Full Year Results 2023
Highlights
Kevin Lyons-Tarr, CEO
Full Year Results 2023 | 1 |
Results Summary
RevenueOperating profit Basic EPS
$1.33bn | $136.2m | 377.9c |
16% | 32% | 32% |
Total paid and | ||
Cash and bank deposits | proposed regular DPS | |
$104.5m | 215.0c |
2022: $86.8m | 2022: 160.0c |
Full Year Results 2023 | 2 |
Financial
Review
David Seekings, CFO
Full Year Results 2023 | 3 |
Income Statement
2023 | 2022 | ||
$m | $m | ||
Revenue | 1,326.5 | 1,140.3 | 16% |
Gross profit | 401.9 | 321.9 | 25% |
Gross profit margin | 30.3% | 28.2% | |
Marketing costs | (159.9) | (128.7) | 24% |
Selling costs | (47.2) | (38.6) | 22% |
Admin & central costs | (56.8) | (50.4) | 13% |
Share option related charges | (1.1) | (0.8) | 38% |
DB pension admin costs | (0.7) | (0.5) | 40% |
Operating profit | 136.2 | 102.9 | 32% |
Operating margin | 10.3% | 9.0% | |
Interest | 4.3 | 0.7 | |
Pension finance income | 0.2 | 0.1 | |
Profit before tax | 140.7 | 103.7 | 36% |
Tax | (34.5) | (23.6) | |
Profit after tax | 106.2 | 80.1 | 33% |
Basic EPS | 377.9c | 285.6c | 32% |
- Revenue +16%
o H1 +23%; H2 +11%
o US $1,302.6m; UK $23.9m - Gross profit +25%
o Significant improvement in YOY GP%
o Recovery from pandemic-related factors - Marketing costs +24%
o Marketing spend remains productive
o Revenue per marketing dollar $8.30 (2022: $8.86; 2019: $5.58)
o Brand component the key driver - Selling costs +22%
o Year of investment, mostly in customer service resource, in 2023 - Admin/other overheads +13%
o Key senior additions to the team to support growth
o DB pension admin includes buy-in costs o Head Office costs $5.0m (2022: $5.0m) - Operating profit +32%
o Operating margin rises above 10%
o Reflects improved gross margin dynamics and marketing productivity - Net finance income
o YOY increase of $3.7m
o Improving yields and large cash balances - Effective tax rate 25% (2022: 23%)
Full Year Results 2023 | 4 |
Balance Sheet
2023 | 2022 | |
$m | $m | |
Fixed assets | 35.2 | 30.2 |
Right-of-use assets | 11.4 | 13.1 |
Goodwill | 1.0 | 1.0 |
Deferred tax assets | 3.8 | 2.4 |
Retirement benefit asset | - | 1.2 |
51.4 | 47.9 | |
Inventories | 13.6 | 18.1 |
Receivables | 68.4 | 87.5 |
Payables | (89.9) | (84.8) |
(7.9) | 20.8 | |
Current tax | 0.4 | (1.2) |
Deferred tax liabilities | (1.6) | (0.4) |
Cash and bank deposits | 104.5 | 86.8 |
Lease liabilities | (12.3) | (13.7) |
91.0 | 71.5 | |
Net assets | 134.5 | 140.2 |
- Fixed asset additions include:
o Screen printing and embroidery machinery o Initial phase of DC expansion ($3.8m) - Working capital net negative $7.9m
o Significant improvement in supply chain conditions
o Unwinding of elevated working capital position at December 2022
o More typical working capital profile expected going forward - 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 assets ($17.5m) and company 'top-up'
(£3.2m or $4.1m) used to pay the buy-in policy premium - Financial strength
o Cash and bank deposits $104.5m; no debt o Use of cash under regular review in
accordance with capital allocation framework and balance sheet funding guidelines
Full Year Results 2023 | 5 |
Cash Flow
2023 | 2022 | |
$m | $m | |
At start of period | 86.8 | 41.6 |
Operating profit | 136.2 | 102.9 |
Share option non-cash charges | 1.1 | 0.8 |
Pension admin costs paid by Plan | 0.5 | 0.5 |
Depreciation and amortisation | 4.7 | 4.0 |
Amortisation of right-of-use assets | 1.7 | 1.5 |
Change in working capital | 29.2 | (8.5) |
Capital expenditure | (9.7) | (8.0) |
Underlying operating cash flow | 163.7 | 93.2 |
Contributions to defined benefit pension | (6.5) | (4.3) |
Consideration for business combination | - | (1.7) |
Tax | (33.8) | (20.8) |
Interest | 3.9 | 0.7 |
Own share transactions | 1.4 | (0.9) |
Capital element of lease payments | (1.4) | (1.2) |
Exchange and other | 1.2 | (1.1) |
Free cash flow | 128.5 | 63.9 |
Dividends to Shareholders | (110.8) | (18.7) |
Net cash inflow in the period | 17.7 | 45.2 |
At end of period | 104.5 | 86.8 |
- Excellent operating cash generation through the year
o Strong trading and operating profit
o Supply chain pressures in 2022 fully addressed o Unwinding of elevated 2022 working capital
balances leading to cash inflow in 2023 of $37.7m
o Cash conversion of 120% - Pension
o Company contributions of $6.5m paid in 2023, including 'top-up' contribution of $4.1m
o Deficit contributions ceased in H2 after buy-in transaction - Tax payments rising in line with profitability
- Net interest income reflects healthy cash balances throughout the year and improving interest rates on deposits
-
$110.8m paid in dividends to Shareholders
o Interim and Final regular dividends increasing in line with capital allocation guidelines
o Special dividend of $2.00 per share paid in H1 2023
Full Year Results 2023 | 6 |
Operational
Review
Kevin Lyons-Tarr, CEO
Full Year Results 2023 | 7 |
Market | |||||||||
• After two exceptional years fuelled by | |||||||||
ASI Industry Sales North America 2004 - 2023 | $bn | the strong post-pandemic recovery, | |||||||
annual industry growth in 2023 of 1.2% | |||||||||
28.0 | 25.8 | 25.8 | 26.1 | (~$310m) was the lowest in more than | |||||
26.0 | a decade (with the exception of 2020), | ||||||||
22.9 | 24.7 | ||||||||
24.0 | 23.6 | 23.2 | an indication of industry | ||||||
22.0 | 21.5 | 22.0 | 20.7 | 'normalisation' combined with a more | |||||
19.6 | 19.8 | 20.5 | cautious macroeconomic environment | ||||||
20.0 | 19.4 | ||||||||
18.6 | 18.5 | ||||||||
18.0 | 17.8 | 17.4 | |||||||
16.9 | • Despite very strong 2022 comparatives | ||||||||
15.9 | |||||||||
16.0 | and softer industry growth in H2, | ||||||||
14.0 | market share gains continued to be | ||||||||
12.0 | made | ||||||||
10.0 | • 4imprint's share of total market 5.0% | ||||||||
vs. 4.3% in 2022 and 3.3% in 2019 | |||||||||
Source: ASI |
No. of orders received ('000)
529 | ||||||
519 | ||||||
457 | 426 | New | ||||
1,561 | ||||||
1,130 | 268 | 1,003 | 1,341 | Existing | ||
692 | ||||||
2019 | 2020 | 2021 | 2022 | 2023 |
- More than 2 million orders received for the first time in company history, 12% above 2022
- 529,000 new customer orders were received in 2023, 2% over 2022
- 311,000 new customers acquired, 1% over 2022
- Existing customer orders up 16% over 2022, representing consistent retention performance and quality of customers acquired
Full Year Results 2023 | 8 |
Marketing Effectiveness
US and Canada Acquired and Retained %
• Total marketing spend +24% at $159.9m (2022: $128.7m) inclusive of planned marketing testing in H2
• Revenue per marketing dollar KPI slightly below 2022 but still well above pre- pandemic levels and includes cost of planned testing in H2, geared towards future planning rather than near-term gain
• Reshaping of marketing mix continued with brand element more than 35% of the total marketing spend
• Recent brand awareness metrics very encouraging
o Unaided above 15% for the first time o Aided greater than 50% for the first
time
• New customer acquisition softened in H2 due to challenging prior year comparative and slowing industry growth
• Retention rates remained strong and consistent
Full Year Results 2023 | 9 |
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4imprint Group plc published this content on 13 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2024 07:13:06 UTC.