Interim Results

CLIPPER LOGISTICS PLC

Interim results for the six months to 31 October 2020

Strong momentum continues driven by the structural shift to e-commerce; upgrading full year expectations

Clipper Logistics plc ("Clipper", "the Group", or "the Company"), a leading provider of value-added logistics solutions and e-fulfilment and returns management services to the retail sector, is pleased to announce its unaudited results for the six months ended 31 October 2020 ("H1 FY21").

Financial Highlights

Operational Highlights

Current Trading and Outlook

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

"The Group has successfully chartered the uncertainty and disruption caused by the pandemic to deliver impressive revenue growth of 19.8% and underlying EBIT growth of 54.3%. The Group benefited directly from the structural shift and acceleration of online retail such that our e-fulfilment and returns management division saw underlying EBIT growth of 63.3% which included a positive contribution from our Clicklink joint venture."

"In addition, we are immensely proud of the operations which have commenced in the period with major customers including N Brown, Joules, Linenbundle, Revolution Beauty, T M Lewin and Unipart."

"I would like to thank all colleagues, who have worked tirelessly to continue to support our customers through the pandemic."

"We have a solid new business pipeline in the UK, and we have the infrastructure to deliver innovative, technology-focused omni-channel solutions to retailers."

"Whilst conscious of the UK macro-economic climate, given our strategic positioning in the e-commerce sector, we remain positive about the long term outlook. It is pleasing trading has continued to be positive post-period end, with the key Black Friday trading weekend seeing record daily volumes for many customers. We therefore expect full year earnings to be materially ahead of the Board's previous expectations. Given this financial and operational momentum, Clipper remains confident that the Group is well positioned to achieve future growth, both in the UK and internationally."

A conference call for sell-side analysts only will be held at 09.30am today, 3 December 2020. Please contact Buchanan at [email protected] if you wish to attend.

This announcement is released by Clipper Logistics plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"). It is disclosed in accordance with the Group's obligations under Article 17 of MAR. Upon the publication of this announcement, this information is considered to be in the public domain.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Clipper Logistics plc by David Hodkin, Chief Financial Officer.

About Clipper

Clipper Logistics plc (www.clippergroup.co.uk), which is premium listed on the Main Market of the London Stock Exchange, is a retail logistics specialist, which provides value-added, consultancy-led services to its blue-chip client base. Clipper is a UK leader in its markets, with a long-standing customer base in:

A profitable and cash generative commercial vehicles business complements the Group's logistics activities.

Cautionary statement

Any forward-looking statements made in this document represent the Board's best judgment as to what may occur in the future. However, the Group's actual results for the current and future financial periods and corporate developments will depend on a number of economic, competitive and other factors, some of which may be outside the control of the Group. Such factors could cause the Group's actual results in future periods to differ materially from those expressed in any forward-looking statements included in this announcement.

PERFORMANCE AT A GLANCE

ALTERNATIVE PERFORMANCE MEASURES ("APMs")

APMs are used by the Board to assess the Group's financial performance, for analysis and for incentive-setting purposes. These measures are not defined by International Financial Reporting Standards ("IFRS") and therefore may not be directly comparable with other companies' APMs, including those in the Group's industry. APMs should be considered in addition to and are not intended to be a substitute for IFRS measurements. The table below reconciles APMs to statutory measures as defined by IFRS.

OPERATING AND FINANCIAL REVIEW

Group summary

Revenue

Group revenue increased by 19.8% to £305.2 million (H1 FY20: £254.8 million).

Group revenue growth of £50.4 million was wholly attributable to growth in the e-fulfilment and returns management business activity.

In the Logistics division, in the UK: approximately 10% of this growth was due to the full six months impact of new contracts won in H1 FY20; approximately 50% was due to revenue growth on new contracts won in the second six months of the prior year ("H2 FY20"); 10% was due to revenue arising from contracts won in H1 FY21; and the remainder was due to organic growth in existing customers in the UK. Within Europe and the Commercial vehicles division, revenue declined in H1 FY21 compared to H1 FY20 and was directly attributable to the impact of COVID-19, with the closure of non-essential retail.

