4imprint Group

LN: FOUR

£954.9m market cap

3420p last close

4imprint is the leading direct marketer of promotional products in the US, Canada, the UK and Ireland. In FY18, 97% of revenues were generated in the US and Canada.

Investment summary

4imprint’s pre-close update indicates trading in the later weeks of the full year continued strong, with FY19 results set to be at the higher end of the market forecast range. Revenue (+17%) was slightly above our estimate, which we raised by $10m at the November trading update. The $41.0m net cash at the year end was also a little ahead of our forecast of $39.5m. We have initiated FY21 forecasts, which show the group exceeding management’s $1bn revenue target a year earlier than originally anticipated. The large scale of the addressable market leaves plenty of opportunity for growth, with potential for further share price appreciation.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 627.5 45.1 42.5 107.7 41.4 28.0
2018A 738.4 48.5 46.1 133.5 33.4 27.4
2019E 855.1 58.1 54.6 152.4 29.3 21.0
2020E 950.0 64.1 60.8 169.5 26.3 19.5
Industry outlook

The PPAI, an industry body, estimates the value of the US promotional products distribution market at US$25bn. 4imprint is the largest distributor in this large and diverse market, yet has market share of around 3%. Q219 sales for the market were up 5.4%, having increased by 4.9% in FY18. 4imprint has consistently grown faster than the market, building share through its reputation for quality, reliability and customer service. There are no direct comparators, as the other larger players have differentiated business models.

Last updated on 23/01/2020
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (US$m) 39.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 7.3 11.1 69.2
Relative* 6.8 4.3 53.3
52-week high/low 3500.0p/1917.5p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD