4imprint Group — Market-leading marketing

4imprint Group (LSE: FOUR)

Last close As at 17/12/2024

GBP48.10

−65.00 (−1.33%)

Market capitalisation

GBP1,356m

More on this equity

Research: TMT

4imprint Group — Market-leading marketing

4imprint is the leading distributor of promotional product in North America, a very large (c $26bn) and highly fragmented market. The group’s core expertise is in the management of its marketing mix, driving new customer recruitment and stimulating existing customers’ spend. The underlying market has been difficult of late, reflecting geopolitical uncertainty and the lack of business confidence. Despite this, 4imprint has held gross margins at 32% and expects to deliver an operating margin in ‘double figures’ for the full year. Our forecasts are finessed (less than 5%) post the recent trading update, with slightly lower revenue and slightly higher margin. The group is inherently highly cash generative and had cash and short-term deposits of $137m at end October, buoying dividend uplift prospects.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

4imprint-Group_resized

TMT

Q3 trading update

Media

5 December 2024

Price

£50.40

Market cap

£1,420m

$1.26/£

Net cash at 31 October 2024

$137m

Shares in issue

28.17m

Free float

97.6%

Code

FOUR

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.8)

(3.8)

16.5

Rel (local)

(3.8)

(4.5)

4.5

52-week high/low

£65.40

£43.20

Business description

4imprint Group is a leading direct marketer of promotional products in the United States, Canada, the UK and Ireland. In FY23, 98% of revenues were generated in the United States and Canada.

Next events

FY24 trading update

Mid-January 2025

FY24 results

Mid-March 2025

Analyst

Fiona Orford-Williams

+44 (0)20 3077 5739

4imprint Group is a research client of Edison Investment Research Limited

Year end

Revenue
($m)

PBT*
($m)

EPS*
(c)

DPS**
(c)

P/E
(x)

Yield
(%)

12/22

1,140

103.7

285.6

160.0

22.2

2.5

12/23

1,327

140.7

377.9

215.0

16.8

3.4

12/24e

1,370

150.0

404.6

240.0

15.7

3.8

12/25e

1,430

156.2

414.9

255.0

15.3

4.0

12/26e

1,500

164.5

436.4

270.0

14.5

4.3

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excluding special dividends.

Marketing agility pays

The evolution of 4imprint’s marketing portfolio, from brand-promoting TV campaigns through to sample ‘Blue Boxes’, gives 4imprint optionality to optimise spend as market conditions shift, quickly and responsively. The addition of the brand element over the last five years gave a step change upwards in gross and operating margins. Our modelling anticipates this being sustainable, at least across the forecast horizon. Apart from cost of goods sold, marketing is the single largest line item in the income statement, ahead of staff costs. Revenue per marketing dollar is a key performance metric.

Consistent cash generator

4imprint has delivered average operating cash conversion of 106% since FY11 (excluding FY20–21). This partly reflects its limited capex requirements, although it has funded two extensions to its distribution centre in Oshkosh, Wisconsin over that period. The latest project was completed on time and on budget this September and should cater for growth on a five-year horizon. With the legacy pension issues also now resolved via a buy-in, cash is again accumulating on the balance sheet. Management has previously paid out special dividends in similar circumstances.

Valuation: Well below the level indicated by DCF

The share price is down 23% from its April peak but still 12% up over the year-to-date. The valuation is ahead of the marketing services sector and has historically been at a (higher) premium, reflecting 4imprint’s quality of earnings, attractive cash conversion and distribution policies. A discounted cash flow (WACC of 9%, terminal growth of 3%, as before) generates an implied value of £62.49, down 2% on the £63.92 calculated post August’s interims, but well ahead of the current share price.

Investment summary

Company description: Market-leading promotional product distributor

4imprint presents a unique investment case: a UK-listed company, with British and US management, run out of the US and with 98% of revenues generated in North America. It distributes promotional products across the spectrum of enterprises in North America, with a huge range of product across categories from pens to apparel. The market is very large, estimated by industry body the Advertising Specialty Institute (ASI) at $26.1bn in FY23, and highly fragmented. 4imprint has the largest market share at just over 5%. It has achieved this prominence through organic growth, helped by its reputation for quality, reliability and customer service. There are no direct comparators, as the other large players have differentiated business models, described below. The model is very straightforward: direct marketing stimulates demand, met either by drop-shipping from suppliers or, for apparel, from the group’s main distribution centre in Oshkosh, Wisconsin. Sophisticated data-driven marketing is core, supplemented with brand awareness advertising that drives direct traffic to the website.

Financials: Top-line growth, stable margins, high cash conversion

The group has an enviable long-term financial record of organic growth, interrupted only by the impact of COVID-19.

4imprint is a highly cash-generative business, with limited requirement for capital spend, and has a net cash positive balance sheet, with the recent trading update indicating a balance of $137m at end October.

Ordinary dividends were supplemented in FY22 by the payment of an additional special dividend, when the cash reserves were beyond what was needed to comfortably support the growth in the business. The latest net cash figure (lease debt only) is greater than that prior to the last special distribution.

Exhibit 1: Revisions to forecasts

Revenue ($m)

PBT* ($m)

EPS* (c)

Old

New

% chg

Old

New

% chg

Old

New

% chg

2024e

1,394

1,370

-2

150.0

150.0

u/c

404.6

404.6

u/c

2025e

1,484

1,430

-4

159.3

156.23

-1

423.3

414.9

-2

2026e

1,580

1,500

-5

170.1

164.5

-3

451.2

436.4

-3

Source: Edison Investment Research. Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Forecast revenue growth for FY24 of 3.3% (was +5%) is below historical growth levels, reflecting tougher markets and our forecasts are recast from this lower base. Operating margin, though, is slightly higher and our PBT forecast is unchanged in light of maintained guidance at this level.

Our FY25 and FY26 estimates are for revenue growth of 4.4% and 4.9% respectively, with the promotional products market closely tied to the health of the US economy. We anticipate gross and operating margins to be maintained at current levels.

Valuation: Premium erosion

4imprint’s shares have historically traded at a notable premium to other marketing service companies, but we regard them as a flawed proxy given the differentiation of the business models. In our discounted cash flow (DCF) we continue to apply a WACC of 9% and terminal growth of 3%. This generates an implied valuation of £62.49, down from £63.92 in our August note.

Sensitivities: Correlated to US economic health

4imprint’s core sensitivity is the health and confidence of the North American corporate economy. This currently includes assessments of the impact of a possible new tariff regime. Here, 4imprint has the benefit of its lived experience. This includes a long adjustment period from the extended buffer stocks held by suppliers. Substitution also mitigated the impact, along with tariffs being imposed on the landed cost, rather than the cost to customers, although the overall impact would likely be inflationary. 4imprint’s financial performance also depends on the continuing efficacy of its marketing efforts. The group takes its responsibilities towards its employees, customers and suppliers very seriously, which stands it in good stead in more difficult trading conditions. The products it supplies signify its customers’ brand values, with all the inherent reputational risks. More specific sensitivities include currency, as the group earns 98% of its revenues in US dollars but carries its head office costs and pays its dividend in sterling. It reports in US dollars, so a stronger dollar has a positive impact and vice versa.

Company description: Direct marketing of promotional products

Customised, promotional products

Promotional products are used by businesses to increase the profile of their services, products or events, and also to motivate staff within their own operations. The product range offered by 4imprint is extensive, from the basic, such as pens, bags and drinkware, through to higher priced items such as apparel, business gifts and full displays for trade shows. All are customised with the name and/or logo of the organisation doing the promotion.

4imprint’s business model is remarkably straightforward. It supplies customised promotional products to customers across North America (98% of revenues) and the UK and Ireland (2% of revenues). The company grew revenues steadily over many years to FY19, when the trajectory was interrupted by the COVID-19 lockdowns. These had a severe effect on demand as corporate America diverted its attention to managing the immediate impacts. Once those lockdowns eased, 4imprint bounced back strongly, exceeding its long-held strategic ambition to push through the $1bn revenue threshold in FY22, achieving $1.14bn in that year.

Exhibit 2: 4imprint typical drinkware

Exhibit 3: 4imprint typical apparel

Source: 4imprint

Source: 4imprint

Exhibit 2: 4imprint typical drinkware

Source: 4imprint

Exhibit 3: 4imprint typical apparel

Source: 4imprint

Management leads with a strong ethos of ‘doing the right thing’ by all its stakeholders: customers, suppliers, staff and shareholders. It is highly protective of the group’s reputation for ‘best-in-class’ customer service and of its partnership approach to dealing with its suppliers. In both aspects, the brand’s positioning undoubtedly helped to give a degree of resilience over the COVID-affected period and subsequent supply-side inefficiencies.

The scale of the operation is large. In FY23, 4imprint handled around 2.09m orders, up 12% on the prior year, with an average order value of around $630 (FY22: c $610). All are individually customised and of great importance to the customer. The market is highly fragmented; there are reported to be over 30k distributor firms in North America alone, of which c 26k are in the US. It is, however, substantial, estimated by industry body ASI to have been worth $26.1bn in 2023, up 1.2% over the prior year. The overwhelming majority of these distributors are small, with only around 5% generating revenues over $2.5m.

Orders are processed, customised, then despatched, mostly direct from the supplier (apparel being the major exception). The large distribution facility, recently expanded, is in an industrial zone on the outskirts of Oshkosh, Wisconsin. Having been based in Oshkosh since the early 1990s, 4imprint is a well-established local employer and cultivates its reputation as a preferred employer through offering benefits such as training, onsite medical and dental provision (company-funded), holiday pay and pensions. The group also has a screen-printing facility at Appleton, Wisconsin, which put on a second shift during H124 to cater for increased demand, particularly for apparel. Staff retention across the group is very good, with turnover in low single digits, with the company’s reputation enhanced locally by the way it treated its staff during the pandemic.

4imprint’s typical client has over 25 employees and has revenues of over $1m and could be drawn from any part of the economy — commercial, academic, governmental, charitable or other — and there is no particular bias to any one or group of industries. The group’s growth has consistently outstripped the market, with an all-organic revenue CAGR of 14.8% for the period FY13–23, compared to estimated market compound growth of 2.4%. This premium growth from 4imprint is delivered through the group’s sophisticated direct marketing operation, based on data, and covering online and offline approaches to acquiring new customers and to drive return visits.

Exhibit 4: Largest product categories by volume

Increase FY23 on FY22

CAGR FY19–23

1

Apparel

18%

17%

2

Bags

14%

11%

3

Drinkware

3%

10%

4

Stationery

25%

11%

5

Writing

22%

6%

6

Outdoor & Leisure

17%

15%

7

Trade Show & Signage

21%

9%

8

Auto, Home and Tools

20%

10%

9

Wellness and Safety

19%

13%

10

Awards & Office

35%

N/A

Source: 4imprint accounts

Apparel is a particularly important category in the industry and is an area where 4imprint had been under scale. It is inherently more complex to fulfil, with multiple sizing options and colourways, etc. Apparel has a particularly high perceived value and is often used as an element of staff motivation, in addition to its inherent promotional benefit. It obviously sells through at higher price points and boosts basket size. The embroidery side of 4imprint’s offering differs to its other products due to the degree of customisation that must be carried out before despatch. Management has evaluated the business and commercial dynamics of in-housing as opposed to external sourcing. The key issues swaying the argument to an internal solution principally surround scalability, product quality and speed. Unless these can all align, the risk to client satisfaction — and hence quality, repeat business — is too high. Bespoke digital printing is also carried out at the facility for display materials and where transfer printing is preferred or technically superior to embroidery for fabrics and bags. 4imprint has expanded its capacity here, adding five direct-to-garment printing machines.

In FY23, Apparel accounted for 24% of 4imprint’s sales.

A short video of some typical the embroidery production is included below.

Own brands offering in the mix

Over recent years, 4imprint has developed some brands of its own to infill certain product categories. While modest in terms of the overall percentage of sales, they allow for a greater degree of control, including on ethical sourcing and sustainability. There are currently three own brands in the stable:

Crossland is 4imprint’s ‘outdoor’ brand, including products such as fleece jackets, blankets, beanie hats, vacuum mugs, backpacks and coolers, with FY23 sales of $25m (+5%). Fleece jackets are now manufactured using recycled polyester, and the transition to recycled source material in mugs followed in 2024. Other product categories are also in transition as part of the group-wide ‘Better choices’ programme, and in FY23 made up around 30% of Crossland sales, up from 30% the year before and with a target of 40% for the current year.

Refresh is a drinkware brand, launched in 2017, with FY23 revenues of $11.1m (flat year-on-year). Again, Refresh uses a growing proportion of recycled source materials, reaching 30% in FY23 from 27% in FY22 and with an ambitious target of 70% for FY24.

Taskright is a brand for everyday stationery items (notepads, notebooks, pencils, sticky notes etc), launched in 2020 and with FY23 sales of $11.1m, up 66% on FY22. Sourcing was 100% from responsible forestry suppliers in FY23, a target maintained for FY24.

Exhibit 5: Video of the distribution centre (click to play)

Source: 4imprint

Marrying the digital and the analogue

4imprint has an essentially online business model. However, part of the strength of the business is the management of the combination of digital and analogue. This applies both to the marketing and the operational side, where day-to-day activities involve a far higher element of handholding for customers for whom this type of buying is not central to their normal working practices. Customer service personnel talk to customers over the phone to guide them through the process, from the main office in Oshkosh, Wisconsin, and remotely where appropriate.

At the end of December 2023, 4imprint employed 1,638 people (97% of whom were based in the US), up from 1,367 people a year previously. This workforce is usually supplemented with temporary employees according to the demand cycle across the year. In FY23, 42% were employed in distribution and production roles, 41% in sales and marketing and the balance of 17% in administration.

Within the main office, there are some specialist teams: one focused on inbound enquiries from Canada, including French speakers; an education team, focused on K-12, colleges and universities, and on licensing; federal, state and local government; Spanish speakers; and a team specifically dealing with claims and credits. Supplier faults/errors and delivery issues are dealt with promptly by this team and the overall rate of orders needing attention of this type runs at less than 2%.

Marketing mix secret sauce

4imprint has many years of experience honing what does and does not work when it comes to encouraging existing customers to buy and how to acquire new customers. Management monitors marketing effectiveness through key performance indicators (KPIs) such as the number of customers acquired, and the percentage of those customers retained after 12 and after 24 months. The long-term trends for these metrics are shown in the exhibit below, which clearly illustrates the degree of disruption prompted by the pandemic.

Exhibit 6: Long-term customer growth and retention

Source: 4imprint

The group uses a wide range of marketing techniques, including a small residual element of ‘traditional’ printed catalogues, search engine marketing, email, quantitative analytics, Blue Box physical samples (used for customer retention) and, importantly, television-based campaigns aimed at boosting brand awareness. Photographic work is carried out in studios at the head office, with models all drawn from the workforce. This has obvious cost benefits but also adds to the authenticity of the branding.

The management of the marketing mix is sophisticated and is based on the data derived from each marketing exercise, which is fed back into the planning. This systemic management of the marketing effort is a vital part of the group’s IP and is key to how the group has been able to build its market share through understanding customers’ needs and buying patterns. Flexibility and speed of response are paramount.

The introduction of brand marketing to the mix over the last five years has been revelatory, delivering a step change in productivity and hence operating margin. The first linear TV brand campaign was launched in FY18 and immediately outperformed initial expectations, delivering high volumes of organic traffic to the group’s website and increasing unprompted brand awareness. As is shown in the exhibit below, this has delivered a step up in revenue per marketing dollar, which is one of the group’s main KPIs.

Exhibit 7: Development of revenue per marketing dollar

Source: 4imprint

Investment in supplier relationships pays off

It is easy to overlook the importance of the supplier relationships in the business model. 4imprint guards its corporate integrity closely and this extends to its supply chain. Ethical standards on employment and sourcing back through the chain are high, and the potential reputational impact of any lowering or breach of these standards on either 4imprint or its clients is considerable. The group’s general approach is that of partnership. Given its industry positioning as market leader, it will tend to be the supplier’s largest customer, but it also endeavours to be a favoured customer through good communication and prompt payment. This attitude has stood the group in strong stead, particularly when trading has been complicated by delays with shipments from China and the intricacies of the logistics of distribution in North America. With constant evolution in product mix, open communication and trust are essential and may be the crucial deciding factor for suppliers on who to deal with. Being paid on time also helps considerably.

Just as there is ongoing consolidation within the distributors, there has been a mirroring process happening within the supply base, with the bigger suppliers getting bigger and private equity funding having moved into the sector. As 4imprint’s business has scaled, it has had to manage its supplier relationships to continue to meet customer expectations on quality and on expedited delivery schedules. This has necessitated gravitating to suppliers of greater scale, where key factors, such as regulatory requirements, product safety and documented provenance, are easier to manage.

There is a natural limit on supplier concentration, given the sheer number of SKUs being offered across the various catalogues and online. In general terms, management estimates that the 10 largest suppliers account for around half of the overall group volume. Roughly one-third (and growing) of the total supplier base supplies multiple product lines, a further third is supplying apparel and the balance have a particular product speciality.

There is a core team of senior merchandisers and compliance specialists, with around 25 further team members in support. Goods are typically designed and produced overseas and shipped to the US for decoration or else sourced domestically.

Supplier prices are normally published and set on an annual basis.

The promotional goods landscape

The size of the US promotional products market for FY23 was estimated at $26.1bn by industry body ASI. This was a 1.2% increase on the year, after a gain of 11% the prior year. For the current year, the North American market made modest gains in Q1 that were reversed in Q2. There was a reported pick up in Q3 of 4.2%, but this figure seems to be at variance with activity levels disclosed by several market participants and is unlikely to be representative of H224 market performance.

Industry estimates suggest that around one-third of the total market is accounted for by corporate programmes, namely contractual relationships with large corporations. Given the overall scale of the promotional products sector, 4imprint can afford to sidestep this corporate programme segment of the market, which would be significantly more capital intensive and contractual in nature. This leaves around two-thirds of the market truly addressable, allowing for considerable further growth before any market share constraints might emerge. Stripping out the corporate programmes increases 4imprint’s share of the addressable market, but there is obviously still plenty of potential for further growth.

This is a competitive landscape (industry body Promotional Products Association International (PPAI) estimates there are around 30k distributors), but participants are predominantly small and locally active. Over the last few years, 4imprint’s (entirely organic) growth has moved it up the relative ‘league table’, resuming the leadership position as having the largest sales of all US promotional product distributors, a position it had relinquished when others focused on PPE product distribution over the COVID-affected period. In FY23, 4imprint only accounted for around 5.1% of the estimated distributor market, or under 8% of the addressable market.

Exhibit 8: 10-year record and FY24e and FY25e projection of industry, 4imprint and US GDP growth

Source: ASI, US Congressional Budget Office, company accounts, Edison Investment Research

The second largest distributor is HALO Branded Solutions (FY23 revenues: $937.7m, -7.0% y-o-y; owned by TPG Capital), which supplies branded merchandise, corporate apparel, uniform programmes, and recognition and incentive solutions to (often large) corporate customers. Third largest by sales was Staples Promotional Products (FY23 revenues: $906.0m, +2.0%; owned by private equity firm Sycamore Partners). Staples has a markedly different business model based on regional field salesforces travelling around the client pool. It is particularly heavily weighted to corporate programmes.

Custom Ink, with FY23 revenues of $650.0m, flat on the prior year, started out as a customised Tshirt business where people uploaded their own designs, and now has a substantial product offering. Proforma (FY23 sales: $638.0m, +2.9%) has a franchise-based business model based on printing, design and brand promotion. BDA (FY23 sales: $452.0m, +0.9%) has a strong franchise in licensed sports affiliated merchandise. (Note: all sales figures quoted represent sales in North America only.)

The Pebble Group is not considered a direct competitor, and neither is Altitude Group. The former provides technology solutions and a digital commerce platform to SME promotional product distributors and has a corporate programmes arm, while the latter is a SaaS and platform business within the sector, as opposed to a distributor.

Amazon has often been cited as a potential threat to 4imprint’s business model. While Amazon is underestimated at any competitor’s peril, we do not believe it will take a significant proportion of this type of trade. As explained above, 4imprint’s operation involves a meaningful amount of interaction with the client to make sure that the design and specification are as required. For distributors selling through the Amazon Marketplace, the commission charged can vary from 15–25% of the sale price. As volumes are modest, due to the personalisation, this proposition is not likely to be that attractive to the core supplier base.

Management

CEO Kevin Lyons-Tarr has been with the business since 1991 and is based in Oshkosh, Wisconsin. He has performed a number of roles within the group, including CIO and COO, and became president of the direct marketing business in 2004. He was appointed as an executive director in 2012 and then CEO in March 2015. David Seekings, the group CFO (KPMG-trained), is also a long-standing employee, having joined as group financial controller in 1996. He moved from the UK to Oshkosh in 2000 to take up the role of CFO of 4imprint direct marketing and was appointed overall group CFO in March 2015, remaining in the US. David announced his intention to retire earlier in the year and his successor, from 9 December 2024, has been announced as Michelle Brukwicki. Michelle is a certified public accountant in the US with accounting experience gained initially with Deloitte & Touche and most recently has been senior VP – finance and CFO of TDS Telecom, a division of Telephone and Data Systems. Michelle brings over 25 years of financial and accounting related experience at publicly listed companies, along with extensive experience in strategic planning and business development, leadership development, enterprise risk management and investor relations.

The senior management team is based at the group’s principal office in Oshkosh, which is also where the direct marketing is carried out.

Sensitivities

The key sensitivity for 4imprint and its peers is the health (or otherwise) of the economy, particularly that of corporate entities across North America. 4imprint’s particular sweet spot is small and medium-sized commercial enterprises with between 20 and 500 employees. These firms are large enough to be considering marketing their organisations, but not so large as to have the capacity to source directly or be of sufficient scale to take out a corporate programme. As such, the normal economic cyclicality is limited, with some counter-cyclical elements as businesses may be more likely to drive differentiation and bolster their market positioning.

Return of tariffs?

The forthcoming return of the Trump administration raises questions regarding the possible imposition of tariffs on imported goods, particularly those from China. Previous experience was that the tariff regime applied to tightly specified products, so substitution for similar but slightly different items was commonplace. This required considerable knowledge and understanding of the intricacies of the regulations and this experience will doubtless help if the incoming regime carries through with its stated intentions. This has been intimated at a 60% import tariff for goods from China, and at 10–20% for goods from other originating countries.

