TIDMFOUR
RNS Number : 9770V
4imprint Group PLC
13 August 2020
13 August 2020
4imprint Group plc
Half year results for the period ended 27 June 2020
(unaudited)
4imprint Group plc (the "Group" or the "Company"), the leading
direct marketer of promotional products, announces its half year
results for the period ended 27 June 2020.
Financial overview Half year Half year
2020 2019
$m $m Change
---------- ----------
Revenue 265.81 405.06 -34%
Underlying* profit before tax 0.25 19.79 -99%
Profit before tax 0.03 19.45 -100%
------------------------------------- ---------- ---------- ---------------
Underlying* basic EPS (cents) 0.73 55.81 -99%
Basic EPS (cents) 0.07 54.81 -100%
Interim dividend per share (cents) nil 25.00 -100%
Interim dividend per share (pence) nil 20.52 -100%
------------------------------------- ---------- ---------- ---------------
* Underlying is before defined benefit pension charges and
exceptional items.
The results for the half year and prior half year are
unaudited.
Operational overview
* H1 results significantly impacted by COVID-19
pandemic
* 470,000 total orders processed in H1 2020 (2019:
778,000)
* Business successfully managed through 'lockdown'
* Safety and retention of team members prioritised
* Marketing recalibrated to resonate with customers
during the pandemic whilst producing material cost
savings
* Order counts have recovered to a current run rate
above 50% of prior year
* Strong financial position; cash balance of $37.49m at
half year
Paul Moody, Chairman said:
" Although significant uncertainty remains over the likely
duration and extent of the pandemic, the Board is confident that
the core strength of the Group's highly flexible business model and
competitive positioning will allow it to take advantage of the
opportunity presented by a recovering market, leaving it well
placed to re-establish the growth pattern of recent years."
For further information, please contact:
4imprint Group plc MHP Communications
Tel. + 44 (0) 20 3709 9680 Tel. + 44 (0) 20 3128 8794 / +44
(0) 7884 494112
Kevin Lyons-Tarr - CEO Katie Hunt
David Seekings - CFO Rachel Mann
Chairman's Statement
Impact of COVID-19
The first half of 2020 was dominated by the spread of the
COVID-19 pandemic and its impact on our business. From early March
onwards the Group experienced unprecedented disruption and
challenges on many levels. Trading was severely affected as weekly
order counts plunged from 13% ahead of prior year for the first two
months of the year to a low point in mid-April of less than 20% of
the 2019 comparative. Order counts have subsequently recovered to a
current run rate of above 50% of prior year.
This demand profile produced a material negative impact on
financial performance. Group revenue in the first half of 2020 was
$265.81m, a decrease of $139.25m or 34% from prior year. Profit
before tax was just above breakeven for the six-month period,
(2019: $19.45m), resulting in basic earnings per share of 0.07c,
(2019 54.81c).
Response
Our actions in response to the COVID-19 crisis have focused on
protecting the long-term prospects of the business, staying true to
our culture, and mitigating adverse consequences for our
stakeholders. In particular:
-- We have pursued a people-led approach during this difficult
time. The protection and retention of our team members is central
to our culture and remains essential to our success. This approach
gives us full confidence in our ability to provide excellent
service to our customers and to capitalise fully on the
opportunities that will emerge as demand levels recover.
-- We successfully managed the enforced closure of our office
and distribution operations during several weeks of 'lockdown', and
the subsequent staged re-opening of these facilities observing
health and safety as well as social distancing protocols. An
expanded 'work from home' capability has allowed us to continue
providing excellent customer service throughout this challenging
period.
-- We have worked together with our suppliers more closely than
ever to ensure product availability in the context of a changing
product mix and a challenging production environment. Our promise
to pay our suppliers on time has been kept.
-- We have radically recalibrated our marketing activities in
order to maintain a presence with both existing and prospective
customers. This has proved effective and appropriate in materially
reducing spend at a time of decreased demand while also protecting
the longer-term prospects of the business.
-- We have prioritised cost control and cash conservation to
preserve liquidity, controlling discretionary spend, delaying
capital projects, removing any bonus payments for 2020 and
cancelling the final dividend that had been declared with the 2019
full year results.
Communication and governance
At a time of severe operational disruption, the Board has worked
to ensure strong and effective communication and active governance
including but not limited to:
-- Full attendance at all Board meetings and supplementary
conference calls, often convened at short notice.
-- Uninterrupted internal information flow, including KPIs,
scheduled financial reporting and regular updates to the Board by
the Executive Directors.
-- Clear and timely external information flow, specifically
trading updates to the market detailing order counts, operational
adjustments and the Group's liquidity position, followed up with
extensive investor engagement.
-- Regular updates from the CEO to all team members, updating
them on the impact of COVID-19 and our evolving plans.
Dividend
At the 2019 final results in March, we proposed a final dividend
of 59.00c. As the extent of the pandemic became clear, and in order
to maintain maximum liquidity, we took the prudent step of
cancelling that dividend. In the face of substantial residual
economic uncertainty, we are not proposing an interim dividend for
2020.
Pension update
As previously agreed with the Trustee, in May 2020 we paid a
'lump sum' contribution of $9.14m into our legacy defined benefit
pension plan. In addition to improving the funding level of the
plan, this contribution sets in motion the final phase of our
pension de-risking strategy by positioning the plan for eventual
buyout within a five-year timeframe.
Outlook
Thanks to strong trading pre-pandemic and a prudent balance
sheet funding philosophy, the Group was in excellent financial
health coming in to the COVID-19 crisis. This has permitted
management to make decisions that support the longer-term health of
the business and are consistent with 4imprint's purpose and
culture. The Group remains in a strong financial position with good
liquidity, including a cash balance at the half year of $37.49m and
an undrawn, committed bank facility of $20.00m.
Although significant uncertainty remains over the likely
duration and extent of the pandemic, the Board is confident that
the core strength of the Group's highly flexible business model and
competitive positioning will allow it to take advantage of the
opportunity presented by a recovering market, leaving it well
placed to re-establish the growth pattern of recent years.
Paul Moody
Chairman
13 August 2020
Operating and Financial Review
Operating Review
Half year Half year
2020 2019
Revenue $m $m Change
---------------- ---------- ---------- -------
North America 260.54 394.43 -34%
UK and Ireland 5.27 10.63 -50%
---------------- ---------- ---------- -------
Total 265.81 405.06 -34%
---------------- ---------- ---------- -------
Half year Half year
2020 2019
Underlying* operating profit $m $m Change
------------------------------ ---------- ---------- -------
Direct Marketing operations 1.92 21.16 -91%
Head office (1.79) (1.73) -3%
Total 0.13 19.43 -99%
------------------------------ ---------- ---------- -------
* Underlying is before defined benefit pension charges and
exceptional items.
The results for the half year and prior half year are
unaudited.
Overview
After a decade of strong year-over-year organic growth,
increased market share in keeping with our strategic objectives and
successful expansion of our operations, the emergence of the
COVID-19 pandemic in the first half of 2020 caused an unprecedented
collapse in demand that severely impacted our results. This
situation has presented a multitude of challenges, but equally it
has brought out the best in our team members who have worked
tirelessly to adapt our operational capabilities and thoroughly
test the resilience of our business model.
2020 started auspiciously, with total orders received up more
than 13% over prior year at the end of February. From the second
week in March onwards, however, we experienced a significant
reduction in daily order flow as 'lockdown' orders were widely
implemented. Order counts in the US hit a low point in the second
week of April, falling to less than 20% of the comparative week in
2019. Demand activity in the small UK business also saw a sharp
contraction during this period. As the partial or full lifting of
restrictions began in many US states in May and early June, weekly
order counts increased steadily, and are now running above 50% of
prior year. In total, just over 470,000 orders were processed in
the first half on 2020, compared to more than 778,000 in the same
period in 2019.
Encouragingly, we continued to acquire new customers during this
period, albeit at much lower levels, with the new-to-existing
customer ratio staying in a broadly stable band throughout. In
addition, the average order value was higher than historical
comparatives during this period of depressed demand.
As a direct result of these factors, Group revenue of $265.81m
was 66% of the prior year number of $405.06m. Underlying operating
profit was $0.13m, (2019: $19.43m). Although clearly very
disappointing as a financial result, this half year performance
must be set in the context of extreme circumstances and is
materially ahead of the bleakest scenarios contemplated in April.
In addition, swift decision making and a very keen eye on cost have
minimised operational cash burn in the first half of the year,
leaving the Group with a strong liquidity position and a firm
platform for further recovery as market conditions improve.
Operational summary
Throughout the pandemic, our first priority has been the health,
safety and wellbeing of our team members. We have operated in
compliance with evolving governmental guidelines and best
practices, and robust safety and social distancing protocols have
been implemented in our facilities. We have prioritised the
retention of our team members, staying true to the culture that has
been essential to our success over many years. Whilst involving an
element of short-term financial investment, we believe that this
approach puts us in the best possible position to capitalise on the
opportunities arising from an eventual economic recovery.
Since the beginning of the pandemic we have been able to provide
an undiminished service offering to our customers via an enhanced
and expanded 'work from home' capability. Firstly, this allowed us
to provide continuity of service under 'lockdown' conditions.
Secondly, even though our office and distribution facilities are
now fully re-opened, a majority of our office-based team members
continue to work productively from home, minimising the risk of
virus transmission and making effective social distancing much more
practical.
Given the global nature of the pandemic, our supply chain has
not been left unaffected by the crisis. At the start of the year
our initial concerns centered on the blank goods imported by our
domestic suppliers to be printed as our customers order them. Those
concerns were largely mitigated by the timing of the inventory
cycle relative to the Chinese New Year. The more significant impact
in the period was related to the myriad of logistical and
production implications caused by the rapidly changing situation
regarding local lockdowns, delivery delays and other challenges.
Our long-term, close working relationships with our suppliers meant
that we worked together very effectively, ensuring the best
possible flow of products and service to our customers even during
the 'lockdown' period. We are proud of what we have achieved
together with our supplier partners during this very challenging
time.
Marketing, which is at the center of our strategy and has driven
our significant growth over the years, is the largest expense in
the business. In reaction to the impact of the pandemic, we
radically recalibrated our marketing activities in a very short
space of time. Catalogue circulation and Blue Box (TM) mailings
were stopped and have only recently begun to be added back to the
mix as more customers return to their place of work. Search engine
spend was significantly reduced to align with lower demand in the
market. We developed and deployed two new TV campaigns during the
period, each delivering contextually appropriate messaging to
potential new customers and to our existing customers during this
difficult time, while also taking advantage of dramatically lower
airing costs. The different elements of this marketing
recalibration resulted in a material overall cost reduction.
Marketing costs in the second quarter were $9.49m, compared to
$41.10m in the same period in 2019, striking an effective balance
between maintaining brand awareness and capturing the limited
demand in the market at the same time as preserving cash to allow
increased investment in marketing as and when conditions
warrant.
Cash conservation has been central to our management of the
business throughout the COVID-19 crisis. All discretionary overhead
cost has been tightly controlled and any incentive or bonus
compensation has been cancelled for the year. Capital expenditure
has been reduced to the minimum and most planned projects have been
postponed. These measures, along with the major marketing cost
reductions outlined above, have allowed us to maintain the Group's
culture and preserve a strong financial position as we enter the
second half of 2020.
Competitive position
The Group's financial strength has allowed us the flexibility to
make decisions that support the ongoing investment in our people
and our marketing activities. These are crucial elements underlying
the enduring agility, resilience - and success - of our very low
fixed cost direct marketing business model.
We came into the COVID-19 crisis in a strong position, growing
rapidly on the back of an effective strategy. Although the pandemic
has had a dramatic and negative impact on demand in the promotional
products industry, we remain confident in the business model and
the strategy. Whilst it is impossible to reliably predict the
timing and trajectory of a recovery, we are poised to take full
advantage of the eventual market share opportunities that will
result.
Financial Review
Half year Half year Half
2020 2019 year Half year
Underlying* Underlying* 2020 2019
Total Total
$m $m $m $m
-------------------------------- ------------- ------------- ------- ----------
Underlying* operating profit 0.13 19.43 0.13 19.43
Defined benefit pension scheme
administration costs (0.16) (0.14)
Net finance income 0.12 0.36 0.12 0.36
Pension finance charge (0.06) (0.20)
Profit before tax 0.25 19.79 0.03 19.45
-------------------------------- ------------- ------------- ------- ----------
* Underlying is before defined benefit pension charges and
exceptional items.
The results for the half year and prior half year are
unaudited.
The Group's operating result in the period, summarising expense
by function, was as follows:
Half year Half year
2020 2019
$m $m
------------------------------ ---------- ----------
Revenue 265.81 405.06
------------------------------ ---------- ----------
Gross profit 77.28 131.67
Marketing costs (47.16) (79.18)
Selling costs (15.21) (15.31)
Admin & central costs (14.36) (17.24)
Share option related charges (0.42) (0.51)
------------------------------ ---------- ----------
Underlying operating profit 0.13 19.43
------------------------------ ---------- ----------
After strong trading in the first two months, the spread of the
COVID-19 pandemic had a significant detrimental effect on Group
performance in the remainder of the first half of 2020. Group
revenue for the period was $265.81m (2019: $405.06m), a decrease of
34.4%, reflecting a significant drop in demand.
The gross profit percentage in the first half reduced to 29.1%
(2019: 32.5%). The primary influences, in order of magnitude, were:
(i) excess production labour classified within cost of sales
(embroidery, warehouse, artwork) not fully absorbed against low
order volume; (ii) elevated average order values attracting higher
customer volume discounts; (iii) product mix and residual
tariff-related product cost increases; and (iv) lower supplier
rebate accrual rates due to decreasing volume.
Marketing costs were 17.7% of revenue in the period, comparing
favourably to 19.5% of revenue in 2019. This reflects swift and
decisive realignment of the marketing portfolio in the face of
decreased demand.
Shown within admin costs is $3.51m of employee retention credits
under the US CARES Act. Head Office costs were essentially flat
year-over-year at $1.79m.
As a result of the above factors, underlying operating profit
was just above breakeven at $0.13m (2019: $19.43m).
Foreign exchange
The Group reports in its primary trading currency, US dollars.
Sterling/US dollar is the exchange rate most relevant to the
Group's financial performance.
Half year 2020 Half year 2019 Full year 2019
Period Average Period Average Period end Average
end end
---------- ------- -------- ------- -------- ----------- --------
Sterling 1.23 1.26 1.27 1.29 1.31 1.28
---------- ------- -------- ------- -------- ----------- --------
The primary foreign exchange factors relevant to the Group's
operations are as follows:
-- Translational risk in the income statement remains low. In
the first half of 2020 98% of the Group's revenue was in US
dollars, the Group's reporting currency. The net impact from
currency movements on the 2020 half year income statement was not
material to the Group's results.
-- Most of the constituent elements of the Group balance sheet
are US dollar-based. The main exception to this is the
Sterling-based defined benefit pension liability. Currency
movements produced an exchange gain on the pension liability of
$0.86m for the first half of 2020.
-- The Group generates cash mostly in US dollars, but its
primary applications of post-tax cash are Shareholder dividends,
pension contributions and some Head Office costs, all of which are
paid in Sterling. As such, the Group's cash position is sensitive
to Sterling/US dollar exchange movements. To the extent that
Sterling weakens against the US dollar, more funds are available in
payment currency to fund these cash outflows.
Share option charges
A total of $0.42m (2019: $0.51m) was charged in the period in
respect of IFRS 2 'Share-based payments'. This charge was made up
of two elements: (i) executive awards under the 2015 Incentive Plan
and (ii) charges in respect of the 2019 UK SAYE Scheme and the 2018
US Employee Stock Purchase Plan.
Current options outstanding are: 115,563 share options under the
UK SAYE and US ESPP schemes; and 68,472 share options and awards
under the 2015 Incentive Plan.
Net finance income
Net finance income in the period was $0.12m (2019: $0.36m). This
is made up of external interest received on deposits, offset by
fees on borrowing facilities and lease interest charges under IFRS
16. The year-over-year reduction in net external interest is due
primarily to lower yields on lower deposits.
Taxation
The tax charge for the half year was $0.01m (2019: $4.08m). The
composite tax rate of 21% (2019: 21%) reflects the expected tax
rate for the Group for the full year in 2020. The charge relates
principally to taxation payable on profits earned in the USA.
Earnings per share
Underlying basic earnings per share was 0.73c (2019: 55.81c), a
decrease of 98.7%. This reflects the decrease of 98.7% in
underlying profit after tax, and a weighted average number of
shares in issue similar to prior year.
Basic earnings per share was 0.07c (2019: 54.81c), a decrease of
99.9% over prior year.
Dividends
In April 2020 the Board took the prudent step to cancel the 2019
final dividend due to be paid in May 2020. This decision was taken
in order to maintain maximum flexibility and liquidity for the
business at a time of significant uncertainty as to how quickly
markets might recover. Inherent uncertainty remains at the time of
reporting the 2020 half year results, and as such the Board is not
proposing an interim dividend for 2020.
Importantly, the Board has not fundamentally changed its
dividend policy, and it will continually reassess this position in
future periods.
Defined benefit pension scheme
The Group sponsors a legacy UK defined benefit scheme which has
been closed to new members and future accruals for several years.
The scheme has 97 pensioners and 260 deferred members.
At 27 June 2020, the deficit of the scheme on an IAS 19 basis
was $3.51m, compared to $12.31m at 28 December 2019. Gross scheme
liabilities under IAS 19 were $37.24m and assets were $33.73m.
The change in deficit is analysed as follows:
$m
------------------------------------------------------------- --------
IAS 19 deficit at 29 December 2019 12.31
Pension administration costs paid by the scheme 0.17
Pension finance charge 0.06
Contributions by employer (10.91)
Re-measurement losses on post-employment obligations 3.93
Return on pension scheme assets (excluding interest income) (1.19)
Exchange gain (0.86)
-------------------------------------------------------------- --------
IAS 19 deficit at 27 June 2020 3.51
-------------------------------------------------------------- --------
The net liability decreased by $8.80m in the period, driven
primarily by employer's contributions of $10.91m and return on
assets of $1.19m, offset by remeasurement losses of $3.93.
The Company paid a 'lump sum' deficit contribution of GBP7.5m
($9.14m) in May 2020. This was in addition to the regular monthly
contributions into the Plan. These contributions are part of a
recovery plan agreed by the Company and the Trustee that aims
towards funding on a buyout basis by mid-2024.
Cash flow
Net cash was $37.49m at 27 June 2020 (29 June 2019: $42.66m; 28
December 2019: $41.14m).
Cash flow in the period is summarised as follows:
Half year Half year
2020 2019
$m $m
------------------------------------------------- ---------- ----------
Underlying operating profit 0.13 19.43
Share option non-cash charges 0.42 0.50
Depreciation and amortisation 1.65 1.35
Amortisation of right of use assets 0.82 0.75
Profit on sale of property, plant and equipment (0.08) -
Change in working capital 9.18 17.58
Capital expenditure (net) (3.25) (4.18)
------------------------------------------------- ---------- ----------
Underlying operating cash flow 8.87 35.43
Tax (0.14) (3.26)
Interest 0.12 0.36
Defined benefit pension contributions (10.91) (1.66)
Purchase of own shares (0.22) (1.28)
Capital element of lease payments (0.81) (0.82)
Exchange loss (0.56) (0.08)
------------------------------------------------- ---------- ----------
Free cash flow (3.65) 28.69
Dividends to Shareholders - (13.51)
------------------------------------------------- ---------- ----------
Net cash (outflow)/inflow in the period (3.65) 15.18
------------------------------------------------- ---------- ----------
The Group free cash flow in the period before the special
pension contribution of $9.14m was $5.49m (2019: $28.69m), further
emphasising the efficient and cash generative qualities of the
Group's business model even in the challenging circumstances
resulting from the COVID-19 pandemic.
Working capital inflow in the first half of 2020 was $9.18m,
principally reflecting typical seasonal fluctuations in payables
and receivables around mid-year.
Capital expenditure was $3.25m in the period (2019: $4.18m). In
the interests of cash conservation, minimal further capital
expenditure projects are planned for the remainder of 2020.
$0.22m of cash was paid in the period to the Employee Benefit
Trust. These funds were used to purchase 4imprint Group plc shares
in order to cover the requirements of the US ESPP scheme, which
matures in December 2020, and future UK SAYE and 2015 Incentive
Plan maturities.
Balance sheet and Shareholders' funds
Net assets at 27 June 2020 were $61.18m, compared to $62.95m at
28 December 2019. The balance sheet is summarised as follows:
27 June 28 December
2020 2019
$m $m
-------------------------------- -------- ------------
Non-current assets 31.86 31.84
Working capital (4.04) 5.15
Net cash 37.49 41.14
Pension deficit (3.51) (12.31)
Other assets/(liabilities) net (0.62) (2.87)
Net assets 61.18 62.95
-------------------------------- -------- ------------
Shareholders' funds reduced by $1.77m since the 2019 year end.
Constituent elements of the movement were net profit in the period
of $0.02m and $0.42m of share option related movements, net of
$(0.02) exchange, $(1.98)m of net pension movements and own share
transactions of $(0.21)m.
The Group had a net negative working capital balance of $(4.04)m
at 27 June 2020, ($(11.73)m at 29 June 2019). This is a typical
half year working capital profile reflecting the low capital
requirements of the Group.
The net pension deficit, stated on an IAS 19 basis, reflects the
'lump sum' payment of $9.14m made into the plan in May 2020.
Financing and liquidity
Full details of the Board's balance sheet funding guidelines and
capital allocation priorities were set out on page 20 of the
Group's 2019 Annual Report & Accounts. The Board retains the
same guidelines in both of these areas.
The primary aim of the Group's conservative balance sheet
funding approach is to facilitate continued investment in
marketing, people and technology through different economic cycles,
recognising that an economic downturn typically represents a market
share opportunity for the business. As a result of this approach,
the Group entered the COVID-19 crisis with a substantial cash
balance and no debt. Despite the effects of COVID-19 on financial
performance, the Group remained in a strong financial position at
the 2020 half year, enabling management to make decisions that look
to the longer-term health of the Group and which support 4imprint's
distinctive culture.
The Group has a $20.0m working capital facility with its
principal US bank, JPMorgan Chase, N.A. The facility has standard
debt service coverage ratio and debt to EBITDA covenants. The
interest rate is US$ LIBOR plus 2.0%, and the facility expires on
31 May 2022. In addition, an overdraft facility of GBP1.0m, with an
interest rate of bank base rate plus 2.00%, is available from the
Group's principal UK bank, Lloyds Bank plc.
The Group had cash balances of $37.49m at the period end and has
no current requirement or plans to raise additional equity or core
debt funding.
Critical accounting policies
Critical accounting policies are those that require significant
judgments or estimates and potentially result in materially
different results under different assumptions or conditions. It is
considered that the Group's only critical accounting policies are
in respect of pensions and leases.
Principal risks and uncertainties
The Group may be affected by a number of risks and
uncertainties. The principal risks comprise: macroeconomic
conditions; markets & competition; currency exchange; business
facility disruption; disruption to the product supply chain or
delivery service; disturbance in established marketing techniques;
reliance on key personnel; failure or interruption of information
technology systems and infrastructure; failure to adapt to new
technological innovations; and cyber security.
At the 2020 half year these risks, uncertainties and associated
mitigating activities remain consistent with the detailed review
set out on pages 22 to 26 of the Group's Annual Report 2019, a copy
of which is available on the Group's website:
https://investors.4imprint.com. However, the COVID-19 pandemic in
the first half of 2020 has placed significant focus on certain risk
areas. The Group's effective response to these evolving risks has
been crucial, and it will shape the risk agenda for the remaining
months of the 2020 financial year. The heightened risk areas
identified, with associated commentary, are:
Macroeconomic The COVID-19 crisis has led to severe economic
conditions: disruption and a significant reduction in overall
demand in the promotional products industry.
Recovery in 4imprint's primary markets will
be dependent on the duration and scope of the
pandemic, the nature and severity of possible
future containment measures, and the potential
further deterioration in the financial health
of customers. The Group's mitigation strategies
remain unchanged, but there is closer monitoring
of economic conditions for signs of recovery
as well as maintaining liquidity and preserving
the marketing platform.
Business facility The 4imprint business model relies on centralised
disruption: facilities. 'Lockdown' orders have meant that
office and distribution facilities were essentially
closed for periods in the first half of the
year. A repetition of these facility closures
might conceivably recur in the second half of
the year. In mitigation, a robust 'work from
home' capability was in place for customer service
well before the pandemic hit and was rapidly
expanded in the first half of the year to include
most support functions.
-----------------------------------------------------
Disruption of At the start of the pandemic the supply chain
supply: looked like it could present a problem, with
around 60% of blank product originating in China.
Significant disruption in supply would lead
to lost revenue. This eventuality was largely
avoided through good timing of bulk inventory
purchases by domestic suppliers. Geo-political
risk has increased as a result of heightened
trade tensions between the US and China. Mitigation
activities are unchanged, however relationships
with key suppliers have become even closer in
recent months.
-----------------------------------------------------
The Board has ultimate responsibility for risk management. In
practice this takes the form of a pragmatic overall approach that
is tailored specifically towards the nature of the Group's business
model and operations, and the way that it is structured and
controlled. Business operations are conducted from centralised
facilities, with short reporting lines. The Executive Directors are
close to day-to-day business operations, facilitating early
identification of and proactive response to ongoing and emerging
risks.
This approach proved to be particularly appropriate in the first
half of 2020, including early and regular senior management team
meetings leading to the rapid assembly and deployment of working
groups within the business to assess impacts and make plans
covering, for example: internal/team member communications; health
and safety protocols and escalation procedures; shut-down of
facilities; continuity of customer service; supply chain; and
embroidery production. The Board has met regularly since the onset
of the pandemic, receiving regular operational updates.
Brexit
The uncertainty surrounding the Brexit process continues.
Overall, however, it is still considered that the nature and
geography of the Group's operations, with 98% of the Group's
revenue originating in North America, leave it in a strong position
to absorb any negative effects and the uncertainty does not impact
our evaluation of going concern.
Going concern statement
In accordance with the UK Corporate Governance Code 2018 the
Directors are required to state whether or not it is appropriate to
adopt the going concern basis of accounting, and to identify any
material uncertainties over the Group's ability to do so over a
period of at least twelve months from the date of these financial
statements.
Assessment of prospects
In making their assessment of the Group's liquidity risk, the
Directors have carefully considered:
-- The Group's strategy, market position and business model, as
set out on pages 8 to 17 of the 2019 Annual Report, which are
central to an understanding of its prospects.
-- The principal risks and uncertainties facing the Group, as
outlined in the Principal risks and uncertainties section of this
Financial Review.
-- Information contained in this Financial Review concerning the
Group's financial position, cash flows and liquidity position.
-- Regular management reporting and updates from the Executive Directors.
-- Recent detailed financial forecasts and analysis.
Whilst the COVID-19 pandemic has had a major impact on trading
volumes, the Board considers that the Group's strategy, competitive
position and business model remain entirely relevant and, indeed,
have proved to be resilient and agile under stress. Business
operations have been able to adapt successfully to the challenging
and rapidly changing conditions in a timely manner. The marketing
portfolio was radically re-shaped in a very short space of time,
and discretionary overhead spend has been tightly controlled,
demonstrating the essentially minimal fixed cost base of the direct
marketing model. In addition, capital spend has been minimised and
dividend payments have been temporarily halted. These actions,
coupled with the strong financial position of the Group going into
this crisis, give the Board confidence that despite substantial
residual uncertainty as to future market conditions, the Group will
be in a good position both to withstand further economic stress and
to take market share opportunities in a recovering market.
Methodology and sensitivities
In the light of the assessment of prospects outlined above, the
Group's financial results over recent years, and its performance
through the first half of 2020, the Board considers that the key
factor that would prejudice the ongoing viability and liquidity of
the Group is a significant additional decline in demand.
A 'base case' was developed for the purposes of financial
modelling. The commercial underpin to this model is the Board's
view that whilst the promotional products market has contracted in
the first half of 2020, for example due to the cancellation of
trade shows and physical events, our recent experience is that
market demand has remained resilient across the product range and
customer base. The base case started with current order volumes at
around 50% of 2019 levels, gently increasing through the second
half of 2020 and eventually returning to 100% of 2019 demand by the
end of 2021. As revenue increases, marketing costs are modelled to
return to historical levels, as measured by the Group's revenue per
marketing dollar KPI. This base case shows improving financial
results, an accumulating cash balance and no liquidity
concerns.
An alternative 'distressed' forecast was then produced to model
the effects on the Group's liquidity of an extreme downside
scenario based on severe, but plausible demand assumptions. This
model assumes a significant relapse in demand patterns beginning in
September 2020, with order volumes dropping back to 15% of 2019
levels until the end of 2020, and only recovering very gradually
through 2021 to end at around 60% of 2019 order levels. This
distressed model involves long periods of demand significantly
bleaker than the worst actual experience in April 2020 and is
intended to simulate a new COVID-19 surge, a further wave of
full-scale lockdowns, and no near-term prospect of an effective
vaccine or treatment for COVID-19, resulting in severely diminished
corporate demand in a downsized promotional products market.
Even under the extreme stress built into the distressed model,
the Group retains sufficient liquidity throughout the going concern
period. This liquidity is in the form of cash balances. In
addition, there are further mitigating actions that the Group could
take, including cutting marketing cost and reducing headcount, that
are not modelled into the distressed forecast but would, if
required, be fully under the Group's control.
The assumptions used in the base forecast and the resultant
sensitised financial forecasts have been reviewed and approved by
the Board. The conclusion of this review is that the Group has
significant flexibility in its variable costs, a very low fixed
cost base and enters the going concern period with a strong net
cash position, enabling it to remain cash positive even under
severe economic stress.
Based on the above the Directors have evaluated the Group's
prospects and have a reasonable expectation that the Group will
continue to operate and to meet its liabilities as they fall due,
for at least the next twelve months. On this basis, the Directors
continue to adopt the going concern basis in preparing the
condensed consolidated half year financial statements.