New contracts which commenced in FY20 include Amara Living, Hope & Ivy, Simba Sleep, SLG and the Very Group. New contracts which commenced in H1 FY21 include: H&M, Linenbundle, N-Brown, Next, Revolution Beauty, TM Lewin and a significant increase in supporting Supply Chain Coordination (NHS) with the storage and distribution of PPE. Against this, the following customers have been lost: Antler, M&Co and Secret Sales (due to entering administration).

Please refer to the Segmental Review section for a more detailed discussion on each operating segment.

EBIT

Group EBIT increased by £3.6 million, or 21.7%, to £20.2 million (H1 FY20: £16.6 million), in part due to the strong revenue growth of 19.8% discussed above. In addition to these revenue drivers, included in the prior year is a material Non-underlying factor of £3.5 million from a negative goodwill credit arising on a business combination in H1 FY20. There was no similar contribution to EBIT in H1 FY21. Excluding this, underlying EBIT increased by £7.1 million (54.3%) in H1 FY21 compared to H1 FY20, £0.8 million of which is attributable to improved contribution to Group EBIT from Clicklink.

By segment:

Please refer to the Segmental Review section for a more detailed discussion on each operating segment.

Net finance costs

Net finance costs have decreased by 8.2% to £5.1 million (H1 FY20: £5.5 million), largely as a result of the unwind of lease liability interest costs, and a reduction in interest paid on bank loans and overdrafts due to lower requirement of rolling credit facilities. Offsetting this, but to a lesser extent, are increased interest costs on the commercial vehicles stocking lines.

Profit before tax and amortisation and Profit before tax

As a result of the above, Group profit before tax and amortisation increased by 34.7% to £15.0 million (H1 FY20: £11.1 million) and Group profit before tax increased by 38.2% to £14.3 million (H1 FY20: £10.4 million).

Taxation

The tax charge on profit before tax was £2.9 million (H1 FY20: £2.3 million). The effective tax rate in H1 FY21 is 20.2% (H1 FY20: 21.7%), the decrease being due to a higher proportion of Group profit being generated in the UK. The headline rate of corporation tax in the UK is 19%, unchanged from the prior year. Certain expenditure being disallowed for tax purposes, in both the UK and Europe, leads to an effective rate higher than the headline rate. The effective tax rate applied at the half year is an estimate of the expected full year rate.

Basic Earnings Per Share (EPS)

EPS was 11.2 pence in H1 FY21, 40.0% up on the same period of the prior year (H1 FY20: 8.0 pence).

Dividend

In line with Clipper's dividend policy and reflecting the Group's earnings growth, the Board is pleased to announce an interim dividend of 4.0 pence per share, which will be paid on 4 January 2021 to shareholders on the register at 11 December 2020. This represents an increase of 14.3% (0.5 pence per share) compared to the interim dividend of 3.5 pence paid in January 2020.

Cashflow

Cash generated from operations in H1 FY21 was £49.1 million (H1 FY20: £19.1 million), the £30.0 million increase compared to H1 FY20 being predominantly due to good working capital performance. In H1 FY21, the working capital inflow was £10.1 million compared to £12.3 million outflow in H1 FY20, as a result of increased volumes of activity in UK Logistics, the introduction of new customers, deferral of some indirect taxes, but also due to continued focus on billing and cash collection throughout the period.

As result of the uncertainty arising from the COVID-19 pandemic, protective measures were undertaken by the Group in order to preserve cash. This included the deferral of payments relating to property leases, extension of supplier payment terms, deferrals of income taxes and VAT. Supplier payments have returned to normal terms within H1 FY21, and the majority of the lease payments have now also been paid. The deferred VAT of £10.0 million will be paid in H2 FY22 and residual income taxes of £8.5 million will be paid in full in H2 FY21.

Capital spend across non-current assets has decreased by £3.4 million to £3.4 million in H1 FY21 compared to £6.8 million in H1 FY20. This is as a result of lower customer related requirements in H1 FY21 compared to H1 FY20.

