4imprint Group

LN: FOUR

Market Cap£876m

Last Close 3120p

4imprint is the leading direct marketer of promotional products in the United States, Canada, the UK and Ireland. In FY20, 98% of revenues were generated in the United States and Canada.

Investment summary

4imprint’s interim results show a strong pick-up in demand from both existing and new customers. Management’s decisions taken early in the onset of the pandemic to retain the staff base and maintain a market presence through advertising have put the group in a strong position to capitalise on the rebound in the US economy. A return to paying dividends is a clear indication of confidence and we have increased our revenue forecasts for FY21 and FY22 by 11% in both years. The step-up in projections at an earnings level are lower, given the higher US tax charges. 4imprint’s balance sheet remains strong, with end-June net cash of $53m.

Y/E Dec	Revenue (US$m)	EBITDA (US$m)	PBT (US$m)	EPS (c)	P/E (x)	P/CF (x)
2019A	860.8	59.1	55.6	157.2	27.3	21.4
2020A	560.0	8.4	5.0	13.8	311.5	164.4
2021E	775.0	26.6	22.6	62.6	68.7	48.1
2022E	850.0	36.1	32.0	88.6	48.5	39.3

Industry outlook

The Advertising Specialty Institute (ASI), an industry body, estimated the value of the US promotional products distribution market in 2020 at US$20.7bn, down 20% on prior year, after an extended period of growth at a 10-year CAGR of 5.0%. However, the FY20 figure includes US$6bn of PPE sales, without which sales would have fallen by 43% year-on-year. 4imprint has dipped from the top of table but had negligible PPE sales.

Last updated on 21/09/2021