4imprint Group (LSE: FOUR)

Currency in GBP

Last close As at 28/03/2023

GBP50.10

80.00 (1.62%)

Market capitalisation

GBP1,430m

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 value in 2022 at over US$25bn, up 13% on the year, we;; ahead of the increase in GDP of 2.9%. While there will be a continuing impact in FY23 from inflation on customer budgets, and ongoing concerns regarding stock availability and cost inflation for both stock and staff, the overall prospects for the sector remain positive.

Sector

TMT

Equity Analyst

Fiona Orford-Williams

Fiona Orford-Williams

Director, TMT

Key Management

  • David Seekings

    FD

  • Kevin Lyons-Tarr

    CEO

Balance Sheet

Forecast net cash (US$m)

49.3

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 12.2 11.8 73.4
Relative 19.4 12.2 77.4
52 week high/low 5090.0p/2240.0p

Financials

4imprint’s FY22 results are impressive, with 45% organic revenue growth and an uplift in operating margin to 9.0% (FY21: 3.9%) despite some gross margin pressure from inflation. Much of this is due to the step-change in marketing efficiency via investment in the 4imprint brand, which has delivered large numbers of new customers and higher order counts. The group is inherently highly cash generative, and we already assumed that a special dividend was likely. This is now confirmed, at twice the level we anticipated, at $2/share. The pace of growth will likely moderate this year and there will need to be some investment to cater for the larger volumes, but momentum remains good, and our forecasts are edged ahead.

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 75.5 74.5
2022A 1140.3 108.4 103.7 285.0 21.3 16.8
2023E 1275.0 115.2 110.7 294.8 20.6 16.7
2024E 1410.0 132.2 127.4 343.8 17.6 15.0

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