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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -70.00 | -1.36% | 5,080.00 | 5,060.00 | 5,110.00 | 5,190.00 | 5,060.00 | 5,150.00 | 144,980 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 1.33B | 106.2M | 3.7696 | 13.53 | 1.45B |
Hot Features
Premium
RNS Number:0546P
4imprint Group PLC
27 August 2003
Press Release 27 August 2003
4imprint Group plc
Interim Results for the six months to 28 June 2003
4imprint Group plc, the leading global distributor of imprinted promotional
products, today reports its Interim Results for the six months ended 28 June
2003.
Financial highlights
* US Dollar sales were up 7.7% in total, driven by strong sales
performances from AIA and the Corporate Programmes channel
* European Premiums volume was down from last year's exceptional
performance
* After the negative impact of exchange rates of #2.25m, there was an
overall decrease in turnover of 4.4%
* Exceptional operating charge of #1.3m related to AIA restructuring -
the associated changes are anticipated to produce annual cost savings in
excess of #1m from 2004 onwards
* An operating loss before tax, operating exceptional items and goodwill
amortisation of #587k (#520k profit in same period of 2002)
* Interim dividend is unchanged at 1p per share
Operational highlights
* Integration of the programmes acquired from Gearworks - MG Rover,
Lexus, Mazda and Accenture - in June has proceeded as planned, and these are
expected to contribute to profits in the second half.
* Strong order intake in European Premiums has recovered a significant
part of the first half shortfall compared to last year.
* System-wide US dollar billings for Adventures in Advertising (AIA), our
franchise organization, increased 8% and service fee income was up 9%.
* Overheads continue to be tightly controlled
* Recent US Corporate Programmes wins are expected to make a positive
contribution in the second half
Commenting on the Results, Dick Nelson, Chief Executive of 4imprint Group plc,
said:
"The malaise that has hung over the broader advertising market for the better
part of two years has brightened slightly for us in the past few months.
Trading across the Group relative to our markets and competitors gives us
optimism that the Board's expectations for the full year can be met."
- Ends -
www.4imprint.com www.4imprint.co.uk
For further information, please contact:
4imprint Group plc
Dick Nelson, Chief Executive Tel: +44 (0) 20 7444 4140
Email: dnelson@4imprint.com (today only)
Issued by:
Bankside
Henry Harrison-Topham / Russell Elliott Tel: +44 (0) 20 7444 4140
Email: henry.ht@bankside.com www.bankside.com
Chief Executive's Review
Introduction
Group turnover decreased from the prior year by #1.99m. Two-thirds of this
decrease arose from our European operations, with the remainder coming from the
US. This, coupled with the continued investment in US Corporate Programmes, led
to a loss before tax, exceptional items and goodwill amortisation of #587k in
the first half of 2003, (#520k profit in 2002).
However, the cash position remains healthy and, given the Group's high
operational gearing and traditionally busier second half of the year, we
anticipate a much stronger trading performance in the remainder of the financial
year.
Financial Summary
US dollar sales were up 7.7% in total, driven by strong performances from AIA
and the Corporate Programmes channel. However, this did not fully offset the
translation effect of a higher exchange rate, which amounted to #2.25m.
European sales were lower, due primarily to a reduction in European Premiums
volume from last year's exceptional performance. These factors resulted in a
fall in Group turnover to #43.04m, from #45.03m in 2002.
Overheads continue to be tightly controlled and a number of business processes
have been reviewed to ensure superior client service, but without increasing
overall overheads from the levels incurred in 2002.
The process of removing under-performing AIA franchise owners, which was
commenced last autumn, should largely be completed by year-end. A further
review resulted in the trading update on 10 June, which announced the relocation
of AIA to Oshkosh, and the removal of further non-compliant or under performing
franchise owners. The associated costs of collection and debtor provisions,
along with the costs of relocation, resulted in the creation of an operating
exceptional item totalling #1.3m. These changes are anticipated to produce
annual cost savings in excess of #1m from 2004 onwards.
Working capital control remains a priority and, despite the usual pressures in
the first half of the year, the Group's cash performance was strong. Capital
expenditure has been further reduced and, with the exception of stock relating
to Corporate Programmes growth, other working capital has been reduced in Europe
and AIA from the interim stage in 2002.
On the advice of our actuaries and as noted in our 2002 Annual Report, our
pension fund, which has been closed to new members for several years, now
requires a cash contribution of #1.44m per annum, up from #0.12m. The next
scheduled full actuarial valuation is in April 2004 and, although options
available for the group in respect of the pension scheme appear to be limited,
it remains under review because of its relative size and the unknown future
burden that it represents for the company. The increased contribution rate
commenced in May 2003, and the total additional payment of #220k in the first
half is held in the balance sheet as a prepayment as required under current
accounting regulations (SSAP24).
The Board has declared an interim dividend of 1 pence per Ordinary Share (2002 -
1 pence).
Corporate Programmes
Our Corporate Programmes channel designs, sources, manufactures, warehouses and
distributes promotional products for major clients, which include Barclays, BT,
Cessna, IBM, JCB, Microsoft and Union Pacific.
The UK Corporate Programmes group saw the benefits of the reductions in the cost
base made last year and, despite significant downward pressure in the economy,
sustained only a slight decrease in turnover from the first half of 2002.
Integration of the programmes acquired from Gearworks in June of this year (MG
Rover, Lexus, Mazda and Accenture) has proceeded as planned. These programmes
will contribute to profits in the second half of the year. We also expect to
build on an encouraging first half performance in Germany.
Revenues in US Corporate Programmes increased 55% over the same period last year
as the investment we have made to build this division continues to produce
significant results. Wins so far in 2003 include ABB, Royal Purple, Fidelity
Information Systems, Sikorsky Aircraft Corporation, Raytheon, Orkin, Trinity
Healthcare and Borg Warner, all of which will be in operation within the next
six months and are expected to help this channel make a positive contribution in
the second half.
Direct Marketing
Our Direct Marketing channel mails over 8 million catalogues and other pieces
annually to customers and prospects, and serves more than 150,000 customers
worldwide.
The decision to mail fewer catalogues in 2002, justified by the forecast
weakness in both UK and US economies at the time, has had a negative impact on
2003 revenues in both the UK and US direct marketing units. As a result, sales
were down 3.3% and 1.5% respectively from the prior half year.
Our catalogues have a significant shelf life, often producing orders six months
or more after the original mailing date. By mailing fewer catalogues in the
autumn of 2002, we have so far received less orders relating to those catalogues
in 2003 than comparatively in the prior year. However, response rates and
average order values for catalogues mailed this year are generally in line with
expectations, and mailings have now been increased for the remainder of this
year. Orders received via the Internet in this channel are now 25% of the total
compared to 20% in 2002.
Premiums
Our Premiums channel designs, sources and arranges offshore manufacturing of
large one-off imprinted promotional products orders, most often used by larger
companies in consumer promotions.
The UK Premiums group had an exceptionally strong first half in 2002. In the
first half of 2003, sales were down 20% due principally to the negative impact
on our airline customers of the travel slowdown caused by the war in Iraq and
SARS. However, a strong order intake in recent weeks has recovered much of the
first half's shortfall.
The US Premiums team continues to make good progress and, although it was only
recently established and with relatively low sales at present, they more than
doubled revenues over the first half of 2002.
Partner Services
Our Partner Services channel leverages our bespoke enterprise operating system
and industry-leading supply chain management processes into other channels of
distribution.
System-wide billings for Adventures in Advertising (AIA), our franchise
organisation, increased 8% and service fee income was up 9%. As previously
reported, we have raised the standards for joiners and, as a result, we have
added 32 new owners in the first half of this year compared to 78 in 2002. The
relocation of the AIA offices from Boston to Oshkosh, Wisconsin, is proceeding
to plan and will be substantially completed by year-end.
We continue vigorously to pursue old debts owed to us by franchisees. To assist
in this complex process we have retained the services of a specialist debt
collection agency, whose regular updates are used as the basis for our bad debt
provision. We also commissioned a separate report from PricewaterhouseCoopers,
which has given us additional comfort as to the adequacy of the provision. An
additional #742k of bad debt provision is contained within the operating
exceptional charge of #1.3m, but the nature of these balances means that any
provision is judgmental and requires regular re-assessment.
Dan Carlson, founder of AIA, retired with effect from 30 June 2003. David
Woods, the new CEO, and other members of the management team have assumed Dan's
duties, primarily the recruitment of new owners.
The UK Field Sales group has found the marketplace more competitive than
anticipated and much work has been done to refocus this team.
Outlook
The malaise that has hung over the broader advertising market for the better
part of two years has brightened slightly for us in the past few months.
Trading across the Group relative to our markets and competitors gives us
optimism that the Board's expectations for the full year can be met.
Dick Nelson
Chief Executive Officer
27 August 2003
Consolidated Profit & Loss Account (Unaudited)
For the six months to 28 June 2003
Notes Half year Half year Full year
2003 2002 2002
#'000 #'000 #'000
Turnover 2 43,044 45,034 94,625
Operating (loss)/profit before goodwill (597) 381 2,368
amortisation and exceptionals
Operating exceptional item 3 (1,300) (2,366) (2,366)
Goodwill amortisation (373) (473) (858)
Operating loss 2 (2,270) (2,458) (856)
Exceptional item 3 - - 503
Interest 10 139 245
Loss before taxation (2,260) (2,319) (108)
Taxation 4 679 696 373
(Loss)/profit after taxation (1,581) (1,623) 265
Dividends 5 (287) (287) (646)
Transfer from reserves (1,868) (1,910) (381)
Earnings per share 6 (5.51)p (5.65)p 0.92p
Basic & diluted
Dividend per share 1.00p 1.00p 2.25p
All operations relate to continuing activities.
Reconciliation of Movement in Shareholders' Funds (Unaudited)
Half year Half year Full year
2003 2002 2002
#'000 #'000 #'000
(Loss)/profit for the financial period (1,581) (1,623) 265
Dividends (287) (287) (646)
(1,868) (1,910) (381)
Other recognised losses relating to the period - exchange (738) (350) (1,821)
adjustments
Net movement in shareholders' funds (2,606) (2,260) (2,202)
Opening shareholders' funds 43,513 45,715 45,715
Closing shareholders' funds 40,907 43,455 43,513
These financial statements should be read in conjunction with the attached notes.
Consolidated Balance Sheet (Unaudited)
As at 28 June 2003
At 28 June At 29 June At 28 December
2003 2002 2002
#'000 #'000 #'000
Fixed assets 18,518 20,832 19,587
Current assets
Stock 7,344 6,721 6,269
Debtors due within one year 28,418 36,020 31,140
Debtors due after more than one year 2,348 4,258 2,732
Cash at bank and in hand 10,137 14,410 9,268
48,247 61,409 49,409
Creditors: amounts falling due within one year (24,413) (35,310) (23,999)
Net current assets 23,834 26,099 25,410
Total assets less current liabilities 42,352 46,931 44,997
Provisions for liabilities and charges (1,445) (3,476) (1,484)
Net assets 40,907 43,455 43,513
Capital and reserves
Called up share capital 11,044 11,044 11,044
Other reserves 29,863 32,411 32,469
Equity shareholders' funds 40,907 43,455 43,513
4,745 228 4,828
Net cash
These financial statements should be read in conjunction with the attached notes.
Consolidated Cash Flow (Unaudited)
For the six months to 28 June 2003
Notes Half year Half year Full year
2003 2002 2002
#'000 #'000 #'000
Cash inflow/(outflow) from operating activities 7 675 (2,053) 3,293
Returns on investments and
servicing of finance 10 139 245
Taxation 335 (199) (130)
Capital expenditure (860) (1,168) (2,072)
Acquisitions and disposals - - (153)
Equity dividends paid (355) (358) (645)
Cash (outflow)/inflow before the use of liquid resources
and financing (195) (3,639) 538
Financing
Repayment of loans (311) (8,262) (19,310)
Decrease in cash in the period (506) (11,901) (18,772)
Cash inflow from movement in debt 311 8,262 19,310
Change in net debt resulting from cash flows (195) (3,639) 538
Translation differences 112 571 994
Movement in net cash in the period (83) (3,068) 1,532
Opening net cash 4,828 3,296 3,296
Closing net cash 4,745 228 4,828
These financial statements should be read in conjunction with the attached notes.
Notes to the Financial Statements
1 Basis of preparation
This Interim Report for the half year ended 28 June 2003 has not been audited
and does not constitute statutory accounts within the meaning of S240 of the
Companies Act 1985. The financial information has been prepared on the basis of
the accounting policies set out in the Group's Annual Report & Accounts for the
year ended 28 December 2002. Those accounts carry an unqualified auditors'
report and have been delivered to the Registrar of Companies. The comparative
results for the year ended 28 December 2002 are abridged and, as such, do not
represent statutory accounts.
2 Segmental analysis Half year 2003 Half year 2002 Full year 2002
Operating Operating Operating
(loss)/ (loss)/ (loss)/
Turnover Profit Turnover Profit Turnover Profit
#'000 #'000 #'000 #'000 #'000 #'000
ORIGIN
United Kingdom 22,623 (178) 23,982 317 49,376 1,029
Goodwill amortisation - (138) - (138) - (284)
22,623 (316) 23,982 179 49,376 745
United States 20,421 (419) 21,052 64 45,249 1,339
Exceptional item - (1,300) - (2,366) - (2,366)
Goodwill amortisation - (235) - (335) - (574)
20,421 (1,954) 21,052 (2,637) 45,249 (1,601)
TOTAL 43,044 (2,270) 45,034 (2,458) 94,625 (856)
3 Exceptional items
As a result of a strategic review of our Partner Services channel in the US we
have provided for certain one-off costs of #1.3m relating to the relocation of
the Franchise operation, AIA, to Oshkosh and the restructuring of the operation.
The operating exceptional in 2002 relates to provisions made predominantly for
amounts due from debtors in AIA. The release in 2002 of the exceptional
provision of #0.5m relates to costs on a prior year disposal.
4 Taxation
The taxation charge for the 6 months to 28 June 2003 has been calculated by
applying the best estimate of the Group's annual tax rate to the loss before
taxation for the period.
5 Dividend
The interim dividend for 2003 of 1p per ordinary share (2002 : 1.00p) will be
paid on 10 November 2003 to ordinary shareholders on the register at the close
of business on 17 October 2003.
6 Earnings per share
The Earnings Per Share for the half year is based on the loss after tax of
#1,581,000 (2002 : loss #1,623,000) and weighted average shares in issue
(excluding those held in 4imprint QUEST) of 28,709,185 (2002 : 28,709,185).
The Diluted Earnings Per Share for the half year is based on the same loss
figures as above and there is no dilutive effect of share options outstanding.
The weighted average number of shares in issue for Diluted Earnings Per Share
purposes is therefore 28,709,185 (2002 : 28,709,185).
7 Reconciliation of operating loss to operating cashflows
Half year Half year Full year
2003 2002 2002
#'000 #'000 #'000
Operating loss (2,270) (2,458) (856)
Depreciation charge 1,143 1,241 2,399
Amortisation of goodwill 373 473 858
(Profit)/loss on sale of tangible fixed assets (6) - 3
Exceptional reorganisation costs paid - (603) -
Increase in stocks (1,110) (1,466) (1,108)
Decrease in debtors 3,253 358 4,078
(Decrease)/increase in creditors (262) 402 (824)
Expenditure against provisions (446) - (1,257)
Net cash inflow/(outflow) from operating activities 675 (2,053) 3,293
8 Retirement benefits
The Group operates a defined benefit pension scheme in the UK. A full actuarial
valuation was carried out at 5 April 2001 and updated to 28 June 2003 (for FRS
17 purposes) by a qualified independent actuary. The major assumptions used by
the actuary were (in nominal terms):
Half Year Half Year Full Year
28 June 29 June 28 December
2003 2002 2002
Rate of increase in salaries 3.75% 4.00% 3.50%
Rate of increase of pensions in
payment 2.50% 2.75% 2.25%
Discount rate 5.50% 6.00% 5.75%
Inflation 2.50% 2.75% 2.25%
The assets in the scheme and the
expected rates of return were:-
Half Year Half Year Full Year
28 June 29 June 28 December
2003 2002 2002
#'000 #'000 #'000
Equities 7.00% 32,416 7.50% 43,757 7.00% 31,510
Bonds 5.00% 29,001 5.50% 23,092 5.00% 28,585
Other 6.00% 739 6.50% 1,118 6.00% 1,485
Total market value of assets 62,156 67,967 61,580
Actuarial value of liability (84,108) (78,739) (78,091)
Deficit in the scheme (21,952) (10,772) (16,511)
Related deferred tax asset 6,586 3,232 4,953
Net pension liability (15,366) (7,540) (11,558)
The movement in the net pension liability was:
Half year to Half year to Full year to
28 June 29 June 28 December
2003 2002 2002
#'000 #'000 #'000
Net pension liability at beginning of period (11,558) (2,402) (2,402)
Movement in period:
Current service cost (40) (55) (110)
Contributions 390 60 120
(Interest cost)/net return on assets (382) 100 200
Actual return less expected return on assets 1,834 (6,129) (12,830)
Experience gains and losses on liabilities 27 45 290
Changes in assumptions (7,270) (1,362) (750)
Movement in deferred tax asset 1,633 2,203 3,924
Net pension liability at end of period (15,366) (7,540) (11,558)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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