Sparks - 4imprint Group

The two key takeaways from 4imprint’s H126 results are that the company has seen improving trends in orders from new customers and average order value through the period, with the latter enabling better protection of the gross and operating margins than management had expected. As a result of the better-than-expected performance, management has indicated that FY26 revenue will be higher than FY25 and adjusted PBT will be ‘approximately $130m’. The revenue guidance implies a modest year-on-year revenue decline in H226 with similar rates of growth in the company’s KPIs and partly reflecting the annualisation of price increases that began in H225. While this represents a profit decline of c 14% y-o-y, it represents an upgrade of c 9% versus our prior estimate.  A continuation of the more-encouraging trends would support further upgrades.

H126 revenue declined by 1.1%, gross profit declined by c 3% and adjusted operating profit was c 12% lower. Both the gross and operating margins declined by 130bps versus H125, indicating that operating cost ratios were well controlled and stable.

The key revenue drivers were a c 3% increase in average order value, with improving recovery of tariff related costs as H126 progressed, partially offset by 1.3% fewer orders. While overall orders continued to decline in H126 and with existing customer orders broadly unchanged, there were more-encouraging trends in orders received from new customers as the period progressed, with a Q226 decline of 5% following a 9% decline in Q126. Changes in growth rates for orders from new customers are an important indicator of the business’s potential growth.

The declared interim dividend of 80c/share is unchanged versus H125.

Management has announced new costs for the impact of uncertain tax treatments.