7th Aug 2024 15:09
(Alliance News) - 4imprint Group PLC on Wednesday said it managed to achieve first-half earnings growth, shaking off tepid market conditions.
The London-based direct marketer and distributor of promotional merchandise said pretax profit rose 11% to USD73.0 million in the six months that ended June 29 from USD66.0 million a year prior.
Revenue increased 5.0% to USD667.5 million from USD635.5 million.
4imprint raised its interim dividend by 23% to 80.0 US cents from 65.0 cents previously.
The company gained 145,000 new customers over the six-month period, down 8.2% from the 158,000 added over the same period in 2023.
Chair Paul Moody said: "Based on our first half financial results and recent internal forecasts, the board expects that 2024 full year group revenue will reflect a growth rate similar to the first half of the year. As a result of improving financial dynamics in the business, particularly higher gross profit percentage and the flexibility of the marketing mix, it is expected that profit before tax for the 2024 full year will remain within the current range of analysts' forecasts."
4imprint booked pretax profit of USD140.7 million on USD1.33 billion in revenue in 2023. A 5.0% increase would bring revenue to USD1.40 billion in 2024.
"While headwinds remain in the US promotional goods industry, 4imprint is performing resiliently and continues to outperform the market. In addition, margins are progressing nicely and cash is building up, which supports additional shareholder returns in the new year," Peel Hunt analysts Jessica Pok and Melanie Yang commented.
The expansion of a distribution centre in Oshkosh, Wisconsin is well underway, 4imprint said. The USD20 million project aims to support continued growth of the Apparel category with occupancy of the facility scheduled for September.
"[Whilst] demand has been below our original expectations for the 2024 half year, it is important to note that 4imprint has continued to take market share in the period, with 6% demand level revenue growth compared to industry statistics showing broadly flat overall revenues over the period," it said.
"In addition, an improved gross profit percentage and a more flexible marketing portfolio have helped drive strong profitability and cash generation even as we continue to make important investments in people and infrastructure that will help to propel the future growth of the business."
Investment in personnel has been concentrated on specialist areas such as supply chain, compliance, human resources, IT, merchandising, and marketing.
Shares in 4imprint were down 3.4% to 5,430.00 pence each in London on Wednesday afternoon.
By Eric Cunha, Alliance News news editor
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