Kevin Lyons-Tarr David Seekings
Chief Executive Officer Chief Financial Officer
13 August 2020
Condensed Consolidated Income Statement (unaudited)
Half Half Full
year year year
2020 2019 2019
Note $'000 $'000 $'000
------------------------------- ------ ---------- ---------- ----------
Revenue 6 265,808 405,057 860,844
Operating expenses 7 (265,841) (385,773) (807,224)
------------------------------- ------ ---------- ---------- ----------
Operating (loss)/profit 6 (33) 19,284 53,620
------------------------------- ------ ---------- ---------- ----------
Finance income 154 402 818
Finance costs (7) (6) (22)
Interest on lease liabilities (26) (32) (45)
Pension finance charge (62) (203) (378)
------------------------------- ------ ---------- ---------- ----------
Net finance income 59 161 373
Profit before tax 26 19,445 53,993
Taxation 8 (5) (4,083) (11,276)
------------------------------- ------ ---------- ---------- ----------
Profit for the period 21 15,362 42,717
------------------------------- ------ ---------- ---------- ----------
Cents Cents Cents
------------------------------- ------ ---------- ---------- ----------
Earnings per share
Basic 9 0.07 54.81 152.42
Diluted 9 0.07 54.60 151.87
Underlying 9 0.73 55.81 154.41
------------------------------- ------ ---------- ---------- ----------
Condensed Consolidated Statement of Comprehensive Income
(unaudited)
Half Half Full
year year year
2020 2019 2019
$'000 $'000 $'000
--------------------------------------------- -------- -------- --------
Profit for the period 21 15,362 42,717
---------------------------------------------- -------- -------- --------
Other comprehensive (expense)/income
Items that may be reclassified subsequently
to the income statement:
Currency translation differences (16) (117) (173)
Items that will not be reclassified
subsequently to the income statement:
Return on pension scheme assets (excluding
interest income) 1,194 1,888 2,372
Re-measurement losses on post-employment
obligations (3,931) (3,187) (2,164)
Tax relating to components of other
comprehensive (expense)/income 520 247 (570)
Effect of change in UK tax rate 238 - (9)
---------------------------------------------- -------- -------- --------
Total other comprehensive expense net
of tax (1,995) (1,169) (544)
---------------------------------------------- -------- -------- --------
Total comprehensive (expense)/income
for the period (1,974) 14,193 42,173
---------------------------------------------- -------- -------- --------
Condensed Consolidated Balance Sheet (unaudited)
At At At
27 June 29 June 28 Dec
2020 2019 2019
Note $'000 $'000 $'000
-------------------------------- ----- --------- --------- ---------
Non-current assets
Property, plant and equipment 26,002 21,854 24,369
Intangible assets 1,140 1,075 1,152
Right-of-use assets 1,164 1,108 1,985
Deferred tax assets 3,553 5,651 4,338
-------------------------------- ----- --------- ---------
31,859 29,688 31,844
-------------------------------- ----- --------- --------- ---------
Current assets
Inventories 8,625 11,572 11,456
Trade and other receivables 31,400 48,212 52,899
Current tax 1,233 - 140
Cash and cash equivalents 37,494 42,660 41,136
-------------------------------- ----- --------- --------- ---------
78,752 102,444 105,631
-------------------------------- ----- --------- --------- ---------
Current liabilities
Lease liabilities (1,234) (1,285) (1,630)
Trade and other payables (44,067) (71,517) (59,209)
Current tax - (183) -
---------
(45,301) (72,985) (60,839)
-------------------------------- ----- --------- ---------
Net current assets 33,451 29,459 44,792
-------------------------------- ----- --------- --------- ---------
Non-current liabilities
Lease liabilities - - (415)
Retirement benefit obligations 11 (3,509) (15,046) (12,305)
Deferred tax liability (624) (1,120) (968)
(4,133) (16,166) (13,688)
-------------------------------- ----- --------- --------- ---------
Net assets 61,177 42,981 62,948
-------------------------------- ----- --------- --------- ---------
Shareholders' equity
Share capital 18,842 18,842 18,842
Share premium reserve 68,451 68,451 68,451
Other reserves 5,238 5,310 5,254
Retained earnings (31,354) (49,622) (29,599)
-------------------------------- ----- --------- --------- ---------
Total Shareholders' equity 61,177 42,981 62,948
-------------------------------- ----- --------- --------- ---------
Condensed Consolidated Statement of Changes in Shareholders'
Equity (unaudited)
Retained earnings
Share
Share premium Other Own Profit Total
capital reserve reserves shares and loss equity
$'000 $'000 $'000 $'000 $'000 $'000
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Balance at 29 December 2018 18,842 68,451 5,427 (1,466) (47,987) 43,267
Adjustments arising from
the adoption of IFRS 16 (187) (187)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Balance at 30 December 2018
after adjustment 18,842 68,451 5,427 (1,466) (48,174) 43,080
---------------------------------
Profit for the period 15,362 15,362
Other comprehensive expense (117) (1,052) (1,169)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Total comprehensive income (117) 14,310 14,193
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Share-based payment charge 502 502
Own shares purchased (1,281) (1,281)
Own shares utilised 617 (617) -
Dividends (13,513) (13,513)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
At 29 June 2019 18,842 68,451 5,310 (2,130) (47,492) 42,981
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Profit for the period 27,355 27,355
Other comprehensive income (56) 681 625
Total comprehensive income (56) 28,036 27,980
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Share-based payment charge 426 426
Proceeds from options exercised 339 339
Own shares purchased (1,625) (1,625)
Own shares utilised 726 (726) -
Deferred tax relating to
share options 94 94
Deferred tax relating to
losses re share options (101) (101)
Dividends (7,146) (7,146)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
At 28 December 2019 18,842 68,451 5,254 (3,029) (26,570) 62,948
--------- --------- ---------- -------- ---------- ---------
Profit for the period 21 21
Other comprehensive expense (16) (1,979) (1,995)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Total comprehensive income (16) (1,958) (1,974)
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Share-based payment charge 415 415
Proceeds from options exercised 17 17
Own shares purchased (229) (229)
Own shares utilised 491 (491) -
Balance at 27 June 2020 18,842 68,451 5,238 (2,767) (28,587) 61,177
--------------------------------- --------- --------- ---------- -------- ---------- ---------
Condensed Consolidated Cash Flow Statement (unaudited)
Half Half Full
year year year
2020 2019 2019
Note $'000 $'000 $'000
---------------------------------------------- ----- -------- --------- ---------
Cash flows from operating activities
Cash generated from operations 12 1,206 37,943 56,248
Tax paid (141) (3,255) (10,318)
Finance income received 154 402 818
Finance costs paid (including interest
on lease liabilities) (33) (38) (67)
---------------------------------------------- ----- -------- --------- ---------
Net cash generated from operating activities 1,186 35,052 46,681
---------------------------------------------- ----- -------- --------- ---------
Cash flows from investing activities
Purchases of property, plant and equipment (3,109) (3,964) (7,673)
Purchases of intangible assets (218) (212) (505)
Net proceeds from sale of property,
plant and equipment 82 - -
---------
Net cash utilised in investing activities (3,245) (4,176) (8,178)
---------------------------------------------- ----- -------- ---------
Cash flows from financing activities
Capital element of lease payments (811) (821) (1,687)
Proceeds from share options exercised 17 - 339
Purchase of own shares by EBT (229) (1,281) (2,906)
Dividends paid to Shareholders 10 - (13,513) (20,659)
---------------------------------------------- ----- -------- --------- ---------
Net cash used in financing activities (1,023) (15,615) (24,913)
---------------------------------------------- ----- -------- --------- ---------
Net movement in cash and cash equivalents (3,082) 15,261 13,590
Cash and cash equivalents at beginning
of the period 41,136 27,484 27,484
Exchange (losses)/gains on cash and
cash equivalents (560) (85) 62
---------------------------------------------- ----- -------- --------- ---------
Cash and cash equivalents at end of
the period 37,494 42,660 41,136
---------------------------------------------- ----- -------- --------- ---------
Analysis of cash and cash equivalents
Cash at bank and in hand 37,494 39,766 41,136
Short-term deposits - 2,894 -
---------------------------------------------- ----- -------- --------- ---------
37,494 42,660 41,136
---------------------------------------------- ----- -------- --------- ---------
Notes to the Interim Financial Statements
1 General information
4imprint Group plc is a public limited company incorporated in
England and Wales, domiciled in the UK and listed on the London
Stock Exchange. Its registered office is 25 Southampton Buildings,
London, WC2A 1AL.
These condensed consolidated interim financial statements, which
were authorised for issue in accordance with a resolution of the
Directors on 13 August 2020, do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the period ended 28 December 2019 were
approved by the Board of Directors on 3 March 2020 and delivered to
the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 498 of
the Companies Act 2006.
The financial information contained in this report has neither
been audited nor reviewed by the auditors, pursuant to Auditing
Practices Board guidance on Review of Interim Financial
Information.
2 Basis of preparation
These condensed consolidated interim financial statements for
the half year ended 27 June 2020 have been prepared, in US dollars,
in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and IAS 34 'Interim Financial
Reporting', as adopted by the European Union, and should be read in
conjunction with the Group's financial statements for the period
ended 28 December 2019, which were prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union.
After making enquiries about a number of factors, including
current trading and borrowing facilities, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue to operate for a period of at least twelve
months from the date these interim financial statements were
approved . Accordingly, they continue to adopt the going concern
basis in preparing the Interim Report and financial statements (see
Financial Review for more detail).
The tax charge for the interim period is accrued based on the
best estimate of the tax charge for the full financial year.
3 Accounting policies
The accounting policies applied in these condensed consolidated
interim financial statements are consistent with those of the
annual financial statements for the period ended 28 December 2019,
as described in those annual financial statements. New accounting
standards applicable for the first time in this reporting period,
and not early adopted by the Group, have no impact on the Group's
results.
4 Use of assumptions and estimates
The preparation of the interim financial statements requires
management to make judgments, estimates and assumptions that affect
the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making estimates about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates.
There have been no changes in the key areas involving management
estimates since the year end. Assumptions and sensitivities on the
recalculation of the defined benefit pension obligations are shown
in note 11. Assumptions on the Oshkosh lease remain unchanged (see
note 13).
5 Financial risk management
The Group's activities expose it to a variety of financial
risks: currency risk; credit risk; liquidity risk; and capital
risk. These condensed consolidated interim financial statements do
not include all financial risk management information and
disclosures required in the annual financial statements; they
should be read in conjunction with the Group's annual financial
statements for the period ended 28 December 2019. There have been
no changes in any risk management policies since that date.
6 Segmental analysis
The chief operating decision maker has been identified as the
Board of Directors and the segmental analysis is presented based on
the Group's internal reporting to the Board.
At 27 June 2020 the Group had two operating segments, North
America and UK & Eire. The costs of Head office are reported
separately to the Board, but this is not an operating segment.
Half Half Full
year year year
2020 2019 2019
Revenue $'000 $'000 $'000
North America 260,537 394,433 839,284
UK & Eire 5,271 10,624 21,560
-------------------------------------------- -------- -------- --------
Total revenue from the sale of promotional
products 265,808 405,057 860,844
-------------------------------------------- -------- -------- --------
Half Half Full
year year year
2020 2019 2019
Profit $'000 $'000 $000
North America 2,830 21,014 57,446
UK & Eire (909) 149 (42)
----------------------------------------------- -------- -------- ---------
Underlying operating profit from 4imprint
Direct Marketing 1,921 21,163 57,404
Head Office (1,789) (1,735) (3,472)
----------------------------------------------- -------- -------- ---------
Underlying operating profit 132 19,428 53,932
Defined benefit pension scheme administration
costs (165) (144) (312)
----------------------------------------------- -------- --------
Operating (loss)/profit (33) 19,284 53,620
Net finance income 121 364 751
Pension finance charge (62) (203) (378)
----------------------------------------------- -------- -------- ---------
Profit before tax 26 19,445 53,993
Taxation (5) (4,083) (11,276)
----------------------------------------------- -------- -------- ---------
Profit after tax 21 15,362 42,717
----------------------------------------------- -------- -------- ---------
7 Operating expenses
Operating expenses are shown net of US Government Employee
Retention Credits and UK Government Job Retention Scheme claims
totalling $3.64m (2019: nil).
8 Taxation
The taxation rate was 21%, based on the estimated rate for the
full year (H1 2019: 21%; FY 2019: 21%). Tax paid in the period was
$0.14m (H1 2019: $3.26m; FY 2019: $10.32m).
The deferred tax assets/liabilities at 27 June 2020 have been
calculated at a tax rate of 19% (2019: 19% for items reversing
pre-April 2020 and 17% for all other items) in respect of UK
deferred tax items and 25% (2019: 25%) in respect of US deferred
tax items.
9 Earnings per share
Basic, underlying and diluted
The basic, underlying and diluted earnings per share are
calculated based on the following data:
Half Half Full
year year year
2020 2019 2019
$'000 $'000 $'000
------------------ ------ ------- -------
Profit after tax 21 15,362 42,717
------------------ ------ ------- -------
Half Half Full
year year year
2020 2019 2019
$'000 $'000 $'000
----------------------------------------------- ------ -------- ---------
Profit before tax 26 19,445 53,993
Adjustments:
Defined benefit pension scheme administration
costs 165 144 312
Pension finance charge 62 203 378
----------------------------------------------- ------ -------- ---------
Underlying profit before tax 253 19,792 54,683
Taxation (note 8) (5) (4,083) (11,276)
Tax relating to above adjustments (43) (66) (131)
----------------------------------------------- ------ -------- ---------
Underlying profit after tax 205 15,643 43,276
----------------------------------------------- ------ -------- ---------
Half Half Full
year year year
2020 2019 2019
Number Number Number
000's 000's 000's
--------------------------------------------- ------- ------- -------
Basic weighted average number of shares 28,001 28,029 28,026
Adjustment for employee share options 97 107 102
--------------------------------------------- ------- ------- -------
Diluted weighted average number of shares 28,098 28,136 28,128
--------------------------------------------- ------- ------- -------
Cents Cents Cents
--------------------------------------------- ------- ------- -------
Basic earnings per share 0.07 54.81 152.42
--------------------------------------------- ------- ------- -------
Diluted earnings per share 0.07 54.60 151.87
--------------------------------------------- ------- ------- -------
Underlying basic earnings per share 0.73 55.81 154.41
--------------------------------------------- ------- ------- -------
Underlying diluted basic earnings per share 0.73 55.60 153.85
--------------------------------------------- ------- ------- -------
The basic weighted average number of shares excludes shares held
in the employee share trust. The effect of this is to reduce the
average by 84,682 (H1 2019: 56,566; FY 2019: 59,908).
The underlying basic earnings per share is calculated before the
after-tax effect of exceptional items and defined benefit pension
charges and is included because the Directors consider this gives a
measure of the underlying performance of the ongoing business.
10 Dividends Half Half Full
year year year
2020 2019 2019
$'000 $'000 $'000
---------------------------------- ------- ------- -------
Dividends paid in the period - 13,513 20,659
---------------------------------- ------- ------- -------
Cents Cents Cents
---------------------------------- ------- ------- -------
Dividends per share
declared - Interim - 25.00 25.00
- Final - - -
----------- ----------------------------- ------- -------
No interim dividend for 2020 is proposed due to the inherent
economic uncertainty that remains at the time of reporting (interim
2019: 25.00c; final 2019: nil).
11 Employee pension schemes
The Group operates defined contribution pension plans for the
majority of its UK and US employees. The regular contributions are
charged to the income statement as they are incurred.
The Group also sponsors a legacy UK defined benefit pension
scheme which is closed to new members and future accruals. The
funds of the scheme are held in trust, administered by a corporate
trustee, and are independent of the Group's finances.
The last full actuarial valuation was carried out by a qualified
independent actuary as at 30 September 2019 and this has been
updated on an approximate basis to 27 June 2020 in accordance with
IAS 19. There have been no changes in the valuation methodology
adopted for this period's disclosures compared to previous periods'
disclosure.
The principal assumptions applied by the actuaries at 27 June
2020 were:
Half Half Full
year year year
2020 2019 2019
----------------------------------------- ------ ------ ------
Rate of increase in pensions in payment 2.75% 3.05% 2.90%
Rate of increase in deferred pensions 2.00% 2.05% 2.15%
Discount rate 1.40% 2.25% 1.95%
Inflation assumption:
- RPI 2.80% 3.15% 2.95%
- CPI 2.00% 2.05% 2.15%
----------------------------------------- ------ ------ ------
The mortality assumptions adopted at 27 June 2020 imply the
following life expectancies at age 65:
Half Half Full
year year year
2020 2019 2019
Years Years Years
Male currently aged 40 22.4 23.4 22.3
Female currently aged 40 24.2 25.4 24.1
Male currently aged 65 21.3 22.0 21.3
Female currently aged 65 23.0 23.9 23.0
-------------------------- ------- ------- -------
The movement on the net pension obligation is shown in the
Financial Review.
The sensitivities on key actuarial assumptions at the period end
were:
Change in defined benefit
Change in assumption obligation
------------------- ----------------------------- --------------------------
Discount rate Decrease of 0.25% 4.4%
Rate of inflation Increase of 0.25% 2.0%
Increase in life expectancy
Rate of mortality of one year 4.2%
------------------- ----------------------------- --------------------------
12 Cash generated from operations
Half year Half year Full year
2020 2019 2019
$'000 $'000 $'000
--------------------------------------------------- --------- --------- ---------
Operating (loss)/profit (33) 19,284 53,620
Adjustments for:
Depreciation charge 1,423 1,126 2,345
Amortisation of intangibles 223 221 440
Amortisation of right-of-use assets 819 750 1,499
Profit on sale of property, plant and equipment (82) - -
Share option non-cash charges 415 502 928
Defined benefit scheme administration costs
- non-cash charge 165 144 312
Contributions to defined benefit pension scheme (10,909) (1,661) (3,593)
Changes in working capital:
Decrease/(increase) in inventories 2,829 (1,693) (1,577)
Decrease/(increase) in trade and other receivables 21,340 (1,988) (6,579)
(Decrease)/increase in trade and other payables (14,984) 21,258 8,853
Cash generated from operations 1,206 37,943 56,248
--------------------------------------------------- --------- --------- ---------
13 Leases
The lease term of the Oshkosh office premises ended on 31 March
2020 and the business stayed within the existing office space in
the short-term on an agreed 'holding over' lease, as allowed in the
original lease agreement. Whilst there is no fixed term for this
holding over, a reasonable estimate of the period required before
alternative space would be available for occupancy was twelve
months from the date of the current lease expiry. Consequently, the
lease term was reassessed at the year end and the right-of-use
asset and lease liability were increased to reflect an additional
twelve months' tenancy to 31 March 2021. A new lease has not yet
been signed but this assessment is still considered reasonable.
14 Capital commitments
The Group had capital commitments contracted but not provided
for in these financial statements of $0.30m
(29 June 2019: $1.56m; 28 December 2019: $1.40m).
15 Related party transactions
The Group did not participate in any related party transactions
that require disclosure.
16 Alternative performance measures
An Alternative Performance Measure ("APM") is a financial
measure of historical or future financial performance, financial
position, or cash flows, other than a financial measure defined or
specified within IFRS.
The Group uses APMs to supplement standard IFRS measures to
provide users with information on underlying trends and additional
financial measures, which the Group considers will aid the users'
understanding of the business.
The Group's APMs have not changed in the current period and
definitions can be found on page 109 of the 2019 Annual Report.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge,
these condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 as adopted by the European Union
and that the interim management report includes a fair review of
the information required by DTR 4.2.7 and 4.2.8, namely:
-- An indication of the important events that have occurred
during the first half year and their impact on the condensed
consolidated interim financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- Material related party transactions in the first half year
and any material changes in the related party transactions
described in the last annual report.
The Directors of 4imprint Group plc are as listed in the Group's
Annual Report for 28 December 2019. A list of current Directors of
4imprint Group plc is maintained on the Group website:
https://investors.4imprint.com.
By order of the Board
Kevin Lyons-Tarr David Seekings
Chief Executive Chief Financial
Officer Officer
13 August 2020
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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