4Imprint Regulatory News (FOUR)

2 August 2012

4imprint Group plc

Half year results for the period ended 30 June 2012

4imprint Group plc (the 'Group'), an international promotional products business, announces today its half year results for the period ended 30 June 2012

Financial highlights

·; Revenue up 17% at £88.36m (H1 2011: £75.84m)†

·; Underlying* operating profit up 21% at £3.39m (H1 2011: £2.80m)†

·; Underlying* profit before tax up 26% at £3.32m (H1 2011: £2.62m)†

·; Profit before tax up 50% at £2.46m (H1 2011: £1.64m)†

·; Net cash £11.39m, prior year end £5.46m

·; Underlying* basic earnings per share up 25% at 8.61p (H1 2011: 6.89p)†

·; Basic earnings per share, including the profit on disposal of Brand Addition, was 38.79p (H1 2011: 10.91p)

·; Dividend per share 5.25p, an increase of 5%

Operational highlights

·; 4imprint Direct Marketing

·; Continued growth in market share

·; More than 274,000 orders received, 17% ahead of half year 2011

·; Underlying* operating profit up 12% at £3.95m (H1 2011: £3.52m)

·; SPS

·; 8% revenue growth and underlying* operating profit £0.35m (H1 2011: £0.10m)

·; Brand Addition sale completed on 23 March 2012

·; £11.40m of sale proceeds deposited in a cash escrow account for pension scheme risk reduction

† Continuing operations

* Underlying is before share option charges, exceptional items and defined benefit pension charge

John Poulter, Chairman said:

"The first half of this year has been a period of substantial positive change for the Group. Brand Addition has been sold, enabling the Group to strengthen its balance sheet, to focus on the continued organic growth of 4imprint Direct Marketing and SPS and to reduce the risk of the pension deficit. 

We are well positioned to take advantage of the growth opportunities presented by 4imprint Direct Marketing's large and highly fragmented market and, notwithstanding any significant macroeconomic changes to the markets it serves, the Group remains on track for a continued good performance in the second half year."

- Ends -

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Chairman's statement

The first half of this year has been a period of substantial positive change for the Group. Brand Addition has been sold, enabling the Group to strengthen its balance sheet, to focus on the continued organic growth of 4imprint Direct Marketing and SPS and to reduce the risk of the pension deficit.

Strategy

The Board's strategy is to pursue further development and profitable organic growth of 4imprint Direct Marketing and to take appropriate steps to reduce the burden of the legacy defined benefit pension scheme.

Results summary

The Group delivered an encouraging performance from continuing operations in the first half of the year, with revenue* up 17% and underlying operating profit* up 21%. Both 4imprint Direct Marketing and SPS contributed to the increase. In addition, the Group completed the sale of Brand Addition for a consideration of £24m. That business has been reported as a discontinued activity.

Profit before tax* was up 50% at £2.46m. Underlying basic earnings per share* was up 25% at 8.61p and basic earnings per share, including the profit on disposal of Brand Addition, was 38.79p.

4imprint Direct Marketing (92% of revenue)

4imprint Direct Marketing continued to demonstrate the strength and momentum of its business model, with North American revenue in the first half of the year up 14% in US dollars as the business continued to gain market share. 4imprint Direct Marketing UK revenue increased by 15% in the first half of the year as a result of increased marketing activity.

Total Direct Marketing revenue was 17% ahead in sterling, consistent with the Group's organic growth strategy and underlying operating profit at £3.95m was 12% ahead.

SPS (8% of revenue)

Total revenue in SPS increased by 8% in the first half of the year despite a difficult economic background. This was due to increased focus on marketing, selling and customer service activities, together with modest investment in moulding and printing equipment to support the launch of new products. Underlying operating profit at £0.35m compared to £0.10m in the first half of 2011.

Cash

The Group had net cash at the half year of £11.39m, an increase of £5.93m from year end. Net cash generated from continuing operating activities was £4.88m in the first half. £11.40m of the Brand Addition proceeds were deposited into escrow to be used for risk reduction of the defined benefit pension scheme.

Dividend

The Board has declared an interim dividend of 5.25p (H1 2011: 5.00p).

Board

Kevin Lyons-Tarr was appointed to the Board as an Executive Director and Steve Gray and John Warren were appointed to the Board as Non-Executive Directors on 11 June 2012. The Board reiterates its thanks to Ian Brindle and Nick Temple who retired as Non-Executive Directors on 30 June 2012.

Outlook

The Group continues to take advantage of the growth opportunities presented by 4imprint Direct Marketing's large and highly fragmented markets as well as continuing to drive the recovery of SPS.

Following the Group's encouraging first half performance, and notwithstanding any significant macroeconomic changes to the markets it serves, the Group remains on track for a continued good performance in the second half year.

John Poulter

Chairman

2 August 2012

* Continuing operationsOperating and financial review

Operating review - continuing operations

† restated to exclude discontinued operations.

Group revenue for the first half of the year was 17% ahead of H1 2011, 14% ahead at constant currency, with organic growth from both 4imprint Direct Marketing and SPS. Underlying operating profit increased by 21% (18% at constant currency).

4imprint Direct Marketing

4imprint Direct Marketing revenue increased by 17% over the first half of 2011. At constant currency, revenue increased by 14%. In both North America and the UK, the Direct Marketing business is growing faster than the overall market, expanding share in the highly fragmented markets it serves.

In North America, in the first half of 2012, new customer orders increased 11% over the same period last year and circa 66,000 new customers were acquired. The business continues to develop and refine an array of marketing techniques used in new customer acquisition, ranging from circulation increases of 'Specialty' print catalogues, a rapidly expanding online presence, search engine optimisation, e-mail marketing and social media all underpinned by database analytics.

Existing customer orders in the first half of 2012 were 22% up over the same period last year, indicative of customer retention rates that are slightly ahead of historical experience. These consistent retention rates are an important facet of the business model as the number of new customers acquired continues to increase.

In the UK, revenue increased 15% over the same period, despite an unhelpful economic environment. The growth was driven primarily through a modest increase in marketing investment, further optimisation of both on and offline marketing activities and emphasis on increasing the product range. Order counts for new customers and retained customers were both up over the first half of 2011.

Operating profit was 12% ahead of the same period in the prior year, 10% at constant currency. Gross margins have remained stable throughout the first half of 2012 and marketing costs have moved broadly in line with the increase in revenue.

SPS

SPS revenue increased by 8% over the first half of 2011, in a market place which remains competitive. The business continues to focus on improved customer service which is a prerequisite to achieving growth within a demanding marketplace. Marketing activities have been focused on opportunities for revenue growth across both product and customer segments. Continued investment in manufacturing capability has resulted in a number of new products being added to the portfolio. In addition, the business has further developed its printing capability and extended its range of bought-in products.

Underlying operating profit increased by £0.25m compared to first half of 2011 as a result of a stable gross margin and control over costs. Underlying operating profit before depreciation for the first half of 2012 at £0.66m, compared with £0.42m in the first half of 2011.

Financial review

Group results

* underlying is before share option charges, exceptional items and defined benefit pension charge.

† restated to exclude discontinued operations.

Profit before tax

Underlying profit before tax from continuing operations was £3.32m compared to £2.62m in the first half of 2011, an increase of 26%. Net interest payable was £0.07m. Profit before tax from continuing operations was £2.46m compared to £1.64m in the first half of 2011, an increase of 50%.

Discontinued operations

On 23 March 2012 the Group completed the disposal of Brand Addition to H.I.G., a private equity investment firm. The aggregate consideration was £24m (subject to a normalised level of working capital and on a cash and debt free basis). £1.25m of the consideration is deferred for 12 months and is guaranteed under an irrevocable letter of credit from the Bank of Montreal.

In line with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', Brand Addition has been presented as a discontinued operation and half year 2011 results have been restated accordingly.

Revenue generated by Brand Addition in 2012 up to the date of sale was £11.31m and post tax profit was £9,000.

Profit on disposal of Brand Addition in the half year was £8.63m, net assets sold were £12.28m and net cash inflow from the disposal (after fees, working capital and cash at date of disposal adjustments) was £18.60m.

Taxation

Continuing operations tax charge for the half year was £0.93m at a rate of 38% (H1 2011: 38%), this relates predominantly to taxation chargeable in respect of profit earned in the USA.

Basic earnings per share

Underlying earnings per share from continuing operations was 8.61p (H1 2011: 6.89p), an increase of 25% and earnings per share from continuing operations were 5.82p, 48% ahead.

Earnings per share from discontinued operations, including profit on the disposal of Brand Addition, were 32.97p, resulting in total earnings per share of 38.79p

Cash flow

The Group's net cash at 30 June 2012 was £11.39m, following a net cash inflow of £5.93m in the half year period.

Net cash generated from operating activities was £1.67m, (£4.88m inflow from continuing operations and £(3.21)m cash outflow for discontinued operations). 4imprint Direct Marketing remains highly cash generative, with low working capital requirements. SPS working capital increased in the period to support revenue growth.

