4imprint Group PLC Annual Financial Report

Data : 01/04/2019 @ 16:57
Fonte : UK Regulatory (RNS & others)
Titolo : 4imprint Group Plc (FOUR)
Quotazione : 3380.0  -20.0 (-0.59%) @ 17:29
Quotazione 4imprint Grafico

4imprint Group PLC Annual Financial Report

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TIDMFOUR

RNS Number : 7307U

4imprint Group PLC

01 April 2019

4imprint Group plc (the "Company")

Publication and Posting of 2018 Annual Report and Accounts

The Company has published its 2018 Annual Report and Accounts, together with a Notice of Annual General Meeting and Form of Proxy.

These documents have been posted to shareholders.

Copies of the Annual Report and Notice of Annual General Meeting are available on the Company's website, http://investors.4imprint.com.

Copies of the Annual Report, Notice of Annual General Meeting and Form of Proxy have been submitted to the National Storage Mechanism and will shortly be available at www.morningstar.co.uk/uk/NSM.

The Annual General Meeting of the Company will be held at 11.00 on 7 May 2019 at the offices of Peel Hunt, Moor House, 120 London Wall, London EC2Y 5ET.

A condensed set of the financial statements for the 52 weeks ended 29 December 2018 together with information on important events that occurred during that financial period and their impact on the financial statements were contained in the Final Results RNS announcement made on 5 March 2019. That information, together with the information set out in the appendices to this announcement, which is extracted from the Annual Report, constitute the material required by DTR 6.3.5R which is required to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the Annual Report.

In the appendices "Group" is 4imprint Group plc and its subsidiaries.

For further information, please contact:

Andrew Scull

Company Secretary

4imprint Group plc

Tel: 020 3709 9680

Appendices

   A.   Statement of Directors' Responsibilities in respect of the Financial Statements 

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial 52 week period. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. In preparing the financial statements, the Directors are required to:

-- select suitable accounting policies and then apply them consistently;

-- state whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and IFRSs as adopted by the European Union have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

-- make judgments and accounting estimates that are reasonable and prudent; and

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Andrew Scull

Company Secretary

5 March 2019

B. Principal risks and uncertainties

The list below is extracted in full and unedited from the Annual Report and Accounts 2018, pages 20 to 25. Page references below are to pages in the Annual Report and Accounts 2018.

4imprint's business model means that it may be affected by a number of risks, not all of which are within its control. Outlined below are the current principal potential risks and uncertainties to the successful delivery of the Group's strategic goals. The list is not exhaustive and other, as yet unidentified, factors may have an adverse effect.

Economic and market risks

 
 Macroeconomic conditions 
 
   Description of risk 
   The business conducts most of its operations in North America 
   and would be affected by a downturn in general economic 
   conditions in this region or negative effects from tension 
   in international trade. In previous economic downturns, 
   the promotional products market has typically softened 
   broadly in line with the general economy. 
 Potential impact 
   *    Customer acquisition and retention could fall,            Link to strategy 
        impacting revenue in current and future periods.          (R) Organic revenue growth 
                                                                  (R) Cash generation and 
                                                                  profitability 
   *    The growth and profitability levels called for in the 
        Group strategic plan may not be achieved. 
 
 
   *    Cash generation could be reduced broadly 
        corresponding to a reduction in profitability. 
 Mitigating activities 
   *    Management monitors economic and market conditions to     Direction 
        ensure that appropriate and timely adjustments are        (R) On a broad level 
        made to marketing and other budgets.                      market conditions to 
                                                                  date have remained quite 
                                                                  stable 
   *    The customer proposition in terms of promotions,          (R) = Unchanged 
        price, value and quality of product can be adjusted 
        to resonate with customer requirements and budgets in 
        the prevailing economic climate. 
 
 
   *    The Group's balance sheet funding policy (see page 
        18) aims to provide operational and financial 
        flexibility to facilitate continued investment in the 
        business through different economic cycles. 
 
