4Imprint Regulatory News (FOUR)

6 Apr 2005 12:00

4imprint Group PLC06 April 2005 6 April 2005 4imprint Group plc ("4imprint" or the "Company") (Registered number 177991) CHAIRMAN'S AGM STATEMENT As this is my first AGM statement to shareholders, I want to use the opportunityit affords to speak to you about the strategy we are pursuing in 4imprint.After the problems which beset the company in 2002/3 the most urgent priority ofthe Board was first, to stop the destruction of value which had occurred andsecondly, to formulate and execute a programme of progressive restoration ofvalue. As you are aware, the first part of this programme was put underway late in 2003and by the middle of 2004 the company had been brought to a state of modest, butsustainable profitability. The programme of rebuilding value was put underway in the second half of lastyear and continues. The principal features of this programme, which covers allfour sections of the Group's business, is as follows:- (a) European Direct Marketing and Corporate Programmes. This sector includes the Manchester-based business and the Germany based Kreyer company, with the former representing 85% of the total. Early in the second half of last year, a major review of the UK business took place, with the intention of establishing a route to sustained value growth. The following actions have been executed:- (i) Significant reductions in infrastructure costs have been secured. (ii) The under performing Corporate Programmes business has been refocused onto demanding profit targets and several unprofitable contracts have been disengaged. (iii)The Direct Marketing business is undergoing substantial change. This business represents a great opportunity for 4imprint UK to develop aggressively a "catalogue/internet/telephone" business based on the skills/technology developed in 4imprint Inc in the USA. A new team has been put in place to execute this plan. (iv) The Senior Management has been changed and a very strong team has been established committed and incentivised to drive the business forward. The prospects for this sector are encouraging. (b) European Premium Promotions In 2004, the business underperformed previous years, changes were necessary and a major review was carried out. Loss making and under performing sections were eliminated and the core "creative and design" units were reduced in number and refocused into areas where the skills and knowledge in PPI could be best exploited. (c) US Direct Marketing - The 4imprint Inc Business This business represents the fastest growing business in the Group and has great potential. It is the USA market leader in the catalogue/internet/ telephone method of marketing and selling promotional products. Sales in 2004 were 17% greater than 2003, and prospects for further sustained strong growth are real and achievable, through sustained investment in catalogue design and web expertise. (d) AIA - The Franchising Business This franchise business is the only such business in the 4imprint Group and was acquired in 2000. Post acquisition financial problems, which damaged the group severely, have been eliminated and the business is now well run and operates under strong financial controls. In 2004, AIA has system wide sales of $115 million generated operating profits of $1.80 million from around 350 Franchises. AIA's growth plan is principally based on the introduction of the new, non-franchisee sales partnerships which will run in parallel with the existing franchises, but in different geographical areas. This new development is being introduced selectively with the full support of current Franchisees. (e) Overheads The overhead structure supporting the four sectors has been streamlined and it is intended to hold costs at around £1 million/annum: a significant reduction on previous years. The 4imprint Group is strongly cash generating. It is non capital intensive;its fixed assets base is adequate to support considerable organic growth. Thestrategy being pursued expects the Group to achieve its growth organically; significant acquisitions are not envisaged. Equally, if any part of the Group's business does not fit our demanding growth strategy, disposal would be considered. Consequently, the Group should progressively increase its cash resources. The Board intends that a significant part of this cash should be returned to shareholders. The proposed share buy back on which shareholderswill vote today, coupled with an attractive dividend policy, should ensure thatshareholders participate in the benefits of the Groups recovery and growthprogrammes. Finally, a few words about current trading. Shareholders will be pleased to hearthat though it is early in the year, the Group has made a good start to the yearwith sales and profits ahead of last year and in line with expectations. OnlyEuropean Promotions, where the tough trading conditions experienced in thesecond half of 2004 have continued into this year, has done less well than theprevious year. As a whole business, the Group looks forward to a year of progress for 2005. K.J. MintonChairman6 April 2005 -Ends-Enquiries:4imprint Group plcKen Minton, Executive Chairman 0161 272 4000 This information is provided by RNS The company news service from the London Stock Exchange