23rd Apr 2008 11:00
4imprint Group PLC23 April 2008 4imprint Group PLC 23 April 2008 Chairman's Statement - AGM Since taking up the role of Executive Chairman of 4imprint, in 2004, I have usedthe Annual General Meetings to update Shareholders on the evolution of theStrategy the Board is pursuing and our performance on executing this. Thismorning I intend to continue this theme. Shareholders will have seen from the recently published 2007 Annual Report thatthe three Divisions, on which the Board is basing its growth strategies, are allnow soundly established, and I will now tell you about the progress being madein each of them. First, the Direct Marketing Division, which markets under the 4imprint name. Asyou know this is the largest Division in 4imprint. It is also our fastestgrowing Division. Division sales in 2004 were $73m growing to $145m in 2007.This growth has been achieved through two parallel avenues of investment. First, we have continued to invest, annually, considerable revenue in the searchfor and acquisition of new customers, using catalogues and internet marketing asour main prospecting vehicles. This investment has allowed us to grow ourcustomer file substantially each year. In 2004 we added approximately 30,000 newcustomers; in 2007 we added well over 70,000 new customers. This prospectingactivity has been the major driver of the growth of sales and operating profit. In 2007, 53% of all orders came from existing customers and 47% of orders camefrom first time buyers. Of the orders from existing customers, 74% came fromcustomers acquired in the years prior to 2007 and 26% from repeat purchasersacquired in 2007. We have complemented these investments by providing both new and existingcustomers with the highest standards of customer service in price/competition,quality and delivery. This has been achieved by investing and training newpeople, extending our product range, optimising our search engine skills, andestablishing industry leading I.T. systems. Our market share in USA though growing strongly, is still small and provides uswith enormous growth opportunities. We intend to maintain both strands of ourinvestment policy. Furthermore, we are confident from our US and UK experiencesthat the model we are employing has wide appeal, and we intend to establishsimilar activities in Western Europe. The next largest Division is the End User Division. This Division, which hastotal sales in excess of £50m per annum, comprises three companies: (a) The Manchester based business now with a new name BRAND ADDITION. (b) The Kreyer business based in Germany. (c) The Product Plus International Business based in London. Both the Manchester and German based businesses distribute promotional productsboth to "Blue Chip" clients with focussed Corporate Support Programmes, and to awide range of smaller Companies using conventional sales representation methods.The Corporate Client Base is being continually extended, both in UK and Germanywhile the rep based "Field Sales" business has also been growing well and is setto continue. The Product Plus Business in London has more sales volatility, butthe customer base has been extended steadily, with particular success in sectorslike Health and Beauty, Airlines and Publishing. This breadth of customer baseis offsetting the volatility and led to good growth in 2007. The Manchester based business has benefited substantially from the separation ofthe Product Source Trade Business into Blackpool, and the integration of the UKDirect Marketing with US Direct Marketing, and now has a strong, more focussed,base to support revenue growth. The Trade Division, which has a turnover of around £23m per annum is the thirdDivision of the Group. This Division was formed from the integration of the4imprint Product Source business with the Supreme business, which we acquired atthe end of 2006. These two businesses were integrated on a common site atBlackpool in the second half of 2007 under the name of SPS (EU). Despiteproblems in terms of output and customer service, which affected the business inthe second half of 2007, this Division has very good prospects. It has thewidest range of production, printing, and design capabilities of any promotionalwholesaler in the UK. It also has a successful and growing export business,where sales in 2007 represented 8% of total sales. The Division's main tasks nowfocus on revenue growth, developing the very large export opportunity, andexpanding the range of products and "badging" services in the Divisionsportfolio. Trading Update - First Quarter Sales in the US Direct Marketing Division were 19% ahead of the same period lastyear, reflecting our decision to maintain a steady increase in our prospectinginvestment. However, the yield of new customers from this investment iscurrently lower than previous years and reflects the weaker economic climate inthe USA. As a result, Divisional operating profit in 2008 is likely to show areduced level of growth than for previous years. Continuing sales from the End User Business were over 10% ahead of last yearwith good progress from Kreyer and Product Plus International. Divisionaloperating profit for 2008 is expected to show good growth over the previousyear. The Trade Division has had a very slow start to the year; but sales in Marchwere better and this improvement is continuing. Further cost savings have alsobeen made. However the slow start will adversely impact our Divisional operatingprofit expectations for 2008. OUTLOOK Against the background set out earlier the Board expects that the Group willmake further progress in 2008 with the second half being stronger than thefirst. K.J. MintonExecutive Chairman23 April 2008 Enquiries: 4imprint Group plcK.J. Minton, Executive Chairman 020 7299 7201 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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