Brisk demand for T-shirts, notebooks and other promotional products fuelled a 15 per cent rise in comparable sales at 4imprint (FOUR) in the reported period, propelling the direct marketer's underlying operating profits up 18 per cent to almost $14m (£10.5m).
Like-for-like orders were up 14 per cent to 529,000 as 4imprint's data-driven marketing attracted more than 120,000 new customers. Orders from this group climbed 11 per cent, while those from existing customers increased by 19 per cent. The strong trading drove revenues up 17 per cent in North America - where the group earns 97 per cent of its turnover - and 7 per cent in the UK and Ireland.
The preceding financial year lasted 53 weeks, meaning a quiet trading week in January was replaced by a busy seven days in summer. That boosted headline sales growth, but also pushed marketing costs up by a fifth. Still, strong cash generation swelled its cash pile, prompting management to hike the dividend.
4imprint should benefit from increased capacity at its distribution centre in Oshkosh, Wisconsin. It also stands to gain from the recent decline in sterling, as it generates most of its cash in dollars but pays dividends and pension contributions in pounds. Broker FinnCap expects pre-tax profits of $38.4m for the December year-end, giving EPS of 97.6¢ ($33.5m and 87.5¢ in FY2015).
| 4IMPRINT (FOUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,525p | MARKET VALUE: | £429m | |
| TOUCH: | 1,502-1,566p | 12-MONTH HIGH: | 1,525p | LOW: 1,057p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 75¢ | NET CASH: | $20m | |
| Half-year to 2 Jul | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 231 | 11.4 | 29.0 | 12.09 |
| 2016 | 270 | 11.1 | 28.2 | 16.32 |
| % change | +17 | -2 | -3 | +35 |
Ex-div: 18 Aug Payment: 15 Sep £1=$1.33 | ||||
