4imprint Group

LN: FOUR

£932.4m market cap

3320p 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 indicated 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 40.7 27.5
2018A 738.4 48.5 46.1 133.5 32.8 26.9
2019E 855.1 58.1 54.6 152.4 28.8 20.6
2020E 950.0 64.1 60.8 169.5 25.9 19.2
Industry outlook

Industry body PPAI estimates the value of the US promotional products distribution market at US$23bn. 4imprint is the largest distributor in this large and diverse market, yet has market share of around 3%. Q319 sales for the market were up 4.3%, slightly down on the +5.4% reported for Q219 and the 4.9% for FY18. The industry seems to have tackled the potential disruption from US-China tariffs effectively, although those set to be introduced in December did not take effect. Promotional products remain an attractive marketing medium for businesses for both external marketing purposes and internal motivational programmes.

Last updated on 12/02/2020
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 0.9 15.1 71.8
Relative* 2.8 12.3 62.8
52-week high/low 3500.0p/1917.5p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD