REG - 4imprint Group PLC - Final Results
12/03/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250312:nRSL2571Aa&default-theme=true
RNS Number : 2571A 4imprint Group PLC 12 March 2025
12 March 2025
4imprint Group plc
Final results for the period ended 28 December 2024
4imprint Group plc (the "Group"), a direct marketer of promotional products,
today announces its final results for the 52 weeks ended 28 December 2024.
Financial overview 2024 2023 Change
$m $m
Revenue 1,367.9 1,326.5 +3%
Operating profit 148.1 136.2 +9%
Profit before tax 154.4 140.7 +10%
Cash and bank deposits 147.6 104.5 +41%
Basic earnings per share (cents) 416.3 377.9 +10%
Total paid and proposed regular dividend per share (cents) 240.0 215.0 +12%
Total paid and proposed regular dividend per share (pence) 186.4 167.8 +11%
Proposed special dividend per share (cents) 250.0 - -
Proposed special dividend per share (pence) 193.3 - -
Operational overview
· Strong financial performance with further market share gains
· Flexible marketing mix enabling tailored investment in challenging
market conditions
· Double-digit percentage operating profit margin maintained
· 2,124,000 total orders received in 2024 (2023: 2,090,000); increase
in existing customer orders offsetting a decline in new customer acquisition,
impacted by uncertain economic conditions
· Group well financed with cash and bank deposits of $147.6m (2023:
$104.5m)
· $20m Oshkosh distribution centre expansion project completed on time
and on budget
Paul Moody, Chairman said:
"The Group delivered a strong financial performance in 2024, continuing to
outperform the promotional products market as a whole and thereby taking
further market share.
In the first two months of 2025 revenue at the order intake level was slightly
down compared to the same period in 2024, reflecting continued uncertainty in
the market. It is possible that market conditions, including potential tariff
impacts, may continue to influence demand in 2025. From our experience,
however, as business sentiment improves, demand for promotional products
increases as does our ability to gain market share.
Despite a challenging near-term environment, our view of the prospects of the
business remains unchanged. The Board is confident in the Group's strategy,
competitive position and growth opportunity."
For further information, please contact:
4imprint Group plc MHP Group
Tel. + 44 (0) 20 3709 9680 Tel. + 44 (0) 7884 494112
Kevin Lyons-Tarr, Chief Executive Officer Katie Hunt
David Seekings, Chief Financial Officer Eleni Menikou
Chairman's Statement
Performance summary
The Group delivered a strong financial performance in 2024, continuing to
outperform the promotional products market as a whole and thereby taking
further market share.
Group revenue for 2024 was $1.37bn, an increase of $0.04bn or 3% over 2023.
Profit before tax for the year was $154.4m (2023: $140.7m), driving an
increase in basic earnings per share to 416.3c (2023: 377.9c). The business
model remained highly cash generative, with cash and bank deposits at the end
of 2024 of $147.6m (2023: $104.5m), leaving the Group well financed entering
2025.
The Group made solid operational progress in 2024 against a challenging market
backdrop. Despite a more cautious macroeconomic environment that began in the
second half of 2023 and continued through 2024, the business continued to
acquire and retain high-quality customers in the year.
The business model is highly resilient and the financial dynamics are strong.
Gross profit margin improved to 32% (2023: 30%) and our flexible marketing mix
enabled us to tailor our investment to prevailing market conditions,
delivering a double-digit percentage operating profit margin.
The consistent cash-generative profile of our model allows us to invest in the
business, positioning us for future growth at the same time as providing
meaningful returns to Shareholders through dividend payments. Notably, in 2024
we completed a $20m capital project to expand the Oshkosh distribution centre,
supporting further growth in the apparel category of our product range.
Strategy
Our strategic direction has not changed. We aim to deliver attractive organic
revenue growth by increasing our share of the fragmented yet substantial
markets that we serve.
We take a long-term view of the business. This includes making necessary
investments in the people, marketing resources and infrastructure required for
success, regardless of the immediate market conditions. From experience, we
know that maintaining investment in the business in more difficult times
positions us to take advantage of market share opportunities when conditions
improve.
Dividend
The Group finished 2024 in a strong financial position, with cash and bank
deposits of $147.6m (2023: $104.5m). The Board recommends a final dividend per
share of 160.0c (2023: 150.0c), giving a total paid and proposed 2024 regular
dividend per share of 240.0c (2023: 215.0c). In addition, the Board is
recommending a special dividend per share of 250.0c, bringing total regular
and special 2024 dividends per share to 490.0c.
Outlook
In the first two months of 2025 revenue at the order intake level was slightly
down compared to the same period in 2024, reflecting continued uncertainty in
the market. It is possible that market conditions, including potential tariff
impacts, may continue to influence demand in 2025. From our experience,
however, as business sentiment improves, demand for promotional products
increases as does our ability to gain market share.
Despite a challenging near-term environment, our view of the prospects of the
business remains unchanged. The Board is confident in the Group's strategy,
competitive position and growth opportunity.
Paul Moody
Chairman
11 March 2025
Chief Executive's Review
Revenue 2024 2023 Change
$m $m
North America 1,342.7 1,302.6 +3%
UK & Ireland 25.2 23.9 +5%
Total 1,367.9 1,326.5 +3%
Operating profit Change
2024 2023
$m $m
Direct Marketing operations 153.2 141.2 +8%
Head Office costs (5.1) (5.0) +2%
Total 148.1 136.2 +9%
Performance overview
Despite a cautious macroeconomic environment, the Group delivered a resilient
trading performance in 2024. Revenue grew 3%, outperforming the overall
promotional products industry and representing another year of market share
gains. Our results reflect the outstanding efforts of our team members, the
strength of the relationships we have with our supplier partners, and the
effectiveness of our marketing investments.
In total 2,124,000 orders were received in 2024, representing an increase of
2% over 2023. The percentage increase in total order activity over the prior
year started moderating in the second half of 2023 and continued throughout
2024. In line with historical patterns, existing customer orders made up the
majority, with 1,644,000 orders, representing a 5% increase over 2023. This
strength in existing customer orders reflects the quality of the customers we
are acquiring and of the customer file moving forward.
480,000 new customer orders were received in 2024, down 9% compared to 2023.
We acquired 280,000 new customers in the year, representing a decrease of 10%
over the 311,000 acquired in 2023. The relative slow down in new customer
acquisition correlates with the softening market conditions and industry
demand patterns. Average order values in 2024 were 2% above prior year, driven
by changes in the merchandising mix, customer preferences and price
adjustments through the year.
Our order intake and average order values laid the base for a strong financial
performance in 2024. Group revenue for 2024 was $1.37bn, representing an
increase of 3% or $0.04bn over 2023. Operating profit for 2024 of $148.1m was
9% above the 2023 comparative of $136.2m, producing an operating margin for
the year of 10.8% (2023: 10.3%). Other than the revenue growth outlined above,
three major themes contributed to this strengthening in net return:
· Gross profit percentage improved by 1.5 percentage points against the
prior year, stabilising at around 32%. This favourable movement was driven
mainly by carefully targeted price adjustments and a more typical level of
supplier cost increases.
· Productivity of marketing spend continues to be encouraging, with our
revenue per marketing dollar KPI at $7.88 for the full year (2023: $8.30). For
comparison purposes, this KPI was below $6 in the pre-pandemic year of 2019.
· Some operational gearing over the fixed and semi-fixed elements of
the cost base, but this was offset by incremental investment, primarily in
people, to support the continued growth of the business.
The 4imprint direct marketing business model remains very cash generative,
with cash and bank deposits at the 2024 year-end of $147.6m (2023: $104.5m).
Operational highlights
Significant operational progress was made in 2024. Much of this was related to
investing in facilities, marketing and resources to support a growing
business.
· People. Our team members are essential to our current and future
success. Starting in 2023 and continuing throughout 2024, we made key
appointments at the strategic leadership level and have added team members to
strengthen our platform for future profitable growth. We have been able to
attract the high-quality talent that we need in a variety of areas across the
business, both in terms of those who directly support our increasing order
count as well as people to strengthen our organisational structure for the
future.
· Marketing. The development of and investment in the brand component
of our marketing mix has been the key catalyst behind our materially improved
marketing productivity in recent years as compared to historical performance.
The marketing portfolio is now much more heavily weighted toward brand and
search compared to catalogues. We believe that our increasing level of aided
and unaided brand awareness strengthens the business, creating opportunity in
both near and long term. As we demonstrated in 2024, this mix allows us to be
nimble when responding to market conditions, and the improved flexibility in
managing our marketing investment helps protect our operating profit. We will
continue to manage our investment to take full advantage of immediate market
share opportunities, at the same time strengthening the business for the
future.
