TIDMFOUR
RNS Number : 7307U
4imprint Group PLC
01 April 2019
4imprint Group plc (the "Company")
Publication and Posting of 2018 Annual Report and Accounts
The Company has published its 2018 Annual Report and Accounts,
together with a Notice of Annual General Meeting and Form of
Proxy.
These documents have been posted to shareholders.
Copies of the Annual Report and Notice of Annual General Meeting
are available on the Company's website,
http://investors.4imprint.com.
Copies of the Annual Report, Notice of Annual General Meeting
and Form of Proxy have been submitted to the National Storage
Mechanism and will shortly be available at
www.morningstar.co.uk/uk/NSM.
The Annual General Meeting of the Company will be held at 11.00
on 7 May 2019 at the offices of Peel Hunt, Moor House, 120 London
Wall, London EC2Y 5ET.
A condensed set of the financial statements for the 52 weeks
ended 29 December 2018 together with information on important
events that occurred during that financial period and their impact
on the financial statements were contained in the Final Results RNS
announcement made on 5 March 2019. That information, together with
the information set out in the appendices to this announcement,
which is extracted from the Annual Report, constitute the material
required by DTR 6.3.5R which is required to be communicated to the
media in full unedited text through a Regulatory Information
Service. This announcement is not a substitute for reading the
Annual Report.
In the appendices "Group" is 4imprint Group plc and its
subsidiaries.
For further information, please contact:
Andrew Scull
Company Secretary
4imprint Group plc
Tel: 020 3709 9680
Appendices
A. Statement of Directors' Responsibilities in respect of the Financial Statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial 52 week period. Under that law the
Directors have prepared the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and company financial statements
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group and Company for that period. In preparing the financial
statements, the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements and
IFRSs as adopted by the European Union have been followed for the
Company financial statements, subject to any material departures
disclosed and explained in the financial statements;
-- make judgments and accounting estimates that are reasonable
and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Andrew Scull
Company Secretary
5 March 2019
B. Principal risks and uncertainties
The list below is extracted in full and unedited from the Annual
Report and Accounts 2018, pages 20 to 25. Page references below are
to pages in the Annual Report and Accounts 2018.
4imprint's business model means that it may be affected by a
number of risks, not all of which are within its control. Outlined
below are the current principal potential risks and uncertainties
to the successful delivery of the Group's strategic goals. The list
is not exhaustive and other, as yet unidentified, factors may have
an adverse effect.
Economic and market risks
Macroeconomic conditions
Description of risk
The business conducts most of its operations in North America
and would be affected by a downturn in general economic
conditions in this region or negative effects from tension
in international trade. In previous economic downturns,
the promotional products market has typically softened
broadly in line with the general economy.
Potential impact
* Customer acquisition and retention could fall, Link to strategy
impacting revenue in current and future periods. (R) Organic revenue growth
(R) Cash generation and
profitability
* The growth and profitability levels called for in the
Group strategic plan may not be achieved.
* Cash generation could be reduced broadly
corresponding to a reduction in profitability.
Mitigating activities
* Management monitors economic and market conditions to Direction
ensure that appropriate and timely adjustments are (R) On a broad level
made to marketing and other budgets. market conditions to
date have remained quite
stable
* The customer proposition in terms of promotions, (R) = Unchanged
price, value and quality of product can be adjusted
to resonate with customer requirements and budgets in
the prevailing economic climate.
* The Group's balance sheet funding policy (see page
18) aims to provide operational and financial
flexibility to facilitate continued investment in the
business through different economic cycles.
Competition
Description of risk
The promotional products markets in which the business
operates are intensely competitive and the rapid development
of internet commerce, digital marketing and online marketplaces
may allow competitors to reach a broader audience. In addition,
new or disruptive business models looking to break down
the prevailing distributor/supplier structure in the promotional
products industry may be developed by existing competitors
or new entrants.
Potential impact
* Aggressive competitive activity could result in Link to strategy
pressure on prices, margin erosion and loss of market (R) Market leadership
share. All of these factors could impair the growth (R) Organic revenue
of the business and therefore impact the financial growth
results. (R) Cash generation
and profitability
* The Group's strategy based on achieving organic
growth in fragmented markets may need to be
reassessed.
Mitigating activities
* An open-minded culture and an appetite for technology Direction
are encouraged, with the aim of positioning the (R) The competitive
business at the forefront of innovation in the landscape to date has
industry. been relatively consistent
in our main markets
(R) = Unchanged
* Management closely monitors competitive activity in
the marketplace.
* Price, satisfaction and service level guarantees are
an integral part of the customer proposition.
Customer surveys and market research are used to
gauge customer satisfaction and perception, and the
causes of any negative indications are investigated
and addressed rapidly.
Currency exchange
Description of risk
There is some exposure to currency exchange risk. Although
the business trades predominantly in US dollars, it also
transacts business in Canadian dollars, Sterling and Euros,
leading to some currency risk on trading. In addition,
Head Office costs, pension scheme commitments and dividends
are payable in Sterling, consequently the business may
be adversely impacted by movements in the Sterling/US dollar
exchange rate when it repatriates cash to the UK.
Potential impact
* The financial results of trading operations, and Link to strategy
therefore overall profitability, may be negatively (R) Cash generation and
affected. profitability
(R) Capital structure
(R) Shareholder value
* The financial condition and cash position of the
Group may differ materially from expectations. In an
extreme scenario, the Group's strategic objectives
around capital structure and core dividend
commitments could be disrupted.
Mitigating activities
* The Group reports its results in US dollars, Direction
minimising currency impact on reported revenue, (R) Political instability,
operating profit and net assets since trading interest rate policy
operations are concentrated largely in North America. (US) and Brexit concerns
(UK) may lead to increased
volatility in currency
* The Group can use forward contracts to hedge markets
anticipated cash receipts from its overseas (R) Increased
operations, giving some certainty of amounts
receivable in Sterling.
Operational risks
Business facility disruption
Description of risk
The 4imprint business model means that operations are concentrated
in centralised office and distribution facilities. The
performance of the business could be adversely affected
if activities at one of these facilities were to be disrupted,
for example, by fire, flood, loss of power or internet/telecommunication
failure.
Potential impact
* The inability to service customer orders over any Link to strategy
extended period would result in significant revenue (R) Market leadership
loss, deterioration of customer acquisition and (R) Organic revenue growth
retention metrics and diminished return on marketing (R) Cash generation and
investment. profitability
* The Group's reputation for excellent service and
reliability may be damaged.
Mitigating activities
* Back-up and business continuity procedures are in Direction
place to ensure that customer service disruption is (R) No significant change
minimised. This includes customer service resource in the nature or likelihood
based at a separate location and team members working of these risks
from home, (R) = Unchanged
* Websites are cloud-based, and data is backed up
immediately to off-site servers.
* Relationships are maintained with third party
embroidery contractors to provide backup in the event
of facility unavailability.
Disruption to the product supply chain or delivery service
Description of risk
As a consequence of the Group's drop-ship distribution
model, trading operations could be interrupted if (i) the
activities of a key supplier were disrupted and it was
not possible to source an alternative supplier in the short
term; or (ii) the primary parcel delivery partner used
by the business suffered significantly degraded service
levels. As the Group continues to grow, the volume of orders
placed with individual suppliers becomes significant.
Potential impact
* Inability to fulfil customer orders would lead to Link to strategy
lost revenue and a negative impact on customer (R) Market leadership
acquisition and retention statistics. (R) Organic revenue growth
(R) Cash generation and
profitability
* The Group's reputation for excellent service and
reliability may be damaged.
Mitigating activities
* A rigorous selection process is in place for key Direction
suppliers, with evaluation and monitoring of quality, (R) Risk inherent in
production capability and capacity, ethical standards increasing supplier concentration
and financial stability. (R) Increased
* Wherever possible, relationships are maintained with
suitable alternative suppliers for each product
category.
* Secondary relationships are in place with alternative
parcel carriers.
Disturbance in established marketing techniques
Description of risk
The success of the business relies on its ability to attract
new and retain existing customers through a variety of
marketing techniques. These methods may become less effective
as follows:
Offline: The flow of print catalogues and sample packages
would be disrupted by the incapacity of the US Postal Service
to make deliveries, for example due to natural disasters
or labour activism.
Online: Search engines are an important source for channelling
customer activity to 4imprint's websites. The efficiency
of search engine marketing could be adversely affected
if the search engines were to modify their algorithms or
otherwise make substantial changes to their practices.
Potential impact
* If sustained over anything more than a short time Link to strategy
period, an externally-driven decrease in the (R) Market leadership
effectiveness of key marketing techniques would cause (R) Organic revenue
damage to the customer file as customer acquisition growth
and retention fall. This would affect order flow and (R) Cash generation
revenue in the short term and the productivity of the and profitability
customer file over a longer period, impacting growth
prospects.
Mitigating activities
* Offline: Developments in the US Postal Service are Direction
closely monitored through industry associations and (R) Successful marketing
lobbying groups. Alternative parcel carriers are diversification in 2018
continuously evaluated. via the introduction
of the brand marketing
investment
* Online: Management stays very close to new (R) Decreased
developments and emerging technologies in the online
space. Efforts are focused on anticipating changes
and ensuring compliance with both the requirements of
providers and applicable laws.
* The Marketing team constantly tests and evaluates new
marketing techniques and opportunities in order to
broaden the overall marketing portfolio and to reduce
the dominance of any one constituent element. An
example is the brand marketing campaign launched
during 2018.
Reliance on key personnel
Description of risk
Performance depends on the ability of the business to continue
to attract, motivate and retain key staff. These individuals
possess sales and marketing, merchandising, supply chain,
IT, financial and general management skills that are key
to the continued successful operation of the business.
Potential impact
* The loss of key employees or inability to attract Link to strategy
appropriate talent could adversely affect the Group's (R) Market leadership/revenue
ability to meet its strategic objectives, with a growth
consequent negative impact on future results. (R) Cash generation
and profitability
(R) Shareholder value
Mitigating activities
* The business is proactive in aiming to deliver a Direction
first class working environment. In addition, (R) The business has
competitive employment terms and incentive plans are been able to attract
designed with a view to attracting and retaining key and retain appropriate
personnel. talent
(R) = Unchanged
Technological risks
Failure or interruption of information technology systems
and infrastructure
Description of risk
The business is highly dependent on the efficient functioning
of its IT infrastructure. An interruption or degradation
of services at any 4imprint operational facility would
affect critical order processing systems and thereby compromise
the ability of the business to deliver on its customer
service proposition.
Potential impact
* In the short term, orders would be lost and delivery Link to strategy
deadlines missed, decreasing the efficiency of (R) Market leadership
marketing investment and impacting customer (R) Organic revenue growth
acquisition and retention. (R) Cash generation and
profitability
* Revenue and profitability are directly related to
order flow and would be adversely affected as a
consequence of a major IT failure.
* Depending on the severity of the incident, longer
term reputational damage could result.
Mitigating activities
* There is significant ongoing investment in both the Direction
IT team supporting the business and the hardware and (R) The IT platform is
software system requirements for a stable and secure mature, and performance
operating platform. has been efficient and
resilient
(R) = Unchanged
* Back-up and recovery processes are in place,
including immediate replication of data to an
alternative site, to minimise the impact of
information technology interruption.
* Cloud-based hosting for eCommerce and other back end
functionality.
Failure to adapt to new technological innovations
Description of risk
The operating platforms of the business may not be able
to respond and adapt to rapid changes in technology. If
the development of websites and customer-facing applications
for alternative devices and platforms is slow or ineffective
the business could lose competitive edge. In addition,
the development of order processing, supplier-facing and
data analytics technologies could fail to deliver the improvements
in speed, ease and efficiency necessary to attract and
retain a productive customer base.
Potential impact
* If the business fails to adapt to new technologies Link to strategy
and therefore falls behind in the marketplace, it may (R) Market leadership
fail to capture the number of new customers and (R) Organic revenue growth
retain existing customers at the rate required to
deliver the growth rates called for in the Group's
strategic plan.
Mitigating activities
* Management has a keen awareness of the need to keep Direction
pace with the rapidly changing and continuously (R) Innovation remains
evolving technological landscape. a priority
(R) = Unchanged
* An appetite for technological innovation is
encouraged in the business. Sustained investment is
made in the development of both outward-facing and
back office systems.
Security of customer data
Description of risk
Unauthorised access to and misappropriation of customer
data could lead to reputational damage and loss of customer
confidence. This is a rapidly changing environment, with
new threats emerging on an almost daily basis.
Potential impact
* A significant security breach could lead to Link to strategy
litigation and losses, with a costly rectification (R) Cash generation
process. In addition, it might be damaging to the and profitability
Group's reputation and brand. (R) Shareholder value
* An event of this nature might result in significant
expense, impacting the Group's ability to meet its
strategic objectives.
Mitigating activities
* The business employs experienced IT staff whose focus Direction
is to mitigate IT security violations. Investment in (R) The general incidence
software and other resources in this area continues and publicity around
to be a priority. cyber-crime continues
to increase
(R) Increased
* Due to the ever-evolving nature of the threat,
emerging cyber risks are addressed by the IT security
team on a case-by-case basis.
* Technical and physical controls are in place to
mitigate unauthorised access to customer data and
there is an ongoing investment process in place to
maintain and enhance the integrity and efficiency of
the IT infrastructure and its security.
C. Related party transactions
There are no related party transactions requiring
disclosure.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSUAVSRKOASRAR
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April 01, 2019 10:57 ET (14:57 GMT)
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