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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 4imprint Group Plc | LSE:FOUR | London | Ordinary Share | GB0006640972 | ORD 38 6/13P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 50.00 | 0.81% | 6,250.00 | 6,220.00 | 6,260.00 | 6,320.00 | 6,090.00 | 6,200.00 | 29,100 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 1.33B | 106.2M | 3.7837 | 16.49 | 1.75B |
From Apr 2019 to Apr 2024
TIDMFOUR
RNS Number : 6579M
4imprint Group PLC
01 August 2017
1 August 2017
4imprint Group plc
Half year results for the period ended 1 July 2017
4imprint Group plc (the "Group" or the "Company"), the leading direct marketer of promotional products, announces its half year results for the period ended 1 July 2017.
Highlights
Hot Features
Premium
Financial Half Half
year year
2017 2016
$m $m Change
--------------------------------- ------- ------- ---------------
Revenue 298.91 270.22 +11%
Underlying* profit before tax 16.49 14.33 +15%
Profit before tax 15.70 11.14 +41%
--------------------------------- ------- ------- ---------------
Underlying* basic EPS (cents)
Basic EPS (cents) 41.28 37.28 +11%
Interim dividend per share 39.16 28.22 +39%
(cents)
18.10 16.32 +11%
Interim dividend per share
(pence) 13.80 12.30 +12%
--------------------------------- ------- ------- ---------------
* Underlying is before share option related charges, defined benefit pension charges and exceptional items.
Operational
-------------------------------------------------------------------
* Organic revenue growth in both North American and UK
markets continues to outpace the growth rates of the
industry as a whole
* 587,000 individually customised orders received in
the period, up 11% over H1 2016
* 125,000 new customers acquired (+4%); catalogue
marketing activities weighted more to H2
* 14% increase over H1 2016 in orders from existing
customers, reflecting strong customer retention
profile
* Strong operating cash generation, resulting in
$33.26m net cash at period end, ($21.68m at 31
December 2016)
-------------------------------------------------------------------
For further information, please contact:
4imprint Group plc MHP Communications Tel. + 44 (0) 20 7299 7201 Tel. + 44 (0) 20 3128 8100 Kevin Lyons-Tarr - CEO Katie Hunt David Seekings - CFO Nessyah Hart
About 4imprint Group
We are the leading direct marketer of promotional products in the USA, Canada, the UK and Ireland.
Operations are focused around a highly developed direct marketing business model which provides millions of potential customers with access to tens of thousands of customised products.
Organic growth is delivered by using a wide range of data-driven, offline and online direct marketing techniques to capture market share in the large and fragmented promotional products markets that we serve.
Our locations
North America
Most of our revenue is generated in North America, serviced from the principal office in Oshkosh, Wisconsin.
-- 2016 revenue: $540.6m (97% of Group revenue) -- 859 employees (June 2017)
UK and Ireland
Customers in the UK and Irish markets are served out of an office in Manchester, UK.
-- 2016 revenue: $17.6m (3% of Group revenue) -- 38 employees (June 2017)
Our objectives
Market leadership
We aim to develop our position as the leading direct marketer of promotional products in the markets in which we operate.
Organic revenue growth
Our primary financial objective is to maximise organic revenue growth whilst maintaining a broadly stable operating margin percentage.
Competitive advantage
We aspire to achieve competitive advantage through sustained investment in three key areas:
-- Marketing -- People -- Systems technology and data analytics
Website
http://investors.4imprint.com
Chairman's Statement
The results for the first half of 2017 were encouraging and consistent with our strategic objective to deliver profitable organic revenue growth.
Revenue of $298.9m was up 11% over the same period in 2016, and operating profit before exceptional items at $16.1m was 15% higher against the same comparative. At the demand level, total orders received were up 11% over the first six months of 2016, representing continued growth at a rate well above that of the industry as a whole.
Our business continues to benefit from stable gross margins and tight control of the marketing budget and other overheads. Coupled with low fixed capital and working capital requirements, this translated into strong cash generation in the first half of the year and a closing cash balance of $33.3m, ($21.7m at 31 December 2016).
As a result of active management in recent years, the Group's legacy defined contribution pension liability has now been significantly de-risked. A new contribution schedule has been agreed with the Trustee, resulting in an annual cash commitment of just above $3m over the next five and a half years with the intention of eliminating the funding deficit over this period.
The Group is in a secure financial position, with a much reduced and less volatile call on cash from its ongoing pension obligations. In this context, the Board has declared an interim dividend per share of 18.10c, an increase of 11% over 2016.
4imprint is a marketing-led organisation. In addition to refining our existing data-driven marketing platform, the team is constantly looking for, and testing, different or complementary marketing techniques to assist with new customer acquisition and the retention of existing customers. This culture of innovation in the ways that we reach our customers remains a key focus moving forward.