The first point to make on this is that, due to the length of the supply chains, suppliers will tend to hold several months of ‘buffer’ stock, transacted at previously agreed prices and bought in bulk, meaning that the full impact would not be apparent until FY26.

Secondly, the tariff would be imposed on the ‘landed cost’, which, depending on the product, might be roughly half of the cost price, with the balance made up from production, decoration, etc. So a tariff of 20% would be on the 50% landed cost, making it only 10% of the pass-on price. At this level, the ‘pain’ can be split between the supplier and the distributor without making a significant difference to the prices charged to customers. Were tariffs to be set at a higher level, then this would inevitably lead to some inflation in customer pricing, although there is always the potential to mitigate through substitution.

It is less likely that there will be any large-scale return to domestic manufacture of the bulk, low-ticket blank items.

Other sensitivities

Other factors that may influence financial performance include:

Supply chain issues: 4imprint’s suppliers source an estimated 50–60% of their blank product from China. Disruptions to container shipping can complicate operational logistics and raise prices. 4imprint’s close and longstanding relationships stand it in good stead when these issues arise.

Marketing efficacy: 4imprint has a strong record of translating its marketing spending into revenue growth through the application of data analysis to its various promotional advertising and marketing drivers. The range of options it uses – and its openness to try new approaches – should enable it to continue to focus its spend on the most effective methods.

Inflation: while pricing sensitivity is important, the sheer number of SKUs allows for customers to reconfigure their requirements where necessary.

Currency: although the group earns 98% of its revenues in US dollars, it carries its head office costs and pays its dividend in sterling. It reports in US dollars, so a stronger dollar has a positive impact and vice versa.

Competitive risks: as outlined above, there are both large national and localised and regional competitors. However, there are no other direct marketers in these product categories anywhere near the scale of 4imprint. With a focus on quality and service, the competitive risk from predatory pricing is relatively limited. The close and direct relationships with both customers and suppliers should enable the group to continue to have a good sense of market dynamics.

Supplier consolidation/concentration/reputational risks: 4imprint has been going through a process over recent years of migrating its supplier base upscale, with more coherent disciplines on sourcing, which should mitigate the reputational risks, although it would never be possible to eliminate these entirely.

Data security: while the US market is not subject to the EU General Data Protection Regulation, the reputational risks through any mishandling of data could be considerable and would undermine the relationship of trust that the group has built both with customers and with suppliers.

Single site distribution: the bulk of 4imprint’s sales volume is drop-shipped directly from the suppliers. For the apparel/embroidery, the group operates from its large distribution centre on the edge of Oshkosh, with the capacity recently extended, and from a separate site in Appleton, Wisconsin for screen printing.

Dependence on courier services (UPS is the main courier used): rising postal costs for catalogues have sometimes been an issue but are an unavoidable cost of business, borne by the client.

ESG considerations

4imprint has considered its corporate responsibility as a key facet of its ethos long before ESG became more general practice. It has now formalised its approach. In particular:

4imprint achieved externally certified carbon neutrality in respect of greenhouse gas emissions at its operational facilities, regarding Scope 1 and Scope 2, over a year ahead of its original target of December 2022. Scope 1 emissions were reduced by 5% in FY23, with reductions of 18% in Scope 2 Location-based emissions and of 63% in Market-based emissions. Location-based is the largest component here.

Good progress is being made on Scope 3 emissions – important given transport is a major component of the business model. Monitoring became more sophisticated in FY23, giving a better understanding of the complexities. Overall emissions rose 16%, roughly in line with revenues. Apparel has a greater environmental impact than many other categories and is a growing proportion of the mix, so this is a better outturn than it might appear.

In FY22, the group built a solar array of 2,660 panels at the main Oshkosh distribution centre, providing c 40% of the location’s power requirement. With the extension of the facility, the solar array was also expanded, as shown below, with the objective that the proportion of power supplied should be at least maintained at the previous level.

Exhibit 9: Extended Oshkosh distribution centre with expanded solar array highlighted

Source: 4imprint

In FY22, 4imprint introduced a product categorisation under the sub-brand of ‘Better Choices’, allowing customers to identify products that best fit their own organisation’s values. Products chosen for the range are rigorously researched and supported by third-party certification programmes and other supplier provided information. By end FY23, over 15,000 Better Choices ‘tags’ had been applied to products (some products may have more than one tag), representing c $310m in revenue, up from $196m the previous year.

Grants of $500 for promotional products were awarded to 5,600 non-profit organisations under the group’s ‘one by one’ programme in FY23, valued at $2.8m. Items were also shipped from inventory to support various initiatives.

Valuation

For a company operating on a ‘mature’ basis, we would normally assess the valuation relative to other quoted businesses with similar operating models. We would then sense-check this valuation via a DCF analysis. The issue for 4imprint is that there are not any genuine quoted peers to measure it against. For context, therefore, we have looked at the multiples of other smaller and medium-sized marketing services companies and those of a smaller group of US B2B distributors, although they operate in different market segments with greatly differing dynamics.

Marketing service groups context

Marketing services groups self-evidently have business models substantially different from 4imprint and none have anything like the consistent performance record. They are nevertheless listed in the same sector and provide a particular backdrop. We have expanded the list to include the larger global groups, as restricting to the UK gives few comparators of scale and is obviously more reflective of the local market trading conditions, albeit that most of the companies included here have substantial North American trading assets.

