- trade and other receivables/payables:
its gearing ratio on a regular basis and
as part of that investment appraisal. Key
the notional amount for trade receivables/
adjusting the level of dividends paid to
measures monitored by the Group are
payables with a remaining life of less than
ordinary shareholders.
interest cover and net debt compared to
one year are deemed to refl ect their
earnings before interest, tax, depreciation
fair value.
and amortisation.
The book and fair values of the Group’s fi nancial instruments were as follows:
CURRENT FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
LIABILITIES
Bank overdraft
Short term borrowings
Trade and other payables
Long term borrowings
CURRENT FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
LIABILITIES
Bank overdraft
Short term borrowings
Trade and other payables
Long term borrowings
2014
Book value
£’000
2014
Fair value
£’000
2013
Book value
£’000
2013
Fair value
£’000
5,360
28,332
(85)
(19,056)
(51,724)
(4,260)
5,360
28,332
(85)
(19,056)
(51,724)
(4,103)
2,849
22,946
(569)
(5,205)
(37,313)
(2,093)
2,849
22,946
(569)
(5,205)
(37,313)
(2,045)
2012 Book
value
£’000
2012
Fair value
£’000
2011
Book value
£’000
2011
Fair value
£’000
1 May 2010
Book value
£’000
1 May 2010
Fair value
£’000
2,231
20,544
2,231
20,544
156
20,630
156
20,630
320
20,089
320
20,089
(81)
(5,941)
(38,741)
(625)
(81)
(5,941)
(38,741)
(614)
(5,641)
1,454
(42,247)
(963)
(5,641)
1,454
(42,247)
(890)
(8,266)
(953)
(35,938)
(1,994)
(8,266)
(953)
(35,938)
(1,925)
Long-term borrowings are classifi ed as Level 2 (items with signifi cant observable inputs) fi nancial liabilities under IFRS 13. There have been
no transfers between Level 1 and Level 2 fi nancial instruments during the period.
118
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
26. Financial instruments and fi nancial risk management objectives and policies (continued)
Maturity of fi nancial liabilities:
Due within
one year
Due between one
and two years
Due between two
and fi ve years
1 May 2010
30 April 2011
30 April 2012
30 April 2013
30 April 2014
Fixed
Floating
Total
Fixed
Floating
Total
Fixed
Floating
Total
Fixed
Floating
Total
Fixed
Floating
Total
1,767
10,278
12,045
1,399
5,939
7,338
836
5,186
6,022
1,063
4,711
5,774
1,436
17,705
19,141
1,399
149
1,548
620
158
778
269
211
480
550
361
911
1,242
978
2,220
436
10
446
146
39
185
34
111
145
503
679
1,182
1,469
571
2,040
Total
3,602
10,437
14,039
2,165
6,136
8,301
1,139
5,508
6,647
2,116
5,751
7,867
4,147
19,254
23,401
119
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
27. Related party disclosures
At the previous year end, Steve Parkin
and bore interest at 3.25% per annum.
and Sean Fahey, both Directors, jointly
The rental agreement terminated on
had an unpaid loan account in favour of
30 May 2014.
the Company. The loan was not interest
bearing and was repaid to the Company
During the year the Company leased
in April 2014.
racehorses which are benefi cially owned
by Steve Parkin. These horses ran in the
Additionally Steve Parkin had an individual
Company name and in Company
loan account in favour of the Company.
colours. Under the terms of the lease, the
The loan was not interest bearing and was
Company is responsible for all expenditure
repaid to the Company in April 2014.
in connection with the horses but can retain
any monies received for a win or placing
At the previous year end, Tony Mannix, a
up to the value of the costs incurred for that
Director, had an unpaid loan account in
horse. The rights and liabilities arising under
favour of the Company. The loan was not
this arrangement ceased on 31 May 2014.
interest bearing and was repaid to the
Company in April 2014.
Roydhouse Properties Ltd is the landlord of
two of the Company’s leasehold properties
At the previous year end, Mike Badrock,
and is classed as a related party due to the
a Non-Executive Director, had an unpaid
company having common directors with
loan account in favour of the Company.
Clipper Logistics plc.
The loan was not interest bearing and was
repaid to the Company in April 2014.
Guiseley Association Football Club shares a
common director with Clipper Logistics plc.
At the previous year end the Company
had advanced a loan to Harrogate Road
Balances due to and from the former
Restaurants Ltd, a related party of the
parent company can be found in note 20.
Group as it shares certain shareholders and
Interest receivable and payable from the
directors in common with the Company.
former parent company can be found in
The loan was not interest bearing and was
notes 9 and 10.
repaid to the Company in April 2014.
The dividends paid to the former parent
The Group rented an aircraft from South
company can be found in note 8.
