4Imprint Group Plc (LON:FOUR)
An upbeat AGM statement indicates good momentum continuing through the early weeks of the new financial year. We have edged up our forecasts to reflect revenues to date running ahead of budget at +16% year-on-year. It is still too early to assess the impact of the additional marketing spend on brand awareness that was factored in at the time of the finals. Even without any benefit from this initiative, earnings are set to increase by a CAGR of over 12% for FY18-19e. Strong cash generation is funding the brand and marketing investment, as well as paying out a progressive dividend, on top of the supplementary payment made for FY17.
Revenues ahead again
At the finals in March, we moved our FY18 revenue forecast up 2% and we are now moving up again by the same percentage. Guidance is for double-digit growth over the medium term, to reach $1bn by FY22. This looks increasingly achievable, with an 8.7% CAGR now required to reach this level. Previously, expectations on operating profit were for a flat performance year-on-year, reflecting the $7m extra spend on brand awareness (on top of ‘normal’ marketing costs of around $120m). The additional revenue now built into our model now adds 3% to our EBITDA estimate, with FY19e figures moving ahead a similar amount off this higher base.
To read the entire report Please click on the pdf File Below: