(Alliance News) - 4imprint Group PLC on Tuesday reported a sharp drop in annual profit, and has decided against shareholder payouts but stressed it will return to paying dividends soon.
Shares in the direct marketer of promotional merchandise were 12% lower in London on Tuesday morning at 2,374.00 pence each.
For the 53 weeks to January 2, 4imprint recorded pretax profit of USD3.8 million, almost wiped out from USD54.0 million in the 52 weeks to January 2, 2019.
Direct Marketing underlying operating profit dropped 87% to USD7.6 million.
Revenue plunged 35% to USD560.0 million from USD860.8 million. North America revenue fell 34%, while UK & Ireland revenue slumped 53%.
4imprint said total orders fell to 960,000 from 1.6 million the year before.
Chair Paul Moody said: "The group has seen an encouraging recovery since the initial shock of Covid-19 in the first half of the year. We look forward to the beneficial effect that vaccine programmes 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% 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 US market. In the past three weeks, there has been a marked increase in trading momentum, with order intake compared to 2019 approaching the 70% seen in the fourth quarter of 2020."
As a result of the tough results, 4imprint has opted against any dividend payouts for the recent financial year, in effort to conserve cash. It had paid 66.68 pence per share for the year before.
"In order to maintain maximum liquidity, we continue to take a prudent view on dividend payments. Consequently, we are not proposing a final dividend for 2020, although it is important to note that the board has not changed its dividend policy and will reassess the position over coming months as the timing and trajectory of the recovery becomes clearer," 4imprint explained.
Moody added: "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 capitalise on the opportunities arising in recovering markets."
By Paul McGowan; paulmcgowan@alliancenews.com
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4Imprint (FOUR)