· Supply. The relationships with our suppliers are a critical success
factor for the business. Given our 'drop-ship' business model, our suppliers
enable us to deliver the '4imprint Certain' service that our customers come to
us for. During times of stress on the supply chain, we have relied on the deep
relationships we have with our key Tier 1 suppliers, working together to
manage any issues effectively. In the coming year, we will again work with
these key suppliers to manage the impact of tariffs applied to the products we
offer.
· Oshkosh facilities. A major capital investment of $20m was made in
2024 to expand the Oshkosh distribution centre, increasing the footprint from
just over 300,000 sq. ft. to approximately 470,000 sq. ft. This investment
will support the anticipated growth in the apparel category of our product
range for the next several years.
· Sustainability. Exciting progress has been made relative to our
sustainability initiatives. In particular:
o More precise and extensive measurement of our carbon footprint,
facilitating enhanced greenhouse gas and Task Force on Climate-related
Financial Disclosures reporting.
o Further development of recycled and more sustainable materials in the
manufacture of our in-house brands.
o Expansion of our Better Choices® product designation programme.
o Addition to the solar array at our Oshkosh distribution centre to match
the expansion in the footprint of the facility.
Looking ahead
Our operations are robust and scalable, and our team is strong and committed.
We have demonstrated the ability to adjust to changing market conditions over
the past several years, gaining market share, improving profitability and
delivering strong cash generation. As ever, we will continue investing in the
business to be positioned for growth when customer demand strengthens. We
remain confident in our strategy and our prospects.
Financial Review
The Group's revenue and profit in the period, summarising expense by function,
were as follows:
2024 2023
$m $m
Revenue 1,367.9 1,326.5
Gross profit 435.4 401.9
Marketing costs (173.7) (159.9)
Selling costs (49.8) (47.2)
Administration and central costs (61.8) (56.8)
Share option charges and related social security costs (1.6) (1.1)
Defined benefit pension plan administration costs (0.4) (0.7)
Operating profit 148.1 136.2
Net finance income 6.3 4.5
Profit before tax 154.4 140.7
Taxation (37.2) (34.5)
Profit for the period 117.2 106.2
Group operating result
The Group has delivered another strong financial performance for 2024,
continuing to grow revenue and operating profit despite a challenging market
backdrop.
Revenue increased 3% to $1.37bn (2023: $1.33bn), with existing customer orders
and average order value (5% and 2% higher than 2023 respectively) more than
offsetting the decline in new customer orders (9% below 2023) which were
impacted by uncertain economic conditions.
The gross profit percentage of 31.8% improved from 30.3% in 2023, benefiting
from carefully targeted price adjustments implemented throughout 2023 and 2024
and minimal supplier cost increases.
Marketing costs increased to 13% of revenue compared to 12% in 2023. Whilst
this represents a small decrease in the revenue per marketing dollar KPI from
$8.30 in 2023 to $7.88 for 2024, this continues to represent a material
improvement from pre-pandemic historical norms and reflects the flexibility of
the marketing mix that has enabled us to control the marketing investment in a
challenging external environment.
Selling, administration and central costs together increased 7% to $111.6m
(2023: $104.0m) primarily reflecting a full year of costs for team members
added during the first half of 2023.
The strong gross profit margin and flexible marketing mix outlined above
delivered another uplift in operating profit to $148.1m (2023: $136.2m) and
operating margin to 10.8% (2023: 10.3%).
Segmental performance
Revenue Operating
profit/(loss)
$m 2024 2023 2024 2023
North America 1,342.7 1,302.6 153.6 141.0
UK & Ireland 25.2 23.9 (0.4) 0.2
Direct Marketing Operations 1,367.9 1,326.5 153.2 141.2
Head Office Costs - - (5.1) (5.0)
Total 1,367.9 1,326.5 148.1 136.2
North America revenue increased 3% and operating profit by 9%. As the business
constitutes more than 98% of Group revenue and 104% of Group operating profit,
the commentary for the Group operating result above applies equally to the
North American business.
UK & Ireland revenue increased 5% driven by improved demand, an increase
in average order value and favourable currency movements. Investment in brand
awareness advertising campaigns to drive future business growth led the
business to a small operating loss for 2024 of $(0.4)m (2023: operating profit
$0.2m).
Foreign exchange
The primary US dollar exchange rates relevant to the Group's 2024 results were
as follows:
2024 2023
Year-end Average Year-end Average
Sterling 1.26 1.28 1.27 1.24
Canadian dollars 0.69 0.73 0.76 0.74
The Group reports in US dollars, its primary trading currency. It also
transacts business in Canadian dollars, Sterling and Euros. Sterling/US dollar
is the exchange rate most likely to impact the Group's financial performance.
The primary foreign exchange considerations relevant to the Group's operations
are as follows:
· translational risk in the income statement remains low with the
majority of the Group's revenue arising in US dollars, the Group's reporting
currency;
· most of the constituent elements of the Group balance sheet are US
dollar-based; and
· the Group generates cash mostly in US dollars, but its primary
applications of post-tax cash are Shareholder dividends and some Head Office
costs which are paid in Sterling.
As such, the Group's cash position is sensitive to Sterling/US dollar exchange
movements. To the extent that Sterling weakens against the US dollar, more
funds are available in payment currency to fund these cash outflows.
Share option charges
A total of $1.6m (2023: $1.1m) was charged in the period in respect of IFRS 2
'Share-based Payments'. This was made up of two elements: (i) executive awards
under the Deferred Bonus Plan (DBP) and Long-Term Incentive Plan (LTIP); and
(ii) charges in respect of employee savings-related share schemes.
Current options and awards outstanding are 71,603 options under the US
Employee Stock Purchase Plan, 10,956 options under the UK Save As You Earn
scheme, 46,321 awards under the DBP and 36,855 awards under the LTIP. Awards
under the DBP in respect of 2024 are anticipated to be made in late March
2025.
Net finance income
Net finance income for the period was $6.3m (2023: $4.5m), comprising interest
earned on cash deposits and lease interest charges under IFRS 16. The increase
in finance income on 2023 reflects the higher level of cash deposits held.
Taxation
The tax charge for the period was $37.2m (2023: $34.5m) giving an effective
tax rate of 24% (2023: 25%). The primary component of the charge relates to
current tax on US taxable profits of $35.8m (2023: $32.1m).
Earnings per share
Basic earnings per share increased 10% to 416.3c (2023: 377.9c), reflecting
the 10% increase in profit after tax and a weighted average number of shares
in issue similar to prior year.
Dividends
Dividends are determined in US dollars and paid in Sterling, converted at the
exchange rate on the date that the dividend is declared.
The Board has proposed a final dividend of 160.0c per share (2023: 150.0c)
which, together with the interim dividend of 80.0c per share, gives a total
paid and proposed regular dividend relating to 2024 of 240.0c per share (2023:
215.0c), an increase of 12% compared to the prior year.
The final dividend has been converted to Sterling at an exchange rate of
£1.00/$1.2934. This results in a final dividend per share payable to
Shareholders of 123.7p (2023: 117.0p), which, combined with the interim
dividend paid of 62.7p per share, gives a total dividend per share for the
period of 186.4p (2023: 167.8p).
In addition to the interim and final dividends, the Board has also proposed a
special dividend of 250.0c per share (193.3p) (2023: nil), which will be paid
at the same time as the final dividend in June 2025. This special dividend is
non-recurring in nature and is in accordance with the Group's established
balance sheet funding and capital allocation policies which are described in
more detail below.
The final and special dividends, together amounting to 410.0c per share
(317.0p), will be paid on 3 June 2025 to Shareholders on the register at the
close of business on 2 May 2025.
Defined benefit pension plan
The Group sponsors a legacy UK defined benefit pension plan (the "Plan") which
has been closed to new members and future accrual for several years.
Following the purchase of a bulk annuity policy in June 2023 in the form of a
buy-in arrangement, the Group ceased to make monthly deficit funding
contributions to the Plan but still funds the ongoing administration costs and
settlement of residual liabilities.
Consistent with both the Trustee's overriding objective to enhance the
security of the benefits payable to members and the Group's long-term
commitment to the full de-risking of its legacy defined benefit pension
obligations, progress has been made during 2024 to achieve a full buy-out of
the Plan liabilities which is anticipated to be completed during 2025.
