Last March, 4Imprint (FOUR) set itself a target of achieving $1bn (£0.76bn) in revenues by 2022. In the same breath, the group – a direct marketer of promotional products – launched a brand awareness initiative, guiding towards an investment of around $7m for 2018 – with operating profits “flat against 2017”.
That said, and as signalled at the half-year stage, the results of 4Imprint’s brand development programme have exceeded management’s expectations. And for the full 12 months to 29 December, operating profits edged up slightly, rising 7 per cent to $44.3m.
This improvement came despite a slight reduction in the gross margin. In the first half, a sharp rise in order volumes weighed on operational capacity – and while this was mostly addressed by the mid-year point, the second half saw larger-than-foreseen order volumes in the fast-growing – but lower-margin – apparel category. Reassuringly, the gross margin should “stabilise” in 2019.
Meanwhile, the group is bringing forward the expansion of its distribution centre in Oshkosh, Wisconsin, by one year – entailing a capital cost of around $5m. Management explained that one of the primary activities at this centre is embroidery on apparel; extra space is needed to cater for momentum here.
House broker Peel Hunt forecasts adjusted pre-tax profits of $52.4m and EPS of 147ȼ, against $45.6m and 129ȼ in 2018.
| 4IMPRINT (FOUR) | ||||
| ORD PRICE: | 2,050p | MARKET VALUE: | £ 576m | |
| TOUCH: | 2,050-2,130p | 12-MONTH HIGH: | 2,280p | LOW: 1,555p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 154ȼ | NET DEBT: | $27.5m | |
| Year to 29 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
| 2014 | 416 | 23.3 | 59.7 | 20.45 |
| 2015 | 497 | 31.2 | 81.3 | 26.57 |
| 2016 | 558 | 34.2 | 87.3 | 41.82 |
| 2017** | 628 | 40.7 | 103 | 42.58 |
| 2018 | 738 | 44.1 | 126 | 53.15 |
| % change | +18 | +9 | +22 | +25 |
| Ex-div: | 04 Apr | |||
| Payment: | 15 May | |||
| *Excludes special dividend in 2017 of 43.17p. £1 = $1.31 | ||||
