4imprint Group

LN: FOUR

£690.9m market cap

2490p last close

4imprint is the leading direct marketer of promotional products in the US, Canada, the UK and Ireland. 97% of 2018 revenues were generated in the US and Canada.

Investment summary

4imprint’s FY18 results show continued strong progress, with revenues up 18% on the prior year – 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 was lifted 2% on the results, 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.

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 30.0 20.3
2018A 738.4 48.8 46.4 132.3 24.4 19.8
2019E 812.3 55.7 52.6 147.0 21.9 16.0
2020E 877.3 60.5 57.4 159.5 20.2 15.0
Last updated on 24/04/2019
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 24/04/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (US$m) 38.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 5.1 24.6 46.4
Relative* 1.2 14.7 45.9
52-week high/low 2610.0p/1695.0p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD