4imprint Group

LN: FOUR

£589.8m market cap

2100p last close

4imprint is the leading direct marketer of promotional products in the US, Canada, the UK and Ireland. In FY19, 97% of revenues were generated in the US and Canada.

Investment summary

4imprint’s first half trading was heavily affected by the commercial repercussions of the COVID-19 pandemic as it spread across the US. With uncertainty over the speed and extent of the reopening of the US economy, projections for the remainder of the year (and for FY21) are more tentative than usual. Despite the difficult trading circumstances, 4imprint retains a strong, cash positive balance sheet, and has low fixed costs and capital requirements. We believe that it retains its long-term attractions in a large, fragmented market and should rebuild quickly as the economy recovers.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 738.4 48.5 46.1 129.4 20.9 16.6
2019A 860.8 59.1 55.6 157.2 17.2 13.1
2020E 535.0 3.9 0.5 0.3 9027.6 1263.9
2021E 600.0 18.8 15.0 40.6 66.7 36.6
Industry outlook

The Advertising Specialty Institute (ASI), an industry body, estimated the value of the US promotional products distribution market in 2019 at US$25.8bn. 4imprint is the largest distributor, yet has an estimated market share of less than 3%. The market reportedly grew at around 4.5% for FY19, with a 10-year CAGR of 5.0%, but is currently estimated to retrench by 35% in 2020. However, this figure includes some distributors switching to supplying PPE.

Last updated on 21/10/2020
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Sector
TMT
Share price graph
Balance sheet
Forecast net cash (US$m) 22.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 12.1 (11.0) (31.4)
Relative* 11.3 (5.4) (16.6)
52-week high/low 3500.0p/1320.0p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD

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