Half Year Results 2024
Highlights
Kevin Lyons-Tarr, CEO
Half Year Results 2024 | 1 |
Results Summary
RevenueOperating profit Basic EPS
$667.5m | $69.9m | 194.3c |
5% | 10% | 10% |
Cash and bank deposits Interim Dividend
$121.5m | 80.0c |
2023 FY: $104.5m | 2023 HY: 65.0c |
2023 HY: $74.5m |
Half Year Results 2024 | 2 |
Financial
Review
David Seekings, CFO
Half Year Results 2024 | 3 |
Income Statement
H1 2024 | H1 2023 | FY 2023 | |||
$m | $m | $m | |||
Revenue | 667.5 | 635.5 | 5% | 1,326.5 | |
Gross profit | 214.0 | 193.3 | 11% | 401.9 | |
Gross profit margin | 32.1% | 30.4% | 30.3% | ||
Marketing costs | (87.4) | (77.3) | 13% | (159.9) | |
Selling costs | (24.7) | (22.7) | 9% | (47.2) | |
Admin & central costs | (31.0) | (28.5) | 9% | (56.8) | |
Share option related charges | (0.9) | (0.5) | 80% | (1.1) | |
DB pension admin costs | (0.1) | (0.5) | -80% | (0.7) | |
Operating profit | 69.9 | 63.8 | 10% | 136.2 | |
Operating margin | 10.5% | 10.0% | 10.3% | ||
Interest | 3.1 | 2.1 | 4.3 | ||
Pension finance income | - | 0.1 | 0.2 | ||
Profit before tax | 73.0 | 66.0 | 11% | 140.7 | |
Tax | (18.3) | (16.5) | (34.5) | ||
Profit after tax | 54.7 | 49.5 | 11% | 106.2 | |
Basic EPS | 194.3c | 176.2c | 10% | 377.9c |
- Revenue +5%
o US $654.7m; UK $12.8m
o Revenue growth reflecting market conditions - Gross profit +11%
o Favourable movement in gross profit margin o Carefully targeted price adjustments
o Manageable supplier cost increases - Marketing costs +13%
o Efficient and flexible marketing mix
o Rev/mktg dollar $7.64 (H1 2023: $8.22)
o Continued investment in brand element (TV) - Selling costs +9%
o Annualisation of large 2023 recruitment classes
o Pay scales re-configured - Admin/other overheads +9%
o Investment in the business as it scales
o More key hires in specialisms to add depth o Operational gearing will return over time - Operating profit +10%
o Operating margin percentage 10.5% (H1 2023: 10.0%)
o Reflects business model resilience - Net finance income
o Interest on large cash balances - Effective tax rate 25% (H1 2023: 25%)
Half Year Results 2024 4
Balance Sheet
H1 2024 | H1 2023 | FY 2023 | |
$m | $m | $m | |
Fixed assets | 46.4 | 31.6 | 35.2 |
Right-of-use assets | 11.0 | 12.3 | 11.4 |
Goodwill | 1.0 | 1.0 | 1.0 |
Deferred tax assets | 3.9 | 3.0 | 3.8 |
Retirement benefit asset | - | 0.1 | - |
62.3 | 48.0 | 51.4 | |
Inventories | 20.4 | 18.3 | 13.6 |
Receivables | 74.7 | 81.4 | 68.4 |
Payables | (116.3) | (115.8) | (89.9) |
(21.2) | (16.1) | (7.9) | |
Current tax | (1.6) | (0.5) | 0.4 |
Deferred tax liabilities | (1.2) | (0.4) | (1.6) |
Cash and bank deposits | 121.5 | 74.5 | 104.5 |
Lease liabilities | (12.0) | (13.0) | (12.3) |
106.7 | 60.6 | 91.0 | |
Net assets | 147.8 | 92.5 | 134.5 |
- Fixed asset additions include:
o DC expansion - ~160,000 sq. ft. o Expanded solar array
o Additional DTG, embroidery and screen-print equipment - Right-of-useassets/liabilities relate to building leases:
o Oshkosh/London offices
o Appleton screen print facility - Pension (retirement benefit asset) o Buy-in completed in June 2023
o Substantially all remaining pension benefits insured
o Eliminates inflation, interest rate and longevity risks
o Plan to move from buy-in to buy-out in 2025 - Working capital
o Core net negative balance o Clean and well managed - Financial strength
o Cash and bank deposits $121.5m; no debt o Use of cash under regular review by the
Board
Half Year Results 2024 | 5 |
Cash Flow
H1 2024 | H1 2023 | FY 2023 | |
$m | $m | $m | |
At start of period | 104.5 | 86.8 | 86.8 |
Operating profit | 69.9 | 63.8 | 136.2 |
Share option non-cash charges | 0.9 | 0.5 | 1.1 |
Pension admin costs paid by the Plan | - | 0.5 | 0.5 |
Depreciation and amortisation | 2.3 | 2.3 | 4.7 |
Lease depreciation | 0.8 | 0.8 | 1.7 |
Change in working capital | 13.3 | 32.8 | 29.2 |
Capital expenditure | (13.4) | (3.5) | (9.7) |
Underlying operating cash flow | 73.8 | 97.2 | 163.7 |
Contributions to defined benefit pension | - | (2.1) | (6.5) |
Interest | 2.9 | 2.1 | 3.9 |
Tax | (15.8) | (16.5) | (33.8) |
Own share transactions | (0.6) | (0.4) | 1.4 |
Capital element of lease payments | (0.7) | (0.7) | (1.4) |
Exchange and other | (0.5) | 1.1 | 1.2 |
Free cash flow | 59.1 | 80.7 | 128.5 |
Dividends to Shareholders | (42.1) | (93.0) | (110.8) |
Net cash inflow/(outflow) in the | 17.0 | (12.3) | 17.7 |
period | |||
At end of period | 121.5 | 74.5 | 104.5 |
- Cash generative business model o Increasing operating profit
o Efficient working capital profile
o Cash conversion in H1 2024 of 106% - Capex in H1 2024 includes:
o DC expansion stage payments: $10.8m
o Addition to solay array: $1.0m
o DTG equipment: $1.0m - Pension buy-in:
o No more deficit reduction contributions (previously $3-4m per year)
o Minimal administration expenses up to point of buy-out - Tax payments rising in line with profitability
-
Dividends
o Interim and Final regular dividends increasing in line with capital allocation and balance sheet funding guidelines
o $42.1m cash dividends paid in H1 2024
Half Year Results 2024 | 6 |
Operational
Review
Kevin Lyons-Tarr, CEO
Half Year Results 2024 | 7 |
Market
ASI Industry Sales North America 2004 - 2023 $bn
28.0 | 25.8 | 25.8 | 26.1 | ||||||||
26.0 | |||||||||||
24.7 | |||||||||||
24.0 | 21.5 | 22.0 | 22.9 | 23.6 | 23.2 | ||||||
22.0 | 19.6 | 19.8 | 20.5 | 20.7 | |||||||
20.0 | 19.4 | ||||||||||
17.8 | 18.6 | 18.5 | |||||||||
18.0 | 16.9 | 17.4 | |||||||||
15.9 | |||||||||||
16.0 | |||||||||||
14.0 | |||||||||||
12.0 | |||||||||||
10.0 |
• Industry revenue in H1 2024 essentially |
flat vs H1 2023; $910m below H1 2019 |
• 4imprint's share of total market in H1 |
2024 6.3% vs. 6.0% in 2023 and 3.4% in |
2019 |
• Potential for industry growth to return |
later in H2 2024 as 2023 comparatives |
soften; although some volatility may |
remain due to macro-economic and US |
election news cycle |
Source: ASI
No. of orders received ('000)
272 | 250 | |||
248 | ||||
126 | 181 | 775 | 835 | |
435 | 638 | |||
344 | ||||
2020 2021 2022 2023 2024
Half year
529
519
1,341 | 1,561 | New | |
Existing | |||
2022 2023
Full year
• More than 1 million orders received in |
H1 2024, 4% above H1 2023 |
• Average order value +2% vs H1 2023 |
• 145,000 new customers acquired in H1 |
2024, 158,000 during the same period |
last year |
• 250,000 new customer orders received |
in H1 2024, 8% less than H1 2023 |
• Existing customer orders up 8% over |
H1 2023, representing a resilient |
retention performance and quality of |
customers acquired |
Half Year Results 2024 8
Marketing Effectiveness | |||||||||||||||||||||||||||||||||||||||
US and Canada Acquired and Retained % | |||||||||||||||||||||||||||||||||||||||
60% | 90,000 | • Total marketing spend +13% at $87.4m | |||||||||||||||||||||||||||||||||||||
50% | 80,000 | (H1 2023: $77.3m) | |||||||||||||||||||||||||||||||||||||
70,000 | • | Revenue per marketing dollar KPI below | |||||||||||||||||||||||||||||||||||||
40% | 60,000 | H1 2023 but still well above pre- | |||||||||||||||||||||||||||||||||||||
pandemic levels; decrease a reflection of | |||||||||||||||||||||||||||||||||||||||
50,000 | the soft market and an element of | ||||||||||||||||||||||||||||||||||||||
30% | 40,000 | testing to determine whether additional | |||||||||||||||||||||||||||||||||||||
marketing spend would produce a | |||||||||||||||||||||||||||||||||||||||
20% | 30,000 | worthwhile lift | |||||||||||||||||||||||||||||||||||||
20,000 | • | Marketing mix similar to PY; brand | |||||||||||||||||||||||||||||||||||||
10% | 10,000 | element remains largest component | |||||||||||||||||||||||||||||||||||||
0% | 0 | • Latest brand awareness metrics very | |||||||||||||||||||||||||||||||||||||
encouraging | |||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | 3 | 4 | 1 | 2 | ||
o Unaided moving towards 20% | |||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||||||||||||||||
o Aided approaching 60% | |||||||||||||||||||||||||||||||||||||||
Customers acquired | % Retained 12 Months | % Retained 24 Months | |||||||||||||||||||||||||||||||||||||
Revenue per marketing dollar | • New customer acquisition remains | ||||||||||||||||||||||||||||||||||||||
challenging in the current environment |
5.64 |
2020 |
5.46 |
2021 |
8.19 |
2022 |
8.22 |
2023 |
7.64 |
2024 |
8.86 |
2022 |
8.30 |
2023 |
- Retention rates remained strong and consistent
Half year | Full year |
Half Year Results 2024 | 9 |