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4imprint Group

US growth promoters

Update | Media | 05 Mar 2019

4imprint's results show continued strong progress, with FY18 revenues up 18% on the prior year, coming in just ahead of our forecasts. The growth was supported by additional brand awareness spend, with revenue per marketing dollar holding up very well at $5.63 (FY17: $5.67). The group continues to be well placed to carry on growing its market share in the substantial and fragmented promotional goods sector, on margins that should edge ahead. Our FY19 revenue forecast is lifted 2%, with a slightly lower increase in earnings reflecting further brand support marketing. The group has strong cash conversion (100%) and a cash rich balance sheet. We consider that there is further potential upside to the share price.

4imprint Group

Bitesize briefing - 4imprint

Edison TV: | Media | 05 Feb 2019

4imprint is the leading direct marketer of promotional products in the US and Canada, with a market share estimated about 3% of this fragmented $25bn market. In this short briefing, we describe its impressive organic growth record, outline its marketing approach and talk through its strong cash generation.

4imprint Group

Boxing clever

Outlook | Media | 24 Jan 2019

4imprint’s year-end update indicates another very strong performance, with FY18 revenues ahead 18% – all organic. PBT will be at the top end of the market range with net cash $2.5m ahead of our modelled number at $27.5m. Our forecasts will be formally reviewed with the prelims in March, but we note that management’s revenue goal of $1bn by FY22 now requires a CAGR of 7.9% over the intervening period, well below historical levels. The brand awareness programme implemented in FY18 has clearly helped stimulate growth and the group is accelerating investment in support. The organic growth record, high cash conversion and cash-rich balance sheet all support the current rating, with further upside potential.

4imprint Group

Branding awareness

Update | Media | 01 Nov 2018

4imprint’s trading update shows the spring 2018 brand marketing campaign continuing to generate supplementary revenues, as was the case at the interims. We have again edged our forecasts ahead (around 1% at both the revenue and earnings levels), to the higher end of the previous range of market estimates. There is still a substantial opportunity to exploit, given the market size (estimated by ASI at US$23.6bn) and the group’s leading position. While the group trades at a premium to the UK marketing sector, the drift in the share price has made the valuation more attractive, particularly on a DCF basis. The group remains highly cash-generative, with funding growth and a progressive dividend.

4imprint Group

Market leader

Update | Media | 31 Jul 2018

4imprint’s interim results show that its recently-adopted strategy of additional investment in brand awareness is recruiting new customers even better than initial trials had indicated. The investment is holding back FY18e operating margin (already built into forecasts), but underpins our market-beating growth expectations. The ambition to reach US$1bn of revenue by FY22 looks increasingly achievable. Our FY18e and FY19e revenue numbers rise by 2%, with consequent uplift to operating profit. A lower anticipated tax charge further lifts projected EPS. The group is highly cash generative, funding growth and a progressive dividend.

4imprint Group

Continued momentum

Update | Media | 08 May 2018

An upbeat AGM statement indicates good momentum continuing through the early weeks of the new financial year. We have edged up our forecasts to reflect revenues to date running ahead of budget at +16% year-on-year. It is still too early to assess the impact of the additional marketing spend on brand awareness that was factored in at the time of the finals. Even without any benefit from this initiative, earnings are set to increase by a CAGR of over 12% for FY18-19e. Strong cash generation is funding the brand and marketing investment, as well as paying out a progressive dividend, on top of the supplementary payment made for FY17.

4imprint Group

Branding evolution

Update | Media | 09 Mar 2018

4imprint has announced another set of strong results, accompanied by a supplementary dividend of $0.60 to be paid alongside the final. It has also outlined a programme to build a more substantial longer-term business through adding brand awareness campaigns to the existing marketing spend. Revenues have grown at a CAGR of 18.1% over the last six years. Guidance for the next five years is for double-digit growth to reach the $1bn level by FY22 and we have lifted our forecasts to reflect this. Profit growth is restrained in the near term by the additional marketing spend, but should move on faster in FY19, with EPS further boosted by a lower US tax charge.

4imprint Group

Strong Q4, US tax change gains

Update | Media | 17 Jan 2018

A continued strong performance in Q417 delivered 12% revenue growth in FY17 vs FY16, a shade ahead of our previous forecast. We see good top-line momentum into FY18e as the group takes further share in its large and fragmented market, benefiting from its targeted marketing. US taxation reforms will kick in for FY18 and our EPS forecast is lifted by 10%. Cash resource of $30.7m at end FY17 allows for an increased dividend with plenty of scope for additional investment as the business continues to scale. Our new FY19e numbers show further good earnings progress, with the valuation rating coming in to more attractive levels.

4imprint Group

Market share gains continue

Update | Media | 01 Aug 2017

4imprint’s interim results show that it continues to make steady progress building market share in the large and fragmented US market for promotional goods. H117 revenue growth of 11% compares to a market estimated to be growing in line with GDP at 2-3%, with the increase coming from both existing and newly recruited customers. Marketing spend, the key growth lever, is more heavily weighted to H2 this year and our revenue forecast is edged up, with a slightly higher tax charge leaving EPS unchanged. The group has good cash generation, a net cash position on the balance sheet and a growing dividend, underpinning the rating.

4imprint Group

Online catalogue of success

Update | Media | 10 Mar 2017

4imprint has again posted strong results, with FY16 revenue increase well ahead of the market growth of 2-3% and a tick up in operating margin. Second half performance was good, with revenues up 8%, which would have been higher but for market uncertainty around the US presidential elections. December returned to normal trading patterns. As indicated at the interims, there has been a 35% uplift in the dividend, reflecting the de-risking of the pension position and marketing spend at appropriate levels. With strong cash generation, a cash positive balance sheet and good earnings and dividend growth, the premium rating is clearly merited.

4imprint Group

Premium growth continues

Update | Media | 19 Jan 2017

4imprint continues to deliver premium growth as it builds market share across its large and fragmented market, estimated to be worth around $25bn. The group’s data-driven marketing investment approach and efficient fulfilment are supporting this profitable (and organically scalable) growth, while the strong cash generation has allowed the historic pension issues to be fully addressed with a one-off contribution of $14.5m in the period. The group ended the year with net cash of $21.5m, up from $18.4m at end FY15. With our 35% forecast increase in the FY16 dividend (in line with the interim), the valuation premium continues to look well supported.

4imprint Group

Interims and dividend increase

Update | Media | 02 Aug 2016

4imprint continues to grow its top line well ahead of US GDP and market, driven by ongoing investment in marketing, people and systems. Like-for-like H116 revenues were up over 15%, compared with our unchanged FY16 forecast of +13%. The large but fragmented market, estimated at over US$25bn, gives a substantial further opportunity, with organic growth the preferred (and proven) route. With the pension situation addressed and marketing spend well supported, the interim dividend has been lifted 35%.