Outlook
Trading in the first half of the year was in line with our expectations, reflecting a planned re-phasing of some of our marketing activities towards the second half of 2017. A firm foundation is in place for further organic revenue growth in the second half.
Paul Moody Chairman
1 August 2017
Operating and Financial Review
Operating Review
Half Half
year year
2017 2016
Revenue $m $m Change
---------------- ------- ------- -------
North America 290.17 261.29 +11%
UK and Ireland 8.74 8.93 -2%
---------------- ------- ------- -------
Total 298.91 270.22 +11%
---------------- ------- ------- -------
Half Half
year year
2017 2016
Underlying* operating profit $m $m Change
------------------------------ ------- ------- -------
Direct Marketing operations 18.20 16.18 +12%
Head office (1.67) (1.85) -10%
------------------------------ ------- ------- -------
Total 16.53 14.33 +15%
------------------------------ ------- ------- -------
* Underlying is before share option related charges, defined benefit pension charges and exceptional items.
The first six months of 2017 produced encouraging trading results which were in line with our expectations. Group revenue for the period improved by 11% and underlying operating profit was 15% higher, both measured against the 2016 half year comparative.
The North American business accounted for 97% of Group revenue, producing $290.2m (2016: $261.3m) in the first half. This growth rate of 11% compares favourably with the latest estimates from industry sources which indicate that the overall promotional products markets in the US and Canada are likely to be growing at a rate of around 3%. This confirms that we continue to take share in markets that remain fragmented yet substantial.
The UK and Ireland business had a good first half, also continuing to take market share with revenue up 11% in underlying currency. This strong trading performance was negatively impacted by year-on-year currency movements, ending with half year US dollar reported revenue 2% lower than 2016.
Overall, more than 125,000 new customers were acquired during the period, with new customer orders up by 4% over prior year. This customer acquisition rate was consistent with a deliberate re-phasing of our catalogue marketing activities in the first half of the year, with planned year-on-year increases weighted more towards the second half. Orders from existing customers increased by 14% over 2016. In total, 587,000 individually customised orders were processed in the period, an increase of 11% over the comparative period.
We remain confident in the platform provided by our direct marketing business model, which is constantly evolving through sustained investment in marketing, people, systems technology and data analytics. Our team is focused on identifying and testing new ways to: (i) deliver our message to potential customers; (ii) improve retention of our existing customers; and (iii) enhance the remarkable customer service delivered across all customer interactions.
Underlying operating profit in Direct Marketing operations, excluding Head Office costs, increased by 12% over the same period in the prior year. This result was driven by a familiar combination of stable gross margin percentage together with a fixed element of selling and administration overheads allowing increased allocation of funds to invest in marketing activities.
Head Office costs were 10% lower than prior year, largely due to exchange rate movements.
Overall Group operating margin percentage improved to 5.5% (2016: 5.3%).
Our business operations remain highly cash generative. Satisfactory trading and efficient balance sheet management resulted in $27.7m of pre-tax operating cash flow being generated in the first half of 2017.
Financial Review
Half Half
year year Half Half
2017 2016 year year
underlying* underlying* 2017 2016
$m $m $m $m
------------------------- ------------- ------------- ------- -------
Underlying* operating
profit 16.53 14.33 16.53 14.33
Defined benefit pension
scheme administration
costs (0.15) (0.15)
Share option charges (0.29) (0.21)
Net finance expense (0.04) - (0.04) -
Pension finance charge (0.25) (0.37)
Exceptional items (0.10) (2.46)
------------------------- ------------- ------------- ------- -------
Profit before tax 16.49 14.33 15.70 11.14
------------------------- ------------- ------------- ------- -------
* Underlying is before share option related charges, defined benefit pension charges and exceptional items.
Operating result
Group revenue in the first half of the year was $298.91m (2016: $270.22m), an increase of 11% over the prior year. Underlying profit before tax in the period was $16.53m (2016: $14.33m), an increase of 15%.
Foreign exchange
The average Sterling/US dollar rate for the first half of 2017 was $1.26 (H1 2016: $1.43; FY 2016: $1.35). The closing Sterling/US dollar rate as at 1 July 2017 was $1.30 (2 July 2016: $1.33; 31 December 2016: $1.23).
The Sterling/US dollar exchange rate has been quite volatile since the EU referendum in June 2016. The implications for the Group are as follows:
-- Translational risk in the income statement is low; 97% of the Group's trading activities originate in US dollars, the reporting currency. At constant currency the Group's revenue in the first half of 2017 would have been $1.2m higher.
-- The balance sheet is stable, as most constituent elements are primarily US dollar-based. The main exception to this is the Sterling-based defined benefit pension liability. Currency movements produced an exchange loss on the pension liability of $1.05m for the first half of 2017.
