Join our community of smart investors

4imprint ramps up orders

Could the group achieve its $1bn sales target early?
August 1, 2019

4imprint’s (FOUR) branding initiatives – launched in 2018 – are progressing well. Indeed, the group – which is a direct marketer of promotional products – processed 778,000 orders during the first-half to June and won 147,000 new customers; a significant increase from 683,000 and 138,000 a year earlier.

IC TIP: Buy at 2920p

In turn, management thinks the group is “running ahead of plan” against its target of achieving $1bn in revenues by 2022 – noting that this goal implied a sales growth rate of around 10 per cent. In the event, the promotional products group is generating top-line growth in the mid-teens.

North America – the group’s main geography – enjoyed a 17 per cent rise in revenues to $394m. Meanwhile, the UK endured a 3 per cent decline. 4imprint cites tough trading conditions on this side of the pond, and adverse currency movements – albeit the UK constitutes just 2.6 per cent of the overall top line.

Net cash landed at $42.7m at the half-year-end, up by 61 per cent – giving the group plenty of room to proceed with the planned $5m expansion of its Oshkosh distribution facility, which will be operational in August 2019. A dividend of 25ȼ (paid in pence) is also twice covered by earnings.

Broker FinnCap expects adjusted pre-tax profits of $54.2m and EPS of 152ȼ for 2019, up from $46.4m and 132ȼ last year.

4IMPRINT (FOUR)   
ORD PRICE:2,920pMARKET VALUE:£ 821m
TOUCH:2,890-2,920p12-MONTH HIGH:2,990pLOW: 1,765p
DIVIDEND YIELD:2.0%PE RATIO:26
NET ASSET VALUE:153ȼNET CASH:$42.7m
Half-year to 29 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (p)
201834815.944.9615.85
201940519.454.8120.52
% change+16+22+22+29
Ex-div:08 Aug   
Payment:17 Sep   
£1 = $1.22