 
 Competition 
 
   Description of risk 
   The promotional products markets in which the business 
   operates are intensely competitive and the rapid development 
   of internet commerce, digital marketing and online marketplaces 
   may allow competitors to reach a broader audience. In addition, 
   new or disruptive business models looking to break down 
   the prevailing distributor/supplier structure in the promotional 
   products industry may be developed by existing competitors 
   or new entrants. 
 Potential impact 
   *    Aggressive competitive activity could result in            Link to strategy 
        pressure on prices, margin erosion and loss of market      (R) Market leadership 
        share. All of these factors could impair the growth        (R) Organic revenue 
        of the business and therefore impact the financial         growth 
        results.                                                   (R) Cash generation 
                                                                   and profitability 
 
   *    The Group's strategy based on achieving organic 
        growth in fragmented markets may need to be 
        reassessed. 
 
   Mitigating activities 
    *    An open-minded culture and an appetite for technology     Direction 
         are encouraged, with the aim of positioning the           (R) The competitive 
         business at the forefront of innovation in the            landscape to date has 
         industry.                                                 been relatively consistent 
                                                                   in our main markets 
                                                                   (R) = Unchanged 
    *    Management closely monitors competitive activity in 
         the marketplace. 
 
 
    *    Price, satisfaction and service level guarantees are 
         an integral part of the customer proposition. 
         Customer surveys and market research are used to 
         gauge customer satisfaction and perception, and the 
         causes of any negative indications are investigated 
         and addressed rapidly. 
 
 
 Currency exchange 
 
   Description of risk 
   There is some exposure to currency exchange risk. Although 
   the business trades predominantly in US dollars, it also 
   transacts business in Canadian dollars, Sterling and Euros, 
   leading to some currency risk on trading. In addition, 
   Head Office costs, pension scheme commitments and dividends 
   are payable in Sterling, consequently the business may 
   be adversely impacted by movements in the Sterling/US dollar 
   exchange rate when it repatriates cash to the UK. 
 Potential impact 
   *    The financial results of trading operations, and          Link to strategy 
        therefore overall profitability, may be negatively        (R) Cash generation and 
        affected.                                                 profitability 
                                                                  (R) Capital structure 
                                                                  (R) Shareholder value 
   *    The financial condition and cash position of the 
        Group may differ materially from expectations. In an 
        extreme scenario, the Group's strategic objectives 
        around capital structure and core dividend 
        commitments could be disrupted. 
 Mitigating activities 
   *    The Group reports its results in US dollars,              Direction 
        minimising currency impact on reported revenue,           (R) Political instability, 
        operating profit and net assets since trading             interest rate policy 
        operations are concentrated largely in North America.     (US) and Brexit concerns 
                                                                  (UK) may lead to increased 
                                                                  volatility in currency 
   *    The Group can use forward contracts to hedge              markets 
        anticipated cash receipts from its overseas               (R) Increased 
        operations, giving some certainty of amounts 
        receivable in Sterling. 
 

Operational risks

 
 Business facility disruption 
 
   Description of risk 
   The 4imprint business model means that operations are concentrated 
   in centralised office and distribution facilities. The 
   performance of the business could be adversely affected 
   if activities at one of these facilities were to be disrupted, 
   for example, by fire, flood, loss of power or internet/telecommunication 
   failure. 
 Potential impact 
   *    The inability to service customer orders over any         Link to strategy 
        extended period would result in significant revenue       (R) Market leadership 
        loss, deterioration of customer acquisition and           (R) Organic revenue growth 
        retention metrics and diminished return on marketing      (R) Cash generation and 
        investment.                                               profitability 
 
 
   *    The Group's reputation for excellent service and 
        reliability may be damaged. 
 Mitigating activities 
   *    Back-up and business continuity procedures are in         Direction 
        place to ensure that customer service disruption is       (R) No significant change 
        minimised. This includes customer service resource        in the nature or likelihood 
        based at a separate location and team members working     of these risks 
        from home,                                                (R) = Unchanged 
 
 
   *    Websites are cloud-based, and data is backed up 
        immediately to off-site servers. 
 
 
   *    Relationships are maintained with third party 
        embroidery contractors to provide backup in the event 
        of facility unavailability. 
 
