Last close As at 05/08/2026
GBP50.00
▲ 110.00 (2.25%)
Market capitalisation
GBP1,378m
Research: TMT
4imprint has continued to trade better than its underlying market across H124, with revenues 5% ahead of H123. The North American promotional products market recovered lost ground in Q2 to be effectively flat over the half, implying further market share gains for 4imprint, already the largest player but with a share of just 5%. The gross margin improvement posted in H223 from pricing and mix has continued and looks to be sustainable. We have trimmed our FY24 revenue forecast by 3% but lifted our pre-tax profit by 2%, with consequent adjustments to FY25, where we look for 6.5% top-line growth, predicated on a stronger US economy. We now publish our first thoughts on FY26 with similar growth and margin assumptions.
4imprint |
Outperforming a challenging market |
H124 results |
Media |
7 August 2024 |
Share price performance
Business description
Next events
Analysts
4imprint is a research client of Edison Investment Research Limited |
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4imprint has continued to trade better than its underlying market across H124, with revenues 5% ahead of H123. The North American promotional products market recovered lost ground in Q2 to be effectively flat over the half, implying further market share gains for 4imprint, already the largest player but with a share of just 5%. The gross margin improvement posted in H223 from pricing and mix has continued and looks to be sustainable. We have trimmed our FY24 revenue forecast by 3% but lifted our pre-tax profit by 2%, with consequent adjustments to FY25, where we look for 6.5% top-line growth, predicated on a stronger US economy. We now publish our first thoughts on FY26 with similar growth and margin assumptions.
Year end |
Revenue |
PBT* |
EPS* |
DPS** |
P/E |
Yield |
12/22 |
1,140 |
103.7 |
285.6 |
160.0 |
24.9 |
2.3 |
12/23 |
1,327 |
140.7 |
377.9 |
215.0 |
18.8 |
3.0 |
12/24e |
1,394 |
150.0 |
404.6 |
240.0 |
17.5 |
3.4 |
12/25e |
1,484 |
159.3 |
423.3 |
255.0 |
16.7 |
3.6 |
12/26e |
1,580 |
170.1 |
451.2 |
270.0 |
15.7 |
3.8 |
Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excluding special dividends.
Margin gains from marketing and product mix
H124 revenue was up 5% (+6% at the demand level), with operating profit up by 10%. This reflects the improved gross margin at 32.1% (H123: 30.4%), itself due to a more favourable product mix combined with pricing benefits and careful control of input costs. The greater flexibility that the group has on its marketing mix, with more TV/brand awareness in the mix, supports the margin at the operating level and, again, we see these improvements as sustainable. Revenue per marketing dollar has dipped slightly to $7.64 from $8.22 in H123, but it is worth noting that this is against an average of $7.18 over the last five years and $6.50 over the last 10. Customer retention was good (as usual), with order intake up 8%, compensating for the tougher market for acquiring new customers.
Strong cash conversion supports dividend uplift
4imprint ended H124 with net cash and short-term deposits of $121.5m, up from $104.5m at end FY23. Underlying operating cash flow conversion of 106% was in line with its long-term average (excluding the FY20/FY21 pandemic distortion). Our year-end projection is now for $133.7m (was $125m), despite the $20m spend on the distribution centre expansion. This allows for a meaningful uplift in the dividend (we now estimate 240c/share, up from 225c). The group has lease debt only.
Valuation: Below level indicated by DCF
The share price has performed well when compared to other marketing service stocks, up by 25% year-to-date against peers up 4%. A discounted cash flow (WACC of 9%, terminal growth of 3%, as before) generates an implied value of £63.92, up from £61.18 at the time of our May update note when the US$/£ rate was around the same level as now, implying some potential further upside.
Exhibit 1: Financial summary
$000s |
2022 |
2023 |
2024e |
2025e |
2026e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
1,140,286 |
1,326,500 |
1,393,500 |
1,484,000 |
1,580,000 |
Cost of Sales |
(818,670) |
(924,600) |
(948,364) |
(1,012,088) |
(1,077,560) |
||
Gross Profit |
321,616 |
401,900 |
445,136 |
471,912 |
502,440 |
||
EBITDA |
|
|
108,428 |
142,600 |
151,000 |
160,400 |
170,200 |
Operating profit (before amort. and excepts.) |
|
|
102,902 |
136,200 |
144,000 |
153,300 |
163,100 |
Intangible Amortisation |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
Pensions and share options |
(815) |
(1,100) |
(1,400) |
(1,400) |
(1,400) |
||
Operating Profit |
102,902 |
136,200 |
144,000 |
153,300 |
163,100 |
||
Net Interest |
804 |
4,475 |
6,000 |
6,000 |
7,000 |
||
Net pension finance charge |
0 |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
103,706 |
140,675 |
150,000 |
159,300 |
170,100 |
Profit Before Tax (IFRS) |
|
|
103,706 |
140,675 |
150,000 |
159,300 |
170,100 |
Tax |
(23,563) |
(34,500) |
(37,500) |
(39,825) |
(42,525) |
||
Profit After Tax (norm) |
80,143 |
106,174 |
112,500 |
119,475 |
127,575 |
||
Profit After Tax (IFRS) |
80,143 |
106,174 |
112,500 |
119,475 |
127,575 |
||
Discontinued businesses |
0 |
0 |
0 |
0 |
0 |
||
Net income (norm) |
|
|
80,143 |
106,259 |
114,000 |
119,475 |
127,575 |
Net income (IFRS) |
|
|
80,143 |
104,374 |
112,500 |
119,475 |
127,575 |
Average Number of Shares Outstanding (m) |
28.1 |
28.1 |
28.2 |
28.2 |
28.3 |
||
EPS - normalised fully diluted (c) |
|
|
285.6 |
377.9 |
404.6 |
423.3 |
451.2 |
EPS - (IFRS) (c) |
|
|
285.0 |
377.0 |
404.5 |
423.2 |
451.1 |
Dividend per share (c) |
160.0 |
215.0 |
240.0 |
255.0 |
270.0 |
||
Special dividend per share (c) |
200.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
28.2 |
30.3 |
31.9 |
31.8 |
31.8 |
||
EBITDA Margin (%) |
9.5 |
10.8 |
10.8 |
10.8 |
10.8 |
||
Operating Margin (before GW and except.) (%) |
9.0 |
10.3 |
10.3 |
10.3 |
10.3 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
47,940 |
51,400 |
65,200 |
68,100 |
71,000 |
Intangible Assets |
1,010 |
1,010 |
1,010 |
1,010 |
1,010 |
||
Other intangible assets |
957 |
490 |
490 |
490 |
490 |
||
Tangible Assets |
29,255 |
34,700 |
49,800 |
52,700 |
55,600 |
||
Right of use assets |
13,103 |
11,400 |
10,100 |
10,100 |
10,100 |
||
Deferred tax assets |
2,381 |
3,800 |
3,800 |
3,800 |
3,800 |
||
Retirement benefit asset |
1,234 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
192,353 |
186,900 |
222,397 |
271,763 |
329,719 |
Stocks |
18,090 |
13,600 |
14,287 |
14,910 |
16,193 |
||
Debtors |
87,511 |
68,400 |
74,010 |
76,452 |
83,026 |
||
Cash and short-term deposits |
86,752 |
104,500 |
133,700 |
180,000 |
230,100 |
||
Other |
0 |
400 |
400 |
400 |
400 |
||
Current Liabilities |
|
|
(87,401) |
(91,280) |
(92,868) |
(96,786) |
(101,035) |
Creditors |
(85,966) |
(89,900) |
(91,608) |
(95,606) |
(99,755) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Lease liabilities |
(1,435) |
(1,380) |
(1,260) |
(1,180) |
(1,280) |
||
Long Term Liabilities |
|
|
(12,672) |
(12,520) |
(11,540) |
(10,298) |
(9,098) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Lease liabilities |
(12,315) |
(10,920) |
(9,940) |
(9,940) |
(8,740) |
||
Other long term liabilities |
(357) |
(1,600) |
(1,600) |
(358) |
(358) |
||
Net Assets |
|
|
140,220 |
134,500 |
183,190 |
232,779 |
290,586 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
101,317 |
166,900 |
145,500 |
158,300 |
167,600 |
Net Interest |
699 |
3,900 |
6,000 |
6,000 |
7,000 |
||
Tax |
(20,755) |
(33,800) |
(33,500) |
(37,325) |
(40,025) |
||
Capex |
(8,011) |
(9,700) |
(22,100) |
(10,000) |
(10,000) |
||
Acquisitions/disposals |
(1,700) |
0 |
0 |
0 |
0 |
||
Pension contributions |
(4,367) |
(6,500) |
0 |
0 |
0 |
||
Financing |
(866) |
2,500 |
(900) |
(900) |
(900) |
||
Dividends |
(18,722) |
(110,800) |
(64,600) |
(69,222) |
(73,687) |
||
Other/ Capital portion of lease repayments |
(2,432) |
5,250 |
(1,200) |
(500) |
200 |
||
Net Cash Flow |
45,163 |
17,750 |
29,200 |
46,353 |
50,188 |
||
Opening net debt/(cash and short-term deposits) |
|
|
(41,589) |
(86,752) |
(104,500) |
(133,700) |
(180,000) |
Net impact of disposals etc |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
(2) |
(1) |
(53) |
(89) |
||
Closing net debt/(cash) |
|
|
(86,752) |
(104,500) |
(133,700) |
(180,000) |
(230,100) |
Source: 4imprint accounts, Edison Investment Research
|
|
Research: Investment Companies
HgT posted a 12-month net asset value (NAV) total return of 12.2% to end June 2024 (based on preliminary unaudited H124 valuations), maintaining its impressive long-term track record, at 18.6% and 18.3% pa over the last five and 10 years, respectively. Despite the still modest exit activity in the global private equity market, HgT received £347m (or 15% of opening NAV) in proceeds from exits and refinancings in H124. The four full and partial exits signed in 2024 were agreed at an average 13% uplift to their previous carrying values, reinforcing HgT’s portfolio valuations. Accounting for all deals announced to date, HgT’s pro forma available liquid resources were £508m, a robust 70% commitment coverage ratio.