TIDMFOUR

RNS Number : 0397I

4imprint Group PLC

30 March 2020

30 March 2020

4imprint Group plc (the "Company")

Publication and Posting of 2019 Annual Report and Accounts

The Company has published its 2019 Annual Report and Accounts, together with a Notice of Annual General Meeting and Form of Proxy and 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 (the "AGM") of the Company is scheduled to be held at 11.00 on 5 May 2020 at the offices of Peel Hunt, Moor House, 120 London Wall, London EC2Y 5ET.

However, following the announcements by the Government requiring people to stay at home, except for certain limited reasons, social distancing and the restrictions on public gatherings, Shareholders are strongly discouraged from seeking to attend the AGM in person . These Government and public health measures will impact the format and attendance at the AGM and may impact its location.

If the public health guidance remains unchanged, the AGM this year will be run as a closed meeting and Shareholders will not be able to attend in person. The format will be purely functional in order to comply with the relevant legal requirements and likely attended only by one Director and the Company Secretary. Accordingly, we strongly encourage all Shareholders to exercise their right to appoint a proxy by returning a completed proxy card or by voting online in advance of the meeting at www.signalshares.com . Full details on voting by proxy are contained in the Shareholder notes to the Notice of Meeting.

We will continue to monitor the situation and the latest available public health guidance, and updates about the AGM (including any requirement to change the location of the AGM) will be communicated with Shareholders before the meeting through the Corporate website https://investors.4imprint.com and via announcement on the Regulatory Information Service.

A condensed set of the financial statements for the 52 weeks ended 28 December 2019 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 3 March 2020. 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, and page references are to pages in the 2019 Annual Report and Accounts.

For further information, please contact:

Emma Taylor

Company Secretary

4imprint Group plc

Tel: 020 3709 9680

E-mail: agm@4imprint.com

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 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 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 

-- 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.

The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Board of Directors on pages 38 and 39, confirm that, to the best of their knowledge:

-- The Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company

-- The Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group

-- The Strategic Report on pages 6 to 36 and Directors' Report on pages 56 and 57 include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces

Emma Taylor

Company Secretary

3 March 2020

B. Principal risks and uncertainties

The list below is extracted in full and unedited from the 2019 Annual Report and Accounts, pages 22 to 26.

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                                                    Link to strategy 
        *    Customer acquisition and retention could fall,                (R) Organic revenue growth 
             impacting revenue in current and future periods.              (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                                               Direction 
        *    Management monitors economic and market conditions to         (R) International trade 
             ensure that appropriate and timely adjustments are            tensions and political 
             made to marketing and other budgets.                          instability have increased 
                                                                           economic volatility in 
                                                                           the US 
        *    The customer proposition in terms of promotions,              (R) Brexit uncertainty 
             price, value and quality of product can be adjusted           in the UK has led to 
             to resonate with customer requirements and budgets in         lack of business confidence 
             changing economic climates.                                   (R) Potential development 
                                                                           of COVID-19 virus into 
                                                                           a pandemic 
        *    The Group's balance sheet funding policy (see page            Increased 
             20) aims to provide operational and financial 
             flexibility to facilitate continued investment in the 
             business through different economic cycles. 
 
 
 Markets & competition 
 
   Description of risk 
   The promotional products markets in which the business 
   operates are intensely competitive. The development of 
   buying groups and online marketplaces may allow competitors 
   to reach a broader audience. New or disruptive business 
   models looking to break down the prevailing distributor/supplier 
   structure may become a threat. Private equity interest 
   in the promotional products industry has increased in recent 
   years, offering potential funding for existing competitors 
   or new entrants. 
      Potential impact                                                    Link to strategy 
        *    Aggressive competitive activity or a disruptive new           (R) Market leadership 
             model could result in pressure on prices, margin              (R) Organic revenue growth 
             erosion and loss of market share, impacting the               (R) Cash generation and 
             financial results.                                            profitability 
 
 
        *    The Group's strategy based on achieving organic 
             revenue growth in fragmented markets may need to be 
             reassessed. 
      Mitigating activities                                                Direction 
        *    An open-minded culture and an appetite for technology          (R) The competitive landscape 
             are encouraged, with the aim of positioning the                to date has been relatively 
             business at the forefront of innovation in the                 consistent in our main 
             industry.                                                      markets 
                                                                            (R) No disruptive model 
                                                                            has yet gained much traction 
        *    Management closely monitors competitive activity in            in the industry 
             the marketplace.                                               = Unchanged 
 
 
        *    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                                                   Link to strategy 
        *    The financial results of trading operations, and             (R) Cash generation and 
             therefore overall profitability, may be negatively           profitability 
             affected.                                                    (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                                                 Direction 
        *    The Group reports its results in US dollars,                    (R) Political instability, 
             minimising currency impact on reported revenue,                 interest rate policy 
             operating profit and net assets since trading                   and trade tensions (US) 
             operations are concentrated mainly in North America.            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                     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                                                    Link to strategy 
         *    The inability to service customer orders over any             (R) Market leadership 
              extended period would result in significant revenue           (R) Organic revenue 
              loss, deterioration of customer acquisition and               growth 
              retention metrics and diminished return on marketing          (R) Cash generation 
              investment.                                                   and profitability 
 