 Disruption to the product supply chain or delivery service 
 
   Description of risk 
   As a consequence of the Group's drop-ship distribution 
   model, trading operations could be interrupted if (i) the 
   activities of a key supplier were disrupted and it was 
   not possible to source an alternative supplier in the short 
   term; or (ii) the primary parcel delivery partner used 
   by the business suffered significantly degraded service 
   levels. As the Group continues to grow, the volume of orders 
   placed with individual suppliers becomes significant. 
 Potential impact 
   *    Inability to fulfil customer orders would lead to         Link to strategy 
        lost revenue and a negative impact on customer            (R) Market leadership 
        acquisition and retention statistics.                     (R) Organic revenue growth 
                                                                  (R) Cash generation and 
                                                                  profitability 
   *    The Group's reputation for excellent service and 
        reliability may be damaged. 
 Mitigating activities 
   *    A rigorous selection process is in place for key          Direction 
        suppliers, with evaluation and monitoring of quality,     (R) Risk inherent in 
        production capability and capacity, ethical standards     increasing supplier concentration 
        and financial stability.                                  (R) Increased 
 
 
   *    Wherever possible, relationships are maintained with 
        suitable alternative suppliers for each product 
        category. 
 
 
   *    Secondary relationships are in place with alternative 
        parcel carriers. 
 
 
 Disturbance in established marketing techniques 
 
   Description of risk 
   The success of the business relies on its ability to attract 
   new and retain existing customers through a variety of 
   marketing techniques. These methods may become less effective 
   as follows: 
   Offline: The flow of print catalogues and sample packages 
   would be disrupted by the incapacity of the US Postal Service 
   to make deliveries, for example due to natural disasters 
   or labour activism. 
   Online: Search engines are an important source for channelling 
   customer activity to 4imprint's websites. The efficiency 
   of search engine marketing could be adversely affected 
   if the search engines were to modify their algorithms or 
   otherwise make substantial changes to their practices. 
 Potential impact 
   *    If sustained over anything more than a short time         Link to strategy 
        period, an externally-driven decrease in the              (R) Market leadership 
        effectiveness of key marketing techniques would cause     (R) Organic revenue 
        damage to the customer file as customer acquisition       growth 
        and retention fall. This would affect order flow and      (R) Cash generation 
        revenue in the short term and the productivity of the     and profitability 
        customer file over a longer period, impacting growth 
        prospects. 
 Mitigating activities 
   *    Offline: Developments in the US Postal Service are        Direction 
        closely monitored through industry associations and       (R) Successful marketing 
        lobbying groups. Alternative parcel carriers are          diversification in 2018 
        continuously evaluated.                                   via the introduction 
                                                                  of the brand marketing 
                                                                  investment 
   *    Online: Management stays very close to new                (R) Decreased 
        developments and emerging technologies in the online 
        space. Efforts are focused on anticipating changes 
        and ensuring compliance with both the requirements of 
        providers and applicable laws. 
 
 
   *    The Marketing team constantly tests and evaluates new 
        marketing techniques and opportunities in order to 
        broaden the overall marketing portfolio and to reduce 
        the dominance of any one constituent element. An 
        example is the brand marketing campaign launched 
        during 2018. 
 Reliance on key personnel 
 
   Description of risk 
   Performance depends on the ability of the business to continue 
   to attract, motivate and retain key staff. These individuals 
   possess sales and marketing, merchandising, supply chain, 
   IT, financial and general management skills that are key 
   to the continued successful operation of the business. 
 Potential impact 
   *    The loss of key employees or inability to attract         Link to strategy 
        appropriate talent could adversely affect the Group's     (R) Market leadership/revenue 
        ability to meet its strategic objectives, with a          growth 
        consequent negative impact on future results.             (R) Cash generation 
                                                                  and profitability 
                                                                  (R) Shareholder value 
 Mitigating activities 
   *    The business is proactive in aiming to deliver a          Direction 
        first class working environment. In addition,             (R) The business has 
        competitive employment terms and incentive plans are      been able to attract 
        designed with a view to attracting and retaining key      and retain appropriate 
        personnel.                                                talent 
                                                                  (R) = Unchanged 
 

