Final Results for the year ended 30 April 2015

Clipper Logistics plc

Final Results for the year ended 30 April 2015

Clipper Logistics plc ("Clipper", "the Group", or "the Company"), a leading provider of value-added logistics solutions and e-fulfilment services to the retail sector, is pleased to announce its Full Year Results for the year ended 30 April 2015.

Financial Highlights for the Year Ended 30 April 2015

· Group revenue increased by 16.7% from £201.2 million to £234.8 million

· Group Adjusted EBIT1 increased by 24.9% from £9.6 million to £12.0 million

· Group profit for the financial year was £7.3 million (2014: £2.8 million), after deduction of discontinuing costs of £0.3 million (2014: £2.3 million) and exceptional costs of £0.9 million (2014: £2.5 million); an increase of 157.3%

· Earnings per share increased by 157.0% to 7.3p (2014: 2.8p)

· Adjusted earnings per share2 increased by 20.1% to 8.4p (2014: 7.0p as restated)

· Net debt at 30 April reduced by 11.6% to £13.6 million (2014: £15.4 million)

1 Adjusted EBIT is defined as operating profit excluding discontinuing and exceptional costs.

2 Adjusted earnings per share is based on profit attributable to ordinary equity holders adjusted by adding back discontinuing and exceptional costs, and adjusting for the

tax thereon.

Percentages are calculated based on the underlying numbers as presented in the Financial Statements, not on the rounded figures above.

Operational Highlights for the Year Ended 30 April 2015

· Successful Initial Public Offering (IPO) on the London Stock Exchange

· Acquisition and integration of Servicecare Support Services Limited, broadening the Clipper service offering to include electrical returns

· Significant contract wins with new customers including Pep&Co, Philip Morris and Zara

· Long-term extensions to contracts with existing major retail customers including Harvey Nichols, New Look and Tesco

· Major new contract with John Lewis to provide a range of retail support services from a new distribution centre

· Adoption of the 'Boomerang' returns management brand proposition by a number of new and existing customers, including the first in mainland Europe providing value-added returns management services to s.Oliver under a new agreement

· Continued strong growth in the retail e-commerce market driving volumes with existing customers, and new contract opportunities

· Strong new business pipeline expected to deliver continued organic growth in the 2016 financial year

Post Year End Highlights

· Subsequent to the 30 April 2015 year end, the Company has agreed terms for a Click and Collect solution in collaboration with John Lewis

Steve Parkin, Executive Chairman of Clipper commented:

"The Group is proud to be continuously recognised throughout the UK's retail sector, as a leading provider of value-added logistics and e-fulfilment solutions and this is reflected in our latest set of full year results. Successfully implementing its strategy of both organic and acquisitive growth whilst working with some of the UK's most recognised brands, the business continues to drive shareholder value. Our new reporting year has started strongly with the signing of terms for a Click & Collect solution with John Lewis and we look forward to updating the market with further successes through the coming year."

2015 Annual Report and Accounts

The full 2015 Annual Report and Accounts for the Company can be found on its website at www.clippergroup.co.uk/report-accounts/, and the investor presentation relating to this Annual Report and Accounts can be found at www.clippergroup.co.uk/results-presentations/. Copies of the 2015 Annual Report and Accounts will be posted to shareholders shortly.

2015 Annual General Meeting ("AGM")

Clipper Logistics plc's 2015 AGM will be at Clipper Logistics, Gelderd Road, Leeds, LS12 6LT on 28 September 2015 at 11.00am. The Notice of AGM will be issued within the next month.

Forward looking statements

This announcement contains forward looking statements. These have been made by the Directors in good faith using information available up to the date on which they approved this report. The Directors can give no assurance that these expectations will prove to be correct. Due to the inherent uncertainties, including both business and economic risk factors underlying such forward looking statements, actual results may differ materially from those expressed or implied by these forward looking statements. Except as required by law or regulation, the Directors undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

ENQUIRIES

Chairman's Statement

I am pleased to write as Chairman of Clipper Logistics plc following our first anniversary of listing on the London Stock Exchange in June 2014.

Our first year as a listed company has seen continued growth reflecting our ability to demonstrate real value-add services for our extensive client base, and we remain confident of our ability to maintain this momentum.

The Group has seen a strong performance throughout the year under review, with a number of high profile contract wins and renewals, including those with Harvey Nichols, New Look, Pep&Co, Philip Morris, and Zara.

The acquisition of Servicecare Support Services Limited in December 2014 extended our returns management capabilities to include electrical products, and the business has performed well, being immediately earnings-enhancing.

Our driving force remains our ethos of constantly identifying new services, methods and technologies that address the operational challenges of our clients. Our unrivalled understanding of the e-fulfilment and returns market, coupled with our clients' continually evolving needs in these areas, will ensure that we retain and expand our market share.

We are excited about the continued opportunities for progress of the Group in the years ahead, and are proud of the range and quality of services the Group provides.

We are exceptionally well-positioned to benefit from the further significant growth expected in the online retail sector, where independent market research indicates that by 2022 one-third of all retail activity in the UK will take place online. Further, our innovative value-added solutions are expected to achieve continued growth in our non e-fulfilment activities, as evidenced by recent contract wins in this business area.

Group Results

Group revenues increased by 16.7% to £234.8 million for the year to 30 April 2015, and Group Adjusted EBIT increased by 24.9% to £12.0 million. Excluding the impact of the Servicecare acquisition, revenue grew by 13.8% and Group Adjusted EBIT by 16.6%.

Adjusted earnings per share was 8.4 pence for the year to 30 April 2015 (2014: 7.0 pence as restated).

On an unadjusted basis earnings per share was 7.3 pence (2014: 2.8 pence).

Net debt was reduced to £13.6 million at year end (2014: £15.4 million as restated), after the payment of £3.7 million in respect of the acquisition of Servicecare Support Services Limited, and £2.1 million in respect of non-recurring IPO transaction costs.

People and Board

Clipper Logistics plc is led by an excellent management team that has been at the core of the business for many years.

Having guided the Group through periods of significant change in the UK retail industry, the management team's ability to continue to steer the business along its path of organic growth through customer focus, technical innovation 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.

Governance

The Group is proud of its commitment to high levels of corporate governance. Alongside the executive management team of Tony Mannix (CEO), David Hodkin (CFO) and Sean Fahey (CIO), the Company benefits from the combined experience of its Non-Executive Directors: Paul Hampden Smith (Senior Independent Non-Executive Director), Stephen Robertson, Ron Series and Mike Russell.

Dividends

The Board is recommending a final dividend of 3.2 pence per share, making a total dividend in respect of the year ended 30 April 2015 of 4.8 pence per share. This is reflective of the significant increase in underlying profits.

The proposed final dividend, if approved by shareholders, will be paid on 30 September 2015.

Outlook

The Group continues to be amongst the leading providers of value-added and e-fulfilment solutions to the retail sector in the UK. The full year benefits of the Servicecare acquisition, and the development of Click and Collect delivery services to store, coupled with recent contract wins, place the Group in an excellent position to continue to achieve further growth in the medium term, both in the UK and internationally.

