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
ACSURVKRRWUOORR
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