Income tax payments and interest payments excluding IFRS 16 lease interest are largely in line with the first six months of the prior year. There was a £2.9 million cash outflow in H1 FY20 relating to a business combination with no such similar outflow in H1 FY21. Dividend payments are £6.3 million, a £0.3 million decrease on H1 FY20.

Lease repayments, net of drawdowns have increased by £7.9 million to £23.2 million in H1 FY21 as a result of additions in the prior year.

The net repayment on the revolving credit facility of £8.0 million in H1 FY21 compares to a net drawdown of £17.0 million in H1 FY20.

Net debt

Net debt at the end of H1 FY21 is £27.7 million (excluding leases liabilities arising as a result of the application of IFRS 16), compared to £64.4 million at the end of H1 FY20. Net debt was £45.1 million at 30 April 2020, the decrease since the year end being largely due to the working capital inflow as result of increased activity, reduced capital expenditure and deferrals of VAT and income taxes as discussed above. Much of our net debt relates to capital to be recovered from blue-chip customers over the term of their open book contracts. Recoverable capex on open book contracts at 31 October 2020 amounts to £32.4 million.

OUTLOOK

The key Black Friday trading weekend occurred shortly after the end of H1 FY21. In this period, the Group processed record daily volumes for many of our customers and is pleased to report that early customer feedback has been very positive. The Board remains confident that the Group is strategically well positioned to capitalise on the mega-trend towards online retail, not just in the UK but also in mainland Europe.

SEGMENTAL REVIEW

Overview

Group revenue increased by 19.8% to £305.2 million (H1 FY20: £254.8 million), with revenue by segment as set out in the table below:

Group EBIT increased by £3.6 million, or 21.7%, to £20.2 million (H1 FY20: £16.6 million), with EBIT by segment as set out in the table below:

Excluding underlying factors:

To aid understanding and for greater comparability to historical results, on an underlying IAS 17 basis Group EBIT would have been:

E-fulfilment and returns management services

E-fulfilment operations 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. At no time does Clipper take ownership of customers' products.

We continue to manage the return of products on behalf of retailers, particularly those sold online, through our Boomerang brand.

Revenue

Revenue from E-fulfilment and returns management services grew by £51.5 million (37.7%) from £136.5 million in H1 FY20 to £188.0 million in H1 FY21.

This revenue growth was achieved in certain operations which were still in the start-up phase in H1 FY20 such as the services we perform for Amara Living, Hope and Ivy, Simba Sleep and the Very Group. These contributed a full six months' revenue to the results for H1 FY21, having only contributed in part to the results of H1 FY20.

Growth has also been derived from H&M, Linenbundle, Medusa-19, Revolution Beauty and T M Lewin which commenced in H1 FY21. These activities did not contribute to revenue for H1 FY20 and only contribute for part of H1 FY21. As such, these will not generate a full contribution to the Group's annual revenue and profits until the year ending 30 April 2022.

Operations which did not commence until H2 FY20, including the distribution and storage of PPE for the NHS, generated no contribution to the results for H1 FY20 but contribute a full six months to the revenue and profit of H1 FY21.

Technical Services delivered strong revenue growth in H1 FY21 and are significantly ahead of plan. The 'box-in-a-box' solution at the Northampton ADC has shown significant growth and the volumes processed for Amazon in Germany continue to grow. A new mezzanine floor at the Oldham facility is nearing completion and will allow for further capacity.

We have processed record volumes on several of our existing contracts such as PrettyLittleThing.com, Wilko and Zara as a result of the acceleration in growth within online, contributing considerable organic revenue growth to the H1 FY21 results.

We expect this structural shift in consumer behaviour to be permanent and therefore we expect further organic revenue growth in H2 FY21.

EBIT

EBIT from E-fulfilment and returns management services grew by £4.0 million (36.8%) from £10.8 million in H1 FY20 to £14.8 million in H1 FY21.

