18th Apr 2006 11:01
4imprint Group PLC18 April 2006 Chairman's Statement at AGM In my statement at last year's AGM, I spoke to shareholders about the strategybeing developed by the Group as it emerged from the major restructuring of theprevious year. Today I want to bring shareholders up to date with the Group'spresent position, and to give you some guidance as to how the Board sees thefuture. Let me first reiterate, that the strategy being pursued will continue to reflectthe policy determined by the Board to concentrate solely on achieving sustainedgrowth of shareholder value. The commitment to this objective is understood andespoused by all Senior Executive Management and they are financiallyincentivised to achieve that objective. Much has been achieved in 4imprint during 2005 and this has been fully set outin the Annual Report, and will not be repeated here. Suffice it to say that theincrease in stock price and dividends over last year produced a TSR for the yearof 60%. Today, 4imprint is organised in a simplified way and comprises just twoDivisions; The European Division and the North American Division. Each Divisionis headed by a Chief Executive. The Group is directed through an ExecutiveCommittee comprising the two Divisional Chief Executives, their Deputies orFinance Directors, together with the Group Financial and Group Corporate ServiceDirectors. It is chaired by myself, meets at least every month, and isresponsible for executing the policy and strategy determined by the Board. I would now like to spend a few minutes describing to you the businessundertaken by these two Divisions: The European Division, with total sales in 2005 of £50.8m is headquartered inManchester, and markets and distributes promotional products in the followingways:- (a) through a Direct Marketing Business using the most modern (Catalogue/Callcentre) techniques developed by our North American Division. (b) Through a conventional Field Sales Business using sales representatives. (c) Through a value added service for Corporate Programmes and PremiumPromotions, where the promotional products can be tailored to clients'particular needs, using sophisticated design and procurement skills. (d) Through a wholesaler service, where promotional products are supplied to asubstantial number of clients distributing to end markets. Our small German based business Kreyer, operates two of these channels in theGerman market; a Field Sales Service and a Corporate Programmes Service. Our North American Division, which trades as 4imprint Inc, had total sales in2005 of 83 million dollars. It sells promotional products through just twochannels; a Direct Marketing business in 2005 which represented over 80% of theDivision's sales, and a small Corporate Programmes Business. The USA market for promotional products is estimated at $17 bn and the DirectMarketing sector of this is still relatively small. However, the attractivenessof this method of trading, is being increasingly recognised by the highlyfragmented customer base. This base is becoming increasingly comfortable with acombination of catalogue/web sales techniques where 4imprint Inc has significanttechnical and operational strength. Thus the prospects for Direct Marketing andfor 4imprint's particular methods and skills, are believed to be excellent.Indeed the recent performance is illustrative of this with 4imprint Inc. salesin 2005 28% over 2004 and 2004 sales 17% over 2003. Sales in the first quarterof this year are maintaining this trend. So how do we see the future for the 4imprint Group? We remain confident that theprospects for sustained organic growth are very strong in our North AmericaDivision and we shall continue to support the business with the resources toachieve this. Since the business is not capital intensive, most resourceinvestment will be on recruitment and training of people. For our European Division we see good growth prospects for all the businesssectors and we shall continue to support them with the resources needed. TheDirect Marketing business will be particularly supported since we believe thegrowth opportunities from our modest current base are most attractive. 4imprint Group is a strongly cash generating group and the investment costs ofsustaining the organic growth we see should not demand too much of the cash wegenerate. While we do not exclude any acquisition activity, such investmentswould have to satisfy stringent criteria on "fit" and value creation. We willreview regularly, the desirability of returning surplus cash to Shareholders. Turning now to the prospects for your Company in 2006:- I am pleased to be ableto tell you that Group Sales and Operating Profits for Quarter One, forContinuing Businesses (that is excluding AiA which was sold in the middle oflast year), are running ahead of last year, with the US Direct Marketingbusiness, as I have said earlier, being particularly strong. The Board believes that 2006 will be another year of progress for your Company. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
4Imprint