 
         *    The Group's reputation for excellent service and 
              reliability may be damaged. 
      Mitigating activities                                                Direction 
        *    Back-up and business continuity procedures are in              (R) No significant 
             place to ensure that customer service disruption is            change in the nature 
             minimised. This includes customer service resource             or likelihood of these 
             based at a separate location and team members working          risks 
             from home.                                                     = 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 back-up 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; (ii) a key supplier's own supply chain is compromised 
   by 'force majeure' events in the country of original product 
   manufacture, for example natural disasters, social/political 
   unrest or pandemic; or (iii) 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                                                     Link to strategy 
        *    Inability to fulfil customer orders would lead to              (R) Market leadership 
             lost revenue and a negative impact on customer                 (R) Organic revenue 
             acquisition and retention statistics.                          growth 
                                                                            (R) Cash generation 
                                                                            and profitability 
        *    The Group's reputation for excellent service and 
             reliability may be damaged. 
      Mitigating activities                                                  Direction 
        *    A rigorous selection process is in place for key                 (R) Risk inherent in 
             suppliers, with evaluation and monitoring of quality,            increasing supplier 
             production capability and capacity, ethical standards,           concentration 
             financial stability and business continuity planning.            (R) Spread of Coronavirus 
                                                                              has increased risk 
                                                                              Increased 
        *    Very close relationships are maintained with key 
             suppliers, including a detailed shared knowledge of 
             factory locations, operations and capabilities in the 
             country of original product manufacture, allowing 
             swift understanding of and appropriate reaction to 
             events. 
 
 
        *    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. 
   In addition, the evolving landscape around data privacy 
   legislation potentially affects our ability, both online 
   and offline, to access and analyse customer data information. 
      Potential impact                                                     Link to strategy 
        *    If sustained over anything more than a short time              (R) Market leadership 
             period, an externally driven decrease in the                   (R) Organic revenue 
             effectiveness of key marketing techniques would cause          growth 
             damage to the customer file as customer acquisition            (R) Cash generation 
             and retention fall. This would affect order flow and           and profitability 
             revenue in the short term and the productivity of the 
             customer file over a longer period, impacting growth 
             prospects. 
 
 
        *    Restrictive data privacy legislation could 
             significantly decrease the yield on our marketing 
             activities. 
      Mitigating activities                                                   Direction 
        *    Offline : Developments in the US Postal Service are               (R) Successful marketing 
             closely monitored through industry associations and               diversification continues 
             lobbying groups. Alternative parcel carriers are                  via the successful 
             continuously evaluated.                                           integration of a brand 
                                                                               component to the marketing 
                                                                               portfolio 
        *    Online: Management stays very close to new                        Decreased 
             developments and emerging platforms 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. 
 
 
        *    Data privacy requirements are monitored closely and 
             assessed. 
 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                                                    Link to strategy 
         *    The loss of key employees or inability to attract             (R) Market leadership/revenue 
              appropriate talent could adversely affect the Group's         growth 
              ability to meet its strategic objectives, with a              (R) Cash generation 
              consequent negative impact on future results.                 and profitability 
                                                                            (R) Shareholder value 
       Mitigating activities                                                  Direction 
         *    The business is proactive in aiming to deliver a                 (R) The business has 
              first class working environment. In addition,                    been able to attract 
              competitive employment terms and incentive plans are             and retain appropriate 
              designed with a view to attracting and retaining key             talent 
              personnel.                                                       = Unchanged 
 
 
         *    Succession planning. 
 

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                                                   Link to strategy 
         *    In the short-term, orders would be lost and delivery         (R) Market leadership 
              deadlines missed, decreasing the efficiency of               (R) Organic revenue growth 
              marketing investment and impacting customer                  (R) Cash generation and 
              acquisition and retention.                                   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                                                 Direction 
        *    There is significant ongoing investment in both the             (R) The IT platform is 
             IT team supporting the business and the hardware and            mature, and performance 
             software system requirements for a stable and secure            has been efficient and 
             operating platform.                                             resilient 
                                                                             = 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 are 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                                                    Link to strategy 
         *    If the business fails to adapt to new technologies            (R) Market leadership 
              and therefore falls behind in the marketplace, it may         (R) Organic revenue growth 
              fail to capture the number of new customers and 
              retain existing customers at the rate required to 
              deliver the growth rates called for in the Group's 
              strategic plan. 
      Mitigating activities                                                  Direction 
        *    Management has a keen awareness of the need to keep              (R) Innovation remains 
             pace with the rapidly changing and continuously                  a priority 
             evolving technological landscape.                                = 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. 
 
 
 Cyber threats 
 
   Description of risk 
   Malware, ransomware and other malicious cyber threats can 
   lead to system failure and/or unauthorised access to and 
   misappropriation of customer data, potentially leading 
   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                                                   Link to strategy 
         *    Revenue and profitability are directly related to            (R) Cash generation 
              order flow and would be adversely affected as a              and profitability 
              consequence of system compromise.                            (R) Shareholder value 
 
 
         *    A significant security breach could lead to 
              litigation and losses, with a costly rectification 
              process. In addition, it might be damaging to the 
              Group's reputation and brand. 
 
 
         *    An event of this nature might result in significant 
              expense, impacting the Group's ability to meet its 
              strategic objectives. 
      Mitigating activities                                                 Direction 
        *    The business employs experienced IT staff whose focus           (R) The general incidence 
             is to mitigate IT security violations. Investment in            and publicity around 
             software and other resources in this area continues             cyber-crime continues 
             to be a high priority.                                          to increase 
                                                                             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

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