I look forward to working with all of the Group's stakeholders as we continue to develop the business.

Operating and Financial Review

1. Overview of results

The Group made excellent progress in the financial year to 30 April 2015.

Group revenue

Group revenues increased by 16.7% to £234.8 million, with strong growth in all business areas including e-fulfilment & returns management services and non e-fulfilment logistics:

Percentages are calculated based on the underlying numbers as presented in the Financial Statements, not on the rounded figures in the table above.

Within the value-added logistics services segment, the Group benefited from:

· the full-year impact of contract wins secured in the previous financial year including, amongst others, Antler, ASOS, Go Outdoors and SuperGroup;

· the part-year impact of the acquisition of Servicecare and its subsidiary Electrotec in December 2014;

· organic growth on existing contracts, including Asda, John Lewis, Tesco, and Wilkinsons;

· the market migration in the retail sector towards online trading which continues to bring particularly strong organic growth to our e-fulfilment customers; and

· the part-year impact of contracts won during the year to 30 April 2015, including M&S and Ted Baker, and additional services for ASOS, as well as the s.Oliver returns contract win in Germany. The full year benefit of these contracts will be realised in the year to 30 April 2016, together with the part-year benefits of contracts either recently commenced or currently in the pipeline and due to go live during the remainder of calendar year 2015 and early calendar year 2016.

Revenue growth in commercial vehicles was driven by:

· a £5.3 million increase in new vehicle sales. Whilst unit sales were down, the average selling price of each unit increased significantly due to the mix of vehicles sold; and

· a £1.5 million increase in after-sales revenues, comprising servicing, bodyshop and parts sales.

Group Adjusted EBIT

Adjusted EBIT is the primary Key Performance Indicator ("KPI") by which the management team assesses corporate performance. Adjusted EBIT is assessed against Board approved budgets. A further KPI is net debt, which is discussed below.

The Group grew Adjusted EBIT strongly in all segments and business activities:

Group Adjusted EBIT is defined as Group operating profit excluding discontinuing and exceptional costs.

Percentages are calculated based on the underlying numbers as presented in the Financial Statements, not on the rounded figures in the table above.

Group Adjusted EBIT increased by 24.9% to £12.0 million in the year to 30 April 2015, and the Group is well placed to achieve further EBIT growth in the coming financial year due to the full year benefits of recent contract wins and the Servicecare acquisition, coupled with a very strong new business pipeline.

Adjusted EBIT margin is not a key metric as the high proportion of open book and minimum volume guarantee contracts within the UK logistics division distorts reported margins.

This is due to an element of management fees on certain contracts being fixed in the short term, so that an increase in revenue in periods of increased activity will not necessarily give rise to a proportionate increase in profit, resulting in lower reported margins. Conversely in periods of reduced activity levels, reported margins would typically increase.

Similarly, revenue derived from minimum volume guarantee contracts is fixed at a minimum level, so that a shortfall in activity levels would give rise to a lower cost base, and a higher reported margin.

In addition, within the commercial vehicles segment, the level of high value, relatively low margin new vehicle sales also distorts reported margins.

Accordingly, Adjusted EBIT is a more relevant measure of financial performance than Adjusted EBIT margin.

E-fulfilment & returns management services include the receipt, warehousing, stock management, picking, packing and despatch of products on behalf of customers to support their online trading activities, as well as a range of ancillary support services including returns management, branded as 'Boomerang', under which returns of products are managed on behalf of retailers.

Non e-fulfilment operations include receipt, warehousing, picking and distribution of products on behalf of customers. Within this sector the Group handles high value products, including tobacco, alcohol and designer clothing, and also undertakes traditional retail support services including processing, storage and distribution of products, particularly fashion, to high street retailers.

Central logistics overheads include the costs of the directors of the logistics business, the project delivery and IT support teams, sales and marketing, accounting and finance, and human resources that cannot be allocated in a meaningful way to business units. Despite continuing to invest significantly in such resources during the year, particularly in operational support, and solution design and implementation, we managed to recover more of this cost from customers in the year due to the high volume of new projects.

Incremental investment will inevitably be required in the logistics overheads base as the business continues to grow, including the impact of the full year effect of the infrastructure investments undertaken in the second half of the year ended 30 April 2015.

The commercial vehicles business, Northern Commercials (Mirfield) Limited, operates Iveco and Fiat commercial vehicle dealerships from six locations, together with four sub-dealerships. It sells new and used vehicles, provides servicing and repair facilities, and sells parts. Vehicles sold and serviced range from small light commercial vans, through to articulated tractor units.

Head office costs represent the cost of the Executive Chairman, Chief Financial Officer, Deputy Chief Financial Officer, Company Secretary, Non-Executive Directors and plc compliance costs.

Share based payment charges totalling £0.1 million have been charged to central logistics overheads, commercial vehicles cost and head office costs as appropriate in respect of the Sharesave plan and the Performance Share Plan (see note 22 to the Group Financial Statements).

The profit after tax for the year to 30 April 2015 was £7.3 million (2014: £2.8 million), as set out in the Financial Statements below. This is stated after charging £0.3 million (2014: £2.3 million) of discontinuing costs, and £0.9 million (2014: £2.5 million) of exceptional costs.

As such, adjusted profit after tax for the year to 30 April 2015 (which excludes the discontinuing costs, exceptional costs and the tax associated with those costs) was £8.4 million (2014: £6.9 million), an increase of 21.1%.

The discontinuing costs in the year to 30 April 2015 relate to remuneration of a retiring director, consultancy and professional fees in respect of potential investment opportunity appraisals, the costs of operating the Chairman's private office, and certain advertising, sponsorship and entertaining expenditure, none of which have been borne by the Group since Admission ("Admission" being defined as 4 June 2014, the date on which Clipper Logistics plc was admitted to the premium segment of the London Stock Exchange). The discontinuing costs in the year to 30 April 2014 also included all of the above.

Of the exceptional costs of £0.9 million (2014: £2.5 million) incurred in the year to 30 April 2015, £0.7 million (2014: £2.0 million) related to the costs of the IPO and £0.2 million (2014: £nil) related to professional and legal expenses incurred on the acquisition of Servicecare. In 2014, there were also exceptional depot closure costs of £0.4 million, and redundancy costs on reorganisation of £0.1 million.

Net interest charges

Net interest charges for the year to 30 April 2015 were £1.4 million, an increase of £0.5 million from the £0.9 million incurred in the previous year, reflecting the higher average level of net debt in the business following the payment of £18.5 million in dividends and other distributions to the former parent company in the prior year, related to the reorganisation of the Group in preparation for the IPO. In addition, the interest charges in the year to 30 April 2015 reflect the net cash outflow on the Servicecare acquisition of £3.7 million.

