24 July 2014

4imprint improves as Nelson nails 'Cessna' deal

10/01/2003

Shares in promotional products distributor 4imprint (FOUR) improved 3p to 36.5p today, after the support services outfit flagged up a new contract with Cessna Aircraft Company and CEO Dick Nelson said its full year result would match market expectations.

4imprint (FOUR) has been chosen to supply promotional products for Cessna's on-site store in Kansas, as well as to manage and stock the store, which is open to Cessna employees and visitors. Nelson's Whitefield-headquartered company has also set up an online store for Cessna, a division of Fortune 500 outfit Textron that designs and makes light and mid-size business jets as well as single engine piston aircraft.

4imprint consists of a batch of companies in the highly fragmented promotional products market worth some $30 billion. Globally its the biggest direct marketer of these products and the fourth largest distributor, with blue chip clents like BT, British Airways, Microsoft and BMW on its books.

In other, more upbeat news, Nelson says 4Imprints full year figures due out in mid-March will hit reduced market forecasts. 'The advertising market remains challenging, but we're beginning to see the benefits of tighter controls and growth plans we put in place last year, and our cash generation in 2002 has been better than expected' he added.

Last September, 4imprint's interims to 29 June were a big disappointment. Pre-tax profits of 500,000 reversed to a 2.3 million deficit after a 2.4 million provision against amounts owed from US franchisee owners. Following a review of the operation, management had targeted a number of 'underperforming or non-compliant' owners for temination at its US franchise Adventures in Advertising.

Even the profit before tax, exceptionals and goodwill measure crashed 45 per cent to a mere 520,000, on turnover 1.4 per cent softer at 45 million, as 4imprint endured 'the worst conditions seen in advertising in recent history'.

However, with the now reduced forecasts likely to be met, and the shares still languishing, analyst Charlie Cottam at house broker WestLB Panmure has an 'outperform' note out on the stock with a 60p target price. He has 5.6p of earnings pencilled in for the year to 29 December 2002, down from 8.9p, and expects pre-tax profits of 2.5 million (trimmed back from previous estimates of 3.9 million). At 36.5p, the shares trade on a mere 6.5 times earnings.

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