- Raised guidance for 2022 profit above $100 million
- Shares hit all-time high, up 72% over last year
- Company enters 2023 with confidence
Shares in promotional products company 4imprint (FOUR) racked up another all-time high on Friday, rising 4% to £46.40 after the firm raised full-year profit guidance yet again and taking gains over the last year to 72%.
The raise comes hot on the heels of a similar upgrade in November when the company said pre-tax profit for the year ending 1 January 2023 would be at least $90 million. Now that figure is ‘not less than’ $100 million.
The company said unaudited revenues for 2022 were up 45% to $1.14 billion as the group experienced a ‘particularly strong’ finish to the year.
The unaudited net cash balance at year-end was $86.7 million, more than double the prior-year balance of $41.6 million. The board said the group entered 2023 with ‘optimism’. Full-year results will be announced on 15 March 2023.
WHAT IS DRVING THE UPGRADES?
The implied pre-tax margin of 9% is above historical averages and is benefitting from strong operational leverage in the business. Firms with high fixed costs relative to their variable costs get an operating margin boost from higher revenues.
Over the last year, order counts in the US have been running above pre-pandemic levels while average order values have also been higher. Volume and price increases combined with greater productivity of the marketing portfolio are key factors behind the momentum in the business.
Shares has previously highlighted the phenomenal success of the 4imprint business with the shares notching up a 20-fold price increase over the last decade. It is often the least exciting businesses which go under the radar.
4imprint sells promotional products such as pens and t-shirts in North America, the UK and Ireland to help customers build their brands and ‘make lasting connections’ with their clients.