Exhibit 10: Marketing service companies’ multiples

Price

Perf ytd (%)

P/E 1FY (x)

P/E 2FY (x)

P/E 3FY (x)

Hist EV/sales last (x)

EV/ EBITDA 1FY (x)

EV/ EBITDA 2FY (x)

EV/ EBITDA 3FY (x)

Div yield last (x)

EBITDA margin 1FY (%)

WPP (GBp)

866

15.1

10.1

9.9

9.3

1.0

7.4

7.5

7.2

5.2

16.5

Omnicom (US$)

103.8

20.0

13.0

12.0

11.1

1.7

9.6

9.1

8.7

3.2

16.3

Publicis (€)

102.2

21.6

14.1

13.3

12.6

2.2

9.4

8.8

8.4

3.8

21.0

Interpublic (US$)

29.9

(8.4)

10.6

10.9

10.2

1.4

7.3

7.6

7.3

3.8

18.6

Dentsu (¥)

3937

8.8

17.4

12.6

12.5

1.1

7.6

6.5

6.0

3.9

13.7

Stagwell (US$)

8.04

21.3

10.5

10.2

9.9

1.6

9.4

8.8

7.9

0.0

14.8

S4 Capital (GBp)

38

(28.8)

8.1

5.7

4.4

0.4

5.3

4.4

3.8

0.0

10.6

M&C Saatchi (GBp)

190

17.5

10.6

9.2

7.9

1.1

6.1

5.8

5.2

1.0

18.0

Next 15 Group (GBp)

447

(46.3)

5.8

7.0

6.5

0.9

4.4

5.2

4.8

1.7

21.4

Altitude (GBp)

29

0

12.6

9.7

9.1

0.8

6.3

4.9

4.3

0.0

8.8

The Pebble Group (GBp)

45

(26.9)

9.2

8.5

7.7

0.6

4.7

4.4

4.2

2.0

12.7

Average

(0.6)

11.1

9.9

9.2

1.2

7.0

6.6

6.2

2.2

15.7

4imprint (GBp)

5,020

9.3

16.9

15.8

14.6

1.3

11.3

10.9

10.4

3.4

11.0

Source: LSEG Data & Analytics, Edison Investment Research. Note: Prices as at 3 December 2024.

As can be seen, the share price performances year-to-date vary widely, largely driven by company specific factors, with disappointments on trading resulting in sizeable mark-downs. 4imprint has historically traded at a significant premium to these stocks, reflecting its financial record, strong balance sheet and high levels of cash conversion. The premium on current year P/E is 53%, which is roughly at the average historical level. As at the end of September, 4imprint’s shares were trading 30% below their long-term average FY1 EV/EBITDA (long-term being back to 2006 to smooth out cyclical and pandemic effects). For context on this, see our latest edition of MediaWatch.

DCF is a relevant valuation technique

Given the issues with the peer-based approach and given the group’s financial characteristics – particularly the element of repeat business – a DCF is our preferred valuation technique.

In Exhibit 11, below, we show a range of terminal growth rates and weighted average costs of capital (WACCs), predicated on the projections contained in the financial summary in Exhibit 15. Beyond the explicit forecast period, we assume revenue growth of 5%, which is clearly below that achieved historically (FY14–23 CAGR: 13.8%). Given the changed macroeconomic backdrop, we highlight a WACC of 9%, with a terminal growth rate assumption of 3%. We also assume EBITDA margins are stable over FY26–31 at 11.0%. On this basis, the implied valuation in sterling is £62.49, using an exchange rate of $1.26/£. This represents a premium of 24% to the current share price. Our last published valuation was slightly higher at £63.92 in August, reflecting the small adjustments to the financial forecasts.

Exhibit 11: DCF (p/share) at varying terminal growth rates and WACCs

Terminal growth rate

1.00%

2.00%

3.00%

4.00%

5.00%

WACC

13.00%

3,451

3,598

3,774

3,989

4,257

12.00%

3,769

3,956

4,185

4,471

4,839

11.00%

4,151

4,395

4,700

5,092

5,615

10.00%

4,620

4,945

5,363

5,921

6,702

9.00%

5,207

5,654

6,249

7,082

8,331

8.00%

06,118

6,600

7,490

8,824

11,048

7.00%

6,978

7,928

9,354

11,730

16,482

6.00%

8,400

9,924

12,464

17,544

32,784

Source: Edison Investment Research

Financials

Revenues back on a steady growth track

The exhibit below shows the long-term revenue performance and the achieved EBITDA margin. The impact of COVID-19 is clear across FY20 and FY21, with a steep bounce back in FY22 and FY23, and steadier growth forecast thereafter. As discussed above, the business model is relatively straightforward, with sales responding to the marketing effort, with revenue per marketing dollar a (genuine) KPI (see Exhibit 7, above).

Exhibit 12: Long-term revenue and EBITDA margin, FY11–26e

Source: 4imprint Group accounts, Edison Investment Research

Marketing expenditure is the largest line item in the operating expenses (after cost of goods sold), at 11.4% of revenue in FY23 (FY22: 10.6%), with staff costs the next largest at 7.8% (FY22: 7.6%). The introduction of brand awareness content into the spending mix from FY18 resulted in a clear step up in marketing efficiency, reflected in the improved EBITDA margin. We believe that this level of return is sustainable and are not modelling any further expansion.

The recent trading update, covering the period to end October 2024, described year-to-date (to end October) order count up 2%, implying some modest further weakening since the half year in both new and existing customer ordering patterns. New customer orders were 9% below prior year to date (from -8% at the half year), but orders from existing customers were up 6% (+8% at the half year), which is testament to the quality of the customers acquired under the new marketing mix.

Combined with strong average order values at 2% above prior year (+2% at the half year), overall order revenue was 4% above the same period in 2023.

Nevertheless, 4imprint has held its gross margins for the 10 months to end October at around 32% (H124: 32.1%) and operating margins remain ‘in double digits’.

Full year guidance is now for revenues of around $1.37bn and for a profit before tax ‘within the range of analysts’ forecasts’ at just over $150m. Our previous revenue assumption was a little higher than this at $1.39bn, based on a similar rate of growth in H224 as had been experienced in H124, and we have now adjusted this to align with management guidance. Our PBT assumption of $150m is unchanged, resulting in a nudge up in FY24 EBITDA margin from 10.8% to 11.0%.

Starting off a lower base, there is a consequent impact on our estimates for FY25 and FY26, as shown below.

Exhibit 13: Adjustments to forecasts

Revenue ($m)

PBT* ($m)

EPS* (c)

Old

New

% chg.

Old

New

% chg.

Old

New

% chg.

2024e

1,394

1,370

-2

150.0

150.0

u/c

404.6

404.6

u/c

2025e

1,484

1,430

-4

159.3

156.2

-1

423.3

414.9

-2

2026e

1,580

1,500

-5

170.1

5

-3

451.2

436.4

-3

Source: Edison Investment Research. Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Long-term record of cash generation

Rather than simply examine the latest period of cash generation, we feel it is more useful to look at the long-term pattern of generation and use of cash, shown in the exhibit below for the 10 years from FY13 to FY23.

Exhibit 14: Sources and uses of cash over FY13–23

Source: 4imprint Group accounts, Edison Investment Research

This exhibit clearly illustrates how inherently cash generative the group is, as well as how modest the requirements for capital expenditure are to support the scaling up of the business. The two main uses of cash have been for dividends and to fund the legacy pension scheme. The issues regarding the latter were addressed over a number of years to reduce the potential risk and with an eye to getting the funding to a position where a buy-in could be carried out. The liabilities were then bought in during FY23, around a year ahead of the original schedule. This was effected via a bulk annuity policy with fair value matching the insured liabilities, eliminating risks from inflation, interest rates and longevity and removing volatility from 4imprint’s balance sheet.

There has been capital expenditure, and this has been directed in the main to increasing capacity at the distribution facility in Oshkosh (illustrated in Exhibit 9, above), adding capabilities in embroidery and screen-printing as well as increasing the footprint. The most recent spend has been on further extending the facility, adding 160k ft², alongside increasing capacity from the solar array, such that it should still provide 40% of the energy requirements on site, at a cost of $20m and completed on (or slightly ahead of) schedule in September 2024. The earlier extension (in FY19) was intended to cater for the group’s expansion plans over a five-year period. This latest project now represents the subsequent phase, with a similar utilisation horizon.

There was also a small acquisition in FY22 of a local screen-printing company, Fox Graphics, for $1.7m, which has enabled the group to bring this activity in-house. Screen-printing facilities were extended further, coming on stream in April 2023. Generally, though, M&A is not a feature of the business development, as market share can be grown more effectively and efficiently organically.

For the dividends (declared in US dollars and paid in sterling), cover has historically been around the 1.7–1.8x level. However, payments were suspended over the pandemic-affected period of FY19–20, when management’s priority was to preserve the financial health of the business and ensure that it would be in a position to take advantage when demand re-emerged.

In FY22, the accumulation of cash on the balance sheet reached levels where it was becoming a distraction for some investors and a special dividend of $2.00 was declared in addition to the ordinary dividend of $1.60. The expected level of cash at the end of the current year is $133.7m on our modelling, which is well ahead of the $86.8m at end FY22, so it may be that a special distribution may again be considered on top of our projected ordinary dividend of $2.40 per share.

Cash-rich balance sheet

The long-held strategy of maintaining a strong, cash-positive balance sheet really proved its worth over the pandemic-affected years, enabling management to take a longer-term view and carry the additional costs, which gave 4imprint a clear advantage when demand picked up again. It will also enable the group to ride out any short-term geopolitical-driven fluctuations to market conditions. There is no debt on the balance sheet bar the lease liabilities, which amounted to $12.0m at the half year, from $12.3m at the previous year-end. The group does have an undrawn, committed $20m line of credit available, should it be needed.

As mentioned above, we model a year-end cash balance of $133.7m, which may prove overly conservative, given that the net cash balance as at the end of October was $137.0m, after the payment of the interim dividend of $22.5m.

Exhibit 15: Financial summary

$000s

2022

2023

2024e

2025e

2026e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,140,286

1,326,500

1,370,000

1,430,000

1,500,000

Cost of Sales

(818,670)

(924,600)

(932,336)

(975,260)

(1,023,000)

Gross Profit

321,616

401,900

437,664

454,740

477,000

EBITDA

 

 

108,428

142,600

151,000

157,250

164,600

Operating profit (before amort. and excepts.)

 

 

102,902

136,200

144,000

150,150

157,500

Intangible Amortisation

0

0

0

0

0

Exceptionals

0

0

0

0

0

Pensions and share options

(815)

(1,100)

(1,400)

(1,400)

(1,400)

Operating Profit

102,902

136,200

144,000

150,150

157,500

Net Interest

804

4,475

6,000

6,000

7,000

Net pension finance charge

0

0

0

0

0

Profit Before Tax (norm)

 

 

103,706

140,675

150,000

156,150

164,500

Profit Before Tax (IFRS)

 

 

103,706

140,675

150,000

156,150

164,500

Tax

(23,563)

(34,500)

(37,500)

(39,038)

(41,125)

Profit After Tax (norm)

80,143

106,174

112,500

117,113

123,375

Profit After Tax (IFRS)

80,143

106,174

112,500

117,113

123,375

Discontinued businesses

0

0

0

0

0

Net income (norm)

 

 

80,143

106,259

114,000

117,113

123,375

Net income (IFRS)

 

 

80,143

104,374

112,500

117,113

123,375

Average Number of Shares Outstanding (m)