Technological risks

 
 Failure or interruption of information technology systems 
  and infrastructure 
 
   Description of risk 
   The business is highly dependent on the efficient functioning 
   of its IT infrastructure. An interruption or degradation 
   of services at any 4imprint operational facility would 
   affect critical order processing systems and thereby compromise 
   the ability of the business to deliver on its customer 
   service proposition. 
 Potential impact 
   *    In the short term, orders would be lost and delivery     Link to strategy 
        deadlines missed, decreasing the efficiency of           (R) Market leadership 
        marketing investment and impacting customer              (R) Organic revenue growth 
        acquisition and retention.                               (R) Cash generation and 
                                                                 profitability 
 
   *    Revenue and profitability are directly related to 
        order flow and would be adversely affected as a 
        consequence of a major IT failure. 
 
 
   *    Depending on the severity of the incident, longer 
        term reputational damage could result. 
 Mitigating activities 
   *    There is significant ongoing investment in both the      Direction 
        IT team supporting the business and the hardware and     (R) The IT platform is 
        software system requirements for a stable and secure     mature, and performance 
        operating platform.                                      has been efficient and 
                                                                 resilient 
                                                                 (R) = Unchanged 
   *    Back-up and recovery processes are in place, 
        including immediate replication of data to an 
        alternative site, to minimise the impact of 
        information technology interruption. 
 
 
   *    Cloud-based hosting for eCommerce and other back end 
        functionality. 
 
 
 Failure to adapt to new technological innovations 
 
   Description of risk 
   The operating platforms of the business may not be able 
   to respond and adapt to rapid changes in technology. If 
   the development of websites and customer-facing applications 
   for alternative devices and platforms is slow or ineffective 
   the business could lose competitive edge. In addition, 
   the development of order processing, supplier-facing and 
   data analytics technologies could fail to deliver the improvements 
   in speed, ease and efficiency necessary to attract and 
   retain a productive customer base. 
  Potential impact 
    *    If the business fails to adapt to new technologies        Link to strategy 
         and therefore falls behind in the marketplace, it may     (R) Market leadership 
         fail to capture the number of new customers and           (R) Organic revenue growth 
         retain existing customers at the rate required to 
         deliver the growth rates called for in the Group's 
         strategic plan. 
 Mitigating activities 
   *    Management has a keen awareness of the need to keep        Direction 
        pace with the rapidly changing and continuously            (R) Innovation remains 
        evolving technological landscape.                          a priority 
                                                                   (R) = Unchanged 
 
   *    An appetite for technological innovation is 
        encouraged in the business. Sustained investment is 
        made in the development of both outward-facing and 
        back office systems. 
 
 
 Security of customer data 
 
   Description of risk 
   Unauthorised access to and misappropriation of customer 
   data could lead to reputational damage and loss of customer 
   confidence. This is a rapidly changing environment, with 
   new threats emerging on an almost daily basis. 
 Potential impact 
   *    A significant security breach could lead to               Link to strategy 
        litigation and losses, with a costly rectification        (R) Cash generation 
        process. In addition, it might be damaging to the         and profitability 
        Group's reputation and brand.                             (R) Shareholder value 
 
 
   *    An event of this nature might result in significant 
        expense, impacting the Group's ability to meet its 
        strategic objectives. 
 Mitigating activities 
   *    The business employs experienced IT staff whose focus     Direction 
        is to mitigate IT security violations. Investment in      (R) The general incidence 
        software and other resources in this area continues       and publicity around 
        to be a priority.                                         cyber-crime continues 
                                                                  to increase 
                                                                  (R) Increased 
   *    Due to the ever-evolving nature of the threat, 
        emerging cyber risks are addressed by the IT security 
        team on a case-by-case basis. 
 
 
   *    Technical and physical controls are in place to 
        mitigate unauthorised access to customer data and 
        there is an ongoing investment process in place to 
        maintain and enhance the integrity and efficiency of 
        the IT infrastructure and its security. 
 

C. Related party transactions

There are no related party transactions requiring disclosure.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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