In addition to the significant revenue drivers noted above, EBIT in H1 FY20 benefited from a negative goodwill credit of £1.8 million. Underlying EBIT growth therefore was 63.3%. The table below normalises the effect of these impacts:

In addition, EBIT benefited from an improvement in the contribution from the Clicklink operation. We expect Clicklink to be profitable for the full year FY21, but due to its seasonality - with over 40% of annual revenues being generated in the Nov-Jan quarter - this will add further to the positive contribution in H2 FY21.

The revenue of joint ventures is not directly consolidated into Group revenue, so adding new customers will have no impact on Group revenue, but they do have an impact on the joint venture's profitability, 50% of which is consolidated into Group EBIT. Clicklink is currently preparing to process volumes forecasted to be 30% higher than in the previous year.

Non e-fulfilment logistics

Non e-fulfilment operations include receipt, warehousing, stock management, picking and distribution of products on behalf of customers. Clipper does not take ownership of customers' products at any time.

Within this sector, Clipper handles high value products, including tobacco, electrical products and high value clothing, whilst also undertaking traditional retail support services including processing, storage and distribution of products, particularly fashion, to high street retailers.

Revenue

Revenue from Non e-fulfilment logistics increased in H1 FY21 compared to H1 FY20. Revenue was £74.8 million in H1 FY20 and was £82.2 million in H1 FY21. Growth of Non e-fulfilment logistics activity was therefore 9.9%.

A number of new activities which commenced in H1 FY20 contributed revenue for the full six months in H1 FY21, having only contributed in part to the revenue for H1 FY20. Contracts won in H2 FY20 such as the NHS, Joules and New Girl Order are contributing to the revenue growth in H1 FY21 compared to H1 FY20.

Organic growth in certain contracts such as Morrisons contributed to the revenue growth in H1 FY20 for both transport and warehouse. Also worth noting is the storage of PPE. Offsetting this, but to a lesser extent, are reduced revenues on contracts with Harvey Nichols, M&S and transport operations for EWM and New Look as a result of closure of non-essential retail stores by the UK Government in response to COVID-19.

In H1 FY21 the transport contract with M&Co ceased following the company entering administration.

EBIT

EBIT from Non e-fulfilment logistics grew by £0.4 million (4.1%) from £9.7 million in H1 FY20 to £10.1 million in H1 FY21.

EBIT in this operating segment benefited from a £1.7 million contribution from negative goodwill in H1 FY20.

The table below normalises the effect of these impacts:

After adjusting for this, underlying EBIT increased 26.9%.

Central logistics overheads

Central logistics overheads represent the costs of support services specific to the logistics operations, but which cannot be allocated in a meaningful way to the sub-segment activities.

Such costs include directorate, advertising and promotions, accounting and IT, and the costs of the solutions development team.

Central logistics overheads of £4.4 million are £1.0 million adverse to the prior year (H1 FY20: £3.4 million). To support the growth in E-fulfilment and returns management services and Non e-fulfilment logistics, the Group has continued to invest in the Logistics overhead base, particularly in developing innovative business solutions for retail, for both current customers and future customers.

Commercial vehicles

The commercial vehicles business, Northern Commercials, operates Iveco and Fiat commercial vehicle dealerships from five locations, together with three sub-dealerships. It sells new and used vehicles, provides servicing and repair facilities, and sells parts.

Main dealerships are located in Brighouse, Manchester, Northampton, Dunstable and Tonbridge. Thus, the business operates across the north of England and into Wales, through the Midlands, and into the South-east.

Revenue

Commercial vehicles revenue decreased by £6.9 million (16.0%) from £43.6 million in H1 FY20 to £36.7 million in H1 FY21, the reduction substantially all due to new vehicle sales. 727 new vehicles were sold generating £20.4 million of revenue in H1 FY21, compared to 743 sold in H1 FY20 generating £26.9 million of revenue. Parts sales are also down for the first half of the year. The closure of non-essential retail impacted Commercial vehicles with several of its locations closed during the first lockdown.

EBIT

EBIT has increased for H1 FY21 compared to H1 FY20 due to improved dealer incentives and cost reduction initiatives.

Head office costs

Head office costs represent the cost of certain Executive and Non-Executive Directors, plc compliance costs and the costs of the plc head office at Central Square, Leeds.

We incurred Head office costs of £1.9 million in H1 FY21 (H1 FY20: £1.6 million). The £0.3 million increase was driven by: increased salary costs of £0.2 million reflecting increased headcount, increased expenditure on corporate events and travel expenditure of £0.1 million.

STRATEGY

The Group's direction continues to be shaped by the same four key strategic pillars of earlier years, namely:

There have been significant developments in each of these areas in H1 FY21.

In terms of expanding the customer base, please refer to commentary provided elsewhere in this report.

New products and services have been developed and continue to be developed both for existing customers and with a view to attracting new customers. These include:

We continue to seek out value-additive acquisition opportunities in the UK, Europe and beyond. We have identified and analysed several potential targets in H1 FY21, but none that have resulted in any firm offer being made.

RISK MANAGEMENT

A risk management process is used by the Group to identify, monitor, manage and mitigate against such risks. The principal risks and uncertainties facing the business are unchanged from those identified in the 2020 Annual Report.

The key such risks are outlined below:

The Group has mitigation strategies in place to deal with these risks. Further details can be found on pages 22 to 25 in the 2020 Annual Report.

CONDENSED FINANCIAL STATEMENTS FOR THE 6 MONTHS TO 31 OCTOBER 2020

Interim Group Income Statement (unaudited)

Interim Group Statement of Comprehensive Income (unaudited)

Interim Group Statement of Financial Position (unaudited)

1 To aid comparability, the comparatives for the six months ended 31 October 2019 have been re-presented from that previously reported to follow the treatment adopted in the six months ended 31 October 2020 and the year ended 30 April 2020. Previously reported in the six months ended 31 October 2019 was Property, plant and equipment of £66,046,000 , Right-of-use assets of £153,962,000, Deferred tax assets of £4,085,000, Current financial liabilities: borrowings of £(36,217,000), Lease liabilities short term of £nil , Short term provisions of £nil, Non-current financial liabilities: borrowings of £(215,800,000), Lease liabilities: long term of £nil, Deferred tax liabilities of £(3,005,000) and long term provisions of £(461,000).

Interim Group Statement of Changes in Equity (unaudited)

Interim Group Statement of Cash Flows (unaudited)

1 To aid comparability, the comparatives for the six months ended 31 October 2019 have been re-presented from that previously reported to follow the treatment adopted in the six months ended 31 October 2020 and the year ended 30 April 2020. Previously reported in the six months ended 31 October 2019: Net cash flows from operating activities of £10,234,000, Net cash flows from investing activities £(11,328,000) and Net cash flows from financing activities £(136,000).

Notes to the Interim Financial Statements

1. Accounting policies

Basis of preparation

Clipper Logistics plc ("the Company") is a public limited company incorporated and domiciled in the United Kingdom. The condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency rules of the Financial Conduct Authority ("FCA") and where applicable IAS 34 "Interim Financial Reporting (as adopted by the EU)".

As required by the Disclosure and Transparency rules of the FCA, the condensed interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 30 April 2020. These statements do not include all the information required for full annual financial statements and should be read in conjunction with the full annual report for the year ended 30 April 2020. The financial information for the half year ended 31 October 2020 and for the equivalent period in 2019 has not been audited or reviewed.

The information for the year ended 30 April 2020 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The financial statements are prepared on the going concern basis.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Operating and Financial Review. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described above. The Group has considerable financial resources together with strong trading relationships with its key customers and suppliers. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully.

The Group continues to give consideration to the ongoing COVID-19 pandemic as part of its assessment of viability and ability to continue for the foreseeable future.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

2. Financial risks, estimates, assumptions and judgments

The preparation of the condensed interim financial information 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 judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing these condensed interim financial statements were the same as those that applied to the consolidated financial statements for the year ended 30 April 2020.

3. Revenue

The Group has applied IFRS 15 in all periods.

Disaggregation of revenue

Revenue is disaggregated into two distinct operating segments. This is consistent with the revenue information that is disclosed for

each reportable segment under IFRS 8 'Operating Segments', as reported in note 4 below.

Revenue recognised in the income statement is analysed as follows:

4. Segment information

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

Within the value-added logistics services segment, the Chief Operating Decision Maker also reviews performance of three separate business 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 following table presents profit information for continuing operations regarding the Group's business segments:

1 In the reported interim results for the six months ended 31 October 2019, the impact of IFRS 16 was shown separately to aid comparability to the six months ended 31 October 2018. The £4,428,000 impact of IFRS 16 for the six months ended 31 October 2019 has been allocated as follows: £2,416,000 in E-fulfilment & returns management services; £1,813,000 in Non e-fulfilment logistics and £199,000 in Commercial vehicles.

5. Other net gains or losses

Other net gains or losses comprises the following amounts

Exceptional items in the six months ended 31 October 2020 relate to the cost of reorganisation within the Commercial vehicles division.

6. Staff costs

Directors' remuneration is in line with the disclosures set out in the 2020 Annual Report.

7. Finance costs

8. Finance income

9. Taxation

Tax has been provided on the profit before taxation, at the estimated effective rate for the full year of 20.2% (Year ended 30 April 2020: 19.5%). 

10. Earnings per share

Basic earnings per share amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. 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 shares outstanding during the period 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:

11. Dividends

An interim dividend for the current year of £4,069,000 at 4.0p per share was approved by the board on 2 December 2020. The dividend will be payable on 4 January 2021 to shareholders on the register at the close of business on 11 December 2020.

12. Property, plant and equipment

During the six months ended 31 October 2020, the Group acquired property, plant and equipment with a cost of £2,593,000 (six months ended 31 October 2019: £6,447,000). Included in the additions during the period are assets in the course of construction amounting to £5,000 (2019: £nil).

13. Right-of-use assets

14. Cash and cash equivalents

15. Financial liabilities - borrowings

1 To aid comparability, the comparatives for the six months ended 31 October 2019 have been re-presented from that previously reported to follow the treatment adopted in the six months ended 31 October 2020 and the year ended 30 April 2020.

The principal lender has security over all assets of the Group's UK operations.

The Group's obligations under leases are secured by the lender's charge over the relevant assets.

The maturity analysis of the bank loans and revolving credit advances is as follows:

The Group has access to a committed overdraft of £8,000,000 and a non-amortising revolving credit facility of £35,000,000 repayable in 2023. At 31 October 2020 £11,000,000 (2019: £34,000,000) of the revolving credit facility was drawn.

16. Financial instruments

Fair value of financial instruments

The book value of trade and other receivables, trade and other payables, cash and cash equivalents & current borrowings equates to fair value.

The table below sets out the book value and fair value of the Group's other financial assets and liabilities:

The main methods and assumptions used in estimating the fair values of financial instruments are as follows:

Long term borrowings are classified as Level 2 (items with significant observable inputs) financial liabilities under IFRS 13. There have been no transfers between Level 1 and Level 2 financial instruments during the period.

17. Share based payments

There have been no options granted in the six months ended 31 October 2020. Details of grants in prior periods are set out in the 2020 Annual Report. During the six months ended 31 October 2020, the Company issued 53,298 (2019: 47,893) ordinary shares for aggregate consideration of £88,000 (2019: £114,000) to satisfy share options. At 31 October 2020 options over 491,948 ordinary shares (2019: 507,568) were exercisable.

The charge for share based payments in the six months ended 31 October 2020 is £123,000 (2019: £392,000).

The increase in deferred tax asset during the period in relation to share based payments amounted to £653,000, which has been recognised in the share based payment reserve.

18. Related party disclosures

The company owns 50% of the issued capital and voting rights of Clicklink Logistics Limited ("Clicklink"), a customer of the Group and a provider of services to the Group.

The condensed financial statements include the following in respect of Clicklink: