4imprint Group Reports Signs Of Recovery Despite Steep Drop In 2020 Revenue
On Tuesday, 4imprint Group PLC, parent of Oshkosh, Wisconsin-based distributor 4imprint (PPAI 107200, D16), released financial results for its 2020 fiscal year. The company reports significant impacts due to the COVID-19 pandemic, with 960,000 total orders processed in 2020 compared to 1,587,000 in 2019.
With reduced demand, 4imprint Group’s revenue in 2020 was $560.04 million, a decrease of $300.80 million or 35 percent, from 2019. Profit before tax for the year was $3.84 million, compared to $53.99 million in 2019. Despite the difficult trading environment, the company reports that its cash performance was strong. The company ended 2020 with $39.77 million in cash on hand, just below the 2019 balance of $41.14 million, despite the payment in the year of a "lump sum" pension contribution of $9.14 million.
Ending the year in a strong financial position, 4imprint management says the company is well placed to take advantage of opportunities during the recovery. “The Group has seen an encouraging recovery since the initial shock of COVID-19 in the first half of the year,” said Paul Moody, 4imprint Group chairman, in the report. “We look forward to the beneficial effect that vaccine programs may bring to the economy. The fourth quarter of 2020 was relatively robust, enhanced by seasonal apparel and year-end gift giving. Order counts in January and February 2021 were 65 percent of 2019 levels, reflecting typically lower order activity at the start of the year combined with volatility caused by news flow and weather events in our primary U.S. market. In the past three weeks, there has been a marked increase in trading momentum, with order intake compared to 2019 approaching the 70 percent seen in the fourth quarter of 2020. The board is proud of the resilience and flexibility demonstrated by the Group’s people and business operations. Decisions have been made and actions taken consistent with 4imprint’s purpose and culture and with a view to the long-term health of the business. The Group is financially strong and very well placed to capitalize on the opportunities arising in recovering markets.”
The report further explains that 4imprint Group’s operational and financial performance was dominated by the spread of the COVID-19 pandemic. From mid-March onwards it experienced severe operational disruption alongside significantly decreased demand for promotional products. Weekly order counts dropped from around 13 percent ahead of 2019 for the first two months of the year to a low point in mid-April 2020 down 20 percent from 2019. Since that point, order counts steadily recovered to a fourth quarter run rate of around 70 percent of the prior year.