4imprint Group PLC on Wednesday raised its interim dividend following strong financial performance in the first half, despite demand falling short of expectations.

The London-based direct marketer and distributor of promotional merchandise said pretax profit rose 11% to $73.0 million in the six months that ended June 29 from $66.0 million a year prior.

Revenue increased 5.0% to $667.5 million from $635.5 million, while operating expenses rose 4.5% to $597.6 million from $571.7 million.

4imprint raised its interim dividend by 23% to 80.0 US cents from 65.0 cents previously.

The company gained 145,000 new customers over the six month period, down 8.2% from the 158,000 added over the same period in 2023.

Chair Paul Moody said: ‘Based on our first half financial results and recent internal forecasts, the board expects that 2024 full year group revenue will reflect a growth rate similar to the first half of the year. As a result of improving financial dynamics in the business, particularly higher gross profit percentage and the flexibility of the marketing mix, it is expected that profit before tax for the 2024 full year will remain within the current range of analysts’ forecasts.’

4imprint booked pretax profit of $140.7 million on $1.33 billion in revenue in 2023. A 5.0% increase would bring revenue to $1.40 billion in 2024.

The expansion of a distribution centre in Oshkosh, Wisconsin is well underway, 4imprint said. The $20 million project aims to support continued growth of the Apparel category with occupancy of the facility scheduled for September.

‘[Whilst] demand has been below our original expectations for the 2024 half year, it is important to note that 4imprint has continued to take market share in the period, with 6% demand level revenue growth compared to industry statistics showing broadly flat overall revenues over the period,’ it said.

‘In addition, an improved gross profit percentage and a more flexible marketing portfolio have helped drive strong profitability and cash generation even as we continue to make important investments in people and infrastructure that will help to propel the future growth of the business.’

Investment in personnel has been concentrated on specialist areas such as supply chain, compliance, human resources, IT, merchandising, and marketing.

4imprint shares were down 2.1% to 5,500.00 pence each in London on Wednesday morning.

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