Acre Aviation Ltd, a company owned by
Steve Parkin. Charges are on an arm’s
Key management compensation is
length basis and the Group had advanced
disclosed in note 5.
a loan to South Acre Aviation Ltd. The loan
was repaid to the Company in April 2014
120
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
27. Related party disclosures (continued)
STATEMENT OF FINANCIAL POSITION:
Loan to SN Parkin & SE Fahey – closing
Loan to SN Parkin & SE Fahey –
maximum balance in the year
2014
2014
Group
Group
£’000
£’000
-
83
Loan to SN Parkin – closing
Loan to SN Parkin – maximum balance in the year
-
1,653
Loan to A G Mannix – closing
Loan to A G Mannix – maximum balance
in the year
Loan to M D Badrock – closing
Loan to M D Badrock –
maximum balance in the year
Loan to South Acre Aviation Ltd – interest bearing
Loan to Harrogate Road Restaurants Ltd – closing
INCOME STATEMENT:
South Acre Aviation Ltd – aircraft rental costs
Horse Costs
Roydhouse Properties Ltd – rent payable
Guiseley Association Football Club –
advertising and sponsorship
-
12
-
496
-
-
69
414
819
275
2013
2013
Group
Group
£’000
£’000
83
83
1,536
1,536
12
12
103
103
42
54
52
83
781
210
2012
2012
Group
Group
£’000
£’000
2011
2011
Group
Group
£’000
£’000
1 May 2010
1 May 2010
Group
Group
£’000
£’000
46
46
713
913
12
12
-
-
42
-
20
211
-
280
15
911
353
737
12
41
-
-
42
-
-
174
-
140
760
760
637
645
41
41
-
-
-
-
-
218
-
87
121
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
28. Business combinations
a) R. Geist Spedition GmbH & Co. KG
The Group acquired Geist to increase its
On 1 October 2013, the Group acquired
presence in mainland Europe and therefore
100% of the voting shares of R. Geist
assist the Group’s UK customers with their
Spedition GmbH & Co. KG (“Geist”),
expansion plans.
an unlisted company based in Germany
and specialising in value-added logistics
services, in exchange for cash consideration.
Purchase consideration:
Cash paid
Total consideration
Analysis of cash fl ows on acquisition:
Net cash acquired with the subsidiary
(included in cash fl ows from investing activities)
Net cash fl ow on acquisition
Acquisition:
ASSETS
Property, plant and equipment
Cash and cash equivalents
Inventories
Trade receivables
Other receivables
LIABILITIES
Trade payables
Other payables
Bank loans
Current tax liability
Deferred tax liability
Total identifi able net assets (liabilities) at fair value
Goodwill arising on acquisition
Total consideration
122
£’000
224
224
(160)
(64)
Fair value recognised
on acquisition
£’000
127
160
49
841
48
418
475
317
24
-
(9)
233
224
Strategic Report | Governance | Financial Statements
Notes to the Group
Financial Statements
continued
28. Business combinations (continued)
a) R. Geist Spedition GmbH & Co. KG
Due to the contractual terms imposed
With effect from 1 March 2014 the Geist
(continued)
on acquisition, the customer list is not
business was merged with Clipper Logistics
The fair value of the trade receivables
separable. Therefore, it does not meet the
GmbH. The combined entity now trades as
amounts to £841,000. The gross amount
criteria for recognition as an intangible
Clipper Geist Logistics GmbH & Co. KG.
of trade receivables is £878,000.
asset under IAS 38. None of the goodwill
An impairment provision of £37,000 has
recognised is expected to be deductible for
b) Clipper Logistics GmbH
been made.
income tax purposes.
On 16 April 2014, the Company acquired,
at book value, the former parent
The goodwill of £233,000 comprises the
From the date of acquisition, Geist has
company’s 75% shareholding in Clipper
value of expected synergies arising from the
contributed £4,190,000 of revenue and
Logistics GmbH.
acquisition and a customer list, which is not
£209,000 to the profi t before tax from
separately recognised. Goodwill is allocated
continuing operations of the Group. If
On 30 April 2014 the Company acquired
entirely to the value-added logistics
the combination had taken place at
the remaining 25% from the minority
services segment.
the beginning of the year, revenue from
shareholders, in exchange for the allotment
continuing operations would have been
of 800,000 ordinary shares of 0.05p each.
£204,193,000 and the profi t before tax from
As this is an increase in the Company’s
continuing operations for the Group would
ownership interest that does not result in a
have been £3,986,000.
change of control, this is accounted for as
an equity transaction through other reserves.
