4imprint Group

LN: FOUR

£713.4m market cap

2540p 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 trading update indicated that order intake in Q4 was a little better than we had anticipated. Unaudited FY20 revenue was reported at c $560m, or 5% above our prior forecast. We remain circumspect around trading prospects for FY21, given the impact of the pandemic on corporate America and have left our forecast unchanged for now. The indicated year-end net cash balance at $39.8m (excluding lease debt) was well ahead of our projected figure ($22.5m in our modelling), and close to the $40.1m reported in October, implying that cash collections have held up strongly. We continue to view 4imprint as a high-quality investment proposition.

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 27.1 21.5
2019A 860.8 59.1 55.6 157.2 22.3 17.0
2020E 535.0 3.9 0.5 0.3 11691.1 1636.7
2021E 600.0 18.8 15.0 40.6 86.4 47.4
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. Notwithstanding its market-leading position, 4imprint’s share is therefore less than 3% (3.6% excluding PPE).

Last updated on 04/03/2021
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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 2.8 (9.6) (17.5)
Relative* 0.5 (11.8) (17.5)
52-week high/low 3040.0p/1320.0p
*% relative to local index
Key management
Kevin Lyons-Tarr CEO
David Seekings FD

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