At 28 December 2024 and 30 December 2023, the Plan on an IAS 19 basis was in a
breakeven position with gross Plan assets and liabilities both $20.9m (2023:
$23.3m). As expected, there was no change in the net IAS 19 Plan position as
the fair value of the bulk annuity policy matches the liabilities insured.
A triennial actuarial valuation of the Plan was completed as at 30 September
2022 and this forms the basis of the IAS 19 valuation referred to above.
Cash flow
The Group had cash and bank deposits of $147.6m at 28 December 2024, an
increase of $43.1m against the 30 December 2023 balance of $104.5m. Cash flow
in the period is summarised as follows:
2024 2023
$m $m
Operating profit 148.1 136.2
Share option charges 1.6 1.1
Defined benefit pension administration costs paid by the Plan - 0.5
Depreciation and amortisation 5.1 4.7
Lease depreciation 1.7 1.7
Change in working capital 5.6 29.2
Capital expenditure (19.5) (9.7)
Underlying operating cash flow 142.6 163.7
Tax and interest (29.5) (29.9)
Defined benefit pension plan contributions - (6.5)
Proceeds from issue of ordinary shares - 2.4
Own share transactions (2.0) (1.0)
Capital element of lease payments (1.5) (1.4)
Exchange (1.0) 1.2
Free cash flow 108.6 128.5
Dividends to Shareholders (65.5) (110.8)
Net cash inflow in the period(1) 43.1 17.7
(1)Representing the movement in cash and bank deposits balances.
The Group generated underlying operating cash flow of $142.6m (2023: $163.7m),
a conversion rate of 96% of operating profit (2023: 120%) reflecting the cash
generative nature of the Group's 'drop-ship' distribution model. The decrease
in the conversion rate from the prior year was driven by the unwind of the
elevated working capital position in 2023 arising from the difficult supply
chain conditions experienced after the pandemic. Capital expenditure includes
the significant investment in expanding capacity at the Oshkosh distribution
centre which was completed during the year.
Free cash flow decreased by $19.9m to $108.6m (2023: $128.5m) due to the
unwind of the abnormal working capital position in 2023 and higher level of
capital expenditure in 2024 outlined above. Dividends to Shareholders in 2024
includes the 2023 final dividend paid in June 2024 and the 2024 interim
dividend paid in September 2024. The dividends paid in 2023 include the
special dividend of $58.1m announced alongside the 2022 final dividend.
Balance sheet and Shareholders' funds
Net assets at 28 December 2024 were $185.1m, compared to $134.5m at 30
December 2023. The balance sheet is summarised as follows:
28 December 30 December
2024 2023
$m $m
Non-current assets 58.0 51.4
Working capital (13.5) (7.9)
Cash and bank deposits 147.6 104.5
Lease liabilities (5.3) (12.3)
Other assets and liabilities - net (1.7) (1.2)
Net assets 185.1 134.5
Shareholders' funds increased by $50.6m since 30 December 2023. The main
constituent elements of the movement were retained profit in the period of
$117.2m, net of equity dividends paid to Shareholders of $65.5m.
The Group had a net negative working capital balance of $13.5m at 28 December
2024 (30 December 2023: $7.9m). This net negative position reflects the
strength of our business model, with low inventory requirements, a high
proportion of customers paying for orders by credit card and the diligent
payment of suppliers to agreed terms.
Balance sheet funding
The Board is committed to aligning the Group's funding with its strategic
priorities. This requires a stable, secure and flexible balance sheet through
different economic cycles. The Group will therefore typically remain ungeared
and hold a positive cash and bank deposits position.
The Board's funding guidelines are unchanged, and aim to provide operational
and financial flexibility to:
· facilitate continued investment in marketing, people and technology
through different economic cycles, recognising that an economic downturn
typically represents a future market share opportunity for the business;
· protect the ability of the business to act swiftly as growth
opportunities arise in accordance with the Group's capital allocation
guidelines; and
· underpin a commitment to Shareholders through the maintenance of
regular interim and final dividend payments.
The quantum of the cash target at each year-end will be influenced broadly by
reference to the investment requirements of the business and the subsequent
year's anticipated full-year ordinary dividend.
The Board will keep these guidelines under review and is prepared to be
flexible if circumstances warrant.
Capital allocation
The Board's capital allocation framework is designed to deliver increasing
Shareholder value, driven by the execution of the Group's growth strategy. The
Group's capital allocation priorities are:
· Organic growth investments
o Either capital projects or those expensed in the income statement.
o Market share opportunities in existing markets.
· Interim and final dividend payments
o Increasing broadly in line with earnings per share through the cycle.
o Aim to at least maintain dividend per share in a downturn.
· Mergers and acquisitions
o Not a near-term priority.
o Opportunities that would support organic growth.
· Other Shareholder distributions
o Quantified by reference to cash over and above balance sheet funding
requirement.
o Special dividends most likely method: other methods may be considered.
Treasury policy
The financial requirements of the Group are managed through a centralised
treasury policy. The Group operates cash pooling arrangements for its North
American operations. Forward contracts may be taken out to buy or sell
currencies relating to specific receivables and payables as well as
remittances from overseas subsidiaries. There were no forward contracts open
at the year-end or prior year-end. The Group holds most of its cash with its
principal US and UK bankers.
The Group has a $20.0m working capital facility with its principal US bank,
JPMorgan Chase, N.A. The facility has minimum net income and debt to EBITDA
covenants. The interest rate is the Secured Overnight Financing Rate plus
1.6%, and the facility expires on 31 May 2026. In addition, an overdraft
facility of £1.0m with an interest rate of the Bank of England base rate plus
2.0% (or 2.0% if higher) is available from the Group's principal UK bank,
Lloyds Bank plc, until 31 December 2025. These facilities were undrawn at the
year-end (2023: undrawn) and the Group expects these facilities to be renewed
prior to their respective expiry dates.
The Group had cash and bank deposits of $147.6m (2023: $104.5m) at the
year-end and has no current requirement or plans to raise additional equity or
core debt funding.
Estimates and judgments
The preparation of the consolidated financial statements requires management
to make judgments and estimates that affect the application of accounting
policies, the amounts reported for assets and liabilities as at the balance
sheet date and the amounts reported for revenues and expenses during the year.
Management considers the critical accounting judgments to be in respect of
revenue and the amendment to the Oshkosh office lease signed on 1 November
2024. Further information on these judgments is provided in the notes to the
financial statements.
A review of internal and external indications of impairment was undertaken in
accordance with IAS 36 for both the North American and UK cash-generating
units (CGUs). This resulted in a full impairment review being undertaken for
the UK CGU but no impairment being identified.
Going concern
In determining the appropriate basis of preparation of the financial
statements for the period ended 28 December 2024, the Directors have
considered the Group's ability to continue as a going concern over the period
to 27 June 2026.
The Group has modelled its cash flow outlook for the period to 27 June 2026,
considering the continuing uncertainties around macroeconomic conditions and
the geopolitical environment. This forecast shows no liquidity concerns or
requirement to utilise the Group's undrawn facilities.
The Group has also modelled a downside scenario reflecting severe but
plausible downside demand assumptions which shows no liquidity concerns or
requirement to utilise the Group's undrawn facilities in the going concern
period.
Based on their assessment, the Directors have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's and Company's ability
to continue as a going concern from the date the financial statements are
approved until 27 June 2026. Accordingly, they continue to adopt the going
concern basis in preparing the Group's and Company's financial statements.
Risk Management
The Board recognises that effective risk management and a robust system of
internal control are integral components of good corporate governance and are
fundamental to the long-term sustainable success of the Group. Risk appetite,
the risk management process and associated mitigating activities and controls
are all essential elements of the Group's strategic and operational planning
processes.
The Board, supported by the Audit Committee, has overall responsibility for
oversight and management of risk and control across the Group. On a day-to-day
basis this responsibility is delegated to the Executive Directors and
supported by the Group's Business Risk Management Committee (BRMC). The Board
is committed to embedding a risk aware culture, setting the tone from the top
and ensuring that risk is an intrinsic element of the governance structure.
Principal Risks & Uncertainties
Outlined in Appendix 1 are the current principal risks and uncertainties that
would impact the successful delivery of the Group's strategic goals. These are
consistent with those disclosed in the prior year. The list is not exhaustive
and other, as yet unidentified, factors may have an adverse effect.