Net cash generated from investing activities was £6.18m (£18.60m net cash inflow on business disposal, £(11.40)m cash deposited into an escrow account for the pension fund and £(1.02)m capital expenditure); dividends paid to shareholders were £(2.52)m and proceeds from issue of ordinary shares were £0.54m (exercise of share options).

Balance sheet and Shareholders' funds

* includes £11.40m pension scheme bank account.

Net assets and Shareholders' funds increased by £5.82m to £18.87m. Profit for the half year period of £10.16m (including £8.63m profit on disposal of business) was offset by £3.17m actuarial losses on the pension scheme, Shareholder dividend of £2.52m and £1.35m other items.

Pension deficit

The Group sponsors a UK defined benefit pension scheme, closed to new members and future accruals. At 5 April 2012 (the date of the scheme accounts), the scheme had 1,291 pensioners and 646 deferred pensioners.

Finance costs included a £0.52m charge in relation to the scheme (H1 2011: £0.29m).

At 30 June 2012 the deficit for the scheme, calculated in accordance with IAS 19, was £26.98m (31 December 2011: £23.55m). The increase was principally due to a reduction in the discount rate to 4.5% (31 December 2011: 4.9%). Liabilities of the scheme at 30 June 2012 were £96.10m and assets of the scheme were £69.12m.

Following the sale of Brand Addition, £11.40m was placed on bank deposit for the benefit of the pension fund. This amount is held in escrow to be used for pension scheme risk reduction exercises to be agreed between the Trustee and the Company. Under the terms of the escrow agreement it cannot be returned to the Company.

The Company cash contribution to the scheme in the first half of the year was £0.26m. In line with the schedule of contributions, a further payment of £2.90m will be made into the scheme out of the escrow cash account by 31 December 2012 if the escrow monies have not been paid into the scheme for risk reduction exercises by that date.

Exchange

The average US dollar exchange rate for the half year period was 1.58 (H1 2011: 1.62; FY 2011: 1.60). The closing rate at 30 June 2012 was 1.57 (2 July 2011: 1.60; 31 December 2011: 1.55).

Critical accounting policies

Critical accounting policies are those that require significant judgements or estimates and potentially result in materially different results under different assumptions or conditions. It is considered that the Group's critical accounting policies are pensions, deferred taxation and goodwill.

Risks

The Group continues to be affected by a number of risks. These have not changed since the year end and are detailed on pages 11 and 12 of the Group's Annual Report and Accounts 2011, a copy of which is available on the Group's website, http://investors.4imprint.com. The risks include: macroeconomic conditions, market competitors; operational risks; purchase of materials and services; and potential litigation and complaints.

Gillian Davies

Group Finance Director

2 August 2012Condensed consolidated income statement (unaudited)

Condensed consolidated statement of comprehensive income (unaudited)

Condensed consolidated balance sheet (unaudited)

Consolidated statements of changes in Shareholders' equity (unaudited)

Condensed consolidated cash flow statement (unaudited)

Notes to the interim financial statements

1 General information

4imprint Group plc is a public limited company incorporated and domiciled in the UK and listed on the London Stock Exchange. Its registered office is 7/8 Market Place, London, W1W 8AG.

The condensed consolidated interim financial statements were authorised for issue in accordance with a resolution of the Directors on 1 August 2012.

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2011 were approved by the Board of Directors on 7 March 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

The financial information contained in this report has neither been audited nor reviewed, pursuant to Auditing Practices Board guidance on Review of Interim Financial Information, by the auditors.

2 Basis of preparation

These condensed consolidated interim financial statements for the half year ended 30 June 2012 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and IAS 34 'Interim Financial Reporting', as adopted by the European Union, and should be read in conjunction with the Group's financial statements for the year ended 31 December 2011, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

3 Accounting policies

The accounting policies applied in these condensed consolidated interim financial statements are consistent with those of the annual financial statements for the year ended 31 December 2011, as described in those annual financial statements.

The tax charge for the interim period is accrued based on the best estimate of the tax charge for the full financial year.

4 Restatement

The half year 2011 income statement and notes have been restated to classify the Brand Addition segment as a discontinued operation.

In addition the net interest charge in respect of the defined benefit pension scheme has been reclassified to finance costs from operating expenses to reflect the nature of the charge more accurately.

5 Segmental analysis

The chief operating decision maker has been identified as the Board, and the segmental analysis is presented based on the Group's internal reporting to the Board.

The continuing operations of the Group are reported in two primary business segments:

Inter segment revenues are on an arms-length basis.

Net finance costs totalling £588,000 (H1 2011: £463,000, FY 2011: £933,000), and taxation charge of £934,000 (H1 2011: £625,000, FY 2011: £1,950,000) cannot be separately allocated to individual segments.

Unallocated assets include head office items and tax.

6 Discontinued operations

On 23 March 2012 the Group disposed of the Brand Addition business to H.I.G., a leading global private equity investment firm. The aggregate consideration was £24m (based on a normalised level of working capital and on a cash and debt free basis). £1.25m of the consideration is deferred for twelve months, there are no conditions attaching to this payment and it is guaranteed under an irrevocable letter of credit from the Bank of Montreal.

* £1.25m deferred until March 2013.

Included within the cash flow statement are the following cash items from discontinued operations:

7 Exceptional items

The Company made an enhanced transfer value (ETV) offer to deferred members of the defined benefit pension scheme during the prior year and 307 members accepted the offer and transferred out of the scheme.

SPS restructuring costs in 2011 related to a reduction in headcount.

8 Taxation

The taxation charge for continuing operations for the period to 30 June 2012 was 38% (H1 2011: 38%; FY 2011: 38%, after adjusting profit before tax for the non-taxable goodwill impairment). Tax paid in the period was £112,000 (H1 2011: £53,000; FY 2011: £1,414,000).

9 Earnings per share

Basic, underlying and diluted

The basic, underlying and diluted earnings per share are calculated based on the following data:

The basic weighted average number of shares excludes shares held in the employee share trust. The effect of this is to reduce the average by 75,856 (H1 2011: 80,984; FY 2011: 79,109).

The interim dividend for 2012 of 5.25p per ordinary share (interim 2011: 5.00p; final 2011: 9.60p) will be paid on 14 September 2012 to ordinary Shareholders on the register at the close of business on 10 August 2012.

11 Pension scheme bank account

Following the sale of Brand Addition, under the terms of an escrow agreement with the Trustee of the defined benefit pension scheme, the Company deposited £11.40m into a bank account held jointly with the defined benefit pension scheme Trustee. This amount will be used for pension scheme risk reduction exercises as agreed between the Company and the Trustee and no payment may be made to the Company from the account.

12 Employee pension schemes

The Group operates defined contribution pension plans for the majority of its UK and US employees. The regular contributions are charged to the income statement as they are incurred.

The Group also sponsors a UK defined benefit pension scheme which is closed to new members and future accruals. The funds of the scheme are administered by a trustee company and are independent of the Group's finances.

During the period the financial position of the defined benefit pension scheme has been updated in line with the expected return on scheme assets, the interest on scheme liabilities and cash contributions made to the scheme. The last full actuarial valuation was carried out by a qualified independent actuary as at 5 April 2010 and this has been updated on an approximate basis to 30 June 2012.The amounts recognised in the income statement are:

The principal assumptions made by the actuaries at 30 June 2012 were:

The mortality assumptions adopted at 30 June 2012 imply the following life expectancies at age 65:

Analysis of the movement in the balance sheet liability:

13 Analysis of net debt

14 Cash generated from operations

Cash flows relating to discontinued operations are shown in note 6.15 Share capital

During the period 561,519 shares, with a nominal value of £216,000, were issued for a consideration of £544,000 to satisfy exercises of share options under the UK SAYE and US Sharesave Schemes (2011: no shares issued in year).

16 Capital commitments

The Group had capital commitments of £43,000 contracted but not provided for in these financial statements

(2 July 2011: £44,000, 31December 2011: £213,000, of which £134,000 was in respect of discontinued operations).

17 Related party transactions

The Group did not participate in any related party transactions that require disclosure.

Statement of Directors' responsibilities

The Directors confirm that, to the best of their knowledge, this condensed consolidated set of interim financial statements has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by rules 4.2.7R and 4.2.8R of the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Services Authority, namely:

·; An indication of the important events that have occurred during the first six months and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year.

·; Disclosure of material related party transactions and changes therein.

The names of the Directors of 4imprint Group plc are as listed in the Group's Annual Report for 31 December 2011, apart from Mr K. Lyons-Tarr who was appointed an Executive Director and Mr J.A. Warren and Mr S.J. Gray who were appointed as Non-Executive Directors on 11 June 2012. Mr I. Brindle and Mr N. Temple resigned as Non-Executive Directors on 30 June 2012. A list of current Directors of 4imprint Group plc is maintained on the Group website: http://investors.4imprint.com

By order of the Board

2 August 2012