reports
- Nick Spoliar
Audio Note: 4imprint Group - Quality holding offers upside
In this audio note, Zeus’ Nick Spoliar summarises the investment case for 4imprint Group. FOUR’s shares have largely traded sideways in the past three months, responding to well-rehearsed market challenges, but they have generated truly excellent outperformance on a longer term basis, having increased eightfold over the past decade and fourfold from the Covid lows to their current levels around 5,100p.
- Nick Spoliar
4imprint Group (FOUR LN) - Quality holding offers upside - Corporate
FOUR’s shares have largely traded sideways in the past three months, responding to well-rehearsed market challenges, but they have generated truly excellent outperformance on a longer term basis, having increased eightfold over the past decade and fourfold from the Covid lows to their current levels around 5,100p. Buyers of the shares who held their nerve during the pandemic have been richly rewarded as the company’s strong model, blending proprietary customer analytics / effective marketing too...
- Fiona Orford-Williams
4imprint Group - Good performance against a difficult backdrop
4imprint’s trading update indicates no change to full year guidance and estimates, despite a challenging trading backdrop of wavering corporate confidence in an unstable economic and political environment. This has affected new customer acquisition more than it has affected transactions by existing customers, which is testament to the quality of the latter group. This in turn is a function of the group’s flexible marketing mix, including brand awareness. 4imprint had cash resources of $137m at e...
- Nick Spoliar
4imprint Group (FOUR LN) - Continuing to deliver - Corporate
FOUR has published a 10-month update this morning which reflects continuing progress against a difficult environment, very similar to conditions which the company described back in August. FOUR is a leading player in the $US25bn-plus US promotional products sector; and while the sector presents challenges at present, it remains in our view an area of significant opportunity. Grasping this opportunity, and as illustrated in today’s announcement, the company continues to outperform peers, taking...
- Charlie Cullen
4imprint Group (FOUR LN)
FOUR’s H1 results this morning demonstrate a resilient performance in the face of markets negatively affected by the uncertain economic environment. Although still relatively small in relation to the $US25bn-plus promotional products sector, suggesting there is a large opportunity, FOUR is a leading player, and today’s announcement shows that the company continues to outperform peers, meaningfully taking market share. Margin enhancement during the first half at the gross and operating levels...
- Fiona Orford-Williams
4imprint Group - Outperforming a challenging market
4imprint has continued to trade better than its underlying market across H124, with revenues 5% ahead of H123. The North American promotional products market recovered lost ground in Q2 to be effectively flat over the half, implying further market share gains for 4imprint, already the largest player but with a share of just 5%. The gross margin improvement posted in H223 from pricing and mix has continued and looks to be sustainable. We have trimmed our FY24 revenue forecast by 3% but lifted our...
- Fiona Orford-Williams
4imprint Group - Solid start to the year
4imprint’s AGM trading update indicates a solid start to the year against a challenging market backdrop, with full-year expectations (and therefore our forecasts) unchanged. Group revenue growth of 6% over the prior year for the four months to end April is clearly ahead of the North American market, where Q124 industry revenue indications range from broadly flat to a small decline, indicating that the group is continuing to build market share. 4imprint is the largest distributor in North America...
- Fiona Orford-Williams
4imprint Group - Continued market share gains
4imprint’s FY23 results are as outlined in January’s trading update, with 16% top-line growth and a further step up in operating margin to 10.3% from 9.0%. Given that the trading backdrop became more difficult over the final few months, as shown in industry reports, this implies that the group continues to build share in its large and fragmented addressable market for promotional products. 4imprint ended the year with net cash and short-term deposits of $105m after particularly strong cash conve...
- Fiona Orford-Williams
4imprint Group - FY23 finishes strongly
4imprint’s year-end trading update indicates that 2023 was a strong year for the group’s financial performance. Revenue of $1.33bn is in line with guidance reiterated in November of ‘slightly above $1.3bn’, but PBT is now guided at ‘not below $140m’, above our previous expectation of $131m. We attribute the stronger profitability to a combination of higher gross margin and marketing efficiency. Strong cash performance resulted in the year-end balance of $105m exceeding our prior $84m estimate. O...
- Fiona Orford-Williams
4imprint Group - Further progress in Q323
4imprint’s Q323 trading update indicated further good growth, albeit moderating against comparatives getting tougher as the year progresses. Full year revenue guidance is maintained at ‘slightly above’ $1.3bn, with continuing high returns on marketing spend prompting a $5m uplift in PBT guidance to ‘not less than $130m’. 4imprint’s underlying markets reflect US corporate economic health, with any downside mitigated by the prospect of carrying on building market share as less well-funded firms st...
- Fiona Orford-Williams
4imprint Group - Record H123 customer demand
4imprint’s interim results reflect the narrative at last week’s trading update, being strong underlying demand, an uptick in gross margin as the supply chain bottlenecks ease and strong returns on each dollar of marketing spend. Having upgraded following the update, we have now ‘tidied up’ our modelling for FY23 and FY24. With the buy-in of the legacy defined benefit pension and the accelerated recovery contributions, plus payment of the special dividend, we expect 4imprint to end FY23 with net ...
- Fiona Orford-Williams
4imprint Group - Strong order intake and upgrades
Ahead of 4imprint’s interim results, scheduled for 9 August, the company has issued a half-year trading update indicating performance running well ahead of market expectations for the full year. This is in terms of volumes, gross margin, profitability and cash. The May AGM statement had also been very positive, but there was greater uncertainty at that time whether the buoyant conditions would persist and we held our forecasts. We have now lifted our revenue and earnings estimates for FY23 and F...
- Liberum Research Team
- Liberum Research Team
- Fiona Orford-Williams
4imprint Group - Very strong demand
4imprint’s AGM statement indicates that the group has had a very strong start to the year, with order intake 22% ahead of the equivalent period in FY22. Given the degree of macroeconomic uncertainty and the comparatives getting tougher as the year progresses, management is indicating that full year results will be within the range of current market forecasts. This level of growth is well ahead of the market, which industry body ASI estimates at +3.3% by value in Q123, indicating that 4imprint is...
- Liberum Research Team
- Liberum Research Team
- Alex O’Hanlon
- Joe Brent
LIBERUM: 4imprint Group* - 1% increase in marketing costs and 45% reve...
The FY 22 results were strong and a special DPS of 200c was announced. We make five key points: 1) A 1% increase in marketing costs delivered 45% revenue growth in FY 22; 2) 4imprint improved its market share to c. 4.4% in 2022 vs c. 3.3% in 2019, indicating it has strengthened its market position; 3) US recession risk remains elevated but can be absorbed by the underlying business; 4) Management has demonstrated its willingness to return excess cash to shareholders through the special dividend ...
- Fiona Orford-Williams
4imprint Group - Brand investment turbocharges growth
4imprint’s FY22 results are impressive, with 45% organic revenue growth and an uplift in operating margin to 9.0% (FY21: 3.9%) despite some gross margin pressure from inflation. Much of this is due to the step-change in marketing efficiency via investment in the 4imprint brand, which has delivered large numbers of new customers and higher order counts. The group is inherently highly cash generative, and we already assumed that a special dividend was likely. This is now confirmed, at twice the le...
- Liberum Research Team
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