Kevin Lyons-Tarr David Seekings
Chief Executive Officer Chief Financial Officer
11 March 2025
Group Income Statement for the 52 weeks ended 28 December 2024
Note 2024 2023
$m $m
Revenue 1 1,367.9 1,326.5
Cost of sales (932.5) (924.6)
Gross profit 435.4 401.9
Operating expenses (287.3) (265.7)
Operating profit 1 148.1 136.2
Finance income 6.7 4.7
Finance costs (0.4) (0.4)
Pension finance income - 0.2
Net finance income 6.3 4.5
Profit before tax 154.4 140.7
Taxation 2 (37.2) (34.5)
Profit for the period 117.2 106.2
Cents Cents
Earnings per share
Basic 3 416.3 377.9
Diluted 3 415.3 377.0
Group Statement of Comprehensive Income for the 52 weeks ended 28 December
2024
Note 2024 2023
$m $m
Profit for the period 117.2 106.2
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Currency translation differences (1.1) 1.4
Items that will not be reclassified subsequently to the income statement:
Remeasurement losses on post-employment obligations - (7.5)
Tax relating to components of other comprehensive income 2 0.4 2.3
Other comprehensive loss for the period, net of tax (0.7) (3.8)
Total comprehensive income for the period, net of tax 116.5 102.4
Group Balance Sheet at 28 December 2024
Note 2024 2023
$m $m
Non-current assets
Goodwill 1.0 1.0
Intangible assets 0.3 0.5
Property, plant and equipment 5 49.3 34.7
Right-of-use assets 6 4.2 11.4
Deferred tax assets 3.2 3.8
Retirement benefit asset - -
58.0 51.4
Current assets
Inventories 17.1 13.6
Trade and other receivables 64.4 68.4
Corporation tax debtor 0.4 0.4
Other financial assets - bank deposits 94.3 14.0
Cash and cash equivalents 53.3 90.5
229.5 186.9
Current liabilities
Lease liabilities 6 (1.9) (1.4)
Trade and other payables (95.0) (89.9)
(96.9) (91.3)
Net current assets 132.6 95.6
Non-current liabilities
Lease liabilities 6 (3.4) (10.9)
Deferred tax liabilities (2.1) (1.6)
(5.5) (12.5)
Net assets 185.1 134.5
Shareholders' equity
Share capital and share premium reserve 89.7 89.7
Other reserves 4.7 5.8
Retained earnings 90.7 39.0
Total Shareholders' equity 185.1 134.5
Group Statement of Changes in Shareholders' Equity for the 52 weeks ended 28
December 2024
Retained earnings
Share Other reserves Own shares Profit Total
Share capital premium reserve $m $m and loss equity
$m $m $m $m
At 1 January 2023 18.8 68.5 4.4 (0.9) 49.4 140.2
Profit for the period 106.2 106.2
Other comprehensive income
Currency translation differences 1.4 1.4
Remeasurement losses on post-employment obligations (7.5) (7.5)
Tax relating to components of other comprehensive income (note 2) 2.3 2.3
Total comprehensive income 1.4 101.0 102.4
Shares issued 0.1 2.3 2.4
Proceeds from options exercised 0.1 0.1
Own shares utilised 0.7 (0.7) -
Own shares purchased (1.1) (1.1)
Share-based payment expense 1.1 1.1
Deferred tax relating to components of equity (note 2) 0.2 0.2
Dividends (note 4) (110.8) (110.8)
At 30 December 2023 18.9 70.8 5.8 (1.3) 40.3 134.5
Profit for the period 117.2 117.2
Other comprehensive income
Currency translation differences (1.1) (1.1)
Tax relating to components of other comprehensive income (note 2) 0.4 0.4
Total comprehensive income (1.1) 117.6 116.5
Own shares utilised 1.3 (1.3) -
Own shares purchased (2.0) (2.0)
Share-based payment expense 1.6 1.6
Dividends (note 4) (65.5) (65.5)
At 28 December 2024 18.9 70.8 4.7 (2.0) 92.7 185.1
Group Cash Flow Statement for the 52 weeks ended 28 December 2024
Note 2024 2023
$m $m
Cash flows from operating activities
Cash generated from operations 7 162.1 166.9
Tax paid (35.8) (33.8)
Finance income received 6.7 4.3
Lease interest (0.4) (0.4)
Net cash generated from operating activities 132.6 137.0
Cash flows from investing activities
Purchase of property, plant and equipment (19.6) (10.0)
Proceeds from sale of property, plant and equipment 0.1 0.3
(Increase)/decrease in current asset investments - bank deposits (81.7) 21.0
Net cash (used in)/from investing activities (101.2) 11.3
Cash flows from financing activities
Capital element of lease payments (1.5) (1.4)
Proceeds from issue of ordinary shares - 2.4
Proceeds from share options exercised - 0.1
Purchase of own shares (2.0) (1.1)
Dividends paid to Shareholders 4 (65.5) (110.8)
Net cash used in financing activities (69.0) (110.8)
Net movement in cash and cash equivalents (37.6) 37.5
Cash and cash equivalents at beginning of the period 90.5 51.8
Exchange gains on cash and cash equivalents 0.4 1.2
Cash and cash equivalents at end of the period 53.3 90.5
Notes to the Financial Statements
General information
4imprint Group plc, registered number 177991, is a public limited company
incorporated in England and Wales, domiciled in the UK and listed on the
London Stock Exchange. Its registered office is 25 Southampton Buildings,
London WC2A 1AL. The Group is engaged in the direct marketing of promotional
products.
The Group presents the consolidated financial statements in US dollars and
rounded to $0.1m. A substantial portion of the Group's revenue and earnings
are denominated in US dollars and the Board is of the opinion that a US dollar
presentation gives the most meaningful view of the Group's financial
performance and position.
Material accounting policy information
The material accounting policies adopted in the preparation of these financial
statements are consistent with those adopted in the annual financial
statements for the period ended 30 December 2023, as described in those annual
financial statements.
Basis of preparation
This announcement was approved by the Board of Directors on 11 March 2025. The
financial information in this announcement does not constitute the Group's
statutory accounts for the periods ended 28 December 2024 or 30 December 2023
but it is derived from those accounts. Statutory accounts for 30 December 2023
have been delivered to the Registrar of Companies, and those for 28 December
2024 will be delivered after the Annual General Meeting. The auditor has
reported on those accounts. Their reports were unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
The audited consolidated financial statements from which these results are
extracted have been prepared under the historical cost convention in
accordance with UK-adopted International Accounting Standards.
In assessing the impact of the July 2024 IFRS Interpretations Committee's
agenda decision on segment reporting, management reassessed the presentation
of the Group Income Statement and considered it appropriate to include further
analysis on the face of the Group Income Statement with the additional
disclosure of cost of sales and gross profit amounts to improve consistency
with the management discussion and analysis. This has no impact on operating
profit.
New accounting standards, amendments or revisions to existing standards or
interpretations applicable for the first time in this reporting period have
not had a material impact on the Group's results or balance sheet. Following
the application of the mandatory temporary exception included in the
Amendments to IAS 12 in the prior year, the Group has completed its assessment
confirming that the impact of Pillar Two income taxes for 2024 is not
material.
Environmental risks
In preparing the financial statements, management has considered the impact of
environmental risks. Whilst the impact of environmental risks is still
developing and therefore all possible future outcomes are uncertain, risks and
mitigating actions known to the Group have been considered in forming
judgments, estimates and assumptions and in assessing going concern and
viability. The main impact of this consisted of the inclusion of cash flows in
the forecasts used to assess impairment, going concern and viability for
energy and waste reduction initiatives and in supporting our product
transition for a low carbon economy with the expansion of our Better Choices®
programme. These considerations did not have a material impact on the
financial statements.
Going concern
The financial statements have been prepared on a going concern basis. In
adopting the going concern basis, the Directors have considered: the Group's
business activities, together with the principal risks and uncertainties
likely to affect its future development, performance and position; the
financial position of the Group, its cash flows and liquidity position; and
the Group's financial risk management objectives and its approach to managing
its exposures to currency, credit, liquidity, and capital risks.
The Group continues to maintain a robust financial position in accordance with
its balance sheet funding guidelines, providing it with sufficient access to
liquidity to fund its strategic priorities and anticipated dividend payments.
At 28 December 2024, the Group had cash and bank deposits of $147.6m, no debt,
and undrawn facilities comprising a $20m working capital facility that expires
on 31 May 2026 and £1m overdraft facility that expires on 31 December 2025.
In adopting the going concern basis of preparation, the Directors have
assessed the Group's cash flow forecasts for the period to 27 June 2026, which
reflect current market conditions and incorporate assumptions about demand
activity and revenue, gross margins, and marketing productivity.
