- Shares gain over 60% in less than a month
- Revenues on track to top $1 billion this year
- Dividend bumped more than 150%
Shares in promotional gift seller 4Imprint (FOUR) leapt 17% to a new all-time high of £39.15 after the firm posted what it admitted was a ‘remarkable’ half-year earnings update.
Less than a month ago the stock was trading below £24 but on 19 July the firm raised its earnings guidance sharply, sending analysts back to their spreadsheets and triggering a meteoric rise in the share price.
EYES ON THE PRIZE
The direct marketing firm reported sales for the first six months of $515.5 million, an increase of 58%, thanks to record new customers and a record flow of orders.
The company took on 146,000 new customers in the first half, a marked increase over last year, while total orders processed rose 44% to 886,000.
‘The board remains very confident in the group's strategy, the strength and resilience of its business model and its competitive position,’ said chairman Paul Moody.
He added: ‘This confidence is expressed in our expectation of reaching our long-held revenue target of $1bn during the 2022 financial year.’
Pre-tax profits jumped from $3.4 million to $43.9 million, putting the group on track to beat its most recent full-year earnings estimate of $75 million.
The direct marketing business model is highly cash-generative, with free cash flow of $33.6 million in the first half bringing the total cash balance to $67 million.
In a sign of confidence, even with the continuing uncertainty over geopolitical events and the broader economy, the board raised the interim dividend from $0.15, or 10.8p per share, to $0.40 (33p).
EXPERT VIEW
Analyst Joe Brent at Liberum raised his full year EPS (earnings per share) forecast by 5%, having already upgraded by 33% in July, after first-half earnings came in 15% above his estimate.
However, with the shares almost at Brent’s target price of £40, and the growing threat of a US recession, which would harm 4Imprint’s business, there doesn’t seem to be much room for error.
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