-- The Group is highly cash-generative, mostly in US dollars, but its primary applications of post-tax cash are Shareholder dividends and pension contributions, both of which are paid in Sterling. To the extent that Sterling weakens against the US dollar, more funds are available in payment currency for these purposes.
Share option charges
A total of $0.29m (2016: $0.21m) was charged in the period in respect of IFRS2, "Share-based payments". This charge was made up of two elements: (i) executive awards under the 2015 Incentive Plan, and (ii) charges in respect of the 2016 UK SAYE Scheme and 2016 US Employee Stock Purchase Plan.
Current options outstanding are: 138,892 share options under the SAYE Scheme and Stock Purchase Plan; and 42,278 share options, awarded in respect of the 2015 and 2016 financial periods, under the 2015 Incentive Plan.
Exceptional items
Exceptional items charged in the first half of 2017 amounted to $0.10m (2016: $2.46m). All of the charge related to the pension risk reduction project.
Net finance expense
Net finance expense in the period was $0.04m (2016: $nil). This represents non-utilisation fees on the US line of credit, offset by a modest amount of external interest received on deposits.
Taxation
The tax charge for the half year was $4.71m (2016: $3.23m). The composite tax rate of 30% (2016: 29%) reflects the expected tax rate for the Group for the full year in 2017. The charge relates principally to taxation payable on profits earned in the USA. The increase in the overall rate between years is due mainly to higher taxable profits arising in the USA, which is a higher tax rate jurisdiction.
Earnings per share
Underlying basic earnings per share was 41.28c (2016: 37.28c), an increase of 11%, reflecting the increase of 11% in underlying profit after tax.
Basic earnings per share was 39.16c (2016: 28.22c), an increase of 39% over prior year. The primary factor driving this sharp increase was a significantly lower exceptional charge ($0.10m in the first half of 2017 against $2.46m in the same period in 2016).
Dividends
Dividends are determined in US dollars and paid in Sterling at the exchange rate on the date that the dividend is determined.
The Board has declared an interim dividend per share of 18.10c (2016: 16.32c), an increase of 11%. In Sterling, the interim dividend per share will be 13.80p (2016:12.30p), an increase of 12% over prior period. The dividend will be paid on 14 September 2017 to Shareholders on the register at the close of business on 18 August 2017.
Defined benefit pension scheme
The Group sponsors a legacy UK defined benefit scheme which has been closed to new members and future accruals for several years. The scheme has 74 pensioners and 342 deferred members.
At 1 July 2017, the deficit of the scheme on an IAS 19 basis was $19.50m, compared to $19.29m at 31 December 2016. Gross scheme liabilities under IAS19 were $35.96m and assets were $16.46m.
The change in deficit is analysed as follows:
$m
----------------------------------------------------- -------
IAS 19 deficit at 31 December 2016 19.29
Pension administration costs paid by the scheme 0.15
Exceptional item - buy-out costs paid by scheme 0.10
Pension finance charge 0.25
Contributions by employer (1.66)
Re-measurement losses due to changes in assumptions 0.32
Exchange loss 1.05
------------------------------------------------------ -------
IAS 19 deficit at 1 July 2017 19.50
------------------------------------------------------ -------
The main reason driving the small net increase in the liability was an exchange loss on translation into reporting currency, offsetting the employer contributions in the period. In Sterling, the net deficit decreased by GBP0.67m to GBP15.01m in the period.
Further to the completion of the buy-out exercise in 2016, the old scheme is in the process of being wound up in order to extinguish fully any residual liability. It is anticipated that this process will be completed during the second half of the year.
The remaining population of mainly deferred pensioners was transferred across into a new plan with equivalent benefits. A full actuarial valuation has taken place in respect of the new plan, subsequent to which a new deficit contribution schedule has been agreed with the Trustee. Under this agreement, contributions of GBP2.25m per annum are payable by the Company commencing on 1 July 2017. This amount rises by 3% per annum, with the first increase applicable in July 2018. The agreement is for a period of 5 years 7 months until 31 January 2023, at which point the funding shortfall is expected to be eliminated. In addition, and consistent with previous practice, an annual allowance of GBP0.25m will be paid, to the plan, towards the costs of its administration and management.
At current exchange rates, the overall cash contribution for the second half of 2017 is likely to be around $1.6m. This is before any contributions to agreed transfer values out of the plan, which the Company is committed to funding at a rate of 50% of the transfer value.
Cash flow
Net cash was $33.26m at 1 July 2017 (2 July 2016: $20.00m; 31 December 2016: $21.68m).
Cash flow in the period is summarised as follows:
Half year Half year
2017 2016
$m $m
--------------------------------------- ---------- ----------
Underlying operating profit 16.53 14.33
Depreciation and amortisation 1.25 1.17
Change in working capital 10.73 13.33
Capital expenditure (0.86) (1.40)
--------------------------------------- ---------- ----------
Operating cash flow 27.65 27.43
Tax and interest (3.34) (2.00)
Defined benefit pension contributions (1.66) (15.43)
Other (0.39) (0.80)
--------------------------------------- ---------- ----------
Free cash flow 22.26 9.20
Dividends to Shareholders (10.68) (7.58)
--------------------------------------- ---------- ----------
Net cash inflow in the period 11.58 1.62
--------------------------------------- ---------- ----------
The Group delivered another strong cash flow performance in the first half of 2017, with $22.26m of free cash flow generated in the period. This was driven primarily by the advantageous working capital characteristics of the direct marketing business model.
Balance sheet and Shareholders' funds
Net assets at 1 July 2017 were $28.53m, compared to $29.33m at 31 December 2016. The balance sheet is summarised as follows:
1 July 31 December
2017 2016
$m $m
-------------------- -------- ------------
Non-current assets 24.83 25.05
Working capital (7.17) 3.58
Net cash 33.26 21.68
Pension deficit (19.50) (19.29)
Other liabilities (2.89) (1.69)
Net assets 28.53 29.33
-------------------- -------- ------------
Shareholders' funds decreased by $0.80m since the 2016 year end, with net profit in the period of $10.99m and $0.29m of share option related movements offset by $0.40m exchange, $0.26m of net pension movements, own share transactions of $0.74m and dividends paid of $10.68m.
The Group had a net negative working capital balance of $7.17m at 1 July 2017, ($(3.53)m at 2 July 2016), reflecting a stable and typical half year trading position.
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 are taken out to buy or sell currency relating to specific receivables and payables as well as remittances from overseas subsidiaries. The Group holds the majority of its cash with its principal US and UK bankers. A facility with the principal US bank, JPMorgan Chase, N.A., is available to fund the short term working capital requirements of the North American business.
The Group has $20.5m of working capital facilities with its principal US bank. The interest rate is US$ LIBOR plus 1.5%, and the facilities expire on 31 May 2018 ($20.0m US facility) and 31 August 2017 ($0.5m Canadian facility). In addition, an overdraft facility of GBP1.0m, with an interest rate of bank base rate plus 2.0%, is available from the Group's principal UK bank, Lloyds Bank plc.
Critical accounting policies
Critical accounting policies are those that require significant judgements or estimates and potentially result in materially different results under different assumptions or conditions. It is considered that the Group's only critical accounting policy is in respect of pensions.
Risks
The Group may be affected by a number of risks. These risks have been reviewed at the half year and have not changed since the year end. The risks are detailed on pages 16 to 18 of the Group's Annual Report 2016, a copy of which is available on the Group's website: http://investors.4imprint.com. These risks comprise: macroeconomic conditions; competition; currency exchange; business facility disruption; disruption to delivery service or the product supply chain; disturbance in established marketing techniques; reliance on key personnel; failure or interruption of information technology systems and infrastructure; failure to adapt to new technological innovations; and security of customer data.
Kevin Lyons-Tarr David Seekings Chief Executive Officer Chief Financial Officer
1 August 2017
Condensed Consolidated Income Statement (unaudited)
Half Half Full
year year year
2017 2016 2016
Note $'000 $'000 $'000
------------------------------------- ------ ---------- ---------- ----------
Revenue 6 298,911 270,222 558,223
Operating expenses (282,923) (258,713) (523,527)
------------------------------------- ------ ---------- ---------- ----------
Operating profit before exceptional
items 16,090 13,970 37,636
Exceptional items 7 (102) (2,461) (2,940)
------------------------------------- ------ ---------- ---------- ----------
Operating profit 6 15,988 11,509 34,696
------------------------------------- ------ ---------- ---------- ----------
Finance income 1 21 22
Finance costs (38) (20) (46)
Pension finance charge 11 (254) (372) (521)
------------------------------------- ------ ---------- ---------- ----------
Net finance cost (291) (371) (545)
Profit before tax 15,697 11,138 34,151
Taxation 8 (4,709) (3,230) (9,672)
------------------------------------- ------ ---------- ---------- ----------
Profit for the period 10,988 7,908 24,479
------------------------------------- ------ ---------- ---------- ----------
Cents Cents Cents
------------------------------------- ------ ---------- ---------- ----------
Earnings per share
Basic 9 39.16 28.22 87.27
Diluted 9 39.06 28.13 87.02
Underlying 9 41.28 37.28 99.01
------------------------------------- ------ ---------- ---------- ----------
Condensed Consolidated Statement of Comprehensive Income (unaudited)
Half Half Full
year year year
2017 2016 2016
Note $'000 $'000 $'000
------------------------------------------ ----- ------- --------- ---------
Profit for the period 10,988 7,908 24,479
------------------------------------------ ----- ------- --------- ---------
Other comprehensive (expense)/income
Items that may be reclassified
subsequently to the income
statement:
Currency translation differences (400) 722 992
Items that will not be reclassified
subsequently to the income
statement:
Re-measurement gains/(losses)
on post employment obligations 11 10 (20,124) (16,261)
Return on pension scheme assets
(excluding interest income) 11 (334) 12,348 3,323
Tax relating to components
of other comprehensive (expense)/income 62 (835) 869
Effect of change in UK tax
rate - (47) (235)
------------------------------------------ ----- ------- --------- ---------
Total other comprehensive
expense net of tax (662) (7,936) (11,312)
------------------------------------------ ----- ------- --------- ---------
Total comprehensive income/(expense)
for the period 10,326 (28) 13,167
------------------------------------------ ----- ------- --------- ---------
Condensed Consolidated Balance Sheet (unaudited)
At At At
1 July 2 July 31 Dec
2017 2016 2016
Note $'000 $'000 $'000
---------------------------------- ----- --------- --------- ---------
Non-current assets
Property, plant and equipment 18,663 18,318 18,938
Intangible assets 1,024 1,154 1,082
Deferred tax assets 5,143 3,118 5,030
---------------------------------- ----- --------- --------- ---------
24,830 22,590 25,050
---------------------------------- ----- --------- --------- ---------
Current assets
Inventories 4,432 3,646 4,179
Trade and other receivables 44,619 41,429 39,766
Current tax - - 34
Cash and cash equivalents 12 33,263 20,001 21,683
---------------------------------- ----- --------- --------- ---------
82,314 65,076 65,662
---------------------------------- ----- --------- --------- ---------
Current liabilities
Trade and other payables (56,226) (48,601) (40,363)
Current tax (1,107) (196) -
(57,333) (48,797) (40,363)
---------------------------------- ----- --------- --------- ---------
Net current assets 24,981 16,279 25,299
---------------------------------- ----- --------- --------- ---------
Non-current liabilities
Retirement benefit obligations 11 (19,505) (16,376) (19,290)
Deferred tax liability (1,640) (1,160) (1,601)
Provisions for other liabilities
and charges (140) (143) (133)
---------------------------------- ----- --------- --------- ---------
(21,285) (17,679) (21,024)
---------------------------------- ----- --------- --------- ---------
Net assets 28,526 21,190 29,325
---------------------------------- ----- --------- --------- --------- Shareholders' equity Share capital 14 18,842 18,842 18,842 Share premium reserve 68,451 68,451 68,451 Other reserves 6,020 6,150 6,420 Retained earnings (64,787) (72,253) (64,388) ---------------------------------- ----- --------- --------- --------- Total Shareholders' equity 28,526 21,190 29,325 ---------------------------------- ----- --------- --------- ---------
Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)
Retained
earnings
Share Profit
Share premium Other Own and Total
capital reserve reserves shares loss equity
$'000 $'000 $'000 $'000 $'000 $'000
------------------------ --------- --------- ---------- -------- --------- ---------
At 2 January 2016 18,777 68,451 5,428 (712) (63,492) 28,452
Profit for the period 7,908 7,908
Other comprehensive
(expense)/income 722 (8,658) (7,936)
------------------------ --------- --------- ---------- -------- --------- ---------
Total comprehensive
(expense)/income 722 (750) (28)
------------------------ --------- --------- ---------- -------- --------- ---------
Share-based payment
charge 208 208
Proceeds from options
exercised 142 142
Shares issued 65 65
Own shares purchased (65) (65)
Own shares utilised 724 (724) -
Dividends (7,584) (7,584)
------------------------ --------- --------- ---------- -------- --------- ---------
At 2 July 2016 18,842 68,451 6,150 (53) (72,200) 21,190
Profit for the period 16,571 16,571
Other comprehensive
income/(expense) 270 (3,646) (3,376)
Total comprehensive
income 270 12,925 13,195
------------------------ --------- --------- ---------- -------- --------- ---------
Share-based payment
charge 217 217
Own shares purchased (412) (412)
Own shares utilised 43 (43) -
Deferred tax relating
to share options and
losses (308) (308)
Dividends (4,557) (4,557)
------------------------ --------- --------- ---------- -------- --------- ---------
Balance at 31 December
2016 18,842 68,451 6,420 (422) (63,966) 29,325
Profit for the period 10,988 10,988
Other comprehensive
expense net of tax (400) (262) (662)
------------------------ --------- --------- ---------- -------- --------- ---------
Total comprehensive
income (400) 10,726 10,326
------------------------ --------- --------- ---------- -------- --------- ---------
Share-based payment
charge 288 288
Proceeds from options
exercised 8 8
Own shares purchased (742) (742)
Own shares utilised 11 (11) -
Dividends (10,679) (10,679)
------------------------ --------- --------- ---------- -------- --------- ---------
Balance at 1 July
2017 18,842 68,451 6,020 (1,153) (63,634) 28,526
------------------------ --------- --------- ---------- -------- --------- ---------
Condensed Consolidated Cash Flow Statement (unaudited)
Half Half Full
year year year
2017 2016 2016
Note $'000 $'000 $'000
----------------------------------- ----- --------- -------- ---------
Cash flows from operating
activities
Cash generated from operations 13 26,850 13,314 29,495
Net tax paid (3,305) (1,998) (9,423)
Finance income 1 22 23
Finance costs (36) (20) (46)
----------------------------------- ----- --------- -------- ---------
Net cash generated from operating
activities 23,510 11,318 20,049
----------------------------------- ----- --------- -------- ---------
Cash flows from investing
activities
Purchases of property, plant
and equipment (689) (1,203) (2,903)
Purchases of intangible assets (175) (201) (383)
Net proceeds from sale of
property, plant and equipment - - 19
Net cash utilised in investing
activities (864) (1,404) (3,267)
----------------------------------- ----- --------- -------- ---------
Cash flows from financing
activities
Proceeds from issue of ordinary
shares 14 - 65 65
Purchase of own shares by
ESOT (734) (65) (335)
Dividends paid to Shareholders 10 (10,679) (7,584) (12,141)
----------------------------------- ----- --------- -------- ---------
Net cash used in financing
activities (11,413) (7,584) (12,411)
----------------------------------- ----- --------- -------- ---------
Net movement in cash and cash
equivalents 11,233 2,330 4,371
Cash and cash equivalents
at beginning of the period 21,683 18,381 18,381
Exchange gains/(losses) on
cash and cash equivalents 347 (710) (1,069)
----------------------------------- ----- --------- -------- ---------
Cash and cash equivalents
at end of the period 33,263 20,001 21,683
----------------------------------- ----- --------- -------- ---------
Analysis of cash and cash
equivalents
Cash at bank and in hand 12 33,263 20,001 19,196
Short-term deposits 12 - - 2,487
----------------------------------- ----- --------- -------- ---------
33,263 20,001 21,683
----------------------------------- ----- --------- -------- ---------
Notes to the Interim Financial Statements
1 General information
4imprint Group plc is a public limited company incorporated and domiciled in the UK and listed on the London Stock Exchange. Its registered office is 7/8 Market Place, London, W1W 8AG.
The condensed consolidated interim financial statements were authorised for issue in accordance with a resolution of the Directors on 1 August 2017.
These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the period ended 31 December 2016 were approved by the Board of Directors on 8 March 2017 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
The financial information contained in this report has neither been audited nor reviewed, pursuant to Auditing Practices Board guidance on Review of Interim Financial Information, by the auditors.
2 Basis of preparation
These condensed consolidated interim financial statements for the half year ended 1 July 2017 have been prepared, in US dollars, in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and IAS 34 'Interim Financial Reporting', as adopted by the European Union, and should be read in conjunction with the Group's financial statements for the period ended 31 December 2016, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue to operate for a period of at least twelve months from the date these interim financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the Interim Report and financial statements.
3 Accounting policies
The accounting policies applied in these condensed consolidated interim financial statements are consistent with those of the annual financial statements for the period ended 31 December 2016, as described in those annual financial statements. New accounting standards applicable for the first time in this reporting period have no impact on the Group's results.
The tax charge for the interim period is accrued based on the best estimate of the tax charge for the full financial year.
4 Use of assumptions and estimates
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experiences and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. There have been no changes in the key areas involving management judgements since the year end.
5 Financial risk management
The Group's activities expose it to a variety of financial risks: currency risk; credit risk; liquidity risk; and capital risk.
The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2016. There have been no changes in any risk management policies since this date.
6 Segmental analysis
The chief operating decision maker has been identified as the Board.
The operations of the Group are reported in one primary operating segment.