28.1

28.1

28.2

28.2

28.3

EPS - normalised fully diluted (c)

 

 

285.6

377.9

404.6

414.9

436.4

EPS - (IFRS) (c)

 

 

285.0

377.0

404.5

414.8

436.2

Dividend per share (c)

160.0

215.0

240.0

255.0

270.0

Special dividend per share (c)

200.0

0.0

0.0

(0.0)

(0.0)

Gross Margin (%)

28.2

30.3

31.9

31.8

31.8

EBITDA Margin (%)

9.5

10.8

11.0

11.0

11.0

Operating Margin (before GW and except.) (%)

9.0

10.3

10.5

10.5

10.5

BALANCE SHEET

Fixed Assets

 

 

47,940

51,400

65,200

68,100

71,000

Intangible Assets

1,010

1,010

1,010

1,010

1,010

Other intangible assets

957

490

490

490

490

Tangible Assets

29,255

34,700

49,800

52,700

55,600

Right of use assets

13,103

11,400

10,100

10,100

10,100

Deferred tax assets

2,381

3,800

3,800

3,800

3,800

Retirement benefit asset

1,234

0

0

0

0

Current Assets

 

 

192,353

186,900

220,908

269,238

322,595

Stocks

18,090

13,600

14,046

14,368

15,373

Debtors

87,511

68,400

72,762

73,671

78,822

Cash and short-term deposits

86,752

104,500

133,700

180,800

228,000

Other

0

400

400

400

400

Current liabilities

 

 

(87,401)

(91,280)

(91,323)

(93,307)

(95,984)

Creditors

(85,966)

(89,900)

(90,063)

(92,127)

(94,704)

Short term borrowings

0

0

0

0

0

Lease liabilities

(1,435)

(1,380)

(1,260)

(1,180)

(1,280)

Long-term liabilities

 

 

(12,672)

(12,520)

(11,540)

(10,298)

(9,098)

Long-term borrowings

0

0

0

0

0

Lease liabilities

(12,315)

(10,920)

(9,940)

(9,940)

(8,740)

Other long-term liabilities

(357)

(1,600)

(1,600)

(358)

(358)

Net Assets

 

 

140,220

134,500

183,246

233,734

288,513

CASH FLOW

Operating Cash Flow

 

 

101,317

166,900

145,500

157,500

163,500

Net Interest

699

3,900

6,000

6,000

7,000

Tax

(20,755)

(33,800)

(33,500)

(36,538)

(38,625)

Capex

(8,011)

(9,700)

(22,100)

(10,000)

(10,000)

Acquisitions/disposals

(1,700)

0

0

0

0

Pension contributions

(4,367)

(6,500)

0

0

0

Financing

(866)

2,500

(900)

(900)

(900)

Dividends

(18,722)

(110,800)

(64,600)

(69,222)

(73,687)

Other/ Capital portion of lease repayments

(2,432)

5,250

(1,200)

300

0

Net Cash Flow

45,163

17,750

29,200

47,141

47,288

Opening net debt/(cash and short-term deposits)

 

(41,589)

(86,752)

(104,500)

(133,700)

(180,800)

Net impact of disposals etc

0

0

0

0

0

Other

0

(2)

(1)

(41)

(89)

Closing net debt/(cash)

 

 

(86,752)

(104,500)

(133,700)

(180,800)

(228,000)

Source: 4imprint accounts, Edison Investment Research

Contact details

Revenue by geography

25 Southampton Buildings
London WC2A 1AL
UK
+ 44 (0)207 299 7201
www.4imprint.com

Contact details

25 Southampton Buildings
London WC2A 1AL
UK
+ 44 (0)207 299 7201
www.4imprint.com

Revenue by geography

Management team

CEO: Kevin Lyons-Tarr

CFO: David Seekings

Kevin joined the business in 1991, acting in various capacities including CIO and COO, before being appointed president of the direct marketing business in 2004. He was appointed as an executive director in 2012 and as CEO in March 2015.

David is a chartered accountant (KPMG) and joined 4imprint in 1996 as group financial controller. He relocated to the US in 2000 as CFO of the direct marketing business and was appointed as group CFO in 2015. David will be retiring during H125.

Non-executive chairman: Paul Moody

CFO designate (from 9 December 2024): Michelle Brukwicki

Paul joined the board in February 2016 and was appointed chairman in December the same year. He is also non-executive chairman of Card Factory. He spent 17 years at Britvic, the last eight as CEO.

Michelle is a certified public accountant in the US with accounting experience gained initially with Deloitte & Touche and is presently senior VP - finance and CFO of TDS Telecom, a division of Telephone and Data Systems. Michelle brings over 25 years of financial and accounting related experience at publicly listed companies, along with extensive experience in strategic planning and business development, leadership development, enterprise risk management and investor relations.

Management team

Principal shareholders

(%)

Baillie Gifford

11.15

JP Morgan AM

8.26

Blackrock

7.47

abrdn

4.95

Montanaro AM

4.70

Vanguard Group

4.68

Norges Bank

3.97

Schroder IM

3.45

Invesco

3.33


General disclaimer and copyright

This report has been commissioned by 4imprint Group and prepared and issued by Edison, in consideration of a fee payable by 4imprint Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by 4imprint Group and prepared and issued by Edison, in consideration of a fee payable by 4imprint Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on 4imprint Group

View All

Latest from the TMT sector

View All TMT content

Research: TMT

Northern Data Group — Further US HPC expansion

Northern Data Group has announced plans to develop a state-of-the-art AI and HPC data centre in Maysville, Georgia in the United States. This initiative aligns with the company’s strategy of expanding its global AI and high-performance computing (HPC) footprint while maintaining its European roots.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free