In forming its outlook over the going concern period, the Directors considered
the continuing uncertainties around macroeconomic conditions and the
geopolitical environment, and a variety of potential downsides that the Group
might experience, such as a downturn in general economic conditions and a
reduction in the effectiveness of key marketing techniques. This forecast
shows no liquidity concerns or requirement to utilise the Group's undrawn
facilities.
The Group has also modelled a downside scenario reflecting severe but
plausible downside demand assumptions over a three-year horizon. This downside
scenario assumes:
· a severe demand shock occurs at the start of 2025, like that
experienced in 2020 at the start of the pandemic, resulting in revenue for
2025 falling to around 70% of 2024 levels;
· revenue gradually recovers back towards 2024 levels by the end of
2027;
· marketing and direct costs flexed in line with revenue with capital
expenditure maintained to support core operations;
· payment of the proposed 2024 final and special dividends in the first
half of 2025 have been maintained to further 'stress' the scenario, with
dividend payments for the 2025 financial year onwards reduced in line with
earnings per share; and
· other payroll and overhead costs maintained at 2024 levels with an
allowance for inflationary increases to retain capability and capacity to meet
the recovery in demand.
Even under the severe stress built into this scenario, the forecast shows no
liquidity concerns or requirement to utilise the Group's undrawn facilities in
the going concern period. In addition, there are further mitigating actions
that the Group could take, including reducing or withdrawing the proposed 2024
final and special dividends, further cutting marketing costs and reducing
headcount that are not reflected in the downside scenario assumptions but
would, if required, be fully under the Group's control. Given recent trading
and the outlook for the business the Directors consider that, whilst
plausible, this scenario reflects a remote outcome for the Group.
Based on their assessment, the Directors have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's and Company's ability
to continue as a going concern from the date the financial statements are
approved until 27 June 2026. Accordingly, they continue to adopt the going
concern basis in preparing the Group's and Company's financial statements.
Estimates and judgments
The preparation of the consolidated financial statements requires management
to make judgments and estimates that affect the application of accounting
policies, the amounts reported for assets and liabilities as at the balance
sheet date and the amounts reported for revenues and expenses during the year.
Critical accounting judgments are those judgments, apart from those involving
estimations, that have been made in the process of applying the Group's
accounting policies and that have the most significant effect on the amounts
recognised in the financial statements. Key assumptions and sources of
estimation uncertainty are those that have a significant risk of resulting in
a material adjustment to the carrying amounts of the Group's assets and
liabilities within the next financial year.
Management considers the following to be the critical accounting judgments and
key assumptions and sources of estimation uncertainty:
Critical accounting judgments
Revenue
For most of its product line, the Group operates a 'drop-ship' business model
whereby suppliers hold blank inventory, imprint the product and ship directly
to customers. In order to determine the amount of revenue to recognise, it is
necessary for the Group to make a judgment to assess if it is acting as
principal or an agent in fulfilling the performance obligations and promises
to customers for these transactions.
The Group has full discretion to accept orders, agrees artwork with the
customer, sets the transaction price, selects the suppliers used to fulfil
orders, and considers its customer satisfaction promises ('on-time or free',
price and quality guarantees) to be integral to meeting its performance
obligations.
Accordingly, the Group is of the opinion that it acts as principal in
providing goods to customers and recognises the gross amount of consideration
as revenue.
Leases
The Group signed an amendment to its Oshkosh office lease on 1 November 2024,
replacing the option to renew the lease for another consecutive five-year term
with five separate one-year options. In accordance with the requirements of
IFRS 16, the Group has made a judgment on the likelihood of exercising the
separate options to extend in determining the lease term. See note 6 for
further information.
1 Segmental reporting
The Group has two operating segments, North America and UK & Ireland. The
operating segments' performance is assessed on revenue and operating profit
monthly by the chief operating decision maker, being the Board of Directors.
The costs of the Head Office are reported separately to the Board, but this is
not an operating segment.
Revenue 2024 2023
$m $m
North America 1,342.7 1,302.6
UK & Ireland 25.2 23.9
Total Group revenue 1,367.9 1,326.5
2024 2023
Profit $m $m
North America 153.6 141.0
UK & Ireland (0.4) 0.2
Operating profit from Direct Marketing operations 153.2 141.2
Head Office costs (5.1) (5.0)
Operating profit 148.1 136.2
Net finance income 6.3 4.5
Profit before tax 154.4 140.7
2 Taxation
Taxation recognised in the income statement is as follows:
2024 2023
$m $m
Current tax
UK tax - 2.0
Overseas tax 35.8 32.1
Total current tax 35.8 34.1
Deferred tax
Origination and reversal of temporary differences 1.4 0.4
Total deferred tax 1.4 0.4
Taxation 37.2 34.5
The tax for the period is different to the standard rate of corporation tax in
the respective countries of operation. The differences are explained below:
2024 2023
$m $m
Profit before tax 154.4 140.7
Profit before tax for each country of operation multiplied by rate of 37.7 34.6
corporation tax applicable in the respective countries
Effects of:
Expenses not deductible for tax and non-taxable income (0.2) (0.1)
UK tax losses (utilised)/generated in the period (0.8) 0.9
UK tax losses recognised for deferred tax 0.6 (0.4)
Other differences (0.1) (0.5)
Taxation 37.2 34.5
UK tax losses recognised for deferred tax relates to changes to the deferred
tax asset in respect of brought forward UK tax losses which are forecast to be
utilised against UK taxable profits over the next three years.
Management does not consider that there are any material uncertain tax
positions.
On 20 June 2023 the UK Finance Bill was substantively enacted in the UK,
including legislation to implement the OECD Pillar Two income taxes for
periods beginning on or after 31 December 2023. The legislation includes an
income inclusion rule and a domestic minimum tax, which together are designed
to ensure a minimum effective tax rate of 15% in each country in which the
Group operates. Similar legislation is being enacted by other governments
around the world. The Group has applied the mandatory temporary exception in
the Amendments to IAS 12 issued in May 2023 and endorsed in July 2023, and has
neither recognised nor disclosed information about deferred tax assets or
liabilities relating to Pillar Two income taxes and there is no current tax
impact on the financial statements for 2024.
Income tax credited to other comprehensive income is as follows:
2024 2023
$m $m
Current tax relating to post-employment obligations - 2.0
Deferred tax relating to post-employment obligations - (0.7)
Deferred tax relating to UK tax losses 0.4 1.0
0.4 2.3
Income tax credited to equity is as follows:
2024 2023
$m $m
Deferred tax relating to UK tax losses 0.1 0.2
Deferred tax relating to share-based payment schemes (0.1) -
- 0.2
3 Earnings per share
Basic earnings per share is calculated by dividing the profit for the period
by the weighted average number of shares in issue during the period, excluding
shares held by the EBT. The effect of excluding shares held by the EBT is to
reduce the average number by 17,289 (2023: 18,008).
Diluted earnings per share is calculated by adjusting the weighted average
number of shares to assume the conversion of all potentially dilutive ordinary
shares. Shares that are expected to be issued at a price below the market
price of the Company's ordinary shares under the share-based payment schemes
are potentially dilutive.
2024 2023
Number Number
'000 '000
Weighted average number of shares 28,155 28,105
Dilutive effect of share-based payments 65 66
Diluted weighted average number of shares 28,220 28,171
416.3c 377.9c
Basic earnings per share
Diluted earnings per share 415.3c 377.0c
4 Dividends
Equity dividends - ordinary shares 2024 2023
$m $m
Interim paid: 80.0c (2023: 65.0c) 23.4 17.8
Final paid: 150.0c (2023: 120.0c) 42.1 34.9
Special paid: Nil (2023: 200.0c) - 58.1
65.5 110.8
The Directors are proposing a final regular dividend in respect of the period
ended 28 December 2024 of 160.0c per share and a special dividend of 250.0c
per share; an estimated payment amount of $115.5m. Subject to Shareholder
approval at the AGM, these dividends will be paid on 3 June 2025 to
Shareholders registered on 2 May 2025. These financial statements do not
reflect these proposed dividends.