Revenue
-------------------------------------------- -------- -------- --------
Half Half Full
year year year
2017 2016 2016
4imprint Direct Marketing $'000 $'000 $'000
North America 290,169 261,286 540,599
UK and Ireland 8,742 8,936 17,624
-------------------------------------------- -------- -------- --------
Total revenue from the sale of promotional
products 298,911 270,222 558,223
-------------------------------------------- -------- -------- --------
Profit Underlying Total
Half Half Full Half Half Full
year year year year year year
2017 2016 2016 2017 2016 2016
$'000 $'000 $'000 $'000 $'000 $000
4imprint Direct
Marketing 18,195 16,182 42,282 18,195 16,182 42,282
Head Office (1,668) (1,851) (3,905) (1,668) (1,851) (3,905)
------------------------------ -------- -------- --------- -------- -------- --------
Underlying operating
profit 16,527 14,331 38,377 16,527 14,331 38,377
Exceptional items
(note 7) (102) (2,461) (2,940)
Share option related
charges (292) (211) (430)
Defined benefit
pension scheme
administration
costs (145) (150) (311)
------------------------------ -------- -------- --------- -------- -------- --------
Operating profit 16,527 14,331 38,377 15,988 11,509 34,696
Net finance (expense)/income (37) 1 (24) (37) 1 (24)
Pension finance
charge (254) (372) (521)
------------------------------ -------- -------- --------- -------- -------- --------
Profit before tax 16,490 14,332 38,353 15,697 11,138 34,151
Taxation (4,909) (3,886) (10,580) (4,709) (3,230) (9,672)
------------------------------ -------- -------- --------- -------- -------- --------
Profit after tax 11,581 10,446 27,773 10,988 7,908 24,479
------------------------------ -------- -------- --------- -------- -------- --------
7 Exceptional items
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
-------------------------------------- ------ ------ ------
Pension buy-out costs 102 926 1,488
Past service costs regarding defined
benefit pension scheme pensioner
GMP equalisation - 1,535 1,452
-------------------------------------- ------ ------ ------
102 2,461 2,940
-------------------------------------- ------ ------ ------
The pension buy-out costs include: costs incurred by the scheme of $102k (2016 HY: $786, 2016 FY: $1,320k); and costs incurred by the Company of $nil (2016 HY: $140k, 2016 FY: $168k).
8 Taxation
The taxation charge for the period to 1 July 2017 was 30%, the estimated rate for the full year (H1 2016: 29%; FY 2016: 28%). Tax paid in the period was $3.31m (H1 2016: $2.00m; FY 2016: $9.42m).
9 Earnings per share
Basic, underlying and diluted
The basic, underlying and diluted earnings per share are calculated based on the following data:
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
------------------ ------- ------ -------
Profit after tax 10,988 7,908 24,479
------------------ ------- ------ -------
Half Half Full
year year year
2017 2016 2016
Number Number Number
000's 000's 000's
--------------------------------------- ------- ------- -------
Basic weighted average number of
shares 28,056 28,018 28,050
Adjustment for employee share options 77 96 81
--------------------------------------- ------- ------- -------
Diluted weighted average number of
shares 28,133 28,114 28,131
--------------------------------------- ------- ------- -------
Basic earnings per share 39.16c 28.22c 87.27c
Diluted earnings per share 39.06c 28.13c 87.02c
--------------------------------------- ------- ------- -------
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
----------------------------------------------- -------- -------- --------
Profit before tax 15,697 11,138 34,151
Adjustments:
Defined benefit pension scheme administration
costs 145 150 311
Share option charges 288 208 425
Social security charges on share
options 4 3 5
Exceptional items 102 2,461 2,940
Pension finance charge 254 372 521
----------------------------------------------- -------- -------- --------
Underlying profit before tax 16,490 14,332 38,353
Taxation (4,709) (3,230) (9,672)
Tax relating to above adjustments (200) (656) (908)
----------------------------------------------- -------- -------- --------
Underlying profit after tax 11,581 10,446 27,773
----------------------------------------------- -------- -------- --------
Underlying basic earnings per share 41.28c 37.28c 99.01c
------------------------------------- ------- ------- -------
The basic weighted average number of shares excludes shares held in the employee share trust. The effect of this is to reduce the average by 29,575 (H1 2016: 5,429; FY 2016: 4,900).
10 Dividends Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
--------------------------------- ------- ------ -------
Dividends paid in the period 10,679 7,584 12,141
--------------------------------- ------- ------ -------
Cents Cents Cents
--------------------------------- ------- ------ -------
Dividends per
share declared - Interim 18.10 16.32 16.32
- Final 26.80
-------------------------------- ------- ------ -------
The interim dividend for 2017 of 18.10c per ordinary share (interim 2016: 16.32c; final 2016: 26.80c) will be paid on 14 September 2017 to Shareholders on the register at the close of business on 18 August 2017.
11 Employee pension schemes
The Group operates defined contribution pension plans for the majority of its UK and US employees. The regular contributions are charged to the income statement as they are incurred.
The Group also sponsors a legacy UK defined benefit pension scheme which is closed to new members and future accruals. The funds of the scheme are administered by a trustee company and are independent of the Group's finances.
The last full actuarial valuation was carried out by a qualified independent actuary as at 30 September 2016 and this has been updated on an approximate basis to 1 July 2017 in accordance with IAS19. There have been no changes in the valuation methodology adopted for this period's disclosures compared to previous periods' disclosure.