Acquisition of minority shareholding in Clipper Logistics GmbH
Fair value of shares issued
Book value of non-controlling interests acquired
Difference accounted for through equity
c) Stormont Truck and Van Ltd
On 10 August 2013, Northern Commercials
(Mirfi eld) Ltd paid £1,958,000 to Clipper
Group Holdings Ltd to acquire 100% of the
issued share capital of Stormont Truck and
Van Ltd. The trade and assets of Stormont
Truck and Van Ltd were subsequently hived
up into Northern Commercials (Mirfi eld) Ltd.
£’000
800
(33)
767
123
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the Group
Financial Statements
continued
29. First time adoption of IFRS
30. Post balance sheet events
Although as explained in more detail in
Ultimate parent company
note 2.1, the Group’s deemed date of
At 30 April 2014, the Company’s ultimate
transition to IFRS is 1 May 2010, these
parent company was Clipper Group
Financial Statements are the fi rst prepared
Holdings Ltd. Following the partial sale in
by the Group under IFRS. Note 2.1 also
the Initial Public Offering and admission to
explains that while comparative fi gures
trading on the London Stock Exchange on
have been prepared as though the Group
4 June 2014, Clipper Group Holdings Ltd
existed, the Group did not legally form until
ceased to be the ultimate parent company.
16 April 2014. The reconciliations required
under paragraph 24 of IFRS 1 in the fi rst
Bank borrowings
fi nancial statements of an entity adopting
On 2 May 2014, the existing bank facilities
IFRS have therefore not been produced, on
of Clipper Group Holdings Ltd were novated
the grounds that there are no previous UK
to the Company. Upon Admission on 4 June
GAAP fi nancial statements for the Group as
2014, the Group was granted replacement
currently constituted.
bank facilities totalling £30,000,000 by
Santander Corporate UK and settled all
amounts then outstanding by members of
the Group to Clipper Group Holdings Ltd.
124
125
Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc Annual Report and Accounts 2014
Company Financial Statements
for the year ended 30 April 2014
126
126
127
Clipper Logistics plc Annual Report and Accounts 2014
Statement of Directors’ Responsibilities
in respect of the Annual Report and
the Company Financial Statements
The Directors are responsible for preparing
In preparing those Financial Statements the
the Annual Report and the Financial
Directors are required to:
Statements in accordance with applicable
- Select suitable accounting policies and
laws and regulations.
apply them consistently,
- Make judgements and estimates that are
Company law requires the Directors to
reasonable and prudent
prepare fi nancial statements for each
- State whether applicable UK Accounting
fi nancial year. Under that law the Directors
Standards have been followed, subject
have elected to prepare the Financial
to any material departures disclosed and
Statements in accordance with United
explained in the Financial Statements,
Kingdom Generally Accepted Accounting
and
Practice (United Kingdom Accounting
- Prepare the Financial Statements on
Standards and applicable law). Under
the going concern basis unless it is
company law the Directors must not
inappropriate to presume that the
approve the fi nancial statements unless
Company will continue as a going
they are satisfi ed that they give a true
concern.
and fair view of the state of affairs of the
Company and the profi t or loss for
The Directors are responsible for keeping
adequate accounting records that
are suffi cient to show and explain the
Company’s transactions and disclose with
reasonable accuracy at any time the
fi nancial position of the Company and
enable them to ensure that the Financial
Statements comply with the Companies
Act 2006. They are also responsible for
safeguarding the assets of the Company
and hence for taking reasonable steps for
the prevention and detection of fraud and
other irregularities.
that period.
128
Strategic Report | Governance | Financial Statements
Independent
Auditor’s Report - Company
Independent auditor’s report to the members of Clipper Logistics plc
We have audited the Company Financial
Scope of the audit of the Financial
Companies Act 2006; and
Statements of Clipper Logistics plc for
Statements
- the information given in the Strategic
the year ended 30 April 2014 which
An audit involves obtaining evidence about
Report and the Directors’ Report for the
comprise the Company Balance Sheet
the amounts and disclosures in the Financial
fi nancial year for which the Financial
and the related notes A to Q. The fi nancial
Statements suffi cient to give reasonable
Statements are prepared is consistent with
reporting framework that has been
assurance that the Financial Statements are
the Company Financial Statements.
applied in their preparation is applicable
free from material misstatement, whether
law and United Kingdom Accounting
caused by fraud or error. This includes an
Standards (United Kingdom Generally
assessment of: whether the accounting
Matters on which we are required to report
Accepted Accounting Practice).
policies are appropriate to the Company’s
by exception
This report is made solely to the
circumstances and have been consistently
We have nothing to report in respect of the
Company’s members, as a body, in
applied and adequately disclosed; the
following matters where the Companies Act
accordance with Chapter 3 of Part 16 of
reasonableness of signifi cant accounting
2006 requires us to report to you if, in our
the Companies Act 2006. Our audit work
estimates made by the Directors; and
opinion:
has been undertaken so that we might
the overall presentation of the Financial
- adequate accounting records have not
state to the Company’s members those
Statements. In addition, we read all the
been kept by the Company, or returns
matters we are required to state to them
fi nancial and non-fi nancial information
adequate for our audit have not been
in an auditor’s report and for no other
in the Annual Report to identify material
received from branches not visited by us;
purpose. To the fullest extent permitted
inconsistencies with the audited Financial
or
by law, we do not accept or assume
Statements and to identify any information
- the Company Financial Statements and
responsibility to anyone other than the
that is apparently materially incorrect based
the part of the Directors’ Remuneration
Company and the Company’s members
on, or materially inconsistent with, the
Report to be audited are not in
as a body, for our audit work, for this
knowledge acquired by us in the course of
agreement with the accounting records
report, or for the opinions we have formed.
performing the audit. If we become aware
and returns; or
of any apparent material misstatements or
- certain disclosures of directors’
inconsistencies we consider the implications
remuneration specifi ed by law are not
Respective responsibilities of Directors
for our report.
made; or
and auditor
As explained more fully in the Statement of
- we have not received all the information
and explanations we require for our audit.
Directors’ Responsibilities set out on page
Opinion on the Financial Statements
128, the Directors are responsible for the
In our opinion the Company Financial
preparation of the Company Financial
Statements:
Other matters
Statements and for being satisfi ed that they
- give a true and fair view of the state of the
We have reported separately on the Group
give a true and fair view. Our responsibility
Company’s affairs as at 30 April 2014;
Financial Statements of Clipper Logistics plc
is to audit and express an opinion on
- have been properly prepared in
for the year ended 30 April 2014.
the Company Financial Statements in
accordance with United Kingdom
accordance with applicable law and
Generally Accepted Accounting Practice;
The risks disclosed in the Group audit report
International Standards on Auditing (UK
and
in respect of revenue recognition, and the
and Ireland). Those standards require us to
- have been prepared in accordance
classifi cation of certain head offi ce costs
comply with the Auditing Practices Board’s
with the requirements of the Companies
as discontinuing costs, also apply to the
Ethical Standards for Auditors.
Act 2006.
Company Financial Statements.
Opinion on other matters prescribed by
for and on behalf of Ernst & Young LLP,
the Companies Act 2006
Statutory Auditor
Stuart Watson (Senior statutory auditor)
In our opinion:
- the part of the Directors’ Remuneration
Leeds
Report to be audited has been properly
28 August 2014
prepared in accordance with the
129
Clipper Logistics plc Annual Report and Accounts 2014
Company
Balance Sheet
At 30 April
FIXED ASSETS
Tangible assets
Investment in subsidiaries
Intangible assets
Total fi xed assets
CURRENT ASSETS
Stock
Debtors
Cash at bank and in hand
Total current assets
Creditors: amounts falling due within one year
Net current liabilities
Creditors: amounts falling due after more than one year
Provisions for liabilities and charges
NET ASSETS
EQUITY SHAREHOLDERS’ FUNDS
Share capital
Share premium
Other reserve
Profi t and loss account
TOTAL EQUITY
Note
B
C
D
E
F
G
H
I
K
L
L
M
2014
£’000
12,026
11,286
5,778
29,090
543
16,743
3,302
20,588
42,240
2013
£’000
11,905
282
6,193
18,380
295
14,566
14
14,875
18,271
(21,652)
(3,396)
2,438
902
4,098
50
48
851
3,149
4,098
9,086
1,101
4,797
8
48
51
4,690
4,797
Approved by the Board on 28 August 2014 and signed on its behalf by:
D A Hodkin – Chief Financial Offi cer
130
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
A. Accounting policies
Basis of accounting
The Directors have assessed the future
The Financial Statements are prepared
funding requirements of the Group and
The Financial Statements have been
under the historical cost convention.
the Company and compared them to the
prepared in accordance with the
bank facilities which are now available.
Companies Act 2006 and with
The Financial Statements have been
The assessment included a detailed review
applicable accounting standards
prepared on a going concern basis. In
of fi nancial and cash fl ow forecasts for at
in the United Kingdom.
determining the appropriate basis of
least the 12 month period from the date
preparation of the Financial Statements, the
of signing the Annual Report. The Directors
Directors are required to consider whether
considered a range of potential scenarios
Basis of preparation
the Group can continue in operational
within the key markets the Group serves and
The Company Financial Statements for the
existence for the foreseeable future.
how these might impact on the Group’s
year ended 30 April 2014 were authorised for
cash fl ow. The Directors also considered
issue by the Board of Directors on 28 August
Further information in relation to the Group’s
what mitigating actions the Group could
2014 and the Company Statement of
business activities, together with the factors
take to limit any adverse consequences.
Financial Position was signed on the Board’s
likely to affect its future development,
The Group’s forecasts and projections show
behalf by David Hodkin.
performance and position is set out in the
that the Group should be able to operate
A summary of the principal Company
pages 4 to 29.
in borrowing facilities.
Strategic Report section of this report on
without the need for any increase
accounting policies is set out below. These
have been applied on a consistent basis
Note 26 to the Group Financial Statements
Having undertaken this work, the Directors
unless otherwise indicated.
includes the Group’s objectives, policies
are of the opinion that the Company
and processes for managing its capital, its
and the Group have adequate resources
Clipper Logistics plc (the “Company”),
fi nancial risk management objectives and
to continue in operational existence for
a public limited company incorporated
its exposure to foreign exchange, credit and
the foreseeable future. Accordingly, they
and domiciled in the United Kingdom,
interest rate risk.
acts as parent undertaking for the
continue to adopt the going concern basis
in preparing the Financial Statements.
Clipper group of companies.
The Company Balance Sheet at 30
April 2014 shows net current liabilities of
As permitted by section 408 of the
£21,652,000 (2013: £3,396,000). On 2
Tangible fi xed assets
Companies Act 2006, the Company
May 2014 the bank facilities granted by
The cost of tangible fi xed assets is their
has not presented its own profi t and loss
Santander UK plc to Clipper Group Holdings
purchase cost, together with any incidental
account. The profi t after tax for the year was
Ltd were novated to the Company. On 4
expenses of acquisition.
£784,000 (2013: £2,866,000). There were
June 2014 these facilities were restructured
no other recognised gains or losses in either
and extended. Following the restructuring,
Depreciation is calculated so as to write off
year. Audit fees are disclosed in note 6 to
in addition to a fi ve year term loan of
the cost of tangible fi xed assets, less their
the Group Financial Statements.
£12,500,000 amortising quarterly, the Group
estimated residual value, on a straight line or
has access to a fi ve year, non-amortising,
reducing balance basis over their estimated
The Company has taken advantage of the
revolving credit facility of £12,504,000.
economic lives. The estimated economic
exemptions in FRS 1 from preparing cash
fl ows as the Group’s consolidated Financial
Statements, in which the Company is
included, provide equivalent disclosures.
The Company has taken advantage of the
exemption in FRS 8 not to disclose related
party transactions with Group companies.
lives used for the separate categories of
fi xed assets for this purpose are:
- Leasehold property - 5 to 15 years
- Plant and machinery - 2 to 10 years
- Motor vehicles - 4 to 8 years
131
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the
Company Balance Sheet
continued
Investments in subsidiary undertakings
Stocks
Post-retirement benefi ts
Fixed asset investments are shown at cost
Stocks are valued at the lower of cost and
The Company provides no other post-
less provision for impairment.
net realisable value on a line by line basis.
retirement benefi ts to its employees.
Provision is made for obsolete and slow-
moving items.
Purchased goodwill
Goodwill representing the excess of the
purchase price compared with the fair
Taxation
Foreign currencies
Assets and liabilities expressed in foreign
currencies are translated into sterling at
value of net assets acquired is capitalised
The charge for taxation is based on the
rates of exchange ruling at the balance
and written off over its estimated useful life
result for the year. Deferred tax is provided
sheet date or at the agreed contractual
of 20 years, unless the Directors consider
in full on timing differences that result in an
rate. Transactions in foreign currency are
that a shorter period is more appropriate.
obligation at the balance sheet date to
translated at the rate ruling at the date of
pay more tax, or a right to pay less tax, at
the transaction. All differences on exchange
a future date at rates expected to apply
are taken to the profi t and loss account.
Lease assets and obligations
when they crystallise, based on current tax
Leasing agreements and hire purchase
rates and laws. Deferred tax is not provided
contracts which transfer to the Company
on timing differences arising from the
Share based payments
substantially all the benefi ts and risks of
revaluation of fi xed assets where there is no
The former parent company issued
ownership of an asset (“fi nance leases”) are
binding contract to dispose of these assets.
equity-settled share based payments to
treated as if the asset had been purchased
Deferred tax assets are only recognised
certain employees. The fair value at the
outright. Assets held under such agreements
to the extent that it is regarded as more
date of grant of the equity-settled share
are included in fi xed assets and the capital
likely than not that they will be recovered.
based payments is expensed on a
element of commitments is shown as
Deferred tax assets and liabilities recognised
straight-line basis over the vesting period
obligations under fi nance leases. Payments
have not been discounted.
based on the former parent company’s
estimate of shares that will eventually vest.
under such agreements are treated as
consisting of capital and interest elements.
The interest element is charged to the profi t
Pensions
and loss account over the primary lease
Contributions are made to the personal
period in proportion to the reducing capital
pension plans of certain employees.
element outstanding. Assets held under
The assets of the scheme are held
fi nance leases are depreciated over the
separately from those of the Company.
shorter of the lease terms and the useful
The expenditure is charged to the profi t
lives of equivalent owned assets.
and loss account as incurred.
All other leases are treated as operating
leases, the costs of which are charged on a
straight line basis over the lease term. Lease
incentives are recognised over the shorter
of the lease term and the date of the next
rent review.
132
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
continued
B. Tangible fi xed assets
COST
At 1 May 2013
Additions
Intra-group transfers
Disposals
Leasehold
property
£’000
Motor
vehicles
£’000
Plant, machinery,
fi xtures & fi ttings
£’000
Total
£’000
2,088
1,294
21,541
24,923
503
97
(58)
145
-
(115)
2,279
11
(154)
2,927
108
(327)
At 30 April 2014
2,630
1,324
23,677
27,631
ACCUMULATED DEPRECIATION
At 1 May 2013
Charge for the year
Disposals
At 30 April 2014
NET BOOK VALUE
At 30 April 2013
At 30 April 2014
795
162
(58)
899
1,293
1,731
1,014
11,209
13,018
130
(114)
2,621
(154)
2,913
(326)
1,030
13,676
15,605
280
294
10,332
10,001
11,905
12,026
Included within tangible fi xed assets are amounts held under fi nance lease contracts. At 30 April 2014 the net book value of these assets was £3,560,000
(30 April 2013: £1,120,000).The depreciation charged to the accounts in the year in respect of such assets amounted to £1,612,000 (2013: £618,000).
133
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the
Company Balance Sheet
continued
C. Investment in subsidiary undertakings
COST
At 1 May
Additions
At 30 April
PROVISION FOR IMPAIRMENT
2014
£’000
497
11,004
11,501
2013
£’000
497
-
497
At 1 May 2013 and 30 April 2014
215
215
NET BOOK VALUE
At 30 April 2014
11,286
282
On 16 April 2014 the Company acquired from Clipper Group Holdings Ltd, at book value,
its entire investment in the other members of the Group, which included 75% of Clipper
Geist Logistics GmbH & Co. KG (see note 2.1 to the Group Financial Statements). On 30
April 2014 the Company acquired the remaining 25% of Clipper Geist Logistics GmbH &
Co. KG in exchange for the issue of 800,000 ordinary shares (see note 28 to the Group
Financial Statements).
Subsidiary undertakings
Except where indicated, the subsidiary undertakings are incorporated and operate in Great
Britain, registered in England and Wales and the Company or Group owns 100% of the
issued ordinary share capital. The subsidiary undertakings of the Company are as follows:
Company
Nature of business during the year
Clipper Geist Logistics GmbH & Co. KG (Germany) Contract distribution & warehousing
Northern Commercials (Mirfi eld) Ltd
Distribution of commercial vehicles
Stormont Truck and Van Ltd
Distribution of commercial vehicles
Genesis Specialised Product Packing Ltd
On-line retail and distribution
Gagewell Transport Ltd
Clipper e-commerce Ltd
Clipper Logistics (Processing) Ltd
Clipper Logistics (Warehousing) Ltd
Clipper Secure Logistics Ltd
DTS Logistics Ltd
Guardex Security Services Ltd
Transference Technology Ltd (90% owned)*
Northern Commercial Trailers (Mirfi eld) Ltd*
* shareholding held indirectly
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
134
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
continued
D. Intangible assets
COST:
Goodwill
£’000
Contracts and
Licenses
£’000
Total
£’000
At 1 May 2013 and 30 April 2014
8,312
723
9,035
ACCUMULATED AMORTISATION:
At 1 May 2013
Charge for the year
At 30 April 2014
NET BOOK VALUE:
At 30 April 2013
At 30 April 2014
E. Stocks
Component parts and consumable stores
Total inventories
2,119
415
2,534
6,193
5,778
723
-
723
-
-
2014
£’000
543
543
2,842
415
3,257
6,193
5,778
2013
£’000
295
295
135
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the
Company Balance Sheet
continued
F. Debtors
Trade debtors
Corporation tax
Other debtors
Director loan accounts (see note P)
Prepayments and accrued income
Amounts owed by fellow Group companies
Amounts owed by former parent company
2014
£’000
6,412
121
146
-
8,232
1,832
-
2013
£’000
4,996
-
310
1,734
5,245
2,079
202
Total debtors
16,743
14,566
G. Creditors: amounts falling due within one year
Bank overdrafts
Bank loans
Obligations under fi nance leases
or hire purchase agreements
Trade creditors
Other taxes and social security
Other creditors
Corporation tax payable
Accruals and deferred income
Amounts owed to fellow Group companies
Amounts owed to former parent company
2014
£’000
85
86
1,164
13,999
3,667
1,021
-
6,600
351
15,267
2013
£’000
357
169
397
9,066
2,823
679
486
4,257
37
-
Total creditors: amounts falling due within one year
42,240
18,271
H. Creditors: amounts falling due after more than one year
Amounts owed to fellow Group companies
Amounts owed to former parent company
Bank loans
Obligations under fi nance leases
or hire purchase agreements
Total creditors: amounts falling due
after more than one year
2014
£’000
-
-
40
2,398
2013
£’000
283
8,173
32
598
2,438
9,086
Obligations under fi nance leases and hire purchase contracts are secured by related assets.
136
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
continued
I. Provisions for liabilities and charges
At 1 May 2013
Utilised
(Credited) / charged in period
At 30 April 2014
Other provisions
Deferred
taxation
Other
provisions
635
-
(204)
431
466
(89)
94
471
Total
1,101
(89)
(110)
902
Provisions are established over the life of leases to cover remedial work necessary at termination under the terms of
those leases. Two key sites have leases that expire 23 and 14 years from the balance sheet date. All other leases
expire in 10 years or less.
J. Deferred tax
Deferred tax liability:
Accelerated capital allowances
Deferred tax asset:
Provisions & other timing differences
Net deferred tax liability
2014
£’000
(444)
13
(431)
2013
£’000
(661)
26
(635)
The UK corporation tax rate reduced from 23% to 21% with effect from 1 April 2014. A further reduction to 20% is
effective from 1 April 2015. Accordingly, these rates have been applied in the measurement of the Company’s
deferred tax assets and liabilities as at 30 April 2014.
137
Clipper Logistics plc Annual Report and Accounts 2014
Notes to the
Company Balance Sheet
continued
K. Share capital
ALLOTTED, CALLED UP AND FULLY PAID:
3,852 ‘A’ ordinary shares of £1 each
3,851 ‘B’ ordinary shares of £1 each
100,000,000 ordinary shares of 0.05p each
2014
£’000
2013
£’000
-
-
50
50
4
4
-
8
On 30 April 2014 the following transactions occurred:
a) The 3,852 ‘A’ ordinary and 3,851 ‘B’ ordinary shares of £1 each were re-designated as
15,406,000 ordinary shares of 0.05p each.
b) 83,794,000 ordinary shares of 0.05p each were allotted to the then parent company for
cash consideration of £42,000
c) 800,000 ordinary shares of 0.05p each were allotted in exchange for the minority
shareholding in Clipper Logistics GmbH (see note 28 to the Group Financial Statements).
The fair value of the shares issued was estimated at £800,000 and consequently
£800,000 was credited to reserves.
L. Reserves
Share
premium
account
£’000
48
-
48
2014
£’000
4,690
784
(2,500)
175
3,149
Other
reserve
£’000
51
800
851
2013
£’000
4,587
2,866
(2,800)
37
4,690
At 1 May 2012 and 30 April 2013
Arising on acquisition of minority interest
At 30 April 2014
M. Profi t and loss account
At 1 May
Profi t for the fi nancial year
Dividends
Share based payments*
At 30 April
*See note 12 to the Group Financial Statements
138
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
continued
N. Commitments and contingencies
The Company has annual commitments under non-cancellable operating leases as follows:
Operating lease commitments – Land and buildings:
Operating leases which expire:
- Within one year
- Between one and fi ve years
- More than fi ve years
Operating lease commitments – Plant and machinery:
Operating leases which expire:
- Within one year
- Between one and fi ve years
- More than fi ve years
O. Capital commitments
Authorised and contracted for
Authorised, but not contracted for
2014
£’000
509
1,905
4,964
7,378
2014
£’000
582
1,358
215
2,155
2014
£’000
295
-
295
2013
£’000
830
1,141
5,019
6,990
2013
£’000
213
2,024
96
2,333
2013
£’000
209
-
209
139
Clipper Logistics plc Annual Report and Accounts 2014
Strategic Report | Governance | Financial Statements
Notes to the
Company Balance Sheet
continued
P. Related party disclosures
At the previous year end, 30 April 2013,
Harrogate Road Restaurants Ltd is a related
Guiseley A. F. C. Ltd shares a common
Steve Parkin and Sean Fahey, both Directors,
party of the Group as it shares certain
director with Clipper Logistics plc. Advertising
jointly had an unpaid loan account in
shareholders and directors in common
and sponsorship payable by the Company
favour of the Company in the sum of
with Clipper Logistics plc. At 30 April 2013
to Guiseley A. F. C. Ltd in the year ended 30
£83,000. This was the maximum balance
the Company had advanced a loan of
April 2014 amounted to £275,000 (2013:
outstanding and the loan was not interest
£54,000 to Harrogate Road Restaurants Ltd.
