4imprint Group

LN: FOUR

£551.9m market cap

1965p last close

4imprint is the leading direct marketer of promotional products in the US, Canada, the UK and Ireland. 97% of 2017 revenues were generated in the US and Canada.

Investment summary

4imprint’s year-end update indicated 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.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 558.2 40.8 38.4 98.7 25.7 15.2
2017A 627.5 45.1 42.5 107.7 23.5 15.9
2018E 725.0 48.2 45.1 126.9 20.0 15.4
2019E 797.5 55.4 52.3 146.1 17.3 13.0
Last updated on 21/02/2019
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 less than 3%. The market is reportedly growing at around 5% for FY18 and 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 21/02/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (US$m) 25
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (2.2) 1.3 1.3
Relative* (4.8) (0.6) 3.2
52-week high/low 2260.0p/1575.0p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD