- Record FY 2022 - sales up 45% and profit up 236%
- Bumper dividends including special payout
- Big investment in people to drive profitable growth
Promotional products company 4imprint (FOUR) said fiscal 2022 pre-tax profit jumped 236% to $102.9 million on a 45% increase in revenues to $1.14 billion, a new record and in line with recent upgraded guidance.
The shares gained 1% to £45.10 on Wednesday bucking the big falls seen in the wider market.
Looking ahead the company said 2023 has got off to a promising start after ‘encouraging’ trading in the first few weeks of the new financial year.
Management said following a strategic review in November 2022 the board has approved ‘significant’ incremental investment in the business to drive profitable revenue growth.
Analysts’ have penciled in double digit growth in revenues and a 5% increase in earnings per share for 2023.
WHAT DROVE PERFORMANCE?
Full year revenues to 31 December 2022 increased by $353 million boosted by $30 million of order backlog from the prior year caused by global supply chain disruptions.
The business experienced a ‘step change’ in profitability driven by several factors including a 30% increase in order volumes, a 36% increase in the value of orders, stable gross margins, ‘significant’ gains in marketing productivity and positive operational gearing.
Operational gearing amplifies profitability as a greater proportion of revenues are turned into profit due to fixed and semi-fixed costs reducing as a proportion of total revenues.
The business remains cash generative delivering free cash flow of $63.88 million (around 62% of operating profit) in the year which resulted in a doubling of cash and bank deposits to $86.8 million. The company remains debt free.
SHAREHOLDERS TO RECEIVE BUMPER PAYOUT
A strong balance sheet led management to propose a final dividend of $1.2 per share which together with the half year dividend of $0.4 equates to a 2022 dividend of $1.60 up from $0.45 in 2021.
The final dividend has been converted into sterling which equates to total dividends per share of 132.24p. In addition, the board is proposing a special dividend of $2 (165.38p) per share which will be paid at the same time as the final dividend in June 2023.
This means the total payout in sterling amounts to 297.62p equivalent to a 6.6% yield.
