Group plc
4imprint Group plc Annual Report & Accounts 2023
Annual
Report &
Accounts
2023
4imprint Group plc Annual Report & Accounts 2023
Our purpose is to harness the
enduring appeal of promotional
products to help our customers
build their brand, promote
their initiatives, achieve their
marketing goals and make
lasting connections with those
who are important to them.
With every order we are trusted to
carry a distinctive logo or message
on our products, so we understand
clearly that our primary aim is to be
certain to make our customers and
their organisations shine.
We deliver on this trust by cultivating
an authentic environment where our
people are valued and empowered to
do their best work.
Our priority is to attract and retain a
diverse team, each member of which
is committed to creating mutually
beneficial, sustainable outcomes for
all stakeholders and the environment,
in turn protecting and strengthening
the long-term interests of the
Company and our Shareholders.
OVERVIEW
01 Highlights
02 At a Glance
04 Chairman’s Statement
STRATEGIC REPORT
06 Chief Executive’s Review
09 Strategic Objectives
12 Key Performance Indicators
14 Market Position
18 Business Model
20 Sustainability
38 Financial Review
44 Principal Risks & Uncertainties
54 Stakeholder Engagement
58 Non-Financial and Sustainability
Information
CORPORATE GOVERNANCE
60 Corporate Governance Report
62 Board of Directors
64 Statement on Corporate Governance
68 Nomination Committee Report
71 Audit Committee Report
75 Annual Statement by the Chair of the
Remuneration Committee
78 Remuneration Report
93 Directors’ Report
95 Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
96 Independent Auditor’s Report
104 Group Income Statement
105 Group Statement of Comprehensive
Income
106 Group Balance Sheet
107 Group Statement of Changes
inShareholders’ Equity
108 Group Cash Flow Statement
109 Notes to the Financial Statements
135 Company Balance Sheet
136 Company Statement of Changes
inShareholders’ Equity
137 Company Cash Flow Statement
138 Notes to the Company’s Financial
Statements
ADDITIONAL INFORMATION
146 Alternative Performance Measures
148 Five Year Financial Record
IBC Registered Office and Company
Advisers
Contents
Find out more online:
investors.4imprint.com
HIGHLIGHTS
Operational overview
Continued market share gains driving very strong
financial results
Marketing activities remain productive, including
further development of the brand component
Net operating margin above 10%, reflecting
stability in supply chain conditions, improvement
in year-on-year gross margins and some
operational leverage
2,090,000 total orders received in 2023 (2022:
1,860,000); 311,000 new customers acquired in the
year (2022: 307,000)
Group well financed with cash and bank deposits
of $104.5m (2022: $86.8m)
$20m project to expand capacity at the Oshkosh
distribution centre underway, including planned
extension of solar array
Financial overview
REVENUE
$1,326.5m
+16%
2022: $1,140.3m
OPERATING PROFIT
$136.2m
+32%
2022: $102.9m
PROFIT BEFORE TAX
$140.7m
+36%
2022: $103.7m
CASH AND BANK DEPOSITS
$104.5m
+20%
2022: $86.8m
BASIC EPS
377.9c
+32%
2022: 285.6c
TOTAL PAID AND PROPOSED REGULAR DIVIDEND PER SHARE
+34%
2022: 160.0c
TOTAL PAID AND PROPOSED REGULAR DIVIDEND PER SHARE
167.8p
+27%
2022: 132.2p
OVERVIEW
STRATEGIC REPORT
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
01
AT A GLANCE
A platform for
delivery of organic
revenue growth
What we do
We make it easy for our customers to
promote their service, product or event.
Our customers know that promotional
products from 4imprint’s extensive
range along with personal, expert
service on every order will ensure that
their name – and brand – looks great in
front of their target audience.
Our objective
Our objective is to deliver market-
beating organic revenue growth
by expanding our share in the still
fragmented markets in which we
operate. We aim to establish 4imprint
as ‘the’ leading promotional products
brand within our target audience
through sustained investment in an
evolving marketing portfolio.
4imprint Group plc Annual Report & Accounts 2023
02
23
377.9
22
21
20
19
285.6
80.5
11.0
152.4
23 136.2
22
21
20
19
102.9
30.6
4.0
53.6
23
1,326.5
22
21
20
19
1,140.3
787.3
560.0
860.8
Five year growth
Where we do it
We operate the same business model in two primary geographical markets:
Reaching our customers
Innovative marketing allows
us to introduce millions of
potential customers to tens
of thousands of customised
products.
Looking after our
customers
We have an exceptional
culture revolving around
the delivery of remarkable
customer service, and a robust
satisfaction guarantee that our
customers can rely on.
Our product range
Our merchandisers work
closely with our suppliers
to continuously update
and curate our extensive
productrange.
Application of
technology
Our appetite for technology
delivers an attractive
customer experience, an
efficient order processing
platform and sophisticated
data-driven analytics.
How we do it
Our business operations are focused around a highly developed direct marketing business model. Organic revenue growth is
delivered by using a wide range of data-driven, online, offline and brand-based marketing techniques to capture market share in the
large and fragmented promotional product markets that we serve.
NORTH AMERICA
Most of our revenue is generated in the
USA and Canada, serviced from an office,
production and distribution facilities in
Oshkosh and Appleton, Wisconsin.
REVENUE
$1,302 .6m
98%
EMPLOYEES
1,593
December 2023
UK & IRELAND
Customers in the UK and Irish markets
are serviced from an office in Manchester,
England.
REVENUE
$23.9m
2%
EMPLOYEES
45
December 2023
REVENUE ($m)
$1,326.5m
OPERATING PROFIT ($m)
$136.2m
BASIC EARNINGS PER SHARE (c)
377.9c
OVERVIEW
STRATEGIC REPORT
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
03
CHAIRMAN’S STATEMENT
Another strong
financial
performance
“ The Group has
made significant
operational
andfinancial
progress in2023.”
4imprint Group plc Annual Report & Accounts 2023
04
Performance summary
Building on the momentum generated
by a healthy post-pandemic rebound
that began in 2022, the Group
delivered another very strong financial
performance in 2023.
Group revenue for 2023 was $1.33bn,
an increase of $0.19bn or 16% over
2022. Profit before tax for the year was
$140.7m (2022: $103.7m), driving an
increase in basic earnings per share
to 377.9c (2022: 285.6c). The business
model was characteristically cash-
generative, with cash and bank deposits
at the end of 2023 of $104.5m (2022:
$86.8m), leaving the Group well financed
entering 2024.
Total orders received for the full
year were up 12% over 2022, a good
performance reflecting continued
market share gains. These gains were
made despite challenging year-on-year
comparatives from April onwards and a
slow-down in growth in the promotional
products industry in the second half
of 2023 reflecting a more cautious
macroeconomic environment.
The financial dynamics within the
business are strong. Considerable
progress was made in gross margin
percentage which improved by more
than two percentage points against the
prior year. Productivity of marketing
spend has remained encouraging, with
our headline revenue per marketing
dollar KPI remaining above $8 for
the full year. As trailed in last year’s
Annual Report, significant incremental
investment in the business was approved
by the Board at the start of 2023. This
investment, primarily in people, has
enabled us to consolidate realised gains
as well as underpinning future growth
prospects. Incombination, these factors
resulted inan annual operating margin
exceeding10%.
Strategy
Our strategic direction is clear and has
not changed. We aim to deliver market-
beating organic revenue growth by
increasing our share in the large but
fragmented markets in which we operate.
We take a long-term view of the business
and its prospects. An important aspect
of this is our commitment to the further
development of the brand component of
our marketing, which we expect to be a
key growth driver in coming years.
Equally important in ensuring the Group’s
success is an unwavering commitment
to the 4imprint culture, which has been
crucial in allowing us to attract and retain
the depth of talent necessary to underpin
our growth ambitions. Our team
members are essential to our success.
The Board remains committed to the
Group’s strategy and business model as
well as being confident in the strength of
its competitive position.
Sustainability
Further good work has been done in
pursuing innovative and appropriate ways
to minimise the environmental impact of
our operations. Enhanced energy saving
and renewable energy initiatives have
continued and valuable work has been
done in calculating and understanding
the full extent of our GHG Protocol Scope
3 emissions.
Significant progress has been made
in expanding our Better Choices™
sustainable product initiative. More
than 15,000 Better Choices™ ‘tags’ have
now been applied to items included
in the programme and a particular
focus has been on integrating products
from our own private label brands into
thisinitiative.
Pension
In June 2023 we took a significant
further step in the Group’s long-term
commitment to fully de-risk its legacy
defined benefit pension obligations.
Through the purchase of a bulk annuity
‘buy-in’ insurance policy, we were able
to eliminate inflation, interest rate and
longevity risks in respect of substantially
all remaining pension benefits. A cash
lump sum of $4.1m was paid by way of
a ‘top-up’ premium for the transaction,
after which balance sheet volatility
will cease and future deficit reduction
contributions of around $4m per year
willno longer be required.
Dividend
The Group finished 2023 in a very strong
financial position, with cash and bank
deposits of $104.5m (2022: $86.8m).
TheBoard recommends a final dividend
per share of 150.0c (2022: 120.0c),
givinga total paid and proposed 2023
regular dividend per share of 215.0c
(2022: 160.0c).
The use of the Group’s large cash
balance is under regular review in
accordance with the Group’s capital
allocation framework and balance sheet
fundingguidelines.
Board
In August 2023 Charlie Brady stepped
down from the Board due to a
challenging health issue. Charlie joined
the Board in 2015 and over his years with
4imprint made a significant contribution
to the strategic development of the
Group. His wit and wisdom are greatly
missed by his former Board colleagues.
Outlook
The Group has made significant
operational and financial progress in
2023, reflecting a clear strategy and a
highly resilient business model.
Trading results in the first two months
of 2024 have been in line with both the
Board’s expectations and consensus
forecasts. We are confident that we will
continue to takemarket share.
PAUL MOODY
CHAIRMAN
12 March 2024
OVERVIEW
STRATEGIC REPORT
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
05
CHIEF EXECUTIVE’S REVIEW
Consistent
market
sharegains
Performance overview
2023 was another year of record
results for 4imprint. This remarkable
performance reflects the strength of
our strategy in driving continued market
share growth. As ever, this growth was
underpinned by the outstanding efforts
of our team members and the strength
of the relationships we have with our
supplier partners. Excellent progress has
been made in 2023 on several important
initiatives within the business.
As we noted in our half-year report,
trading momentum in the first half of
2023 was favourable, with total orders
received up 18% over 2022. At the time,
however, we were careful to set these
results firmly in the context of weak prior
year comparatives in the first half of
2022. As we expected, the percentage
increases in total order activity over the
prior year moderated over the second
half of the year, reflecting the much more
challenging year-on-year comparatives
that included a period of significant
recovery from the pandemic.
In addition, the second half of 2023
saw softening demand patterns in the
promotional products industry typical
of a less buoyant general economic
environment. Recently released research
from ASI, a North American industry
body, indicated that in the fourth quarter
of 2023 year-over-year sales for industry
distributors in aggregate were essentially
flat, a marked deceleration as compared
to the prior year. We continued to gain
market share against this backdrop.
06
4imprint Group plc Annual Report & Accounts 2023
In total 2,090,000 orders were received
in 2023, representing an increase of
12% over 2022. In line with historical
patterns, existing customer orders made
up the majority, with 1,561,000 orders
representing a 14% increase over 2022.
This strength in existing customer orders
gives us reassurance in respect of the
resilience and reliability of the customer
file moving forward.
529,000 new customer orders were
received in 2023, an increase of 2%
over 2022. We acquired 311,000 new
customers in the year, representing a
gain of 1% over the 307,000 acquired in
2022. As well as being a function of much
tougher comparatives in the second half
of 2022, the relative slow-down in new
customer acquisition also correlates
clearly with the softening demand
patterns in the industry.
Average order values in 2023 were 1%
above prior year, driven by changes
in the merchandising mix, customer
preferences and price adjustments
through the year. This led to a total
increase at the demand revenue level
(value of orders received) of 13%
over2022.
As the year progresses, we anticipate that
2024 will bring more normalised demand
comparatives and an improved, more
typical balance between new and existing
customer activity.
These demand numbers laid the base
for a strong financial performance.
Group revenue for 2023 was $1.33bn,
representing an increase of 16% or
$0.19bn over 2022. The difference
between the 13% increase at demand
level and the 16% gain in reported
revenue is explained mostly by a return
to normal experience in 2023 in respect
of cancelled orders and customer credits/
claims. These effects had been elevated
in 2022 due to the global and local supply
chain disruption that caused significant
adjustments and delays to order flow in
that year.
Operational highlights
Significant operational progress was
made in 2023. Much of this was related to
bolstering resources in the business after
a particularly demanding year managing
$350m in incremental organic revenue
growth in 2022.
– People. Our team members are
essential to our current and future
success. In our 2022 Annual Report
we identified our intention to make a
significant investment in the business
in 2023, primarily in people, in order
to consolidate existing gains and
strengthen our platform for future
profitable growth. Even though the
labour market has remained tight,
we have been able to attract the
high-quality talent that we need in a
variety of areas across the business,
both in terms of those who directly
support our increasing order count
as well as people to strengthen
our organisational structure for
the future. The results have been
tangible: whereas the second half
of 2022 was a time of acute stress
operationally, 2023 was calm and
efficient, leading to lower order
adjustments and cancellations,
better credits/claims experience and
shorter lead times, all of which led to
improved customer service. We have
continued with the development of
our ‘hybrid’ working environment for
team members who previously would
have worked in the office. This model
will remain as a permanent option for
desk-based team members.
After a step change in profitability in the
prior year, the Group delivered another
very strong result in 2023. Operating
profit for 2023 of $136.2m was 32%
above the 2022 comparative of $102.9m,
producing an operating margin for the
year of 10.3% (2022: 9.0%). Other than
the revenue growth outlined above,
three major themes contributed to this
strengthening in net return:
– Gross margin percentages improved
by more than two percentage points
against the prior year. This favourable
movement was driven mainly by price
adjustments, supplier rebates, more
stable product input prices and lower
freight costs.
– Productivity of marketing spend
was encouraging, with our headline
revenue per marketing dollar KPI
remaining above the $8 mark for the
full year. For comparison purposes,
this KPI was below $6 in the pre-
pandemic year of 2019.
– Some operational gearing over the
fixed and semi-fixed elements of the
cost base, but as anticipated this was
lower than usual as a result of the
significant incremental investment
in the business, primarily in people,
to support what is now a much
largerbusiness.
The 4imprint direct marketing business
model remains very cash generative, with
free cash flow in the year of $128.5m
(2022: $63.9m) leading to cash and
bank deposits at the 2023 year-end
of$104.5m (2022: $86.8m).
Revenue
2023
$m
2022
$m Change
North America 1,302.6 1,120.5 +16%
UK & Ireland 23.9 19.8 +21%
Total 1,326.5 1,140.3 +16%
Operating profit
2023
$m
2022
$m Change
Direct Marketing operations 141.2 107.9 +31%
Head Office costs (5.0) (5.0) 0%
Total 136.2 102.9 +32%
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
07
STRATEGIC REPORT
OVERVIEW
CHIEF EXECUTIVE’S REVIEW CONTINUED
– Marketing. The development of and
investment in the brand component
of our marketing mix has been the
key catalyst behind our materially
improved marketing productivity in
recent years as compared to historical
performance. We are confident
that the brand element has settled
into our proven cycle of continued
investment in testing and refining
the marketing mix. Most recently we
have had initial success in our testing
into ‘streaming’ TV which will now
become part of our brand marketing
investment. The improved flexibility
offered by this evolved marketing
portfolio enables us to take full
advantage of the immediate market
share opportunity, at the same time
as strengthening the business for
thelong term.
– Supply. The supply chain position
in 2023 stands in stark contrast to
2022. Through most of 2022 we dealt
with acute pressure stemming from
challenges around global logistics,
inventory availability and production
capacity to keep up with demand.
During that time we relied on the
deep relationships we have with our
key Tier 1 suppliers to manage these
issues as best we could. Thankfully,
during 2023 these supply chain
challenges have now been fully
resolved, taking delays and friction
out of the process and enabling us to
deliver the ‘4imprint Certain’ service
that our customers come to us for.
– Screen-printing. Our new screen-
print facility in Appleton, Wisconsin,
went live for production in April
2023. We have been fortunate to
recruit the team members required
for the new operation. A second
shift launched in the first quarter of
2024, and our intention is to scale up
further to support our overall apparel
decoration capability.
– Oshkosh facilities. The Board has
authorised a further major expansion
at our distribution centre site in
Oshkosh, Wisconsin. This facility
expansion is aimed primarily at
supporting the continued growth of
the apparel category of our product
range. The current footprint will
increase from just over 300,000 sq.ft.
to at least 450,000 sq.ft. Construction
is already under way, with a target
operational date of Q3 2024. The
overall cost of the project will be
around $20m.
Sustainability
Good progress was made on our ESG
agenda in 2023.
– We maintained and renewed our
CarbonNeutral
®
business certification.
– The team has worked on further
energy and waste reduction initiatives,
including a renewable energy initiative
through our local energy provider,
with the ultimate goal of moving
towards clean energy initiatives
and reducing reliance on carbon
offsetproducts.
– The existing solar panel array
will be supplemented and
extended in capacity as part of the
expansion project at the Oshkosh
distributioncentre.
– There has been exciting progress in
expanding and developing our Better
Choices™ sustainable products range.
More than 15,000 Better Choices™
‘tags’ (2022: 8,000) have now been
applied to items meeting qualification
for the programme.
“ Significant
operational
progress was made
in 2023. Much of
this was related to
bolsteringresources
in the business.”
Looking ahead
Our operations are robust and scalable,
especially in the light of the investment
in the business highlighted in this report.
We are confident that we will continue
to take share in the markets in which
we operate.
4imprint Group plc Annual Report & Accounts 2023
08
STRATEGIC OBJECTIVES
Building a commercially and
environmentally sustainable business
that delivers value to all stakeholders
OBJECTIVES
To protect and enhance the 4imprint brand
as synonymous with the principles and
values that it represents
To deliver the extraordinary customer
servicerequired to acquire and retain the
customer relationships that support long-
term valuecreation
To curate and preserve a distinct and diverse
culture that develops, empowers and values
team members
To embrace environmental initiatives tailored
to achieve maximum impact in the context of
our business and operations
To maintain collaborative and mutually
beneficial relationships with our supplier
partners, grounded in clear social and
ethicalexpectations
To support, participate in and give back to
our local communities
KEY ENABLERS
– Relentless focus on excellence in customer service
– Culture guided by application of the 4imprint
Compass and ‘The Golden Rule’
– Investment in environmental initiatives, and setting
of clear and measurable performancetargets
– Clear social and ethical policies and expectations
– 4imprint Supply Chain Code of Conduct
– Charitable giving programme and encouragement
of all team members to volunteer or otherwise
participate in their local communities
KPIs (SEE PAGES 12 AND 13)
– Year-over-year (YOY) revenue growth
– 24-month customer retention
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
STRATEGIC REPORT
4imprint Group plc Annual Report & Accounts 2023
09
OVERVIEW
STRATEGIC OBJECTIVESCONTINUED
Market leadership
driving organic
revenue growth
Cash generation
and profitability
OBJECTIVES
To establish 4imprint as ‘the’ recognised
promotional products brand within our
target audience
To be the leading direct marketer of
promotional products in the markets in
whichwe operate
To expand share in fragmented markets
through sustained investment in a diversified,
evolving marketing portfolio
To set challenging organic revenue targets
linked directly to the Group’s strategy
KEY ENABLERS
– Competitive advantage through continuous
development of and sustained investment in:
– People
– Marketing
– Technology
– Differentiation through operational excellence:
– Customer service
– Merchandising and supply
– Efficient processing at scale of individually
customised, time-sensitive orders
KPIs (SEE PAGES 12 AND 13)
– YOY revenue growth
– Number of orders received
– 24-month customer retention
– Revenue per marketing dollar
OBJECTIVES
To deliver reliable and increasing free cash
flowover the medium to longer term
To balance short-term profitability with
marketing investment opportunities leading
to sustainable long-term free cash flow and
EPSgrowth
KEY ENABLERS
– Reinvestment of cash generated from operations
into organic growth initiatives based on multi-year
revenue/return projections
– Disciplined approach to investment:
– Marketing investment based on our assessment
of both prevailing market conditions and a
combination of current and future customer-
centric metrics, including prospecting yield
curves, retention patterns and lifetime revenue
profiles
– Capital investment evaluated based on cash
payback and discounted cash flow parameters
– Direct marketing ‘drop-ship’ business model,
facilitating efficient working capital management
– Low capital intensity
KPIs (SEE PAGES 12 AND 13)
– Revenue per marketing dollar
– Operating margin
– Basic earnings per share
– Cash conversion
10
4imprint Group plc Annual Report & Accounts 2023
Effective capital
structure
Shareholder
value
OBJECTIVES
To maintain a stable and secure balance
sheet aligned with the Group’s growth
objectives
To have the flexibility to be able to continue
investing in the business through different
economic cycles
To enable the Group to act swiftly when
investment opportunities arise
To meet our legacy defined benefit pension
commitments as they fall due
KEY ENABLERS
– Conservative balance sheet funding approach
– Capital allocation priorities in line with strategic
objectives
KPIs (SEE PAGES 12 AND 13)
– Cash balance
– Return on average capital employed
– Pension asset/(deficit)
– Total Shareholder Return (TSR)
OBJECTIVES
To deliver increasing Shareholder value
through execution of the Group’s
growthstrategy
KEY ENABLERS
– Financial discipline in evaluation of investment
opportunities
– Clear priorities in capital allocation:
– Organic growth initiatives
– Regular dividend payments
– Residual legacy pension funding
– M&A opportunities
– Other Shareholder distributions
KPIs (SEE PAGES 12 AND 13)
– Basic earnings per share
– Dividends per share
– TSR
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OVERVIEW
STRATEGIC REPORT
11
4imprint Group plc Annual Report & Accounts 2023
23 23
1,326.5 1,561
22 22
21 21
20 20
19 19
1,140.3 1,341
1,003
692
1,130
787.3 426
560.0 268
860.8 457
529
519
23 2345 8.30
22 22
21 21
20 20
19 19
41 8.86
38 6.17
43 6.03
43 5.58
23 2310.3 120
22 22
21 21
20 20
19 19
9.0 91
3.9 63
320
6.2 96
0.7
KEY PERFORMANCE INDICATORS
REVENUE GROWTH ($m)
$1,326.5m +16%
24-MONTH CUSTOMER RETENTION (%)
45%
OPERATING MARGIN (%)
10.3%
NUMBER OF ORDERS RECEIVED (‘000)
2,090 +12%
REVENUE PER MARKETING DOLLAR ($)
$8.30
CASH CONVERSION (%)
120%
Following the record-breaking organic growth levels recorded in
2022, the business saw continued encouraging results in 2023.
The year-on-year growth of 16% benefitted from continued
marketing productivity and improved supply chain conditions.
This is a key measure of progress towards our strategic
objectives.
The 24-month customer retention rate offers visibility as to
the broad stability and strength of the customer file. The
2023 results highlight the full post-pandemic recovery of the
24-month customer retention rate.
Operating margin percentage shows the profitability of the
Group’s trading operations. The marked increase in profitability
has been driven by favourable demand, recovery in gross
margin percentage, productive marketing spend and general
operational gearing.
Orders received (demand) statistics are collated on a daily,
weekly and monthly basis to evaluate performance against
targets in our operational plan for both new and existing
customers. Analysis of order patterns offers a clear and
immediate measure of operational performance.
Revenue per marketing dollar gives a measure of the productivity
of our investment in marketing. 2023 represents a sustained and
material improvement from our pre-pandemic historical norms
following the expansion of the brand advertising component of
the mix.
Cash conversion measures the efficiency of the 4imprint
business model in the conversion of operating profits into
operating cash flow. The high conversion rate in 2023 reflects
both good working capital management and the unwinding of an
elevated net working capital balance at the 2022 year-end.
New
Existing
4imprint Group plc Annual Report & Accounts 2023
12
23 23
104.5 104
22 22
21 21
20 20
19 19
86.8 94
41.6 41
39.8 6
41.1 86
23 230.0
22 22
21 21
20 20
19 19
1.2
2.0
285.6
(3.3)
(12.3) 152.4
377.9
23
160.0 200.0
22
21
20
19
45.0
0.0
215.0 23 15
22
21
20
19
54
10
(27)
80.5
11.0
61
25.0
Regular
Special
PENSION ASSET/(DEFICIT) ($m)
$0.0m
CASH AND BANK DEPOSITS ($m)
$104.5m
DIVIDENDS PER SHARE (DPS) (c)
215.0c
REGULAR
BASIC EARNINGS PER SHARE (EPS) (c)
377.9c
RETURN ON AVERAGE CAPITAL EMPLOYED (ROACE) (%)
104%
TOTAL SHAREHOLDER RETURN (TSR) (% in year)
15%
This KPI demonstrates the substantial efforts made in recent
years in the de-risking of the Group’s legacy defined benefit
plan. The purchase of a ‘buy-in’ insurance policy in 2023
was a significant further step towards fully de-risking our
pensionobligations.
Our balance sheet funding guidelines call for the business to
aim for a target cash balance at the end of each financial year.
This KPI reflects the Group’s performance in managing its cash
resources relative to its capital allocation priorities. The 2023
cash balance remains healthy.
DPS provides a tangible measure of the delivery of Shareholder
value. The 2023 regular dividend is in line with the Board’s
guidelines to increase the regular dividend payment broadly
inline with EPS growth.
EPS growth over time gives a clear indication of the financial
health of the business and is a key component of the delivery of
Shareholder value. The 32% increase in EPS in 2023 reflects the
strong trading performance in the year.
This KPI shows the Group’s efficiency in the use of its capital
resources. It is influenced by profitability, working capital
management and productive capital investment.
Our aim is to deliver consistent performance and attractive TSR.
The disruptive effects of the pandemic and subsequent recovery
are clearly demonstrated over the five year period.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
13
STRATEGIC REPORT
OVERVIEW
MARKET POSITION
Maintaining a
leadership position
in the markets
weserve
“ Promotional products
are purchased by
a wide range of
individuals within all
types of businesses
and organisations.”
4imprint Group plc Annual Report & Accounts 2023
14
A fundamental strategic objective for
4imprint is to establish and maintain a
leadership position in the markets we
serve. We aim to establish 4imprint as
‘the’ recognised brand for promotional
products, driving our organic revenue
growth profile to significantly outpace the
overall growth rate of the promotional
products industry as a whole.
With revenue of over $1.3bn, 4imprint
is the largest distributor in the North
American promotional products industry.
The leading trade bodies, PPAI and ASI,
both placed 4imprint at the top of the
latest versions of their annual ‘Top 40’
distributor rankings. This reflects a very
strong recovery post-pandemic. Our
UK business is smaller, with annual
revenue in 2023 of £19.2m ($23.9m),
but it ranks consistently in that market’s
top five distributors according to
industrysources.
Our proposition
Our customers can be certain that our
team and our products will meet their
expectations, every time:
– Certain delivery: It’s on time or it’s
on us. If your event is missed because
we didn’t ship on time, your order
isfree.
– Certain value: If you find, within
30days of purchase, that your order
would have cost less elsewhere, let
us know and we’ll refund double
thedifference.
– Certain happiness: If you’re not
100% satisfied with your order, we’ll
pay to pick it up and rerun it or refund
your money – your choice.
Our 360° Guarantee
®
promises free
samples, complimentary art assistance
and personal, expert service on every
order. We aim to take away the worry,
making 4imprint the trusted right
hand minding the details every step of
the way. Whether raising awareness,
sponsoring events, acquiring customers,
recruiting new employees or supporting
good causes, our customers know that
promotional products from 4imprint
will ensure that their name – and
brand – look great in front of their
targetaudience.
Where we do business
We operate in two primary
geographicalmarkets:
– North America: The estimated
market size of the US and Canadian
promotional products markets
together in 2023 is estimated
to total around $26bn in annual
revenue (around $25bn in 2022).
We serve these markets from
facilities in Oshkosh and Appleton,
Wisconsin,USA.
– UK & Ireland: The UK and Irish
promotional products market size
was estimated by industry sources in
2023 to be around £1.2bn ($1.5bn),
now fully recovered to pre-pandemic
levels. Our office serving these
markets is in Manchester, UK.
The marketplace for promotional
products is fragmented. The US industry
trade body, PPAI, has produced estimates
that our largest market, the USA, is
served by just under 26,000 distributors,
of whom fewer than 1,000 have annual
revenue of more than $2.5m. The
distribution structure is similar in the
Canadian and UK/Irish markets.
Our customers
Promotional products are purchased
by awide range of individuals within all
types of businesses and organisations.
These products have many uses: as
an integral part of sales and marketing
campaigns; for recruitment or recognition
activities; to promote health and safety
initiatives; and for any other method
of making a connection between our
customer’s organisation and the recipient
of theitem.
We define our customer as the individual
placing the order, rather than the
business or organisation for which the
individual works or with which he/she
is associated. Our customer base is
widely dispersed geographically, by size
of business/organisation and across
commercial, governmental, educational,
charitable, religious and other segments.
Our target customer will typically be
working at an organisation with 25 or
more employees and $1m or more in
annual revenue. No single customer
comprises a material part of 4imprint’s
overall revenue.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
15
STRATEGIC REPORT
OVERVIEW
MARKET POSITION CONTINUED
Our products
We sell an extensive range of promotional
products – merchandise that is custom
printed with the logo or name of an
organisation with the aim of promoting a
brand, service, product or event.
Our product range comprises tens
of thousands of individual products
in categories such as pens, bags and
drinkware to higher value items such as
embroidered apparel, technology and
full-size trade show displays, enabling our
customers to find the perfect product
for their promotion and their brand. This
range is carefully updated and curated by
an experienced category management
team.
Our top ten ‘Supergroup’ product
categories by sales volume in 2023 are set
out below:
Supergroup
2023
Rank
2022
Rank Change
Apparel 1 1 18%
Bags 2 2 14%
Drinkware 3 3 3%
Stationery 4 5 25%
Writing 5 4 22%
Outdoors
&Leisure
6 6 17%
Trade Show
&Signage
7 7 21%
Auto, Home
&Tools
8 8 20%
Wellness &Safety 9 10 19%
Awards &Office 10 – 35%
Product trends
The apparel category continued its growth
following significant expansion in recent
years. We are particularly encouraged
by higher growth rates within the t-shirt
and sweatshirt categories (+24% and
+21% respectively) where the prevalence
of well-known brand names makes for a
competitive environment.
Growth in drinkware was relatively
modest in 2023. The category had seen
considerable development in previous
years as its popularity as a gift was
boosted by retail trends and brand
introductions. While brands represent a
solid 18% of drinkware revenue, we are
not seeing this share increase further
despite significant consumer social media
drinkware brand presence during 2023.
Whilst some elements of saturation may
be evident in the category, generic value
priced versions continue to perform well.
Underlying the individual category
performance is broad growth in more
modestly priced traditional office and
giveaway sub-categories. We view this as
more of a return of office and giveaway
type events than evidence of any
economic trading down as these products
have specific use cases. As an example,
the ‘stress ball’ category (included in
Awards & Office) experienced 52% growth
compared to 2022 (102% compared to
2019), the ‘hand fan’ category (included
in Outdoors & Leisure) experienced
58% growth compared to 2022 (114%
compared to 2019). Neither category
received any specific marketing boost.
Traditional stationery category products
such as sticky notes, notepads and
notebooks had a very positive year,
increasing to become our fourth largest
Supergroup. Our Taskright
®
private label
brand has contributed to this story, taking
leading positions in these categories.
Technology dropped off the top ten
Supergroup list (ranked #9 in 2022) but
did have modest growth during 2023. It
remains a category highly responsive to
consumer usage and tech development.
Some subcategories have seen a decline,
for example wired earbuds and USB drives
(memory sticks); conversely there was
growth in wireless charging devices and
power banks as data security concerns
while travelling have increased.
The inclusion of the Awards & Office
Supergroup is largely driven by the ‘stress
ball’ category which is included in this
group as well as mature categories such
as stickers and magnets that experienced
solid growth.
Private label
We continue to develop our stable of
‘in-house’ brands, exclusive to 4imprint.
These products are designed to meet
the core needs of our customers and fill
gaps within categories where in many
cases they have grown to occupy top
selling spots. Great attention is paid
to the functionality, quality and design
characteristics of each item in addition
to the choice of our supplier and
manufacturing partners. In 2022, as part
of our sustainability journey our category
management team began to evaluate
changes we could make to the materials
we were utilising to lower the carbon
footprint and provide more sustainable
options to our customers. Significant
progress has been made, particularly with
shifts to recycled polyester, plastics and
steel for drinkware. More information can
be found on pages 30 and 31.
4imprint Group plc Annual Report & Accounts 2023
16
“ We continue to
develop our stable
of ‘in-house’
brands, exclusive
to4imprint.”
Life is Good
®
In 2023 we launched our collaboration
with Life is Good
®
, a US-based lifestyle
brand who, via their high-quality t-shirt
range and popular character – Jake – aim
to spread the power of optimism and
a positive attitude in life. The 4imprint
range comprises apparel purchased from
Life is Good
®
and a licensing agreement
to extend the brand to existing popular
promotional products. Customers are
able to co-brand their artwork with Jake
and other popular Life is Good
®
artwork.
Better Choices
™
Customers continue to balance many
factors when researching and selecting
promotional products, including brand,
budget, event dates as well as artwork
and logo requirements. The same
customer’s requirements may vary
depending on uses and recipients. Our
Better Choices™ framework is designed
to aid the customer’s decision process
by highlighting and filtering options by
sustainability characteristics and also by
drawing attention to the availability and
affordability of these choices. The Better
Choices™ range has continued to grow
not only in terms of revenue but also in
terms of the more sustainable materials
and programmes that are available.
Verification and integrity remain a critical
part of the programme. More information
can be found on pages 29 to 31.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
17
STRATEGIC REPORT
OVERVIEW
BUSINESS MODEL
Our business is the sale and distribution of promotional products.
Our commercial operations are built around a direct marketing
businessmodel designed to introduce millions of potential customers
totens of thousands of customised promotional products.
1
4
KEY STRENGTHS WHAT WE DO
Our people
– Strong company culture
– Highly trained, long-tenured
teammembers
– Empowered to ‘do the right thing’
Reaching our customers
– Expanding and productive
customerfile
– Marketing ‘engine’ able to attract
new and retain existing customers;
brand increasingly important
– Long tradition of excellence in
customer service
Our platform
– Proprietary, scalable IT system
– Reliable and resilient
suppliernetwork
Financial strength
– Strong balance sheet
– Investment in the business
– Highly cash-generative model
drivingself-financed growth
Customer proposition
– Fast, easy and convenient
– Expansive and relevant product range
– Industry-leading customer guarantee
– Online or over the phone
– Free samples and artwork
– Remarkable customer service
– Certain delivery. It’s on time or it’s
on us
– Certain value. Or we’ll refund double
thedifference
– Certain happiness. If you’re not
100% satisfied, we’ll refund or rerun
your order
Application of technology
– Websites, mobile, customer-facing
– Proprietary order processing
platform
– Sophisticated database analytics
– Mature, scalable systems
– Efficient order processing
– Supplier integration
– Data-driven marketing
– Innovative web and back
officetechnology
18
4imprint Group plc Annual Report & Accounts 2023
2
3
STAKEHOLDER OUTCOMES
Shareholders
Strong cash generation permits us to reinvest
in the continued growth of the business, and
to reward our Shareholders through dividend
payments and share price appreciation.
SEE PAGE 11
Customers
Promotional products work: they help our
customers achieve their marketing goals,
promote their safety initiatives and recognise
their employees, amongst many other uses.
SEE PAGE 15
Team members
We are committed to a culture that
encourages the training, development,
wellbeing and personal fulfilment of every
team member.
SEE PAGES 21 TO 23
Suppliers
We have productive relationships with our
trusted supplier partners. Our suppliers can
expect to be treated in accordance with the
4imprint ‘Golden Rule’ and to be paid on time.
SEE PAGES 24 AND 25
Community
Our team members are actively engaged in
our communities, including charitable giving
and volunteering activities.
SEE PAGES 23 AND 24
Pension Plan Trustee
andmembers
We stand firmly behind our legacy defined
benefit pension plan obligations.
SEE PAGE 40
Details of engagement with stakeholders are
onpages 54 to 57, covering the Directors’ duties
under section 172 (1) Companies Act 2006.
‘Drop-ship’ distribution
– Unrestricted access to tens of
thousands of products
– Efficient delivery of orders to
short lead times
– In-house apparel decoration and
screen-printing
– Minimal investment in inventory
– Supplier holds the inventory
– Supplier prints the product
– Order shipped direct to customer
– Close relationships with suppliers
– Merchandisers ensure the
productrange is continually
updated andcurated
Innovative marketing
– Data-driven heritage and discipline
– Multi-faceted, evolving
marketing portfolio
– Brand, search, catalogue
– New customer acquisition
– Growing customer file
– Existing customer retention
– Blue Box™
19
STRATEGIC REPORT
4imprint Group plc Annual Report & Accounts 2023
ADDITIONAL INFORMATIONFINANCIAL STATEMENTSCORPORATE GOVERNANCE
OVERVIEW
Building a
commercially and
environmentally
sustainable business
SUSTAINABILITY
4imprint Group plc Annual Report & Accounts 2023
20
People first
Our team members are absolutely central
to our success. They are the driving force
behind all that we do. Their extraordinary
commitment reflects an attitude of mind
firmly grounded in 4imprint’s culture and
values.
We have not deviated from our first
priority – an overriding commitment
to the health, safety and wellbeing of
all of our people. We aim to cultivate a
culture of trust that encourages people
to be themselves and bring their unique
talent and experience to a team bound
together by a shared vision and sense of
purpose. This approach enables us not
only to retain existing team members
but to enhance 4imprint’s reputation in
our communities, thereby allowing us
to attract new talent in continued tight
labour markets.
Communication and participation
A good proportion of formerly office-
based jobs are now performed by
team members working from home
on a permanent or hybrid basis. One
implication of this is that the previous
‘in-person’ quarterly updates on business
objectives and progress are no longer
practicable. These quarterly meetings
have therefore been replaced by regular,
detailed and informative written updates
from the CEO or UK General Manager
as well as other leaders in the business.
These updates have offered timely
information about the performance of
the business, payouts under quarterly
incentive remuneration plans, objectives
for the upcoming period, as well as
providing context around ongoing
projects and initiatives.
Our approach to sustainability
We have a long-standing, principled
approach to corporate responsibility. Our
culture and values encourage responsible
practice at all levels of the organisation
and present clear guiding principles
that drive ethical interactions with, and
outcomes for, all key stakeholders.
The Board believes that these principles
and values are entirely consistent with
our primary strategic objective (see
page 9) of building a commercially and
environmentally sustainable business that
represents the cornerstone of 4imprint’s
future success.
Our sustainability agenda focuses on
four pillars, each one built on robust and
ethical business practices:
– People and culture
– Social and community
– Ethical practices and
responsible sourcing
– Environmental
People and culture
Our second strategic objective (see page
10) specifically identifies investment in
our people as a key driver of competitive
advantage. We remain fully committed
to a culture that encourages the training,
development, wellbeing and participation
of every team member.
Further, our culture is based on the
‘Golden Rule’: treat others as you
would wish to be treated yourself.
This mindset is evident across the four
pillars of our sustainability agenda
through team members who go above
and beyond every day to help each other,
to provide remarkable service and to give
back to their communities because they
know and believe that it is the right thing
to do.
Compensation and benefits
In the context of very tight labour
markets we have, in recent years, paid
close attention to ensuring that pay rates
across the business remain competitive.
In addition to base wage rates and the
productivity-based element in the wage
structure for certain functions, all team
members are eligible to participate in a
quarterly ‘gain share’ bonus plan that is
based on the achievement of tangible,
clearly communicated performance
targets. ‘Gain share’ payments were made
each quarter in 2023 commensurate
with the performance of the business,
and quarterly ‘leadership’ bonuses were
also paid to managers and other key
contributors.
Our competitive benefits package
includes paid time off and strong medical,
dental and retirement plans. We also
offer resource aimed at personal financial
wellbeing. Additional training was offered
in 2023 on basics of budgeting and
planning through both a local college and
a non-profit organisation.
“ We have a
long-standing,
principled
approach to
corporate
responsibility.”
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
21
STRATEGIC REPORT
OVERVIEW
Training and development
We believe in the value and benefits of
personal and professional development.
Many of our classes, seminars and
training sessions now take place online.
Our training team ensures that the online
course curriculum continues to evolve
along with the business.
Other training initiatives have included
topics such as personal development,
leadership, safety, IT (particularly cyber
security), ‘train the trainer’ and other
customised technical training classes.
Inclusion remains an important theme
for our training team. The focus in 2023
has revolved around being an inclusive
employer; we have added training
sessions on raising self-awareness and
speaking up as appropriate.
We encourage our team members
to live healthy lives, and this focus on
wellness aims to make healthy living
easy and convenient. We provide a
number of online exercise classes
that team members can participate in
from the convenience of their home.
Through our onsite clinic, a Health Coach
provides different programmes including
educational sessions on healthy eating,
weight loss and exercise. Our Employee
Assistance Programme (EAP) Counsellor
also provides tips on our internal social
media platform and in our weekly
newsletters.
Our training programmes will continue to
be offered online and in webinar format,
and we will include ‘in-person’ sessions as
appropriate. For example, the initial new
starter Customer Service Representative
training classes have reverted to being
held on-site in Oshkosh.
Diversity, Equity and Inclusion (DEI)
We have a clear approach to DEI that is
directly in accordance with the culture and
values that 4imprint has cultivated over
a period of many years. The Group’s DEI
principles can be found on our IR website
at https://investors.4imprint.com.
We understand the importance and
beneficial effect of diversity within our
Group. We believe that remarkable teams
include a wide range of unique individuals,
and that bringing these individuals
together around a shared set of guiding
principles contributes directly to our
success as a business.
We aim to foster a culture that recruits,
develops and promotes team members
regardless of background. We are
committed to the principle of equal
opportunity in employment, and no
applicant or employee receives less
favourable treatment on the grounds of
nationality, age, gender, gender identity,
marital or civil partner status, sexual
orientation, religion, race, ethnicity or
disability. Further, we do not tolerate
discrimination against or harassment of
team members or others.
Good progress continues to be made
on DEI, including seeking a wider pool of
applicants for available jobs, reworking
job descriptions to eliminate barriers
and unconscious bias in the recruitment
process and expanding our training
offering to address these topics. In
addition, in summer 2023 we participated
in a round table with local non-profit
organisations to discuss ways to break
down employment barriers.
We are committed to working with team
members with disabilities to find roles or
reasonable accommodations that enable
them to meet the responsibilities of
their role.
SUSTAINABILITY CONTINUED
Gender representation
TOTAL HEADCOUNT
Permanent and temporary employees
1,159
485
Male
Female
MANAGEMENT
Employees who operate ata
seniorlevel in the Group
47.3
52.7
Male
Female
BOARD
4imprint Group plc Board members
42.9
57.1
Male
Female
At 31 December 2023 the Group
employed a total of 1,644 team members,
split between female (1,159, or 70%) and
male (485, or 30%).
In relation to gender diversity, in
November 2023 the Company took part
in the FTSE Women Leaders Review which
monitors gender balance in FTSE 100
and FTSE 250 companies. In addition
to reviewing gender diversity at Board
level, the FTSE Women Leaders Review
reports on the gender diversity of senior
management and their direct reports.
The data showed:
– The gender diversity of the Board
increased during the year, with 42.9%
female representation at the end of
the year (2022: 37.5%).
– Based on data as at 31 October 2023,
47.3% of the senior management
team including direct reports were
female (50.7% based on data as at
31 October 2022).
Customer service
training class in
progress
4imprint Group plc Annual Report & Accounts 2023
22
Community involvement and
volunteering
We encourage (and enable) our team
members to volunteer for their favourite
causes and make a difference in their
communities. Not only is this simply the
right thing to do, but it also allows our
team members to partner with other
like-minded individuals, forging powerful
relationships while elevating 4imprint
in the eyes of the community. Having
a positive community image not only
assists in maintaining strong employee
relationships but also positions 4imprint
as an ‘employer of choice’, attracting the
new talent required to support our strong
continued growth.
Each 4imprint team member receives
eight hours of paid time off (PTO) per
year for volunteering at nonprofit
organisations, schools, or other causes
that are meaningful to them. In addition
to causes selected by our team members,
we seek out, and often organise, additional
volunteer opportunities (on-premises and
off) to encourage more of our people to
give back.
In 2023, 342 team members participated
in volunteering events across 171
organisations, logging over 2,194 paid
volunteer hours—an increase of close to
30% in both individual participation and
volunteer hours compared to the prior
year. This was a welcome result, as we
bolstered our communication around
volunteer offerings and increased their
frequency too (up over 20% compared to
last year).
In 2023, some of those
opportunitiesincluded:
– ‘Give Back Bus’ events where team
members travelled to locations
together to volunteer.
– Cards 4 Compassion/Crafternoon –
teammates created 827 holiday cards
used to brighten someone’s day.
– Annual Christmas tree decorating at
Simeanna (a local retirement home).
– Feed the Body, Feed the Soul – an
event where volunteers package
meals for the needy.
– Wisconsin ‘Curd’ night – area
basketball team theme night to collect
non-perishable food.
– The community Boys & Girls Club –
creating a safe place, with a mission
to improve the lives of children.
– ‘Rock the Block’ with Habitat
for Humanity – volunteers
repaired homes in low-income
neighbourhoods.
– Collection drives including Coats for
Kids, Help for the Homeless Hygiene
Drive and various items for veterans.
While these opportunities may appear
small when viewed individually, they are
highlighted to showcase the depth of our
volunteer outreach efforts, which align
directly with 4imprint’s culture and values.
Health and safety
A proactive approach to health and safety
is an important aspect of the 4imprint
workplace. Desk-based ergonomics
and best practice protocols in the office
environment along with the operation of
machinery and material handling at our
distribution centre and screen-print facility
are key areas of emphasis in promoting a
safety culture. Incidents or near misses are
closely tracked, and a Safety Committee
meets to consider future improvements
based on experience and analysis of
the data, or to ensure that we are fully
compliant with changing regulatory
requirements. In addition, we benefit
from a fresh perspective through working
closely with external specialists and loss
control experts from our property and
casualty insurance carriers.
We have an extensive employee wellness
programme, including an on-site medical
clinic in the US operation. We have
continued to expand our health services
to include a nurse practitioner, registered
nurse, occupational therapist, and other
resources such as nutrition and health
coaches. These professionals are available
to deal with a wide range of medical
issues and needs. As well as increasing
productivity and being cost-effective for
the Company, the wellness programme
offers great convenience and has proved
very popular with employees for basic
medical services such as flu shots, blood
draws or consultation with a nurse or
nurse practitioner on minor conditions. All
on-site medical services are available for
free to our team members.
Social and community
4imprint believes in being a good
community partner by actively supporting
and fostering strong community
involvement initiatives and programmes.
The health of our business depends on
our loyal customers and, above all, on
our dedicated teammates. We show
our appreciation for their hard work
in many ways, including supporting
causes close to their hearts and their
communities—wherever they live. We
support many causes by sharing our time
and talents, and through the power of
promotionalproducts.
Community
involvement and
volunteering
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
23
STRATEGIC REPORT
OVERVIEW
Sponsorship
4imprint also supports the local
community through sponsorships. In
2023, we sponsored approximately
170 organisations, totalling $330,000 in
support – about 13% more organisations
compared to last year, in line with our
continued growth.
Some local sponsorships include:
– Oshkosh & Fox Cities Marathons
– Samaritan Counselling Center –
Ethics in Business Conference
– Wisconsin Sustainable Business
Council
– Discover Oshkosh (supporting local
businesses/tourism)
– Oshkosh Saturday Farmers Market
– N.E.W Pride Alive (LGBTQ event)
– Waterfest (concert series)
– TEDx Oshkosh
Charitable giving
4imprint’s one by one
®
charitable giving
programme allows nonprofit organisations
throughout the United States, Canada
and the UK to apply for a $500 grant
towards a promotional product order.
This programme fully embodies 4imprint’s
culture, values and principles.
At inception, the programme awarded one
grant each business day. Since then, our
business has grown significantly, and so
has our one by one
®
programme. We now
average over 15 grants per business day,
putting us closer to our goal of awarding
a grant to every certified nonprofit
thatapplies.
In 2023, 4imprint awarded over 5,600
grants for a value of $2,824,500 – an
increase of 125% over the previous year.
This increase is indicative of the quality
of nonprofits we enjoy supporting and
learning about, as well as the positive
impact they have on their communities.
We also donated items of product from
our inventory to one by one
®
applicants
as well as businesses, team members,
troops and customers engaged in
fundraising efforts. Additionally, we
provided numerous benefits and made
charitable contributions not only in the
United States and Canada but also in
other countries. Over 744,000 pieces
were shipped from inventory, and more
than 120 pallets of additional donations
were distributed to just fewer than 1,500
deserving organisations.
Ethical practices and responsible
sourcing
Ethical practices
We do not tolerate discrimination,
harassment, bullying or abuse; we comply
with wage and working condition and
time laws; we do not tolerate forced
labour or child labour; and it is our policy
that all workers have the right to form or
join a trade union and bargain collectively.
Our Modern Slavery Statement describes
the activities we are undertaking to
prevent slavery and human trafficking in
our business operations and supply chain,
in line with section 54 of the UK Modern
Slavery Act 2015. Our Modern Slavery
Statement and further details of our
social & ethical principles are available at
https://investors.4imprint.com/.
Bribery and corruption are not tolerated
in our business operations or in our
supply chain. Our ‘Anti-bribery, financial
crime and sanctions policy’ sets out our
high standards of ethics and compliance
across all aspects of our business and
provides detailed guidance on facilitation
payments, gifts and hospitality and
relationships with third parties, as well as
on money-laundering, tax evasion, fraud
and sanctions regimes. The policy applies
to all employees and workers of 4imprint
regardless of the jurisdiction in which
they operate. That policy, together with
our employee handbooks, establishes
clear systems and controls to ensure
effective implementation. We encourage
an open and transparent culture and
have a whistleblowing policy that is
communicated to all employees.
Supply chain
Our direct Tier 1 suppliers are essentially
domestic, being based in the USA and
Canada for the North American business,
and in the UK and EU for the UK and
Ireland business. These Tier 1 suppliers
take care of the importing/manufacture,
inventory management and printing
capacity required to ship thousands of
orders on a daily basis.
That said, we are acutely aware that
our end-to-end supply chain is long
and complex. As such our business
activities can have a significant impact
at many levels. Our intention is to make
that impact positive from a social,
environmental and economic perspective.
In 2023 4imprint’s primary North American
business had contractual relationships
with 130 suppliers, representing over
99% of our spend. This is a very stable
group of partners with a small number
of new suppliers added or relationships
ended each year. 90% of that spend went
to partners that 4imprint has worked
with for over 20 years. A small number
of supplier accounts are ‘rolled-up’ each
year reflecting some consolidation on
the supplier side of the industry. In 2023,
25 suppliers represented 80% of spend.
Average payment terms to suppliers in
2023 were 30 days or less.
Our ethical supply direction is set
by the Board in its Social and Ethical
Principles Statement which can be
found at https://investors.4imprint.com.
This statement sets broad guidelines
within which the Group must conduct
its business operations in accordance
with best practice, relevant legislation
and respecting human rights and ethical
practices throughout our value chain.
These broad principles are reinforced
in our ‘4imprint Supply Chain Code
of Conduct’. This is based on the
International Labour Organization’s
‘Declaration on Fundamental Principles
and Rights at Work’ and is fully aligned
with the Fair Labor Association’s
Workplace Code ofConduct.
SUSTAINABILITY CONTINUED
Local
sponsorships
4imprint Group plc Annual Report & Accounts 2023
24
Tier 1 monitoring programme
Work to increase monitoring of our Tier 1 suppliers against our Supply Chain Code of Conduct started in earnest in 2019. The
pandemic years were challenging, but good progress was made in 2023. Our initial objective was to grow the programme to cover
more than 90% of annual auditable spend through having an audit (principally a social audit looking at workers’ rights, health &
safety, pay and hours, and child or forced labour) on file within a rolling three year time period. This target was achieved in 2023.
An ‘auditable’ facility is one where the manufacturing, assembly and/or decorating of our products takes place (i.e. excluding office
locations). The table below summarises our monitoring activities:
2023 2022 2021 2020
Contracted suppliers in year 130 135 138 137
Auditable locations in year
1
159 164 166 167
Number of audits completed in year 54 37 31 14
Auditable spend for year ($m) 665.8 577.9 406.7 282.2
Audited spend in three year scope ($m) 646.6 458.4 110.7 30.3
% of auditable spend in scope 97% 79% 27% 11%
1 Auditable location count exceeds contracted suppliers due to some suppliers owning multiple facilities in different locations.
In 2023 we funded 23 Tier 1 audits (some are also requested by other customers of our suppliers). Regardless of who requests or
pays for an audit, any corrective action required will be promptly followed up. LRQA (Elevate) ERSA or SEDEX 4 Pillar are our preferred
audit protocols. Our short-term objectives are to increase the number of audits of smaller suppliers who have not yet experienced an
audit and to maintain the percentage of spend covered to 95% or above each year.
Tier 2 monitoring programme
Our goal is to work with Tier 1 suppliers who are diligent in managing their own Tier 1 suppliers (our Tier 2). From a monitoring
perspective we have continued to work with our suppliers to develop their own programme and provide financial support for some
elements of that. During 2023 we will have funded 22 LRQA (Elevate) ERSA audits with our Tier 2 suppliers.
Our apparel supply chain has a greater presence of established brands and suppliers. 60% of our apparel revenue is derived from
brands that are accredited Fair Labor Association Participating Companies and one core promotional apparel supplier. In addition,
two core suppliers (both include hard goods) are working towards accreditation, a significant commitment which we support.
4imprint team members remain actively involved in the Fair Labor Association’s (FLA) training and meetings.
From a country of manufacture perspective incremental shifts out of China continue but the picture remains steady – approximately
60% of our revenue is derived from products manufactured or assembled in China. The second largest country of manufacture
remains the USA at around 14%, with the Central American/Caribbean apparel bloc together comprising around 7%.
Training and development
We consider training and education for our own and our suppliers’ teams to be an important part of this process. Via our
participation in the FLA’s collegiate licensee programme we have access to a number of training opportunities. While our FLA
affiliation mandates that at least one 4imprint employee should take the training, we have paid additional funds to include team
members in Supplier Operations, Category Management and other associated internal teams to ensure that they develop a strong
awareness of the challenges that can occur in supply chains and our role in preventing and mitigatingthem.
We continue to work with our US trade association (Promotional Product Association International) in its supply chain leadership
work, arranging training sessions and an annual conference geared towards increasing understanding and best practices in social
responsibility, product compliance and sustainability.
For several of our smaller suppliers the roll-out of our monitoring programme means they are experiencing a social audit for
the first time. We are there to support them through that process and any subsequent corrective action. In support of this we
have subscribed to a health & safety training software platform enabling us to deploy and fund targeted health & safety training
whereneeded.
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
Decorating, importing,
warehousing & direct
ship to customer
Final product assembly
e.g. sewing for bags,
assembly of pens
Material and component
production e.g. knitting
for textiles, refill
manufacturing for pens
Raw material processing
e.g. spinning for textiles,
ink manufacturing for
pens
Raw material extraction
e.g. agriculture for
cotton, drilling/refining
for plastic resin
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
25
STRATEGIC REPORT
OVERVIEW
At the operational level the environmental
strategy is driven by the Group
Environmental Committee. This Committee
is chaired by a member of the Oshkosh
senior management team and is attended
by both of the Executive Directors and
other operational senior team members
from the US and UK operations. Its
remit is to manage the development
and implementation of the broad
environmental framework adopted in
2020. The Committee met on six occasions
during 2023 and intends to continue its
regular cadence into 2024. Interactions
between the Committee and the Board
are regular but not fixed; in order to
maintain maximum flexibility, progress
on initiatives and other updates are
coordinated as required either through the
Executive Directors or via discussions and
presentations from Committee members.
SMART
In September 2023 we celebrated
the sixth anniversary of our SMART
(Sustainability. Making A Renewable
Tomorrow) Committee, our internal
employee resource group. The aim of
the SMART Committee is to encourage
and support employee involvement in
sustainability initiatives as part of our
daily operations and their own lives.
Environmental
Overview
4imprint’s primary strategic objective
(page 9) is to build a commercially and
environmentally sustainable business
that delivers value to all stakeholders. We
see climate change mitigation and other
aspects of environmental stewardship as
a fundamental part of this commitment.
As a result, we incorporate environmental
matters into our strategic decision-
making, evaluate our environmental
performance across all the activities of
the Group and search out appropriate
and innovative ways to minimise the
environmental impact of our operations.
The greenhouse gas (GHG) emissions
report and Streamlined Energy and
Carbon Reporting tables in this section
demonstrate progress made during the
year on several of our environmental
initiatives; we aim to strengthen these
commitments to the low-carbon
transition in the years ahead.
Governance
The Board is responsible for strategic
oversight of the Group’s climate-related risks
and opportunities. The potential impacts
of environment-related risks on 4imprint’s
business operations are set out on pages 52
and 53 of the Strategic Report.
The Board held its annual strategy review
‘in-person’ in Oshkosh in early November
2023. An update was provided focused
on our initial work around quantification
of Scope 3 Purchased Goods & Services,
along with updates on renewable energy
and our Better Choices™ programme.
The Board has an agreed Environmental
Principles Statement which is available
at https://investors.4imprint.com. In
addition, as a Non-Executive Director, Jaz
Rabadia brings specific environmental
and sustainability expertise to the Board.
The Committee, composed of around
15 members from across the business,
meets once a month. Many ideas have
been developed and projects undertaken,
varying in scope and nature, but all with
an emphasis on sustainability and caring
for the environment. Some examples of
recent SMART activities are:
– Electronics recycling initiatives for the
personal items of team members,
leading to 3,621 lbs of electronics
being recycled resulting in 5,047 lbs
of emissions being reduced.
– ‘Take the Pledge’ – the successful
launch of a programme encouraging
employees to ‘pledge’ not to use
single-use products in common/lunch
areas. 491 team members signed
up, receiving free reusable lunch kits
andutensils.
– Looptworks – a contract was signed
with this partner in mid-2023 to
repurpose misprinted and scrap
apparel. Pickups occur every three to
four weeks, with the waste apparel
being ‘downcycled’ into insulation
materials.
– ‘Earth Day’ was recognised with a
week-long celebration, including
a SMART-themed scavenger
hunt, sustainability-related
prizes throughout the week and
encouragement for team members
to join the SMART community on our
in-house social network.
– ‘Adopt a Highway’ clean up – 4imprint
team members volunteered to clean
up a section of a local highway twice
a year.
Oshkosh DC,
including 1.4MW
solar array fully
operational
in2023
SUSTAINABILITY CONTINUED
4imprint Group plc Annual Report & Accounts 2023
26
Emissions reduction
In the context of the Group’s operations
and activities, the Group Environmental
Committee’s assessment remains that
climate change mitigation is the most
immediate and material way for 4imprint
to make a difference. Our initial
certification in 2021 as a CarbonNeutral
®
company in accordance with The
CarbonNeutral
®
Protocol has been
renewed annually and expanded
toinclude additional GHG Protocol
categories.
In alignment with our CarbonNeutral
®
company certification we prioritised
in-house energy reduction initiatives
followed by external renewable energy
opportunities. With our 2,660 panel
solar array becoming fully operational in
late 2022, 2023 marks the first year of
its impact on our energy consumption.
During 2023 it generated 1,250,000
Megawatt hours (MWh) of electricity,
of which 967,000 MWh (77%) was
consumed on-site by the distribution
centre facility and 283,000 MWh exported
to the grid. This facility will be expanded
in 2024 on the current site with the array
being developed further to continue to
support energy needs.
The majority of the balance of electricity
needs for this facility were, for 2023,
purchased through our local energy
provider’s renewable energy programme,
NatureWise
®
. That programme is certified
under the USA Green-e
®
certification
programme meeting the GHG Protocol’s
quality criteria for renewable energy
credits. It is our intention to continue with
this programme into 2024.
We are currently exploring enrolling in
a similar renewable energy programme
in 2024 for the screen-printing facility in
Appleton, Wisconsin.
Greenhouse gas emissions report
Our GHG reporting for 2023 is in line with the UK Government regulations on Streamlined Energy and Carbon Reporting introduced
in 2019, and emissions have been calculated based on the GHG Protocol Corporate Standard. The emissions data set out below
relates to the operations of the Group for the period ended 30December 2023.
Greenhouse gas emissions – Streamlined Energy and Carbon Reporting (SECR)
2023 2022 Change
Scope 1
1
Tonnes CO
2
e 526 555
(A)
-5%
(A)
Scope 2 – Location based
2
Tonnes CO
2
e 2,499 3,043
(A)
-18%
(A)
Scope 2 – Market based
3
Tonnes CO
2
e 1,082 2,946 -63%
Total Scope 1 & 2 – Location based Tonnes CO
2
e 3,025 3,598
(A)
-16%
(A)
Total Scope 1 & 2 – Market based Tonnes CO
2
e 1,608 3,501 -54%
Proportion of emissions that relate to the UK
– Scope 1 0.0% 0.0%
– Scope 2 – Location based 0.7% 0.4%
– Scope 2 – Market based 1.6% 0.4%
Intensity measurements – Scope 1 & 2 Location based
– Emissions by Group revenue Tonnes CO
2
e/$m Group revenue 2.3 3.2 -28%
– Emissions by employee numbers Tonnes CO
2
e/avg. employees 1.9 2.7 -30%
Intensity measurements – Scope 1 & 2 Market based
– Emissions by Group revenue Tonnes CO
2
e/$m Group revenue 1.2 3.1
– Emissions by employee numbers Tonnes CO
2
e/avg. employees 1.0 2.7
Energy consumption
– Gas kWh 2,755,631 2,913,353 -5%
– Electricity kWh 4,893,028 4,253,561 15%
Total kWh 7,648,659 7,166,914 7%
Proportion consumed in the UK 1.1% 0.8%
1 Scope 1: Emissions from combustion of fuel and operation of facilities.
2 Scope 2: Location based calculations for use of purchased and consumed electricity.
3 Scope 2: Market based calculations for use of purchased and consumed electricity. Market based data provided for first time in 2023 due to solar installation and
purchases of Renewable Energy Credits in USA business.
(A) Restated to align with data validated by RSK Group Ltd as part of Climate Impact Partners CarbonNeutral
®
Protocol. 2022 will be considered the ‘base year’ going forward.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
27
STRATEGIC REPORT
OVERVIEW
Scope 3
Whilst good progress continues to be made on our Scope 1 and 2 initiatives, by far the largest category of emissions for our business
model is Scope 3 category 1 ‘purchased goods and services’. In 2023 we have spent significant time exploring and learning about our
Scope 3 emissions and developing a plan for how we might best focus our attention looking forward. The following table shows the
progress we have made to date in understanding and analysing our Scope 3 emissions:
4imprint Group GHG emissions (Tonnes CO2e)
2023 2022 Change
Scope 1 526 555
(A)
-5%
Scope 2 – Location based 2,499 3,043
(A)
-18%
Scope 2 – Market based 1,082 2,946 -63%
Total Scope 1 & 2 – Location based 3,025 3,598
(A)
-16%
Total Scope 1 & 2 – Market based 1,608 3,501 -54%
Scope 3
1. Purchased goods and services:
Goods purchased for resale 714,054 613,671
(B)
16%
Goods and services for internal use 22,476 17,535
(B)
28%
2. Capital goods NC NC
3. Fuel and energy related activities 647 703
(A)
-8%
5. Waste generated in operations 286 237
(A)
20%
6. Business travel 425 123
(A)
245%
7. Employee commuting 2,415 2,129
(A)
13%
9. Downstream transportation and distribution 24,633 23,460
(A)
5%
11. Use of sold products NC NC
12. End-of-life treatment of sold products NC NC
Total measured Scope 3 emissions 764,936 657,857 16%
Total measured GHG emissions – Location based 767,961 661,455 16%
Total measured GHG emissions – Market based 766,544 661,358 16%
(A) Indicates data validated under Climate Impact Partners CarbonNeutral
®
Protocol by RSK Group Ltd.
(B) Data calculated by SCS Global Services for 2022, estimated for 2023 based on same methodology and emissions factors.
NC Categories not yet calculated – to be addressed going forward.
Scope 3 category 4 ‘Upstream transportation’ is included in Scope 3 category 9 ‘Downstream transportation and distribution’ as same carrier network.
GHG Protocol Scope 3 categories 8, 10, 13, 14 and 15 have been excluded from the table as they are not considered relevant to 4imprint’s business model.
2022 will be considered the ‘base year’ going forward.
Our CarbonNeutral
®
company certification requires us to calculate and continue to expand our assessment of Scope 3 categories.
Those Scope 3 categories included within the protocol, and independently assessed, are set out in the table above. For 2022 we
included ‘employee commuting’ for the first time and intend to include ‘hotel stays’ (Scope 3 category 6) and review ‘capital goods’
(Scope 3 category 2) in 2024.
Other than ‘purchased goods and services’, the largest category within our CarbonNeutral
®
company certification remains
‘downstream transportation and distribution’, a significant proportion of which is with UPS. We remain a participant in their carbon
neutral shipping programme. Emissions, while increasing in 2023, are at a lower rate than the business growth, reflecting a more
stable supply chain situation.
4imprint commissioned SCS Global Services in 2023 to calculate an estimated GHG inventory for Scope 3 ‘purchased goods and
services’ based on 2022 data. A spend-based methodology was utilised with secondary emissions factors taken from the most
recent EPA USEEIO database. Calculations were separated into products purchased for resale and those for internal use. While
the nuances and limitations of this methodology are appreciated, it provides a valuable starting point to begin to focus on Scope 3
reduction strategies.
It was evident from the calculation that significant emissions are created through apparel production. While the apparel category
generates 24% of our revenue, it represents 50% of the ‘purchased goods and services’ (for resale) emissions. This presents a clear
priority as we begin to consider reduction strategies.
SUSTAINABILITY CONTINUED
4imprint Group plc Annual Report & Accounts 2023
28
Our supplier engagement efforts have continued in 2023, as summarised in the table below. Key Tier 1 suppliers were encouraged
to establish or refine their own Scope 1 & 2 (S1 & S2) emissions calculations. By the end of 2023, 4imprint had received 2022 S1 &
S2 emissions data from suppliers representing 68% of our product spend. This data taught us that, relative to the total ‘purchased
goods and services’ (for resale) emissions, the imprinting of the product is a small percentage. It is, however, a critical part of our
business model and demonstrates important first steps for our suppliers’ own carbon reduction journeys.
Tier 1 suppliers
2022 2021
Count % of spend Count % of spend
Contracted suppliers 135 99% 138 99%
Suppliers completing S1 & S2 calculation 19 68% 10 59%
Suppliers with externally validated calculation 10 42% 6 42%
Suppliers fully reducing/offsetting S1 & S2 emissions 1 11% 0 0%
We subscribed to the Wordly platform (previously known as HIGG) in late 2023. Wordly’s HIGG Facility Environmental Module
(FEM) has begun to be utilised by many of our suppliers. This provides us with standardised emissions data and provides a tool for
suppliers to develop their own strategy and record sustainability achievements. In addition, the Materials Sustainability Index (MSI)
and material-based emission data will be important as we continue to increase the proportion of our range that is manufactured
using more sustainable materials. This data and training will assist our category management team in understanding the varying
environmental impacts of different materials.
Carbon offsetting
To enable us to maintain our CarbonNeutral
®
company certification, the remainder of our emissions footprint assessed under
the Protocol (Scopes 1, 2 and certain elements of Scope 3) is offset via carbon offsets purchased from carefully selected carbon
reduction projects (see table below) via Climate Impact Partners. The volume offset for 2022 totalled 14,000 tCO
2
e (the certification is
valid on an annual basis for previous calendar year emissions).
Mississippi Valley, USA Water Filtration & Improved
Cookstoves, Guatemala
Bondhu Chula Stoves, Bangladesh
– Carbon removal
– Nature-based: Afforestation
&Reforestation
– Standard: American Carbon
Registry (ACR)
– Carbon reduction
– Health & Livelihoods: Clean Cooking
– Standard: Gold Standard
– Carbon removal
– Health & Livelihoods: Clean Cooking
– Standard: Gold Standard
UPS, our preferred supplier for downstream distribution of customer orders, was responsible for 16,476 tCO
2
e of Scope 3 category
9 ‘downstream transportation and distribution’ emissions for 2022. We continue to be enrolled in UPS’s carbon neutral shipping
programme which supports emissions reduction projects and is verified by SGS and Climate Impact Partners. Current information on
this programme can be found at www.ups.com.
In support of our industry trade association, Promotional Products Association International, we sponsor the carbon offsetting of
their four key leadership conferences. In 2023 each conference was certified as a CarbonNeutral
®
Event by Climate Impact Partners.
The offset value amounted to 439 tCO
2
e towards the Gola Rainforest Protection REDD+ project in Sierra Leone.
Better Choices™
Increasingly, environmental aspects regarding the sustainability of materials, as well as social concerns such as workplace culture/
conditions are an important part of the product decision process for our customers. These considerations are expected to grow
significantly in importance and alongside our sophisticated marketing approach will play an important role in reducing our Scope 3
‘purchased goods and services’ emissions in the coming years.
Our Better Choices™ programme, launched in early 2022, provides an easily accessible framework to enable customers to find their
perfect product. Better Choices™ allows customers to easily filter the 4imprint range of promotional products to find the best match
for the values of their organisation and their brand. Each Better Choices™ designation is rigorously researched and is supported by
third party certification programmes and/or other supplier-provided information under the broad headings of Better Materials and
Better Workplaces.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
29
STRATEGIC REPORT
OVERVIEW
Better Materials highlighted designations include:
– Products made using recycled polyester, paper, plastic, metals or other diverse materials such as old car tyres.
– Paper and wood-based products certified by the Forestry Stewardship Council
®
(FSC) or Sustainable Forestry Initiative
®
(SFI) as
responsibly sourced.
– Textiles such as apparel and bags made from organic cotton or US-grown cotton – globally recognised for its approach to
sustainable farming.
Better Workplaces allows customers to find products from brands and suppliers who are:
– An Accredited Participating Company of the Fair Labor Association – known globally for protecting and progressing workers’ rights
around the world.
– A Certified Benefit Corporation (B Corp) – B Corps are legally bound to consider how their actions impact employees, suppliers,
community and the environment.
Other standards and certifications are also available as part of the Better Choices™ programme including, for example:
– Children’s toy and product safety standards such as ASTM F963, CPSIA.
– Technology certification programmes such as Qi, Bluetooth, and safety standards set by UL.
– Sun protection such as UV400 for sunglasses, SPF for sunscreen lotion and UPF ratings for garments.
In accordance with our culture, any Better Choices™ designation places significant emphasis on the integrity of the information
available. In other words, we will be vigilant and disciplined in confirming the veracity of any ‘Eco’ claims made. Industry certifications
and standards such as the Global Recycled Standard (GRS) developed by Textile Exchange and Global Organic Textile Standard
(GOTS) are two such examples. All safety standards and certifications are managed in line with the regulatory requirements for
thatstandard.
The programme has grown significantly during 2023 and is expected to continue to do so both in terms of the number of products
bearing Better Choices™ designations and revenue volume it represents. More than 15,000 Better Choices™ ‘tags’ have now been
applied to items included in the programme (see tables below) and total revenue represented $310m in 2023, having increased from
$196m in 2022. New ‘tags’ applied include both existing items where materials have been converted as well as new products being
introduced. More information on how our private label brands dovetail into this initiative can be found below.
Although we are not yet in a position to accurately calculate the emissions reduction achieved from the shift to more sustainable
materials, we clearly understand its place in our emissions reduction strategy.
Better Choices™ categories* 2023 2022
Year-on-year
change Launch**
Better Materials 4,447 2,611 70% 2,276
Better Workplaces 6,928 2,868 142% 2,974
Standards and certifications 3,901 2,883 35% 2,527
Total tags 15,276 8,362 83% 7,777
Better Materials designations*^ 2023 2022
Year-on-year
change Launch**
Recycled materials 2,577 1,664 55% 1,331
Responsible forestry 980 333 194% 296
Sustainable cotton 1,112 777 43% 783
Carbon neutral products 42 26 62% –
* Products can be tagged under multiple categories and designations.
^ The sum of all Better Materials designations adds up to more than the category total due to some items receiving multiple ‘tags’.
** Programme launched March 2022.
Private label products
The development and growth of our private label brands continued in 2023. The purpose is to create a stable of ‘in-house’ brands,
exclusive to 4imprint and designed to meet the core needs of our customers. In 2023 an increased emphasis was placed on evaluating
opportunities to transition into more sustainable materials enabling items to be highlighted in our Better Choices™ programme.
As we look to transition to more sustainable materials for our private label products our intention is to use the same core supply
chain partners without impacting product quality, design and performance.
SUSTAINABILITY CONTINUED
4imprint Group plc Annual Report & Accounts 2023
30
Crossland
®
is our ‘outdoor’ brand,
including fleece jackets, blankets,
beanie hats, vacuum mugs, backpacks
and coolers. 2023 sales of Crossland
®
products totalled $25m.
Core polyester fleece jackets and blankets
transitioned into recycled polyester in late
2022 and through 2023.
Significant work took place in 2023
in the drinkware category assessing
options to transition steel, aluminium,
acrylic and plastic components into
recycled materials. Production in recycled
materials for our Crossland
®
mugs
commenced in late 2023 with inventory
expected to transition in 2024. In
addition, several bags are in the process
of transitioning to recycled materials
and our Crossland
®
‘puffer’ jackets are
currently in production with recycled
content.
Percentage of Crossland
®
sales in Better
Choices™ programme by end of year:
2022 30%
2023 33%
2024 Target 40%
Refresh
®
was launched in 2017, initially
concentrating on a core line of affordable
water bottles, expanding to include
tumblers, travel mugs and various other
drinkware items. 2023 sales of Refresh
®
products totalled $11.1m.
Entry-level #1PET coloured bottles
transitioned in 2022. In 2023 we
confirmed that production of all metal
and acrylic pieces would move to recycled
material options. As that inventory
transitions during 2024 it will give a
significant shift to the percentage of sales
derived from items made with more
sustainable materials.
Percentage of Refresh
®
sales in Better
Choices™ programme by end of year:
2022 27%
2023 30%
2024 Target 70%
Taskright
®
launched in 2020, focused
on a line of everyday stationery products
such as notebooks, sticky notes and
pencils. As demand for these items
recovered in recent years, the Taskright
®
brand has grown to take leading positions
within its categories. 2023 sales of
Taskright
®
products totalled $11.4m.
As a paper-based category, we have
focused on working with suppliers
and manufacturers who are sourcing
materials from Forestry Stewardship
Council
®
(FSC) and Sustainable Forestry
Initiative
®
(SFI) certified supply chains.
Ideally, the supplier also carries that
organisation’s Chain-of-Custody
certification enabling us to share those
credentials to end users via our own FSC
and SFI retail licences.
Percentage of Taskright
®
sales sourced
from responsible forestry programmes by
end of year:
2022 42%
2023 100%
2024 Target 100%
We pay particular attention to supplier selection as it pertains to our private label brands and the partners that they select for
production. All are core long-term partners to 4imprint and are included in our Tier 1 monitoring programme (see page 25); their
manufacturing partners are included in our Tier 2 programme (see page 25).
Our supplier of garments under the Crossland
®
brand has been an Accredited Participating Company of the FLA for over ten years.
An additional supplier of drinkware, bags and stationery was approved by the FLA to start their accreditation journey in 2022.
Together they represent over 75% of private label brand revenue.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
31
STRATEGIC REPORT
OVERVIEW
SUSTAINABILITY CONTINUED
Certifications and collaborations
CarbonNeutral
®
Certified Company FTSE4Good Index Member Wisconsin Green Masters
4imprint has achieved CarbonNeutral
®
company certification in accordance
with The CarbonNeutral
®
Protocol.
Independently assessed according
to the FTSE4Good criteria, 4imprint
satisfies the requirements to become a
constituent of the FTSE4Good Index.
Participation in the Wisconsin
Sustainable Business Council’s
programme has earned 4imprint
‘Maturing’ status.
Forest Stewardship Council Sustainable Forestry Initiative Sustainable Packaging Coalition
To enable us to distribute FSC certified
products 4imprint holds an FSC Retail
Licence: N003663.
To enable us to distribute SFI certified
products 4imprint holds an SFI Private
Label ID: SFI-02014.
4imprint is a member of the Sustainable
Packaging Coalition.
Environmental strategy – scenario planning analysis
Our first year of TCFD reporting in 2021 was assisted by an external firm of sustainability consultants. We engaged with the same
consultants in 2022 to carry out a bespoke qualitative scenario planning analysis. This project was designed to assess the resilience
of our sustainability strategy under different warming scenarios and to identify key risks and opportunities, thereby providing
strategic outputs to inform our approach to climate change, and sustainability more generally, in our corporate strategy.
In 2023 we revisited and refreshed our scenario planning analysis, given that there had been no material changes to the business in
terms of business strategy, customer base, supply chain or external standards. This exercise found that the work completed in 2022
remained relevant and valid.
Warming scenario methodology
The scenario planning project considered two major warming scenarios, global warming of 2ºC and 4ºC above pre-industrial levels
by 2100. The warming scenarios were constructed from internationally recognised warming and socio-economic cases, overlaid with
sector and Company-specific research. Key individuals from across the business participated in the project, scoring across different
scenarios in order to assess 4imprint’s business model in the context of both transitional and physical climate risks alongside current
and aspirational mitigating activities.
Time horizons considered were: Short term – to 2030; Medium term – 2030-2040; Long term – 2040-2050.
2ºC ‘Middle of the road’ scenario:
– Imperfect efforts to reduce emissions lead to moderate progress but exacerbate inequalities.
– National climate policy drives the US towards net zero and the regulatory scrutiny on environmental performance increases.
– Environmental credentials of products come under increasing scrutiny through extended regulation and consumer preference.
– Consumers increasingly demand more sustainable products, valuing fewer, higher-quality goods over mass consumption.
– Attendance at events and conferences declines as emissions reduction efforts and carbon taxation disincentivise air travel.
– Increasing regulation and stakeholder pressure tightens the offset market, making reliance on offsets in corporate net zero
commitments increasingly difficult and costly.
– As the scenario progresses and emissions begin to plateau, physical climate impacts are still felt, locked in from previous decades’
emissions, and physical climate impacts from extreme weather, flooding, droughts and extreme heat begin to become more
costly and disruptive to business and their supply chains.
FTSE4Good
4imprint Group plc Annual Report & Accounts 2023
32
4ºC ‘Fossil-fuelled global growth’ scenario:
– In the absence of national climate policy, the regulatory scrutiny on environmental performance and reporting declines.
– Little to no regulation is introduced to mandate the use of sustainable materials as consumption soars.
– Fossil-fuelled growth in developing nations expands the global middle class leading to an increase in consumerism, demand for
products and material use.
– There is little improvement in energy efficiency or clean tech, the offset market remains relatively unchanged with supply of low-
quality offsets exceeding demand and prices remaining low.
– Severe physical climate change impacts, including flooding, drought and tropical storms, disrupt global supply chains and material
supply, leading to price volatility and consumer frustration.
– Mass climate migration, protests and geopolitical disruption as a result of climate change and historic inaction become
increasingly common.
Key themes: risks, opportunities and mitigations
The climate-conscious consumer (short through to long-term risk)
– 4imprint’s customers and their buying decisions are largely similar to those of the broader consumer market.
– As the global economy transitions towards a low carbon future there will be increasing changes in consumer behaviour.
– Consumers begin to value fewer, higher-quality goods over mass consumption.
– Sustainability of products, the materials they are produced from, and the companies that produce them, become increasingly
important considerations in buying decisions.
– As it does now, 4imprint will continue to respond to the demands of its customers.
A volatile supply chain (medium to long-term risk)
– With an asset-light, drop-ship business model, 4imprint will face limited direct exposure to physical risk.
– Instead, the impacts of physical risk will come indirectly through suppliers and the supply chain. This will manifest in increased
supply chain costs, increasingly volatile raw material prices and availability and increased product lead times.
– If minor and infrequent, this should have little material impact on 4imprint. However, as time progresses, and the effects of
climate change become more pronounced, the frequency and severity of these impacts will increasingly impact 4imprint. These
effects were notably worse in the 4ºC scenario.
Opportunities in a changing climate (short to medium-term opportunity)
– The transition to a low carbon economy and the changes it brings will present significant opportunities for 4imprint.
– This includes pursuing low emissions sources of energy, an opportunity already being captured through the Oshkosh solar array.
– The growing demand for sustainable products will also provide significant opportunity, for example through further enhancing
the Better Choices™ initiative whereby 4imprint can assist its customers in making more informed decisions by providing accurate
sustainability information and supply chain transparency on its products.
Detailed observations arising from the scenario analysis
Climate focus headlines specific to 4imprint
– As an asset-light business serving a consumer-adjacent customer base, transition risks are likely to have the most material impact
on 4imprint and its business. The principal transition risk relates to the development of the product range, which is likely to have
a larger impact than flooding, storms and other severe weather events.
– This is explored in depth in the 2ºC scenario. In this scenario there is a marked shift in patterns of consumption as the global
economy, and the consumers within it, begin to prioritise sustainability in the products they buy, the materials they are produced
from, and the companies that produce them. These are changes 4imprint has already begun to observe, and respond to, with the
introduction of Better Choices™, amongst other environmental initiatives. The risks and opportunities this poses to 4imprint are
short through to long-term and continue to intensify as the global transition gathers pace.
– Given 4imprint’s drop-ship model, it has relatively low exposure to physical risk in its direct operations. Instead, physical risk is
likely to impact the business indirectly, through the supply chain and the ability to source products reliably and without significant
price increases. As increased frequency of acute physical impacts, such as tropical storms and flash flooding, and chronic impacts
such as heat stress put strain on global materials supply and supply chains, 4imprint will face increasing impact. These physical
risks are explored in more detail in the 4ºC scenario and are a long-term risk.
Other points of interest
Climate change and the changing customer
– The way 4imprint’s customers consume promotional products will continue to change. Sustainability is increasingly influencing
buying decisions in the same way cost, colour or lead time would traditionally. The depth of this influence will vary between
demographics, states or geographies and individuals, making it complex to respond to.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
33
STRATEGIC REPORT
OVERVIEW
SUSTAINABILITY CONTINUED
TCFD Pillar TCFD Disclosure 4imprint Response Page(s)
Governance
Board’s oversight of
climate-related risks
and opportunities
CURRENT
– The Board has ultimate responsibility and accountability for
climate-related issues
– Climate-related issues reviewed by the Board include operational
mitigation activities and strategic commercial activities
– The Group Environmental Committee supports the development
and implementation of 4imprint’s environmental framework and
reports to the Board at the annual strategic review and through
the Executive Directors
– Relevant experience on the Board to hold management to account
on environmental matters
FUTURE PRIORITIES
– Continued emphasis at Board level on shaping of climate strategy
and implications for commercial strategy
26
26
26
Management’s role
in assessing and
managing climate-
related risks and
opportunities
CURRENT
– The Group Environmental Committee drives the agenda and is
responsible for implementation at the operational level
– The Committee is composed of operational executives from both
US and UK operations and Executive Directors and is chaired by
amember of the Oshkosh senior management team
– The strategy is aligned to our environmental framework
parameters
FUTURE PRIORITIES
– Refocusing of senior executives and recruitment of senior talent to
assist with sustainability agenda
– Consider implementation of ESG-linked remuneration and
inclusion of climate-related metrics at the executive level
26
9
TCFD
In 2023 we made further progress in the implementation of the TCFD (Taskforce on Climate-related Financial Disclosures) framework
across our operations, but we also recognise that opportunities remain for continuous improvement in our climate strategy and for
enhancements to be made in future disclosures.
We consider that 4imprint’s climate reporting disclosures are consistent with the four pillars and eleven recommendations of the
TCFD framework.
Our expectation is to continue to utilise the framework and approach established under TCFD as we transition to ISSB IFRS S1 and S2
reporting going forward.
Our updated 2023 TCFD disclosure summary is set out below:
Physical changes and an increasingly volatile supply chain
– 4imprint’s supply chain will be affected by climate change. The impact of physical effects will increase as the severity and
frequency of physical impacts increases. Small, infrequent disruptions will have little impact on the supply chain or material price
and availability, but frequent, more intense events will become increasingly costly. 4imprint’s strong relationship with suppliers
and its drop-ship model will provide some resilience to supply chain impacts, as demonstrated during the pandemic, but in the
long term, with several Tier 1 suppliers in high-risk states, such as Florida, the impacts will intensify.
Continued resilience through the strength of the 4imprint brand
– 4imprint’s brand and its strong relationship with its stakeholders will offer resilience to some of its major climate-related risks.
If decreases in consumption reduce overall demand, brand strength will ensure a consistent market share. If supply chain
disruption threatens material supply, strong supplier relationships will help secure supply. This is underpinned by 4imprint’s
commitment to continue to operate responsibly.
Enabling informed decisions through sustainability transparency
– The transition to a low carbon economy poses significant opportunity for 4imprint, most notably in providing low carbon,
sustainability-focused products. 4imprint can assist its customers in making more informed decisions by providing accurate
sustainability information and supply chain transparency on its products. This will also allow 4imprint to maintain its position as a
market leader and remain ahead of potential product-focused sustainability legislation.
4imprint Group plc Annual Report & Accounts 2023
34
TCFD Pillar TCFD Disclosure 4imprint Response Page(s)
Strategy
Identification of
climate-related risks
and opportunities
CURRENT
– Sustainability is a key part of our first strategic pillar
– Environmental risks are included as a primary risk category in the
Principal Risks & Uncertainties matrix, with sub-headings ‘Climate
change’ and ‘Products and market trends’
– Transition risks associated with climate change are expected to be
of greatest relevance to the business in the short to medium term,
with business operations and locations at relatively low risk from
physical climate-related events
– Climate change scenario planning analysis conducted in 2022 was
revisited with minor updates made in 2023
FUTURE PRIORITIES
– Continuous refinement and advanced granularity in the response
to climate-related risks over different time horizons
– Improved identification of emerging physical climate risks,
particularly at Tier 2 and Tier 3 in the upstream supply chain
9
52–53
33–34
32–34
Impact of climate-
related risks and
opportunities on
business, strategy
and finance
CURRENT
– The expected impacts on the business are detailed in the
‘Environmental risks’ category in the Principal Risks & Uncertainties
matrix
– Impact leading to commercial opportunities is set out in this
Sustainability section
– Climate change scenario planning analysis conducted in 2022 was
revisited with minor updates made in 2023
FUTURE PRIORITIES
– Continuous refinement and advanced granularity in the response
to climate-related risks over different time horizons, leveraging
scenario planning analysis conducted in 2022
– Further develop and test commercial opportunities such as Better
Choices™ and complementary private label product lines to offer
low carbon product solutions to increasingly climate-conscious
customers
– Produce qualitative assessment of potential financial materiality
of climate-related risks and opportunities; progress over time to
quantitative assessment
52–53
32–34
32–34
Resilience of
strategy under
various climate-
related scenarios
CURRENT
– Climate change scenario planning analysis conducted in 2022,
and revisited in 2023 identifying and articulating impact of risks or
opportunities and considering business resilience
FUTURE PRIORITIES
– Consider building on qualitative scenario analysis already
performed to add quantitative scenario analysis in subsequent
years, allowing a more granular understanding of the potential
financial impacts of identified risks
32–34
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
35
STRATEGIC REPORT
OVERVIEW
TCFD Pillar TCFD Disclosure 4imprint Response Page(s)
Risk
management
Processes for
identifying and
assessing climate-
related risks
CURRENT
– Climate-related or environmental topics are raised directly by
Board members
– The Business Risk Management Committee considers emerging
risks through an analysis and scoring process
– Group Environmental Committee discussions may be elevated to
Board level on an ad hoc basis
– Use of external consultants to assist with climate change planning
and analysis
FUTURE PRIORITIES
– Current risk identification processes considered appropriate given
the nature of the Group’s operations and short reporting lines
44
44
26
32–34
Processes for
managing climate-
related risks
CURRENT
– Group risk management processes are set out under Principal
Risks & Uncertainties
– The Business Risk Management Committee’s scoring and
mitigations of climate-related risks are addressed under the
‘Environmental risks’ section
– The Group Environmental Committee and ultimately the Board
drive the broad strategic approach to identifying, managing and
mitigating climate-related risks, including both internal actions
to mitigate GHG emissions and actions to increase customer
awareness of products with sustainable credentials
FUTURE PRIORITIES
– Current risk management processes considered appropriate given
the nature of the Group’s operations and short reporting lines
– Consideration and review of relevant metrics annually to measure
and evidence progress on risk management initiatives
44
52–53
26
Integration
into overall risk
management
CURRENT
– Both climate change and sustainability-related product trends
are recognised within 4imprint’s Principal Risks & Uncertainties
framework
– As a result, the process for identifying and managing climate-
related risks is fully integrated into the Group’s overall risk
management
FUTURE PRIORITIES
– Current procedures considered appropriate given the Group’s
operations and short reporting lines
44
52–53
SUSTAINABILITY CONTINUED
4imprint Group plc Annual Report & Accounts 2023
36
TCFD Pillar TCFD Disclosure 4imprint Response Page(s)
Metrics and
targets
Metrics to assess
climate-related risks
and opportunities
CURRENT
– GHG emissions, intensity measures and energy consumption:
year-over-year performance and analysis
– Metrics expanded to include relevant Scope 3 emissions
– Metrics included under CarbonNeutral
®
Protocol subject to
external independent verification
– Measurement of energy generated by solar array project at
Oshkosh distribution centre
– Better Choices™ programme tag count and revenue generation
– Private label brand revenue within Better Choices™ programme
– Tier 1 supplier engagement in calculation of own Scope 1 and 2
GHG emissions
FUTURE PRIORITIES
– Continue to refine and expand GHG reporting under
CarbonNeutral
®
Protocol and Scope 3 emissions, in particular
those related to goods sold
27–29
27–29
27
27
30
30–31
29
Disclose Scope 1,
Scope 2, Scope 3
GHGs
CURRENT
– GHG emissions table covers Scope 1, 2 and categories of Scope 3
relevant to the business operations
FUTURE PRIORITIES
– Improvement in data gathering and disclosure of relevant aspects
of Scope 3, in particular those related to goods sold
27–28
Targets used to
manage climate-
related risks and
opportunities
and performance
againsttargets
CURRENT
– CarbonNeutral
®
certification achieved in 2021, re-certified in 2022
and 2023
– GHG emissions reporting
FUTURE PRIORITIES
– Further develop targets, reporting and disclosure around Better
Choices™ sustainable product initiative
– Develop targets for the proportion of renewable energy used to
defray the overall carbon footprint
– Ensure that the Group’s risk management and evaluation
process provides feedback on emerging climate-related risks and
opportunities
27
27–29
In the context of the nature of the Group’s risks, the Directors consider that the existing targets and key performance indicators
as set out in this Sustainability section are suitable for an understanding of the potential impacts of climate change on the Group’s
business. The Group continues to develop monitoring and reporting of its GHG emissions with the aim of exploring ways to further
reduce these whilst maintaining the existing CarbonNeutral
®
certification.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
37
STRATEGIC REPORT
OVERVIEW
FINANCIAL REVIEW
A well financed
and cash generative
business
4imprint Group plc Annual Report & Accounts 2023
38
2023
$m
2022
$m
Operating profit 136.2 102.9
Net finance income 4.5 0.8
Profit before tax 140.7 103.7
Taxation (34.5) (23.6)
Profit for the period 106.2 80.1
The Group’s revenue, gross profit and operating profit in the
period, summarising expense by function, were as follows:
2023
$m
2022
$m
Revenue 1,326.5 1,140.3
Gross profit 401.9 321.9
Marketing costs (159.9) (128.7)
Selling costs (47.2) (38.6)
Administration and central costs (56.8) (50.4)
Share option charges and related social
security costs (1.1) (0.8)
Defined benefit pension plan
administration costs (0.7) (0.5)
Operating profit 136.2 102.9
Operating result
Following the record-breaking organic growth levels recorded
in 2022, the business saw continued encouraging results at the
demand level in 2023, particularly in the first quarter against a
relatively weak, pandemic-affected, 2022 comparative, before
moderating from April onwards as the comparatives became
significantly more challenging. This growth in demand, together
with a significant improvement in the supply chain leading
to shorter order cycle times, lower order cancellation rates
and credits/claims, drove revenue to $1.33bn, an increase of
$0.19bn or 16% compared to $1.14bn in 2022.
The gross profit percentage of 30.3% improved markedly from
28.2% in 2022, benefitting from previously implemented price
adjustments, improved supplier rebates, more stable product
input prices and lower freight costs.
Marketing costs increased to 12% of revenue compared to
11% in 2022, reflecting a return to our usual cycle of continued
investment in the testing and refinement of the marketing mix.
The revenue per marketing dollar KPI of $8.30 for 2023 (2022:
$8.86) represents a material improvement from our pre-
pandemic historical norms following the expansion of the brand
advertising component of the mix.
Selling, administration and central costs together increased 17%
to $104.0m (2022: $89.0m) reflecting planned investment in
people, most notably customer service resources, and higher
incentive compensation costs in line with trading performance.
The factors outlined above, combined with the financial leverage
in the business model, delivered further material uplifts in
operating profit to $136.2m (2022: $102.9m) and operating
margin to 10.3% (2022: 9.0%).
Foreign exchange
The primary US dollar exchange rates relevant to the Group’s
2023 results were as follows:
2023 2022
Year-end Average Year-end Average
Sterling 1.27 1.24 1.20 1.24
Canadian dollars 0.76 0.74 0.74 0.77
The Group reports in US dollars, its primary trading currency.
It also transacts business in Canadian dollars, Sterling and Euros.
Sterling/US dollar is the exchange rate most likely to impact the
Group’s financial performance.
The primary foreign exchange considerations relevant to the
Group’s operations are as follows:
– Translational risk in the income statement remains low with
the majority of the Group’s revenue arising in US dollars, the
Group’s reporting currency.
– Most of the constituent elements of the Group balance
sheet are US dollar-based.
– The Group generates cash mostly in US dollars, but its
primary applications of post-tax cash are Shareholder
dividends, some Head Office costs and, up until the end
of July 2023, pension deficit reduction contributions, all of
which are paid in Sterling.
As such, the Group’s cash position is sensitive to Sterling/US
dollar exchange movements. To the extent that Sterling weakens
against the US dollar, more funds are available in payment
currency to fund these cash outflows.
Share option charges
A total of $1.1m (2022: $0.8m) was charged in the period in
respect of IFRS 2 ‘Share-based Payments’. This was made up of
two elements: (i) executive awards under the Deferred Bonus
Plan (DBP) and 2015 Incentive Plan; and (ii) charges in respect of
employee savings-related share schemes.
Current options and awards outstanding are 78,705 shares
under the US Employee Stock Purchase Plan, 10,956 shares
under the UK Save As You Earn scheme, and 42,631 shares
under the DBP and 2015 Incentive Plan. Awards under the DBP
in respect of 2023 are anticipated to be made in late March 2024.
Net finance income
Net finance income for the period was $4.5m (2022: $0.8m).
This comprises interest earned on cash deposits, lease interest
charges under IFRS 16, and the net income on the defined
benefit pension plan assets and liabilities.
Net finance income has increased significantly over 2022 due to
improved yields and significant cash deposits, particularly in the
US where interest rates rose steadily through 2022 and 2023 in
response to economic conditions.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
39
STRATEGIC REPORT
OVERVIEW
FINANCIAL REVIEW CONTINUED
Taxation
The tax charge for the period was $34.5m (2022: $23.6m) giving
an effective tax rate of 25% (2022: 23%). The primary component
of the charge relates to current tax of $32.1m (2022: $24.0m) on
US taxable profits.
Earnings per share
Basic earnings per share increased 32% to 377.9c (2022:
285.6c), reflecting the 33% increase in profit after tax and a
weighted average number of shares in issue similar to prior year.
Dividends
Dividends are determined in US dollars and paid in Sterling,
converted at the exchange rate on the date that the dividend
isdeclared.
The Board has proposed a final dividend of 150.0c per share
(2022: 120.0c) which, together with the interim dividend of 65.0c
per share, gives a total paid and proposed regular dividend
relating to 2023 of 215.0c per share (2022: 160.0c), an increase
of 34% compared to prior year.
The final dividend has been converted to Sterling at an
exchange rate of £1.00/$1.2818. This results in a final dividend
per share payable to Shareholders of 117.0p (2022: 99.2p),
which, combined with the interim dividend paid of 50.8p per
share, gives a total dividend per share for the period of 167.8p
(2022:132.2p).
The final dividend will be paid on 3 June 2024 to Shareholders
on the register at the close of business on 3 May 2024.
Defined benefit pension plan
The Group sponsors a legacy UK defined benefit pension plan
(the “Plan”) which has been closed to new members and future
accrual for several years. The Plan has 122 pensioners and 197
deferred members.
At the end of June 2023, the Trustee of the Plan entered into an
agreement with Legal and General Assurance Society Limited to
insure substantially all remaining pension benefits of the Plan
through the purchase of a bulk annuity policy. The transaction
took the form of a buy-in arrangement, with the insurer funding
the Plan for the future payment of liabilities. The fair value of
the bulk annuity policy matches the liabilities being insured,
thus eliminating inflation, interest rate and longevity risks. The
premium of £20.7m was settled by the transfer of the Plan’s
existing investment portfolio valued at £17.5m and a cash
amount of £3.2m ($4.1m) paid by the Group.
This buy-in agreement was an investment decision for the
Plan, consistent with both the Trustee’s overriding objective
to enhance the security of the benefits payable to members
and the Group’s long-term commitment to the full de-risking
of its legacy defined benefit pension obligations. As a result
of this transaction, the Group ceased to make monthly deficit
funding contributions to the Plan from August 2023 but will
still fund the ongoing administration costs and settlement of
residualliabilities.
At 30 December 2023 the Plan on an IAS 19 basis was in
a breakeven position, compared to a surplus of $1.2m at
31December 2022. Gross Plan assets and liabilities under
IAS19 were both $23.3m.
The change in the net IAS 19 Plan position is analysed as follows:
$m
IAS 19 surplus at 31 December 2022 1.2
Company contributions to the Plan 6.5
Administration costs paid by the Plan (0.5)
Pension finance income 0.2
Return on Plan assets (excluding interest income
and impact of buy-in policy) (1.1)
Return on Plan assets (in relation to buy-in policy) (4.6)
Remeasurement losses due to changes in
assumptions (1.8)
Exchange gain 0.1
IAS 19 surplus at 30 December 2023 –
The net IAS 19 surplus reduced by $1.2m in the period. This
was mainly the result of a negative return on assets and the net
impact of entering the buy-in arrangement discussed above.
A triennial actuarial valuation of the Plan was completed as at
30 September 2022 and this forms the basis of the IAS 19
valuation set out above.
Cash flow
The Group had cash and bank deposits of $104.5m at
30 December 2023, an increase of $17.7m against the
31 December 2022 balance of $86.8m. Cash flow in the period
is summarised as follows:
2023
$m
2022
$m
Operating profit 136.2 102.9
Share option charges 1.1 0.8
Defined benefit pension administration
costs paid by the Plan 0.5 0.5
Depreciation and amortisation 4.7 4.0
Lease depreciation 1.7 1.5
Change in working capital 29.2 (8.5)
Capital expenditure (9.7) (8.0)
Underlying operating cash flow 163.7 93.2
Tax and interest (29.9) (20.1)
Consideration for business combination – (1.7)
Defined benefit pension plan
contributions (6.5) (4.3)
Proceeds from issue of ordinary shares 2.4 –
Own share transactions (1.0) (0.9)
Capital element of lease payments (1.4) (1.2)
Exchange and other 1.2 (1.1)
Free cash flow 128.5 63.9
Dividends to Shareholders (110.8) (18.7)
Net cash inflow in the period 17.7 45.2
The Group generated underlying operating cash flow of $163.7m
(2022: $93.2m), a conversion rate of 120% of operating profit
(2022: 91%). The high conversion rate is due to the unwinding of
the elevated net working capital position from the 2022 year-end
driven by the significant improvement in supply chain conditions.
Capital expenditure includes investments in our screen-
printing operations (machinery and leasehold improvements),
embroidery machinery, and the early phases of an extension to
our Oshkosh distribution centre due to be completed in 2024.
4imprint Group plc Annual Report & Accounts 2023
40
Free cash flow improved by $64.6m to $128.5m (2022: $63.9m).
This is attributable to the excellent trading performance
during the period and the much improved net working capital
position at the end of 2023 compared to 2022. Dividends to
Shareholders includes the 2022 final and special dividends of
$93.0m paid in June 2023 and the 2023 interim dividend of
$17.8m paid in September 2023.
Balance sheet and Shareholders’ funds
Net assets at 30 December 2023 were $134.5m, compared
to $140.2m at 31 December 2022. The balance sheet is
summarised as follows:
30 December
2023
$m
31 December
2022
$m
Non-current assets (excluding
pension asset) 51.4 46.7
Working capital (7.9) 20.8
Cash and bank deposits 104.5 86.8
Lease liabilities (12.3) (13.7)
Pension asset – 1.2
Other assets and liabilities – net (1.2) (1.6)
Net assets 134.5 140.2
Shareholders’ funds decreased by $5.7m since 31 December
2022. The main constituent elements of the movement were
retained profit in the period of $106.2m, net of equity dividends
paid to Shareholders of $110.8m.
The Group had a net negative working capital balance of
$7.9m at 30 December 2023 (31 December 2022: net positive
balance of $20.8m). The elevated position at 31 December 2022
reflected the effects of global and local supply chain issues,
causing a build-up of accrued revenue and inventory on orders
being processed. Significant improvements to supply chain
conditions in the period have driven the reduction in the working
capital balance. This normalised net negative position reflects
the strength of our business model, with a high proportion of
customers paying for orders by credit card and the diligent
payment of suppliers to agreed terms.
Balance sheet funding
The Board is committed to aligning the Group’s funding with its
strategic priorities. This requires a stable, secure and flexible
balance sheet through different economic cycles. The Group will
therefore typically remain ungeared and hold a positive cash
and bank deposits position.
The Board’s funding guidelines are unchanged, and aim to
provide operational and financial flexibility:
– To facilitate continued investment in marketing, people and
technology through different economic cycles, recognising
that an economic downturn typically represents a market
share opportunity for the business.
– To protect the ability of the business to act swiftly as growth
opportunities arise in accordance with the Group’s capital
allocation guidelines.
– To underpin a commitment to Shareholders through the
maintenance of regular interim and final dividend payments.
– To meet our pension contribution commitments as they
falldue.
The quantum of the cash target at each year-end will be
influenced broadly by reference to the investment requirements
of the business, and the subsequent year’s anticipated full-year
ordinary dividend and pension payment obligations.
The Board will keep these guidelines under review and is
prepared to be flexible if circumstances warrant.
Capital allocation
The Board’s capital allocation framework is designed to deliver
increasing Shareholder value, driven by the execution of
the Group’s growth strategy. The Group’s capital allocation
prioritiesare:
– Organic growth investments
– Either capital projects or those expensed in the
incomestatement.
– Market share opportunities in existing markets.
– Interim and final dividend payments
– Increasing broadly in line with earnings per share through
the cycle.
– Aim to at least maintain dividend per share in a downturn.
– Residual legacy pension funding
– Further de-risking initiatives, if viable.
– Mergers and acquisitions
– Not a near-term priority.
– Opportunities that would support organic growth.
– Other Shareholder distributions
– Quantified by reference to cash over and above balance
sheet funding requirement.
– Special dividends most likely method: other methods may
be considered.
Treasury policy
The financial requirements of the Group are managed through
a centralised treasury policy. The Group operates cash pooling
arrangements for its North American operations. Forward
contracts may be taken out to buy or sell currencies relating to
specific receivables and payables as well as remittances from
overseas subsidiaries. There were no forward contracts open at
the year-end or prior year-end. The Group holds most of its cash
with its principal US and UK bankers.
The Group has a $20.0m working capital facility with its principal
US bank, JPMorgan Chase, N.A. The facility has minimum net
income and debt to EBITDA covenants. The interest rate is the
Secured Overnight Financing Rate (SOFR) plus 1.6%, and the
facility expires on 31 May 2025. In addition, an overdraft facility
of £1.0m, with an interest rate of the Bank of England base
rate plus 2.0% (or 2.0% if higher), is available from the Group’s
principal UK bank, Lloyds Bank plc, until 31 December 2024.
The Group expects these facilities to be renewed prior to their
respective expiry dates.
The Group had cash and bank deposits of $104.5m (2022:
$86.8m) at the year-end and has no current requirement or
plans to raise additional equity or core debt funding.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
41
STRATEGIC REPORT
OVERVIEW
FINANCIAL REVIEW CONTINUED
Estimates and judgments
The preparation of the consolidated financial statements
requires management to make judgments and estimates that
affect the application of accounting policies, the amounts
reported for assets and liabilities as at the balance sheet date
and the amounts reported for revenues and expenses during
the year.
Critical accounting judgments are those judgments, apart from
those involving estimations, that have been made in the process
of applying the Group’s accounting policies and that have
the most significant effect on the amounts recognised in the
financial statements. Key assumptions and sources of estimation
uncertainty are those that have a significant risk of resulting in
a material adjustment to the carrying amounts of the Group’s
assets and liabilities within the next financial year.
Management considers the critical accounting judgments to be
in respect of revenue and the purchase of a bulk annuity policy.
A review of internal and external indications of impairment
was undertaken in accordance with IAS 36 for both the North
American and UK cash-generating units (CGU). This did not lead
to formal impairment reviews being undertaken for either CGU.
Going concern
The Group’s business activities, together with the principal
risks and uncertainties likely to affect its future development,
performance and position are set out in the Strategic Report on
pages 6 to 13 and 44 to 53. The financial position of the Group,
its cash flows and liquidity position are described in this Financial
Review. In addition, the financial risk management note in the
financial statements on pages 132 and 133 details the Group’s
approach to managing its exposures to currency, credit, liquidity,
and capital risks.
In determining the appropriate basis of preparation of the
financial statements for the period ended 30 December 2023,
the Directors have considered the Group’s ability to continue as
a going concern over the period to 28 June 2025.
The Group has modelled its cash flow outlook for the period
to 28 June 2025, considering the ongoing uncertainties in the
macroeconomic and geopolitical environment. This forecast
shows no liquidity concerns or requirement to utilise the
Group’s undrawn facilities described in the Treasury policy
section on page 41.
The Group has also modelled a downside scenario reflecting
severe but plausible downside demand assumptions over
a three-year horizon which shows no liquidity concerns
or requirement to utilise the Group’s undrawn facilities in
the going concern period. Details are set out in the viability
statementbelow.
Based on their assessment, the Directors have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt
on the Group’s and Company’s ability to continue as a going
concern from the date the financial statements are approved
until 28 June 2025. Accordingly, they continue to adopt the
going concern basis in preparing the Group’s and Company’s
financialstatements.
Viability statement
The Directors have assessed the prospects of the Group over
the three-year period commencing from the start of the 2024
financial year. This longer-term assessment process supports
the Board’s statements on viability, as set out below, and going
concern as set out above.
A three-year period of assessment was determined to be the
most appropriate as it is the period covered by the Group’s
strategic planning process which sets the direction of the Group
and is reviewed at least annually by the Board. In the context
of the fast-moving nature of the business, its markets, and the
relatively short-term nature of the order book, the Directors
consider that the robustness of the strategic plan is higher in
the first three years. Further, the Group’s business model does
not rely heavily on fixed capital, long-term contracts, or fixed
external financing arrangements, which readily lend themselves
to longer planning periods.
In assessing the Group’s prospects, the Directors carefully
considered several key factors, including the strategy, market
position and business model (see pages 9 to 19), the approved
budget and three-year plan (the “plan”), the principal risks
and uncertainties (see pages 44 to 53) and the Group’s
financial position, cash flows and liquidity (as contained in this
FinancialReview).
The budget and plan, covering the period from 31 December
2023 to 2 January 2027 and developed for the purposes of the
Group’s strategic planning process, provide the basis for the
financial modelling used to assess viability. Over the three-year
period, the plan shows no liquidity concerns, requirement
to utilise the Group’s undrawn facilities, or breaches of
anycovenants.
Whilst all the principal risks and uncertainties could have a
material impact on Group performance, the following risks are
considered to pose the greatest threat to the business model
and to future performance:
– An uncertain macroeconomic and geopolitical environment
that poses downside risks to economic conditions and
growth.
– Risk of disruption to the business from increasingly
sophisticated cyber threats.
– Environmental risks manifesting in damage to our
reputation, our operational facilities and/or those of our
supplier partners, and the failure to respond to trends and
shifts in consumer product preferences.
The Directors have considered the mitigating actions that would
be taken if these principal risks were to materialise, either
individually or collectively, and do not consider it likely that they
have the potential to threaten the viability of the Group over the
assessment period.
4imprint Group plc Annual Report & Accounts 2023
42
The Directors consider the key factor that could prejudice
the liquidity and viability of the Group would be a sudden
unforeseen shock to demand that is beyond what is normally
expected. A severe, but plausible, downside scenario has
been modelled to reflect such an event and includes the
followingassumptions:
– A severe demand shock occurs at the start of 2024, like that
experienced in 2020 at the start of the pandemic, resulting
in revenue for 2024 falling to around 70% of 2023 levels.
– Revenue gradually recovers back towards 2023 levels by the
end of 2026.
– Marketing and direct costs flexed in line with revenue,
capital expenditure moderated to reflect the reduction
in demand, and dividend payments reduced in line with
earnings per share.
– Other payroll and overhead costs maintained at 2023
levels with an allowance for inflationary increases to retain
capability and capacity to meet the recovery in demand.
Even under the severe stress built into this scenario, the Group
retains strong liquidity in the form of cash balances throughout
the assessment period. In addition, there are further mitigating
actions that the Group could take, including further cutting
marketing costs and reducing headcount, that are not reflected
in the downside scenario assumptions but would, if required,
be fully under the Group’s control.
Given the scalability of the Group’s business model, as
demonstrated over the past few years, the absence of
external financing, and low fixed capital and working capital
requirements, a reverse stress testing scenario has not been
undertaken. The Group has proven during previous downturns
its ability to flex its marketing and other costs to mitigate the
impact of falls in revenue and retains flexibility to further reduce
other costs should the need arise.
Though the Group maintains a $20m line of credit with its US
bankers that expires on 31 May 2025 and a small overdraft
facility with its UK bankers that expires on 31 December 2024,
the modelling in both the budget and plan and severe downside
scenario shows the maintenance of positive cash balances
throughout the assessment period. As such, there is no current
requirement to utilise these facilities or intention to secure any
additional facilities.
The assumptions and resulting financial forecasts for the budget
and plan and severe downside scenario have been reviewed and
approved by the Board. The conclusion of this review is that the
Group has significant flexibility in its variable costs, a low fixed
cost base, and enters the 2024 financial year with a strong cash
and bank deposits position of $104.5m, enabling it to remain
cash positive even under severe economic stress.
Based on this review of the Group’s prospects and viability, the
Directors confirm that they have a reasonable expectation that
the Group will continue to operate and to meet its liabilities as
they fall due, for the next three years to 2 January 2027.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
43
STRATEGIC REPORT
OVERVIEW
PRINCIPAL RISKS & UNCERTAINTIES
Risk appetite
4imprint’s business model means that it may be affected by
numerous risks, not all of which are within its control. The Board
seeks to take a balanced approach to the risks and uncertainties
that it faces, encouraging an appetite for measured risk-taking
that contributes to both the operational agility and innovative
culture that it believes is necessary to meet the Group’s strategic
objectives. That risk appetite is, however, tempered by risk
identification, evaluation and management.
Risk management process
The Board has ultimate responsibility for oversight and
management of risk and control across the Group. The Audit
Committee assists the Board in fulfilling its responsibilities to
maintain effective governance and oversight of the Group’s risk
management and internal controls.
Risks are identified through a variety of sources, including
internally from within the Group including the Board,
operational and functional management teams and the Group
Environmental and Business Risk Management Committees,
and externally, to ensure that emerging risks are considered.
Risk identification focuses on those risks which, if they occurred,
have the potential to have a material impact on the Group and
the achievement of its strategic, operational and compliance
objectives. Risks are categorised into the following groups:
strategic risks; operational risks; reputational risks; and
environmental risks.
Management is responsible for evaluating each significant
risk and implementing specific risk mitigation activities and
controls with the aim of reducing the resulting residual risk to an
acceptable level, as determined in conjunction with the Group’s
risk appetite. The Business Risk Management Committee (BRMC)
meets at least three times a year and reviews the consolidated
Group risk register and the mitigating actions and controls
and provides updates to the Audit Committee on a bi-annual
basis. This process is supplemented with risk and control
assessments completed by the operating locations and Group
functionannually.
An internal audit function has been established during the
period with the recruitment of an experienced Director of Group
Internal Audit in October 2023. This will provide the Group with
additional independent assurance over the effectiveness of
internal controls, risk management and governance processes.
Emerging risks
The Group’s risk profile will continue to evolve as a result of
future events and uncertainties. Emerging risks are closely
monitored at BRMC meetings to understand the potential
impact on the business. Emerging risks that have been
discussed over the period include the threat of strike action
at our primary parcel delivery partner, the potential risks
and opportunities presented by the advancement in artificial
intelligence (AI), and potential secondary risks from the impact of
sustained high interest rates on our supplier partners.
Fraud risks
A review of our fraud risk framework and a fraud risk
assessment was initiated during the period to ensure that the
Group’s governance, identification, preventative, and detective
measures are appropriate to manage this growing threat. Fraud
risks are considered alongside other Group risks.
The Board
The Board undertakes a formal review of the Group’s principal
and emerging risks at least annually, assessing them against
the Group’s risk appetite and strategic objectives. The Executive
Directors will routinely update the Board on urgent emerging
issues and principal risks where the residual risk exceeds the
Group’s risk appetite to allow the Board to determine whether
the actions being taken by management are sufficient.
Principal risks and uncertainties
Outlined in the following tables are the current principal risks
and uncertainties that would impact the successful delivery of
the Group’s strategic goals. These are consistent with those
disclosed in the prior year. The list is not exhaustive and other,
as yet unidentified, factors may have an adverse effect.
The Board recognises that effective risk management and a
robust system of internal control are integral components of
good corporate governance and are fundamental to the long-
term sustainable success of the Group. Risk appetite, the risk
management process, and associated mitigating activities and
controls are all essential elements of the Group’s strategic and
operational planning processes.
4imprint Group plc Annual Report & Accounts 2023
44
Strategic risks
Macroeconomic conditions
RISK AND DESCRIPTION
The Group conducts most of its operations in North America and would be affected by a downturn in general economic
conditions in this region or negative effects from tension in international trade. In previous economic downturns the promotional
products market has typically softened broadly in line with the general economy.
STRATEGIC RELEVANCE
Customer acquisition and retention could fall, impacting
revenue in current and future periods.
The growth and profitability levels called for in the Group’s
strategic plan may not be achieved.
Cash generation could be reduced broadly corresponding
toa reduction in profitability.
DIRECTION
A challenging macroeconomic and geopolitical
environment continues to cause uncertainty
in our North American and UK markets, posing
downside risks to general economic conditions
and growth.
Whilst product cost inflation has eased over the
period to a more manageable level, persistent
inflationary pressures could further drive up
product, transportation and labour costs.
Unchanged
MITIGATION
Management monitors economic and market conditions to
ensure that appropriate and timely adjustments are made to
marketing and other budgets.
The customer proposition in terms of promotions, price,
value, and product range can be adjusted to resonate
with customer requirements and budgets in changing
economicclimates.
The Group’s balance sheet funding policy provides
operational and financial flexibility to facilitate continued
investment in the business through different economiccycles.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
45
STRATEGIC REPORT
OVERVIEW
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
Markets and competition
RISK AND DESCRIPTION
The promotional products markets in which the business operates are intensely competitive. New or disruptive business models,
potentially facilitated or accelerated by emerging technology and AI, looking to break down our industry’s prevailing distributor/
supplier structure may become a threat. Buying groups and online marketplaces may allow smaller competitors access to
improved pricing and services from suppliers. Private equity interest in the promotional products industry has increased in recent
years, offering potential funding for existing competitors or new entrants.
STRATEGIC RELEVANCE
Aggressive competitive activity or a disruptive new model
could result in pressure on prices, margin erosion and loss
ofmarket share, impacting the Group’s financial results.
The Group’s strategy based on achieving organic revenue
growth in fragmented markets may need to be reassessed.
Customer acquisition and retention could fall, impacting
revenue in current and future periods.
DIRECTION
The competitive landscape to date has been
relatively consistent on the distributor side in
our main markets.
Unchanged
MITIGATION
Service level, price and satisfaction guarantees are an integral
part of the customer proposition. Negative or changing
customer feedback is investigated and addressed rapidly.
Customers are surveyed regularly to monitor changing
customer interests and perceptions.
Merchandising and supply chain teams have extensive
experience in rapidly adapting the product range to meet
evolving consumer demand.
Our aim is to position the business at the forefront of
innovation in the industry, driven by an open-minded culture
that is customer-focused, embraces collaborative supplier
relationships, and has an appetite for emerging technology.
Management closely monitors competitive activity in the
marketplace including periodic market research studies.
4imprint Group plc Annual Report & Accounts 2023
46
Effectiveness of key marketing techniques and brand development
RISK AND DESCRIPTION
The success of the business relies on its ability to attract new and retain existing customers through a variety of marketing
techniques. These methods may become less effective as follows:
– TV/Video/Brand: Fluctuations in available inventory may cause the price of this technique to increase beyond our
acceptable thresholds. The evolving nature of how consumers access this type of content could change our ability to
effectively access our audience.
– Online: Search engines are an important source for channelling customer activity to 4imprint’s websites. The efficiency of
search engine marketing could be adversely affected if the search engines were to modify their algorithms or otherwise make
substantial changes to their practices, for example to benefit from the use of emerging technology and AI, and the Group was
unable to respond and adapt to these rapid changes.
– Offline: The flow of print catalogues and sample packages would be disrupted by the incapacity of the US Postal Service to
make deliveries, for example due to natural disasters or labour activism. Pandemic conditions that lead to increased levels of
people working from remote locations may diminish the effectiveness of this technique.
The evolving landscape around consumer data privacy preferences and data privacy legislation potentially affects all marketing
techniques if it compromises our ability to access and analyse customer information or results in any adverse impacts to our
brand image and reputation.
STRATEGIC RELEVANCE
If sustained over anything more than a short time period,
an externally driven decrease in the effectiveness of key
marketing techniques would cause damage to the customer
file as customer acquisition and retention fall. This would
affect order flow and revenue in the short term and the
productivity of the customer file over a longer period,
impacting growth prospects in future years.
Restrictive data privacy legislation or changes in consumer
demands around data privacy could decrease the yield on
our marketing activities and might increase compliance costs
and the possibility of lawsuits.
DIRECTION
Marketing diversification continues via the
successful expansion of the brand component in
the marketing portfolio.
Much of the offline/print budget has been
redeployed towards investment in brand
marketing activities.
The business has significantly reduced the
amount of data it shares, increasingly relying
onfirst party data.
Unchanged
MITIGATION
TV/Video/Brand: Given that this is the newest element of
our marketing portfolio, our utilisation of this technique is still
at a relatively early stage of its development, allowing for a
high degree of flexibility.
Online: Management stays very close to evolving
technological developments and emerging platforms in the
online space. Efforts are focused on anticipating changes and
ensuring compliance with both the requirements of providers
and applicable laws. An appetite for technological innovation
is encouraged by the business.
Offline: Developments in the US Postal Service are closely
monitored through industry associations and lobbying
groups. Alternative parcel carriers are continuously evaluated.
Data privacy requirements and consumer data preferences
are monitored closely and assessed.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
47
STRATEGIC REPORT
OVERVIEW
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
Operational risks
Business facility disruption
RISK AND DESCRIPTION
The 4imprint business model means that operations are concentrated in centralised office, distribution and production facilities.
The performance of the business could be adversely affected if activities at one of these facilities were to be disrupted, for
example, by pandemic, fire, flood, loss of power or internet/telecommunication failure.
STRATEGIC RELEVANCE
The inability to service customer orders over any extended
period would result in significant revenue loss, deterioration
of customer acquisition and retention metrics and diminished
return on marketing investment.
A significant portion of our apparel orders are embroidered
in-house at our distribution centre, therefore disruption at
this facility would impact our ability to fulfil these orders.
The Group’s reputation for excellent service and reliability
may be damaged.
DIRECTION
There have been no significant changes to the
operations of the Group over the period which
materially change the nature or likelihood of this
risk.
Unchanged
MITIGATION
Back-up and business continuity infrastructure is in place to
ensure the risk of customer service disruption is minimised.
Websites are cloud-based, and data is backed up
continuously to off-site servers.
Relationships are maintained with third party embroidery
contractors to provide an element of back-up in the event of
facility unavailability.
Our recently acquired screen-printing operations have been
located separately to our existing distribution centre to
diversify the risk of disruption to our facilities.
A significant proportion of our office and customer service
staff can work from home, mitigating some risk should offices
become unavailable.
4imprint Group plc Annual Report & Accounts 2023
48
Domestic supply and delivery
RISK AND DESCRIPTION
As a consequence of the Group’s ‘drop-ship’ distribution model, trading operations could be interrupted if: (i) the activities of a key
supplier were disrupted and it was not possible to source an alternative supplier in the short term; (ii) a key supplier’s own supply
chain is compromised by ‘force majeure’ events in the country of original product manufacture, for example natural disasters,
social/political unrest or pandemic; or (iii) the primary parcel delivery partner used by the business suffered significantly degraded
service levels. As the Group continues to grow, the volume of orders placed with individual suppliers becomes significant.
STRATEGIC RELEVANCE
Inability to fulfil customer orders would lead to lost revenue
and a negative impact on customer acquisition and
retentionstatistics.
The Group’s reputation for excellent service and reliability
may be damaged, leading to potential erosion of the value
built up in the 4imprint brand.
DIRECTION
Supply chain conditions, initially disrupted by the
impact of the pandemic and later compounded
by challenges in the recruitment of staff by
both the Group and our supply partners, have
improved significantly over the period. This has
led to shorter order cycle times, lower order
cancellations and a significant reduction to the
elevated working capital position from the prior
year-end arising from a build-up of accrued
revenue and inventory on orders in process.
The risk of strikes at our primary parcel
delivery partner has been averted following the
ratification of a new five-year contract by UPS
workers.
Decreased
MITIGATION
A rigorous selection process is in place for key suppliers, with
evaluation and monitoring of quality, production capability
and capacity, ethical standards, financial stability and
business continuity planning.
Very close relationships are maintained with key suppliers,
including a detailed shared knowledge of the supply end
of the value chain, allowing swift understanding of and
appropriate reaction to events.
Wherever possible, relationships are maintained with suitable
alternative suppliers for each product category.
Secondary relationships are in place with alternative
parcelcarriers.
Failure or interruption of information technology systems
andinfrastructure
RISK AND DESCRIPTION
The business is highly dependent on the efficient functioning of its IT infrastructure. An interruption or degradation of services,
including from a malicious cyber attack, would affect critical order processing systems and thereby compromise the ability of the
business to deliver on its customer service proposition.
STRATEGIC RELEVANCE
In the short term, orders would be lost and delivery deadlines
missed, decreasing the efficiency of marketing investment
and impacting customer acquisition and retention.
Revenue and profitability are directly related to order flow
and would be adversely affected as a consequence of a major
IT failure.
Depending on the severity of the incident, longer-term
reputational damage could result.
DIRECTION
The IT platform is mature, and performance has
been efficient and resilient.
Investment in home working capability has been
successful and is a stable part of the overall IT
solution.
Unchanged
MITIGATION
There is continuous investment in both the IT team supporting
the business and the hardware and software system
requirements for a stable and secure operating platform.
Back-up and recovery processes are in place, including
immediate replication of data to an alternative site, to
minimise the impact of information technology interruption.
Cloud-based hosting for eCommerce and elements of back-
office functionality.
IT infrastructure in place to support working from home for
our office-based team members.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
49
STRATEGIC REPORT
OVERVIEW
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
Reputational risks
Cyber threats
RISK AND DESCRIPTION
Malware, ransomware and other malicious cyber threats can lead to system failure and/or unauthorised access to and
misappropriation of customer data, potentially leading to reputational damage and loss of customer confidence. This is a rapidly
changing environment, with threats from new technology emerging on an almost daily basis.
STRATEGIC RELEVANCE
Revenue and profitability are directly related to order flow
and would be adversely affected as a consequence of
systemcompromise.
A significant security breach could lead to litigation and
losses, with a costly rectification process. In addition, it might
be damaging to the Group’s reputation and brand.
An event of this nature might result in significant expense,
impacting the Group’s ability to meet its strategic objectives.
DIRECTION
The expected frequency, sophistication and
publicity of attacks continues to increase.
Accordingly, we continue to invest in expertise
and technical solutions, controls and security
reviews to counter the increasing external risks.
Unchanged
MITIGATION
The business employs experienced IT staff whose focus is to
identify and mitigate IT security vulnerabilities.
Investment in software and other resources in this area
continues to be a high priority.
Technical and physical controls are in place to mitigate
unauthorised access to customer data and there is an
ongoing investment process to maintain and enhance the
integrity and efficiency of the IT infrastructure and its security.
Due to the ever-evolving nature of the threat, emerging cyber
risks are addressed by the IT security team on a case-by-
casebasis.
Third party cyber security consultants are employed as and
when appropriate.
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50
Supply chain compliance and ethics
RISK AND DESCRIPTION
Our business model relies on direct (Tier 1) and indirect (Tier 2 and 3) relationships with suppliers located both within our primary
markets and at overseas locations. 4imprint has for many years had very high ethical expectations for supply chain compliance,
but there is always a risk that our wider supply chain partners may, from time to time, not comply with our standards or
applicable local laws.
STRATEGIC RELEVANCE
Significant or continuing non-compliance with such standards
and laws could result in serious damage to our reputation
and brand image.
This could have an adverse effect on our ability to acquire
and retain customers and therefore our longer-term revenue
prospects and financial condition.
DIRECTION
Our supplier compliance programme is
wellestablished.
Whilst visits to, and audits of, both domestic
and overseas suppliers have returned to more
normalised levels, challenges in visiting certain
locations persist.
Unchanged
MITIGATION
Key Tier 1 suppliers must commit to cascading our ethical
sourcing expectations down to their Tier 2 and Tier 3 supply
chain partners.
Specifically, we require our suppliers to comply with our
supplier compliance documentation, including the ‘4imprint
Supply Chain Code of Conduct’ and the ‘4imprint Factory &
Product Compliance Expectations’ document.
We are active in promoting audit coverage of our supply
chain at many levels, and in ensuring that product safety and
testing protocols are adequate and up to date.
Legal, regulatory and compliance
RISK AND DESCRIPTION
We are subject to, and must comply with, extensive laws and regulations, particularly in our primary US market, including those
relating to data privacy legislation.
STRATEGIC RELEVANCE
If we or our employees, suppliers and other partners fail
tocomply with any of these laws or regulations, such failure
could subject us to fines, sanctions or other penalties
that could negatively affect our brand, reputation and
financialcondition.
DIRECTION
Obligations continue to be complied with
andmonitored.
Unchanged
MITIGATION
Consultation with subject matter experts, specialist external
legal advisers and Government agencies as appropriate.
US General Counsel recruited during 2022 and additional
resources committed to strengthen our in-house capabilities.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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51
STRATEGIC REPORT
OVERVIEW
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
Environmental risks
Climate change
RISK AND DESCRIPTION
Climate change potentially affects our operations, facilities, supply chain, team members, communities and our customers
in a variety of ways. As such, it presents a multitude of risks to the business and threatens our ability to achieve our strategic
objectives.
STRATEGIC RELEVANCE
Extreme weather-related events that impact our customers
and/or our suppliers can have ‘episodic’ negative impact on
revenue, customer acquisition and retention, and they can
also cause increases to our product and distribution costs.
Some of our suppliers are located in geographic areas that
are subject to increased risk of these events in the long term.
Further, in the medium term, if the business is not seen
to be taking deliberate and tangible actions to reduce its
GHG emissions, the Group’s reputation and brand may
bedamaged.
DIRECTION
There remains a global sense of urgency in
relation to climate change. As such, the risks
in this area remain elevated, albeit they are
considered stable over the period.
Unchanged
MITIGATION
The flexible nature of our ‘drop-ship’ model allows for
relatively rapid adjustment to episodes of extreme weather.
The business has very low customer concentration which
helps mitigate an element of the risk as well.
The business became ‘carbon neutral’ in 2021 in respect of
Scopes 1 and 2 and meaningful elements of Scope 3, a year
earlier than originally targeted.
Our solar array project at the Oshkosh distribution centre
became fully operational during 2022, significantly increasing
the portion of the Group’s power requirements generated
from renewable sources.
Management is actively monitoring and measuring progress
towards further environmental goals, most notably further
GHG reductions in Scopes 1 and 2 and meaningful elements
of Scope 3.
4imprint Group plc Annual Report & Accounts 2023
52
Products and market trends
RISK AND DESCRIPTION
The transition to a low carbon economy may lead to changing product trends or consumer preferences that render certain
products undesirable or obsolete whilst increasing demand for others.
STRATEGIC RELEVANCE
Failure to anticipate accurately, and respond to, trends
and shifts in consumer preferences by adjusting the mix
of existing product offers may lead to lower demand for
our products, impacting our market position and ability to
generate revenue growth.
DIRECTION
The transition to a low carbon economy is driving
changes in consumer preferences towards
sustainable products.
However, the fact that most of the products in
our broad range are also sold unbranded in the
retail setting, and with an increasing number of
products being ‘tagged’ with our Better Choices™
designation, the pace of the transition towards
sustainable choices is likely to remain quite
manageable.
Unchanged
MITIGATION
Our merchandising teams actively collaborate with our
suppliers to continuously curate our range of products to
adapt to and meet the needs and tastes of our customers.
Our Better Choices™ initiative has been launched to highlight
promotional products that have sustainable attributes, giving
our customers the ability to research product attributes and
supplier standards and certifications related to sustainability,
environmental impact, workplace culture and more.
Additional resources have been committed to strengthen our
sustainability team and assist in delivering our initiatives in
this rapidly evolving area.
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
53
STRATEGIC REPORT
OVERVIEW
STAKEHOLDER ENGAGEMENT
The following disclosure
describes how the Directors
have had regard to the
matters set out in section
172 (1) (a) to (f) and forms the
Directors’ statement required
under section 414CZA of the
Companies Act 2006.
Team members
WHAT’S IMPORTANT
Investment in our people is a key driver of our competitive
advantage (see Strategic Objectives on page 10). We can
only deliver a remarkable customer experience if we
have exceptional team members who subscribe to our
principles and values. We engage with our team members
to ensure that we are fostering a safe, diverse and
inclusive environment that they are happy to work in and
a culture that they identify with. See pages 21 to 23 for
further discussion on people and culture.
ENGAGEMENT
– Open and honest culture involving regular
communications/updates with team members,
whether in-person, via our in-house social media
platform or by email/video call for team members
working from home
– Competitive, merit-based compensation, excellent
benefits package and opportunity for an easily
understood, results-based bonus
– Ability to participate in the Group’s success through
bonus plans and share ownership (US Employee Stock
Purchase Plan (ESPP) and UK Save As You Earn (SAYE)
plans)
– Wide range of training and development opportunities
available for team members (see Sustainability on
page22)
– The Executive Directors are based at the Oshkosh
site and have regular interaction with team members,
including updates as appropriate from the CEO
– Site visits by Chair and NEDs including an annual two-
day visit and strategy review in Oshkosh (see page 61)
DECISIONS, ACTIONS AND OUTCOMES
– Reaffirmed the Board’s commitment to a people-led
approach, prioritising the welfare, health and safety of
our team members
– Conducted an extensive, externally facilitated
employee survey, the feedback from which will drive
initiatives in relation to internal communications and
collaboration in the coming year
– Development and cultivation of the distinctive 4imprint
culture and working environment
– Diversity, equity and inclusion principles continuously
reviewed and embedded in the business (see page 22)
– Continued review of pay rates to ensure remuneration
remains competitive in the market
– Good participation rates in the US ESPP and UK SAYE
schemes launched in the year
– Regular input from the NED with responsibility
for championing the interests of team members
(‘Employee Voice’)
– Low staff turnover rates despite tight labour markets
Section 172 Statement
4imprint’s key stakeholders and outcomes are set out along
with our business model on pages 18 and 19. Our Board
members understand and embrace the responsibility of
balancing the interests of this wide stakeholder base. A
strong and distinctive culture encouraging responsible
practice has been deeply embedded at all levels of
our business for many years (see page 21). Our team
members observe clear guiding principles that drive ethical
interactions with, and generate positive outcomes for, our
key stakeholders.
The Board of 4imprint sets the tone by nurturing and
reaffirming these principles and demonstrating, through its
discussions and actions, that the interests of stakeholders
are central to its decision-making. Within this framework, the
Directors discharge their duties by monitoring and assessing
stakeholder interests in two primary ways:
(i) Regular information flow from the
ExecutiveDirectors.
The Executive Directors are directly involved in day-to-day
business operations as a result of a flat organisational
structure and a business model conducted from
centralised facilities. The Non-Executive Board members
receive regular written and verbal business updates from
the Executive Directors via monthly reports, face-to-face
at regular Board meetings and between Board meetings
as required.
(ii) Direct engagement of Board members.
Directors are expected, where appropriate, to engage
directly with, or on behalf of, stakeholders. In particular,
the Chairman, Senior Independent Director, Board
Committee Chairs and ‘Employee Voice’ Director seek to
understand the needs and priorities of each stakeholder
group and are encouraged to engage independently with
stakeholders depending on subject matter and context.
The Directors consider the interests of each of 4imprint’s
key stakeholder groups when considering their duties
under section 172 and take into account the information
gathered through engagement with these stakeholders when
determining the Group’s strategies and key decisions (see
page 67).
A summary of our stakeholder engagement activities
(together with the issues and factors the Directors have
considered in respect of our stakeholders in complying with
section 172 (1) (a) to (f)) is set out in the following tables.
54
4imprint Group plc Annual Report & Accounts 2023
Customers Suppliers
WHAT’S IMPORTANT
Our purpose (see inside front cover) revolves around
providing relevant, quality promotional products to
our customers to help them convey their message.
Our customers rely on us to make them and their
organisations look good.
ENGAGEMENT
– Emphasis on providing remarkable customer service
within a culture of continuous improvement (see
page 3)
– Guiding each customer to their ‘perfect product’;
product quality, safety, price and range development
(see pages 15 to 17)
– Regular customer surveys
– Periodic extensive customer market research
projects
– Team members empowered to make decisions
in the customer’s interest, and managers (up to
and including CEO) available to address customer
concerns
– Responsible use and security of personal data
DECISIONS, ACTIONS AND OUTCOMES
– Continued development of the marketing mix,
including additional investment in brand marketing,
to resonate with shifts in customer perceptions and
requirements
– Focus on service quality to maintain a great customer
experience in the context of a rapidly growing
business
– Substantial investment in customer service resource
in the year. Tangible beneficial results in the
customer experience in 2023 after the stresses
caused by the very strong post-pandemic order
intake in 2022
– Ongoing development of a curated, easy-to-access
range of products including the Better Choices™
range highlighting promotional products that have
sustainable attributes, giving our customers the
ability to research product features and supplier
standards and certifications related to sustainability,
environmental impact, workplace culture and more
(see pages 29 to 31)
– Continued focus on ethical sourcing and product
safety/compliance (see pages 24 and 25)
WHAT’S IMPORTANT
Our suppliers are integral to the ‘drop-ship’ pillar of our
business model, allowing us to provide the remarkable
customer service and efficient, on-time delivery of
great products that meet the functional, safety and
environmental requirements that are essential to the
success of the business. Our supplier relationships are
discussed in more detail on pages 24 and 25.
ENGAGEMENT
– Regular meetings, information sharing and site visits
with our Tier 1 domestic suppliers
– Supplier agreements and expectation setting
– 4imprint Social & Ethical Principles Statement and
Modern Slavery Statement
– 4imprint Supply Chain Code of Conduct
– Cooperation with suppliers in marketing campaigns
DECISIONS, ACTIONS AND OUTCOMES
– Worked closely with our suppliers to manage residual
supply chain issues from 2022, thereby maintaining
the supply of products to service the strong demand
seen throughout 2023
– Worked with our Tier 1 suppliers to further expand
our supply chain monitoring and responsible
sourcing programmes
– Continued to expand the product range including
further development of exclusive and ‘in-house’
private label products
– Retained and delivered on our commitment to paying
all suppliers promptly to terms
– 4imprint’s Social & Ethical Principles Statement was
updated and reissued in 2023. A copy can be found
at http://investors.4imprint.com
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OVERVIEW
STRATEGIC REPORT
55
4imprint Group plc Annual Report & Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
Community Pension Plan Trustee
and members
WHAT’S IMPORTANT
Most of our team members live locally to our primary
4imprint facilities, so it is clearly in our interests to have
a positive influence in our local communities. This begins
with stable and competitively remunerated employment,
extending to involvement in many community activities.
Our community involvement initiatives are described
more fully on pages 23 and 24.
ENGAGEMENT
– Paid time off work for our team members to
volunteer for a local charity or non-profit organisation
– Support for and sponsorship of many local
organisations, events and good causes
– Donations of promotional products for events
– one by one
®
charitable giving programme
DECISIONS, ACTIONS AND OUTCOMES
– Impact of 4imprint volunteers in the community
– Charitable donations – over 5,600 one by one
®
charitable grants made in 2023 (see page 24)
– Sponsorship of approximately 170 organisations,
totalling $330,000 in support (see page 24)
– 4imprint’s profile and reputation in the local
community enhanced, improving our ability to attract
and retain high-quality, locally-based team members
in tight labour markets
– Outreach programmes to seek to recruit team
members from under-represented groups in the
local community
WHAT’S IMPORTANT
The Group sponsors a legacy defined benefit pension
plan (the “Plan”). We are fully committed to satisfying our
pension obligations in full, with the aim of full funding
and complete de-risking of the remaining liability (see
page 40).
ENGAGEMENT
– Regular interaction with the Trustee of the Plan
– Regular advice from our own pension consultants
– Periodic evaluation of Plan funding and cost of
insuring liabilities
– Specific engagement with the Trustee, the Plan’s
actuaries and our advisers on a completed buy-in
transaction and actions required to make the Plan
ready for buyout in due course
DECISIONS, ACTIONS AND OUTCOMES
– Updates to the Board on Plan funding level and
proposals to insure remaining pension benefits
– Contributions paid into the Plan at the level agreed
with the Trustee up until date of buy-in transaction
– Board approval for the lump sum acceleration of
most of the previously agreed remaining schedule of
contributions to leave the Plan in a position to insure
substantially all remaining pension benefits via a buy-
in transaction
– Plan substantially fully funded on a buyout basis
– Ongoing activities to ensure the Plan is fully buyout
ready by the end of 2024
– Company agreement to pay the ongoing
administration costs and fund settlement of
residualliabilities
4imprint Group plc Annual Report & Accounts 2023
56
Shareholders
WHAT’S IMPORTANT
We aim to attract Shareholders whose requirements
are aligned with our strategic objectives, and who are
interested in a long-term holding in our Company.
This involves a good understanding of our strategic
objectives, our business model and our culture.
ENGAGEMENT
Our key Shareholder engagement activities are:
– Annual Report & Accounts
– Investor Relations website
– Annual General Meeting (AGM)
– Results announcements, investor roadshows and
periodic trading/performance updates (CEO and CFO)
– Meetings and calls throughout the year with existing
and potential investors, including ESG/Compliance
departments
– Meetings with the Chair, NEDs and Company
Secretary as required
DECISIONS, ACTIONS AND OUTCOMES
– Frequent communication and active governance at
Board level
– Timely communication to the market of strong
financial performance including one unscheduled
RNS market update in July 2023
– Detailed Board review and reaffirmation of organic
growth strategy and evolution of the marketing
portfolio including expanding investment in brand
advertising
– Consultation with Shareholders and proxy advisors
on the proposed changes to the Remuneration Policy
including meetings with the Chair, Remuneration
Committee Chair and Company Secretary
– Shareholder register and investor relations activity
regularly reviewed by the Board
– Emphasis on culture, ethics and sustainability in
Board discussions
– Interim and final dividend payments increased in line
with trading performance
– Special dividend paid in June 2023 in line with the
Group’s balance sheet funding and capital allocation
policies
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
STRATEGIC REPORT
4imprint Group plc Annual Report & Accounts 2023
57
OVERVIEW
NON-FINANCIAL AND SUSTAINABILITY INFORMATION
The table below sets out where stakeholders can find information in our Strategic Report relating to non-financial matters,
asrequired by sections 414CA and 414CB of the Companies Act 2006. The information found in the table below forms our
non- financial statement:
REPORTING REQUIREMENT SECTION OF THE ANNUAL REPORT PAGE(S)
Environmental matters Sustainability
26 to 37
Employees Sustainability
21 to 23
Social matters Sustainability
23 and 24
Human rights Sustainability/Statement on
Corporate Governance
24/67
Anti-corruption and anti-bribery Sustainability/Statement on
Corporate Governance
24/67
Business model Business Model
18 and 19
Non-financial KPIs Strategic Objectives
12 and 13
Principal risks Principal Risks & Uncertainties
44 to 53
Governance arrangements for assessing and managing climate-
related risks and opportunities
Sustainability
34
How climate-related risks and opportunities are identified,
assessed and managed
Sustainability/Principal Risks &
Uncertainties
34/44
How climate-related risks and opportunities are integrated into
the overall risk management process
Sustainability/Principal Risks &
Uncertainties
34/44
58
4imprint Group plc Annual Report & Accounts 2023
REPORTING REQUIREMENT SECTION OF THE ANNUAL REPORT PAGE(S)
The climate-related principal risks and opportunities identified
and their associated time periods
Sustainability/Principal Risks
& Uncertainties
32 to 34/52 and 53
The actual and potential impact of identified climate-related
risks and opportunities on the business model and strategy
Sustainability/Principal Risks
& Uncertainties
32 to 34/52 and 53
An analysis of the resilience of the business model and strategy
taking into account different climate-related scenarios
Sustainability
26 to 37
Targets used to manage climate-related risks and realise
climate-related opportunities
Sustainability
37
Metrics and KPIs used to assess progress against climate-related
targets and a description of their basis of calculation
Sustainability
26 to 31
and 37
The Strategic Report was approved by the Board on 12 March 2024.
KEVIN LYONS-TARR DAVID SEEKINGS
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
OVERVIEW
STRATEGIC REPORT
59
4imprint Group plc Annual Report & Accounts 2023
CORPORATE GOVERNANCE REPORT
Supporting
a growing
business
Chairman’s introduction
“ On behalf of the
Board of 4imprint
Group plc, I am
pleased to introduce
the 2023 Corporate
Governance Report.”
4imprint Group plc Annual Report & Accounts 2023
60
The Board remains committed to strong and appropriate
corporate governance, supporting the principles and
provisions contained in the UK Corporate Governance
Code 2018 (the “Code”). I am pleased to confirm that in
the 2023 financial year, 4imprint Group plc has complied
with the Code in full.
This Corporate Governance Report
contains:
– Details of the Board of Directors
– The Statement on Corporate
Governance
– The Report of the Nomination
Committee
– The Report of the Audit Committee
– The Report of the Remuneration
Committee
– The Directors’ Report
During 2023 the Board has prioritised
supporting the leadership team
in developing and enhancing the
senior management organisational
structure and bolstering the resources
and infrastructure required for
the Group to operate efficiently
at a larger scale. Concurrently, we
have remained cognisant of our
governanceresponsibilities.
In November 2023 the Board held
its annual strategy review and Board
meeting at the 4imprint facilities in
Oshkosh, Wisconsin. The Board members
were impressed to see the developments
at the screen-printing facility which has
transitioned from an empty building a
year ago to a busy operational site. The
Board also had the opportunity to review
the detailed plans for the expansion of
the Oshkosh distribution centre which is
due to be operational in the third quarter
of 2024.
This visit also presented an
opportunity for the Board to improve
its understanding of the Group’s ESG
initiatives in the year. In particular
the Board received detailed reports
on responsible sourcing initiatives
and the supplier monitoring and
auditing programme which has been
expanded in the year. Additionally,
the Board has continued to support
management in prioritising the interests
of team members, a key element of the
4imprintculture.
Further details on ESG can be found in
the Sustainability section on pages 20 to
34 of the Strategic Report.
I am extremely proud of the Board’s work
in 2023 in support of the executive and
leadership teams. My fellow Directors
have maintained diligent corporate
governance standards throughout the
year, and I would like to thank them
for their continued commitment and
contribution to 4imprint.
PAUL MOODY
CHAIRMAN
12 March 2024
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
61
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
BOARD OF DIRECTORS
PAUL MOODY
NON-EXECUTIVE CHAIRMAN
Appointed as a Non-Executive Director in February 2016
andbecame Non-Executive Chairman in December 2016.
Paul currently serves on the Board of Card Factory plc as
Non-Executive Chairman. He was previously Non-Executive
Chairman of Johnson Service Group plc and a Non-Executive
Director of Pets at Home Group plc. Paul has extensive
public company experience spending 17 years at Britvic plc,
including the last 8 years as Chief Executive. Prior to that, he
held a number of senior appointments in sales and HR, with
companies including Grand Metropolitan plc and Mars.
LINDSAY BEARDSELL
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Non-Executive Director in September 2021.
Lindsay is currently Executive Vice President, General
Counsel at Tate & Lyle plc, the global supplier of food and
beverage ingredients, which she joined in 2018. In addition
to her extensive legal and governance background, Lindsay
brings a breadth of commercial experience, both in the UK
and internationally, having previously worked as General
Counsel at Ladbrokes Coral plc, SuperGroup plc and
Gazprom Energy Group. She is a graduate of European Law
from the University of Warwick.
JOHN GIBNEY
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Non-Executive Director in March 2021.
John currently serves as a Non-Executive Director and
Chair of the Audit Committee at C&C Group plc. John is a
Chartered Accountant who has extensive public company
experience, having served for 17 years as Chief Financial
Officer of Britvic plc, a leading European soft drinks
business, where he was responsible for finance, legal,
estates, risk management, quality, safety and environment
and procurement. Prior to joining Britvic, John was Senior
Corporate Finance & Planning Manager for Bass plc, and
prior to that role, Finance Director and subsequently Deputy
Managing Director of Gala Clubs. John has previously been a
Non-Executive Director and Chair of the Audit Committee at
PureCircle PLC and Dairy Crest PLC.
KEVIN LYONS-TARR
CHIEF EXECUTIVE OFFICER
Appointed as Executive Director in June 2012 and became
Chief Executive Officer in March 2015.
Based in Oshkosh, Wisconsin, Kevin has been with the
business since 1991, serving in several capacities, including
Chief Information Officer and Chief Operating Officer. He
was appointed President of the Direct Marketing business
in2004 and has led its substantial growth since then.
62
4imprint Group plc Annual Report & Accounts 2023
DAVID SEEKINGS
CHIEF FINANCIAL OFFICER
Appointed as Chief Financial Officer in March 2015.
David is a Chartered Accountant, having trained and
qualified with KPMG. David has been with the 4imprint
Group since 1996, initially as Group Financial Controller,
moving to the USA in 2000 to become Chief Financial Officer
of 4imprint Direct Marketing, based in Oshkosh, Wisconsin.
JAZ RABADIA
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Non-Executive Director in September 2021.
Jaz is a Chartered Energy Manager with over 16 years
of experience in energy, recycling and sustainability
roles. She is currently Head of Responsible Business and
Sustainability at Just Eat Takeaway.com, an online food
order and delivery service, which she joined in December
2021. Prior to this she was Director of Energy, Sustainability
and Social Impact at WeWork and she has also held senior
positions at Starbucks Coffee Company and Sainsbury’s
Supermarkets Ltd. In 2015 Jaz was awarded an MBE for
services to sustainability in the energy management sector
and promoting diversity amongst young people in the
STEMsectors.
CHRISTINA (TINA) SOUTHALL
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Non-Executive Director in May 2019.
Tina is the Chair of the Bally’s Foundation in the UK and
the former Executive Vice President – People for Bally
Interactive, a NYSE listed company operating some of the
world’s biggest casinos, iGaming and sports media sites.
Prior to this, Tina held executive sales and marketing roles
at Vodafone Group Plc, culminating in her appointment as
Regional Director, Northern Europe for Vodafone Global
Enterprise, and she served as a long-standing Trustee of
The Vodafone Foundation. Prior to joining Vodafone, Tina
held senior positions at Avis Europe and at the RAC.
Committees:
Audit Committee
Nomination Committee
Remuneration Committee
Chair
63
4imprint Group plc Annual Report & Accounts 2023
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTSSTRATEGIC REPORTOVERVIEW
STATEMENT ON CORPORATE GOVERNANCE
Statement of compliance with the UK Corporate
Governance Code
The Board supports the principles and provisions of the UK
Corporate Governance Code (the “Code”). The Code sets out
guidance on how companies should be directed and controlled
to follow good governance practice. Companies listed in the
UK are required to disclose how they have applied the main
principles and whether they have complied with the Code’s
provisions throughout the financial year. Where the provisions
have not been complied with, companies must provide
anexplanation.
For the year ended 30 December 2023, the Board considers that
the Company has complied with the provisions of the Code.
The Code is publicly available on the FRC website.
Role of the Board
The primary responsibility of the Board is to promote the long-
term success of the Company and to look after the interests
of all of its stakeholders. The Board has responsibility for
the management, direction and performance of the Group
and is committed to delivering the Group’s strategy through
meaningful engagement with all stakeholder groups.
The Board is also responsible for determining risk appetite,
establishing procedures to manage risk and overseeing the
Group’s internal control framework. This involves undertaking
appropriate assessments of the Group’s emerging and principal
risks, monitoring the Group’s risk management and internal
control systems and reviewing their effectiveness. The Board is
assisted in fulfilling these responsibilities by the Audit Committee
and the Business Risk Management Committee. The aim of
these procedures is to manage and mitigate the risk of any
failure to meet business targets and can only provide reasonable
and not complete assurance against such failures.
The Board is the decision-making body for all matters material
to the Group’s finances, strategy and reputation. The powers
of the Company’s Directors, as well as the rules relating to
the appointment and removal of Directors, are set out in the
Company’s Articles of Association, which can be found on
the Company’s website at https://investors.4imprint.com/
governance/company-documents/.
The Chairman is responsible for leadership of the Board and
ensuring its effectiveness. The Chairman promotes a culture
of openness and debate, ensuring that each Board member
is given opportunity to contribute their views to each topic
underdiscussion.
Board composition and structure
As at the date of this report, the Board comprised seven
members, namely the independent Non-Executive Chairman,
four independent Non-Executive Directors and two Executive
Directors, being the Group Chief Executive Officer and the
Group Chief Financial Officer. The biographies of the Directors
can be found on pages 62 and 63.
The Board is satisfied that there is sufficient balance between
Executive and Non-Executive Directors on the Board to ensure
that no one individual has unfettered decision-making powers
and that the Board has the appropriate balance of skills,
experience, independence and knowledge of the Group to
enable it to discharge its duties and responsibilities effectively.
Having undertaken a review of the Non-Executive Directors’
outside commitments, the Board is satisfied that all Non-
Executive Directors have sufficient time available to allocate to
the Company in order to discharge their duties effectively.
The role of the Non-Executive Directors includes: assisting
in the development of strategy; monitoring the integrity of
financial information and systems of risk management; reviewing
the performance of management including the alignment of
performance with Company culture and values; assisting the
Company in engaging effectively with all its stakeholders; and
determining the appointment, removal and remuneration of
Executive Directors.
The current Non-Executive Directors have letters of appointment
for three years from 1 February 2022 for Paul Moody, 8 May
2022 for Tina Southall, 8 March 2024 for John Gibney, and
1 September 2021 for Lindsay Beardsell and Jaz Rabadia.
These letters are available for inspection by any person at the
Company’s registered office during normal business hours and
also at the AGM.
Operation of the Board
The Board has a formal schedule of matters reserved for its
decision. This schedule was updated during 2020 to reflect
the recommendations of the FRC’s Guidance on Board
Effectiveness and the requirements of the Code. The schedule
was reconsidered and approved by the Board at its meeting on
12 December 2023.
The schedule of matters reserved for the Board includes, but is
not limited to:
– Considering and approving the Group’s purpose, values and
strategic aims and objectives.
– Overseeing the Group’s operations, management and
performance.
– Approving any changes to the Group’s capital, corporate or
management structures.
– Approving half-year and final results announcements and
the Annual Report & Accounts.
– Approval of dividend policy, declaration of interim dividend
and recommendation of final dividend.
– Maintaining a sound system of internal control and risk
management.
– Approval of major capital expenditure and commercial
agreements.
– Ensuring effective communications with Shareholders and
the market.
– Overseeing Board structure, membership and continuity.
– Determining the Remuneration Policy for Directors,
Company Secretary and senior executives.
– Approving delegation of authority to Board Committees and
executive management.
– Ensuring that appropriate corporate governance procedures
are in place.
– Approval of Group policies and statements.
– Review and approval of any other matter likely to have a
material impact on the Group.
The Board delegates other specific responsibilities to its
principal Committees: the Audit Committee; the Nomination
Committee; and the Remuneration Committee. The details of
the Board Committees and their activities are set out on pages
68 to 92.
The Board is ultimately responsible for oversight of the
Group’s environmental initiatives and climate-related risks and
opportunities, including oversight of the Group Environmental
Committee. Further details regarding governance in this area are
given in the Sustainability section on page 26.
4imprint Group plc Annual Report & Accounts 2023
64
The Board delegates day-to-day management of the Group to
the Executive Directors. Detailed management accounts and
operational reports are distributed to the Board on a monthly
basis, in addition to information prepared for presentation at
regular Board meetings.
The Board has at least six scheduled meetings per year and
additional Board meetings are convened as and when required.
In 2023 the Board had seven regular meetings and two
supplementary meetings: (1) in July 2023 to address the need
All Board and Committee meetings are minuted by the Company
Secretary and these minutes are formally approved at the
following Board meeting. Board minutes contain details of the
Directors’ decision-making processes and any concerns raised
by Directors.
Board Committees
The Board has three permanent Committees, being the Audit
Committee, the Nomination Committee and the Remuneration
Committee. Other than the Committee members, further
participants may attend by invitation of the Committee Chair.
Each Committee’s roles and responsibilities are set out in formal
terms of reference which were reconsidered and approved by
the Board at its meeting on 12 December 2023. Reports from
each of these Committees are provided on pages 68 to 92.
Board information and support
The Chairman, in conjunction with the Company Secretary,
ensures that the Board receives accurate, timely and clear
information. In advance of each meeting, the Board receives
an agenda for the meeting, minutes of the previous meeting,
detailed financial information on the performance of the
business and items for discussion. This enables the Directors to
make informed decisions on the corporate and business issues
under consideration. Additionally, all Directors have access to
senior management should they require additional information
on the items to be discussed.
The Company provides resources, as appropriate, to enable
Directors to update their skills and knowledge, including an
induction programme for new Directors joining the Board.
Independent professional advice is available to all Directors as
required, at the Company’s expense. All Directors have access
to the advice and services of the Company Secretary and may
address issues to the Senior Independent Non-Executive
Director, if required. The Non-Executive Directors meet from
time to time without the Executive Directors being present.
Directors’ conflicts of interest
The Companies Act 2006 codifies the duty of the Directors to
avoid a situation in which they have, or could have, an interest
that conflicts, or may possibly conflict, with the interests of the
Company. A Director will not be in breach of that duty if the
relevant matter has been authorised in accordance with the
Articles of Association by the other Directors. Each Director
has confirmed that they are aware of the need to notify the
Company of any potential conflict of interest.
to make an unscheduled trading update; and (2) in August 2023
to approve the 4imprint Group plc interim Company financial
statements for the 26 weeks ended 1 July 2023 to enable the
declaration of an interim dividend.
During 2023, Board and Committee meetings have been held
via a combination of video and in-person attendance at the
4imprint London office. The November 2023 strategy day and
Board meeting was held at the 4imprint offices in Oshkosh,
Wisconsin, with all Board members physically present.
A table detailing the number of Board and Committee meetings held during the period and attendance by Directors at those
meetings is set out below:
Scheduled
Board
meetings
Supplementary
Board
meetings
Audit
Committee
meetings
Nomination
Committee
meetings
Remuneration
Committee
meetings (i)
Number of meetings in 2023 7 2 2 4 4
P. Moody 7 2 2* 4* 4*
K. Lyons-Tarr 7 2 2* 2* 4*
D. Seekings 7 2 2* 2* 4*
L. Beardsell (ii) 7 1 2* 2* 4*
C. Brady (iii) 1 0 0 0 0
J. Gibney 7 2 2 4 4
J. Rabadia (ii) 7 1 2* 2* 4*
C. Southall 7 1 2 4 4
* By invitation.
(i) None of the Executive Directors were present at the time at which the Remuneration Committee considered and made decisions regarding the remuneration of the
Executive Directors.
(ii) Lindsay Beardsell and Jaz Rabadia were appointed as formal members of the Audit, Nomination and Remuneration Committees with effect from 12 December 2023.
(iii) Charles Brady retired from the Board on 18 August 2023.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
65
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
BOARD ACTIVITIES IN 2023
Strategy and culture
– Reviewed and approved the Group’s continuing
organic growth strategy.
– Considered potential future performance targets and
timeframes for communication externally.
– Ongoing review of the people and infrastructure
investment requirements of the business.
– Monitored and reviewed the rapidly evolving marketing
portfolio, in particular the significant investment in
brand-related activities in the year.
– Reviewed and discussed Company culture including
consideration of the impact of work from home and
hybrid working arrangements.
– Considered responsible sourcing and sustainability
initiatives, including projects to reduce greenhouse gas
emissions, in the context of a growing business.
– Continued focus on diversity, equity and inclusion (DEI)
initiatives.
Governance
– In-depth succession planning including ongoing
development of senior management organisational
structure.
– Developed a new Remuneration Policy to facilitate
recruitment of future Executive Directors in the
external market if necessary, including consulting
withShareholders and proxy advisors.
– Monitored Group environmental and sustainability
initiatives including: updates on GHG emission
reduction initiatives; initial measurement of Scope
3 GHG emissions; supplier monitoring and auditing
programme; and expansion of the Better Choices™
programme.
– Annual Board visit to principal business in Oshkosh.
– Internal Board Evaluation.
– Reviewed the Group’s key corporate policies and
procedures, matters reserved for the Board and Terms
of Reference of Committees.
Finance
– Reviewed and approved full-year and half-year results.
– Reviewed and approved 2024 budget and three-year
plan including scenario planning.
– Considered and approved trading updates including
unscheduled RNS market update in July 2023.
– Approved dividends paid in 2023, including special
dividend paid in June 2023.
– Approved c.$20m capital investment for expansion of
the Oshkosh distribution centre.
– Approved lump sum acceleration of pension
contributions to facilitate pension buy-in.
– Approved the purchase of a bulk annuity policy to
substantially complete the de-risking of the Group’s
legacy defined benefit pension scheme.
Risk management
– Reviewed principal risks and uncertainties.
– Regular review of Group risk matrix and internal
control procedures, including reports from the
Business Risk Management Committee.
– Regular review of emerging risks.
– Continued development of internal control procedures
and documentation.
– Considered the scope of an externally facilitated
review of the Group’s Fraud Risk Management
framework.
– Monitored and reviewed initiatives to deal with
increasing cyber security risks.
– Appointed Director of Group Internal Audit based in
Oshkosh.
BOARD PRIORITIES FOR 2024
Ongoing consideration of the next ‘headline’ strategic target and timeframe.
Regular review of the Group’s longer-term strategic options, changes in investor priorities, and other unanticipated changes in the
market or economic environment.
Oversight of the continuing organic growth of the business through increasing market share and the further evolution of the
marketing mix, with continued investment in brand marketing.
Continued development of the business infrastructure and talent required to support significant further growth whilst
maintaining or enhancing the 4imprint culture.
Support the Executive Directors in developing a senior management organisational structure designed to support the current
and future growth ambitions of the business.
Finalise and approve the new Remuneration Policy for Executive Directors, taking into account the feedback from Shareholders
and other stakeholders, with the aim of gaining Shareholder approval at the 2024 AGM.
Provide support and challenge to management in relation to ESG initiatives including:
– Initiatives to measure and address our Scope 3 greenhouse gas emissions.
– Initiatives to promote the responsible sourcing of products.
– Ongoing development of the Better Choices™ programme.
– The development of specific DEI initiatives.
Continue preparation to meet the requirements of the UK Corporate Governance Code 2024.
STATEMENT ON CORPORATE GOVERNANCE CONTINUED
4imprint Group plc Annual Report & Accounts 2023
66
Principal risks and uncertainties
Throughout the period ending 30 December 2023 and in
accordance with provision 28 of the Code, the Board has
carried out a robust assessment of the principal risks and
uncertainties and the possible emerging risks facing the Group,
including those that would threaten its business model, future
performance, solvency or liquidity. This is described in the
Principal Risks & Uncertainties section on pages 44 to 53.
Going concern and viability
The Board has considered the Group’s and Company’s ability
to continue as a going concern and has assessed the future
prospects of the Group in accordance with provisions 30 and 31
of the Code. The going concern and viability statements are set
out on pages 42 and 43.
Board evaluation
The Code requires the Board to conduct an external evaluation
of the performance and effectiveness of the Board and its
Committees every three years. During 2022 an external
independent Board Effectiveness Review was undertaken, led by
The Trusted Advisors Partnership Ltd.
In 2023 an internal Board Evaluation was carried out by the
Chairman and Company Secretary. The review took the form of
a questionnaire with each Director asked to provide a score for
each question and a written comment if appropriate. The output
of the evaluation was presented in a report to the Board at its
December 2023 meeting and the Directors discussed the points
raised by the review.
The review identified the following areas of strength:
– The Board operates to a highly effective standard with
a healthy balance between a cohesive and supportive
Board and one that is prepared and confident to provide
appropriate challenge to executive management.
– The Board remains confident that it is working to a clear
and commonly understood purpose and collective vision
and that the strategy is well defined and understood by all
stakeholders.
– The Board composition is well balanced with a cohort of
experienced, capable and engaged Non-Executive Directors
who are able and willing to fulfil their responsibilities.
– The Board is well chaired, with a clear focus on the big issues
facing the organisation and allowing full and open discussion
before major decisions are taken.
– The Board has made good progress in developing a clear but
flexible Board succession plan which is aligned to the future
strategic needs of the business.
– The Board Committees are well chaired, experienced and
operate effectively.
In November 2023 the Senior Independent Director undertook
an assessment of the performance of the Chairman throughout
2023. This assessment took the form of individual interviews
between the Senior Independent Director and each Board
member, excluding the Chairman, and the Company Secretary.
The feedback from the assessment was presented in a report
to the Board and discussed at its December 2023 meeting. The
feedback on the Chairman was positive and complimentary, with
Board members being fully satisfied with his performance during
2023.
Corporate Governance Policies
The following Corporate Governance Policies and Company
Statements were reconsidered and approved by the Board at a
meeting on 12 December 2023:
– Anti-bribery, Financial Crime and Sanctions Policy
– Disclosure Policy
– Dealing Policy and Code
– Whistleblowing Policy
– Competition Compliance Policy
In addition, the following Company Statements were
reconsidered and approved by the Board at a meeting on
17 January 2024:
– Environmental Principles Statement
– Social & Ethical Principles Statement
– Diversity, Equity and Inclusion Principles Statement
Copies of our Corporate Governance Policies and Company
Statements can be found on our IR website at http://
investors.4imprint.com.
The Board is committed to guarding against any form of
modern slavery or human trafficking taking place in any part
of its business operations or in the Group’s supply chains. In
accordance with section 54(1) of the Modern Slavery Act 2015,
our slavery and human trafficking statement is published
annually on the Company’s website and can be found at
https://investors.4imprint.com/modern-slavery-statement/.
TheModern Slavery Statement in respect of the financial year
ended 30 December 2023 was approved by the Board at a
meeting on 17January 2024.
Engagement with stakeholders
The Board is committed to its responsibilities to all of its
stakeholders, including: Shareholders; team members;
customers; suppliers; the communities in which it operates;
and the Pension Plan Trustee and members, and strives to
ensure effective engagement with, and encourage participation
from, each of these groups. The Directors are mindful of these
responsibilities and consider them as part of their decision-
making process. The Companies Act 2006 s172 Statement on
pages 54 to 57 sets out how the Board has engaged with these
different stakeholder groups.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
67
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
NOMINATION COMMITTEE REPORT
2023 HIGHLIGHTS
Reviewed the composition of the Board and its Committees
following the retirement of Charles Brady in August 2023.
Recommended to the Board the appointment of Lindsay
Beardsell and Jaz Rabadia to each of the 4imprint
Committees.
Reviewed and updated succession plans for the Executive
Directors and key senior management.
Supported management in the development of the Group’s
organisational structure, strengthening senior management
resource as well as building resilience in the business.
Visited the Oshkosh site to enhance engagement between
the Board and members of the senior management team.
Reviewed diversity, equity and inclusion (DEI) initiatives in the
year.
2024 PRIORITIES
Continue to support the Executive Directors as they
transition to the new organisational design and seek to
strengthen further the skills, experience and balance of the
senior management team.
Develop further opportunities for Board engagement with
members of the senior management team to assess the
internal talent pool.
Implement actions for succession planning for the Executive
Directors and senior management team.
Support the further development of specific DEI initiatives.
Chair’s overview
As Chair of the Nomination Committee (the “Committee”),
I am pleased to present my report for 2023. The focus of
the Committee in the year has been in three primary areas:
(i)reviewing the composition of the Board and its Committees
following the retirement of Charles Brady; (ii) succession
planning for the Executive Directors and key senior talent; and
(iii) supporting the development of the Group’s organisational
structure.
68
4imprint Group plc Annual Report & Accounts 2023
Composition of the Nomination Committee
I have chaired the Nomination Committee since 18 May 2021.
The other members of the Committee during the period were
John Gibney, the current Senior Independent Non-Executive
Director; Lindsay Beardsell and Jaz Rabadia, who formally joined
the Committee on 12 December 2023; and, until 18 August
2023, Charles Brady. All Committee members are independent
Non-Executive Directors.
Paul Moody (Non-Executive Chairman of the Company) and
the Executive Directors are usually invited to attend formal
meetingsof the Committee. The Company Secretary also
attends themeetings.
Meetings of the Nomination Committee
The Nomination Committee meets as frequently as is required
to fulfil its duties. During the period ended 30 December 2023
there were four meetings of the Nomination Committee. Details
on attendance of meetings of the Nomination Committee are
setout in the Statement on Corporate Governance, found on
page 65.
Responsibilities of the Nomination Committee
The responsibilities of the Nomination Committee include:
– Reviewing the structure, size and composition (including the
skills, knowledge, experience and diversity) of the Board and
making recommendations to the Board with regard to any
changes.
– Ensuring plans are in place for orderly succession to Board
and senior management positions and overseeing the
development of a diverse pipeline for succession.
– Identifying and nominating candidates for the approval of
the Board to fill Board vacancies as and when they arise.
– Making recommendations to the Board concerning
membership of the Audit and Remuneration Committees,
and any other Board Committees as appropriate, in
consultation with the Chair of those Committees.
The Nomination Committee ensures that Directors are
appointed to the Board on merit, against objective criteria and
with due regard to ensuring that the Board shows a balance of
skills, knowledge and experience. The Nomination Committee
has terms of reference which were considered and approved
by the Board at its meeting on 12 December 2023. These
terms of reference can be found on our IR website at https://
investors.4imprint.com/governance/the-board.
Main activities of the Nomination Committee during
the period ended 30 December 2023
The Nomination Committee’s principal activities during the
yearincluded:
– Reviewing the membership of the Board and its Committees
following the retirement of Charles Brady, Non-Executive
Director, on 18 August 2023. This resulted in the following
recommendations, which were formally approved by the
Board:
– Tina Southall replaced Charles Brady as Chair of the
Remuneration Committee with effect from 18 August
2023.
– John Gibney replaced Charles Brady as the Senior
Independent Director with effect from 18 August 2023.
– Lindsay Beardsell and Jaz Rabadia, both independent
Non-Executive Directors, were appointed as formal
members of the Audit, Nomination and Remuneration
Committees with effect from 12 December 2023.
– No additional appointments to the Board were considered
to be required following Charles Brady’s retirement.
– Reviewing, with the Executive Directors, a phased
organisational restructuring designed to increase business
resilience whilst also enabling senior employees to
diversify their roles and experience, facilitating the further
development of potential internal candidates for future
appointments up to and including the Board. The Committee
is dedicated to ensuring that an effective succession plan is
maintained in respect of the Company’s Directors and for
the senior management team.
– Further recruitment at the senior management level to fill
skills gaps, including the recruitment of a Director of Group
Internal Audit based in Oshkosh in October 2023.
– Board visit to the Oshkosh site in November 2023 offering
the opportunity for face-to-face interaction with members of
the senior management team.
– Review and discussion of the Company’s DEI initiatives in the
year to support the strategy (see page 22 for details).
– Participation in the internal Board evaluation undertaken in
2023 (see page 67 for details).
Appointment and replacement of Directors
Directors may be appointed by the Company by ordinary
resolution or by the Board. A Director appointed by the Board
holds office only until the next AGM and is then eligible for
election by the Shareholders.
At every AGM of the Company, all Directors put themselves
forward for re-election. The office of Director shall be vacated if
he or she: (a) resigns or offers to resign and the Board resolves
to accept such offer; (b) is, or has been, suffering from mental
ill health; (c) becomes bankrupt or compounds with creditors
generally; (d) is prohibited by law from being a Director; (e)
ceases to be a Director by virtue of the provisions of the
Companies Act; or (f) is removed from office pursuant to the
Articles of Association.
All Non-Executive Directors have written letters of appointment.
The terms and conditions for the appointment of Non-Executive
Directors are available for inspection at the Company’s
registered address (during normal working hours) on request.
Full biographies of each Director can be found on pages 62 and
63. Each Director will be seeking re-election at the 2024 AGM.
The Board is satisfied that, having been subject to a recent
performance evaluation in relation to the fulfilment of their
s172 duty, each Director seeking re-election continues to be an
effective member of the Board.
Independence of Directors
The Code states that at least half the members of the boards
of public companies in the FTSE 350, excluding the chairman,
should be independent non-executive directors, meaning
that those directors should be independent in character and
judgment, and free from relationships or circumstances which
are likely to affect, or could appear to affect, their judgment.
The independent Non-Executive Directors play a key role in
ensuring the maintenance of high business standards, assist
in the formation of strategy and provide a constructive and
experienced perspective. The Board considers that Paul Moody,
Lindsay Beardsell, John Gibney, Jaz Rabadia and Tina Southall
are independent for the purposes of the Code. The Board
reviews the independence of Non-Executive Directors on an
ongoing basis and manages a succession plan which considers
the balance of skills of the Board, the tenure of existing
Non-Executive Directors and the Company’s strategy and
DEIprinciples.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
69
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Diversity policy
The Committee supports the Code provision that boards should
consider the benefits of diversity, including gender and ethnicity,
when making appointments and is committed to ensuring
diversity, not just at Board level, but also across the Group’s
senior management.
The Committee understands the importance and beneficial
effect of diversity within the workforce and aims to foster a
culture that recruits, develops and promotes team members at
all levels regardless of background. The Group is committed to
promoting the principle of equal opportunity and to combatting
discrimination throughout its workforce as well as in senior
management, and no applicant or employee receives less
favourable treatment on the grounds of nationality, age, gender,
gender identity, sexual orientation, religion, race, ethnicity or
disability. The Group recognises its responsibility to disabled
persons and endeavours to assist them to make their full
contribution at work.
In relation to gender diversity, at the date of this report, the
Board is 42.9% female (three women out of seven Board
members). In November 2023 the Company took part in the
FTSE Women Leaders Review which monitors gender balance
in FTSE 100 and FTSE 250 companies. In addition to reviewing
gender diversity at Board level, the FTSE Women Leaders Review
reports on the gender diversity of the senior management team
and their direct reports. Based on data as at 31 October 2023,
47.3% of the senior management team including direct reports
were female (50.7% based on data at 31 October 2022).
In November 2023, the Company also took part in the Parker
Review which monitors ethnic diversity at Board level in FTSE
100 and FTSE 250 companies. The Committee is pleased to
report that the Company has met the recommendation of the
Parker Review that by 2024, FTSE 250 companies should have
at least one director from a minority ethnic group. In addition,
the Company also provided data on the ethnic diversity of senior
management (defined in the same way as for the FTSE Women
Leaders Review to be the executive team and their direct
reports). Based on the expected position at 31 December 2023,
6.8% of the senior management team, including direct reports,
were from a minority ethnic background.
The Committee’s aim as regards the composition of the Board is
that it should have a balance of experience, skills and knowledge
to enable each Director and the Board to discharge their duties
effectively. The Committee agrees that it is appropriate that it
should seek to have diversity on its Board; however, it does not
consider that this can be best achieved by establishing specific
quotas and appointments will continue to be made based on
merit, with diversity in mind.
More information about the Company’s people and culture can
be found in the Sustainability section on pages 21 to 23.
TINA SOUTHALL
CHAIR OF THE NOMINATION COMMITTEE
12 March 2024
NOMINATION COMMITTEE REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
70
AUDIT COMMITTEE REPORT
2023 HIGHLIGHTS
Monitored the development and maturity of the Group’s
control environment, including its anti-fraud policies and
procedures.
Established an internal audit function reflecting the
continued growth and evolution of the Group.
Continued preparation for the upcoming changes contained
in the UK Corporate Governance Code 2024 (the “2024
Code”) and measures recently introduced in the Economic
Crime and Corporate Transparency Act 2023 (ECCTA).
2024 PRIORITIES
Continue to oversee the Group’s plans and activities to meet
the changes in the governance landscape, including the 2024
Code.
Development of the internal audit function including the
planned assurance activities.
Continued oversight of the Group’s plans related to current
and emerging cyber security threats.
Chair’s overview
As Chair of the Audit Committee (the “Committee”), I am
pleased to present the Committee’s report for the period
ended 30December 2023. The Committee continues to fulfil
an important oversight role, monitoring the effectiveness of the
Group’s risk management and internal control systems and the
integrity of its financial reporting.
This report explains how the Committee has discharged its
responsibilities during 2023, specifically in relation to financial
and narrative reporting, significant financial reporting matters,
external audit and risk management and internal control.
The focus of the Committee’s work has taken account of the
challenging macroeconomic and geopolitical environment, along
with the continued growth of the Group and the expansion of its
operational footprint in Oshkosh.
With continued development and investment into its control
and reporting systems, the Group is well placed to meet the
additional requirements under the 2024 Code.
71
FINANCIAL STATEMENTS ADDITIONAL INFORMATIONOVERVIEW
4imprint Group plc Annual Report & Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
Committee membership and responsibilities
All members of the Committee are independent Non-Executive
Directors and collectively have recent and relevant financial and
sector experience. There were three changes to the Committee
during the year with Charlie Brady stepping down from the
Board on 18 August 2023 and Lindsay Beardsell and Jaz Rabadia,
both independent Non-Executive Directors since 1 September
2021, being appointed as additional members to the Committee
on 12 December 2023. Committee member biographies and
attendance at meetings during the year can be found on pages
62 to 63 and 65.
The Board continues to maintain the view that I have the recent
and relevant financial knowledge and experience required to
chair the Committee. I am a qualified Chartered Accountant and
have previously held the positions of Non-Executive Director and
Chair of the Audit Committee at PureCircle PLC and Dairy Crest
PLC, and am currently a Non-Executive Director and Chair of the
Audit Committee at C&C Group plc.
At my invitation and to maintain effective communication, the
Chairman of the Board, other independent Non-Executive
Directors, the Chief Executive Officer, the Chief Financial
Officer and the external auditor, Ernst & Young LLP (EY), attend
all meetings. Other attendees include the Group Financial
Controller, Company Secretary and Director of Group Internal
Audit. At the end of each meeting, EY and the Director of Group
Internal Audit are given the opportunity to discuss matters with
the Committee without executive management being present.
EY and the Director of Group Internal Audit also have direct
access to me and the Committee should they wish to discuss
matters outside of the scheduled meetings.
The Committee meets twice each year with a third regular
meeting planned from 2024, and has an agenda linked to events
in the Group’s financial calendar, the Committee’s priority focus
areas, and any emerging regulatory or business issues.
The Committee is ultimately responsible for the oversight
and monitoring of the financial reporting and risk and control
processes. The Committee fulfils this remit by undertaking the
following roles and responsibilities:
– Monitoring the integrity of the financial statements of the
Company and any formal announcement relating to its
financial performance, and reviewing significant financial
reporting judgments contained in them, having regard to
matters communicated to it by the external auditor.
– Reviewing the content of the Company’s Annual Report &
Accounts and advising the Board on whether, taken as a
whole, it is fair, balanced and understandable and provides
the information necessary for Shareholders to assess the
Company’s position and performance, business model and
strategy.
– Reviewing the Company’s internal financial controls and its
internal control and risk management systems.
– Reviewing and approving the Internal Audit Charter and
audit plan and assessing the effectiveness of the function, its
work and its resources.
– Making recommendations to the Board about the
appointment, reappointment and removal of the Company’s
external auditor and approving their remuneration and
terms of engagement.
– Reviewing the effectiveness of the external audit process and
reviewing and monitoring the independence and objectivity
of the external auditor.
– Developing and recommending to the Board the Company’s
policy on the provision of non-audit services by the external
auditor, including approval of non-audit services by the
Committee and specifying the types of non-audit service
to be pre-approved, and assessment of whether non-audit
services have a direct or material effect on the audited
financial statements.
– Reporting formally to the Board on its proceedings
after each meeting and on how it has discharged its
responsibilities.
Financial and narrative reporting
The Group has appropriate processes and controls in place to
support the financial reporting process and provide reasonable
assurance that the financial statements are prepared in
accordance with applicable standards. This includes the
different levels of review, preparation of management papers
formaterial judgments and completion of disclosure checklists
as appropriate.
The Committee reviewed the full and half-yearly results
announcements, the Annual Report & Accounts and the going
concern and viability statements. This review considered the
appropriateness of the accounting principles, policies and
practices adopted in the Group’s financial statements and the
proposed changes to them, significant accounting issues and
areas of judgment and complexity (set out below), and the
integrity of the financial and non-financial information. The
Committee also considered the reports from EY summarising
their work undertaken in respect of the year-end audit and the
outcome of discussions on their key audit matters.
In recommending the results announcements, Annual Report &
Accounts and the going concern and viability statements to the
Board for approval, the Committee satisfied themselves that:
– The financial statements appropriately address the critical
judgments and key estimates both in respect of the amounts
reported and the related disclosures in the financial
statements.
– The processes used for determining the value of the assets
and liabilities have been appropriately reviewed, challenged
and are sufficiently robust.
– The Annual Report & Accounts taken as a whole is fair,
balanced and understandable.
Fair, balanced and understandable
In assessing whether the Annual Report & Accounts was fair,
balanced and understandable, the Committee considered:
– Feedback provided by Shareholders on the Group’s 2022
Annual Report & Accounts and trading updates, and
information received by the Board throughout the period.
– Climate-related disclosures, including those in relation to
the TCFD and The Companies (Strategic Report) (Climate-
related Financial Disclosure) Regulations 2022 reporting
requirements.
– The processes underpinning the compilation of the Annual
Report & Accounts and the Group’s reporting governance
framework.
– The use and disclosure of alternative performance measures
and its belief that these measures are necessary to aid users’
understanding of the business.
– The reviews and findings of the Group’s external auditor.
AUDIT COMMITTEE REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
72
Taking the above into account, together with the views of EY,
the Committee recommended, and the Board confirmed, that
the 2023 Annual Report & Accounts, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for Shareholders to assess the Company’s position
and performance, business model and strategy.
Significant financial reporting matters
Specific areas of audit and accounting estimates reviewed by the
Committee were:
Impact of uncertain macroeconomic conditions and
climate change
The impacts of the uncertain macroeconomic conditions and
climate change have been considered in the preparation of
the financial statements. The Committee has reviewed and
challenged the material assumptions in the forecast financial
performance and cash flows of the Group that underpin
management estimates, as well as the critical accounting
judgments and disclosures in relation to going concern, viability,
adequacy of provisions and potential impairments, and is
satisfied that they are appropriate.
Purchase of a bulk annuity policy
During the period, the Trustee of the 4imprint 2016 Pension
Plan (the “Plan”) entered a bulk purchase annuity policy to
insure substantially all the Plan’s defined benefit obligations.
Management assessed that the purchase of the policy did
not constitute a settlement and that the excess of the cost
of the annuity over the IAS 19 valuation of the obligations
covered should be recorded in other comprehensive income.
The Committee reviewed and concurred with management’s
conclusions and accounting treatment for this transaction.
Going concern
The Committee received and reviewed management forecasts
for the Group’s future cash flow performance which also
included a severe, but plausible, downside scenario that
reflected a sudden unforeseen shock to demand that is beyond
what is normally expected.
Following a robust assessment of the forecasts, the Committee
concluded that the adoption of the going concern basis for
both the half-year and full-year results was appropriate. The
Committee also reviewed and approved the going concern
disclosures included in the financial statements.
External audit
The Company complies with the Statutory Audit Services
for Large Companies Market Investigation (Mandatory
Uses of Competitive Tender Process and Audit Committee
Responsibilities) Order 2014 and undertook a competitive
tender process in 2018, described in the 2018 Annual Report
& Accounts. Following this process, EY was appointed as the
Group’s external auditor at the 2019 AGM for the financial
year commencing 30 December 2018. It is the intention of the
Committee that the Company tender the external audit at least
every ten years.
Having been the partner in charge of the audit since EY’s
appointment and with the audit of the financial statements for
the period ended 30 December 2023 marking a tenure of five
years, Chris Voogd’s involvement with the audit of the Company
will end following his signing of the audit opinion for the 2023
financial year. Following a detailed selection process overseen by
myself, Jon Killingley will be appointed as the partner in charge of
the audit for the next financial year. Jon’s tenure will be limited to
five years in line with EY’s rotation policy and UK audit regulation.
Scope of the external audit plan and fee proposal
The Committee reviewed and approved EY’s audit planning
report and fee estimate for the 2023 financial year audit and
monitored the execution of the audit plan throughout the
process.
Independence and objectivity
To fulfil its responsibility of maintaining and safeguarding the
independence and objectivity of the external auditor, the
Committee reviewed:
– Changes and rotation of external audit team members in the
audit plan for the current year.
– A report from the external auditor describing their
arrangements to identify, report and manage any conflicts of
interest.
– Whether or not the level of challenge to matters of significant
audit risk and the degree of professional scepticism applied
by the auditor were appropriate.
– The nature and extent of non-audit services, if any, provided
by the external auditor.
Non-audit work
The Group’s policy on external audit prohibits certain types of
non-audit work from being performed by the external auditor,
particularly in cases where the external auditor’s independence
and objectivity would be put at risk. Before any significant
non-audit work is commissioned, the nature and extent of such
work is considered, initially by the Chief Financial Officer and
the Company Secretary, to determine if such work would put
at risk the external auditor’s independence and objectivity. This
process includes discussion with the audit partner at EY. The
matter is then referred to the Committee for approval, prior to
commissioning.
No non-audit services were provided by EY during the period.
Details of fees paid to EY for the year ended 30 December 2023
are shown in note 2 of the consolidated financial statements.
Effectiveness of the external audit process
The Committee continually assessed the effectiveness of
the external audit process during the year. The Committee
considered:
– The relevant skills and experience of the external audit
partner and team and their knowledge of the business.
– The external auditor’s planning report detailing scope of
the audit, materiality, identification of areas of audit risk and
audit timelines.
– The execution of the audit plan.
– Feedback from senior management and the external auditor
about the audit process.
– The robustness of the external auditor in challenging the key
accounting and audit judgments.
– Recommendations made by the external auditor in their
management letters and the adequacy of management’s
response.
– The content, insight and value of the external auditor’s
reports.
After taking into account the factors noted above and its
interactions with EY throughout the year, the Committee
was satisfied that the external audit process was effective.
Accordingly, the Committee has recommended the
reappointment of EY, as external auditor, to the Board.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
73
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Risk management and internal control
The Committee assists the Board in fulfilling its responsibilities to
maintain effective governance and oversight of the Group’s risk
management and internal controls by providing assurance that
the Group has appropriate risk management procedures and
effective controls in place and provides oversight of the internal
audit function.
The control system of the Group is intended to mitigate rather
than eliminate the risk of failure to meet the Group’s objectives
and any such system can only provide reasonable and not
absolute assurances against material misstatement or loss.
The Group operates a continuous process of identifying,
evaluating and mitigating the significant risks faced by each
business and the Group as a whole. This includes:
– A defined organisational structure with appropriate
delegation of authority.
– Formal authorisation procedures for investments.
– Clear responsibilities on the part of management for the
maintenance of good financial controls and the production
and review of detailed, accurate and timely financial
management information.
– The control of financial risks through clear authorisation
levels.
– Identification of operational risks and the development of
mitigation plans by senior management.
– Regular reviews of both forward-looking business plans and
historic performance.
– Regular reports to the Board from the Executive Directors.
The internal controls extend to the financial reporting process
and the preparation of the consolidated financial statements.
The basis of preparation of the consolidated financial
statements is set out on pages 109 and 110.
The Committee received updates on the project to review the
Group’s internal controls over financial reporting and IT general
controls that was initiated in the prior year. With the material
processes and controls now documented and operational
across the Group, focus will move in 2024 to internal audit
testing and further enhancement. In parallel, work is also being
undertaken to review the Group’s processes and controls
to manage fraud risk which is expected to be substantially
completed in the coming year. These programmes of work, in
addition to being appropriate to support the continued growth
of the business, will put the Group in a strong position to comply
with the latest changes in the 2024 Code and ECCTA.
The internal control process will continue to be monitored and
reviewed by the Board through the Committee, which will, where
necessary, ensure improvements are implemented.
Internal audit
Following the decision to establish an internal audit capability in
the prior year, an experienced Director of Group Internal Audit
was recruited in October 2023 to lead the function. Reporting
directly to myself, this resource will support the work undertaken
to date in advancing the Group’s risk management agenda
and provide independent advice and third-line assurance to
the Committee over the effectiveness of risk management
processes, internal controls and mitigations.
In the absence of an internal audit function for most of the
period, the Committee continued to derive internal assurance
through:
– The very flat structure of the Group and close involvement of
the Executive Directors in business operations.
– The maturity of the operational and financial systems, no
historical instances of material control breakdown or fraud,
and the low inherent risk presented by the business model
and limited operational sites.
– The combination of experienced internal resource and
specialist external advice used to manage operational risks,
for example cyber-crime and supply chain integrity.
– Regular reports from the Business Risk Management
Committee (BRMC), Executive Directors, supplemental
internal control questionnaires, and reports from the
external auditor.
The Committee has reviewed and approved the Internal
Audit Charter and audit plan for 2024 and will work closely
with the Director of Group Internal Audit in delivering the
work programmes. The Committee has also decided to add
an additional meeting to the 2024 calendar and future years
outside of the main financial reporting and audit cycles, focused
on internal audit and risk management items.
Whistleblowing
The Group has a Whistleblowing Policy (which is also available
on the Company’s website), containing arrangements for the
US General Counsel or the Company Secretary to receive, in
confidence, complaints on accounting, risk issues, internal
controls, auditing issues and related matters for reporting to the
Committee as appropriate.
Assessment of risk management and internal control
systems
In assessing the effectiveness of the Group’s risk management
procedures and internal controls, the Committee received
regular reports from the BRMC and considered the external
auditor’s review of internal controls and audit highlights
memoranda.
The BRMC reports provide detailed information on the Group’s
principal risks and uncertainties, the effectiveness of mitigating
activities and key controls, emerging risks, the categorisation and
disclosure of risks in results announcements and the Annual
Report & Accounts, and updates on changes in the corporate
governance landscape. A description of the risk management
process and the principal risks and uncertainties facing the
Group can be found in the Strategic Report on pages 44 to 53.
Taking into account the factors outlined above and in the
absence of any material matters having been identified, the
Committee continues to have a high degree of confidence in
the effectiveness of the Group’s risk management and internal
controls.
JOHN GIBNEY
CHAIR OF THE AUDIT COMMITTEE
12 March 2024
AUDIT COMMITTEE REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
74
ANNUAL STATEMENT BY THE CHAIR
OF THE REMUNERATION COMMITTEE
2023 HIGHLIGHTS
Consulted with Shareholders and developed a new
Remuneration Policy.
Detailed remuneration benchmarking exercise undertaken
in conjunction with our remuneration advisors.
Reviewed our remuneration strategy in the context of
business developments and the future growth ambitions of
the business.
Reviewed governance, regulatory and investor developments
on executive compensation matters.
Considered broader employee pay and conditions.
2024 PRIORITIES
Obtain Shareholder approval for the new Remuneration
Policy at the 2024 AGM.
Monitor business performance against 2024 bonus targets
during the year.
Continue to consider employee pay at all levels of the
organisation.
Continue to monitor governance, regulatory and investor
developments on executive compensation.
KEY REMUNERATION PRINCIPLES
The Committee’s long-held view regarding remuneration is that
it should be:
Competitive when compared to organisations of a similar
size, complexity, and type.
Linked to the long-term strategy of the Group.
Clear, easy to understand and motivational.
Structured to not promote unacceptable behaviour or
encourage unacceptable risk-taking.
Structured to avoid reward for failure.
Chair’s overview
As Chair of the Remuneration Committee (the “Committee”),
I am pleased to present the Directors’ Remuneration Report
for the year ended 30 December 2023. The report contains:
– This Annual Statement which summarises the remuneration
decisions made during the year and the context in which
these decisions have been taken.
– A copy of the new Remuneration Policy which will be put
forward for approval by Shareholders at the 2024 AGM.
– The Remuneration Report for the year ended
30December2023 (see pages 78 to 92) which details
how ourRemuneration Policy was implemented in the
year ended 30 December 2023 and how we intend to
implementour Remuneration Policy in 2024.
75
FINANCIAL STATEMENTS ADDITIONAL INFORMATIONOVERVIEW
4imprint Group plc Annual Report & Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
75
Business context for executive remuneration
The Committee considers a range of factors when making pay
decisions for the Executive Directors and senior management
team, including the recent financial and operational
performance of the Group. The Group has delivered a strong
financial performance in 2023 and significant operational
progress has been made in preparing the business for its
current and future growth ambitions.
For 2023 the financial results of the business included:
– Group revenue up by 16% to $1.33bn.
– Increase in operating profit of 32% to $136.2m.
– Increase in basic earnings per share of 32%.
– 2023 interim dividend paid of 65.00c (50.80p) per share;
final dividend declared of 150.0c (117.0p).
– Continued investment in marketing and people to position
the business well for future growth.
– Retaining a strong financial position and good liquidity with
cash and bank deposits at the year-end of $104.5m.
Committee decisions and undertakings in 2023
Base salary
As disclosed in last year’s report, the Remuneration Committee
awarded a base salary increase of 6.8% to the Executive
Directors for 2023, in line with that received by the wider
workforce.
Annual bonus
The Committee also approved the annual bonus plan for 2023,
setting targets based on the 2023 budget. In recognition that
the 2023 budget was challenging and represented a major step
change in financial performance, for 2023 only, the Committee
approved a bonus of 60% of base salary for on-target
performance. The Remuneration Policy enables the Committee
to increase the bonus opportunity to 150% of salary, and for
on-target payout to increase to up to 75% of base salary. The
Committee determined that although the performance targets
were made more stretching, the maximum bonus should remain
at 100% of salary for 2023.
The Group has delivered a very strong financial performance
in 2023 with revenue and operating profit exceeding the
2023 budget. In this context and given that all performance
targets were met in full, the Committee determined that it
was appropriate for the annual bonus plan for the Executive
Directors to pay out in full at 100% of salary.
The financial success of the business in 2023 has meant that
there have been regular payments to team members under
both the leadership and management bonus plans and the
quarterly ‘gain share’ bonus plan for all employees.
Committee decisions and undertakings for 2024
Base salary
At its meeting in January 2024, the Committee awarded the Chief
Executive Officer and the Chief Financial Officer a 4.5% increase
in basic annual salary with effect from 1 January 2024. This is in
line with the average increase anticipated to be applied to the
remuneration of employees across the business in 2024.
Annual bonus
In relation to the annual bonus plan, specific performance
targets for 2024 have been set by the Committee with reference
to the 2024 budget approved by the Board. As at January
2024, the Committee was confident that the targets set were
appropriately stretching. No changes have been made to the
performance measures or operation of the bonus grid for 2024.
Remuneration Policy review
The Remuneration Policy (the “Policy”) was approved three years
ago at the 2021 AGM and is therefore due for renewal at the
AGM in 2024.
Context to the review
Since the last Policy was approved, 4imprint has grown
significantly as a result of the successful implementation and
execution of our strategy by the current Executive Directors. The
Group surpassed its strategic revenue target of $1bn in 2022 (a
45% increase from 2021) and revenue has grown to over $1.3bn
in 2023. Profit before tax exceeded $100m for the first time in
our history in 2022 (a 243% increase from 2021) and has grown
to over $140m in 2023. As a consequence, the 4imprint share
price has significantly outperformed the FTSE 250 index over the
last ten-year period. 4imprint entered the FTSE 250 in June 2019
and is ranked FTSE 220 as at the end of December 2023.
The current Policy was designed with the specific circumstances
of the current Executive Directors in mind. Both current
Executive Directors have significant shareholdings (together
owning 1.6% of 4imprint with shareholdings in excess of 3,000%
of salary), therefore the current Policy does not incorporate an
LTIP. In addition, the quantum of the current Policy reflects both
the former size of the business and the desires of our current
Executive Directors to be moderately positioned against the
market.
The Policy review process and consultation
Given this context, the Committee agreed that it was important
to review not only the Remuneration Policy structure but also
the overall potential quantum, to make sure that the new Policy:
– Supports our current business strategy and values;
– Is competitively positioned and future-proofed in terms
of potential quantum and incentive structure to facilitate
Executive Director succession planning; and
– Meets current UK governance standards.
The Committee has undertaken a thorough exercise in reviewing
the current Policy, supported by its independent advisor and
with input from management. The review included obtaining
stakeholder input from all Board members, remuneration
benchmarking, market trends analysis, and review of investor
sentiment and recent governance developments.
The Committee conducted a thorough Shareholder consultation
exercise. Letters and invitations for feedback were shared
with 17 Shareholders representing approximately 68% of
our register. We had constructive conversations with ten
Shareholders meaning we received input from just over half of
our register. In summary, Shareholders were very supportive of
the proposals for the new Policy and remain supportive of our
business strategy and the current Executive team.
ANNUAL STATEMENT BY THE CHAIR OF THE
REMUNERATION COMMITTEE
CONTINUED
4imprint Group plc Annual Report & Accounts 2023
76
Policy review findings and summary of key changes
The Committee concluded that the potential package value for
Executive Directors is significantly below that of similar sized
FTSE 250 companies. This poses a potential risk to succession
planning. In addition, the Committee concluded that to provide
a market standard package to attract and retain new Executives,
an LTIP would need to be made available for use.
Therefore, under the new Policy an LTIP in the form of a
Performance Share Plan with a maximum award of 200% of
salary has been introduced.
When used in conjunction with the LTIP, the Committee
concluded that the Deferred Bonus Plan (which currently
extends to five years) would need to be made more market
standard. As such, for future LTIP participants, the deferral
arrangement is to be reduced to one-third of the total bonus
(currently 50%), with a three-year deferral period.
Finally, the Committee identified that minor adjustments should
be made to align the Policy with UK governance standards,
including extension of the Post-Employment Shareholding
Guidelines time horizon from one to two years and increasing
the guideline to 200% of salary. This change will apply to both
current and future Executive Directors.
For 2024, the current Executive Directors have reaffirmed that
they do not wish to be in receipt of an LTIP award and are not
seeking realignment of their total remuneration package value to
be competitive with levels in the FTSE 250. As such, no changes
have been proposed to the incentive maxima or incentive
structure for the current Executive Directors for 2024.
A market review of the Non-Executive Director fee levels showed
that these were also below competitive FTSE 250 levels and
therefore the fees would need to be increased. The basic Non-
Executive Director fee level has therefore been increased from
£45,000 to £55,000; an additional fee of £8,250 per annum has
been introduced for the Senior Independent Director and for
the Committee Chairs; and the Chair of the Board’s fee has been
increased from £157,500 to £192,150.
We would like to thank Shareholders for their constructive
feedback and engagement with the Policy review process
and we welcome any further feedback on our remuneration
arrangements.
TINA SOUTHALL
CHAIR OF THE REMUNERATION COMMITTEE
12 March 2024
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
77
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
REMUNERATION REPORT
This report sets out the information required by the Companies
Act 2006, Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) (Amendment)
Regulations 2013, Listing Rules of the Financial Conduct
Authority and the UK Corporate Governance Code. This report
is unaudited except where otherwise stated. An ordinary
resolution to approve this report will be put to the AGM on
22May 2024.
In addition, at the 2024 AGM, Shareholders will be asked to approve the new Remuneration Policy which is set out
in this report (pages 79 to 86).
Remuneration governance
Composition of the Remuneration Committee
I have chaired the Remuneration Committee since 18 August 2023 following the retirement of Charles Brady from the 4imprint Board
and its Committees. The other members of the Committee during the period were John Gibney, the current Senior Independent Non-
Executive Director; and Lindsay Beardsell and Jaz Rabadia who formally joined the Committee on 12 December 2023. All Committee
members are independent Non-Executive Directors.
Paul Moody (Non-Executive Chairman of the Company) and the Executive Directors are usually invited to attend formal meetings of
the Committee. The Company Secretary also attends the meetings.
Meetings of the Remuneration Committee
The Remuneration Committee meets as frequently as is required to fulfil its duties. During the period ended 30 December 2023
there were four meetings of the Remuneration Committee. Details on attendance of meetings of the Remuneration Committee are
set out in the Statement on Corporate Governance, found on page 65.
Responsibilities of the Remuneration Committee
The responsibilities of the Remuneration Committee include:
– Determining the policy for Directors’ remuneration and setting remuneration for the Company’s Chairman, Executive Directors,
senior management, and the Company Secretary, in accordance with the Principles and Provisions of the Code.
– Establishing remuneration schemes that promote long-term shareholding by Executive Directors that support alignment with
long-term Shareholder interests.
– Designing remuneration policies and practices to support the strategy and promote long-term sustainable success, with
executive remuneration aligned to Company purpose and values, clearly linked to the successful delivery of the Company’s long-
term strategy.
– To determine the targets for any performance-related bonus and share incentive plans operated for Executive Directors and
senior management.
The Remuneration Committee has terms of reference which were reconsidered and approved by the Board of the Company at its
meeting on 12 December 2023. These terms of reference are available for inspection on the Company’s website.
The remuneration of Non-Executive Directors is determined by the Non-Executive Chairman of the Board and the Executive
Directors.
In exercising its responsibilities and carrying out key decisions, the Remuneration Committee is mindful of the size and structure
of the Company’s businesses. It regularly assesses the remuneration of Executive Directors and senior management in the context
of the remuneration of the wider workforce and of the Company’s actual and projected growth and profitability. The Remuneration
Committee also considers the value generated for Shareholders, and engages, as appropriate, with Shareholders and other
stakeholders to explain and discuss existing policy and future decision-making.
Willis Towers Watson are engaged as remuneration consultants to the Committee. Fees paid to Willis Towers Watson during 2023
were £77,081 (2022: £6,892).
4imprint Group plc Annual Report & Accounts 2023
78
Remuneration Policy
The following section sets out 4imprint Group plc’s Directors’ Remuneration Policy (the “Policy”) which will be subject to a binding
Shareholder vote at the AGM on 22 May 2024 and will take effect from that date.
The Committee has undertaken a thorough exercise in reviewing the current Policy, supported by its independent advisor and with
input from management. The review included stakeholder input from all Board members, remuneration benchmarking, market
trends analysis, and review of investor sentiment and recent governance developments. In addition, the Committee conducted a
thorough Shareholder consultation exercise.
New Remuneration Policy summary and changes
Element of Policy Overview of changes proposed to Policy
Deferred Bonus Plan (DBP) No change to award opportunity or length of deferral for current Executive Directors for 2024
(50% of bonus deferred over five years).
Introduction of a more market-aligned structure to defer one-third of the bonus over three years
for future LTIP participants.
Long-Term Incentive Plan
(LTIP)
Introduction of a new LTIP in the form of a Performance Share Plan. The introduction of the LTIP
is intended to support future Executive Director recruitment as and when required. At the time of
writing, the current Executive Directors have expressed an intention not to participate in the LTIP
and instead continue to participate in the DBP in its current form.
Maximum opportunity of 200% of salary aligned with the FTSE 250 median although the
Committee may choose to make awards at lower levels.
Awards would be subject to a three-year performance period with a two-year holding period.
Share Ownership Guidelines Extend the post-cessation share ownership guidelines to a 200% of salary holding for a full two
years post cessation to align with the Investment Association guidance and accepted best practice.
Principles of Policy
The Committee is made up entirely of independent Non-Executive Directors to avoid any conflicts of interest and no individual is
present at a Committee meeting where their own remuneration is discussed. The Committee ensures that it is kept up to date with
published guidance from investors, shareholder representative bodies and current market practice, so that it can bear these factors
in mind when formulating and making decisions in connection with the Policy.
The guiding principles underlying the Policy remain unchanged. These are that:
(i) Remuneration should be competitive when compared to remuneration in organisations of similar size and complexity in the
relevant external market, without paying more than is necessary;
(ii) Subject to satisfying (i) above, remuneration should be considered in the context of wider employee pay and conditions and
Shareholder views;
(iii) Packages should be structured so that remuneration is aligned to both the strategy of the Company and long-term growth in
Shareholder value;
(iv) Each element of the remuneration package should be clear, easy to understand and motivating;
(v) The overall package should be designed to take account of the performance of the business and to respond to regulatory
changes but not to promote undesirable behaviour or to encourage unacceptable risk taking; and
(vi) Packages should be structured to avoid reward for failure.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
79
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Executive Director Policy table
Element and purpose Opportunity Operation Performance measures
Base salary
Enables 4imprint to
attract and retain
executive talent
Base salaries are reviewed
annually, however increases are
not automatic.
Base salary adjustments reflect
various factors, including increases
for other employees across the
4imprint business; individual and
Company performance; changes
in role and responsibilities; and
pay at companies of a similar size
and complexity in the relevant
external market.
Base salaries should be
competitive when compared to
similar roles at organisations of a
similar size and complexity in the
relevant external market.
Base salary increases are also
considered in the context of the
value of the total remuneration
package.
Base salary increases will not
normally exceed the average
increase awarded to the
wider workforce. However, in
exceptional circumstances salary
increases may exceed this level.
Not applicable.
Retirement benefits
To provide a
competitive level of
retirement benefit in
order to attract and
retain executive talent
Executive Director retirement
benefits are limited to the
opportunity offered to the local
workforce. This is currently capped
at 5% of base salary per annum.
Executive Directors are eligible
either (i) to participate in local
Company pension arrangements,
or (ii) subject to the discretion
of the Committee, to receive
a salary supplement in lieu of
pension contributions (which is
not taken into account as salary
for calculation of annual bonus, or
other benefits).
Not applicable.
Other benefits
To maintain
competitiveness
in attracting and
retaining talent
Benefit values are set at an
appropriate level taking into
account market practice.
The Committee reserves the
discretion to approve a higher
level of benefits if it is considered
by the Committee to be necessary,
appropriate and in the best
interests of the Company and its
stakeholders. For example, this
may include additional benefits to
cover the cost of relocation.
Typical benefits may include:
(i)company car or car allowance
paid in cash; (ii) private medical
insurance for the executive and
his/her family; (iii) life assurance
of up to four times base salary;
(iv) income protection insurance;
and (v) access to independent
professional advice when
necessary.
Other benefits may also be
offered in line with those offered
to other employees, such as paid
holiday.
The benefits offering may differ
to reflect the market practice of
the country of employment or
domicile of the individual Director.
Not applicable.
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
80
Element and purpose Opportunity Operation Performance measures
Deferred Bonus
Plan (DBP)
To encourage share
ownership and
to incentivise and
reward strong annual
performance
The ongoing maximum potential
annual bonus opportunity is 100%
of base salary for 2024.
