Good morning. Sorry for running late today, I can't shake off this chest infection, so am still stranded on my friends' sofa in London. Not ideal. Phone & email messages are piling up, so I'll work my way through them once I'm a bit better, apologies for any inconvenience. Anyway, here's a quick skim of the morning's small cap trading updates & results.



4imprint (LON:FOUR)

There is a confident Q1 trading update from this group issued today. Group revenue for Q1 was an impressive 16% up on last year's Q1. That's all the more impressive since they are up against a headwind of a stronger sterling:US dollar exchange rate. A large part of 4Imprint's business is conducted in America, so that is translating into sterling at a less favourable rate of $1.66=£1 as opposed to $1.55=£1 in Q1 of last year.

I would have liked something a bit more specific about profitability, but the Chairman comments reassuringly;


The excellent performance in the first quarter again demonstrates the strength of the business. Notwithstanding the early point in the year and the short order to sales cycle, the indications are for a positive outcome for the year as a whole.


Checking back to my most recent comments here on FOUR, on 5 Mar 2014 I reviewed their 2013 results, and concluded that whilst it's a good business that is performing well, the price looked up with events on a PER of around 20 (at 691p per share). Although it's surprising how companies can grow into warm valuations when earnings are rising strongly.

Considering that they delivered 35.5p of underlying EPS in 2013, then broker consensus for this year looks too low to me. With such strong revenue growth, then surely 40-45p EPS should be do-able this year? Yet Stockopedia and another site have 2014 broker consensus of 33.4p EPS. At the current share price of 665p that is a PER of 19.9 times broker consensus, but more like 15-16 times if my guesstimates above on 2014 EPS (i.e. 40-45p) are correct. So it looks like a situation where there could be upside surprises on earnings possibly?

The dividend yield is reasonably good, at a forecast 2.9%, which has been growing at an average of about 5% p.a., and is twice covered.…

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