At the time of 4imprint’s (FOUR) preliminary results earlier this year, the marketer of promotional products announced an initiative to build awareness around its brand. We knew this would entail an investment period (and attendant costs), hence the lack of growth in reported profits over the first half, although there wasn't a commensurate impact on earnings because of favourable US tax reforms - 97 per cent of 4imprint’s sales stem from North America.
Encouragingly, early results from the initiative have already exceeded management’s expectations, with total orders processed up 176 per cent to 683,000. Within that total, new customer orders grew 13 per cent, against an increase of 4 per cent at the 2017 half year. Customer retention is improving, with orders from existing customers up 18 per cent.
The company made good headway towards its objective of achieving $1bn in sales by 2022 – with organic double-digit revenue growth over the corresponding period. It’s important to note here that the implementation of IFRS 15 – the accounting standard pertaining to revenue recognition – meant that $4m in revenues and $1.4m in operating profits were moved from the first to the second half.
Broker FinnCap forecasts adjusted pre-tax profits of $44.7m and EPS of 126ȼ for 2018 (from $42.5 and 108ȼ in 2017).
| 4IMPRINT (FOUR) | ||||
| ORD PRICE: | 2,060p | MARKET VALUE: | £579m | |
| TOUCH: | 2,040-2,060p | 12-MONTH HIGH: | 2,060p | LOW: 1,546p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 87ȼ | NET CASH: | $26.5m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
| 2017 | 299 | 15.7 | 39.2 | 13.80 |
| 2018 | 348 | 15.9 | 45.0 | 15.85 |
| % change | +17 | +1 | +15 | +15 |
| Ex-div: | 9 Aug | |||
| Payment: | 18 Sep | |||
