4imprint is the leading direct marketer of promotional products in the United States, Canada, the UK and Ireland. In FY22, 98% of revenues were generated in the United States and Canada.
The US promotional products distribution market is highly fragmented and PPAI estimated its 2022 value at over US$25bn, up 13% on the year, well ahead of the GDP increase of 2.9%. Q123 growth moderated to +3.3%, with a pick up in Q2 to +5.6%, which will include some price inflation, so underlying volume growth is still likely limited. Some questions remain about confidence in the US corporate sector, but the utility of promotional products is high and sector prospects remain positive.
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Outlook
TMT |
Update
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Update
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Flash note
David Seekings
FD
Kevin Lyons-Tarr
CEO
Forecast net cash (US$m)
84
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (13.0) | (14.7) | 4.0 |
Relative | (15.4) | (14.3) | 5.7 |
52 week high/low | 5350.0p/4170.0p |
4imprint’s Q323 trading update indicated further good growth, albeit moderating against comparatives getting tougher as the year progresses. Full year revenue guidance is maintained at ‘slightly above’ $1.3bn, with continuing high returns on marketing spend prompting a $5m uplift in PBT guidance to ‘not less than $130m’. 4imprint’s underlying markets reflect US corporate economic health, with any downside mitigated by the prospect of carrying on building market share as less well-funded firms struggle. Already the largest North American distributor of promotional products, 4imprint’s market share in H123 was just 5.9%, giving plenty to go for. The long-term growth record, strong cash generation and robust balance sheet underpin the rating.
Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 787.3 | 35.7 | 30.2 | 80.3 | 67.5 | 66.7 |
2022A | 1140.3 | 108.4 | 103.7 | 285.0 | 19.0 | 15.0 |
2023E | 1320.0 | 133.8 | 131.0 | 348.6 | 15.6 | 10.5 |
2024E | 1430.0 | 147.1 | 142.0 | 382.2 | 14.2 | 10.8 |