Taxation

The effective rate of taxation of 22.8% (2014: 27.9%) is higher than the standard rate of corporation tax of 20.92% (2014: 22.84%) principally due to expenditure disallowable for tax purposes. As the discontinuing head office costs include some disallowable items such as customer entertaining and sponsorship and the headline UK tax rate reduces by 1%, the effective rate of tax is expected to reduce again in the year ending 30 April 2016.

Earnings per share

As set out in note 21 to the Group Financial Statements, 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 cost. Consequently, the basic measure of earnings per share is significantly distorted by these factors. Adjusting earnings to exclude discontinuing and exceptional costs and the tax effect thereon, gives adjusted earnings of £8.4 million for the year to 30 April 2015 (2014: £6.9 million). In the previous Annual Report the tax effect was calculated at standard rate. It is now calculated at the effective rate applicable to the specific transactions.

Adjusted earnings per share was 8.4 pence for the year to 30 April 2015 (2014: 7.0 pence as restated).

On an unadjusted basis earnings per share was 7.3 pence (2014: 2.8 pence).

Capital expenditure

Of total capital expenditure of £2.4 million (2014: £4.9 million), £1.9 million (2014: £4.0 million) related to the value-added logistics services segment and £0.5 million (2014: £0.9 million) related to the commercial vehicles segment.

Key items of capital expenditure during the year to 30 April 2015 within the value-added logistics services segment were IT system upgrades (including enhanced back-up solutions), site fit out costs for Clipper's Harlow site which commenced operations during the year, site fit out costs in Germany for the new s.Oliver contract, and ongoing capital expenditure relating to fleet renewals. Within commercial vehicles, capital expenditure related primarily to ongoing fleet renewals (for demonstrators and parts vans), and also an upgrade to the vehicle diagnostic system used for Iveco vehicles.

Goodwill and other intangible assets

The goodwill arising on the acquisition of Servicecare amounted to £4.2 million. Other intangible assets acquired with Servicecare, principally in respect of customer relationships, had a fair value of £1.2 million giving rise to a related deferred tax liability of £0.2 million.

Cash flow

With the Group reorganisation undertaken as part of the preparation for the IPO and the payment of the IPO transaction costs falling in two financial years, there has been some distortion in reported cashflows.

Cash generated from operations was £12.6 million (2014: £15.8 million) after paying £2.1 million of IPO transaction costs (2014: £0.6 million). An interim dividend of £1.6 million was paid in the year to 30 April 2015, in line with the stated dividend payment policy. Prior to the IPO, a dividend of £0.3 million was paid to the former parent company. In the year to 30 April 2014, dividends and other distributions totalling £18.5 million were paid to the former parent company.

As detailed in note 28 to the Group Financial Statements, net cash paid in the year to 30 April 2015 for the purchase of Servicecare amounted to £3.7 million,

The Group's business model gives rise to high levels of cash generation. In the UK logistics business, Clipper is typically paid in the month in which services are delivered on open book and minimum volume guarantee contracts, giving rise to a typically negative investment in working capital, whilst in the commercial vehicles business working capital is substantially funded by the manufacturer through stocking facilities for new vehicles, and trade credit terms for parts supplied. Across the two years ended 30 April 2015, net cash generated from working capital was £4.9 million.

Net debt

In addition to Adjusted EBIT, net debt is considered a Key Performance Indicator for the Group. As with Adjusted EBIT, net debt is assessed against Board approved budgets.

As shown in note 19 to the Group Financial Statements, the Group's net debt at 30 April 2015 was £13.6 million (2014: £15.4 million as restated). At this date, the Group had £8.0 million net bank debt, drawn against available bank facilities of £27.5 million. The net debt at 30 April 2014 included £14.2 million payable to the former parent company.

The key terms of the Group's banking facilities are included in note 19 to the Group Financial Statements.

2. Acquisition of Servicecare Support Services Limited

In December 2014, Clipper acquired the entire issued share capital of Servicecare Support Services Limited ("Servicecare") and its wholly owned subsidiary Electrotec International Limited ("Electrotec") for a cash consideration of £5.7 million. Of this consideration, £1.0 million was deferred for six months, and a further £1.0 million was deferred for twelve months. In addition, a further £0.2 million is payable upon receipt of a tax refund due to Servicecare of the same amount.

Servicecare is a specialist provider of returns logistics services to consumer electronics manufacturers and retailers. The business, which operates across the United Kingdom from sites in Oldham, Greater Manchester and Barton, Burton-on-Trent, has been trading since 1995 and has a strong client base that includes Argos, Panasonic, Shop Direct Group and Tefal. Its wholly owned subsidiary Electrotec International Limited was acquired by Servicecare in 1999 and trades as a retail supplier, selling refurbished consumer electrical goods, predominantly online.

In the financial year to 30 April 2014, Clipper launched its 'Boomerang' brand, which was introduced to focus on the growing requirement for returns management services by the clothing and non-electrical general merchandise sectors. As part of the Group's strategy to enhance its Boomerang services to both new and existing customers, the Board has sought to identify potential acquisition targets that would enable the Boomerang service offering to be expanded to cover electrical goods, which require specialist expertise. With its long trading history and blue chip client base Servicecare is a strong fit within the Boomerang brand and has proved to be immediately earnings-enhancing to Clipper, outperforming expectations for the five months post acquisition to the year ended 30 April 2015.

Electrotec complements the Group's subsidiary Genesis, which provides an online route to market for Clipper's customers, particularly in relation to sale of excess in-season stock, sale of end-of-line stock, and sale of returns.

3. Value-added logistics services

Market overview, size and growth of market and market trends

Traditional bricks and mortar retail still constitutes the majority of retail sales in the UK. However, the growth of online retailing and the desire for major retail brands to have as many different touch points with their customers as possible means that multichannel retailing will be a dynamic driver of change for both the retail and logistics markets in the near future. An increasing number of distribution channels are now required to meet the demands of the consumer, including shopping at stores, home delivery, Click and Collect as well as the return of purchased items. The fact that the penetration of internet-based sales in the UK economy is one of the highest in the world leads the Directors to believe that the UK is at the forefront of the logistics challenges being posed to retailers by the growth in online retail.

The retail sector is undergoing structural changes and, as a market leader in the provision of services to support retailers' online and returns management challenges, the Group is strategically well placed to capitalise on the very significant growth expected in this sector of the market.

According to market research (Source: IMRG), the UK's e-commerce market has grown from £0.8 billion in 2000 to £91 billion in 2013 and £104 billion in 2014 (14% annual increase) with double-digit growth forecast until around 2017. Within that market there are also significant changes being experienced:

· orders placed via mobile channels (smartphones and tablets) accounted for 34% of UK e-retail sales in Q1 2015 compared to 20% in Q1 2014 (and only 1% during 2010);

· we are seeing continued growth in the level of Click and Collect sales activity, with Click and Collect comprising 16% of multichannel online sales in Q4 2014 compared to 12% in the same quarter of 2013. Certain of our customers report that Click and Collect now accounts for 60-65% of their overall online volume. Within the Click and Collect service proposition, time compression is a major issue and the customer demand for next day delivery is pervading.

By 2022, one third of sales in the UK are forecast to be conducted online (Source: Insider Trends). The rest of Europe is also experiencing a similar trend. Germany is the second largest e-commerce market in Europe after the UK. Here, online retail sales are forecast to reach €73 billion by 2019, and Europe as a whole is forecast to generate €233 billion of online retail sales by 2018 (Source: Forrester Western European Online Retail Sales Forecast for 2013 to 2018).

Structural growth in online, multichannel retailing

The UK has one of the highest rates of internet and smartphone penetration in Western Europe and this level of penetration is expected to increase further in coming years. The proportion of online sales as a percentage of total retail sales in the UK is already one of the highest in the world (Source: eMarketer December 2014).

This trend is fundamentally altering the logistical requirements of retailers, who must meet the challenges of multichannel retailing (whereby customers place orders across a variety of sales channels, for example retail stores, online stores, mobile stores and telephone sales), which demands complex warehousing, order processing and stock management systems in order to deliver a high quality service to consumers. Further, non-food retailers are expected to invest approximately £5 billion in making the transition from multichannel to 'omni-channel' retailing over the next five years (Source: LCP Consulting).

Omni-channel represents the latest evolution of multichannel retailing, whereby retailers offer consumers flexibility not only on the method of order placement (as is the case with multichannel) but also in respect of the choice of delivery destination - for example, the consumer might place an order online and choose to have the order delivered to that retailer's high street store, or at a Click and Collect site in a third party location, rather than their home address. This development adds even greater complexities to the logistical requirements of retailers. Our customers have seen significant growth in Click and Collect in the year to 30 April 2015. One of our customers commented that, "this [2014] was the year that Click and Collect really came into play with 56% of online orders being collected in shops as opposed to home delivered".

Returns management demands of retailers increasingly complex

Returns management is an increasingly important area for retailers. A smooth returns process is vital to consumers, with 57% saying it is very important to their buying decision (Source: Retail Week, March 2015). It is estimated that 25% to 40% of all clothing and footwear purchases in the UK are returned (Source: IMRG). Historically, customers would return the product to the store where the purchase was made, but as online retail has developed, customers are demanding choice in their method of return, for example posting the product back to the retailer, or taking it into a high street store or a collection point.

As a result, retailers are becoming increasingly focused on consumers' returns experience, just as much as they are on consumers' purchase experience. More so now than ever before, retailers are trying to ensure that returns management is handled effectively so that their brands are not damaged by customers using social media to comment unfavourably on their experience. In addition, product rectification during the returns management process can add value and enhance margin for the retailer.

Managing the returns process represents a stock management and processing challenge for retailers, since traditional warehouses have been designed to receive and process bulk quantities of identical product, rather than to receive individual units of product. Equally, such returned units will inevitably require some degree of inspection, rectification, cleaning or repair before going back into available stock, or may even be deemed unfit for prime sale. Traditional warehouses are simply not geared up for dealing with such a high level of intervention for single products.

Retailers therefore need to rework the product into a saleable state very quickly to reduce working capital investment and maintain margins. Clipper's returns proposition gets the stock back into a Distribution Centre-compliant format allowing the Distribution Centre to focus on its core function of fulfilment. The Group has a strong track record of managing this process for customers, including managing the returns operation for ASOS, the UK's leading online fashion retailer.

Further, the power of social media and consumer review websites enhances the importance of returns management as the returns experience represents the final touch point between a retailer and the consumer - a badly handled customer experience in respect of the returns process may be quickly communicated by that customer to a large number of people, particularly via social media, which has the potential to harm a retailer's future sales prospects.

Boomerang - Clipper's returns management solution

To address the latest challenges faced by retailers in relation to returns management as outlined above, Clipper has successfully introduced the 'Boomerang' brand and concept, and we are particularly pleased to report that under Boomerang approximately 95% of products have been successfully returned to prime stock at first pass.

The acquisition of Servicecare brings additional returns handling capabilities to Clipper. Servicecare specialises in electrical reverse logistics, a solution which had, until the acquisition, represented a gap in Clipper's service offering. The Servicecare proposition adds additional capability into our Boomerang brand. We intend to leverage the Boomerang brand across Servicecare's existing customers and to broaden our service offering with existing Clipper customers with the Servicecare electrical returns proposition going forwards.

We also secured our inaugural reverse logistics contract in mainland Europe. This contract is with s.Oliver in Germany, owners of a global fashion brand. Under the contract, Clipper will manage s.Oliver's European wholesale and retail returns management service. The operation will be delivered out of our existing solutions centres in Münchberg and Hof. This contract win aligns to our clear strategy to develop returns management capabilities in continental Europe to capitalise on our strengths in this key area.

Mechanisation

Mechanisation and semi-automation is becoming increasingly prevalent in the market for large volume customers. Clipper's in-house knowledge and skill allows us to work in a collaborative way with our customers to deliver best practice solutions. Clipper is currently working on a number of client initiatives, including:

· mechanisation of elements of the Boomerang returns process;

· automated sortation for Click and Collect services;

· vertical carousel for pick by light small item; and

· automated box creation, carton packing and labelling.

The majority of capital costs on contracts are typically front-loaded and occur in the run up to project 'go live'. A number of contracts, including Zara, were secured shortly before the 2015 year end and so there were significant capital commitments outstanding at that date totalling £9.4 million (2014: £0.3 million). Customer-specific capital costs such as warehouse fit-out costs are typically recovered through depreciation and finance charges to our customers over the life of the underlying customer contract; speculative space fill capital investment such as adding new mezzanine flooring tends to be recovered from customers when the space is ultimately filled. The majority of capital expenditure is financed through hire purchase agreements.

E-fulfilment & returns management services growth

Our ability and agility, particularly in respect of omni-channel, multi-channel, returns management and mechanisation noted above, have enabled the Group to make very significant advances in its revenues and earnings, significantly outperforming market growth. Revenues from e-fulfilment &returns management services increased by 31.5% from £46.0 million for the year to 30 April 2014 to £60.6 million for the year to 30 April 2015, with Adjusted EBIT growing by 48.0% from £3.7 million to £5.5 million over the same period. We are particularly pleased with this performance, as our strategy has been to become a market leader in the e-commerce sector, and to be a thought leader in the provision of value-added services across the sector. The results of this sector of the business include Servicecare's results for the five months following its acquisition in December 2014.

Whilst we have benefited from the full year effect of the ASOS and Go Outdoors e-commerce contracts won in the year to 30 April 2014, we have also had a number of operational successes in e-fulfilment & returns management services in the year to 30 April 2015 including: the relocation of the Tesco online clothing operation from our Selby site to a new site at Daventry following the securing of a five year extension to our existing contract, the additional space at Daventry allowing Tesco to realise its growth ambitions; the securing of a new contract with ME+EM to provide multichannel retail logistics solutions for their range; and securing the s.Oliver returns management contract. Shortly before the 2015 year end, we also won the contract to provide e-fulfilment services to Zara in certain European countries. Operations on this contract commenced shortly after the year end; the full year benefit of this will not be realised until the year to 30 April 2017. Shortly after the 30 April 2015 year end we also commenced warehousing and e-fulfilment services to support Ireland's largest retailer's online retail operations in Ireland and the UK.

Non e-fulfilment logistics is central to our future strategy too

The Group will continue to develop and deliver truly value-added services to address the needs of retailers in traditional bricks and mortar logistics, including receipt of inbound product, storage, store-readiness of product, and distribution to retail destinations.

The Group will continue to innovate to deliver best in class solutions for its customers.

Revenue from non e-fulfilment operations grew by 14.1% for the year ended 30 April 2015, from £89.6 million to £102.1 million, with Adjusted EBIT increasing by 9.8%, from £9.2 million to £10.1 million.

Within non e-fulfilment, the full year effect of the Antler and SuperGroup contracts, which both commenced in the year to 30 April 2014, contributed to the revenue and Adjusted EBIT growth in the year to 30 April 2015. We also secured and began operations under new long-term contracts with Philip Morris and Ted Baker in the UK and we secured long-term contract extensions: with Harvey Nichols, principally for warehousing and store delivery, with New Look to fulfil their store delivery and collection requirements; and with Whistles to continue to manage the receipt and distribution of its entire product range to customers worldwide.

Additionally, in the year to 30 April 2015:

· we have agreed a new contract with Flyers Group plc, the owners of the Ben Sherman and Firetrap brands and specialists in fashion for children and teenagers, for warehousing and transport services commencing May 2015;

· we have reached agreement with John Lewis to provide a range of retail support services from a new distribution centre close to their existing distribution centre network. This activity will commence in the year to 30 April 2017; and

· we have secured a new contract with Pepkor UK Retail Limited, the owners of the fashion brand Pep&Co, to provide warehousing and returns management services commencing July 2015.

Retail consolidation centres

Clipper continues to innovate in retail consolidation centres, which allow multiple deliveries to be made to retail outlets from a single, localised centre, providing benefits in:

· retail space availability, as the need for on-site stock rooms is obviated;

· a wider range of stock being available to the end customer; and

· reduced emissions, of increasing importance in city centres in particular.

Indeed, Clipper's and Newcastle University's Smartfusion initiative to reduce the number of delivery vehicles on campus and to cut the carbon footprint won two prestigious awards: the "outstanding procurement team" award at the Times Higher Education Leadership and Management Awards 2015 and the Newcastle University "Best Environmental Initiative" award.

Multi-user operations

The Group encourages the use of multi-user sites, where a multiplicity of customers is served from a single location.

This facilitates the sharing of specialised resources, and assists in optimising and balancing demand on people and facilities, in turn allowing the Group to provide cost-effective solutions.

Investment in key personnel

The Group differentiates itself by providing consultancy-led, value-added services to its actual and prospective client base. We have established ourselves as a thought leader within the logistics sector, and this is evidenced both by our customers' buy-in to our innovative approach, and by independent brand health reviews conducted by an independent market research consultancy.

The Group is central to the achievement by its customers of their own objectives and goals.

Accordingly, we invest in recruiting, training and developing people who are specialists in their relevant fields. These include information technology, solution design, facilities specification, implementation and management, e-commerce and returns management, and project management and implementation resource.

4. Commercial vehicles

The commercial vehicles business delivered Adjusted EBIT of £1.9 million (2014: £1.8 million), an increase of 2.1% on the previous year.

Having fully integrated Stormont Truck and Van Limited into Northern Commercials in the year to 30 April 2014 and rationalised the cost base of the two businesses, the year to 30 April 2015 was back to 'business as usual'.

Northern Commercials operates from six dealership locations, and has four sub-dealers. Dealerships are located in Brighouse, Manchester, Northampton, Dunstable, Tonbridge and Brighton. Thus, the business operates across the north of England and Wales (with sub-dealers supporting this geographic territory), through the midlands, and into the south-east.

The business sold 1,810 new vehicles in the year (2014: 2,447), and 470 used vehicles (2014: 416). New fleet sales were somewhat depressed in calendar year 2014 due to the impact of Euro 6 emissions legislation. However, due to a change in mix of vehicles sold, the average selling price of a new vehicle sold in the year to 30 April 2015 was £23,000 compared to £14,000 in the prior year, an increase of 47.4%. Servicing and parts sales saw significant increases in revenue between the year to 30 April 2014 and the year to 30 April 2015, with incremental technicians being recruited to cope with the increasing demand.

Key customers of Northern Commercials include Allied Bakeries, Asda, Clancy Docwra, Dawsons, Ryder, Variety (the Children's Charity), and many other household names.

The business achieved a number of important key performance measures in the year:

· Assistance Non-Stop: Northern Commercials achieved the best response time of all Iveco dealers in the UK, averaging 39.0 minutes to arrive to provide assistance to breakdowns;

· Vehicles Off-Road: Northern Commercials was the number one dealer, with an average of 2.4 days off-road for repairs, compared to an Iveco average of 2.7 days;

· MOT pass rate: 98% of vehicles achieved an initial pass; and

· parts service: 97% of parts required by customers were delivered within 24 hours.

5. Current trading and outlook

As noted above, the Group secured a number of significant contract wins in the year to 30 April 2015, the full year benefit of which will not be realised until the years to 30 April 2016 and 30 April 2017.

As we look ahead to the 2016 financial year, we have a very strong new business pipeline. We continue to win new contracts within both e-fulfilment logistics and non e-fulfilment logistics, both in the UK and Europe, through our focus on our retail specialisms and provision of cost-effective, value-added solutions. We look forward to updating shareholders on these new contracts when they are formalised.

Since the year end, we have commenced operations on the new Pep&Co and Zara contracts, and have also commenced operations for Flyers and for Ireland's largest retailer.

Our returns management service, marketed under the 'Boomerang' brand, continues to gain traction with retailers in both the UK and Europe, particularly with the added service offering of Servicecare, and we are confident that this represents a major area of growth going forward. The full year impact of the Servicecare acquisition, completed in December 2014, will also provide revenue and Adjusted EBIT growth in the year to April 2016.

Our new Click and Collect solution, recently announced in collaboration with John Lewis, is planned to go live in September 2015, and is expected to generate a strong financial contribution from the year ending 30 April 2017 onwards.

The commercial vehicles business is expected to continue to deliver steady growth in profitability in the year to 30 April 2016.

The Board is confident in the Group's prospects for the full year ahead. Current trading is in line with our strategic plan, and we are confident of achieving another period of excellent financial performance in the year to 30 April 2016.

Risk Management

The Group adopts a formal risk identification and management process designed to ensure that risks are properly identified, 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 Board and senior management team are collectively responsible for managing risk across the Group. Risks are formally reviewed regularly and risk registers are updated at least four times a year.

Principal risks are identified through an evaluation of likelihood of occurrence and potential impact. The senior management team ("SMT") also reviews specific strategic, operational and financial and compliance risks in regular SMT meetings, contract and project reviews and other key executive management meetings to enable the SMT and the Board to ensure that the Group's systems are properly aligned with strategic objectives and address the Group's risks.

The Group adopts the following process:

1. Identify risk:

Identify key risks by category (including changes since the last review).

2. Rate risk:

Rate each risk (by evaluating and assigning a score to each risk).

3. Identify risk mitigation:

Identify mitigating actions required for each risk.

4. Execute risk mitigation:

Execute agreed risk mitigation and process improvements.

5. Review, monitor and report risk management process:

Review and monitor risk management process, and report to Board and Audit Committee.

The Group has identified the following key risks through its risk management process:

Strategic:

Operational:

Legal and Regulatory:

Financial:

Directors' Responsibility Statement

We confirm to the best of our knowledge that the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profits of the Group; and that the Chairman's Report, Operating and Financial Review and Risk Management Report include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that the Group faces.

By order of the Board

Steve Parkin, Executive Chairman

27 July 2015

Director's Statement on the Basis of Preparation - Preliminary Announcement

The preliminary announcement has been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU and applied in accordance with the Companies Act 2006. The accounting policies adopted are included in this preliminary announcement.

These financial results do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group Income Statement, Group Statement of Comprehensive Income, Group Statement of Financial Position, Group Statement of Changes in Equity, and Group Statement of Cash Flows, and selected notes for the year ended 30 April 2015 have been extracted from the Group's audited Financial Statements for the year then ended.

The audited financial information contained within the preliminary announcement for the year ended 30 April 2015 was approved by the Board on 27 July 2015. Statutory accounts for the year ended 30 April 2015 were approved on the same date and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on these Financial Statements. Their report was unqualified and did not contain a statement under s.498 (2) or (3) of the Companies Act 2006.

Group Income Statement

For the year ended 30 April

*Earnings per share adjusted for discontinuing and exceptional costs as described in note 7.

Group Statement of Comprehensive Income

For the year ended 30 April

Group Statement of Financial Position

At 30 April

*See note 2.3 for details of restatement

Group Statement of Changes in Equity

For the year ended 30 April

Group Statement of Cash Flows

For the year ended 30 April

*See note 2.3 for details of restatement

Notes to the Group Financial Statements

1. General information

The results comprise those of Clipper Logistics plc and its subsidiaries for the year ended 30 April 2015. This preliminary announcement has been prepared on the basis of accounting policies as set out below and International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board as adopted by the European Union ("IFRS") and does not constitute the Company's statutory accounts within the meaning of Section 435 of the Companies Act 2006.

Statutory accounts for the years ended 30 April 2015 and 30 April 2014 have been reported on by the auditors who issued an unqualified opinion in respect of both periods and the auditors' reports for 2015 and 2014 did not contain statements under 498(2) or 498(3) of the Companies Act 2006.

Statutory accounts for the year ended 30 April 2014 have been filed with the Registrar of Companies. The statutory accounts for the year ended 30 April 2015, which were approved by the Board on 27 July 2015, will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The Group Financial Statements for the year ended 30 April 2015 were authorised for issue by the Board of Directors on 27 July 2015 and the Group Statement of Financial Position was signed on the Board's behalf by David Hodkin.

Clipper Logistics plc (the "Company") and its subsidiaries (together the "Group") provide value-added logistics and other services to predominantly the retail sector and also operate as distributors of commercial vehicles.

The Company is limited by share capital, incorporated and domiciled in the United Kingdom. The address of its registered office is Clipper Logistics, Gelderd Road, Leeds, LS12 6LT.

The Group's Financial Statements have been prepared in accordance with note 2.1 Basis of preparation, and note 2.4 Basis of consolidation. The principal accounting policies adopted by the Group are set out in note 2.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated Financial Statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

2.1. Basis of preparation

Clipper Logistics plc ("the Company"), a public limited company incorporated and domiciled in the United Kingdom, acts as parent undertaking for the Clipper group of companies. The Company has independent operations in its own right and owns 100% of the share capital and voting rights of the following principal trading entities:

· Northern Commercials (Mirfield) Limited

· Clipper Logistics KG (GmbH & Co.) (Germany)

· Servicecare Support Services Limited (see note 28)

· Electrotec International Limited

In addition, the Group has a number of other subsidiaries as set out in note E to the Company Financial Statements.

The Group's Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS) and also in accordance with the provisions of the Companies Act 2006.

The preparation of the financial information under IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates

The accounting policies which follow set out those policies which apply in preparing the Financial Statements for the year ended 30 April 2015.

The Group's Financial Statements have been prepared on a historical cost basis, except for derivative financial instruments which have been measured at fair value. The Financial Statements are presented in Pounds Sterling and all values are rounded to the nearest thousand (£'000) unless otherwise indicated.

2.2. Going concern

The Financial Statements have been prepared on a going concern basis. In determining the appropriate basis of preparation of the Financial Statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future.

Further information in relation to the Group's business activities, together with the factors likely to affect its future development, performance and position is set out in the Strategic Report section of the Company's 2015 Annual Report and Accounts (available to download from www.clippergroup.co.uk/report-accounts/) on pages 6 to 37.

Note 26 to the Financial Statements includes the Group's objectives, policies and processes for managing its capital, its financial risk management objectives and its exposure to foreign exchange, credit and interest rate risk. Further details of the Group's net debt at 30 April 2015 are included in note 19 of the Financial Statements.

The Group statement of financial position shows total current assets of £56,974,000 and total current liabilities of £67,813,000. Net current liabilities at 30 April 2015 were therefore £10,839,000 (2014: £18,613,000). At the year end, the Group had a committed Revolving Credit Facility of £12,504,000 and an overdraft facility of £5,000,000, both of which were undrawn.

The Directors have assessed the future funding requirements of the Group and the Company and compared them to the bank facilities which are now available. The assessment included a detailed review of financial and cash flow forecasts for at least the 12 month period from the date of signing the Annual Report. The Directors considered a range of potential scenarios within the key markets the Group serves and how these might impact on the Group's cash flow. The Directors also considered what mitigating actions the Group could take to limit any adverse consequences.

The Group's forecasts and projections show that the Group should be able to operate without the need for any increase in borrowing facilities.

Having undertaken this work, the Directors are of the opinion that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Financial Statements.

2.3. Restatement of prior year figures

Inventories of commercial vehicles are usually funded under stocking finance plans offered by either the manufacturer's own finance arm, or third party funders. In the financial statements for the year ended 30 April 2014, amounts outstanding to the manufacturer's finance arm were included in trade payables, whereas amounts outstanding to third party stocking finance providers were included as stocking loans within borrowings.

As the relevant characteristics of the stocking finance facilities are the same, regardless of the funder, the Group believes it is more appropriate to disclose all amounts outstanding in the same way, in order to give a consistent view of the working capital requirements. Consequently, in the restated 30 April 2014 Group statement of financial position, trade & other payables have been increased by £2,686,000 (1 May 2013: £978,000) and borrowings have been reduced by the same figure. In the Group statement of cash flows for the year ended 30 April 2014, cash generated from operations has been increased by £1,708,000 and stocking loans advanced has been reduced by the same figure. Had the change not been made, the amount of stocking finance which would have been included in borrowings at 30 April 2015 would have been £5,799,000.

2.4. Basis of consolidation

(a) Group reorganisation

The restructuring noted in note 2.4 (b) below is a combination of entities under common control. IFRS 3 states that it does not apply to a combination of entities or businesses under common control. All of the entities that make up the Clipper Group have remained under common control, in both of the years disclosed. Accordingly, the consolidated financial information of the Clipper Group has been prepared to reflect the combination of the restructured Clipper Group as if it had occurred from 1 May 2010, being the earliest comparative period reported by the restructured group.

The comparative financial information of the Clipper Group for the year ended 30 April 2014 has been prepared on a basis that combines the results and assets and liabilities of all entities within the Clipper Group. Prior to 16 April 2014 the Clipper Group did not constitute a separate legal group.

(b) Merger reserve

At 30 April 2014 the Company was a wholly owned subsidiary of Clipper Group Holdings Limited. In April 2014 the Group undertook a restructuring. On 16 April 2014 the Company acquired fellow subsidiaries from Clipper Group Holdings Limited which comprised 100% of the issued share capital of Northern Commercials (Mirfield) Limited and Genesis Specialised Product Packing Limited and, on 23 April 2014, 75% of the capital of Clipper Logistics GmbH and its subsidiary R. Geist Spedition GmbH & Co. KG (collectively "the Clipper Group"). On 30 April 2014 the Group acquired the remaining 25% of share capital of Clipper Logistics GmbH. There were no remaining non-controlling interests from this date. On 4 June 2014 Clipper Logistics plc was admitted to the premium segment of the London Stock Exchange and Clipper Group Holdings Limited was no longer the parent company.

As described above, the group reorganisation is a combination of entities under common control; and consolidated using a pooling of interests basis. This treats the restructured group as if it was formed in May 2010 and a merger reserve has been included to reflect this, with a balance of £18,168,000 at this date. In the year ended 30 April 2014 a charge of £12,162,000 was made to the reserve to reflect the acquisition of the fellow subsidiaries from Clipper Group Holdings Limited as part of the group reorganisation.

(c) Consolidations

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 April 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

· Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)

· Exposure, or rights, to variable returns from its involvement with the investee

· The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

· The contractual arrangement with the other vote holders of the investee

· Rights arising from other contractual arrangements

· The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to any non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation The financial statements of subsidiaries used in the preparation of the consolidated Financial Statements are prepared on the same reporting year as the parent company.

A change in the ownership interest of a subsidiary without loss of control is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group other than those included in the restructuring referred to above. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

2.5. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Company's Board of Directors, collectively the Group's chief operating decision maker, to assess performance and allocate capital or resources.

2.6. Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The combined Financial Statements are presented in Pounds Sterling, which is the Company's functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

(c) Translation of foreign operations

On consolidation, the assets and liabilities of foreign operations are translated into Pounds Sterling at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates for the year. The exchange differences arising on translation for consolidation are recognised in other comprehensive income.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

2.7. Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation is calculated using the straight- line method to allocate their cost to their residual values over their estimated useful lives, as follows:

· Leasehold property over the length of the lease;

· Plant and machinery 2 - 20 years; and

· Motor vehicles 4 - 8 years.

Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included within 'other net gains' in the income statement when the asset is derecognised.

2.8. Intangible assets

(a) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is 'negative goodwill' and is recognised in the income statement immediately.

Goodwill on acquisitions of subsidiaries is included in 'intangible assets'. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.

(b) Contracts and licences

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

Intangible assets are amortised over the useful economic life (five to ten years) and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

(c) Computer software

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (three to five years).

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the development of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Costs include the software development employee costs and overheads directly attributable to bringing the asset in to use.

Computer software development costs recognised as assets are amortised over their estimated useful lives (not exceeding three years).

2.9. Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash- generating unit's ("CGU") fair value less costs to sell and its value in use.

Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined 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.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a minimum period of two years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the second year.

2.10. Financial assets

The Group classifies its financial assets in the following categories: at fair value through profit or loss and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. At 30 April 2015 the Group held no financial assets available for sale.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets.

Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement within 'other net gains' in the period in which they arise.

Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of other income when the Group's right to receive payments is established.

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a Group of financial assets is impaired.

Impairment testing of trade receivables is described in note 2.13.

2.11. Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition. Cost is determined using the first-in, first-out ("FIFO") method. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.12. Vehicles on consignment

Vehicles held on consignment from manufacturers are included in the statement of financial position where it is considered that the Group enjoys the benefits and carries the risks of ownership.

2.13. Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable may be impaired.

The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within 'administration expenses'.

When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against 'administration expenses' in the income statement.

2.14. Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Cash and cash equivalents are stated net of bank overdrafts in the cash flow statement.

2.15. Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.16. Consignment inventory payables

Inventories of commercial vehicles are usually funded under stocking finance plans offered by either the manufacturer's own finance arm, or third party funders. Amounts outstanding are included in trade and other payables.

2.17. 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 income statement over the period of the borrowings using the effective interest method.

Borrowings are classified 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.

2.18. 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 profits 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 profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset, only if a legally enforceable right exists to set off current tax assets against current tax liabilities, the deferred income taxes relate to the same taxation authority and that authority permits the Group to make a single net payment.

2.19. Employee benefits

(a) Pension obligations

Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies. The Group has only defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity.

For defined contribution plans, the Group pays contributions to privately administered pension insurance plans on a contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due.

(b) Profit-sharing and bonus plans

The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(c) Share based payments

IFRS 2 requires the recognition of equity settled share based payments at fair value at the date of the grant. All equity settled share based payments are ultimately recognised as an expense in the profit and loss account with a corresponding credit to share based payment reserve.

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period based on the best available estimate of the number of shares expected to vest. Estimates are revised subsequently if there is any indication that the number of shares expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital and where appropriate, share premium.

2.20. Provisions

Provisions for items such as dilapidations and legal claims are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.21. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group's activities. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. In practice this means that revenue is generally recognised as follows:

a) Sale of goods

Revenue from the sale of goods is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods. For vehicles this is generally on registration; for other goods it is when despatched, or packaged and made available for collection.

b) Services other than repair and maintenance contracts

Revenue is recognised when the service is rendered

c) Repair and maintenance contracts

Revenue is recognised over the life of the contract in proportion to the costs of providing the services.

2.22. Supplier bonuses

Cost of sales are recognised net of vehicle manufacturers' bonuses. These are recognised when the Group has met the relevant conditions. There is little judgement or estimation involved in computing the amounts.

2.23. Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Assets held under finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on the remaining balance of the liability. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the estimated useful life of the asset and the lease term; where the lease contains an option to purchase which is expected to be exercised, the asset is depreciated over the useful life of the asset. The accounting policy adopted for finance leases is also applied to hire purchase agreements.

2.24. Dividend distribution

Dividend distribution to the Company's shareholders is recognised as a liability in the Group's Financial Statements in the period in which the dividends are approved by the Company's shareholders.

2.25. Exceptional items

Items that are both material and non- recurring are presented as exceptional items within their relevant consolidated income statement category. The separate reporting of exceptional items helps provide a clearer indication of the Group's underlying business performance.

Items which may give rise to classification as exceptional include, but are not limited to, restructuring of the business or depot network, asset impairments and litigation settlements. As shown in note 4, the Group has also identified certion discontinuing costs and disclosed them separately alongside exceptional costs.

2.26. Financial risk management

The Group carries out treasury hedging activities to manage exposures to interest rate movements on its core borrowings using interest rate swaps.

The Group only uses derivatives for hedging purposes and they are recognised at fair value and are re-measured to fair value at each balance sheet date. Where an interest rate swap qualifies as an effective hedge under IAS 39, movements in fair value are shown as an adjustment to the net interest charge being hedged.

Movements in fair value of derivatives that do not qualify as an effective hedge under IAS 39 are shown in 'other net gains' within the income statement. The Group identifies, evaluates and hedges financial risks centrally under policies approved by the Board covering specific areas, such as interest rate risk, foreign exchange risk and credit risk.

2.27. Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Estimated impairment of goodwill

The Group annually tests whether goodwill has suffered any impairment, in accordance with the accounting policy stated above. The recoverable amounts of cash- generating units have been determined based on value-in-use calculations. These calculations require the use of estimates, both in arriving at the expected future cash flows and the application of a suitable discount rate in order to calculate the present value of these flows.

(b) Fair value of intangible assets acquired in business combinations

As there is no ready market for intangible assets such as customer relationships and brands, judgement is required in assessing fair value when accounting for a business combination.

(c) Income taxes

Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Estimates and judgements are continually evaluated by management, on a case-by-case basis, based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

2.28. Borrowing costs

All borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.29. Adoption of new and revised reporting standards

The Group has applied all accounting standards and interpretations issued by the IASB and IFRIC except for the following standards and interpretations which were in issue but not yet effective:

The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations.

As the Group prepares its financial information in accordance with IFRS as adopted by the European Union, the application of new standards and interpretations will be subject to them having been endorsed for use in the EU via the EU Endorsement mechanism. In the majority of cases this will result in an effective date consistent with that given in the original standard or interpretation but the need for endorsement restricts the Group's discretion to early adopt standards.

The Directors do not anticipate that the adoption of the remaining standards and interpretations will have a material impact on the Group's historical financial information in the period of initial application.

In the current year, amendments to IFRS 10, 11 & 12 have been adopted. There has been no material impact, although there have been some minor changes to disclosure.

3. Revenue

Revenue recognised in the income statement is analysed as follows:

Geographical information - revenues from external customers:

Geography is determined by the location of the end customer

4. Segment information

For the Group, the Chief Operating Decision Maker ("CODM") is the main Board of Directors. The CODM monitors the operating results of each business unit separately for the purposes of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss, both before and after exceptional or discontinuing items. This measurement basis excludes Group-wide central services and financing costs which are not allocated to operating segments.

For management purposes, the Group is organised into two main reportable segments:

· Value-added logistics services

· Commercial vehicles, including sales, servicing and repairs

Within the value-added logistics services segment, the CODM also reviews performance of three separate business activities:

· E-fulfilment & returns management services (following the acquisition of Servicecare (see note 28) the definition of this activity has been amended from that shown in the previous Annual Report)

· Non e-fulfilment logistics

· Central logistics overheads, being the costs of support services specific to the value-added logistics services segment, but which are impractical to allocate between the sub-segment activities

Inter-segment transactions are entered into under normal commercial terms and conditions and on an arm's length basis that would also be available to unrelated third parties.

The Group has no customers that account for greater than 10% of the total Group revenue.

The following tables present profit information for continuing operations regarding the Group's business segments for the two years ended 30 April 2015:

Operating profit before non-recurring items:

Exceptional and discontinuing costs:

Operating profit and profit before income tax:

1 Professional fees and other costs paid in relation to the Initial Public Offering.

2 Head office costs include a number of items which are not being 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 office.

The segment assets and liabilities at the balance sheet date are as follows:

Capital expenditure, depreciation and amortisation by segment in the year ended 30 April was as follows:

Capital expenditure:

Capital expenditure comprises additions to property, plant and equipment (note 12) and intangible assets (note 13).

Depreciation

Amortisation:

Non-current assets held by each geographical area are made up as follows:

5. Staff costs

The average monthly number of employees during the year was made up as follows:

Key management compensation (including Executive Directors):

Directors' emoluments:

The number of Directors who were accruing benefits under a Group Pension Scheme is as follows:

6. Group operating profit

This is stated after charging/(crediting):

7. Earnings per share

Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the potentially dilutive instruments into ordinary shares.

The following reflects the income and share data used in the basic earnings per share computation:

The weighted average number of shares has been calculated assuming all shares were converted from £1 to 0.05p shares as from 1 May 2013 in accordance with IAS 33.28.

Adjusted earnings per share

As set out in note 21, during the year ended 30 April 2014 there was a group reorganisation involving both an issue and a subdivision of shares.

In addition, in both years there was a large amount of non-recurring costs. Consequently, the basic measure of earnings per share is significantly distorted by these factors.

Adjusted earnings per share:

*in the previous Annual Report the tax effect was calculated at standard rate. It is now calculated at the effective rate applicable to the specific transactions.

8. Dividends and other distributions

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed dividend is payable to all shareholders on the Register of Members on 4 September 2015. The payment of this dividend will not have any tax consequences for the Group.

9. Finance costs

10. Finance income

11. Income tax expense

(a) Tax charged in the income statement:

(b) Tax relating to items charged or credited to other comprehensive income:

There are no tax consequences of any of the items included in other comprehensive income.

(c) Reconciliation of income tax charge:

The income tax expense in the income statement for the year differs from the standard rate of corporation tax in the UK. The differences are reconciled below:

(d) Deferred tax in the income statement:

The UK corporation tax rate reduced from 21% to 20% with effect from 1 April 2015. As this was substantively enacted at 30 April 2014, this rate has been applied in the measurement of the Group's deferred tax assets and liabilities in both years.

(e) Deferred tax in the statement of financial position:

(f) Deferred tax movement:

12. Property, plant and equipment

Included within property, plant and equipment are amounts held under finance lease contracts. At 30 April 2015 the net book value of these assets was £5,231,000 (30 April 2014 £4,767,000).

13. Intangible assets