4imprint Group - FY23 finishes strongly

4imprint’s year-end trading update indicates that 2023 was a strong year for the group’s financial performance. Revenue of $1.33bn is in line with guidance reiterated in November of ‘slightly above $1.3bn’, but PBT is now guided at ‘not below $140m’, above our previous expectation of $131m. We attribute the stronger profitability to a combination of higher gross margin and marketing efficiency. Strong cash performance resulted in the year-end balance of $105m exceeding our prior $84m estimate. Our revised FY24 and provisional FY25 profit and cash estimates are pushed ahead on this higher base on a 10% operating margin. The shares continue to trade at a substantial discount to our DCF valuation.