However, the Policy provides
the Committee with an overall
maximum of 150% of base
salary for use in future years,
for example, in a recruitment
scenario, or in order to maintain
the competitiveness of the
bonus relative to the market
taking into account Company
and individual performance and
the potential value of the rest of
the remuneration package. See
Recruitment Policy for furtherdetails.
The award for on-target
performance is 50% of base
salary where awards are made in
line with the ongoing maximum
opportunity of 100% of salary.
Where the overall maximum
of 150% is employed, the on-
target bonus opportunity may be
increased to 50% of the maximum,
being 75% of base salary.
For 2024 and future years in
which Executive Directors do
not participate in the Long-Term
Incentive Plan (LTIP):
50% of the annual bonus is
delivered in cash.
50% of the annual bonus is
deferred into share awards
(generally nil-cost options,
conditional share awards or
other forms to meet regulatory
or business needs) for five years
following the date of grant. See
Leaver Policy for exceptions to this
rule.
To the extent an Executive
Director participates in the LTIP:
Two thirds of the annual bonus
will be delivered in cash.
One third of the annual bonus
will be deferred into share
awards (generally nil-cost options,
conditional share awards or
other forms to meet regulatory
or business needs) for three
years following the date of grant.
See Leaver Policy for exceptions to
thisrule.
Cash bonus and deferred share
awards are typically allocated to
participants following the audit
of the Annual Report & Accounts
in the March following the
performance period.
The number of nil cost options
or conditional share awards is
based on the share price on
31December of the financial year
to which annual performance
relates.
The cash bonus and deferred
share awards are subject to
clawback and malus provisions.
See notes to the table.
Performance may be assessed
using financial and non-financial
measures.
Financial performance measures
may include: profitability, revenue
growth, cash generation, or other
financial metrics that are aligned
to the business strategy. Financial
objectives generally account for
the majority of the annual bonus
performance assessment.
Non-financial, corporate
objectives may also be used,
such as environmental, social and
governance (ESG) metrics to the
extent that they align with the
Board’s strategy and are deemed
to enhance prospective long-term
growth in Shareholder value.
Performance measures and
targets are generally set at the
start of the financial year to reflect
the Group’s strategic priorities.
Once awarded, the deferred
component of the annual award
will not be subject to further
performance targets.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
81
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Element and purpose Opportunity Operation Performance measures
Long-Term
Incentive Plan
(LTIP)
To encourage share
ownership and to
incentivise and reward
strong long-term
performance
The ongoing maximum potential
LTIP opportunity is 200% of base
salary, however the Committee
may determine award values
within this maximum.
The award for threshold
performance is 25% of maximum
with straight-line vesting between
threshold and maximum vesting.
For 2024, the current Executive
Directors will not participate in the
LTIP.
To the extent LTIP awards
are granted in future years,
performance will be measured
over a three-year period and a
two-year holding period will apply
to vested shares, normally on a
net-of-tax basis.
In line with the DBP, share
awards are typically allocated to
participants following the audit of
the Annual Report & Accounts.
The LTIP share awards are subject
to clawback and malus provisions.
See notes to the table.
Performance may be assessed
using financial and non-financial
measures. Financial measures will
normally govern the majority of
the award.
Financial performance measures
may include profitability or other
financial metrics that are aligned
to the business strategy as well as
Total Shareholder Return.
Non-financial, corporate objectives
may also be used, such as ESG
metrics to the extent that they
align with the Board’s strategy
and are deemed to enhance
prospective long-term growth in
Shareholder value.
Performance measures and
targets are generally set at the
start of the financial year of the
award to reflect the Group’s
long-term strategic priorities and
are measured over a three-year
period.
All Employee
Share Plans
To encourage
employee share
ownership and reward
long-term value
creation
Employees (including Executive
Directors) may save an agreed
monthly amount, and options are
normally granted at a discount of
up to 20% to the current share
price.
Savings are capped at an agreed
monthly contribution rate, and the
option price is set at the outset of
the plan.
Periodic employee share option
plans open to all employees are
operated in the 4imprint Group.
These take the form of HMRC
approved Sharesave plans in the
UK, and equivalent plans in the
USA.
Not applicable.
Share ownership
guidelines
Provides alignment
with Shareholders
whilst encouraging
sustainable, long-term
value creation
Executive Directors are expected
to maintain a holding of shares in
the Company of at least 200% of
annual base salary.
Executive Directors are
also expected to maintain a
shareholding of at least 200% of
base salary for two years following
cessation of employment.
At least 50% of any vested share
awards (net of tax) from incentive
arrangements are expected to
be held in order to accumulate
the recommended personal
shareholding.
Executive Directors will have until
their fifth annual bonus share
award grant to accumulate their
shareholding.
The post-employment
shareholding guideline will be
enforced through contractual
means.
Not applicable.
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
82
Notes to the Policy table
Remuneration
Committee
discretion
When assessing incentive plan results and performance, the Committee retains the discretion to adjust
incentive plan outcomes in exceptional circumstances if it considers that the outcome does not reflect the
overall performance of the Group over the performance period, or that the outcome is inappropriate in the
context, due to circumstances that were unexpected or unforeseen at the date of grant.
Malus and clawback Malus and clawback provisions apply to both cash and deferred share elements of the DBP and to shares
under the LTIP.
Malus includes the reduction (including to nil) of in-year and/or future year bonus amounts and the
forfeiture or withholding of unvested deferred shares and LTIP share awards. Clawback involves the
recovery of annual bonus and LTIP amounts that have been paid. Clawback may apply to cash bonus
payments made up to two years after the relevant payment date and for deferred shares and LTIP
awards that vested up to five years from the relevant grant date. These provisions may be invoked by the
Committee if it deems this to be appropriate in the context of one or more ‘trigger’ events. These include:
– Material misstatement (including omission) in the Company’s accounts.
– The bonus/award was based on an error, or inaccurate or misleading information.
– Serious misconduct.
– Corporate failure.
– Serious reputational damage.
Discretion to amend
the future operation
of the DBP and LTIP
In the event of a variation in share capital or other event that may affect the share price, the number of
shares subject to an award may be adjusted.
Dividend equivalent
payments
Share-based awards under the LTIP may include the right to receive dividend equivalent payments to the
extent the awards vest.
Minor amendments
to the Policy and
remuneration
under previous
arrangements
Minor changes may be made to the Policy for regulatory or administrative purposes without seeking
further Shareholder approval for such an amendment.
The Committee may make payments notwithstanding that they are not within the current Policy if they
were agreed before:
– The Company’s first remuneration policy subject to binding Shareholder approval came into effect;
– This Policy came into effect (provided they are in line with the remuneration policy at the time of
agreement); or
– Promotion (of the individual to which the payment relates) to the Board of Directors.
Performance
measures
The Committee has selected financial measures as the primary method of determining performance,
as these metrics directly affect Shareholder value. The Committee, when setting the relevant targets,
takes into account the Company’s business plan and internal and external forecasts for the business.
Strategic performance conditions are set in line with the Company’s business plan and strategic priorities.
At the end of the performance period, the Committee will review performance against targets and may
adjust formulaic outcomes for reasons such as (but not limited to) disposals, acquisitions and changes
in accounting treatment, if it is considered necessary for a fair outcome in the context of wider Company
performance. Where discretion is exercised the rationale and adjustment will be disclosed in the relevant
Annual Report.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
83
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Executive Director service contracts
Executive Directors have rolling service contracts, notice periods are twelve months from the Company and six months from the
Executive Director. Any new Executive Director would be appointed on similar terms. The Executive Directors’ service contracts are
available for inspection at the Company’s registered office.
Executive Director recruitment policy
The following guidelines are followed by the Committee when considering the pay and employment terms for a new Executive
Director:
– The Committee aims to pay no more than is necessary to secure the right talent for the business.
– The ongoing remuneration policy for any new Executive Director will align to the remuneration policy for Executive Directors as
set out in this Policy.
– Base salaries are set at a market rate in order to attract the appropriate person. Factors to be taken into account include: the
individual’s previous salary and remuneration package; the skills and experience of the individual; the salary of the previous role
incumbent; and pay at organisations of similar size, complexity and sector in the relevant external market.
– Special arrangements may be made for a new Executive Director in order to secure their appointment. These may include:
– The Committee may choose to provide additional compensation for incentive awards forfeited by the executive upon joining
4imprint. In such cases, we would seek to apply similar conditions to forfeited awards including: performance conditions;
vesting and holding periods; and form of award. Any ‘buyout’ payment will be reduced by an equivalent amount in the event
the Executive Director’s former employer pays a portion of the remuneration that was deemed foregone. Where possible,
existing incentive plans will be used to satisfy such awards, however, in the event that this is not appropriate, the Committee
retains the right to use the Listing Rules exemption 9.4.2 for the purposes of a buyout award. There is no specified limit to the
value of buyout awards, however the Committee will rigorously consider the appropriate value so as not to pay more than the
compensation being forfeited. Malus and clawback provisions would normally apply to buyout awards, for the same reasons as
detailed under the DBP and LTIP.
– The overall maximum incentive opportunity that may be offered upon recruitment is 350% of base salary. This comprises an
increased award under the DBP of 150% of base salary and an LTIP award of up to 200% of salary.
– For external and internal appointments, the Committee may agree that the Company will meet certain relocation expenses
and legal fees as it considers to be appropriate. Assistance will be subject to reasonable clawback for service of less than 12
months.
Corporate events
Upon a takeover, unvested deferred share awards under the DBP would normally vest in full immediately. Unvested share awards
under the LTIP would normally vest (and be released) early. The proportion of any unvested LTIP awards which vest will be
determined by the Committee, taking into account: the extent to which the Committee deems any performance conditions applicable
to awards have been satisfied; the underlying performance of the Company and the participant; such other factors the Committee
considers in its opinion to be relevant; and, unless the Committee determines otherwise, the proportion of the performance period
which has elapsed. Awards may be exchanged to the extent that an offer to exchange awards for new awards is made and accepted
by the award holder.
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
84
Executive Director Leaver Policy
Element / provision Policy
Contractual notice
period and loss of
office compensation
– Twelve months’ notice from the Company and six months from the Executive Director.
– Executive Directors may be required to work during their notice period or take ‘gardening leave’.
Payments in lieu of notice may also be made.
– Contractual non-competition payments may be made on a monthly basis for the twelve months
following termination of employment subject to mitigation.
– Contractual termination payments for Executive Directors include base salary, retirement and other
benefits.
Treatment of bonuses – Normally, an Executive Director may, at the Committee’s discretion, receive a bonus for the year in
which the Executive Director leaves, although US-based Executive Directors are entitled to continue to
participate in the bonus plan up to the date of termination of employment (subject to the satisfaction of
performance requirements). Any such bonus award may be paid in such proportions of cash or shares
as the Committee may determine.
– For ‘good leavers’ unvested deferred share awards will normally continue to vest as if the Executive
Director had not left, with the Committee retaining the discretion to accelerate the vesting of awards
where the Committee considers it appropriate (for example, if the Executive Director dies or has a
terminal illness). ‘Good leaver’ reasons are defined as: injury, ill health, disability, redundancy, retirement
(as agreed by the Company), the company or business for which the Executive Director works being
sold out of the 4imprint Group, death or such other circumstances as the Committee may determine.
– Leavers for any other reason would result in no bonus being paid, and any unvested deferred share
awards would lapse.
Treatment of LTIP – An unvested award will usually lapse when an Executive Director ceases to be an employee or director
of the Group.
– If, however, an Executive Director ceases to be an employee or director of the Group because of their
ill health, injury, disability, retirement, redundancy, the sale of their employing company or business
out of the Group or in other circumstances at the discretion of the Committee (i.e. they leave as a
‘good leaver’), their award will normally continue to vest on the date when it would have vested and
be released from any relevant holding period on the date when it would have been released if they
had not ceased to be an employee or director of the Group. The extent to which awards normally
vest in these circumstances will be determined by the Committee, taking into account the satisfaction
of the performance conditions applicable to awards measured over the original performance period,
the underlying performance of the Company and the Executive Director and such other factors the
Committee considers, in its opinion, relevant.
– The Committee retains discretion to allow the award to vest (and be released) following the Executive
Director ceasing to be an employee or director of the Group, taking into account any applicable
performance conditions measured up to that point.
– Unless the Committee decides otherwise, the extent to which an award vests will also take into account
the proportion of the performance period which has elapsed when the Executive Director ceases to
be an employee or director of the Group. The period over which a ‘recruitment award’ will normally be
time pro-rated will be determined at the time of grant and will normally replicate the approach to time
pro-rating applied to the award in respect of which the ‘recruitment award’ was granted.
– If an Executive Director dies, their award will vest (and, where subject to a holding period, be released)
on the date of their death on the basis set out for other ‘good leavers’ above. Alternatively, the
Committee may decide that unvested awards will vest (and, where subject to a holding period, be
released) on the date they would have if the Executive Director had not died on the basis set out for
other ‘good leavers’ above.
– If an Executive Director ceases to be an employee or director of the Group during a holding period
in respect of an award for any reason other than summary dismissal, their award will normally be
released at the end of the holding period, unless the Committee determines that it should be released
when the participant ceases to be an employee or director of the Group. If a participant dies during the
holding period, their award will be released on the date of death (unless the Committee decides it will
be released at the end of the normal holding period).
– If an Executive Director is summarily dismissed, any outstanding awards they hold will lapse
immediately.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
85
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Future reward scenarios
The graphs below provide an indication of the reward opportunity for each of the current Executive Directors based on their roles as
at 1 January 2024.
11% 11%
16% 16%
24% 24%
22% 21%
16% 16%
24% 24%
22% 21%
Minimum Minimum$597 $412
100% 100%
68% 68%
52% 52%
45% 47%
$0 $0$200 $200$400 $400$600 $600$800 $800$1,000 $1,000$1,200 $1,400
On-target On-target$879 $601
Maximum Maximum$1,162 $789
Maximum + 50%
Share price growth
Maximum + 50%
Share price growth
$1,303 $883
CEO
Total remuneration ($000s)
CFO
Total remuneration ($000s)
Fixed pay (salary, benefits, pension) DBP (cash) DBP (deferred shares) DBP (deferred shares) 50% Share Price Appreciation
The basis of calculation and key assumptions used to complete the charts are as follows:
Minimum – only fixed pay is payable, i.e. base salary, benefits and pension or cash in lieu of pension. No cash bonus is payable and no deferred share awards under the
DBP is granted.
On-target – fixed pay plus 50% of ongoing maximum payout under the DBP.
Maximum – fixed pay plus 100% of ongoing maximum payout under the DBP.
Maximum + 50% share price growth – shows the maximum scenario plus the impact of 50% share price growth.
To note: the charts above illustrate the Policy as it will be implemented in 2024, therefore the LTIP has not been included.
Consideration of employee conditions in the wider Group
The Board (and therefore each Committee member) receives a report for its consideration at its meeting in January in respect of
current salary levels, bonus entitlements, annual pay review and bonus proposals. This is accompanied by a verbal update from
the CEO. In combination, this annual update enables the Committee to take into account conditions in the wider workforce when
considering executive pay actions.
In addition, we have a dedicated Non-Executive Director who is responsible for championing the interests of team members (our
‘Employee Voice’) and who reports back to the Board on initiatives such as the employee engagement survey results.
The remuneration package available to Executive Directors under the Policy is broadly in line with the remuneration package afforded
to our other employees. All employees (including Executive Directors) are entitled to participate in the Company’s Sharesave plans in the
same way. Employees may receive discretionary bonuses based on their performance, although in the case of Executive Directors and
other members of senior management, part of any bonus earned is deferred into awards of the Company’s shares. A three-year deferral
period applies to awards for senior management and currently a five-year deferral period applies to awards for Executive Directors.
More information about how we engage with our team members can be found on page 54 of the Annual Report.
Consideration of Shareholder views
The Committee actively seeks and listens to Shareholder views on 4imprint’s executive remuneration arrangements on an ongoing
basis. In developing this Policy, the Committee undertook a significant consultation with Shareholders and carefully considered the
views put forward. Following the feedback received, the Committee reviewed the position on post-cessation share ownership for
Executive Directors and decided to extend the Policy guidelines to a 200% of salary holding for a full two years post cessation to align
with the Investment Association guidance and accepted best practice.
Non-Executive Director remuneration
Element and purpose Fees are aimed at attracting and retaining high-quality and experienced Non-Executive Directors, with
fee levels reflecting the time commitments and responsibilities of the roles.
Non-Executive Directors are paid a basic fee which is delivered in cash. Additional fees may be paid for
responsibilities of the Senior Independent Director (SID) and for Committee chairs.
Operation Fee levels are reviewed periodically by the Board to maintain competitiveness relative to other listed
companies of a similar size, complexity and type.
Non-Executive Directors do not participate in any incentive schemes and do not receive a pension.
Opportunity Fees payable to Non-Executive Directors cannot exceed the maximum that is set out in the Company’s
Articles of Association. The Company does not adopt a quantitative approach to pay positioning
and exercises judgment as to what it considers to be reasonable in all the circumstances as regards
quantum.
Non-Executive Director letters of appointment
Non-Executive Directors are generally appointed for a period of three years, subject to annual re-election. Non-Executive Directors’
appointments may be terminated without notice by either party.
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
86
Annual report on remuneration
Directors’ remuneration – single total figure (audited information)
Apart from Kevin Lyons-Tarr and David Seekings, Directors are paid in Sterling. It is therefore considered more appropriate to present
the Directors’ remuneration in Sterling. The US dollar remuneration amounts for Kevin Lyons-Tarr and David Seekings are disclosed
separately below:
Base
salary
£
Benefits
£
Annual
bonus
£
Long-term
incentives
£
Pension
£
Total
£
Fixed
pay
£
Variable
pay
£
K. Lyons-Tarr
2023 439,13 4 14,691 434,998 – 10,615 899,438 464,440 434,998
2022 414,367 9,280 409,640 – 9,867 8 43,154 433,514 409,640
D. Seekings
2023 292,756 17,799 289,998 – 10,692 611,245 321,247 289,998
2022 276,245 15,307 273,094 – 9,802 574,4 48 301,354 273,094
P. Moody
2023 157,500 – – – – 157,50 0 157,500 –
2022 150,000 – – – – 150,000 150,000 –
L. Beardsell
2023 45,000 – – – – 45,000 45,000 –
2022 45,000 – – – – 45,000 45,000 –
C. Brady (i)
2023 28,673 – – – – 28,673 28,673 –
2022 45,000 – – – – 45,000 45,000 –
J. Gibney
2023 45,000 – – – – 45,000 45,000 –
2022 45,000 – – – – 45,000 45,000 –
J. Rabadia
2023 45,000 – – – – 45,000 45,000 –
2022 45,000 – – – – 45,000 45,000 –
C. Southall
2023 45,000 – – – – 45,000 45,000 –
2022 45,000 – – – – 45,000 45,000 –
(i) Charles Brady retired from the Board on 18 August 2023.
Kevin Lyons-Tarr and David Seekings US dollar remuneration
Base
salary
$
Benefits
$
Annual
bonus
$
Long-term
incentives
$
Pension
$
Total
$
Fixed
pay
$
Variable
pay
$
K. Lyons-Tarr
2023 546,063 18,268 540,920 – 13,200 1,118,451 577,531 540,920
2022 512,323 11,474 506,479 – 12,200 1,042,476 535,997 506,479
D. Seekings
2023 364,042 22,132 360,613 – 13,296 760,083 399,470 360,613
2022 341,549 18,926 337,653 – 12,119 710,247 372,594 337,653
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
87
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Salaries
The Chief Executive Officer and the Chief Financial Officer received a 6.8% increase in basic annual salary with effect from 1 January
2023. This was in line with the increase applied to the remuneration of salaried employees across the business.
Pension and benefits
The Executive Directors’ pension and other benefits are the same as that offered to the wider workforce. Benefits include medical
insurance, life assurance and income protection.
Short and long-term incentives: Deferred Bonus Plan (DBP)
The Executive Directors participate in a single variable incentive plan through which they may receive an annual bonus, half of which
is paid in cash and half of which is deferred into shares through the award of conditional share awards. The deferral period for
shares awarded to Executive Directors is five years from date of award.
Operation of the DBP
Bonus outcomes under the DBP are variable and depend on the achievement of stretching and robust performance targets based on
the financial results of the Group’s North American business. This basis of measurement is considered to be appropriate given that:
– The North American business comprises 98% of the revenue of the Group and substantially all of its operating profit; and
– It enables direct alignment of the incentive remuneration of the Executive Directors with that of the US-based management team.
Rationale for metric selection
The measures used to assess the performance of the Executive Directors were chosen specifically to align directly with the Group’s
strategic objectives (see pages 9 to 11). These objectives can be summarised as:
– Expansion of market share in large, fragmented, and attractive markets through organic revenue growth; and
– Investment in primarily marketing-based initiatives designed to maximise growth potential up to the point at which this
investment no longer produces an acceptable return.
Accordingly, the Committee agreed the following performance measures as most likely to incentivise an optimum outcome in
alignment with the Group’s strategic priorities:
– Revenue growth. This is the primary driver in meeting the Group’s market share expansion targets and as such serves as the
most heavily weighted measure in calculating incentive remuneration outcomes.
– Operating profit. The inclusion of this measure ensures that the marketing investment to build a strong and growing customer
file is accompanied by an appropriate financial return.
Bonus outturn under each performance measure is contingent on the performance of the other given the key role that both
measures play in ensuring an appropriate balance designed to meet 4imprint’s strategic priorities.
Target setting process and outcomes
The specific bonus targets for 2023 were set by the Committee at its meeting in January 2023, with reference to the 2023 budget
approved by the Board. The Committee noted that the 2023 budget was challenging and represented a major step change in
financial performance and so, for 2023 only, approved a bonus of 60% of base salary for on-target performance ($1,275m revenue;
$115m operating profit).
The bonus measures and targets are inter-related, and as such are best expressed in a grid format. The performance grid approved
by the Committee in January 2023 is set out below.
2023 Plan Threshold Target Maximum
Revenue target ($m) 1,233 1,244 1,256 1,267 1,275 1,289 1,300 1,312 1,323
Op. profit $115m minimum 40% 45% 50% 55% 60% 80% 100% 100% 100%
Op. profit $110m minimum 20% 25% 30% 35% 40% 70% 90% 100% 100%
Revenue growth % vs 2022 10% 11% 12% 13% 14% 15% 16% 17% 18%
Table shows bonus outcome as a % of base salary.
For the avoidance of doubt:
– If operating profit was below $110m no bonus would have been payable regardless of revenue performance.
– If revenue growth was below 10% no bonus would have been payable regardless of operating profit performance.
– Budgeted revenue growth of 14% and operating profit of $115m would have resulted in the Executive Directors earning an on-
target bonus of 60% of base salary, with lower and higher combinations of the two measures producing outcomes ranging from
10% of base salary for threshold performance to 100% of base salary for maximum performance.
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
88
For 2023, revenue of the North American business was $1,302.6m (growth of 16% over 2022) and operating profit was $141.0m.
These financial results exceeded the amounts necessary per the performance grid, for bonuses of 100% of base salary to be
awarded to the Executive Directors.
Accordingly at the January 2024 Remuneration Committee meeting, the Committee approved the maximum bonus award to the
Executive Directors of 100% of base salary, payable 50% in cash and 50% in the form of conditional share awards with a vesting
period of five years. The Committee had no requirement to exercise its discretion to alter the amount of bonus payable.
Bonus targets in respect of 2024 performance are not disclosed for reasons of commercial sensitivity but will be disclosed
retrospectively in next year’s Remuneration Report.
Statement of Directors’ shareholdings and share interests (audited information)
Details of the beneficial interests in the number of ordinary shares held in the Company by each Director and their connected
persons are set out below:
Holding at
30 December
2023
Holding at
31 December
2022
Kevin Lyons-Tarr 266,425 265,909
David Seekings 187,501 186,779
Paul Moody 9,500 9,500
Lindsay Beardsell – –
Charles Brady 2,000
*
2,000
John Gibney 3,000 3,000
Jaz Rabadia – –
Tina Southall 3,000 3,000
* On date of retirement from the 4imprint Board.
The value of each of the Executive Directors’ shareholdings at the year-end exceeds the 200% of base salary shareholding
requirement. The shareholdings included in the table above are not subject to any further performance conditions.
There has been no change in the Directors’ interests in the share capital of the Company from 31 December 2023 to the date of thisreport.
Movement in scheme interests during the financial year (audited information)
Scheme interests awarded in the year comprise deferred bonus payments and US ESPP interests only.
In accordance with the rules of the DBP, the intention is to issue deferred shares in 2024 in respect of the 2023 bonus awards.
Details of share options held by the Directors are set out below:
Holding at
31 Dec
2022
Granted
during the
year Exercised
Holding at
30 Dec
2023 Date of grant
Share price
at date of
grant
Exercise
price
Exercisable
From To
K. Lyons-Tarr
US ESPP 516 – 516 – 17 May 2021 £23.00 $27.61 25 July 2023 25 July 2023
US ESPP – 390 – 390 4 Oct 2023 £49.50 $51.08 12 Dec 2025 12 Dec 2025
2015 Incentive Plan 10,196 – – 10,196 28 Mar 2019 £24.00 $nil 28 Mar 2024 28 Mar 2024
DBP – 4,920 – 4,920 28 Mar 2023 £49.00 $nil 28 Mar 2028 28 Mar 2028
D. Seekings
US ESPP 722 – 722 – 17 May 2021 £23.00 $27.61 25 July 2023 25 July 2023
US ESPP – 390 – 390 4 Oct 2023 £49.50 $51.08 12 Dec 2025 12 Dec 2025
2015 Incentive Plan 6,797 – – 6,797 28 Mar 2019 £24.00 $nil 28 Mar 2024 28 Mar 2024
DBP – 3,280 – 3,280 28 Mar 2023 £49.00 $nil 28 Mar 2028 28 Mar 2028
Gains made on exercise of options in the period were £12,033 for Kevin Lyons-Tarr and £16,837 for David Seekings (2022: £nil for
Kevin Lyons-Tarr and £nil for David Seekings).
During 2023 the middle-market value of the share price ranged from £42.00 to £53.50 and was £45.70 at the close of business on
30December 2023.
Details of share options granted by 4imprint Group plc as at 30 December 2023 are given in note 5.
None of the terms and conditions of the share options were varied during the period. The performance criteria for all Directors’
options were consistent with the Remuneration Policy. Once an award has vested, the exercise of share options is unconditional,
subject to the Rules of the option grant.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
89
OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
Payments to past Directors
There were no payments to past Directors during the period.
Payments for loss of office
There were no payments for loss of office made during the period.
Performance graph and table
Total Shareholder Return
The graph below illustrates the Company’s Total Shareholder Return performance relative to the FTSE 250 Index of which the
Company is a constituent. The graph shows performance of a hypothetical £100 invested over the period.
1,200
1,000
800
600
400
200
0
Dec
2023
Dec
2022
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2020
Dec
2021
— 4imprint Group plc — FTSE 250
Total remuneration of Executive Chairman/Chief Executive Officer
2014
£’000
2015
£’000
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
K. Lyons-Tarr 326 481 564 738 603
*
422 386 843 899
J.W. Poulter 180 45
Total remuneration 180 371 481 564 738 603 422 386 843 899
Annual variable award
Percentage versus max
opportunity (%) 100 60 40 50 100 50
*
n/a n/a 100 100
Long-term incentive
Vesting rate (%) – – – – – – – – – –
* In March 2020, Kevin Lyons-Tarr waived his conditional share awards in respect of 2019.
Kevin Lyons-Tarr was appointed Group Chief Executive Officer on 31 March 2015. Prior to that, the Executive Chairman, John Poulter,
fulfilled the role.
Relative importance of spend on pay
The table below shows the Group’s actual spend on pay relative to dividends:
2023
$m
2022
$m Change
Wages and salaries 92.7 77.8 19%
Dividends paid 110.8 18.7 493%
REMUNERATION REPORT CONTINUED
4imprint Group plc Annual Report & Accounts 2023
90
Percentage change in remuneration of Directors and employees
The table below shows the percentage change in remuneration of each of the Directors and the Company’s employees as a whole
between 2023 and 2022.
Salary Bonus
Taxable
benefits
Average pay based on all employees 2% -31% -17%
Kevin Lyons-Tarr 7% 7% 59%
David Seekings 7% 7% 17%
Paul Moody 5% – –
Lindsay Beardsell 0% – –
Charles Brady 0% – –
John Gibney 0% – –
Jaz Rabadia 0% – –
Tina Southall 0% – –
The calculation for the full year shows that average pay based on all employees across the US and UK has increased by 2% in 2023.
However, this calculation is anomalous for a number of reasons: (i) the average number of employees increased significantly during
the year (+20%), having a dilutive effect on the salary increase percentage; (ii) a large number of new employees were added in
customer services and production roles on starting salaries below longer-tenured employees; (iii) there are c.600 employees on levels
where their wages change based on productivity; and (iv) since the pandemic, wage increases have been implemented at different
times of the year, with the majority of US employees receiving pay increases around mid-year. After eliminating the impact of these
factors, the average base salary increase across all employees is around 7%.
The average bonus percentage for all employees decreased in the year as the prior year included a one-off special bonus of $1,000
for every team member in recognition of the extraordinary efforts during the year in dealing with unprecedented levels of demand.
The change in taxable benefits of -17% relates to medical insurance for a small number of UK employees. In the US business there
has been no change to medical benefits for any employees. The increase in Kevin Lyons-Tarr’s taxable benefits relates to a change in
medical coverage.
CEO pay ratio
Year Country Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2023 UK A 25.4 : 1 18.6 : 1 13.6 : 1
2023 US A 18.8 : 1 16.0 : 1 11.5 : 1
2022 UK A 18.0 : 1 12.8 : 1 9.5 : 1
2022 US A 12.4 : 1 10.5 : 1 7.5 : 1
2021 UK A 24.4 : 1 18.4 : 1 12.9 : 1
2021 US A 17.7 : 1 14.5 : 1 10.6 : 1
2020 UK A 33.5 : 1 26.5 : 1 19.0 : 1
2020 US A 25.2 : 1 19.9 : 1 14.7 : 1
The data in the table above has been calculated using Option A which provides a comparison of the Company’s full-time equivalent
total remuneration for all employees against the CEO’s total remuneration. As the CEO is US-based and the Group has just 51
UK employees (2022: 50) compared with 1,491 US employees (2022: 1,274), the calculations are shown for both the UK and US
employee populations.
The data set included all employees who received base salary during the year ended 30 December 2023 and were still employed at
that date. Where appropriate, remuneration has been annualised to reflect the full-time equivalent amount, for example for part-time
employees and new starters in the year.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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STRATEGIC REPORT
The calculations were carried out by identifying the 25th, 50th and 75th percentile employee, based on total remuneration for
the 2023 financial year. The calculation of total remuneration includes base pay and bonuses, benefits and employer pension
contributions paid in the financial year. In the US data set, owing to the difficulty in compiling the data for each individual, medical and
life cover benefits have been excluded from total remuneration. No other remuneration items have been omitted.
The Committee notes the limited availability of comparable pay ratios across companies and sectors given the range of business
models and employee population profiles that exist.
Statement of voting at general meetings
Votes cast by proxy and in the meeting in respect of Directors’ remuneration were as follows:
Resolution AGM Votes for % for Votes against % against
Votes withheld
(abstentions)
Approval of Remuneration Report 2023 20,786,721 93.52 1,441,396 6.48 75
Approval of Remuneration Report 2022 24,162,559 96.40 903,584 3.60 1,318
Approval of Remuneration Policy 2021 21,870,335 94.94 1,164,452 5.06 380,941
Implementation of Policy in 2024
At its meeting in January 2024, the Committee awarded the Chief Executive Officer and the Chief Financial Officer a 4.5% increase
in basic annual salary with effect from 1 January 2024. This is in line with the average increase applied to the remuneration of all
employees across the business.
In relation to the annual bonus scheme for the Executive Directors and senior management team, specific performance targets
for 2024 have been set by the Committee with reference to the 2024 budget approved by the Board. The bonus plan variables,
consisting of revenue growth percentage and operating profit performance of the North American business, remain unchanged, but
the targets are not disclosed in this report for commercial reasons. As at January 2024, the Committee was confident that the targets
set were appropriately stretching.
In respect of fees paid to the Non-Executive Chairman and Non-Executive Directors, during the year the Committee commissioned a
report from its remuneration advisors to benchmark 4imprint fees against the FTSE 250. The report showed that, following five years
of nil or minimal increases, annual fees paid to the Chair of the Board and to Non-Executive Directors were below the lower quartile
of the FTSE 250. In recognition of the performance of the Board, and in order to bring the Chairman’s annual fee closer to the lower
quartile benchmark, at its meeting in January 2024, the Committee approved an increase in the Chairman’s annual fee from £157,500
to £192,150 with effect from 1 January 2024.
In addition, at a Board meeting in January 2024, the Non-Executive Chairman and the Executive Directors approved an increase
in Non-Executive Directors’ fees from £45,000 to £55,000 per annum, plus an additional fee of £8,250 per annum for each of the
following roles: Senior Independent Director; Chair of the Audit Committee; Chair of the Nomination Committee; and Chair of the
Remuneration Committee. These increases, which were effective from 1 January 2024, aim to bring 4imprint Non-Executive Director
fees closer to the lower quartile for FTSE 250 companies.
TINA SOUTHALL
CHAIR OF THE REMUNERATION COMMITTEE
12 March 2024
REMUNERATION REPORT CONTINUED
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DIRECTORS’ REPORT
The Directors present their report and the audited consolidated
and Company financial statements for the period ended
30December 2023. The Company’s Statement on Corporate
Governance is included in the Corporate Governance section
on pages 64 to 67 of this Annual Report. The Statement on
Corporate Governance forms part of the Directors’ Report and
isincorporated into it by cross-reference.
4imprint Group plc (registered number 177991) is a public
limited company incorporated in England and Wales, domiciled
in the UK and listed on the London Stock Exchange. It is limited
by shares. Its registered office is 25 Southampton Buildings,
London WC2A 1AL.
Dividends
Dividends are declared in US dollars and paid in Sterling,
converted at the exchange rate at the time the dividend
isdeclared.
An interim dividend of 65.0c (50.8p) per ordinary share was
paid on 15 September 2023. The Directors recommend a final
dividend of 150.0c (117.0p) per share which, if approved, will be
paid on 3 June 2024 in respect of shares registered at close of
business on 3 May 2024.
The total distribution paid and recommended for 2023 on the
ordinary shares is $60.0m (2022: $101.1m) or 215.0c per share
(2022: 360.0c including a special dividend of 200.0c per share).
Cross-reference to Strategic Report
The Strategic Report is set out on pages 6 to 59 of the
Annual Report. It includes the Chief Executive’s Review and
Financial Review, which contain information and disclosures
concerning the Group’s financial performance and position,
future prospects, key performance indicators, principal risks
and uncertainties, risk management objectives and policies,
going concern and viability. The Board regularly considers the
Company’s approach to its risk management objectives and
policies and reviews the Company’s risk management processes.
The Board concluded that the current risk management
processes are appropriate for the nature of the business
and current Group structure. Details of the Company’s risk
management processes are set out on page 44.
In addition, the Sustainability section, which is included within
the Strategic Report, contains information in respect of the
Group’s approach to social and ethical responsibility, the
environment, health and safety, employee welfare and diversity,
equity and inclusion.
These elements of the Strategic Report are incorporated into the
Directors’ Report by cross-reference.
Directors
The names and biographical details of the present Directors,
their Committee memberships, independence status and
identification of the Senior Independent Director are given on
pages 62 and 63. The Directors served throughout the period
ended 30 December 2023 and up to the date of signing of
these financial statements. In addition, Charles Brady served
as a Non-Executive Director from the start of the period until
18 August 2023.
The interests of the Directors in the shares of the Company are
shown on page 89.
None of the Directors, nor their associated companies, nor any
members of their families, had any interest either during or at
the end of the period ended 30 December 2023 in any contract
with the Company or its subsidiaries requiring disclosure under
sections 197, 198, 200, 201 and 203 of the Companies Act 2006.
Share capital
The Group’s objective for managing capital is described in
note18.
The Company has a single class of share capital which is divided
into ordinary shares of 38
6
⁄13p each. The shares are in registered
form.
Rights and obligations attaching to shares
Subject to applicable statutes and other Shareholders’ rights,
shares may be issued with such rights and restrictions as the
Company may by ordinary resolution decide, or, if there is
no such resolution or in so far as it does not make specific
provision, as the Board may decide. At each AGM, the Company
seeks annual Shareholder authority for the Company’s Directors
to allot shares, in certain circumstances, for cash. Currently,
there are no such restrictions in place over the issued share
capital of the Company, other than those required by law
orregulation.
Relations with Shareholders
Significant shareholdings
At 30 December 2023, the Company had received notification of
the following interests in voting rights pursuant to the Disclosure
and Transparency Rules:
Date
notified
% of share
capital
(i)
Baillie Gifford & Co 12.05.23 9.97%
abrdn plc 20.09.23 5.60%
Montanaro Asset Management
Limited 04.12.23 4.95%
(i) Percentages are shown as a percentage of the Company’s issued share
capitalwhen the Company was notified of the change in holding. As at
12March 2024, the Company had received further notifications from
abrdnplc (28.02.24, 5.36%). Copies of these, along with historic notifications
received and any notifications received since 12 March 2024, can be found
onour website at https://investors.4imprint.com/investors/regulatory-news/.
The Board places a high value on its relations with its investors
and consults with Shareholders in connection with specific
issues where it considers it appropriate. The Group, principally
through the Chief Executive Officer and Chief Financial
Officer, has regular dialogue and meetings with institutional
Shareholders, fund managers and analysts. Subject always to
the constraints regarding sensitive information, discussions
cover a wide range of issues, including strategy, performance,
management and ESG.
The Board considers it important to understand the views of
Shareholders, in particular any issues which concern them. The
Senior Independent Non-Executive Director is available to meet
major Shareholders if they so wish.
Qualifying third party indemnity provisions
Qualifying third party indemnity agreements have been signed
by the Company in respect of Kevin Lyons-Tarr, David Seekings,
Paul Moody, Lindsay Beardsell, John Gibney, Jaz Rabadia and
Tina Southall with effect from the date of their respective
appointments to the Board of Directors.
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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STRATEGIC REPORT
Shares held in trust for employee share schemes
The trustees of the 4imprint 2012 Employee Benefit Trust may
vote or abstain from voting on shares held in the trust in any
way they consider appropriate.
Significant agreements
There are no agreements containing provisions entitling a
counterparty to exercise termination or other rights in the event
of a change of control.
Remuneration Report
Details of the procedures and guidelines used by the
Remuneration Committee in determining remuneration are
outlined in its report on pages 78 and 79.
Purchase of own shares
Following approval at the 2023 AGM of Resolution 17, the
Company is authorised, generally and without conditions, to
make market purchases, as defined in the Companies Acts, of
its ordinary shares of 38
6
⁄13p subject to the provisions set out
in such Resolution. This authority applies from 24 May 2023
until the earlier of the end of the 2024 AGM or 24 August 2024
unless previously cancelled or varied by the Company in a
general meeting. No such cancellation or variation has taken
place. During the period, no shares have been purchased by the
Company, but the Employee Benefit Trust purchased 18,000
(2022: 35,000) ordinary shares.
Waiver of dividends
The dividend income in respect of the 24,692 shares (2022:
22,860 shares) held in the 4imprint 2012 Employee Benefit Trust
has been waived at the date of this report.
Going concern
The going concern statement is on page 42.
Environment and sustainability
The Board recognises its obligations to protect the environment
and is committed both to achieving required environmental
standards across all the activities of the Group and to minimising
its environmental impact. Further information about the Group’s
environmental and sustainability policy, together with TCFD
reporting disclosures and climate change scenario analysis, is
set out in the Sustainability section on pages 26 to 37.
Greenhouse gas emissions report
Details regarding the Group’s carbon emissions, energy
consumption and energy efficiency are included in the Strategic
Report on pages 27 and 28.
Methodology
All of the emission sources required under the Companies Act
2006 (Strategic Report and Directors’ Report) Regulations 2013
for Scope 1 and Scope 2 emissions have been reported.
The emission factors used were from the UK Government’s GHG
Conversion Factors for Company Reporting 2023 for UK entities
and EPA conversion factors for US entities.
Political donations
No political donations were made in the period ending
30December 2023 or prior period.
Annual General Meeting
Notice of the AGM is set out in a separate document. Items of
special business to be considered at the AGM are described in
detail in the Notice of the AGM and the notes on the business to
be conducted.
Independent auditor
On the recommendation of the Audit Committee, a resolution
to reappoint Ernst & Young LLP (EY) as independent external
auditor will be proposed at the 2024 AGM, together with a
resolution granting the Directors the authority to determine
EY’s remuneration.
Directors’ statement as to disclosure of information
to independent auditor
In the case of each of the persons who are Directors of the
Company at the date this report was approved:
– So far as each of the Directors is aware, there is no relevant
audit information (as defined in the Companies Act 2006) of
which the Company’s auditor is unaware.
– Each of the Directors has taken all of the steps that he or
she ought to have taken as a Director to make himself or
herself aware of any relevant audit information (as defined)
and to establish that the Company’s auditor is aware of that
information.