£210,000). This advertising and sponsorship
bearing. The loan was repaid to the
The loan was not interest bearing and was
ceased at the end of the 2013/14 football
Company in April 2014.
repaid to the Company
in April 2014.
season.
Additionally Steve Parkin had an individual
Balances due to the former parent
loan account outstanding at 30 April 2013
The Company rents an aircraft from South
company can be found in note H.
in the sum of £1,536,000. The maximum
Acre Aviation Ltd, a company owned by
balance outstanding in the year ended 30
Steve Parkin. Charges are on an arm’s
Interest payable to the former parent
April 2014 was £1,653,000 and the loan was
length basis and in the year ended 30
company during the year ended 30 April
not interest bearing. The loan was repaid to
April 2014 amounted to £69,000 (2013:
2014 was £298,000 (2013: £310,000).
the Company in April 2014.
£52,000). At the commencement of this
At the previous year end, 30 April 2013,
a loan in the sum of £42,000 to South
company can be found in note 8 to the
Tony Mannix, a Director, had an unpaid
Acre Aviation Ltd, which was repaid in April
Group Financial Statements.
arrangement the Company also advanced
The dividends paid to the former parent
loan account in favour of the Company in
2014. The loan carried interest at 3.25% per
the sum of £12,000. This was the maximum
annum. The rental agreement terminated
balance outstanding and the loan was not
on 30 May 2014.
interest bearing. The loan was repaid to the
Q Post balance sheet events
Ultimate parent company
Company in April 2014.
During the year the Company leased
At 30 April 2014, the Company’s ultimate
racehorses which are benefi cially owned
parent company was Clipper Group
At the previous year end, 30 April 2013,
by Steve Parkin. These horses ran in the
Holdings Ltd. Following the partial sale in
Mike Badrock, a Non-Executive Director,
Company name and in Company
the Initial Public Offering and admission to
had an unpaid loan account in favour of
colours. Under the terms of the lease, the
trading on the London Stock Exchange on
the Company in the sum of £103,000. The
Company is responsible for all expenditure
4 June 2014, Clipper Group Holdings Ltd
maximum balance outstanding in the year
in connection with the horses but can retain
ceased to be the ultimate parent company.
ended 30 April 2014 was £496,000 and the
any monies received for a win or placing
loan was not interest bearing. The loan was
up to the value of the costs incurred for that
Bank borrowings
repaid to the Company in April 2014.
horse. The total net costs charged to the
On 2 May 2014, the existing bank facilities
income statement in the year ended 30
of Clipper Group Holdings Ltd were novated
April 2014 amounted to £414,000 (2013:
to the Company. Upon Admission on 4 June
£83,000). The rights and liabilities arising
2014, the Group was granted replacement
under this arrangement ceased on
bank facilities totalling £30,000,000 by
31 May 2014.
Santander Corporate UK and settled all
amounts then outstanding by members of
Roydhouse Properties Ltd is the landlord of
the Group to Clipper Group Holdings Ltd.
two of the Company’s leasehold properties
and is classed as a related party due to
the company having common directors
with Clipper Logistics plc. Rents paid to
Roydhouse Properties Ltd in the year
ended 30 April 2014 were £819,000 (2013:
£781,000).
140
Strategic Report | Governance | Financial Statements
Directors, Secretary, registered
and head offi ce and advisors
Directors:
Company Secretary:
Registered Offi ce and Head Offi ce
of the Company:
Registered number:
Sponsor, fi nancial advisor,
sole bookrunner and broker:
Legal advisors:
Reporting accountant and auditors:
Registrars:
Financial public relations advisors
to the Company:
Steve Parkin, Executive Chairman
Tony Mannix, Chief Executive Offi cer
David Hodkin, Chief Financial Offi cer
Sean Fahey, Chief Information Offi cer
Paul Hampden Smith, Senior Independent Non-Executive Director
Mike Russell, Independent Non-Executive Director
Stephen Robertson, Independent Non-Executive Director
Ron Series, Independent Non-Executive Director
Paul White
Gelderd Road
Leeds
LS12 6LT
03042024
Numis Securities Ltd
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
DWF LLP
Bridgewater Place
Water Lane
Leeds
LS11 5DY
Ernst & Young LLP
1 Bridgewater Place
Water Lane
Leeds
LS11 5QR
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Bell Pottinger
Holborn Gate
330 High Holborn
London
WC1V 7QD
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Clipper Logistics plc Annual Report and Accounts 2014
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Clipper Logistics plc Annual Report and Accounts 2014
Clipper Logistics plc
Gelderd Road
Leeds
LS12 6LT
0113 204 2050
Tel:
Email: info@clippergroup.co.uk
Web: www.clippergroup.co.uk
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