5 Property, plant and equipment
Plant, Computer Total
machinery, hardware $m
Land and fixtures & $m
buildings fittings
$m $m
Cost
At 1 January 2023 21.6 26.1 3.0 50.7
Additions 3.9 5.3 0.8 10.0
Disposals - (1.4) (0.2) (1.6)
Reclassification (0.6) 0.6 - -
At 30 December 2023 24.9 30.6 3.6 59.1
Additions 14.5 4.2 0.9 19.6
Disposals (0.1) (1.4) (0.4) (1.9)
At 28 December 2024 39.3 33.4 4.1 76.8
Depreciation
At 1 January 2023 4.3 15.4 1.8 21.5
Charge for the period 0.7 2.8 0.8 4.3
Disposals - (1.1) (0.2) (1.3)
Exchange differences - - (0.1) (0.1)
At 30 December 2023 5.0 17.1 2.3 24.4
Charge for the period 0.9 3.2 0.8 4.9
Disposals (0.1) (1.3) (0.4) (1.8)
At 28 December 2024 5.8 19.0 2.7 27.5
Net book value
At 28 December 2024 33.5 14.4 1.4 49.3
At 30 December 2023 19.9 13.5 1.3 34.7
Freehold land with a value of $1.3m (2023: $1.3m) has not been depreciated.
The carrying amount of land and buildings includes assets under construction
of $0.1m (2023: $3.8m).
6 Leases
The Group leases premises in Oshkosh and Appleton, Wisconsin, and in London,
England. In addition, there are various items of machinery on short-term
leases and some office equipment with low value. The Group applies the IFRS 16
exemptions for short-term and low-value leases. No leases contain variable
payment terms.
The lease for office premises in Oshkosh was renewed in 2020 until 30
September 2025 and included an option to extend the lease over the same office
space for a further five years to 30 September 2030. During the period, an
amendment to the lease was signed, replacing the five-year option with five
separate one-year options, with notices of intent to exercise to be given no
later than 31 March preceding the then current lease term expiration date. In
consideration of these amendments, the Group exercised its option to renew the
lease for the first one-year extension period of 1 October 2025 through 30
September 2026.
In accordance with IFRS 16, the Group has reassessed the lease term to reflect
the change to the non-cancellable period of the lease (following the exercise
of the first one-year option) and the revised structure of the option over the
extension period. In reassessing the likelihood of exercising the further
options to extend the lease, the Group concluded that it is no longer
reasonably certain that it would renew the lease beyond the end of the revised
non-cancellable period (30 September 2026). This reflects the diminished
demand for a footprint as large as the current leased space following the
post-pandemic shift towards working from home; the increased options for
alternative sites given the reduced space requirements; and the potential to
relocate to the nearby Oshkosh distribution centre following the completion of
the recent extension project.
The lease liability has been remeasured for the new lease term to 30 September
2026 using a revised discount rate based upon the incremental cost of
borrowing for a similar term and asset obtained from the Group's US bankers.
This resulted in a reduction to the lease liability at 1 November 2024 (the
date of the lease amendment) and corresponding adjustment to the right-of-use
asset of $5.9m. The adjusted carrying value of the right-of-use asset will be
depreciated on a straight-line basis over the period of the determined lease
term. The undiscounted potential future rental payments relating to the
periods covered by extension options that are not included in the lease term
(and therefore lease liability) total $6.5m (2023: $nil).
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the period:
Leasehold land and buildings
$m
At 1 January 2023 13.1
Depreciation charge for the period (1.7)
At 30 December 2023 11.4
Additions 0.4
Remeasurement of lease liability (5.9)
Depreciation charge for the period (1.7)
At 28 December 2024 4.2
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
2024 2023
$m $m
At start of period 12.3 13.7
Additions 0.4 -
Remeasurement of lease liability (5.9) -
Interest charge 0.4 0.4
Payments (1.9) (1.8)
At end of period 5.3 12.3
Current 1.9 1.4
Non-current 3.4 10.9
7 Cash generated from operations
2024 2023
$m $m
Profit before tax 154.4 140.7
Adjustments for:
Depreciation of property, plant and equipment 4.9 4.3
Amortisation of intangible assets 0.2 0.4
Depreciation of right-of-use assets 1.7 1.7
Share-based payments expense 1.6 1.1
Net finance income (6.3) (4.5)
Defined benefit pension administration costs paid by the Plan - 0.5
Contributions to defined benefit pension - (6.5)
Plan
Changes in working capital:
(Increase)/decrease in inventories (3.5) 4.5
Decrease in trade and other receivables 3.8 20.0
Increase in trade and other payables 5.3 4.7
Cash generated from operations 162.1 166.9
Statement of Directors' responsibilities
Each of the Directors confirm, to the best of their knowledge:
· The financial statements within the full Annual Report & Accounts
from which the financial information within this Final Results Announcement
has been extracted, have been prepared in accordance with UK-adopted
International Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit of the Company and undertakings
included in the consolidation taken as a whole.
· The Chief Executive's Review, the Financial Review and Principal
Risks & Uncertainties include a fair review of the development and
performance of the business and the position of the Company and undertakings
included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that it faces.
Alternative performance measures
An alternative performance measure (APM) is a financial measure of historical
or future financial performance, financial position, or cash flows, other than
a financial measure defined or specified within IFRS.
The Group uses APMs to supplement standard IFRS measures to provide users with
information on underlying trends and additional financial measures, which the
Group considers will aid the users' understanding of the business.
Definitions
Underlying operating profit is operating profit before exceptional items.
Exceptional items are defined below. These items may be volatile in magnitude
and distort the underlying performance measures of the ongoing business.
Underlying operating margin % is underlying operating profit divided by total
revenue.
Exceptional items are income or costs that are both material and
non-recurring.
Underlying profit before tax is defined as profit before tax excluding
exceptional items.
Underlying profit after tax is defined as profit after tax before exceptional
items, net of any related tax charges.
Underlying earnings per share is defined as underlying profit after tax
divided by the weighted average number of shares in issue during the financial
year.
Revenue per marketing dollar is the total revenue of the Group divided by the
total marketing expense of the Group. This provides a measure of the
productivity of the marketing expenditure, which is a cornerstone of the
Group's organic revenue growth strategy.
Free cash flow is defined as the movement in cash and cash equivalents and
other financial assets - bank deposits, before distributions to Shareholders
but including exchange gains/(losses) on cash and cash equivalents. It is a
measure of cash available for allocation in line with the Group's capital
allocation policy.
2024 2023
$m $m
Net movement in cash and cash equivalents (37.6) 37.5
Add back: Increase/(decrease) in current asset investments - bank deposits 81.7 (21.0)
Add back: Exchange loss on increase in current asset investments - bank (1.4) -
deposits
Add back: Dividends paid to Shareholders 65.5 110.8
Less: Exchange gains on cash and cash equivalents 0.4 1.2
Free cash flow 108.6 128.5
Cash conversion is defined as the percentage of underlying operating cash flow
to underlying operating profit and is provided as a measure of the efficiency
of the Group's business model to generate cash.
Return on average capital employed is defined as underlying profit before tax
divided by the simple average of opening and closing non-current assets,
excluding deferred tax and retirement benefit assets, plus net current assets
and non-current lease liabilities. This is given to show a relative measure of
the Group's efficient use of its capital resources.
Capital expenditure is defined as purchases of property, plant and equipment,
and intangible assets, net of proceeds from the sale of property, plant and
equipment. These numbers are extracted from the cash flows from investing
activities shown in the Group cash flow statement.
2024 2023
$m $m
Purchase of property, plant and equipment (19.6) (10.0)
Proceeds from sale of property, plant and equipment 0.1 0.3
Capital expenditure (19.5) (9.7)
Underlying operating cash flow is defined as cash generated from operations
before contributions to the defined benefit pension Plan, less capital
expenditure. This reflects the cash flow directly from the ongoing business
operations. This is reconciled to IFRS measures as follows:
2024 2023
$m $m
Cash generated from operations 162.1 166.9
Add back: Contributions to defined benefit pension Plan - 6.5
Less: Purchase of property, plant and equipment, and intangible assets (19.6) (10.0)
Add: Proceeds from sale of property, plant and equipment 0.1 0.3
Underlying operating cash flow 142.6 163.7
Cash and bank deposits is defined as cash and cash equivalents and other
financial assets - bank deposits. This measure is used by the Board to
understand the true cash position of the Group when determining the potential
uses of cash under the balance sheet funding and capital allocation policies.
This is reconciled to IFRS measures as follows:
2024 2023
$m $m
Other financial assets - bank deposits 94.3 14.0
Cash and cash equivalents 53.3 90.5
Cash and bank deposits 147.6 104.5
Appendix 1 - Principal Risks & Uncertainties
STRATEGIC RISKS
Macroeconomic conditions
Risk and description
The Group conducts most of its operations in North America and would be
affected by a downturn in general economic conditions and/or negative effects
from instability in the geopolitical environment or tension in international
trade affecting this market. In previous economic downturns the promotional
products market has typically softened broadly in line with the general
economy.
