- Actions take to reduce the cash burn
- Order rates partially recovered through the second half
Results for promotional materials provider 4imprint (LSE: FOUR) reflected the intense economic shock of the pandemic on businesses that rely on the everyday act of people gathering to do things - be it business, social, or otherwise.
The company, which provides materials for promotional events, training seminars etc., moved to trim its cash burn by cutting marketing activities and axing the dividend – which has yet to be reinstated. The result was that cash flow turned broadly neutral in the second half of the year, along with a pick-up in order rates. Management reckons orders in the second-half were back up to 70 per cent of those in the same period in the prior year. Overall, orders processed in the year were 960,000 versus 1,587,000 for 2019.
Edison expects EPS for 2021 at 49.5 cents a share, rising to 71.7 cents in the following year.
Few businesses will have experienced such a fall off in activity as 4imprint and survived – with a net cash position into the bargain. But uncertainties remain as to how quickly general business activity will recover. Hold.
Last IC view: Hold, 2,225p, 13 Aug 2020
| 4IMPRINT (FOUR) | ||||
| ORD PRICE: | 2,435p | MARKET VALUE: | £ 684m | |
| TOUCH: | 2,430-2,445p | 12-MONTH HIGH: | 2,900p | LOW: 1,067p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 305 | |
| NET ASSET VALUE: | 233ȼ | NET CASH: | $26.6m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2016 | 558 | 34.2 | 87.3 | 41.8 |
| 2017 | 628 | 40.7 | 103 | 42.6 |
| 2018 | 738 | 44.2 | 126 | 53.2 |
| 2019 | 860 | 53.9 | 152 | 25.0 |
| 2020 | 560 | 3.84 | 11.0 | nil |
| % change | -35 | -93 | -93 | - |
| Ex-div: | - | |||
| Payment: | - | |||
| £1=$1.38 | ||||