The amounts recognised in the income statement in respect of the defined benefit pension scheme are:
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
-------------------------------------------------- ------ ------ ------
Defined benefit pension scheme administration
costs 145 150 311
Pension finance charge 254 372 521
Exceptional - Past service cost re pensioner
items GMP equalisation - 1,535 1,452
- Pension buy-out costs
paid by the scheme 102 786 1,320
------------------------------------------------- ------ ------ ------
Total recognised in the income statement 501 2,843 3,604
-------------------------------------------------- ------ ------ ------
The principal assumptions applied by the actuaries at 1 July 2017 were:
Half Half Full
year year year
2017 2016 2016
--------------------------------------------- ------ ------ ------
Rate of increase
in pensions in
payment - Pensioners 3.20% 2.42% 3.20%
- Deferred pensioners 3.20% 2.82% 3.20%
Rate of increase in deferred
pensions 2.10% 2.10% 2.10%
Discount
rate - Pensioners 2.63% 2.28% 2.68%
- Deferred members 2.63% 2.97% 2.68%
Inflation
assumption - RPI pensioners 3.30% 2.52% 3.30%
- RPI deferred members 3.30% 2.92% 3.30%
- CPI deferred members 2.20% 1.82% 2.20%
------------------------- ------------------ ------ ------ ------
The mortality assumptions adopted at 1 July 2017 imply the following life expectancies at age 65:
Half Half Full
year year year
2017 2016 2016
Male currently aged 40 23.3 24.4 23.6
yrs yrs yrs
Female currently aged 40 25.3 26.5 25.8
yrs yrs yrs
Male currently aged 65 21.9 22.2 21.9
yrs yrs yrs
Female currently aged 65 23.7 24.2 23.9
yrs yrs yrs
------------------------- ------ ------ ------
Analysis of the movement in the balance sheet liability:
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
-------------------------------------------- -------- --------- ---------
At start of period 19,290 23,114 23,114
Administration costs paid by the
scheme 145 150 311
Interest expense 254 372 521
Exceptional item - Buy-out costs
paid by scheme 102 786 1,320
Exceptional item - Past service cost
re GMP equalisation of pensioners - 1,535 1,452
Contributions by employer (1,663) (15,429) (17,353)
Re-measurement (gains)/losses on
post employment obligations (10) 20,124 16,261
Return on pension scheme assets (excluding
interest income) 334 (12,348) (3,323)
Exchange loss/(gain) 1,053 (1,928) (3,013)
-------------------------------------------- -------- --------- ---------
At end of period 19,505 16,376 19,290
-------------------------------------------- -------- --------- ---------
12 Analysis of net cash
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
--------------------------- ------- ------- -------
Cash at bank and in hand 33,263 20,001 19,196
Short-term deposits - - 2,487
--------------------------- ------- ------- -------
Cash and cash equivalents 33,263 20,001 21,683
--------------------------- ------- ------- -------
13 Cash generated from operations
Half Half Full
year year year
2017 2016 2016
$'000 $'000 $'000
------------------------------------------- ------- -------- --------
Operating profit 15,988 11,509 34,696
Adjustments for:
Depreciation charge 1,020 922 1,890
Amortisation of intangibles 236 250 499
Profit on sale of property, plant
and equipment - (15) -
Exceptional non-cash items 102 2,321 2,772
Decrease in exceptional accrual/provisions - - (4)
Share option non-cash charges 288 208 425
Defined benefit scheme administration
costs - non-cash charge 145 150 311
Contributions to defined benefit pension
scheme (1,663) (15,429) (17,354)
Changes in working capital:
(Increase)/decrease in inventories (252) 812 280
(Increase)/decrease in trade and other
receivables (4,033) 785 2,313
Increase in trade and other payables 15,019 11,801 3,667
Cash generated from operations 26,850 13,314 29,495
------------------------------------------- ------- -------- --------
14 Share capital
No shares were issued in the period. In April 2016 the Company issued 120,000 shares, with a nominal value of $65,000, to the 4imprint Employee Benefit Trust for a consideration of $65,000 to satisfy exercises of share options under the Performance Share Plan.
15 Capital commitments
The Group had capital commitments contracted but not provided for in these financial statements of $0.4m .
(2 July 2016: $0.5m; 31 December 2016: $nil).
16 Related party transactions
The Group did not participate in any related party transactions that require disclosure.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge, these condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and 4.2.8, namely:
-- An indication of the important events that have occurred during the first half year and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- Material related-party transactions in the first half year and any material changes in the related-party transactions described in the last annual report.
The Directors of 4imprint Group plc are as listed in the Group's Annual Report for 31 December 2016. A list of current Directors of 4imprint Group plc is maintained on the Group website: http://investors.4imprint.com.
By order of the Board
Paul Moody David Seekings
Chairman Chief Financial
Officer
1 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFERDTILVID
(END) Dow Jones Newswires
August 01, 2017 02:00 ET (06:00 GMT)
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