Approved by the Board and signed on its behalf by
EMMA TAYLOR
COMPANY SECRETARY
12 March 2024
DIRECTORS’ REPORT CONTINUED
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94
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
United Kingdom law and regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law the
Directors have elected to prepare the Group and Company
financial statements in accordance with UK-adopted
International Accounting Standards (IFRSs). Under company law
the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the Group and the Company and of the profit or loss
of the Group for that period.
In preparing the financial statements, the Directors are
requiredto:
– Select suitable accounting policies in accordance with IAS 8
‘Accounting Policies, Changes in Accounting Estimates and
Errors’ and then apply them consistently.
– Make judgments and accounting estimates that are
reasonable and prudent.
– Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information.
– Provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable
users to understand the impact of particular transactions,
other events and conditions on the Group’s and Company’s
financial position and financial performance.
– In respect of the Group’s and Company’s financial
statements, state whether IFRSs have been followed, subject
to any material departures disclosed and explained in the
financial statements.
– Prepare the financial statements on the going concern basis
unless it is appropriate to presume that the Group and
Company will not continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company
and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and Company and for
taking reasonable steps for the prevention and detection of
fraud and other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report, Directors’
Report, Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
TheDirectors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’swebsite.
Each of the Directors, whose names and functions are listed in
the Board of Directors on pages 62 and 63, confirm, to the best
of their knowledge:
– That the consolidated financial statements, prepared in
accordance with IFRSs, give a true and fair view of the assets,
liabilities, financial position and profit of the Company and
undertakings included in the consolidation taken as a whole.
– That the Annual Report, including the Strategic Report,
includes a fair review of the development and performance
of the business and the position of the Company and
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
– That they consider the Annual Report, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the
Group’s position, performance, business model and strategy.
Approved on 12 March 2024 by
KEVIN LYONS-TARR DAVID SEEKINGS
CHIEF EXECUTIVE CHIEF FINANCIAL
OFFICER OFFICER
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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OVERVIEW
CORPORATE GOVERNANCE
STRATEGIC REPORT
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INDEPENDENT AUDITOR’S REPORT
To the members of 4imprint Group plc
Opinion
In our opinion:
– 4imprint Group plc’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair
view of the state of the Group’s and of the Company’s affairs as at 30 December 2023 and of the Group’s profit for the year then
ended;
– the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
– the Company financial statements have been properly prepared in accordance with UK adopted international accounting
standards as applied in accordance with section 408 of the Companies Act 2006; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of 4imprint Group plc (the ”Company”) and its subsidiaries (the ”Group”) for the year ended
30 December 2023 which comprise:
Group Company
Consolidated balance sheet as at 30 December 2023 Balance sheet as at 30 December 2023
Consolidated income statement for the year then ended Statement of changes in equity for the year then ended
Consolidated statement of comprehensive income for the year
then ended
Statement of cash flows for the year then ended
Consolidated statement of changes in equity for the year then
ended
Related notes A to L to the financial statements, including
material accounting policy information
Consolidated statement of cash flows for the year then ended
Related notes 1 to 24 to the financial statements, including
material accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards and as regards the Company financial statements, as applied in accordance with section 408 of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Company and we remain
independent of the Group and the Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and Company’s
ability to continue to adopt the going concern basis of accounting included:
– We confirmed our understanding of the Board’s going concern assessment process and also engaged with management early
to ensure key factors were considered in their assessment. Management have performed their going concern assessment for
the period ending on 28 June 2025. Management consider the key factor that would affect the going concern assumption for the
Group to be a severe downturn in customer demand;
– We obtained the Board’s going concern assessment, including cash flow forecasts which cover the period to 28 June 2025. The
Board prepared ‘base case’ and ‘downside’ cash flow forecast models. The downside scenario assumes a significant deterioration
in demand patterns during 2024, similar to those experienced in 2020 when the pandemic started, with order volumes for
the first year of the three-year forecast period dropping back to around 70% of 2023 levels, before gradually recovering.
Management’s base case and downside forecasts demonstrate that the Group retains sufficient liquidity in the going concern
period to 28 June 2025;
ADDITIONAL INFORMATION
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OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
– We considered the appropriateness of methods used to calculate the cash forecasts and determined, through inspection of
the methodology and testing of the calculations, that the methods utilised were appropriately sophisticated to be able to make
an assessment for the Group and Company. We also confirmed the mathematical integrity of management’s scenarios. We
evaluated the historical accuracy of management’s forecasting and considered this against external analyst expectations. We have
concluded that management’s estimates have historically been appropriate and conservative, and this is supported by post year-
end results to date;
– We have assessed the Board’s considerations related to material climate change impacts, including the re-certification of the
Group’s carbon neutral status during the year, and developing Better Choices™, their sustainable product initiative;
– We have checked the amount and maturity of the $20m US line of credit and £1m UK overdraft facility, which expire on 31 May
2025 and 31 December 2024, respectively, to facility agreements. These facilities remain undrawn and covenant requirements
attached to the $20m US line of credit have also been tested to the facility agreement. There are no covenants on the £1m UK
overdraft;
– We obtained the Board’s forecast covenant calculations for the committed but undrawn $20m US line of credit which cover the
period until expiry (31 May 2025). We tested inputs into the covenant forecast calculations back to the base case and confirmed
the Group has significant headroom and no forecast breach in covenants. Both the base case and the downside cash flow
forecasts assume no utilisation of the $20m line of credit or £1m UK overdraft facility;
– We assessed management’s consideration of the geopolitical and macro-economic environment and the impact on the Group’s
operations, noting that the Group has no operations in Russia, Ukraine, Belarus, or in the Middle East. The possible impact to the
Group would likely manifest itself through inflationary cost pressures;
– We tested the key assumptions included in each of the cash flow forecast models. We tested the assumption regarding significant
declines in revenue included in the downside scenario as well as the recovery rates;
– We performed sensitivity analysis on the downside scenario, assuming increased product costs and reduction in demand, to
identify the impact on the Group’s liquidity. This did not identify liquidity issues. Moreover, the Group has demonstrated its ability
to manage through historic recessions and the more recent COVID-19 pandemic;
– We performed reverse stress testing on the base case and downside forecasts to identify what reduction in revenue would be
required before the Group’s liquidity is exhausted during the going concern period. We assessed whether significant declines in
revenue beyond those experienced during the pandemic were plausible;
– We considered the mitigating factors that are within the control of the Group which include the ability to reduce marketing costs,
direct costs, capex spend and flex dividends. In addition, if required, other payroll and overhead costs could also be reduced;
– We consider that the severe but plausible scenario identified as part of the going concern assessment appropriately reflects the
principal risks of the business and reasonable possible changes in key assumptions;
– In our stress test and reverse stress test models, we have excluded the $20m US line of credit and the £1m UK overdraft facility;
– Our reverse stress test models on the base case and downside scenario showed that with available mitigation, the Group would
have sufficient liquidity to meet its liabilities as they fall due throughout the going concern period; and
– We read the Group’s going concern disclosures included in the Annual Report in order to evaluate whether the disclosures were
appropriate and in conformity with the applicable reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and Company’s ability to continue as a going concern for a period
to 28 June 2025.
In relation to the Group and Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope – We performed an audit of the complete financial information of two full scope components and audit
procedures on specific balances for a further four components.
– The components where we performed full or specific audit procedures accounted for 100% of profit
before tax, 100% of revenue and 100% of total assets.
Key audit matters – Management override of internal controls through manual journals to revenue.
Materiality – Overall Group materiality of $7.0m (2022: $5.2m) which represents 5% (2022: 5%) of profit before tax
for the current period.
4imprint Group plc Annual Report & Accounts 2023
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An overview of the scope of the Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope
for each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements.
Wetake into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the
business environment, the potential impact of climate change and other factors such as geographical and macroeconomic issues
when assessing the level of work to be performed at each company.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements, of the six (2022: seven) reporting components of the Group, we selected
six (2022: seven) components covering entities within the United States of America and United Kingdom, which represent the
principal business units within the Group.
Of the six (2022: seven) components selected, we performed an audit of the complete financial information of two (2022: two)
components (“full scope components”) which were selected based on their size or risk characteristics. For the remaining four
(2022:five) components (“specific scope components”), we performed audit procedures on specific accounts within that component
that we considered had the potential for the greatest impact on the significant accounts in the financial statements either because
ofthe size of these accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 100% (2022: 100%) of the Group’s profit before
tax,100% (2022: 100%) of the Group’s revenue and 100% (2022: 100%) of the Group’s total assets.
For the current year, the full scope components contributed 100% (2022: 100%) of the Group’s profit before tax, 98% (2022: 98%)
ofthe Group’s revenue and 98% (2022: 98%) of the Group’s total assets.
The specific scope component contributed 0% (2022: 0%) of the Group’s profit before tax, 2% (2022: 2%) of the Group’s revenue
and 2% (2022: 2%) of the Group’s total assets. The audit scope of these components may not have included testing of all significant
accounts of the component but will have contributed to the coverage of significant accounts tested for the Group.
Changes from the prior year
We have reduced the number of specific scope components from five to four as a result of a component becoming dormant in
theyear.
Involvement with component teams
All audit work performed for the purposes of the audit was undertaken by the Group audit team except for our inventory existence
procedures in respect of one full scope component. These procedures were undertaken by another EY global network firm operating
under the Group audit team’s instruction and were attended in person.
The Group audit team interacted with management throughout the audit and completed site visits to the Group’s locations in the
United States of America as part of our year-end testing, and to the Group’s location in the United Kingdom as part of our interim
and year-end audit procedures.
The Group audit engagement partner participated in the interim and closing meetings for full scope components.
Climate change
Stakeholders are increasingly interested in how climate change will impact 4imprint Group plc. The Group has determined that the
most significant future impacts from climate change on their operations will be from extreme weather-related events and potential
reputation and brand damage from failure to take deliberate and tangible action to reduce its GHG emissions and changes in
consumer preferences towards sustainable products. These are explained on pages 34 to 37 in the required Task Force for Climate
related Financial Disclosures in the sustainability section and on pages 44 to 53 in the principal risks and uncertainties.
All of these disclosures form part of the ‘Other information’, rather than the audited financial statements. Our procedures on these
unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities
on ‘Other information’.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any
consequential material impact on its financial statements.
As explained in the Group’s viability statement, governmental and societal responses to climate change risks are still developing,
and the degree of certainty of these changes means that they cannot be taken into account when determining asset and liability
valuations under the requirements of UK adopted International Accounting Standards.
The Group has included environmental matters in its strategic objectives and the cash flow impacts of its environmental initiatives
areincorporated into the financial forecasts used to assess viability and going concern.
Our audit effort in considering the impact of climate change in the financial statements was focused on evaluating management’s
assessment of the impact of climate risk on future cash flow forecasts, including changes in consumer preferences towards
sustainable products, which was used in their assessment of going concern, viability, recoverability of deferred tax assets and
associated disclosures.
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 4imprint Group plc
ADDITIONAL INFORMATION
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We also assessed the appropriateness of the Directors’ considerations of climate change risks in their assessment of going concern
and viability and associated disclosures.
Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to
impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk 1 – Management override of internal controls through manual journals to revenue
Description of risk:
There is a risk that management may override controls to intentionally misstate revenue transactions through inappropriate
manual journal entries to revenue and consequently operating profit.
Investor focus on the Group’s revenue performance, together with the management reward and incentive schemes which are
based on revenue percentage growth and operating profit targets, create an incentive for management to manipulate revenue
recognition.
There is one material revenue stream with performance obligations that are straightforward and fulfilled by delivery of goods
to customer. Revenue is generated through a high volume of relatively low value transactions and there is no concentration of
customer credit risk. Our audit risk is focussed on manual journals to the revenue accounts. Therefore, we concluded there was
arisk that management may override controls to:
a. overstate revenue, and therefore operating profit, in order to report improved results to the market; or
b. understate revenue, and therefore operating profit, in order to provide a contribution towards meeting targets for management
rewards and incentive schemes in the next financial period.
Revenue for the year was $1,326.5m (2022: $1,140.3m) and operating profit was $136.2m (2022: $102.9m).
Refer to the accounting policies (pages 110 and 111); and note 1 of the consolidated financial statements (page 115).
Our response to the risk:
We identified, documented and confirmed our understanding of the Group’s revenue recognition policies and performed a
walkthrough to assess the design and implementation of key controls over the revenue process.
We performed testing to validate a sample of revenue transactions extracted from the sales invoicing system to revenue recorded
and reconciled in the general ledger.
We performed data analytics testing over the entire revenue process from revenue recognition through to invoice settlement via
cash. Where the postings did not follow our expectation, we investigated outliers and tested these journal entries to assess their
validity by agreeing the transactions back to source documentation.
We tested manual journal entries posted to revenue accounts, applying parameters designed to identify entries that were not in
accordance with our expectations. This included analysing and selecting journals for testing which appeared unusual in nature due
to size, preparer or being manually posted as there is greater opportunity to record fictitious entries than with automated journals,
and therefore outside the normal course of business.
We investigatedmaterial classes of journals which did not flow through this process in line with our expectationsto confirm our
understanding and ensure these were genuine transactions and appropriately accounted for.
We also introduced unpredictability into our manual journal entries testing, by randomly sampling manual journal entries with
no pre-determined criteria. We corroborated such journals to source documentation to confirm that the entries supported the
revenue recognised and that the entries were valid.
We performed audit procedures over this risk area on 4imprint, Inc. and 4imprint Direct Limited which covered 100% (2022: 100%)
of revenue for the year.
Key observations communicated to the Audit Committee:
We did not identify evidence of management override through inappropriate journal entries recorded to revenue in the period.
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We have removed the following key audit matters included in our prior year auditor’s report which we believe no longer present risks
of material misstatement to the financial statements in the current period:
– Management override of internal controls through manual journals to supplier rebate income
Our risk assessment has reduced reflecting the facts that rebates are based on agreed contractual rates with suppliers,
agreements are coterminous with the reporting date and there are no significant judgments involved in the recognition of
supplier rebates.
– Management override of internal controls to the expected credit loss provision on unbilled accrued revenue
This risk emerged due to disruption to the Group’s supply chain caused by the pandemic which resulted in an unusual increase
in unbilled accrued revenue on orders that had been delivered to customers but where other products on the overall customer
order had not been delivered at year-end. The ageing and value of unbilled accrued revenue balances is now comparable to pre-
pandemic levels.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the
audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group to be $7.0m (2022: $5.2m), which is 5% (2022: 5%) of profit before tax for the current
period. We believe that profit before tax for the current period provides us with an appropriate basis for determining materiality
aswe consider the users of the financial statements are primarily focused on earnings.
We determined materiality for the Company to be £2.5m (2022: £2.4m), which is 1% (2022: 1%) of equity.
There was no change in our final materiality from our original assessment at planning for the Company.
During the course of our audit, we reassessed initial materiality for both the Group and Company.
Our final materiality for the Group ($7.0m) was higher than our initial materiality ($6.2m) owing to the Group’s improved trading
performance throughout the year.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgment
was that performance materiality was 75% (2022: 75%) of our planning materiality, namely $5.3m (2022: $3.9m). We have set
performance materiality at this percentage based on our assessment of the appropriateness of the Group’s internal controls,
thenature of historic audit misstatements and the residual risk of undetected misstatements in the financial statements.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is
undertaken based on a percentage of total performance materiality. The performance materiality set for each component is based
on the relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that
component. In the current year, the range of performance materiality allocated to components was $0.9m to $4.5m (2022: $0.8m
to$2.9m).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of $0.3m (2022:
$0.2m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting
onqualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the Annual Report set out on pages 1 to 95, including the Strategic
Report, set out on pages 6 to 59, Corporate Governance Report, set out on pages 60 to 95, and additional information set out on
pages 146 to 148 other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other
information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated
inthis report, we do not express any form of assurance conclusion thereon.
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 4imprint Group plc
ADDITIONAL INFORMATION
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Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there
is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements
areprepared is consistent with the financial statements and those reports have been prepared in accordance with applicable
legal requirements;
– the information about internal control and risk management systems in relation to financial reporting processes and about share
capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the “FCA Rules”), is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
– information about the Company’s Corporate Governance Statement and practices and about its administrative, management
andsupervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the
audit, we have not identified material misstatements in:
– the Strategic Report or the Directors’ Report; or
– the information about internal control and risk management systems in relation to financial reporting processes and about share
capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
– adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received
from branches not visited by us; or
– the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
– certain disclosures of Directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit; or
– a Corporate Governance Statement has not been prepared by the Company.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and Company’s compliance with the provisions of the UK Corporate Governance
Codespecified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 42;
– Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period
isappropriate set out on pages 42 and 43;
– Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets
its liabilities set out on page 43;
– Directors’ statement on fair, balanced and understandable set out on page 95;
– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 44 to 53;
– The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems
setout on pages 44 and 74; and
– The section describing the work of the Audit Committee set out on pages 71 to 74.
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Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 95, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
theDirectors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and Company’s ability to continue
asagoing concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative
butto doso.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
ofthese financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
Company and management.
– We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the
most significant are those that relate to the reporting framework (IFRS, Companies Act 2006, the UK Corporate Governance Code,
the Listing Rules of the UK Listing Authority) and the relevant tax compliance regulations in the jurisdictions in which the Group
operates, notably in the US and the UK. In addition, we concluded that there are certain laws and regulations that may have an
effect on the determination of the amounts and disclosures in the financial statements and those laws and regulations relate to
health and safety, employee, environmental, bribery and corruption practices and various US state laws;
– We understood how 4imprint Group plc is complying with those frameworks by making enquiries of Board members and senior
management executives, internal audit, those responsible for legal and compliance procedures, the US General Counsel and the
Company Secretary. We corroborated our enquiries through our review of Board minutes, Business Risk Management Committee
minutes, papers provided to the Audit Committee and attendance at meetings of the Audit Committee and members of the
senior management team, and from reviewing correspondence received from regulatory bodies and noted that there was no
contradictory evidence;
– We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur.
Indoing so, we considered investor focus and management remuneration in the current year and next year which may create
an incentive for management to manipulate earnings. We considered the possibility of fraud through management override and,
in response, we incorporated data analytics across manual journal entries into our audit approach. Where unusual results or
anomalies were identified through our data analytics, we performed additional audit procedures to address each identified risk.
These procedures included testing transactions back to source information and were designed to provide reasonable assurance
that the financial statements were free from material fraud or error. For more details, please refer to our Key Audit Matters
section above; and
– Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Ourprocedures involved testing details of manual journal entries which met our defined risk criteria based on our understanding
of the business, enquiries of the US General Counsel, Group management and senior management executives of full and specific
scope components. We inspected the volume and nature of complaints by the whistleblowing hotline during the year, and any
past or present pending or threatened litigation or claims against the Group and its components.
We did not identify any instances of non-compliance with laws and regulations that, in our opinion, could have an impact on the
financial statements that would be more than inconsequential.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 4imprint Group plc
ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE
Other matters we are required to address
– Following the recommendation from the Audit Committee, we were reappointed by the Company on 24 May 2023 to audit the
financial statements for the period ended 30 December 2023 and subsequent financial periods.
– The period of total uninterrupted engagement including previous renewals and reappointments is five years, covering the 52
week period ended 28 December 2019, the 53 week period ended 2 January 2021, the 52 week period ended 1 January 2022,
the52 week period ended 31 December 2022 and the 52 week period ended 30 December 2023.
– The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report,
orforthe opinions we have formed.
CHRISTOPHER VOOGD
SENIOR STATUTORY AUDITOR
for and on behalf of Ernst & Young LLP, Statutory Auditor
Birmingham
12 March 2024
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GROUP INCOME STATEMENT
for the 52 weeks ended 30 December 2023
| 2023 | 2022 | ||
| Note | $m | $m | |
Revenue | 1 | ||
Operating expenses | 2 | ( | ( |
Operating profit | 1 | ||
Finance income | |||
Finance costs | ( | ( | |
Pension finance income | |||
Net finance income | 3 | ||
Profit before tax | |||
Taxation | 7 | ( | ( |
Profit for the period | |||
Cents | Cents | ||
| Earnings per share | |||
Basic | 8 | ||
Diluted | 8 |
ADDITIONAL INFORMATION
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| 2023 | 2022 | ||
| Note | $m | $m | |
Profit for the period | |||
| Other comprehensive income | |||
| Items that may be reclassified subsequently to the income statement: | |||
Currency translation differences | 22 | ( | |
| Items that will not be reclassified subsequently to the income statement: | |||
Return on pension plan assets (excluding interest income and impact of buy-in policy) | 6 | ( | ( |
Remeasurement loss on pension buy-in policy | 6 | ( | |
Remeasurement (losses)/gains on post-employment obligations | 6 | ( | |
Tax relating to components of other comprehensive income | 7 | ||
Other comprehensive income for the period, net of tax | ( | ( | |
Total comprehensive income for the period, net of tax |
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 52 weeks ended 30 December 2023
4imprint Group plc Annual Report & Accounts 2023
106
| 2023 | 2022 | ||
| Note | $m | $m | |
| Non-current assets | |||
Intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Deferred tax assets | 7 | ||
Retirement benefit asset | 6 | ||
| Current assets | |||
Inventories | 13 | ||
Trade and other receivables | 14 | ||
Other financial assets – bank deposits | 15 | ||
Cash and cash equivalents | 15 | ||
Corporation tax debtor | |||
| Current liabilities | |||
Lease liabilities | 12 | ( | ( |
Trade and other payables | 16 | ( | ( |
Current tax creditor | ( | ||
( | ( | ||
Net current assets | |||
| Non-current liabilities | |||
Lease liabilities | 12 | ( | ( |
Deferred tax liabilities | 7 | ( | ( |
( | ( | ||
Net assets | |||
| Shareholders’ equity | |||
Share capital | 21 | ||
Share premium reserve | |||
Other reserves | 22 | ||
Retained earnings | |||
Total Shareholders’ equity |
GROUP BALANCE SHEET
at 30 December 2023
ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE
| Retained earnings | ||||||
| Share | Other | |||||
| Share | premium | reserves | Own | Profit | Total | |
| capital | reserve | (note 22) | shares | and loss | equity | |
| $m | $m | $m | $m | $m | $m | |
Balance at 2 January 2022 | ( | ( | ||||
Profit for the period | ||||||
| Other comprehensive income | ||||||
Currency translation differences | ( | ( | ||||
| Remeasurement losses on post-employment | ||||||
obligations | ( | ( | ||||
Tax relating to components of other comprehensive income (note 7) | ||||||
Total comprehensive income | ( | |||||
Proceeds from options exercised | ||||||
Own shares utilised | ( | |||||
Own shares purchased | ( | ( | ||||
Share-based payment charge | ||||||
| Deferred tax relating to components of equity | ||||||
(note 7) | ||||||
Dividends (note 9) | ( | ( | ||||
Balance at 31 December 2022 | ( | |||||
Profit for the period | ||||||
| Other comprehensive income | ||||||
Currency translation differences | ||||||
| Remeasurement losses on post-employment | ||||||
obligations | ( | ( | ||||
Tax relating to components of other comprehensive income (note 7) | ||||||
Total comprehensive income | ||||||
Shares issued (note 21) | ||||||
Proceeds from options exercised | ||||||
Own shares utilised | ( | |||||
Own shares purchased | ( | ( | ||||
Share-based payment charge | ||||||
| Deferred tax relating to components of equity | ||||||
(note 7) | ||||||
Dividends (note 9) | ( | ( | ||||
Balance at 30 December 2023 | ( |
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
for the 52 weeks ended 30 December 2023
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108
| 2023 | 2022 | ||
| Note | $m | $m | |
| Cash flows from operating activities | |||
Cash generated from operations | 23 | ||
Tax paid | ( | ( | |
Finance income received | |||
Lease interest | 12 | ( | ( |
Net cash generated from operating activities | |||
| Cash flows from investing activities | |||
Purchases of property, plant and equipment | ( | ( | |
Purchases of intangible assets | ( | ||
Proceeds from sale of property, plant and equipment | |||
Consideration for business combination | ( | ||
Decrease/(increase) in current asset investments – bank deposits | ( | ||
Net cash from/(used in) investing activities | ( | ||
| Cash flows from financing activities | |||
Capital element of lease payments | 12 | ( | ( |
Proceeds from issue of ordinary shares | 21 | ||
Proceeds from share options exercised | |||
Purchases of own shares | ( | ( | |
Dividends paid to Shareholders | 9 | ( | ( |
Net cash used in financing activities | ( | ( | |
Net movement in cash and cash equivalents | |||
Cash and cash equivalents at beginning of the period | |||
Exchange gains/(losses) on cash and cash equivalents | ( | ||
Cash and cash equivalents at end of the period | 15 |
GROUP CASH FLOW STATEMENT
for the 52 weeks ended 30 December 2023
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
NOTES TO THE FINANCIAL STATEMENTS
4imprint Group plc Annual Report & Accounts 2023
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ADDITIONAL INFORMATION
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OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ADDITIONAL INFORMATION
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OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
| 2023 | 2022 | |
| Revenue | $m | $m |
North America | 1,302.6 | 1,120.5 |
UK & Ireland | 23.9 | 19.8 |
Total Group revenue | 1,326.5 | 1,140.3 |
| 2023 | 2022 | |
| Profit | $m | $m |
North America | 141.0 | 108.0 |
UK & Ireland | 0.2 | (0.1) |
Operating profit from Direct Marketing operations | 141.2 | 107.9 |
Head Office costs | (5.0) | (5.0) |
Operating profit | 136.2 | 102.9 |
Net finance income (note 3) | 4.5 | 0.8 |
Profit before tax | 140.7 | 103.7 |
Assets | Liabilities | Capital expenditure | Depreciation and amortisation | |||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| $m | $m | $m | $m | $m | $m | $m | $m | |
North America | 125.6 | 146.4 | (99.8) | (95.8) | 10.0 | 8.0 | (6.4) | (5.4) |
UK & Ireland | 3.6 | 3.2 | (2.9) | (3.4) | – | – | – | (0.1) |
Head Office | 109.1 | 90.7 | (1.1) | (0.9) | – | – | – | – |
238.3 | 240.3 | (103.8) | (100.1) | 10.0 | 8.0 | (6.4) | (5.5) |
| North | All other | |||
| America | UK | countries | Total | |
| 2023 | $m | $m | $m | $m |
Total revenue by destination | 1,302.7 | 22.9 | 0.9 | 1,326.5 |
Intangible assets | 1.5 | – | – | 1.5 |
Property, plant and equipment | 33.9 | 0.8 | – | 34.7 |
Right-of-use assets | 11.4 | – | – | 11.4 |
| North | All other | |||
| America | UK | countries | Total | |
| 2022 | $m | $m | $m | $m |
Total revenue by destination | 1,120.7 | 18.9 | 0.7 | 1,140.3 |
Intangible assets | 1.9 | 0.1 | – | 2.0 |
Property, plant and equipment | 28.5 | 0.7 | – | 29.2 |
Right-of-use assets | 13.1 | – | – | 13.1 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |||
| Note | $m | $m | ||
Purchase of goods for resale and consumables | 834.5 | 744.9 | ||
Changes in inventories | 4.5 | 2.5 | ||
Impairment loss on trade receivables | 14 | 2.5 | 4.8 | |
Staff costs | 4 | 104.1 | 86.8 | |
Marketing expenditure (excluding staff costs) | 151.7 | 121.2 | ||
Depreciation of property, plant and equipment | 11 | 4.3 | 3.6 | |
Amortisation of intangible assets | 10 | 0.4 | 0.4 | |
Depreciation of right-of-use assets | 12 | 1.7 | 1.5 | |
Short-term and low value operating lease payments | 12 | 0.3 | 0.2 | |
Defined benefit pension plan administration costs | 6 | 0.7 | 0.5 | |
Net exchange losses | 0.2 | 0.3 | ||
Other operating expenses* | 85.4 | 70.7 | ||
1,19 | 0.3 | 1,037.4 |
| 2023 | 2022 | |
| $m | $m | |
| Fees payable to the Company’s auditor for the audit of the Parent Company | ||
and audit of the consolidated financial statements | 0.6 | 0.6 |
| 2023 | 2022 | ||
| Note | $m | $m | |
| Finance income/(cost) | |||
Bank and other interest receivable | 4.7 | 1.1 | |
Pension finance income | 6 | 0.2 | 0.1 |
Lease interest charge | 12 | (0.4) | (0.4) |
Net finance income | 4.5 | 0.8 |
ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
4 Employees
| 2023 | 2022 | ||
Staff costs | Note | $m | $m |
Wages and salaries | 92.7 | 77.8 | |
Social security costs | 7.2 | 5.7 | |
Pension costs – defined contribution plans | 6 | 3.1 | 2.5 |
Share option charges | 5 | 1.1 | 0.8 |
104.1 | 86.8 |
| 2023 | 2022 | |
| Average monthly number of people (including Executive Directors) employed | Number | Number |
Distribution and production | 666 | 545 |
Sales and marketing | 640 | 538 |
Administration | 262 | 227 |
1,568 | 1,310 |
| 2023 | 2022 | |
| Key management compensation | $m | $m |
Salaries, fees and short-term employee benefits | 2.3 | 2.2 |
Social security costs | 0.1 | 0.1 |
Share option charges | 0.2 | 0.1 |
2.6 | 2.4 |
| 2023 | 2022 | |
| Directors’ remuneration | $m | $m |
Aggregate emoluments | 2.3 | 2.2 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 Share-based payments
The Group operates share-based payment schemes which are the US Employee Stock Purchase Plan (ESPP), UK Save As You Earn
(SAYE), and the Deferred Bonus Plan (formerly the 2015 Incentive Plan).
ESPP/SAYE schemes
ESPP and SAYE schemes are offered to all US and UK employees. The exercise price for ESPP and SAYE options is equal to the
market rate, less any discount up to the limit imposed by the local tax authority at the pricing date. The fair value of the options is
determined using the Black-Scholes model at the grant date using the assumptions below:
| US ESPP | US ESPP | UK SAYE | UK SAYE | |
| scheme | scheme | scheme | scheme | |
Grant date | 04/10/23 | 17/05/21 | 21/04/23 | 25/09/19 |
Share price at grant date | £49.50 | £23.00 | £44.65* | £29.90 |
Exercise price | $51.08 | $27.61 | £39.90 | £22.70 |
Number of employees | 812 | – | 42 | – |
Shares under option | 78,705 | – | 10,956 | – |
Vesting period (years) | 2.2 | 2.2 | 3.0 | 3.0 |
Expected volatility | 30% | 30% | 30% | 30% |
Option life (years) | 2.2 | 2.2 | 3.5 | 3.5 |
Expected life (years) | 2.2 | 2.2 | 3.0 | 3.0 |
Risk-free rate | 4.75% | 0.09% | 3.83% | 0.36% |
Expected dividends expressed as a dividend yield | 2% | 2% | 2% | 2% |
Possibility of ceasing employment before vesting | 3% | 2% | 3% | 5% |
Expectations of meeting performance criteria | 100% | 100% | 100% | 100% |
Fair value per option | £13.07 | £5.03 | £10.93 | £8.09 |
*Adjusted to reflect the special dividend declared shortly before the date of grant.
Expected volatility is based on the standard deviation of expected share price returns based on historical statistical analysis of
daily share prices and adjusted for any periods of extraordinary volatility. The risk-free rate is based on zero coupon government
bond yields.
Deferred Bonus Plan (formerly the 2015 Incentive Plan)
Under the DBP, 50% of the annual bonus of the Chief Executive Officer, Chief Financial Officer and certain senior managers is
deferred into shares as awards of $nil cost options or conditional shares, based on the share price at 31 December of the relevant
year. The awards will be made in a 42-day period following the announcement of the Group’s full-year results and the options will
normally not be exercisable until at least three years from the date of the award, conditional upon the person still being in the
employment of a Group company. The awards to Executive Directors will not be exercisable until five years from the date of the
award. It is expected that 26,057 options or conditional shares, with a total fair value of $1.5m will be awarded in 2024 in respect
of the 2023 bonus.
The fair value of the awards of options or conditional shares made in 2019, 2020 and 2023 are based on the share price at
31 December 2018, 31 December 2019 and 31 December 2022, respectively. The option life is between 4.25 and 6.25 years
from the start of the financial year to which the awards relate. The fair value of the expected awards to be made in 2024 is based
on the share price at 31 December 2023.
The expense recognised during the period from share-based payment transactions is shown in the following table:
| 2023 | 2022 | |
| $m | $m | |
Charge resulting from spreading the fair value of options | 1.1 | 0.8 |
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
5 Share-based payments continued
| Number | Number | Number | Date exercisable | |||||
| of ordinary | of option | of ordinary | ||||||
| Date of | shares | holders | shares | Subscription | ||||
| Scheme | grant | 2023 | 2023 | 2022 | price | From | To | |
US ESPP | 17/05/ | 21 | – | – | 89,388 | $27.61 | Jul 2023 | Jul 2023 |
US ESPP | 04/10/23 | 78,705 | 812 | – | $51.08 | Dec 2025 | Dec 2025 | |
UK SAYE | 25/09/19 | – | – | 2,059 | £22.70 | Nov 2022 | Nov 2023 | |
UK SAYE | 21/0 | 4/23 | 10,956 | 42 | – | £39.90 | Jun 2026 | Dec 2026 |
2015 | Incentive Plan | 28/03/19 | 16,993 | 2 | 16,993 | $nil | Mar 2022 | Mar 2029 |
2015 | Incentive Plan | 30/03/20 | – | – | 12,640 | $nil | Mar 2023 | Mar 2030 |
Deferred Bonus Plan | 28/ | 03/23 | 25,638 | 13 | – | $nil | Mar 2026 | Mar 2033 |
Total | 132,292 | 121,080 |
2023 | 2022 | ||||
| Weighted | Weighted | ||||
| average | average | ||||
| Number | exercise price | Number | exercise price | ||
| of shares | (£) | of shares | (£) | ||
Outstanding at start of period | 121,080 | 17.31 | 163,429 | 14.16 | |
Granted | 116,484 | 31.67 | – | – | |
Forfeited/cancelled | (2 | ,10 4) | 26.20 | ( 7,721) | 22.33 |
Exercised | (103,168) | 19.33 | (34,628) | 8.08 | |
Outstanding at end of period | 132,292 | 27.14 | 121,080 | 17.31 | |
Exercisable at end of period | – | – | – | – |
– | – | – | – |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 Pensions
| 2023 | 2022 | |
| $m | $m | |
Defined contribution plans – employers’ contributions (note 4) | 3.1 | 2.5 |
| 2023 | 2022 | |
| $m | $m | |
Administration costs paid by the Plan | 0.5 | 0.5 |
Administration costs paid by the Company | 0.2 | – |
Pension finance income (note 3) | (0.2) | (0.1) |
Total defined benefit pension charge | 0.5 | 0.4 |
| 2023 | 2022 | |
| $m | $m | |
Present value of funded obligations | (23.3) | (20.3) |
Fair value of the Plan’s assets | 23.3 | 21.5 |
Net retirement benefit asset | – | 1.2 |
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
6 Pensions continued
| Present value | Fair value of | ||
| of obligations | Plan assets | Net asset | |
| $m | $m | $m | |
Balance at 2 January 2022 | (37.8) | 39.8 | 2.0 |
Administration costs paid by the Plan | (0.5) | – | (0.5) |
Interest (expense)/income | (0.6) | 0.7 | 0.1 |
Return on Plan assets (excluding interest income) | – | (16.4) | (16.4) |
Remeasurement losses due to changes in experience | (1.3) | – | (1.3) |
Remeasurement gains due to changes in financial assumptions | 13.2 | – | 13.2 |
Contributions by employer | – | 4.3 | 4.3 |
Benefits paid | 3.0 | (3.0) | – |
Exchange gain/(loss) | 3.7 | (3.9) | (0.2) |
Balance at 31 December 2022 | (20.3) | 21.5 | 1.2 |
Administration costs paid by the Plan | (0.5) | – | (0.5) |
Interest (expense)/income | (1.0) | 1.2 | 0.2 |
Return on Plan assets (excluding interest income and impact of buy-in policy) | – | (1.1) | (1.1) |
Remeasurement loss on buy-in policy | – | (4.6) | (4.6) |
Remeasurement losses due to changes in experience | (1.8) | – | (1.8) |
Remeasurement gains due to changes in demographic assumptions | 0.5 | – | 0.5 |
Remeasurement losses due to changes in financial assumptions | (0.5) | – | (0.5) |
Contributions by employer | – | 6.5 | 6.5 |
Benefits paid | 1.4 | (1.4) | – |
Exchange (loss)/gain | (1.1) | 1.2 | 0.1 |
Balance at 30 December 2023 | (23.3) | 23.3 | – |
2023 | 2022 | |||
$m | % | $m | % | |
Sterling liquidity fund | – | – | 9.9 | 46.2 |
Gilt funds | – | – | 3.9 | 18.0 |
Index-linked gilt funds | – | – | 1.8 | 8.2 |
Leveraged gilt funds | – | – | 4.2 | 19.7 |
Leveraged index-linked gilt funds | – | – | 1.4 | 6.4 |
Buy-in policy | 22.8 | 97.9 | – | – |
Cash | 0.5 | 2.1 | 0.3 | 1.5 |
23.3 | 100.0 | 21.5 | 100.0 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 Pensions continued
| 2023 | 2022 | ||
| % | % | ||
Rate of increase in pensions in payment | 2.97 | 3.08 | |
Rate of increase in deferred pensions | 2.37 | 2.66 | |
Discount rate | 4.57 | 4.82 | |
Inflation assumption | – RPI | 3.07 | 3.16 |
– CPI | 2.37 | 2.66 |
| 2023 | 2022 | |
| Years | Years | |
Male currently aged 45 | 21.9 | 22.3 |
Female currently aged 45 | 24.0 | 24.2 |
Male currently aged 65 | 20.7 | 21.3 |
Female currently aged 65 | 22.5 | 23.1 |
Change in assumption | Change in defined benefit obligation | |
Discount rate | Decrease of 1.0% | +12.8% |
Rate of inflation | Increase of 1.0% | +4.9% |
Rate of mortality | Increase in life expectancy of one year | +3.1% |
ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
7 Taxation
Taxation recognised in the income statement is as follows:
| 2023 | 2022 | |
| $m | $m | |
| Current tax | ||
UK tax – current | 2.0 | 1.2 |
Overseas tax – current | 32.1 | 24.0 |
Total current tax | 34.1 | 25.2 |
| Deferred tax | ||
Origination and reversal of temporary differences | 0.4 | (1.5) |
Adjustment in respect of prior periods | – | (0.1) |
Total deferred tax | 0.4 | (1.6) |
Taxation | 34.5 | 23.6 |
The tax for the period is different to the standard rate of corporation tax in the respective countries of operation. The differences are
explained below:
| 2023 | 2022 | |
| $m | $m | |
Profit before tax | 140.7 | 103.7 |
| Profit before tax for each country of operation multiplied by rate of corporation tax | ||
applicable in the respective countries | 34.6 | 25.5 |
| Effects of: | ||
Adjustments in respect of prior periods | – | (0.1) |
Expenses not deductible for tax and non-taxable income | (0.1) | – |
Other differences | (0.5) | (0.4) |
UK tax losses generated/(utilised) in the period | 0.9 | (0.2) |
UK losses recognised for deferred tax | (0.4) | (1.2) |
Taxation | 34.5 | 23.6 |
‘Other differences’ includes adjustments in respect of share options, US leases, and pensions.
‘UK losses recognised for deferred tax’ relates to changes to the deferred tax asset in respect of brought forward UK tax losses which
are forecast to be utilised against UK taxable profits over the next three years.
| Management does not consider that there are any material uncertain tax positions. |
| On 20 June 2023 the UK Finance Bill was substantively enacted in the UK, including legislation to implement the OECD Pillar Two |
income taxes for periods beginning on or after 31 December 2023. The legislation includes an income inclusion rule and a domestic
minimum tax, which together are designed to ensure a minimum effective tax rate of 15% in each country in which the Group
operates. Similar legislation is being enacted by other governments around the world. The Group has applied the mandatory
temporary exception in the Amendments to IAS 12 issued in May 2023 and endorsed in July 2023, and has neither recognised nor
disclosed information about deferred tax assets or liabilities relating to Pillar Two income taxes and there is no current tax impact on
the financial statements for 2023. Based on an assessment of historic data and forecasts for the period ending 28 December 2024,
the Group does not expect a material exposure to Pillar Two income taxes for 2024.
4imprint Group plc Annual Report & Accounts 2023
124
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
7 Taxation continued
Income tax credited/(debited) to other comprehensive income is as follows:
| 2023 | 2022 | |
| $m | $m | |
Current tax relating to post-employment obligations | 2.0 | 1.2 |
Deferred tax relating to post-employment obligations | (0.7) | (0.3) |
Deferred tax relating to UK tax losses | 1.0 | 0.9 |
2.3 | 1.8 |
Income tax credited to equity is as follows:
| 2023 | 2022 | |
| $m | $m | |
Deferred tax relating to UK tax losses | 0.2 | 0.1 |
Deferred tax relating to share options | – | 0.1 |
0.2 | 0.2 |
| Depreciation/ | Net tax | ||||
| capital | UK tax | assets/ | |||
| allowances | Pension | losses | Other | (liabilities) | |
| $m | $m | $m | $m | $m | |
At 2 January 2022 | (2.6) | 0.6 | – | 1.7 | (0.3) |
(Charge)/credit to income statement | (0.4) | – | 1.2 | 0.8 | 1.6 |
(Charge)/credit to other comprehensive income | – | (0.3) | 0.9 | – | 0.6 |
Credit to equity | – | – | 0.1 | 0.1 | 0.2 |
Exchange difference | – | (0.1) | – | – | (0.1) |
At 31 December 2022 | (3.0) | 0.2 | 2.2 | 2.6 | 2.0 |
(Charge)/credit to income statement | (0.6) | 0.4 | 0.4 | (0.6) | (0.4) |
(Charge)/credit to other comprehensive income | – | (0.7) | 1.0 | – | 0.3 |
Credit to equity | – | – | 0.2 | – | 0.2 |
Exchange difference | – | 0.1 | – | – | 0.1 |
At 30 December 2023 | (3.6) | – | 3.8 | 2.0 | 2.2 |
| 2023 | 2022 | |
| $m | $m | |
Deferred tax assets | 3.8 | 2.4 |
Deferred tax liabilities | (1.6) | (0.4) |
2.2 | 2.0 |
ADDITIONAL INFORMATION
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
7 Taxation continued
8 Earnings per share
Basic earnings per share is calculated by dividing the profit for the financial period by the weighted average number of shares in issue
during the period excluding shares held by the 4imprint Group plc Employee Benefit Trust (EBT). The effect of excluding shares held
by the EBT is to reduce the average number by 18,008 (2022: 21,632).
Diluted earnings per share is calculated by adjusting the weighted average number of shares to assume the conversion of all
potentially dilutive ordinary shares. The share-based payment schemes which are likely to vest at the balance sheet date at a price
below the average price of the Company’s ordinary shares are potentially dilutive.
| 2023 | 2022 | |
| Number | Number | |
| ‘000 | ‘000 | |
Weighted average number of shares | 28,105 | 28,064 |
Dilutive effect of share-based payments | 66 | 61 |
Diluted weighted average number of shares | 28,171 | 28,125 |
Basic earnings per share | 377.9c | 285.6c |
Diluted earnings per share | 377.0c | 285.0c |
9 Dividends
| 2023 | 2022 | ||
| Equity dividends – ordinary shares | $m | $m | |
Interim paid: | 65.0c (2022: 40.0c) | 17.8 | 10.6 |
Final paid: | 120.0c (2022: 30.0c) | 34.9 | 8.1 |
Special paid: | 200.0c (2022: nil) | 58.1 | – |
110.8 | 18.7 |
The Directors are proposing a final regular dividend in respect of the period ended 30 December 2023 of 150.0 c per share, an
estimated payment amount of $42.2m. Subject to Shareholder approval at the AGM, this dividend is payable on 3 June 2024 to
Shareholders registered on 3 May 2024. These financial statements do not reflect this proposed dividend.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| Computer | |||
| Goodwill | software | Total | |
| $m | $m | $m | |
| Cost | |||
At 2 January 2022 | – | 2.5 | 2.5 |
Additions | – | 0.3 | 0.3 |
Acquisition of a business | 1.0 | – | 1.0 |
Disposals | – | (0.3) | (0.3) |
At 31 December 2022 | 1.0 | 2.5 | 3.5 |
Disposals | – | (0.6) | (0.6) |
At 30 December 2023 | 1.0 | 1.9 | 2.9 |
| Amortisation | |||
At 2 January 2022 | – | 1.5 | 1.5 |
Charge for the period | – | 0.4 | 0.4 |
Disposals | – | (0.3) | (0.3) |
Exchange differences | – | (0.1) | (0.1) |
At 31 December 2022 | – | 1.5 | 1.5 |
Charge for the period | – | 0.4 | 0.4 |
Disposals | – | (0.6) | (0.6) |
Exchange differences | – | 0.1 | 0.1 |
At 30 December 2023 | – | 1.4 | 1.4 |
| Net book value | |||
At 30 December 2023 | 1.0 | 0.5 | 1.5 |
At 31 December 2022 | 1.0 | 1.0 | 2.0 |
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
11 Property, plant and equipment
| Plant, | ||||
| machinery, | ||||
| Land and | fixtures & | Computer | ||
| buildings | fittings | hardware | Total | |
| $m | $m | $m | $m | |
| Cost | ||||
At 2 January 2022 | 19.0 | 21.2 | 2.9 | 43.1 |
Additions | 2.7 | 4.5 | 0.5 | 7.7 |
Acquisition of a business | – | 0.7 | – | 0.7 |
Disposals | – | (0.2) | (0.4) | (0.6) |
Exchange differences | (0.1) | (0.1) | – | (0.2) |
At 31 December 2022 | 21.6 | 26.1 | 3.0 | 50.7 |
Additions | 3.9 | 5.3 | 0.8 | 10.0 |
Disposals | – | (1.4) | (0.2) | (1.6) |
Reclassification | (0.6) | 0.6 | – | – |
At 30 December 2023 | 24.9 | 30.6 | 3.6 | 59.1 |
| Depreciation | ||||
At 2 January 2022 | 3.7 | 13.2 | 1.5 | 18.4 |
Charge for the period | 0.6 | 2.3 | 0.7 | 3.6 |
Disposals | – | (0.1) | (0.4) | (0.5) |
At 31 December 2022 | 4.3 | 15.4 | 1.8 | 21.5 |
Charge for the period | 0.7 | 2.8 | 0.8 | 4.3 |
Disposals | – | (1.1) | (0.2) | (1.3) |
Exchange differences | – | – | (0.1) | (0.1) |
At 30 December 2023 | 5.0 | 17.1 | 2.3 | 24.4 |
| Net book value | ||||
At 30 December 2023 | 19.9 | 13.5 | 1.3 | 34.7 |
At 31 December 2022 | 17.3 | 10.7 | 1.2 | 29.2 |
Freehold land with a value of $1.3m (2022: $1.0m) has not been depreciated. The carrying amount of land and buildings includes
assets under construction of $3.8m (2022: $nil).
Impairment review
IAS 36 ‘Impairment of Assets’ requires an assessment at each reporting date of whether there is any indication that an asset may
be impaired (see note 10 for details on the impairment testing of goodwill). For the purposes of impairment testing, the Group is
considered to have two cash-generating units (CGUs), being the US and UK businesses.
An assessment of both the US and UK CGUs did not identify any indications of impairment and accordingly, no indicator-based
impairment testing has been undertaken. The US CGU has experienced strong demand levels and resulting financial performance for
2023. Since the full impairment testing undertaken in 2020 and 2021, the UK CGU has continued its recovery in demand, exceeding
pre-pandemic revenue levels and reporting an operating profit for 2023.
The external environment continues to remain uncertain, manifesting in high interest rates and inflation, and low economic growth.
Despite these factors being present, both the US and UK businesses have shown the resilient nature of their operations and
managed to grow significantly against 2021 and 2022. These external factors are therefore not considered to represent impairment
indicators of themselves.
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128
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12 Leases
The Group leases premises in Oshkosh and Appleton, Wisconsin. The lease for office premises in Oshkosh, which was renewed in
2020, has a five-year term with a five-year extension option. A lease term of ten years was reflected in calculating the lease liability
and right-of-use asset upon renewal in 2020. There has been no significant event or significant change in circumstances since the
initial assessment that would require the lease extension option to be reassessed. If the five-year extension option was not exercised,
the lease liability and right-of-use asset would reduce by $6.5m as at 30 December 2023.
In addition, there are various items of leasehold land and buildings (mainly office facilities in London) and machinery on short-term
leases, and some office equipment with low value. The Group applies the IFRS 16 exemptions for short-term and low-value leases.
No leases contain variable payment terms.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
| Leasehold land | |
| and buildings | |
| $m | |
At 2 January 2022 | 11.7 |
Additions | 2.8 |
Acquisition of a business | 0.1 |
Depreciation charge for the period | (1.5) |
At 31 December 2022 | 13.1 |
Depreciation charge for the period | (1.7) |
At 30 December 2023 | 11.4 |
See note 11 for details of the impairment review undertaken for the Group’s non-current assets.
Set out below are the carrying amounts of lease liabilities and the movements during the period:
| 2023 | 2022 | |
| $m | $m | |
At start of period | 13.7 | 12.0 |
Additions | – | 2.9 |
Interest charge | 0.4 | 0.4 |
Payments | (1.8) | (1.6) |
At end of period | 12.3 | 13.7 |
Current | 1.4 | 1.4 |
Non-current | 10.9 | 12.3 |
The maturity analysis of lease commitments is disclosed in note 18.
Set out below are the total cash outflows for leases:
| 2023 | 2022 | |
| $m | $m | |
| Included in cash flows from operating activities | ||
Expense relating to short-term leases | 0.2 | 0.2 |
Expense relating to leases of low-value assets, excluding short-term leases of low-value assets | 0.1 | – |
Lease interest | 0.4 | 0.4 |
| Included in cash flows from financing activities | ||
Capital element of lease payments | 1.4 | 1.2 |
2.1 | 1.8 |
ADDITIONAL INFORMATION
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FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
13 Inventories
| 2023 | 2022 | |
| $m | $m | |
Finished goods and goods for resale | 13.6 | 18.1 |
$8.6m (2022: $13.0m) of the inventories balance relates to goods in transit to customers at the balance sheet date. Provisions held
against inventory total $0.1m (2022: $0.1m). The nominal provisions reflect the minimal levels of inventory held under the ‘drop-ship’
business model, the generic nature of items held and consistently high levels of inventory turnover.
The amount of inventory charged to the income statement is shown in note 2.
| 2023 | 2022 | |
| $m | $m | |
Trade receivables – gross | 46.0 | 66.2 |
Provision for credits | (2.2) | (2.4) |
Provision for impairment of trade receivables | (2.6) | (4.8) |
Trade receivables – net | 41.2 | 59.0 |
Other receivables | 18.1 | 21.3 |
Prepayments | 9.1 | 7.2 |
68.4 | 87.5 |
| 2023 | 2022 | |
| Time past due date | $m | $m |
Up to 3 months | 10.2 | 15.8 |
3 to 6 months | 3.1 | 7.3 |
Over 6 months | 1.2 | 1.9 |
14.5 | 25.0 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 Trade and other receivables continued
| 2023 | 2022 | |
| Time past due date | $m | $m |
Current | 0.6 | 0.5 |
Up to 3 months | 0.6 | 0.7 |
3 to 6 months | 0.6 | 1.5 |
Over 6 months | 0.8 | 2.1 |
2.6 | 4.8 |
2023 | 2022 | |||
| Amount | Provision | Amount | Provision | |
| Age of trade receivable | $m | % | $m | % |
Current | 27.3 | 2.2 | 34.5 | 1.4 |
31 – 60 days | 7.4 | 4.1 | 10.8 | 2.9 |
61 – 90 days | 3.4 | 8.8 | 5.7 | 7.0 |
91 – 180 days | 3.7 | 16.2 | 8.8 | 17.3 |
181 – 365 days | 1.9 | 36.8 | 3.9 | 50.1 |
Over 365 days | 0.1 | 100.0 | 0.1 | 100.0 |
| 2023 | 2022 | |
| $m | $m | |
Sterling | 3.2 | 2.6 |
US dollars | 61.7 | 80.4 |
Euros | – | 0.1 |
Canadian dollars | 3.5 | 4.4 |
68.4 | 87.5 |
| 2023 | 2022 | |
| $m | $m | |
At start of period | 4.8 | 1.7 |
Utilised | (4.7) | (1.7) |
Provided | 2.5 | 4.8 |
At end of period | 2.6 | 4.8 |
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
131
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
| 2023 | 2022 | |
| $m | $m | |
Other financial assets – bank deposits | 14.0 | 35.0 |
| 2023 | 2022 | |
| $m | $m | |
Cash at bank and in hand | 90.5 | 51.8 |
| 2023 | 2022 | |
| $m | $m | |
Trade payables | 65.3 | 59.7 |
Other tax and social security payable | 5.0 | 5.6 |
Other payables | 0.3 | 0.3 |
Contract liabilities | 6.9 | 8.6 |
Accruals | 12.4 | 10.6 |
89.9 | 84.8 |
17 Borrowings
The Group had the following committed floating rate borrowing facilities available:
| 2023 | 2022 | |
| Borrowing facilities | $m | $m |
Expiring in more than one year | 20.0 | 20.0 |
Committed facilities comprise an unsecured $20.0m line of credit for 4imprint, Inc., which expires on 31 May 2025. The Company also
has an unsecured UK overdraft facility of £1.0m that is repayable on demand, which expires on 31 December 2024. These facilities
were undrawn at the year-end (2022: undrawn).
4imprint Group plc Annual Report & Accounts 2023
132
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
18 Financial risk management
The Group’s activities expose it to a variety of financial risks including currency risk, credit risk, liquidity risk and capital risk.
| 2023 | 2022 | |
| Financial assets at amortised cost | $m | $m |
Trade and other receivables (excluding prepayments) (note 14) | 59.3 | 80.3 |
Other financial assets – bank deposits (note 15) | 14.0 | 35.0 |
Cash and cash equivalents (note 15) | 90.5 | 51.8 |
| Financial liabilities at amortised cost | ||
Trade and other payables (excluding non-financial liabilities) (note 16) | (83.0) | (76.2) |
| 2023 | 2022 | |
| $m | $m | |
Due within one year | 1.8 | 1.9 |
Due in two to three years | 3.8 | 3.7 |
Due in four to five years | 4.0 | 4.0 |
Due over five years | 4.3 | 6.2 |
13.9 | 15.8 |
ADDITIONAL INFORMATION
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133
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
18 Financial risk management continued
| 2023 | 2023 | 2022 | 2022 | |
| Rating | Deposit | Rating | Deposit | |
| $m | $m | |||
Lloyds Bank plc | Aa3 | 20.3 | Aa3 | 40.3 |
JPMorgan Chase Bank, N.A. | Aa1 | 84.2 | Aa1 | 46.5 |
104.5 | 86.8 |
| 2023 | 2022 | |||||
| $m | $m | |||||
| Issued and fully paid | ||||||
28,172,530 | (2022: | 28,085,530) ordinary shares of 38 6 / | p each | 18.9 | 18.8 | |
| 13 |
4imprint Group plc Annual Report & Accounts 2023
134
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| Capital | Cumulative | ||
| redemption | translation | ||
| reserve | differences | Total | |
| $m | $m | $m | |
Balance at 2 January 2022 | 0.4 | 5.6 | 6.0 |
Currency translation differences | – | (1.6) | (1.6) |
Balance at 31 December 2022 | 0.4 | 4.0 | 4.4 |
Currency translation differences | – | 1.4 | 1.4 |
Balance at 30 December 2023 | 0.4 | 5.4 | 5.8 |
23 Cash generated from operations
| 2023 | 2022 | |
| $m | $m | |
Profit before tax | 140.7 | 103.7 |
| Adjustments for: | ||
Depreciation of property, plant and equipment | 4.3 | 3.6 |
Amortisation of intangible assets | 0.4 | 0.4 |
Depreciation of right-of-use assets | 1.7 | 1.5 |
Loss on disposal of property, plant and equipment | – | 0.1 |
Share option charges | 1.1 | 0.8 |
Net finance income | (4.5) | (0.8) |
Defined benefit pension administration costs paid by the Plan | 0.5 | 0.5 |
Contributions to defined benefit pension plan | (6.5) | (4.3) |
| Changes in working capital: | ||
Decrease in inventories | 4.5 | 2.5 |
Decrease/(increase) in trade and other receivables | 20.0 | (24.2) |
Increase in trade and other payables | 4.7 | 13.2 |
Cash generated from operations | 166.9 | 97.0 |
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
135
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
Note
2023
£m
2022
£m
Non-current assets
Investments C 105.0 105.2
Deferred tax assets D 2.3 1.3
Retirement benefit asset B – 1.0
Other receivables E 251.4 258.8
358.7 366.3
Current assets
Other receivables E 0.8 0.9
Other financial assets – bank deposits 11.0 29.0
Cash and cash equivalents 4.7 3.7
16.5 33.6
Current liabilities
Amounts due to subsidiary companies F – (0.7)
Other payables G (0.7) (0.8)
(0.7) (1.5)
Net current assets 15.8 32.1
Non-current liabilities
Amounts due to subsidiary companies F (125.5) (132.9)
Net assets 249.0 265.5
Shareholders’ equity
Share capital I 10.8 10.8
Share premium reserve 40.4 38.6
Capital redemption reserve 0.2 0.2
Retained earnings 197.6 215.9
Total equity 249.0 265.5
Company’s income statement
Under section 408 of the Companies Act 2006 an income statement for the Company is not presented. Profit after tax and before
external dividends paid for the period of £74.2m (2022: £41.5m) is included in the retained earnings of the Company.
The financial statements on pages 135 to 145 were approved by the Board of Directors on 12 March 2024 and were signed on its
behalf by:
KEVIN LYONS-TARR DAVID SEEKINGS
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
COMPANY BALANCE SHEET
at 30 December 2023
4imprint Group plc Annual Report & Accounts 2023
136
Retained earnings
Share
capital
£m
Share
premium
reserve
£m
Capital
redemption
reserve
£m
Own
shares
£m
Profit and
loss*
£m
Total
equity
£m
Balance at 2 January 2022 10.8 38.6 0.2 (0.6) 192.8 241.8
Profit for the period 41.5 41.5
Other comprehensive income
Remeasurement losses on post-
employmentobligations (3.6) (3.6)
Tax relating to components of other
comprehensiveincome (note D) 1.4 1.4
Total comprehensive income 39.3 39.3
Proceeds from options exercised 0.3 0.3
Own shares utilised 0.9 (0.9) –
Own shares purchased (1.0) (1.0)
Share-based payment charge 0.1 0.1
Capital instrument granted to subsidiary 0.6 0.6
Deferred tax relating to components of
equity(noteD) 0.1 0.1
Dividends (15.7) (15.7)
Balance at 31 December 2022 10.8 38.6 0.2 (0.7) 216.6 265.5
Profit for the period 74.2 74.2
Other comprehensive income
Remeasurement losses on post-employment
obligations (6.0) (6.0)
Tax relating to components of other
comprehensiveincome (note D) 1.8 1.8
Total comprehensive income 70.0 70.0
Shares issued (note I) 1.8 1.8
Proceeds from options exercised 0.1 0.1
Own shares utilised 0.5 (0.5) –
Own shares purchased (0.8) (0.8)
Share-based payment charge 0.1 0.1
Capital instrument granted to subsidiary 0.7 0.7
Deferred tax relating to components of
equity (note D) 0.1 0.1
Dividends (88.5) (88.5)
Balance at 30 December 2023 10.8 40.4 0.2 (1.0) 198.6 249.0
* See note J.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
for the 52 weeks ended 30 December 2023
ADDITIONAL INFORMATION
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137
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
Note
2023
£m
2022
£m
Cash flows from operating activities
Cash used in operations K (8.8) (5.3)
Finance income received 12.1 17.6
Finance costs paid (6.5) (9.1)
Net cash (used in)/generated from operating activities (3.2) 3.2
Cash flows from investing activities
Dividends received 72.7 36.4
Return of capital contributions 0.9 0.4
Decrease/(increase) in current asset investments – bank deposits 18.0 (29.0)
Net cash from investing activities 91.6 7.8
Cash flows from financing activities
Proceeds from issue of ordinary shares 1.8 –
Proceeds from share options exercised 0.1 0.3
Purchases of own shares (0.8) (1.0)
Dividends paid to Shareholders (88.5) (15.7)
Net cash used in financing activities (87.4) (16.4)
Net movement in cash and cash equivalents 1.0 (5.4)
Cash and cash equivalents at beginning of the period 3.7 9.1
Cash and cash equivalents at end of the period 4.7 3.7
COMPANY CASH FLOW STATEMENT
for the 52 weeks ended 30 December 2023
4imprint Group plc Annual Report & Accounts 2023
138
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS
General information
4imprint Group plc, registered number 177991, is a public limited company incorporated in England and Wales, domiciled in the UK
and listed on the London Stock Exchange. Its registered office is 25 Southampton Buildings, London WC2A 1AL.
The Company’s financial statements are presented in Sterling and rounded to £0.1m. Numbers in the financial statements were
previously rounded to £’000, however, given the growth of the Group, it is now considered appropriate to round numbers to £0.1m.
Basis of preparation
The financial statements have been prepared on a going concern basis (see going concern in the basis of preparation section
of the Group financial statements for further information), under the historical cost convention in accordance with UK-adopted
International Accounting Standards.
New accounting standards, amendments or revisions to existing standards or interpretations applicable for the first time in this
reporting period have not had a material impact on the Company’s results or balance sheet. Please see note 7 of the Group financial
statements for information on the impact of Pillar Two income tax legislation in accordance with Amendments to IAS 12 (International
Tax Reform – Pillar Two Model Rules).
Environmental risks
In preparing the financial statements, management has considered the impact of environmental risks. Whilst the impact of
environmental risks is still developing and therefore all possible future outcomes are uncertain, risks known to the Company
have been considered in forming judgments, estimates and assumptions and in assessing going concern and viability. These
considerations did not have a material impact on the financial statements.
Estimates and judgments
The preparation of the financial statements requires management to make judgments and estimates that affect the application
of accounting policies, the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for
revenues and expenses during the year.
Critical accounting judgments are those judgments, apart from those involving estimations, that have been made in the process
of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial
statements. Key assumptions and sources of estimation uncertainty are those that have a significant risk of resulting in a material
adjustment to the carrying amounts of the Company’s assets and liabilities within the next financial year.
Management considers the following to be the critical accounting judgments and key assumptions and sources of estimation
uncertainty:
Critical accounting judgments
Purchase of a bulk annuity policy
During the period, the Trustee of the 4imprint 2016 Pension Plan (the “Plan”) exchanged the existing investment portfolio, including
a further cash lump sum contribution from the Company, for a bulk purchase annuity policy. This policy funds substantially all the
Plan’s defined benefit obligations (a buy-in policy). This was an investment decision made in line with the stated objective of further
de-risking the Plan’s obligations. The Plan retains the legal and constructive obligation to pay the benefits and the Trustee continues
to administer the Plan.
Based upon the above, management’s judgment was that the purchase of the policy did not constitute a settlement, as defined by
IAS 19, and the excess of the cost of the annuity over the IAS 19 valuation of the obligations covered has been recorded in other
comprehensive income.
Material accounting policy information
The material accounting policies adopted in the preparation of these financial statements are the same as those adopted in
the Group financial statements, except for the investments and amounts due from subsidiary companies policies noted below.
Thesepolicies have been consistently applied to all the periods presented.
Investments
Investments in subsidiaries are stated at cost. Impairment reviews are carried out if there is some indication that the carrying value
of the investments may have been impaired. Where, in the opinion of the Directors, an impairment of the investment has arisen,
provisions are made in accordance with IAS 36 ‘Impairment of Assets’.
Amounts due from subsidiary companies
Amounts due from subsidiary companies are assessed for expected credit losses on a general basis under IFRS 9 ‘Financial
Instruments’. Where required, the Company recognises a provision on this basis reflecting either the lifetime or twelve-month
expected credit loss dependent on the change in credit risk since initial recognition of the financial asset. The amount of the
provision, and any changes, are recognised in the income statement. Amounts due from subsidiary companies are discounted
whenthe time value of money is considered material.
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
139
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
A. Employees
2023
£m
2022
£m
Wages and salaries 1.1 1.0
Social security costs 0.2 0.2
Share option charges 0.1 0.1
1.4 1.3
The average number of people employed by the Company during the period was five (2022: four).
B. Pensions
Full details of the Group’s employee pension plans are contained in note 6 of the Group financial statements. The amount recognised
in the balance sheet represents the net asset in respect of the closed defined benefit pension plan (the “Plan”).
The amount recognised in the balance sheet comprises:
2023
£m
2022
£m
Present value of funded obligations (18.4) (16.9)
Fair value of the Plan’s assets 18.4 17.9
Net retirement benefit asset – 1.0
Changes in the present value of the net retirement benefit asset are as follows:
Present value
of obligations
£m
Fair value of
Plan assets
£m
Net asset
£m
Balance at 2 January 2022 (28.1) 29.5 1.4
Administration costs paid by the Plan (0.4) – (0.4)
Interest (expense)/income (0.5) 0.6 0.1
Return on Plan assets (excluding interest income) – (13.2) (13.2)
Remeasurement losses due to changes in experience (1.0) – (1.0)
Remeasurement gains due to changes in financial assumptions 10.6 – 10.6
Contributions by employer – 3.5 3.5
Benefits paid 2.5 (2.5) –
Balance at 31 December 2022 (16.9) 17.9 1.0
Administration costs paid by the Plan (0.4) – (0.4)
Interest (expense)/income (0.8) 1.0
0.2
Return on Plan assets (excluding interest income and impact of buy-in policy) – (0.9) (0.9)
Remeasurement loss on buy-in policy – (3.7) (3.7)
Remeasurement losses due to changes in experience (1.5) – (1.5)
Remeasurement gains due to changes in demographic assumptions 0.4 – 0.4
Remeasurement losses due to changes in financial assumptions (0.3) – (0.3)
Contributions by employer – 5.2
5.2
Benefits paid 1.1 (1.1) –
Balance at 30 December 2023 (18.4) 18.4
–
4imprint Group plc Annual Report & Accounts 2023
140
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
C. Investments
Shares in subsidiary undertakings
2023
£m
2022
£m
At start of period 105.2 105.0
Capital contribution repaid by subsidiary undertaking (0.9) (0.4)
Capital contribution to subsidiary undertaking 0.7 0.6
At end of period 105.0 105.2
The capital contribution represents IFRS 2 ‘Share-based Payments’ charges in respect of subsidiaries which will not be recharged until
the options vest.
Subsidiary undertakings
The subsidiaries at 30 December 2023 are set out below. All subsidiaries are wholly owned and have ordinary share capital only,
apart from 4imprint USA Limited which also has preference shares.
Company Country of incorporation and operation Business
4imprint, Inc. USA Promotional products
4imprint Direct Limited England Promotional products
4imprint UK Holdings Limited England Holding company
4imprint USA Limited England Holding company
4imprint North America Limited England Dormant
4imprint US Group Inc. USA Holding company
4imprint Limited England Dormant
Cavendish Place Newco No.1 Limited England Dormant
The dormant companies are exempt from statutory audit. There is no requirement in the USA for statutory audits of the US
subsidiaries.
The registered address of all subsidiaries registered in England is 25 Southampton Buildings, London WC2A 1AL, UK. The registered
address of 4imprint, Inc. is 101 Commerce Street, Oshkosh, WI 54901, USA and of 4imprint US Group Inc. is 103 Foulk Road, Suite
202, Wilmington, DE 19803, USA.
Impairment review
IAS 36 ‘Impairment of Assets’ requires an assessment at each reporting date of whether there is any indication that an asset may be
impaired. The Company’s investments in subsidiary undertakings are supported by the cash flows of the US and UK trading entities,
being 4imprint, Inc. and 4imprint Direct Limited, respectively.
An assessment of both the US and UK trading entities did not identify any indications of impairment and accordingly, no indicator-
based impairment testing has been undertaken. The US trading entity has experienced strong demand levels and resulting financial
performance for 2023. Since the full impairment testing undertaken in 2021, the UK trading entity has continued its recovery in
demand, exceeding pre-pandemic revenue levels and reporting an operating profit for 2023.
The external environment continues to remain uncertain, manifesting in high interest rates and inflation, and low economic growth.
Despite these factors being present, both the US and UK entities have shown the resilient nature of their operations and managed
to grow significantly against 2021 and 2022. These external factors are therefore not considered to represent impairment indicators
ofthemselves.
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
141
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
D. Taxation
Income tax credited to other comprehensive income is as follows:
2023
£m
2022
£m
Current tax relating to post-employment obligations 1.6 1.0
Deferred tax relating to components of other comprehensive income 0.2 0.4
1.8 1.4
Movement in deferred tax assets
Pension
£m
Losses
£m
Total
£m
At 2 January 2022 0.5 – 0.5
Credit to income statement – 0.3 0.3
(Charge)/credit to other comprehensive income (0.3) 0.7 0.4
Credit to equity – 0.1 0.1
At 31 December 2022 0.2 1.1 1.3
Credit to income statement 0.4 0.3
0.7
(Charge)/credit to other comprehensive income (0.6) 0.8 0.2
Credit to equity – 0.1 0.1
At 30 December 2023 – 2.3
2.3
Deferred tax at 30 December 2023 has been calculated at a tax rate of 25%. At 31 December 2022, deferred tax was calculated at a
tax rate of 19% for items expected to reverse before 1 April 2023 and 25% in respect of items expected to reverse from 1 April 2023.
4imprint Group plc Annual Report & Accounts 2023
142
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
E. Other receivables
2023
£m
2022
£m
Trading amounts due from subsidiary companies 0.5 0.5
Loans due from subsidiary companies 251.4 258.8
Total amount due from subsidiary companies 251.9 259.3
Other receivables 0.1 0.3
Prepayments and accrued income 0.2 0.1
Total other receivables 252.2 259.7
Current 0.8 0.9
Non-current 251.4 258.8
Trading amounts due from subsidiary companies are repayable on demand and are non-interest bearing.
The movements in the loans due from subsidiary companies are as follows:
£m
At 2 January 2022 244.6
Exchange movement to 7 September 2022 20.8
New $160.0m and £125.9m loans 265.4
Repayment of $160.0m and £125.9m loans on 7 September 2022 (265.4)
Exchange movement between 7 September 2022 and 31 December 2022 (6.6)
At 31 December 2022 258.8
Exchange movement (7.4)
At 30 December 2023 251.4
The Company’s loans due from and due to subsidiary companies (see note F for details of loans due to subsidiary companies)
wererefinanced in 2022 on market terms and form part of the wider financing structure of the Group, the purpose of which was
tomaintain the gearing of the Group’s US subgroup at an appropriate level, facilitate the repatriation of cash from the US to the
UK,andmanage cash flow volatility arising from the taxation of foreign exchange movements.
Loans due from subsidiary companies of £251.4m (2022: £258.8m) include a 5.0% US dollar denominated loan of $160.0m and
a4.0% GBP denominated loan of £125.9m, both of which are repayable on 7 September 2029.
Amounts due from subsidiary companies have been assessed for expected credit losses (ECL) using a common credit loss
methodology that incorporates probability of default, loss given default, and exposure at default inputs. No ECL provision is
considered necessary on the outstanding amounts (2022: £nil). This reflects either the low credit risk characteristics of the borrower,
or the availability of sufficient liquid assets in the borrowing entities to enable them to settle their obligations at short notice.
The carrying amounts of the Company’s other receivables are denominated in the following currencies:
2023
£m
2022
£m
Sterling 126.7 126.8
US dollars 125.5 132.9
252.2 259.7
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
143
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
F. Amounts due to subsidiary companies
2023
£m
2022
£m
Trading amounts due to subsidiary companies – 0.7
Loans due to subsidiary companies 125.5 132.9
Total amounts due to subsidiary companies 125.5 133.6
Current – 0.7
Non-current 125.5 132.9
Trading amounts due to subsidiary companies are repayable on demand and are non-interest bearing.
The movements in the loans due to subsidiary companies are as follows:
£m
At 2 January 2022 118.7
Exchange movement to 7 September 2022 20.8
New $160.0m loan 139.5
Repayment of $160.0m loans on 7 September 2022 (139.5)
Exchange movement between 7 September 2022 and 31 December 2022 (6.6)
At 31 December 2022 132.9
Exchange movement (7.4)
At 30 December 2023 125.5
Loans due to subsidiary companies of £125.5m (2022: £132.9m) comprise a 5.0% US dollar denominated loan of $160.0m,
repayableon 7 September 2029.
G. Other payables
2023
£m
2022
£m
Other payables 0.1 0.2
Accruals 0.6 0.6
0.7 0.8
H. Commitments and contingent liabilities
The Company has provided letters of support to its subsidiary companies, 4imprint Direct Limited, 4imprint UK Holdings Limited
and4imprint USA Limited.
The Company has also entered into a Pound Sterling Facility Agreement with one of its subsidiaries, 4imprint Direct Limited, enabling
it to borrow up to £1,000,000 from the Company under a revolving credit facility until 10 December 2025. Interest is payable at the
UK base rate for Sterling plus 2.0% on any loans drawn under the facility. This facility was undrawn at 30 December 2023.
The Company had no known contingent liabilities at 30 December 2023 (2022: none).
4imprint Group plc Annual Report & Accounts 2023
144
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
I. Share capital
2023
£m
2022
£m
Allotted and fully paid
28,172,530 (2022: 28,085,530) ordinary shares of 38
6
/
13
p each 10.8 10.8
The Company issued 87,000 ordinary shares in the period for consideration of £1.8m to satisfy option exercises under the 2021
USEmployee Stock Purchase Plan (2022: no shares issued).
Details of the Company’s share option schemes, including the options that have been granted and were outstanding at the year-end,
are given in note 5 of the Group financial statements.
Employees of the Company had interests in 1,803 SAYE options at 30 December 2023 (2022: nil).
J. Distributable reserves
The profit and loss reserve of £198.6m (2022: £216.6m) includes £129.1m (2022: £129.3m) which is non-distributable.
K. Cash used in operations
2023
£m
2022
£m
Profit before tax 75.1 42.2
Adjustments for:
Share option charges 0.1 0.1
Impairment of loan to subsidiary – (0.4)
Dividends received (72.7) (36.4)
Net finance income (5.8) (8.6)
Defined benefit pension administration costs paid by the Plan 0.4 0.4
Contributions to defined benefit pension plan (note B) (5.2) (3.5)
Changes in working capital:
Decrease in trade and other receivables 0.1 –
(Decrease)/increase in trade and other payables (0.1) 0.4
Movements in amounts due to/from subsidiary undertakings (0.7) 0.5
Cash used in operations (8.8) (5.3)
ADDITIONAL INFORMATION
4imprint Group plc Annual Report & Accounts 2023
145
OVERVIEW STRATEGIC REPORT
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
L. Related party transactions
During the period the Company has been party to several transactions with fellow subsidiary companies:
2023
£m
2022
£m
Income statement
Finance income due from subsidiary companies 11.4 17.6
Finance costs due to subsidiary companies (6.4) (9.1)
Balance sheet
Interest-bearing loans due from subsidiary companies at end of period 251.4 258.8
Interest-bearing loans due to subsidiary companies at end of period (125.5) (132.9)
Key management compensation, comprising remuneration of the Directors, was:
2023
£m
2022
£m
Salaries, fees and short-term employee benefits 1.8 1.8
Social security costs 0.1 0.1
Share option charges 0.2 0.1
2.1 2.0
All related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
4imprint Group plc Annual Report & Accounts 2023
146
An Alternative Performance Measure (APM) is a financial measure of historical or future financial performance, financial position,
orcash flows, other than a financial measure defined or specified within IFRS.
The Group uses APMs to supplement standard IFRS measures to provide users with information on underlying trends and additional
financial measures, which the Group considers will aid the users’ understanding of the business.
Definitions
Underlying operating profit is operating profit before exceptional items. Exceptional items are defined below. These items may be
volatile in magnitude and distort the underlying performance measures of the ongoing business. A reconciliation of underlying
operating profit to operating profit is shown in note 1 when applicable.
Underlying operating margin % is underlying operating profit divided by total revenue.
Exceptional items are income or costs that are both material and non-recurring.
Underlying profit before tax is defined as profit before tax excluding exceptional items. When applicable, a reconciliation of profit
before tax to underlying profit before tax is shown in note 8.
Underlying profit after tax is defined as profit after tax before exceptional items, net of any related tax charges. When applicable,
areconciliation of profit before tax to underlying profit after tax is shown in note 8.
Underlying earnings per share is defined as underlying profit after tax divided by the weighted average number of shares in issue
during the financial year. When applicable, the calculation of underlying EPS is shown in note 8.
Revenue per marketing dollar is the total revenue of the Group divided by the total marketing expense of the Group. This provides a
measure of the productivity of the marketing expenditure, which is a cornerstone of the Group’s organic revenue growth strategy.
Free cash flow is defined as the movement in cash and cash equivalents and other financial assets – bank deposits, before
distributions to Shareholders but including exchange gains/(losses) on cash and cash equivalents. It is a measure of cash available
forallocation in line with the Group’s capital allocation policy (see page 41):
2023
$m
2022
$m
Net movement in cash and cash equivalents 37.5 11.4
Add back: (Decrease)/increase in current asset investments – bank deposits (21.0) 35.0
Add back: Dividends paid to Shareholders 110.8 18.7
Less: Exchange gains/(losses) on cash and cash equivalents 1.2 (1.2)
Free cash flow 128.5 63.9
Cash conversion is defined as the percentage of underlying operating cash flow to underlying operating profit and is provided as a
measure of the efficiency of the Group’s business model (pages 18 and 19) to generate cash.
Return on average capital employed is defined as underlying profit before tax divided by the simple average of opening and closing
non-current assets, excluding deferred tax and retirement benefit assets, plus net current assets and non-current lease liabilities.
This is given to show a relative measure of the Group’s efficient use of its capital resources.
ALTERNATIVE PERFORMANCE MEASURES
4imprint Group plc Annual Report & Accounts 2023
147
OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
Capital expenditure is defined as purchases of property, plant and equipment and intangible assets, net of proceeds from the sale of
property, plant and equipment. These numbers are extracted from the cash flows from investing activities shown in the Group cash
flow statement.
2023
$m
2022
$m
Purchase of property, plant and equipment (10.0) ( 7.7 )
Purchases of intangible assets – (0.3)
Proceeds from sale of property, plant and equipment 0.3 –
Capital expenditure (9.7) (8.0)
Underlying operating cash flow is defined as cash generated from operations, before pension contributions, less capital expenditure.
This reflects the cash flow directly from the ongoing business operations. This is reconciled to IFRS measures as follows:
2023
$m
2022
$m
Cash generated from operations 166.9 97.0
Add back: Contributions to defined benefit pension plan 6.5 4.3
Less: Loss on disposal of property, plant and equipment – (0.1)
Less: Purchases of property, plant and equipment and intangible assets (10.0) (8.0)
Add: Proceeds from sale of property, plant and equipment 0.3 –
Underlying operating cash flow 163.7 93.2
Cash and bank deposits is defined as cash and cash equivalents and other financial assets – bank deposits. This measure is used by
the Board to understand the true cash position of the Group when determining the potential uses of cash under the balance sheet
funding and capital allocation policies. This is reconciled to IFRS measures as follows:
2023
$m
2022
$m
Other financial assets – bank deposits 14.0 35.0
Cash and cash equivalents 90.5 51.8
Cash and bank deposits 104.5 86.8
4imprint Group plc Annual Report & Accounts 2023
148
Income statement
2023
$m
2022
$m
2021
$m
2020
$m
2019
$m
Revenue 1,326.5 1,140.3 787.3 560.0 860.8
Operating profit 136.2 102.9 30.6 4.0 53.6
Finance income 4.7 1.1 – 0.1 0.8
Finance costs (0.4) (0.4) (0.4) (0.2) –
Pension finance income/(charge) 0.2 0.1 – (0.1) (0.4)
Profit before tax 140.7 103.7 30.2 3.8 54.0
Taxation (34.5) (23.6) ( 7.6) (0.7) (11.3)
Profit for the period 106.2 80.1 22.6 3.1 42.7
Cents Cents Cents Cents Cents
Basic earnings per ordinary share 377.9 285.6 80.5 11.0 152.4
Dividend per share – paid and proposed 215.0 360.0 45.0 – 25.0
Balance sheet
2023
$m
2022
$m
2021
$m
2020
$m
2019
$m
Non-current assets (excluding deferred tax and retirement
benefit assets) 47.6 44.3 37.4 39.0 27.5
Deferred tax assets 3.8 2.4 0.6 4.3 4.3
Retirement benefit asset/(obligation) – 1.2 2.0 (3.3) (12.3)
Net current assets 95.6 105.0 54.8 38.7 44.8
Other liabilities (including lease liabilities) (12.5) (12.7) (11.8) (13.3) (1.4)
Shareholders’ equity 134.5 140.2 83.0 65.4 62.9
Cash and bank deposits 104.5 86.8 41.6 39.8 41.1
FIVE YEAR FINANCIAL RECORD
STRATEGIC REPORT CORPORATE GOVERNANCE
4imprint Group plc Annual Report & Accounts 2023
OVERVIEW
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
CBP024103
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Group plc
4imprint Group plc Annual Report & Accounts 2023
Group office
4imprint Group plc
25 Southampton Buildings
London WC2A 1AL
Telephone +44 (0)20 3709 9680
E-mail hq@4imprint.co.uk
Trading offices
USA
4imprint, Inc.
101 Commerce Street
Oshkosh
WI 54901, USA
Telephone +1 920 236 7272
E-mail sales@4imprint.com
UK
4imprint Direct Limited
5 Ball Green
Cobra Court
Trafford Park
Manchester M32 0QT
Freephone 0800 055 6196
Telephone +44 (0)161 850 3490
E-mail sales@4imprint.co.uk