Strategic relevance Mitigation Direction
· Customer acquisition and retention could fall, impacting revenue in · Management monitors economic and market conditions to ensure that · Inflation and interest rates in our core US market have stabilised,
current and future periods. appropriate and timely adjustments are made to marketing and other budgets. easing pressure on product, transportation and labour costs.
· The growth and profitability levels called for in the Group's strategic · The customer proposition in terms of promotions, price, value, and · However, political and economic uncertainty remains, including from the
plan may not be achieved. product range can be adjusted to resonate with customer requirements, budgets renewed focus on tariffs under the new US administration, resulting in lower
and input costs in changing economic climates. business confidence and downside risks to growth.
· Cash generation could be reduced broadly corresponding to a reduction in
profitability. · The Group's balance sheet funding policy provides operational and
financial flexibility to facilitate continued investment in the business
through different economic cycles. Unchanged
Markets and competition
Risk and description
The promotional products markets in which the business operates are intensely
competitive. New or disruptive business models, potentially facilitated or
accelerated by emerging technology and AI, looking to break down our
industry's prevailing distributor/supplier structure may become a threat.
Buying groups and online marketplaces may allow smaller competitors access to
improved pricing and services from suppliers. Private equity interest in the
promotional products industry has increased in recent years, offering
potential funding for existing competitors or new entrants.
Strategic relevance Mitigation Direction
· Aggressive competitive activity or a disruptive new model could result in · Service level, price and satisfaction guarantees are an integral part of · The competitive landscape to date has been relatively consistent on the
pressure on prices, margin erosion and loss of market share, impacting the the customer proposition. Negative or changing customer feedback is distributor side in our main markets.
Group's financial results. investigated and addressed rapidly. Customers are surveyed regularly to
monitor changing customer interests and perceptions. · Whilst we are not seeing disruption in our markets from new entrants
· The Group's strategy based on achieving organic revenue growth in
enabled by AI technology, the consumer search model landscape is rapidly
fragmented markets may need to be reassessed. · Merchandising and supply chain teams have extensive experience in rapidly evolving which may present opportunities for potential competitors and become
adapting the product range to meet evolving consumer demand. a threat.
· Customer acquisition and retention could fall, impacting revenue in
current and future periods. · Our aim is to position the business at the forefront of innovation in the
industry, driven by an open-minded culture that is customer-focused, embraces
collaborative supplier relationships, and has an appetite for emerging Unchanged
technology. Potential use cases to harness the advancements in AI are being
regularly discussed and assessed.
· Management closely monitors competitive activity in the marketplace,
including periodic market research studies.
Effectiveness of key marketing techniques and brand development
Risk and description
The success of the business relies on its ability to attract new and retain
existing customers through a variety of marketing techniques. These methods
may become less effective as follows:
· TV/video/brand: Fluctuations in available inventory may cause the price
of this technique to increase beyond our acceptable thresholds. The evolving
nature of how consumers access this type of content could change our ability
to effectively access our audience.
· Online: Search engines are an important source for channelling customer
activity to 4imprint's websites. The efficiency of search engine marketing
could be adversely affected if the search engines were to modify their
algorithms or otherwise make substantial changes to their practices, for
example to benefit from the use of emerging technology and AI, and the Group
was unable to respond and adapt to these rapid changes.
· Offline: The flow of print catalogues and sample packages would be
disrupted by the incapacity of the US Postal Service to make deliveries, for
example due to natural disasters or labour activism. Increased levels of
people working from remote locations for a sustained period may diminish the
effectiveness of this technique.
The evolving landscape around consumer data privacy preferences and data
privacy legislation potentially affects all marketing techniques if it
compromises our ability to access and analyse customer information or results
in any adverse impacts to our brand image and reputation.
Strategic relevance Mitigation Direction
· If sustained over anything more than a short time period, an externally · TV/video/brand: This now dominant element of our marketing portfolio · The increasing adoption of AI by the main search engines has the
driven decrease in the effectiveness of key marketing techniques would cause permits a high degree of flexibility, allowing us to quickly respond to potential to change internet search in a way that may potentially diminish its
damage to the customer file as customer acquisition and retention fall. This changes as required. effectiveness for the Group.
would affect order flow and revenue in the short term and the productivity of
the customer file over a longer period, impacting growth prospects in future · Online: Management stays very close to evolving technological · The Group's diversified marketing portfolio has proved to be flexible and
years. developments and emerging platforms in the online space, particularly in effective, producing encouraging results in a soft market.
respect of the adoption of AI by the main search engines. Efforts are focused
· Restrictive data privacy legislation or changes in consumer demands on anticipating changes and ensuring compliance with both the requirements of
around data privacy could decrease the yield on our marketing activities and providers and applicable laws. An appetite for technological innovation is
might increase compliance costs and the possibility of lawsuits. encouraged by the business. Unchanged
· Offline: Developments in the US Postal Service are closely monitored
through industry associations and lobbying groups. Alternative parcel carriers
are evaluated periodically.
· Data privacy requirements and consumer data preferences are monitored
closely and assessed.
· The business relies primarily on first party data, with shared data
significantly reduced.
OPERATIONAL RISKS
Business facility disruption
Risk and description
The 4imprint business model means that operations are concentrated in
centralised office, distribution and production facilities. The performance of
the business could be adversely affected if activities at one of these
facilities were to be disrupted, for example, by a pandemic, extreme weather
events (e.g., cyclones, droughts, floods and fires), loss of power or
internet/telecommunication failure.
Strategic relevance Mitigation Direction
· The inability to service customer orders over any extended period would · Back-up and business continuity infrastructure is in place to ensure the · There have been no significant changes to the operations of the Group
result in significant revenue loss, deterioration of customer acquisition and risk of customer service disruption is minimised. over the period which materially change the nature or likelihood of this risk.
retention metrics and diminished return on marketing investment.
· Websites are cloud-based, and data is backed up continuously to off-site
· A significant portion of our apparel orders are embroidered and printed servers.
in-house at our production and distribution sites in Oshkosh and Appleton,
Unchanged
Wisconsin. Disruption at these facilities would impact our ability to fulfil · Relationships are maintained with third party embroidery and print
these orders. contractors to provide an element of back-up in the event of facility
unavailability.
· The Group's reputation for excellent service and reliability may be
damaged. · Our screen-printing operations have been located separately to our
existing distribution centre to diversify the risk of disruption to our
facilities.
· A significant proportion of our office and customer service staff work
from home, mitigating some risk should offices become unavailable.
· Physical climate-related risk assessment of our operations and facilities
undertaken during the period to better understand how these risks could impact
the Group's operations across different timescales.
Domestic supply and delivery
Risk and description
As a consequence of the Group's 'drop-ship' distribution model, trading
operations could be interrupted if: (i) the activities of a key supplier were
disrupted and it was not possible to source an alternative supplier in the
short term; (ii) a key supplier's own supply chain is compromised by 'force
majeure' events in the country of original product manufacture, for example
extreme weather events (e.g., cyclones, droughts, floods and fires), natural
disasters, social/political unrest or a pandemic; or (iii) the primary parcel
delivery partner used by the business suffered significantly degraded service
levels. As the Group continues to grow, the volume of orders placed with
individual suppliers becomes significant.
Strategic relevance Mitigation Direction
· Inability to fulfil customer orders would lead to lost revenue and a · A rigorous selection process is in place for key suppliers, with · Supply chain and delivery conditions remain stable in both our markets.
negative impact on customer acquisition and retention statistics. evaluation and monitoring of quality, production capability and capacity,
ethical standards, financial stability and business continuity planning.
· The Group's reputation for excellent service and reliability may be
damaged, leading to potential erosion of the value built up in the 4imprint · Very close relationships are maintained with key suppliers, including a Unchanged
brand. detailed shared knowledge of the supply end of the value chain, allowing swift
understanding of and appropriate reaction to events.
· Wherever possible, relationships are maintained with suitable alternative
suppliers for each product category.
· Physical climate-related risk assessment of our key suppliers undertaken
during the period to better understand how these risks could impact the
Group's operations, customers and supply chain across different timescales.
· Secondary relationships are in place with alternative parcel carriers.
Failure or interruption of information technology systems and infrastructure
Risk and description
The business is highly dependent on the efficient functioning of its IT
infrastructure. An interruption or degradation of services, including from a
malicious cyber attack, would affect critical order processing systems and
thereby compromise the ability of the business to deliver on its customer
service proposition.
Strategic relevance Mitigation Direction
· In the short term, orders would be lost and delivery deadlines missed, · There is continuous investment in both the IT team supporting the · The IT platform is mature and performance has been efficient and
decreasing the efficiency of marketing investment and impacting customer business and the hardware and software system requirements for a stable and resilient.
acquisition and retention. secure operating platform.
· Revenue and profitability are directly related to order flow and would be · Back-up and recovery processes are in place, including immediate
adversely affected as a consequence of a major IT failure. replication of data to an alternative site, to minimise the impact of Unchanged
information technology interruption.
· Depending on the severity of the incident, longer-term reputational
damage could result. · Regular security testing of our systems is undertaken in conjunction with
specialist third-party consultants.
· Cloud-based hosting for eCommerce and elements of back-office
functionality.
· IT infrastructure in place to support working from home for our
office-based team members.
REPUTATIONAL RISKS
Cyber threats
Risk and description
Malware, ransomware and other malicious cyber threats can lead to system
failure and/or unauthorised access to and misappropriation of customer data,
potentially leading to reputational damage and loss of customer confidence.
This is a rapidly changing environment, with threats from new technology
emerging on an almost daily basis.
Strategic relevance Mitigation Direction
· Revenue and profitability are directly related to order flow and would be · The business employs experienced IT staff whose focus is to identify and · The expected frequency, sophistication and publicity of attacks continues
adversely affected as a consequence of system compromise. mitigate IT security vulnerabilities. to increase. Accordingly, we continue to invest in expertise and technical
solutions, controls and security reviews to counter the increasing external
· A significant security breach could lead to litigation and losses, with a · Investment in software and other resources in this area continues to be a risks.
costly rectification process. In addition, it might be damaging to the Group's high priority.
reputation and brand.
· Technical and physical controls are in place to mitigate unauthorised
· An event of this nature might result in significant expense, impacting access to customer data and there is an ongoing investment process to maintain Unchanged
the Group's ability to meet its strategic objectives. and enhance the integrity and efficiency of the IT infrastructure and its
security.
· Due to the ever-evolving nature of the threat, emerging cyber risks are
addressed by the IT security team on a case-by-case basis.
· Third party cyber security consultants are employed as appropriate and
support regular security testing of our systems.
· Regular training is rolled out to our team members, including phishing
simulations, to increase awareness of cyber security threats.
Supply chain compliance and ethics
Risk and description
Our business model relies on direct (Tier 1) and indirect (Tier 2 and 3)
relationships with suppliers located both within our primary markets and at
overseas locations. 4imprint has for many years had very high ethical
expectations for supply chain compliance, but there is always a risk that our
wider supply chain partners may, from time to time, not comply with our
standards or applicable local laws.
Strategic relevance Mitigation Direction
· Significant or continuing non-compliance with such standards and laws · Key Tier 1 suppliers must commit to cascading our ethical sourcing · Our supplier compliance programme is well established.
could result in serious damage to our reputation and brand image. expectations down to their Tier 2 and Tier 3 supply chain partners.
· Whilst visits and audits of domestic and overseas suppliers are running
· This could have an adverse effect on our ability to acquire and retain · Specifically, we require our suppliers to comply with our supplier at expected levels, challenges exist in visiting certain locations.
customers and therefore our longer-term revenue prospects and financial compliance documentation, including the '4imprint Supply Chain Code of
condition. Conduct' and the '4imprint Factory & Product Compliance Expectations'
document.
Unchanged
· We are active in promoting audit coverage of our supply chain at many
levels, and in ensuring that product safety and testing protocols are adequate
and up to date.
Legal, regulatory and compliance
Risk and description
We are subject to, and must comply with, extensive laws and regulations,
particularly in our primary US market, including those relating to data
privacy legislation and environmental compliance and reporting obligations.
Strategic relevance Mitigation Direction
· If we or our employees, suppliers and other partners fail to comply with · Consultation with subject matter experts, specialist external advisers · Obligations continue to be complied with, monitored and assured.
any of these laws or regulations, such failure could subject us to fines, and government agencies as appropriate.
sanctions or other penalties that could negatively affect our brand,
reputation and financial condition. · The business employs, and continues to invest in, legal, compliance and
other specialist staff familiar with the obligations faced by the Group. Unchanged
· We continue to monitor and assure controls implemented across the Group
to manage our risk of non-compliance.
ENVIRONMENTAL RISKS
Climate change
Risk and description
Climate change potentially affects our operations, facilities, supply chain,
team members, communities and our customers in a variety of ways. As such, it
presents a multitude of risks to the business and threatens our ability to
achieve our strategic objectives. In order to meaningfully reduce our Scope 3
emissions, the Group will be reliant on third parties and the development of
lower/zero carbon products and technologies.
Strategic relevance Mitigation Direction
· Extreme weather-related events that impact our customers and/or our · The flexible nature of our 'drop-ship' model allows for relatively rapid · There remains a global sense of urgency in relation to climate change. As
suppliers can have a short- to medium-term negative impact on revenue, adjustment to episodes of extreme weather. The business has very low customer such, the risks in this area remain elevated.
customer acquisition and retention, and they can also cause increases to our concentration which helps mitigate an element of the risk as well.
product and distribution costs. Some of our suppliers are located in
· There have been several severe weather events in our primary North
geographic areas that are subject to increased risk of these events in the · We have close relationships with our key suppliers and, wherever American market during the period. Whilst our supplier partners located in the
long term. possible, relationships are maintained with suitable alternative suppliers for affected areas successfully mitigated the impact of these events, the
each product category. regularity and future management of these occurrences is expected to become
· Further, in the medium term, if the business is not seen to be taking
more challenging.
deliberate and tangible actions to reduce its GHG emissions and support the · The business became carbon neutral in 2021 in respect of Scopes 1 and 2
transition to a lower-carbon economy, the Group's reputation and brand may be and is working towards understanding its full Scope 3 emissions profile.
damaged and its access to providers of capital diminished.
· The extension to our existing solar array at the Oshkosh distribution Unchanged
centre became fully operational during the year, contributing to the portion
of the Group's power requirements generated from renewable sources.
· Separate physical and transitional climate-related risk assessments were
undertaken during the period to better understand how these risks could impact
the Group's operations, facilities, customers, supply chain and reputation
across different timescales.
· Management is actively monitoring and measuring progress towards further
environmental goals, most notably further GHG reductions in Scopes 1, 2 and 3.
Products and market trends
Risk and description
The transition to a low carbon economy may lead to changing product trends or
consumer preferences that render certain products undesirable or obsolete
whilst increasing demand for others. New, more sustainable or recycled
products are still being developed for commercial use, which could lead to
increased product costs. Further, our supply chain may seek to pass on
potential costs arising from the transitional changes such as carbon taxes, or
inflation arising from sourcing in-demand raw materials or disruption caused
by extreme weather events.
Strategic relevance Mitigation Direction
· Failure to anticipate accurately, and respond to, trends and shifts in · Our merchandising teams actively collaborate with our suppliers to · The transition to a low carbon economy is driving changes in consumer
consumer preferences and increased costs arising in the value chain, by continuously curate our range of products to adapt to and meet the needs and preferences towards sustainable products.
adjusting the mix of existing product offers, may lead to lower demand for our tastes of our customers.
products, impacting our market position and ability to generate revenue
· However, the fact that most of the products in our broad range are also
growth. · Our Better Choices® initiative highlights promotional products that have sold unbranded in the retail setting, and with an increasing number of
sustainable attributes, giving our customers the ability to research product products being 'tagged' with our Better Choices® designation, the pace of the
attributes, supplier standards and certifications related to sustainability, transition towards sustainable choices, whilst expected to accelerate in the
environmental impact, workplace culture and more, helping them to reduce their future, is likely to remain manageable.
own carbon emissions.
· We continue to invest in our sustainability team to assist in delivering
our initiatives in this rapidly evolving area. Unchanged
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UAABRVAUOAARRecent news on 4imprint
See all newsREG - 4imprint Group PLC - Doc re Report and Accounts
AnnouncementREG - 4imprint Group PLC - Holding(s) in Company
AnnouncementREG - 4imprint Group PLC - EBT Purchase
AnnouncementREG - 4imprint Group PLC - Director/PDMR Shareholding
AnnouncementREG - 4imprint Group PLC - EBT Purchase
Announcement