The most important number among 4imprint's (FOUR) first-half results for 2013 was the increase in operating margins at the printing and marketing products company. They rose almost a point to 4.6 per cent. That makes a big difference in a business with big numbers. This uplift was due primarily to a more modest 7 per cent rise in marketing spend, which less was than half the 15 per cent rise in direct marketing sales.
Direct marketing in North America accounts for most of 4imprint's revenues and in the six-month period this operation pushed up profits by a third to £5.3m. It's worth noting that 4Imprint's balance sheet benefits greatly from this division holding no stock. Once an outsourced product is shipped directly from a supplier to a customer, an invoice is raised or a credit card (half of all direct marketing sales are on a card) is debited. And with 4imprint accounting for less than 2 per cent of the $23bn (£15bn) North American promotions market, it does not need to look for new markets. The balance of half-year group sales and operating profits (£385,000) came from a Blackpool-based manufacturer of promotional products.
For the full year, broker Espirito Santo forecasts revenues of £211m, adjusted pre-tax profits of £12.1m (£9.3m) and EPS of 32.1p (25.5p in 2012).
| 4IMPRINT (FOUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 558p | MARKET VALUE: | £149m | |
| TOUCH: | 555-558p | 12-MONTH HIGH: | 561p | LOW: 262p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 69p | NET CASH: | £14.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 88 | 2.16 | 5.10 | 5.25 |
| 2013 | 101 | 3.61 | 9.81 | 5.60 |
| % change | +15 | +67 | +92 | +7 |
Ex-div: 7 Aug Payment: 13 Sep | ||||
