Group plc
Annual
Report &
Accounts
2021
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4imprint Group plc Annual Report & Accounts 2021
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
14 Market Position
18 Business Model
20 Sustainability
30 Financial Review
36 Principal Risks & Uncertainties
44 Stakeholder Engagement
CORPORATE GOVERNANCE
48 Corporate Governance Report
50 Board of Directors
52 Statement on Corporate Governance
57 Nomination Committee Report
60 Audit Committee Report
64 Annual Statement by the Chair of
the Remuneration Committee
66 Remuneration Report
78 Directors’ Report
80 Statement of Directors’
Responsibilities
FINANCIAL STATEMENTS
Independent Auditor’s Report
81
91 Group Income Statement
92 Group Statement of Comprehensive
Income
93 Group Balance Sheet
94 Group Statement of Changes in
Shareholders’ Equity
95 Group Cash Flow Statement
96 Notes to the Financial Statements
123 Company Balance Sheet
124 Statement of Changes in Company
Shareholders’ Equity
125 Company Cash Flow Statement
126 Notes to the Company’s Financial
Statements
ADDITIONAL INFORMATION
134 Alternative Performance Measures
135 Five Year Financial Record
136 Registered Office and Company
Advisers
Find out more online:
investors.4imprint.com
4imprint Group plc Annual Report and Accounts 2021
HIGHLIGHTS
Operational overview
Strong trading recovery in 2021 after pandemic-
impacted performance in 2020
1,429,000 total orders processed in 2021
(2020: 960,000); 263,000 new customers acquired
in the year (2020: 173,000)
Commitment to $2m in capital expenditure in
2022 for clean energy solar project at Oshkosh
distribution centre
Strong financial position: cash balance of
$41.59m; no debt
Evolving marketing mix, including significant
acceleration of brand component
Re-introduction of Shareholder dividends;
Interim (paid): 15.00c; Final (proposed): 30.00c
Complex and disruptive supply chain issues in the
second half of 2021 resulting in elevated order
backlog at year-end
Financial overview
REVENUE
$787.32m
+41%
2020: $560.04m
PROFIT BEFORE TAX
$30.23m
+687%
2020: $3.84m
BASIC EPS
80.46c
+629%
2020: 11.03c
OPERATING PROFIT
$30.65m
+672%
2020: $3.97m
CASH
$41.59m
+5%
2020: $39.77m
TOTAL PAID AND PROPOSED DIVIDEND PER SHARE
(CENTS)
45.00c
2020: nil
TOTAL PAID AND PROPOSED DIVIDEND PER SHARE
(PENCE)
33.82p
2020: nil
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2021 is a 52 week period and 2020 is a 53 week period. See page 31.
01
4imprint Group plc Annual Report and Accounts 2021
AT A GLANCE
Delivering
organic
revenue
growth
We are a direct marketer of promotional
products with operations in North
America, the UK and Ireland. From
2010 to 2019 we delivered a decade of
uninterrupted market-beating organic
revenue growth.
Revenue and profits were significantly impacted in 2020 by the effects of the
COVID-19 pandemic, followed by an encouraging recovery in the Group’s fortunes
in 2021. We have a strategic objective to achieve $1bn in Group revenue.
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 aim is to return to our pre-
COVID-19 trajectory of organic revenue
growth by expanding our share in
the still fragmented markets in which
we operate. Our stated objective is
to achieve $1bn in Group revenue.
The original target date for achieving
this target was 2022, although this
may now be delayed depending
on the pace of the recovery of
the business from the effects
of the pandemic.
02
4imprint Group plc Annual Report and Accounts 2021
Where we do it
We operate the same business model in two primary geographical markets:
NORTH AmERICA
UK & IRELAND
Most of our revenue is generated in the USA
and Canada, serviced from an office and a
distribution centre in Oshkosh, Wisconsin.
Customers in the UK and Irish
markets are serviced from an office
in Manchester, UK.
REVENUE
REVENUE
$773.71m
98%
$13.61m
2%
Five year growth
REVENUE
$787.32m
21
20
19
18
17
787.32
560.04
860.84
738.42
627.52
OPERATING PROFIT
$30.65m
30.65
3.97
21
20
19
18
17
53.62
44.32
41.28
BASIC EARNINGS PER SHARE
80.46c
EmPLOYEES
EmPLOYEES
1,162
December 2021
41
December 2021
21
20
19
18
17
80.46
11.03
152.42
125.61
103.15
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.
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
product range.
Application of technology
Our appetite for technology
delivers an attractive customer
experience, an efficient order
processing platform and
sophisticated data-driven
analytics.
03
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4imprint Group plc Annual Report and Accounts 2021
CHAIRMAN’S STATEMENT
Focused on
recovery
Performance summary
Throughout 2021 we have been focused
intently on the recovery of our business
after the unprecedented trading
environment seen in 2020. Although
the true extent and impact of the
pandemic is yet to be fully realised, the
significant improvement in the demand
profile and financial results during the
year demonstrates the strength of the
business model and gives continued
confidence in the long-term prospects
of the Group.
Given that the 2020 demand numbers
suffered such material disruption from
the effects of COVID-19, the most
informative indicator to gauge the extent
of the recovery in demand in 2021 is
the 2019 comparative (the most recent
‘normal’ year). Total order count in the
first half of 2021 was 79% of 2019 levels,
rising to 101% in the second half and
producing 90% of 2019 for the year. New
customer acquisition was 88% of 2019,
evidence of a very encouraging recovery
of demand in the business.
Consequently, the financial results for
2021 showed a sharp improvement over
prior year. Group revenue for 2021 was
$787.3m, an increase of $227.3m or
41% over 2020. Profit before tax for the
year was $30.2m (2020: $3.8m), resulting
in basic earnings per share of 80.46c,
(2020: 11.03c). The Group ended 2021
in a strong financial position, with a cash
balance of $41.6m (2020: $39.8m).
04
4imprint Group plc Annual Report and Accounts 2021
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Strategic direction
The Board is very pleased with the nature
and extent of the Group’s recovery from
the COVID-19 pandemic. Our team’s
clear and deliberate actions have been
informed at all stages by a desire to
protect the long-term prospects of the
business by staying true to our culture
and in so doing reinforcing our strategic
objectives.
Our team members throughout the
entire organisation are at the heart of
our culture. It was therefore natural to
pursue a people-led approach through
the pandemic. This has resulted in
direct benefits in employee retention
in difficult labour markets, and will
also be important as we look for new
opportunities to enhance our culture
and customer service capabilities based
on the team’s experience with remote
working and flexible scheduling.
We have continued to work very closely
with our supplier partners in the year.
These long-standing and innovative
relationships remain crucial in enabling
us to navigate the complex and evolving
supply chain issues resulting from the
pandemic, and in facilitating the future
development of our product range.
Our business model is founded on an
effective and efficient marketing engine.
We believe that our team has been able
to take advantage of extremely difficult
market conditions by making bold moves
in re-shaping the marketing mix. It is clear
that we have been able to accelerate
change, particularly in building the
prominence of the 4imprint brand, that
might otherwise have occurred over a
longer timeframe.
In combination, these decisions and
actions taken in 2021 have contributed
materially to the improving financial
performance of the Group and remain
fundamental to our strategy.
ESG
The team has made significant progress
in 2021 in the further development and
execution of the Group’s ESG agenda.
Highlights include our certification
as a CarbonNeutral® company and
the development of our recently
introduced better choices™ sustainable
product initiative.
Board
John Warren retired from the Board at
the AGM in May 2021. He was succeeded
as Chair of the Audit Committee by John
Gibney, who had been appointed to the
Board on 8 March 2021.
In addition, I am delighted that we were
able to strengthen significantly the depth
and diversity of the Board through the
appointment, on 1 September 2021, of
two new Non-Executive Directors. Jaz
Rabadia MBE brings extensive experience
in energy management and sustainability.
Lindsay Beardsell brings a wealth of
domestic and international commercial
experience in combination with her
public company background in legal
and governance matters.
Dividend
We reintroduced dividend payments at
the half year, when the Board declared
an interim dividend of 15.00c per share
(2020: nil). In view of the Group’s financial
performance in the second half of the
year, and in line with our balance sheet
funding and capital allocation guidelines,
the Board is pleased to recommend a
final dividend per share of 30.00c (2020:
nil), giving a total paid and proposed 2021
dividend of 45.00c (2020: nil).
“ Trading results in
the first few weeks
of 2022 have been
encouraging.”
Outlook
The recovery in the Group’s financial
performance in 2021 has been very
encouraging. Most importantly, it was
driven by decisions and actions fully
aligned with the Group’s strategy, culture
and focus on the sustainability of the
longer-term health of the business.
Challenges continue with regard to
the ongoing pandemic, supply chain
disruption and inflationary pressures.
However, the Group has a clear strategy
and is financially strong. Our business
model is flexible and resilient and our
market opportunity remains attractive.
Trading results in the first few weeks of
2022 have been encouraging.
PAUL mOODY
CHAIRmAN
15 March 2022
05
4imprint Group plc Annual Report and Accounts 2021
CHIEF EXECUTIVE’S REVIEW
Stronger and
more focused
than ever
Performance overview
In the first half of 2021 we saw a
continued recovery in demand for our
products after the severe downturn in
2020 directly caused by the COVID-19
pandemic. Despite the complications
caused by new virus variants, severe
supply chain disruption in the fourth
quarter and other lingering effects of the
pandemic in the second half of 2021,
significant further progress was made
on the road to recovery.
Throughout the year our team members
responded in typical fashion to meet
the ongoing challenges resulting from
the pandemic. Their ‘can do’ attitude,
empathy and resilience has been
essential in allowing us not only to deal
with daily challenges but equally to look
forward to future opportunities.
06
4imprint Group plc Annual Report and Accounts 2021
Revenue
North America
UK & Ireland
Total
Operating profit
Direct Marketing operations
Head Office costs
Total
2021
52 weeks
$m
773.71
13.61
2020
53 weeks
$m
549.87
10.17
787.32
560.04
2021
52 weeks
$m
2020
53 weeks
$m
+41%
+34%
+41%
34.54
(3.89)
30.65
7.56
(3.59)
+357%
+8%
3.97
+672%
Due to heavily disrupted trading patterns
in 2020, we have found that the most
informative comparative against which to
assess current year demand performance
is the last ‘normal’ year, 2019. Demand
activity in January and February was
relatively quiet, with total orders received
running at an average of 65% of 2019.
By the half year orders were up 79%
year to date against 2019, evidencing the
beneficial effect of vaccine rollouts and
the easing of restrictions in our primary
US market. Total orders in the second
half were 101% of 2019 levels, leaving
counts for the full year at 90% of the
same comparative.
In total 1,429,000 orders were received
from both new and existing customers
in 2021 (2019: 1,587,000; 2020:
960,000). It is encouraging that we have
continued to acquire new customers at
a relatively steady rate throughout the
pandemic. In 2021 we acquired 263,000
new customers (2019: 297,000; 2020:
173,000). It is also a good sign that
customers acquired during the pandemic
have demonstrated typical retention
rates, indicating that they are within our
target profile. The average order value
has remained higher than historical
comparatives through 2021.
This improving trading environment
during the year resulted in gains in year-
on-year financial performance. Group
revenue for 2021 was $787.32m, a gain of
41% over the prior year. Operating profit
for 2021 of $30.65m (2020: $3.97m) is
a clear demonstration of the progress
made by the business in the year.
The Group has remained financially
strong throughout the pandemic and had
a cash balance of $41.59m at the 2021
year-end, demonstrating the flexibility
of our direct marketing business model.
Operational highlights
In 2021 we made several key decisions
and took various actions that have been
central to the encouraging revival of the
Group’s fortunes. We are confident that
these choices reflect 4imprint’s culture
and values and were made with an eye
to securing the Group’s long-term future.
– People. From the start of the
pandemic we have pursued a people-
led approach. The health and safety
of our team members has remained
paramount, and we have consistently
observed best practice COVID-19
related protocols. Further, we are in
no doubt that, in a business based on
delivering excellent service, our team
members are a crucial element of our
success. As such, we have invested in
the retention of our people as a top
priority since the early days of the
pandemic. Apart from being simply
the right thing to do, this approach
has delivered tangible benefits in
recent months as we have retained
the necessary resource to deal with
the recovering demand levels as the
year progressed, particularly at a time
of serious labour constraints in our
North American markets.
Flexible working. The vast majority
of our office-based team members
have been working from home from
the early weeks of the pandemic. This
has allowed us to make considerable
progress in testing new working
practices, rolling out the necessary
computer solutions and considering
future options in the context of our
developing experience with remote
working and flexible scheduling. Our
aim is to learn from the lessons this
experience has offered to enhance
our culture and therefore our
competitive position for the future.
–
–
Supply. In 2021 we tested
the strength and depth of the
relationships with many of our
key suppliers in a very challenging
environment of supply chain
disruptions. Early problems revolved
around managing production
difficulties caused by lockdowns, and
a changing product mix. From around
August 2021 onwards new challenges
emerged around global logistics,
freight costs, inventory availability
and the difficulty and increased
cost of finding production labour to
keep up with recovering demand.
This has placed severe strain on our
operations, resulting in a significantly
higher than usual order backlog at the
year-end. Most recently, these factors
have caused inflationary pressure on
product cost to feed through from
suppliers. We continue to work to
help mitigate the resulting margin
pressure, including careful pricing
adjustments balancing near-term
margin, customer retention, brand
values and the market opportunity.
– marketing. Prior to the pandemic we
had already made great progress in
our strategic initiative to significantly
evolve our marketing portfolio
through the introduction of a brand
awareness pillar. From the start
we believed that this represented
an opportunity to strengthen the
business for the long-term and also
to provide more flexibility than was
available in our previous marketing
mix. The pandemic provided the
opportunity to be bold; indeed we
have aggressively re-calibrated the
marketing portfolio through the crisis.
At the start of the pandemic the
flexibility of the new portfolio allowed
us to dramatically reduce costs
as order volumes plummeted by
substantially reducing our print (direct
mail) element, simultaneously taking
07
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4imprint Group plc Annual Report and Accounts 2021
CHIEF EXECUTIVE’S REVIEW CONTINUED
Looking ahead
Our view is that the many challenges
introduced by the COVID-19 pandemic
have presented an opportunity for
4imprint to become stronger and more
focused than ever. We are realistic;
the residual impacts of the pandemic
will continue to be felt in various ways
for some time to come. However, the
encouraging trading momentum that was
built over the course of 2021 validates
that our strategy remains fully relevant,
and that our markets are attractive and
ready to be addressed via our agile and
resilient business model.
“ Our view is that the
many challenges
introduced by the
COVID-19 pandemic
have presented
an opportunity for
4imprint to become
stronger and more
focused than ever.”
KEVIN LYONS-TARR
CHIEF EXECUTIVE
15 March 2022
full advantage of the reduced cost
of brand marketing. Our increasing
investment in brand awareness prior
to, and during the pandemic has also
helped us to take full advantage of the
recovery by staying ‘front of mind’ with
prospective and existing customers.
As a result, in 2021 we took the
opportunity to accelerate strategic
changes in the marketing mix
(primarily increasing the brand and
decreasing the print components)
that typically would have occurred
over a longer timeframe. The results
we have seen so far in the recovery
phase give us confidence that these
changes leave our marketing engine
in good shape and ready to power
the business in the years ahead.
ESG
We continued to make progress in our
ESG initiatives in 2021, particularly with
regard to environmental matters. Our
Environmental Committee has met
monthly to monitor and steer a number
of exciting projects, including:
– Working to understand further and
audit the Scope 1 and Scope 2 carbon
footprint of our operations, as well as
selected Scope 3 elements material
to our business, most notably
transportation.
– Progressing existing carbon reduction
projects, for example completion of
the rollout of LED lighting in all of our
operational facilities.
– Achievement in October 2021,
well ahead of schedule, of the
CarbonNeutral® company certification
from our external consultant Natural
Capital Partners.
– Our better choices™ initiative, a
broad review of our product range
and how it is presented on our
website with the aim of providing
our customers with easy access to
as much information and product
variety as possible to enable them to
consider choices based on verified
sustainability criteria.
– Our recently announced project
to install a 1MW solar array at our
Oshkosh distribution centre.
Further details are set out on pages 20
to 29 in the Sustainability section of the
Strategic Report.
08
4imprint Group plc Annual Report and Accounts 2021
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 service
required to acquire and retain the customer
relationships that support long-term
value creation
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
ethical expectations
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
performance targets
4imprint Supply Chain Code of Conduct
– Clear social and ethical policies and expectations
–
– 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
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09
4imprint Group plc Annual Report and Accounts 2021
STRATEGIC OBJECTIVES CONTINUED
Market leadership
driving organic
revenue growth
Cash generation
and profitability
OBJECTIVES
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
which we operate
To expand share in fragmented markets
through sustained investment in a diversified,
evolving marketing portfolio
To drive organic revenue growth to achieve
our target of $1bn in Group revenue
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
To deliver reliable and increasing free cash
flow over the medium to longer-term
To balance short-term profitability with
marketing investment opportunities leading
to sustainable long-term free cash flow and
EPS growth
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
– Cash conversion
10
4imprint Group plc Annual Report and Accounts 2021
Effective capital
structure
Shareholder value
OBJECTIVES
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”)
To deliver increasing Shareholder
value through execution of the Group’s
growth strategy
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
–
Total Shareholder Return (“TSR”)
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4imprint Group plc Annual Report and Accounts 2021
KEY PERFORMANCE INDICATORS
REVENUE GROwTH ($m)
$787.32m +41%
NUmBER OF ORDERS RECEIVED (000s)
1,429 +49%
21
20
19
18
17
787.32
560.04
860.84
738.42
627.52
21
20
19
18
17
426
268
457
420
369
692
1,003
1,130
969
816
New
Existing
Year-over-year revenue growth gives the clearest measure
of progress towards our target of $1bn in Group revenue.
The pandemic halted the Group’s record of organic revenue
growth in 2020, however 2021 saw a strong return to growth
as markets recovered.
Orders received (demand) statistics are collated on a daily,
weekly and monthly basis to evaluate performance against
the targets in our operational plan for both new and existing
customers. Analysis of order patterns offers a clear and
immediate measure of operational performance.
24-mONTH CUSTOmER RETENTION (%)
REVENUE PER mARKETING DOLLAR ($)
37.9%
21
20
19
18
17
37.9
42.7
43.4
42.6
42.5
$6.17
21
20
19
18
17
6.17
6.03
5.58
5.63
5.67
The 24-month customer retention rate offers visibility as to the
broad stability and strength of the Group’s customer file. After
several years of stability the negative impact of the pandemic is
clearly visible in the most recent 24-month retention number.
Revenue per marketing dollar gives a measure of the productivity
of our investment in marketing. In prior years a gentle year-over-
year reduction in this KPI was typical, in keeping with the nature of
marketing yield curves. 2020 and 2021 did not follow this pattern
with revenue per marketing dollar rising as a result of shifts in the
marketing mix in response to adverse market conditions.
OPERATING mARGIN (%)
3.89%
3.89
0.71
21
20
19
18
17
6.23
6.10
6.65
CASH CONVERSION (%)
63%
21
20
19
18
17
63
96
97
102
320
Operating margin % shows the profitability of the Group’s
trading operations. Clearly this KPI was hit hard in 2020 by the
impact of the pandemic but showed strong recovery in the
2021 financial year. Our short to medium-term goal would be to
return the operating margin % to levels at or approaching those
achieved pre-pandemic.
Cash conversion measures the efficiency of the 4imprint
business model in the conversion of operating profits into
operating cash flow. Pandemic-related disruption caused 2020
conversion to be higher than normal, whereas supply chain
pressures in the fourth quarter of 2021 caused an untypical
build in working capital at the year-end.
12
4imprint Group plc Annual Report and Accounts 2021
CASH BALANCE ($m)
$41.59m
21
20
19
18
17
41.59
39.77
41.14
27.48
30.77
RETURN ON AVERAGE CAPITAL EmPLOYED (“ROACE”) (%)
41%
41
6
21
20
19
18
17
86
82
82
Our balance sheet funding guidelines call for the business to aim
for a target net cash balance at the end of each financial year.
This KPI reflects the Group’s performance in managing its cash
resources relative to its capital allocation priorities. In the last
two years it has also demonstrated the resilience of the business
model, even in times of severe economic stress.
This KPI shows the Group’s efficiency in the use of its capital
resources. It is influenced by profitability, working capital
management and productive capital investment. ROACE was
depressed in 2020 due to pandemic-related lower profits,
recovering somewhat in 2021 with improved profits, offset by
working capital build around the year-end.
PENSION ASSET/(DEFICIT) ($m)
$1.97m
21
20
19
18
17
1.97
(3.31)
(12.31)
(15.02)
(18.11)
BASIC EARNINGS PER SHARE (“EPS”) (c)
80.46c
21
20
19
18
17
80.46
11.03
152.42
125.61
103.15
This KPI demonstrates the substantial efforts made in recent
years in the de-risking of the Group’s legacy defined benefit
plan. A milestone was passed in 2021 as the IAS19 net balance
moved from deficit to surplus in the year, on course for our aim
of eventual full buyout funding of the plan.
EPS growth over time gives a clear indication of the financial
health of the business and is a key component in the delivery of
Shareholder value. This KPI has recovered significantly in 2021
after a substantial disruption in profitability in 2020.
DIVIDENDS PER SHARE (“DPS”) (c)
TOTAL SHAREHOLDER RETURN (“TSR”) (% in year)
45.00c
21
20
19
18
17
45.00
25.00
70.00
58.10
60.00
Regular
Supplementary
10%
21
20
19
18
17
(27)
10
2
10
61
DPS provides a tangible measure of the delivery of Shareholder
value. Dividend payments were cancelled in 2020 to maintain
liquidity during the pandemic. 2021 has seen a return to both
Interim (paid) and Final (proposed) dividends.
Our aim is to deliver consistent performance and attractive TSR.
The negative TSR in 2020 was driven by a falling share price and
dividend cancellations as a result of the pandemic. The positive
TSR for 2021 reflects recovery in the share price and a return to
dividend payments.
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4imprint Group plc Annual Report and Accounts 2021
MARKET POSITION
market
leadership
driving organic
revenue growth
14
4imprint Group plc Annual Report and Accounts 2021
An essential element of the 4imprint
strategy is the objective to achieve a
market leadership position in the markets
we serve through organic revenue
growth. We aim to establish 4imprint as
‘the’ recognised brand for promotional
products, driving the aspiration that
our organic revenue growth profile will
significantly outpace the overall growth
rate of the industry.
4imprint is one of the largest distributors
in the US promotional products industry
according to the rankings of both PPAI
and ASI, the leading industry trade
bodies. In the ASI annual rankings by
revenue for the 2020 financial year
4imprint was the third largest distributor
in North America, with revenue of $550m.
This reflects the negative effect of the
pandemic on the 2020 results, and
compares to pre-pandemic 2019 revenue
of $839m, when 4imprint was at the top
of the ASI rankings. We do not expect the
2021 list to be available until after the
date of this report.
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 is free.
Certain value: If you find, within 30 days
of purchase, that your order would have
cost less elsewhere, let us know and we’ll
refund double the difference.
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, complementary art assistance
“ Promotional products are purchased by a
wide range of individuals within all types of
businesses and organisations.”
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 causes,
our customers know that promotional
products from 4imprint will ensure that
their name – and brand – looks great in
front of their target audience.
where we do business
We operate in two primary
geographical markets:
– North America: Market size estimates
have been quite volatile as the
pandemic progressed, however
the US and Canadian promotional
products markets together are
estimated to total over $20bn in
annual revenue. We serve these
markets from a centralised base in
Oshkosh, wisconsin.
– UK & Ireland: The UK and Irish
promotional products market size
was estimated by industry sources
in 2021 to be around $1.0bn, down
from a high in 2019 of an estimated
$1.5bn. 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 a wide 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 the item.
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 of 25 or
more employees. No single customer
comprises a material part of 4imprint’s
overall revenue.
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– Both the Technology and Trade
Show categories, although recovered
somewhat from the impact of
the pandemic, are still well below
volume running rates from 2019.
Assuming some respite from the
pandemic, demand for products in
these categories should continue to
improve looking ahead.
– COVID-related products such as
hand sanitiser (Wellness & Safety)
and face masks (Apparel), have
declined in volume relative to
2020 but are holding their strong
performance significantly above 2019
levels.
4imprint Group plc Annual Report and Accounts 2021
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 ranging
from basic giveaways such as pens, bags
and drinkware to higher value items such
as embroidered apparel, business gifts
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 merchandising team.
Our top ten ‘Supergroup’ product
categories by sales volume in 2021 are
set out below. Movements from the 2020
and 2019 comparatives are provided to
illustrate the different effects by category
of the COVID-19 pandemic.
Supergroup 2021
+/- vs. 2020 +/- vs. 2019
Apparel
Bags
Drinkware
Writing
Outdoors
& Leisure
Wellness & Safety
Stationery
Auto, Home
& Tools
Technology
Trade Show
+53%
+51%
+70%
+32%
+96%
-11%
+49%
+45%
+32%
+55%
+20%
-7%
+0%
-29%
+9%
+47%
-20%
-13%
-41%
-30%
Product trends
Clearly the pandemic had a significant
impact on the performance of the
product range in both comparative years.
As we have adapted and business has
rebounded, nearly all categories have
experienced growth against 2020, albeit
with the degree and speed of recovery
varying significantly between categories.
In general, many of the category and
material trends that were evident pre-
COVID have continued, for example
growth in metal/vacuum drinkware and
the appeal of co-branding with well-
known consumer branded products
such as Camelbak or Nike.
– Apparel, our largest category, has
been a highlight throughout. Demand
activity in 2021 was robust, running
significantly higher than 2020 levels
and 20% above the 2019 base year.
The bag category has recovered well
but in 2021 was still 7% below 2019
in demand.
–
– Drinkware volumes demonstrated a
very healthy recovery in 2021, with a
70% increase over the low in 2020,
and overall demand back to 2019
levels for the full year.
– Although recovering in 2021 against
prior year, Writing is a mature
category as evidenced by the 29%
decrease against 2019 volumes.
– Outdoors & Leisure was 96% up over
2020, and 9% above 2019, showing
benefit from evolving patterns of
demand in this category.
16
4imprint Group plc Annual Report and Accounts 2021
4imprint ‘Own Label’ brands
Over the last few years 4imprint has developed,
and continues to evolve, its own exclusive
‘in-house’ brands to fill gaps in certain
product categories.
Crossland®
The Crossland® brand began as an ‘outdoor’ apparel brand,
primarily in fleece jackets. In 2018 the brand was successfully
expanded into other product categories, including ‘beanie’ hats,
blankets and vacuum mugs. 2019 saw additional apparel lines,
as well as vacuum drinkware, backpacks and coolers added
under the Crossland® brand. Further expansion of the range
has included outdoor chairs and additional outerwear, including
‘puffer’ style jackets and vests. Growth has been driven by newer
categories such as drinkware and blankets, with the Crossland®
brand as a whole above 2019 levels. Development work has
taken place to identify recycled fabric options for core fleece
jackets and blankets which are due to be launched in 2022.
reFresh®
The exclusive reFresh® brand was launched in 2017 with a
core line of affordable water bottles in a variety of designs
and colours. Through 2019, the brand evolved to include
competitively priced, brightly coloured tumblers and travel
mugs. In late 2020 new metal drinkware items were added
to the brand to become leading products in their respective
sub-categories: a single wall aluminium bottle, a double wall
vacuum bottle and a double wall wine tumbler. The reFresh®
brand has returned to significant growth in 2021 after being
negatively affected in 2020 as event cancellations impacted
lower price point drinkware. Newer metal and vacuum
options introduced in 2020 created strong growth.
In addition, we have identified recycled resins suitable
for manufacturing lower end plastic bottles, with the
coloured options launched late in 2021.
TaskRight®
Launched in spring 2020 with a range of
notepads and sticky pads, the TaskRight®
brand is a line of everyday stationery
products. This brand began to take off in
2021 as the stationery category recovered.
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4imprint Group plc Annual Report and Accounts 2021
BUSINESS MODEL
Our business is the sale and distribution of promotional products.
Our commercial operations are built around a direct marketing
business model designed to introduce millions of potential customers
to tens of thousands of customised promotional products. Our
business model is very well-established and has proved to be flexible
and resilient during the COVID-19 pandemic.
KEY STRENGTHS
wHAT wE DO
Our people
–
Strong company culture.
– Highly trained, long-tenured
team members.
Empowered to ‘do the right thing’.
–
Reaching our customers
–
Expanding and productive
customer file.
– 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
supplier network.
Financial strength
Strong balance sheet.
–
–
Investment in the business.
– Highly cash-generative model
driving self-financed growth.
18
1
4
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
the difference
– 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
office technology
4imprint Group plc Annual Report and Accounts 2021
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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 23 AND 24
Community
Our team members are actively engaged in our
communities, including charitable giving and
volunteering activities.
SEE PAGE 23
Pension Plan Trustee
and members
We stand firmly behind our legacy defined
benefit pension scheme obligations.
SEE PAGE 32
Details of engagement with stakeholders are on
pages 44 to 47, covering the Directors’ duties
under section 172 (1) Companies Act 2006.
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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™
‘Drop-ship’
from suppliers
– Unrestricted access to tens
of thousands of products
Efficient delivery of orders
to short lead times
–
– minimal investment in inventory
– Supplier holds the inventory
– Supplier prints the product
– Order shipped direct to customer
– Close relationships with suppliers
– Merchandisers ensure the
product range is continually
updated and curated
3
4imprint Group plc Annual Report and Accounts 2021
SUSTAINABILITY
A principled
approach to
corporate
responsibility
20
4imprint Group plc Annual Report and Accounts 2021
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.
People first
We are in no doubt that our team
members are our most important
asset. As such it was natural that we
would pursue a people-led approach
throughout the COVID-19 pandemic,
despite the very severe initial effect on
our trading operations.
“Our culture and
values encourage
responsible practice
at all levels of the
organisation.”
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 supply and practices
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 are 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.
An encouraging recovery in trading
has taken place, but subsequent
virus variants mean that the threat of
COVID-19 has remained, therefore the
immediate health and safety of our
team members has endured as our top
priority. This overriding commitment to
the wellbeing of our people is illustrated
by the fact that a large proportion of
our office-based team members are still
working from home.
Crucially, at the start of the pandemic we
resolved not to lay off any of our team
members, staying true to the culture
that has been essential to our success
over many years. Although it involved an
element of short-term investment, this
approach has paid back handsomely in
allowing us not only to retain existing
team members to take care of recovering
trading activity, but also in enhancing
4imprint’s reputation in our communities,
thereby allowing us to attract new talent
in extremely tough local labour markets.
Communication and participation
The spread of the pandemic and its
consequences have meant that the
well-established and popular ‘in-person’
quarterly updates on business objectives
and performance have not been
possible. In consequence, these quarterly
meetings have been replaced by more
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 assurance about the performance
and recovery of the business, as well
as providing detail and context around
pandemic-related safety requirements
and protocols.
Compensation and benefits
In 2021 we were able to return to pay
increases after a year of pandemic-
induced wage freezes. This included an
important re-basing of the starting/lower
end of the wage scale.
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.
In 2020 and the first half of 2021,
financial challenges driven by economic
circumstances meant that no ‘gain share’
bonus was paid. In line with the recovery
of the business, we are very pleased
that ‘gain share’ payments were re-
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4imprint Group plc Annual Report and Accounts 2021
SUSTAINABILITY CONTINUED
introduced in the second half of 2021 in
the light of the much-improved financial
performance of the business.
Our competitive benefits package
includes paid time off and strong medical,
dental and retirement plans. We also
offer resource aimed at personal financial
wellbeing through online classes and
access to appropriate advisers, for
example retirement planning specialists.
We have been very careful not to dilute
the benefits package despite the financial
effect of the pandemic.
Training and development
We have always believed in the value and
benefits of personal and professional
development. Whilst we have still not
returned to in-person classes and
seminars, we have transferred the
majority of our classes online, enabling
remote participation in training sessions.
In addition, we revamped our online
course curriculum and compiled almost
100 new online classes covering a
wide variety of topics. In the COVID-19
environment, we found out that team
members were struggling with more
current issues like health and safety
measures and getting used to working
from home, so our training team
developed a series of online courses to
make working remotely less challenging.
In the last two years, we have offered
over 25 company-wide ‘Exploring
Diversity’ classes addressing issues of
social prejudice, racism, harassment,
and exclusion in the workplace. These
classes were mandatory for all associates.
Since we are growing steadily and
regularly adding new team members,
we plan to offer the ‘Exploring Diversity’
classes regularly. We have received
very appreciative feedback from team
members on topics such as inclusion,
empathy, and collaboration, which are
key elements in our work culture.
We encourage our team members to live
healthier lives, and this focus on wellness
aims to make healthy living easy and
convenient. Since we are not yet able
to restart our onsite exercise classes,
we added a number of online yoga and
exercise classes that team members
can participate in from the convenience
of their home. We have also partnered
with our Employee Assistance Program
(“EAP”) to offer short, on-site visits with
an EAP counsellor once per month. The
15-minute visits are designed to get to
know EAP counsellors, find out more
about EAP, or see if you have an issue
appropriate for EAP.
22
For the past twelve years our DiSC
programme has been one of our most
successful training courses. DiSC is a
workplace behavioural assessment
consisting of an online survey and a
two-hour class. Based on the survey,
team members are aligned with one of
four groups with distinct behavioural and
communication styles, outlining personal
strengths and challenges and offering
suggestions on how to better interact and
communicate with the different styles. We
continue to offer the DiSC programme for
all new hires as well as subsequent DiSC
refresher sessions where we bring in the
entire team and manager.
Due to the current pandemic our training
programmes will continue to be offered
online and in webinar format, but we
are hoping to be able to resume in-
person training activities in the summer
of 2022. New training initiatives that we
are planning on introducing are a series
of Financial Wellness classes, Leadership
Book Discussions, Safety classes, Cyber
Security classes, Manager DiSC training,
and expanding our Diversity & Inclusion
curriculum.
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 http://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. As such, DEI
is an important part of our training and
development efforts (see above).
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 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.
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.
Gender representation
HEADCOUNT
Permanent and
temporary employees
326
881
Male
Female
MANAGEMENT
Employees who operate
at a senior level in the Group
24
BOARD
4imprint Group plc
Board members
3
22
5
Male
Female
Male
Female
At 1 January 2022 the Group employed
1,207 team members, split between
female (881) and male (326).
The Group continued to show
encouraging gender diversity at
management level in the Group, (as
defined in the FTSE Women Leaders
Review), with 52% female representation
at the management level.
The gender diversity of the Board of
4imprint Group plc improved during the
year, with 37.5% female representation
from September 2021 onwards.
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 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 at both sites 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:
basic medical services such as COVID/
flu shots, blood draws or consultation
with a nurse or nurse practitioner on
minor conditions can take 15 minutes
compared to hours spent travelling to
and from attending an external medical
facility. All on-site medical services are
available for free to our team members.
4imprint Group plc Annual Report and Accounts 2021
Social and community
Community involvement
and volunteering
4imprint is a strong supporter of
involvement in our communities.
We continue to encourage our team
members to become involved with
local volunteer causes. Paid time off is
available to our team members to be
used specifically for volunteering for a
local charity or non-profit organisation of
their choice. In 2021, despite the ongoing
restrictions and complications caused by
COVID-19, our team members gave 1,447
hours of their paid time and countless
hours of their own time to schools,
religious organisations, clubs, non-profit
organisations and other special events.
Some examples of community
involvement are:
– Under normal circumstances,
4imprint is actively involved in its
local communities in many ways,
for example in team sponsorships,
student scholarships at local colleges,
product donations for events such
as fun runs, 5Ks and marathons and
encouragement of team members to
participate on volunteer boards and
committees. These activities have been
largely curtailed due to the pandemic,
but we are hopeful that 2022 will see
the return of such opportunities.
In 2021 a group of team members
from Oshkosh were able to use some
of their volunteering paid time off to
assist with annual site preparations
including general clean-up and
planting native species at the nearby
Heckrodt Wetland Reserve.
–
– Another community activity in 2021
was the annual Oshkosh Celebration
of Lights. As well as 4imprint being
a major sponsor of the event, our
eager volunteers were able to prevail
over the pandemic and use volunteer
hours to ensure the smooth running
of the event.
Charitable giving
The 4imprint culture, values and principles
are expressed through the enduringly
popular ‘one by one®’ charitable giving
programme operated in our North
American business. Each business day
we aim to donate an average of five $500
grants to non-profit organisations. These
grants are to be used on promotional
products to help the recipients spread
the word, recruit volunteers, thank donors
and generally make their communities
a better place. Over 1,200 grants were
awarded in 2021, with a value of nearly
$1.8m, reflecting a return to a variation
of normality. In 2020 (750 grants)
many events were cancelled during the
unprecedented challenges presented by
COVID-19.
In addition to ‘one by one®’, we also
distributed over 1,500 donations of
product from inventory to businesses,
team members, customers and troops
doing fundraising activities.
Ethical supply and practices
Supply chain
Our direct tier 1 suppliers are based
in the USA and Canada for the North
American business, and in the UK
and EU for the UK/Ireland business.
Therefore, our supply base is essentially
domestic, with our suppliers taking care
of the importing/manufacture, inventory
management and printing capabilities
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. Depending on the products,
it can extend far beyond our domestic
supply partners across the globe to the
tier 2 manufacturers of the base product
and ultimately to tier 3 suppliers of raw
materials or components. As such, our
business activities can have a significant
impact at many levels. Our intention is to
4imprint team
members
volunteer
at nearby
Heckrodt
Nature
Preserve
4imprint
sponsor and
volunteer at the
annual Oshkosh
Celebration
of Lights
23
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4imprint Group plc Annual Report and Accounts 2021
SUSTAINABILITY CONTINUED
make that impact positive from a social,
economic and environmental perspective.
The direction is set by the Board in its
Social & Ethical Principles Statement which
can be found at http://investors.4imprint.
com. This statement sets broad guidelines
within which the Group should conduct its
business operations in accordance with
best practice, in compliance with 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 of Conduct. 4imprint
team members are actively involved in
the FLA’s activities.
At the operational level, this means that
4imprint’s goal is to work with tier 1
suppliers who are diligent in managing
their sourcing practices and selecting
tier 2 manufacturing facilities; and
who commit to ensuring safe working
environments where employees are
adequately compensated and respected.
These ethical sourcing expectations
are communicated and reviewed
through our document ‘4imprint Supply
Chain Responsibility and Compliance
Expectations’. Signature of this document
reaffirms the supplier’s commitment
to these principles within their own
organisation and supply base.
Such principles have taken on additional
importance and meaning in the last couple
of years as we have worked to ensure that
the health and wellness of our suppliers’
employees is appropriately considered
before restarting business operations
after lockdowns and disruptions.
The monitoring and development of our
supply chain (tiers 1 & 2) continues to
form an important part of our business.
Although COVID-19 has continued to
present challenges to the arrangement
and extent of our supply chain auditing
programme, we have performed a mix
of virtual and on-site audits during 2021.
Elevate continues as our lead auditing
firm for both North America and offshore.
We consider that training and education,
for our own teams and those of our
suppliers, forms an important part of
our supplier-focused activities. 4imprint
supply chain professionals continue to
lead the work of our US trade association
(Promotional Products Association
International) in supply chain management,
driving education and collaboration in our
industry’s supplier network.
Underpinning all of our product supply
efforts is our aim to match remarkable
customer service with great products
that meet functional, environmental
and safety standards in each market of
distribution. Our internal supply chain
compliance team works to stay abreast
of current and developing standards as
set by the regulatory bodies and liaises
with our supplier partners to manage and
validate product testing and other quality
assurance procedures.
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.
24
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.
Below are some examples of how we have
moved forward in 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 42 and 43 of the Strategic
Report.
Environmental matters were a topic
of Board discussion through the year
but most notably at the Board’s annual
strategy review in November 2021. The
Board has an agreed Environmental
Principles Statement which is available at
http://investors.4imprint.com.
We are delighted to have appointed
Jaz Rabadia to the Board in September
2021. Jaz has an extensive background
in energy conservation and sustainability
with organisations such as Sainsbury’s
and Starbucks. She was recognised with
an MBE in the Queen’s 2016 New Year
Honours for services to sustainability
in the energy management sector and
promoting diversity in STEM. We very
much look forward to benefiting from
Jaz’s experience and perspective.
At the operational level the
environmental agenda 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 original intention was for
the Group Environmental Committee
to transition to quarterly meetings,
however the volume of and enthusiasm
for the subject matter has meant that the
Committee continued to meet monthly
throughout 2021. The Committee reports
formally to the Board at the annual
strategy review. Further 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.
We support the TCFD’s disclosure
framework. Further details are set out
as follows:
Climate change
In the context of the Group’s operations
and activities, an initial materiality
assessment conclusively pointed the
Group Environmental Committee towards
climate change mitigation as the most
immediate and material way to make
a difference.
In our 2020 Annual Report we described
how we had committed to making
4imprint a carbon neutral business.
We set a target date of no later than
December 2022 for becoming carbon
neutral regarding greenhouse gas (GHG)
emissions at our operational facilities
(Scope 1 and Scope 2), and also in
respect of impactful elements of Scope
3, such as shipping of our products to
customers.
We also mentioned that we aspired to
reach our target through prioritising
internal carbon reduction initiatives
supplemented by other effective
environmental stewardship tools as
needed, and that we had engaged
Natural Capital Partners, the leading
experts on carbon neutrality and
climate finance, both to assist with
the refinement of our detailed carbon
reduction plan and to coordinate external
certification of carbon neutral status.
4imprint Group plc Annual Report and Accounts 2021
We are proud that 4imprint achieved
CarbonNeutral® company status in
October 2021, more than a year ahead
of the target date. This certification
of carbon neutrality is achieved
by calculating a carbon footprint
and reducing it to zero through a
combination of in-house efficiency
measures, renewable energy and
external emissions reduction projects.
The requirements of The CarbonNeutral
Protocol framework were met in full,
including an independent assessment
of greenhouse gas (“GHG”) emissions
based on a thorough evaluation of all
parts of 4imprint’s business, from heating
and cooling to electricity use, business
travel, waste generated in operations,
transportation and more.
In support of its objectives, the Group
Environmental Committee has initiated
or continued several emissions reduction
projects in 2021, including:
– Participation from January 2021
onwards in the UPS carbon neutral
shipping programme, (Scope 3),
which supports emissions’ reduction
projects that help mitigate the impact
of the shipment of parcels to our
customers.
– Completion of the rollout of LED
–
lighting across the whole business,
and further work on insulation and
energy loss projects.
Smaller yet significant and visible
initiatives such as the installation
of electric vehicle charging stations
at our Manchester, UK office.
In consultation with Natural Capital
Partners, and in order to enable us to
achieve our CarbonNeutral® company
certification, we have made use of
carefully selected carbon reduction
products to offset the remainder of our
carbon footprint:
– North American Grasslands Portfolio,
–
–
USA.
Improved Water Infrastructure,
Sub-Saharan Africa.
Kulera REDD+ and Cookstoves,
Malawi.
We are excited to have a major capital
investment project in our sights for the
year ahead. We plan to build a 2,660 panel
solar array at our distribution centre in
Oshkosh, at a total project cost of around
$2m. Completion of the project is planned
for August 2022. The array is expected to
generate around 1,400 megawatt-hours
of energy annually, (enough to power
more than 40% of current requirements),
significantly increasing the portion of the
Group’s power requirements generated
from renewable sources and adding
resilience to the business. Any excess
electricity collected will be fed into the
local power grid.
Our broad ambition looking ahead is to
significantly increase the portion of the
Group’s energy requirements generated
from renewable sources. This will allow
us over time to realign the portfolio
of initiatives enabling us to achieve
CarbonNeutral® company certification
more towards clean energy initiatives with
less reliance on carbon offset products.
The execution of the solar power project
will be a major step in this direction in
2022, and we intend to pursue further
clean energy initiatives in future years.
Across all of these climate change
initiatives we will be careful to ensure
relevance to 4imprint’s business
operations and culture. In addition, our
progress on carbon neutrality will give us
a platform to potentially use our influence
in our supply chain (Scope 3 downstream)
by spreading the message and promoting
similar initiatives at our tier 1 suppliers
and potentially beyond.
TCFD
In 2021 we have made good progress
in the implementation of the TCFD
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 are proud that
4imprint achieved
CarbonNeutral®
company status in
October 2021, more
than a year ahead
of the target date.”
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4imprint Group plc Annual Report and Accounts 2021
SUSTAINABILITY CONTINUED
TCFD Pillar
TCFD Disclosure
4imprint Response
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 reports to the Board at least
annually and supports the development and implementation of
4imprint’s environmental framework
Page(s)
24–25
– Board appointment in the year strengthens relevant experience to
24
hold management to account on environmental matters
FUTURE PRIORITIES
– Continued disclosure on shaping of climate strategy and
implications for commercial strategy
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
a member of the Oshkosh Senior Management Team
The strategy is aligned to our environmental framework
parameters
FUTURE PRIORITIES
– Review ESG-linked remuneration and inclusion of climate-related
metrics at the executive level
CURRENT
–
–
Sustainability is a key part of our first strategic pillar
‘Environmental risks’ has been established as a new primary risk
category in the Principal Risks & Uncertainties matrix, with sub-
headings ‘Climate change’ and ‘Products and market trends’
– We expect transition risks associated with climate change 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
24–25
9
9
43
– Opportunities are set out in this Sustainability section, mainly
25, 29
around carbon footprint management and low carbon product
sustainability initiatives
FUTURE PRIORITIES
– Advanced granularity in the categorisation of climate-related risks
–
over short, medium and long-term time horizons
Improved identification of emerging climate risks, including in the
downstream supply chain
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 has been reviewed in
this Sustainability section
FUTURE PRIORITIES
–
Further develop commercial opportunities such as better choices™
to offer low carbon product solutions to customers
– Produce qualitative assessment of potential financial materiality
of climate-related risks and opportunities; progress over time to
quantitative assessment
43
29
29
Management’s role
in assessing and
managing climate-
related risks and
opportunities
Strategy
Identification of
climate-related risks
and opportunities
Impact of climate-
related risks and
opportunities on
business, strategy
and finance
26
4imprint Group plc Annual Report and Accounts 2021
TCFD Pillar
TCFD Disclosure
4imprint Response
Page(s)
Resilience of
strategy under
various climate-
related scenarios
Risk
management
Processes for
identifying and
assessing climate-
related risks
Processes for
managing climate-
related risks
Integration
into overall risk
management
CURRENT
–
This year is 4imprint’s first TCFD statement; as a result the focus
has been on identifying risks and opportunities and developing
mitigating actions to address risk and capture opportunity
– As such, no scenario analysis contemplating future climate-related
impacts has yet been performed
FUTURE PRIORITIES
– Deliver a qualitative scenario analysis leading to quantitative
scenario analysis in subsequent years, allowing a more granular
understanding of the potential financial impacts of identified risks
CURRENT
–
–
Topics can be raised directly by Board or Audit Committee
members
The Business Risk Management Committee considers emerging
risks through analysis and scoring process
36
– Group Environmental Committee discussions may be elevated to
24–25
Board level on an ad hoc basis
FUTURE PRIORITIES
– Current risk identification processes considered appropriate given
the nature of the Group’s operations and short reporting lines
Introduction of scenario analysis into risk and opportunity
identification and assessment
–
36
CURRENT
– Group risk management processes are set out under Principal
36–43
–
–
Risks & Uncertainties
The Business Risk Management Committee’s scoring and
mitigations of climate-related risks are addressed under the
‘Environmental risks’ section
Further detail on specific risk mitigations is set out in the
Sustainability section; these actions include both internal
actions to mitigate GHG emissions and actions to increase
customer awareness of products with sustainable credentials
on 4imprint’s website
FUTURE PRIORITIES
– Current risk management processes considered appropriate given
the nature of the Group’s operations and short reporting lines
– We will review metrics annually to measure and evidence progress,
ensuring the data captured is consistently fit for purpose
CURRENT
– Both climate change and sustainability-related product trends
are recognised within 4imprint’s Principal Risk & 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
43
24–25
36
36
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4imprint Group plc Annual Report and Accounts 2021
SUSTAINABILITY CONTINUED
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:
28–29
year-over-year performance and analysis
– Metrics subject to third party audit coordinated by Natural
25
Disclose Scope 1,
Scope 2, Scope 3
GHGs
Targets used to
manage climate-
related risks and
opportunities
and performance
against targets
Capital Partners
FUTURE PRIORITIES
– Measure beneficial effect of low carbon initiatives, particularly the
solar array project due in 2022
– Develop further reportable metrics including packaging, waste,
water usage, business travel and other data
CURRENT
– GHG emissions table covers Scope 1 and Scope 2
–
Selected Scope 3 elements include participation in UPS carbon
neutral shipping programme
FUTURE PRIORITIES
–
Improvement in data gathering and disclosure of relevant aspects
of Scope 3
CURRENT
– Carbon Neutral target achieved a year early
– GHG emissions reporting
–
The energy generated from the planned solar array project is
estimated at 1,400 MWh, or around 40% of the requirements of
the Oshkosh distribution centre
FUTURE PRIORITIES
– Develop targets for the proportion of renewable energy used to
defray the overall carbon footprint
– Develop targets, reporting and disclosure around better choices™
sustainable product initiative
– Consider disclosing distinct Scope 3 GHG reduction targets as
more knowledge is accumulated
28
25
28
25
Unit
2021
2020
Change
GHG emissions
Scope 1: Direct emissions from combustion of fuel
and operation of facilities
Scope 2: Indirect emissions from purchased
and consumed electricity
Total Group emissions Scope 1 & 2
Tonnes CO2-e
Tonnes CO2-e
Tonnes CO2-e
Proportion of emissions that relate to the UK:
– Scope 1
– Scope 2
466
413
+13%
3,097
3,563
3,196
3,609
-3%
-1%
0.0%
0.4%
0.0%
0.4%
Intensity measurements
Emissions by Group revenue
Emissions by employee numbers
Energy consumption
Gas
Electricity
Total
Proportion consumed in UK
28
Tonnes CO2-e/$m Group revenue
Tonnes CO2-e/$m avg. employees
4.5
3.1
6.4
3.0
-30%
+2%
kWh
kWh
kWh
2,552,191 2,225,482
4,552,139 4,206,876
7,104,330 6,432,358
0.8%
0.8%
+15%
+8%
+10%
4imprint Group plc Annual Report and Accounts 2021
Our GHG reporting for 2021 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 on the
previous page relates to the operations
of the Group for the period ended
1 January 2022.
sustainable alternatives, not just for
the business but also at home.
– Participation of team members in
environmentally conscious events
such as Earth Day (plant a free tree);
‘Adopt a Highway’ programme, (clean-
up of waste along an ‘adopted’ stretch
of highway); and volunteering for the
annual Fox-Wolf Watershed Alliance
clean-up.
better choices™
Our recently announced better choices™
programme is designed to make it easy
for our customers to find and research
the promotional products with the
characteristics that are most important
to them.
The Group’s GHG Scope 1 and 2 emissions
in 2021 were essentially flat compared to
2020. It should be noted, however, that
by far the largest energy demands at the
Oshkosh office and distribution facilities
are heating and cooling requirements
at different times of the year. These
demands can fluctuate significantly each
year depending on weather factors,
therefore the improved intensity metric
by Group revenue, whilst encouraging,
should be viewed in this context.
SmART
Our SMART (Sustainability. Making
A Renewable Tomorrow) committee
celebrated its fourth anniversary in
September 2021. The SMART committee
has in recent years been responsible
for embedding environmental and
sustainability initiatives as an integral
part of our daily operations.
From inception this initiative has been
supported enthusiastically throughout
the business. Our in-house Yammer
(social media) platform has proved to
be a conducive forum for our team
members to engage in SMART initiatives
and sustainability discussions. Many
projects and ideas have been undertaken,
varying in scope and nature, but all with
an emphasis on sustainability. Some
examples of recent SMART activities are:
– Continuous improvements in
–
–
recycling of waste materials across
the business, diverting from landfill.
Installation of motion sensors and
automation to cut down on energy
usage in our facilities.
Leading the LED lighting project
across the business and identifying
solutions for energy loss.
– Group Yammer posts and discussions
concerning good choices and
Members of our Group Environmental
and SMART committees are actively
engaged with the Green Masters Program
promoted by the Wisconsin Sustainable
Business Council (“WSBC”). We look
forward in particular to sharing details
of our CarbonNeutral® journey and in
particular our solar panel renewable
energy project at WSBC forums in 2022.
Our products
Consistent with our corporate purpose,
our products are designed to effectively
promote our customers’ messages time
after time through repeated usage and
impressions. In other words, the most
effective promotional products are
those that have high utility, meaning
for the recipient and the quality to last.
Our products must also align with our
customers’ brand stories, each of which
is unique. As a result, offering a wide but
thoughtfully curated range of products
across many categories and with a variety
of characteristics is vital.
Our diverse range of products covers a
wide array of many different materials,
substrates, manufacturing processes and
imprinting techniques. The products that
we sell are mostly items that people use
in their everyday lives and as such are
typically available, unbranded, in retail.
Trends in retail/consumer quickly make
their way across to the business-to-
business/promotional space.
We are therefore very conscious of the
requirement to adapt to the changing
needs of our customers by helping them
find the ‘perfect product’ – and this
‘perfect product’ increasingly comes with
sustainable characteristics.
Supported by a major project that
combined our merchandising, supply
chain, compliance and software
development teams, the 4imprint.com
website now provides curation of, and
accessibility to, thousands of product
and supplier standards, certifications and
other attributes related to sustainability,
environmental impact and more. With
this information displayed alongside
products, promotional product users are
equipped with the tools they need to find
the items that best fit their interests and
needs and those of their organisations.
better choices™ highlights a wide range
of designations, including:
– Products manufactured with more
sustainable materials such as certified
organic cotton and recycled polyester.
– Paper and wood-based products
sourced from Forestry Stewardship
Council (FSC) responsible forestry
certified supply chains.
– Production by suppliers and brands
meeting Fair Labor Association
standards, B-Corporations or
other relevant attributes that
demonstrate commitments to social
and environmental performance,
transparency and accountability.
– Product safety and performance
information.
In accordance with our culture, better
choices™ will place 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.
We believe that better choices™ will help
expand our customers’ definition of,
and ability to find, their ‘perfect product’.
Further, through better choices™ we have
a platform with potential to drive positive
change for all of our stakeholders.
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4imprint Group plc Annual Report and Accounts 2021
FINANCIAL REVIEW
Focused
on financial
discipline
30
Operating profit
Net finance cost
Profit before tax
Taxation
Profit for the period
2021
52 weeks
$m
2020
53 weeks
$m
30.65
(0.42)
30.23
(7.64)
22.59
3.97
(0.13)
3.84
(0.75)
3.09
The Group’s operating result in the period, summarising
expense by function, was as follows:
Revenue
Gross profit
Marketing costs
Selling costs
Admin and central costs
Share option related charges
Defined benefit pension scheme
administration and past service costs
Operating profit
2021
52 weeks
$m
2020
53 weeks
$m
787.32
560.04
226.02
(127.53)
(32.16)
(34.73)
(0.61)
(0.34)
30.65
157.94
(92.88)
(30.78)
(29.26)
(0.63)
(0.42)
3.97
Revision to the definition of underlying profit
measures
In previous Annual Reports and Accounts, defined benefit
pension charges were not included in the definition of
underlying operating profit. These charges have now become
relatively stable and are not material, therefore are now included
in underlying, which is defined as before exceptional items.
As there are no exceptional items in 2021 or 2020, the term
underlying is not used in relation to any measurements of profit
in the 2021 Annual Report and Accounts.
Operating result
The recovery of the business from the effects of the COVID-19
pandemic has been very encouraging.
–
Demand returned steadily through the early part of the year, helped
by the rollout of vaccines and easing of restrictions in our primary
US market. This momentum continued to build, with aggregate
order counts exceeding 2019 levels (the most recent ‘normal’ year)
in the second half of the year. Group revenue for 2021 of $787.32m
increased 40.6% compared to 2020 of $560.04m, recovering to
91.5% of reported 2019 revenue of $860.84m.
The gross profit percentage stabilised year-over-year at 28.7%
(2020: 28.2%). Product cost inflation resulting from pandemic-
related global and local supply chain issues has been partially
mitigated using price adjustments. Factors including a shift in
product mix towards apparel and higher average order values
mean that margin percentages remain below pre-pandemic levels.
Marketing costs were 16.2% of revenue (2020:16.6%), leading
to an improvement in our Revenue per Marketing Dollar KPI to
$6.17 (2020: $6.03). Strategic investment in a changing marketing
mix has been made through the year to capitalise on market
share opportunities in recovering markets.
Selling, administration and central costs increased 11.4% to
$66.89m (2020: $60.04m). The year-on-year change is due
principally to a credit of $4.1m in 2020 relating to COVID-19
4imprint Group plc Annual Report and Accounts 2021
assistance under the US CARES Act and UK Coronavirus Job
Retention Scheme. No similar assistance was accessed in 2021.
As a result of the above factors, operating profit increased by
$26.68m to $30.65m (2020: $3.97m).
2021 returned to the usual 52 week accounting period for the
Group, compared to the 53 week period in 2020. The effect of the
extra week in 2020 on Group revenue was an increase of around
$5m and the impact on operating profit was negligible due to a
full week of payroll and overheads offsetting the gross margin
arising from a quiet trading week during the holiday period.
Foreign exchange
The primary US dollar exchange rates relevant to the Group’s
2021 results were as follows:
2021
2020
Period end
Average
Period end
Average
Sterling
Canadian
dollars
1.35
0.79
1.38
0.80
1.36
0.79
1.28
0.75
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
98% of the Group’s revenue arising in US dollars, the Group’s
reporting currency. The net impact on the 2021 income
statement from trading currency movements was not
material to the Group’s results (note 20).
– Most of the constituent elements of the Group balance
sheet are US dollar-based. Exceptions are the Sterling-based
defined benefit pension asset, which produced an exchange
loss in the year of $0.06m, and the UK cash balance with an
exchange loss of $0.14m in the year.
The Group generates cash mostly in US dollars, but its
primary applications of post-tax cash are Shareholder
dividends, pension contributions and some Head Office
costs, all of which are paid in Sterling. As such, the Group’s
cash position is sensitive to Sterling/US dollar exchange
movements. By way of example, using actual exchange rates,
the movement of Sterling against the US dollar during 2021
meant that every US$1m converted to Sterling was worth
around £9,000 more at the 2021 closing rate compared to
the 2020 closing rate.
Share option charges
A total of $0.61m (2020: $0.63m) was charged in the year in
respect of IFRS 2 ‘Share-based Payments’. This was made up
of two elements: (i) executive awards under the 2015 Incentive
Plan, now replaced by the Deferred Bonus Plan (“DBP”); and
(ii) charges in respect of the 2019 UK SAYE and the 2021 US
Employee Stock Purchase Plan.
No awards of conditional shares under the DBP will be made in
respect of 2021. There were no awards made in 2020, resulting
in the consistent IFRS 2 charge year-over-year.
Current options and awards outstanding are 13,880 shares
under the UK SAYE, 97,624 shares under the 2021 US Employee
Stock Purchase Plan, and 51,925 shares under the 2015
Incentive Plan.
31
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4imprint Group plc Annual Report and Accounts 2021
FINANCIAL REVIEW CONTINUED
Net finance cost
Net finance cost for the year was $0.42m (2020: $0.13m). The
increase in cost on 2020 is attributable to lower interest rates
earned on deposits, and higher IFRS 16 lease interest charges
following the extension to the Oshkosh office lease in the prior
year which resulted in a higher lease liability being recognised
on the balance sheet.
Taxation
The tax charge for the year was $7.64m (2020: $0.75m), giving
an effective tax rate of 25% (2020: 20%). The charge comprises
a current tax charge of $5.92m, representing net tax payable on
US taxable profits, and a deferred tax charge of $1.72m.
The increase in the effective tax rate is principally due to the
significant increase in profitability of the North American
business that is subject to a higher rate of corporation tax than
the UK, and the de-recognition of a deferred tax asset in respect
of UK tax losses following a review of updated forecasts of UK
taxable profits.
Earnings per share
Basic earnings per share was 80.46c (2020: 11.03c), an increase
of 629%. This reflects the increase of 631% 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
is declared.
Due to significant uncertainty as to how quickly markets might
recover from the COVID-19 pandemic, and in the interests of
financial prudence, the Board cancelled the payment of the
2019 final dividend and did not propose 2020 interim or 2020
final dividends.
Underpinned by a strong net cash position and an improving
commercial outlook for the Group, the Board re-introduced
biannual dividend payments with an interim dividend of 15.00c
per share declared at the 2021 half year.
The Board has proposed a final dividend of 30.00c per share
(2020: nil) which, together with the interim dividend of 15.00c
per share, gives a total paid and proposed regular dividend
relating to 2021 of 45.00c per share (2020: nil).
The final dividend has been converted to Sterling at an exchange
rate of £1.00/$1.30515. This results in a final dividend per share
payable to Shareholders of 22.99p (2020: nil), which, combined
with the interim dividend paid of 10.83p per share, gives a total
dividend per share for the year of 33.82p (2020: nil).
The final dividend will be paid on 31 May 2022 to Shareholders
on the register at the close of business on 29 April 2022.
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
accruals for several years. The Plan has 110 pensioners and 231
deferred members.
At 1 January 2022, the surplus of the Plan on an IAS 19 basis
was $1.97m, compared to a deficit of $3.31m at 2 January 2021.
Gross Plan assets under IAS 19 were $39.80m, and liabilities
were $37.83m.
32
The change in the net IAS 19 Plan position is analysed as follows:
IAS 19 deficit at 2 January 2021
Company contributions to the Plan
Defined benefit pension scheme
administration costs
Pension finance charge
Re-measurement gain due to changes
in assumptions
Return on scheme assets
(excluding interest income)
Exchange loss
IAS 19 surplus at 1 January 2022
$m
(3.31)
4.59
(0.34)
(0.02)
2.50
(1.39)
(0.06)
1.97
The net IAS 19 position improved by $5.28m in the year,
driven primarily by employer’s contributions of $4.59m and
re-measurement gains of $2.50m, partially offset by a negative
return on assets of $1.39m. In Sterling, the net IAS 19 position
improved by £3.89m in the year to a surplus of £1.46m.
The Company continues to pay regular monthly contributions
into the Plan as part of a recovery plan agreed by the Company
and the Trustee that aims towards funding on a buyout basis by
mid-2024. A milestone was passed in the year as the net balance
sheet position in respect of the Plan turned from a net deficit to
a net surplus as measured on an IAS 19 valuation basis.
A triennial actuarial valuation of the Plan was completed in
September 2019 and this forms the basis of the 2021 IAS 19
valuation set out above. The next triennial Plan valuation is
scheduled for September 2022.
Cash flow
The Group had net cash of $41.59m at 1 January 2022, an increase
of $1.82m against the 2 January 2021 balance of $39.77m.
Cash flow in the period is summarised as follows:
Operating profit
Share option related charges
Defined benefit pension scheme
administration and past service costs
Depreciation and amortisation
Lease depreciation
Change in working capital
Capital expenditure
Underlying operating cash flow
Tax and interest
Defined benefit pension contributions
Own share transactions
Capital element of lease payments
Exchange and other
Free cash flow
Dividends to Shareholders
Net cash inflow/(outflow) in
the period
2021
$m
30.65
0.60
0.34
3.67
1.34
(13.76)
(3.47)
19.37
(6.82)
(4.59)
(0.84)
(1.12)
(0.05)
5.95
(4.13)
2020
$m
3.97
0.63
0.42
3.43
1.50
6.59
(3.82)
12.72
(0.52)
(13.28)
0.94
(1.42)
0.19
(1.37)
–
1.82
(1.37)
The Group generated underlying operating cash flow of $19.37m
(2020: $12.72m), a conversion rate of 63% (2020: 320%). Working
capital usage at the end of 2021 was unusually high, driven by the
global and local supply chain issues that have resulted in material
increases in accrued revenue and inventory balances on orders in
4imprint Group plc Annual Report and Accounts 2021
process at year-end. This position is expected to unwind in 2022
as the supply chain situation improves and orders are completed.
Free cash flow improved by $7.32m to $5.95m in 2021 (2020:
$(1.37)m). This is largely attributable to the recovery in operating
profit in 2021 and the special contribution to the defined benefit
pension plan of $9.14m paid in 2020.
Dividends resumed in 2021 with the payment of an interim
dividend to Shareholders announced at the half year.
Balance sheet and Shareholders’ funds
Net assets at 1 January 2022 were $82.97m, compared to $65.37m
at 2 January 2021. The balance sheet is summarised as follows:
pandemic and resulting supply chain issues. The Group remained
in a strong financial position at the 2021 year-end, enabling
management to make decisions that look to the longer-term health
of the Group and which support 4imprint’s distinctive culture.
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 priorities are:
– Organic growth investments
– Either capital projects or those expensed in the
income statement.
1 January
2022
$m
2 January
2021
$m
–
– Market share opportunities in existing markets.
Interim and final dividend payments
– Increasing broadly in line with earnings per share through
Non-current assets
Working capital
Net cash
Lease liabilities
Pension asset/(deficit)
Other assets – net
Net assets
38.04
12.27
41.59
(12.09)
1.97
1.19
82.97
43.27
(1.50)
39.77
(13.21)
(3.31)
0.35
65.37
Shareholders’ funds increased by $17.60m since the 2020 year-
end. Constituent elements of the movement were net profit in the
period of $22.59m and share option related movements of $0.38m,
net of equity dividends paid to Shareholders $(4.13)m, own share
transactions of $(0.84)m, the after tax impact of returns on pension
scheme assets and re-measurement gains on pension obligations
of $(0.30)m, and exchange losses of $(0.10)m.
The Group had a net positive working capital balance of $12.27m
at 1 January 2022 (net negative balance of $1.5m at 2 January
2021). This reflects the build-up of accrued revenue and inventory
on orders in process at year-end, impacted by global and local
supply chain issues.
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 the cycle. The Group will therefore
typically remain ungeared and hold a net cash 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
fall due.
–
–
–
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.
As a result of this approach, the Group has maintained a
substantial cash balance and no debt throughout the COVID-19
the cycle.
– Aim to at least maintain dividend per share in a downturn.
– Residual legacy pension funding
– In line with agreed funding schedule.
– Further de-risking initiatives, if viable.
– mergers & 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.
– Supplementary 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 period end or prior period end. The Group holds most of its
cash with its principal US and UK bankers.
The Group has a $20.0m working capital facility with its principal
US bank, JPMorgan Chase, N.A. The facility has a minimum EBITDA
test and standard debt service coverage ratio and debt to EBITDA
covenants. The interest rate is US$ LIBOR plus 2.0%, and the
facility expires on 31 May 2023. In addition, an overdraft facility
of £1.0m, with an interest rate of bank base rate plus 2.0%, is
available from the Group’s principal UK bank, Lloyds Bank plc.
Critical accounting policies
Critical accounting policies are those that require significant
judgments or estimates and potentially result in materially
different results under different assumptions or conditions.
It is considered that the only critical accounting judgments are
in respect of revenue, leases and the retirement benefit asset.
Key sources of estimation uncertainty
Determining the carrying amount of some assets and liabilities
requires estimation of the effects of uncertain future events. The key
sources of estimation uncertainty are considered to be in relation to
the valuation of the defined benefit Plan liabilities and assets.
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”), leading to an
impairment review being undertaken for the UK CGU only. This
review did not result in any material charges to the consolidated
Group income statement. The Company has recognised an
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4imprint Group plc Annual Report and Accounts 2021
FINANCIAL REVIEW CONTINUED
expected credit loss charge of £223k on a loan to a subsidiary
undertaking in its individual financial statements.
Viability statement
In accordance with Provision 31 of the UK Corporate
Governance Code 2018, the Board has assessed the prospects
and viability of the Group.
Assessment of prospects
In making their assessment of the Group’s prospects, the
Directors have carefully considered:
–
The Group’s strategy, market position and business model,
as set out in the Strategic Report section on pages 9 to 19 of
the 2021 Annual Report.
The principal risks and uncertainties facing the Group, as
outlined in the Principal Risks & Uncertainties section on
pages 36 to 43 of the 2021 Annual Report.
Information contained in this Financial Review
concerning the Group’s financial position, cash flows
and liquidity position.
–
–
– Regular management reporting and updates from the
Executive Directors.
– Recent detailed financial forecasts and analysis for the three-
year period to 28 December 2024.
Whilst the lingering effect of the COVID-19 pandemic continues
to present challenges, including on the supply chain and
inflationary pressures, the Board considers that the Group’s
strategy, competitive position, and business model remain
entirely relevant and, indeed, have proved to be resilient and
flexible under stress.
October 2021, committed plans to build a solar panel array at
our distribution centre in Oshkosh, plans to review ESG-linked
executive remuneration with the inclusion of climate-related
metrics, and the launch of our better choicesTM programme to
make it easier for our customers to find products with the
characteristics that are most important to them. The flexible
nature of our ‘drop-ship’ model and close relationships
maintained with key and alternative suppliers allows for relatively
rapid adjustment to episodes of extreme weather.
Whilst governmental and societal responses to climate change
risks are still developing, and therefore all possible future outcomes
are not known, the Group has embedded environmental matters
into our strategic objectives and sees climate change and other
aspects of environmental stewardship as a fundamental part of
our commitment to build a commercially and environmentally
sustainable business that delivers value to all stakeholders.
The cash flow impact of our environmental initiatives are
incorporated into the financial forecasts used to assess viability
and going concern.
Viability assessment period
In their assessment of viability, the Directors have reviewed
the assessment period and have determined that a three-year
period to 28 December 2024, in line with the Group’s rolling
strategic planning process, continues to be most appropriate.
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 and recognises that forecast
information beyond this period is significantly less meaningful.
Business operations have adapted successfully to the
challenging and rapidly changing external conditions in a timely
manner. The marketing portfolio was reconfigured during 2020
and 2021, providing flexibility over expenditure and the agility
to invest in opportunities for growth in recovering markets.
Discretionary overhead and capital spend continues to be tightly
controlled, demonstrating the essentially minimal fixed cost base
of the direct marketing model.
The Group’s business model does not rely heavily on fixed capital,
long-term contracts, or fixed external financing arrangements.
Assessment of viability
The Board considers that the key factor that would prejudice the
ongoing viability and liquidity of the Group would be a severe
downturn in demand, which negatively impacts new customer
acquisition and existing customer retention.
These actions, coupled with the strong financial position of
the Group that has been maintained throughout this global
pandemic, give the Board confidence that despite residual
uncertainty as to future market conditions, the Group will be in a
good position both to withstand further economic stress and to
take market share opportunities as demand continues to recover.
Environmental risks
As a primary strategic objective of the Group and as noted
above in the assessment of prospects, environment-related risks
and opportunities are specifically considered by the Board in
their assessment of viability and going concern.
The Group has established an appropriate governance
structure, in the form of the Group Environmental Committee
and Business Risk Management Committee, to identify new and
emerging risks related to climate change and the environment.
As detailed more fully in the Principal Risks & Uncertainties
section, environmental risks have the potential to impact the
Group’s ability to achieve its strategic objectives through damage
to our reputation, our operational facilities and those of our
supplier partners, and the failure to respond to trends and shifts
in consumer product preferences.
As detailed more fully in the Sustainability section, the Group has
proactively responded to these risks with several initiatives. These
include the achievement of CarbonNeutral® company status in
The ‘base case’ three-year plan, developed for the purposes of
the Group’s strategic planning process, provides the basis for
the financial modelling used to assess viability. The commercial
underpin to this ‘base case’ is the Board’s view that whilst the
promotional products market contracted in 2020, for example
due to the cancellation of trade shows and physical events, our
recent experience is that market demand is resilient across
the product range and customer base, as evidenced in the
rapid recovery in demand during 2021. The ‘base case’ started
with the total order count at 90% of pre-pandemic 2019 levels,
as achieved in 2021, with consistent and sustained top-line
growth throughout the three-year period. Marketing costs were
modelled to increase in line with revenue with the Group’s
revenue per marketing dollar KPI remaining stable at historic
levels. This ‘base case’ shows improving financial results, an
accumulating cash balance and no liquidity concerns.
Severe, but plausible, downside demand assumptions were then
determined and used to adjust the ‘base case’ forecast to model
the effects on the Group’s liquidity. This ‘downside’ scenario
assumes a significant deterioration in demand patterns during
2022, similar to those experienced in 2020 when the pandemic
started, with order volumes for the full year dropping back to
around 70% of 2019 levels, before gradually recovering back
to 2019 order levels by 2024. Marketing and direct costs were
flexed in line with revenue, but other payroll and overhead costs
remained at 2021 levels with some allowance for inflationary
increases. This ‘downside’ scenario was intended to simulate
34
a severe shock to demand, similar to the experience from
COVID-19, that results in sustained diminished corporate
demand in a downsized promotional products market.
Even under the severe stress built into the ‘downside’ model,
the Group retains sufficient liquidity throughout the assessment
period. This liquidity is in the form of cash balances. 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 distressed forecast 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 or working capital requirements, a reverse stress testing
scenario has not been undertaken. The Group has proven during
2020 its ability to flex its marketing and other costs to mitigate
the impact of falls in revenue driven by COVID-19 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 2023, and a small overdraft
facility with its UK bankers, that expires on 31 December 2022,
the modelling in both the ‘base case’ and ‘downside’ scenarios
shows the maintenance of positive cash balances throughout the
assessment period and, as such, there is no current requirement to
utilise the facilities or intention to secure any additional facilities.
The assumptions used in the ‘base case’ and ‘downside’
scenarios and resulting financial forecasts 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 very low
fixed cost base, and enters the 2022 financial year with a strong
net cash position of $41.6m, enabling it to remain cash positive
even under severe economic stress.
4imprint Group plc Annual Report and Accounts 2021
Confirmation of viability
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 28 December 2024.
Going concern
Based on the assessment outlined in the viability statement
above, the Directors have reasonable expectations that the
Group and Company will have adequate resources to continue
to operate from the date these financial statements were
approved until at least 1 July 2023. Accordingly, they continue
to adopt the going concern basis in preparing the Group’s and
Company’s financial statements.
Non-financial reporting regulations
The table below sets out where stakeholders can find
information in our Strategic Report relating to non-financial
matters, as required by sections 414CA and 414CB of the
Companies Act 2006. The information found in the below pages
form our non-financial statement:
Reporting requirement
Section of the Annual Report
Environmental
matters
Sustainability
Employees
Sustainability
Social matters
Sustainability
Page(s)
24-29
21-23
23
Human rights
Sustainability/Statement
on Corporate Governance
23-24/56
Anti-corruption
and anti-bribery
Sustainability
Business model
Business Model
Non-financial KPIs
Strategic Objectives
24
18-19
12-13
Principal risks
Principal Risks & Uncertainties
36-43
management report
The Strategic Report is considered to form the management
report for the purpose of DTR 4.1.8R.
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4imprint Group plc Annual Report and Accounts 2021
PRINCIPAL RISKS & UNCERTAINTIES
The UK Corporate Governance Code 2018 requires the Board
to carry out a robust assessment of the Group’s principal and
emerging risks. Risk appetite, the risk management process, and
associated mitigating activities are all essential elements of the
Group’s strategic and operational planning processes.
Risk appetite
4imprint’s business model means that it may be affected by a
number of 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 the Group’s risk
management process, although responsibility for reviewing
specific risks and controls is delegated to the Audit Committee.
The Executive Directors and operational management teams are
responsible for the identification and evaluation of risks and the
subsequent implementation of specific risk mitigation activities.
A formal risk review is conducted by the Board at least annually.
During 2021 further progress has been made in developing
the Group’s risk management process, including assessing and
scoring of specific risks, delineation of ‘principal’ versus ‘other’
risks, and implementation of revised risk categories (as follows)
that we consider to be more in line with the development of the
Group in recent years and its strategic priorities. The Business
Risk Management Committee, chaired by the Group Financial
Controller, has driven much of the progress made in 2021. The
lingering effects of the pandemic and some unavoidable internal
resource constraints have limited the Committee’s formal
meetings in the year; our aim is for the Committee to meet
quarterly in 2022.
Categorisation of risks
During 2021 the Business Risk Management Committee has
developed a revised risk categorisation process that has been
reviewed and approved by the Board. The new risk categories
are briefly summarised below:
–
Strategic risks. These are risks often caused by external
events that typically might affect broad economic or market
conditions. Strategic risks will generally be managed through
mitigations undertaken at a strategic level.
– Operational risks. These are risks and uncertainties faced
in the course of conducting normal business activities via
established procedures and systems. Operational risks will
typically be driven by internal events and will be managed
and mitigated through control activities.
– Reputational risks. These are risks that some kind of
negative circumstance could impact the brand reputation
and/or image of the Group or its businesses in the wider
marketplace. Mitigations are often specific controls or
procedures aimed at ensuring compliance with regulations
or expectations.
Environmental risks. This risk category recognises the
obligation of the Group to protect and positively impact the
external environment. Risk management might typically be in
the form of longer-term mitigation projects such as carbon
footprint reduction or product range initiatives.
–
Emerging risks
Business operations are conducted from centralised facilities
in Oshkosh and Manchester, with short reporting lines. As a
result, the Executive Directors are close to day-to-day matters,
facilitating early identification of, and response to, shifting risk
patterns. Emerging risks are a standing agenda item of the
Business Risk Management Committee. Urgent issues arising
will continue to be escalated as appropriate and discussed at
regular Board meetings.
Outlined in the following tables are the current principal risks
and uncertainties that would impact the successful delivery of
the Group’s strategic goals. The list is not exhaustive and other,
as yet unidentified, factors may have an adverse effect.
36
4imprint Group plc Annual Report and Accounts 2021
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. Most recently, the economic downturn
associated with the COVID-19 pandemic had a significant negative effect on demand for our products.
STRATEGIC RELEVANCE
DIRECTION
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 to
a reduction in profitability.
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 economic
climates.
The Group’s balance sheet funding policy provides
operational and financial flexibility to facilitate continued
investment in the business through different economic cycles.
Concerns remain with respect to virus variants
and resulting restrictions in our markets,
however our business model has proved to
be resilient and continues to resonate with
our target customers as demonstrated by the
continued recovery of the business from the
significant negative effects of the COVID-19
pandemic.
Global supply chain issues and international
trade tensions continue to cause volatility in our
North American and UK markets.
Brexit uncertainty remains in the Group’s UK
market, leading to a lack of business confidence.
Recent inflationary pressures could drive up
labour, product and transportation costs,
affecting customer demand for our products.
Unchanged
Markets & competition
RISK AND DESCRIPTION
The promotional products markets in which the business operates are intensely competitive. New or disruptive business models
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
DIRECTION
The competitive landscape to date has been
relatively consistent on the distributor side in
our main markets.
Unchanged
Aggressive competitive activity or a disruptive new model
could result in pressure on prices, margin erosion and loss of
market 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.
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 technology.
Management closely monitors competitive activity in the
marketplace including periodic market research studies.
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4imprint Group plc Annual Report and Accounts 2021
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
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 can 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.
– 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
DIRECTION
Marketing diversification continues via the
successful integration of a brand component to
the marketing portfolio.
The COVID-19 pandemic, in particular the trend
towards ‘work-from-home’ has negatively
impacted response rates for print catalogues.
This has resulted in a successful redeployment of
offline/print budget towards further investment
in brand and online marketing.
The business has significantly reduced the
amount of data it shares, increasingly relying on
first party data.
Unchanged
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.
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 new 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.
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
38
4imprint Group plc Annual Report and Accounts 2021
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
DIRECTION
The COVID-19 pandemic raised the risk of
potential shutdown of one or all of our facilities,
however the risk of a return to ‘lockdown’ type
restrictions appears to be diminishing.
Unchanged
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.
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.
A significant proportion of our office and customer service
staff can work from home, mitigating some risk should offices
become unavailable.
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4imprint Group plc Annual Report and Accounts 2021
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
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
DIRECTION
Inability to fulfil customer orders would lead to lost revenue
and a negative impact on customer acquisition and retention
statistics.
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.
Risk is inherent in increasing supplier
concentration, and the COVID-19 pandemic has
increased this risk.
The supply chain problems seen in the second
half of 2021 have significantly heightened risk in
this area and are still ongoing.
mITIGATION
Increased
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
parcel carriers.
Failure or interruption of information technology
systems and infrastructure
RISK AND DESCRIPTION
The business is highly dependent on the efficient functioning of its IT infrastructure. An interruption or degradation of services at
any 4imprint operational facility would affect critical order processing systems and thereby compromise the ability of the business
to deliver on its customer service proposition.
STRATEGIC RELEVANCE
DIRECTION
The IT platform is mature, and performance has
been efficient and resilient, including through
the COVID-19 pandemic with high levels of staff
working from home.
Unchanged
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.
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.
40
4imprint Group plc Annual Report and Accounts 2021
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 new threats emerging on an almost daily basis.
STRATEGIC RELEVANCE
DIRECTION
The general incidence and publicity around
cyber-crime continues to increase.
Increased
Revenue and profitability are directly related to order flow
and would be adversely affected as a consequence of system
compromise.
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.
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-case
basis.
Third party cyber security consultants are employed as and
when appropriate.
Supply chain compliance & ethics
RISK AND DESCRIPTION
Our business model relies on direct (tier 1) and indirect (tier 2 & 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
DIRECTION
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.
Our supplier compliance programme is
well established.
The COVID-19 pandemic has restricted
opportunities for visits to and audits of both
domestic and overseas supplier locations.
Increased
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.
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4imprint Group plc Annual Report and Accounts 2021
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
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. An example is
data privacy legislation.
STRATEGIC RELEVANCE
DIRECTION
If we or our employees, suppliers and other partners fail to
comply 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 financial
condition.
mITIGATION
Consultation with consultants, subject matter experts,
specialist external legal advisers and Government agencies
as appropriate.
Obligations continue to be complied with
and monitored.
Unchanged
42
4imprint Group plc Annual Report and Accounts 2021
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
DIRECTION
There is an increasing sense of urgency globally,
and as such, the risks in this area will increase
as well.
Increased
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 for these events.
Further, 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 be damaged.
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.
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.
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
DIRECTION
Failure to anticipate accurately and respond to trends
The transition to a low carbon economy is driving
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.
mITIGATION
Our merchandising teams actively collaborate with our
suppliers to continuously curate our range of products to
adapt 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.
changes in consumer preferences towards
sustainable products.
However, most of the products in our broad
range are also sold unbranded in the retail
setting, with the pace of the transition towards
sustainable choices likely to remain quite
manageable.
Unchanged
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4imprint Group plc Annual Report and Accounts 2021
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.
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. 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, monitoring
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 Executive Directors.
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 the issue in question.
The Directors consider the interests of each of our key
stakeholder groups when considering their duties under
s172 and take into account the information gathered through
engagement with these stakeholders when determining the
Group’s strategies and key decisions.
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.
44
Team members
wHAT’S ImPORTANT
Investment in our people is a key driver of our competitive
advantage (see Strategic Objective 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 results-based bonus
– Ability to participate in the Group’s success through bonus
plans and share ownership (ESPP and SAYE plans)
– Wide range of training and development opportunities
–
–
available for team members (see Sustainability on page 22)
The Executive Directors are based at the Oshkosh site and
have regular interaction with team members
Site visits by Chairman and NEDs, usually including an
annual two-day visit and Board meeting in Oshkosh; not
possible in 2021 due to COVID-19 restrictions
DECISIONS, ACTIONS AND OUTCOmES
– Re-affirmed our commitment to a people-led
approach;
– Protection and retention of our team as our
first priority
– No enforced lay-offs
– Benefits package not diluted
– Monitored the continuing impact of the COVID-19
pandemic on the business, prioritising employee
health and safety and compliance with laws
and regulations
Further investment in and development of enhanced
work from home capabilities
–
– Continuous development and cultivation of 4imprint
culture and working environment, including enhanced
articulation of DEI principles
– Return to pay increases in 2021 after pandemic-driven
wage freeze, including re-basing of starting/lower end
of wage scale
– Good participation rates in 2021 US employee share
ownership (ESPP) plan
– Regular input from the NED with responsibility
for championing the interests of team members
(‘Employee Voice’), including review of third party
annual detailed employee survey
Low staff turnover rates; a good result at a very
stressful time for the business
–
4imprint Group plc Annual Report and Accounts 2021
Customers
Suppliers
wHAT’S ImPORTANT
wHAT’S ImPORTANT
Our suppliers are integral to the ‘drop-ship’ pillar of our
business model. Effective supplier partnerships are
fundamental to providing 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 23 and 24.
ENGAGEmENT
– Regular meetings, information sharing and site visits
(where possible given pandemic-related restrictions)
Supplier agreements and expectation setting
4imprint ‘Supply Chain Code of Conduct’
Visits, in conjunction with suppliers, to offshore
factories where the base product is manufactured;
programme further curtailed in 2021 due to pandemic
–
–
–
– Cooperation with suppliers in marketing campaigns
DECISIONS, ACTIONS AND OUTCOmES
–
In 2021 we worked closely with our suppliers to
address the extensive and disruptive supply chain
issues that came to the fore in the second half of
the year
– Renewed focus on product range development
in the context of a rapidly changing product mix,
including some further development of exclusive
and ‘own-brand’ products
– Retained our commitment to paying all suppliers
–
promptly to terms
4imprint’s Social & Ethical Principles Statement
was updated and reissued in 2021
– Annual review of Modern Slavery Statement
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
– Guiding each customer to their ‘perfect product’;
product quality, safety, price and range development
– 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 of personal data
DECISIONS, ACTIONS AND OUTCOmES
–
Successful re-calibration of the marketing mix
including reallocation of funds away from print
catalogues and towards brand (primarily TV) to
resonate with shifts in customer behaviour and
working patterns
– Ongoing development of a curated, easy to access
range of products allowing customers to make
informed decisions over what they purchase
– Renewed focus on service quality; this was particularly
important in the second half of 2021 given the
disruption to the fulfilment and delivery of customer
orders caused by supply chain issues
– Monitoring of product trends and developments;
particularly important in the market conditions created
by the COVID-19 pandemic
– Continued focus on ethical sourcing and product
–
safety/compliance
Launch of better choices™ initiative to highlight
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 page 29)
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4imprint Group plc Annual Report and Accounts 2021
STAKEHOLDER ENGAGEMENT CONTINUED
Community
Pension Plan Trustee
and members
wHAT’S ImPORTANT
wHAT’S ImPORTANT
Most of our team members live locally to their place of
work, 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 page 23.
ENGAGEmENT
– Paid time off work for our team members to
–
volunteer for a local charity or non-profit organisation
Support and sponsor 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 1,200 ‘one by one®’
charitable grants made in 2021, despite the
restrictions presented by COVID-19
– Use the power of promotional products to spread
–
the message
4imprint’s profile and reputation in the local
community enhanced, improving our ability to attract
and retain high quality, locally-based team members
in very tight labour markets
The Group sponsors a legacy defined benefit pension
scheme (the “Plan”). We are fully committed to
satisfying our pension obligations in full, with the ultimate
aim of full funding and complete de-risking of the
remaining liability.
ENGAGEmENT
– Regular interaction with the Trustee of the Plan
– Regular advice from our own pension consultants
– Periodic evaluation of Plan funding
DECISIONS, ACTIONS AND OUTCOmES
– Board updates on Plan funding level and pension
matters generally
– Contributions paid into the Plan at the agreed level
–
throughout 2021
Significantly improved funding level for the Plan as a
result of regular contributions, funding of transfers
out and ‘lump sum’ of £7.5m ($9.1m) paid into the
Plan in May 2020, all as agreed with the Trustee
– Well-articulated eventual ‘endgame’ for the Plan,
leading to final de-risking phase with agreed target
of full funding on a buyout basis by mid 2024
46
4imprint Group plc Annual Report and Accounts 2021
The Strategic Report was
approved by the Board on
15 March 2022.
KEVIN LYONS-TARR
CHIEF EXECUTIVE OFFICER
DAVID SEEKINGS
CHIEF FINANCIAL OFFICER
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
– Meetings and calls throughout the year with existing
and potential investors, including ESG/Compliance
departments
– Meetings with Chairman, NEDs and Company
Secretary as required
DECISIONS, ACTIONS AND OUTCOmES
–
Frequent communication and active governance
at Board level, including timely communications
to the market of the effects of the pandemic and
associated supply chain difficulties on the business,
and mitigating actions taken addressing order
intake, operational adjustments and the Group’s
liquidity position
–
–
– Detailed Board review and re-affirmation of growth
strategy and evolution of the marketing portfolio
Involvement of Company Secretary and Chairman
in ESG discussions with Shareholders and
compliance agencies
Shareholder register and investor relations activity
regularly reviewed by the Board
Emphasis on culture, ethics and sustainability in
Board discussions
Extensive review of Remuneration Policy and
Shareholder consultations in preparation for
requesting Shareholder approval at the AGM in
May 2021
–
–
– Re-introduction of Interim and Final dividend
payments
– Recruitment of two additional NEDs with
complementary skills to existing Board members
and addressing diversity guidelines
47
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4imprint Group plc Annual Report & Accounts 2021
CORPORATE GOVERNANCE REPORT
Building a
sustainable
business
reflecting our
identity & values
Chairman’s introduction
On behalf of the
Board of 4imprint
Group plc, I am
pleased to introduce
the 2021 Corporate
Governance Report.
48
4imprint Group plc Annual Report & Accounts 2021
The Board remains committed to strong and appropriate
corporate governance, and supports the principles and
provisions contained in the UK Corporate Governance
Code 2018 (the “Code”). I am pleased to confirm that
in the 2021 financial year 4imprint has operated in full
compliance with the Code.
On behalf of the Board, I would like to
congratulate the Group Environmental
Committee on achieving its stated
CarbonNeutral® goal one year early, in
addition to making substantial progress
on other important initiatives. More detail
on our progress can be found in the
Sustainability section on pages 20 to 29
of the Strategic Review.
I am extremely proud of the Board’s
work in 2021 in supporting the executive
and leadership team in managing the
business’s recovery from the pandemic,
whilst at the same time, maintaining
high standards of corporate governance.
I would like to thank my fellow Directors
for their continued commitment and
contribution to 4imprint.
PAUL MOODY
CHAIRMAN
15 March 2022
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 2021 we welcomed three new
Non-Executive Directors to the Board
of 4imprint. In March, we appointed
John Gibney, who succeeded John
Warren as Chair of the Audit Committee
after John’s retirement at the AGM
in May. In September, with a view to
strengthening the depth and diversity
of our Board, we appointed Lindsay
Beardsell and Jaz Rabadia. Lindsay
brings extensive legal, governance and
commercial experience and Jaz has
an impressive background in energy
management and sustainability. We
look forward to benefitting from
their contribution to the Board in the
years ahead.
In 2021 the Board has devoted
considerable time to discussion of
the Group’s ESG agenda. In particular,
the Directors focused on supporting
management in the development
and execution of several exciting and
deliverable sustainability initiatives.
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49
4imprint Group plc Annual Report & Accounts 2021
BOARD OF DIRECTORS
Committees:
n Audit Committee
n Nomination Committee
n Remuneration Committee
n Chair
C
PAUL MOODY
NON-eXeCUtIve CHAIRMAN
KevIN LYONS-tARR
CHIeF eXeCUtIve OFFICeR
Appointed as Non-executive Director in February 2016 and
became 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 eight 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.
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
in 2004 and has led its substantial growth since then.
DAvID SeeKINGS
CHIeF FINANCIAL OFFICeR
JOHN GIBNeY n n n
INDePeNDeNt NON-eXeCUtIve DIReCtOR
C
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.
Appointed as a Non-executive Director in March 2021.
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.
50
4imprint Group plc Annual Report & Accounts 2021
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CHARLeS BRADY n n n
SeNIOR INDePeNDeNt NON-eXeCUtIve DIReCtOR
C
CHRIStINA (tINA) SOUtHALL n n n
C
INDePeNDeNt NON-eXeCUtIve DIReCtOR
Appointed as Non-Executive Director in June 2015.
Charles is a solicitor and was the founder and Managing
Director of Central Law Training Limited which, during his
leadership between 1987 and 2002, became the largest
provider of post-qualification legal training in the UK.
Wilmington plc, a company listed on the London Stock
Exchange, acquired Central Law Training in 1999. Charles
remained with the business becoming Chief Executive of
Wilmington plc in 2002, a post which he held until 2014.
Charles has also served as a Non-Executive Director of
both Hatton Blue Limited, a start-up IT company, and the
PPA (Professional Publishers Association).
Appointed as Non-Executive Director in May 2019.
Tina is the Executive Vice President – People for Bally
Interactive which is 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.
LINDSAY BeARDSeLL
INDePeNDeNt NON-eXeCUtIve DIReCtOR
JAZ RABADIA
INDePeNDeNt NON-eXeCUtIve DIReCtOR
Appointed as a Non-executive Director in September 2021.
Lindsay is currently Executive Vice President and 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.
Appointed as a Non-executive Director in September 2021.
Jaz is a Chartered Energy Manager with over 14 years
of experience in energy, recycling and sustainability
roles. She is currently Head of Responsible Business and
Sustainability at Just Eat Holding Ltd, 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
STEM sectors.
51
4imprint Group plc Annual Report & Accounts 2021
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 2018 (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 an explanation.
For the year ended 1 January 2022, the Board considers that the
Company has complied with the provisions of the Code.
The 2018 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/investors/
shareholder-information/agm-company-documents/.
The Chairman is responsible for leadership of the Board and
ensuring its effectiveness. The Chairman promotes a culture of
openness and debate and ensures that each Board member is
given opportunity to contribute their views to each topic under
discussion.
Board composition and structure
As at the date of this report, the Board comprised eight
members, namely the Independent Non-Executive Chairman,
five 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 50 and 51.
On 8 March 2021 the Board appointed John Gibney as a Non-
Executive Director. John replaced John Warren as Chair of the
Audit Committee following his retirement from the Board at
the close of the 2021 AGM. On 1 September 2021 the Board
appointed Lindsay Beardsell and Jaz Rabadia as Non-Executive
Directors. Details of the recruitment process are included in the
Nomination Committee Report on pages 57 to 59.
The Board is satisfied that there is a 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
2019 for Tina Southall, 8 March 2021 for John Gibney, 11 June
2021 for Charles Brady, 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 re-
considered and approved by the Board at its meeting on
14 December 2021.
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 Interim and Final results announcements and the
Annual Report and 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.
52
4imprint Group plc Annual Report & Accounts 2021
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. Each
Committee’s roles and responsibilities are set out in formal
terms of reference which were re-considered and approved by
the Board at its meeting on 14 December 2021. Reports from
each of these Committees are provided on pages 57 to 77.
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.
As a consequence of the travel restrictions in place due to the
COVID-19 pandemic, the UK-based Non-Executive Directors
were unable to visit the 4imprint site in Oshkosh, Wisconsin
during 2021. Instead, the annual strategy review day in
November was held online and included presentations from and
discussions with members of the Senior Management Team.
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.
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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 57
to 77.
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 pages 24 and 25.
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 order to address the ongoing challenges arising from the
effects of the COVID-19 pandemic, additional Board meetings
were held during 2021. Board and Committee meetings were
primarily held online during 2021, with the September Board
meeting being a hybrid meeting with the UK-based Directors
meeting in person and the US-based Directors attending virtually.
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:
Board
meetings
Audit
Committee
meetings
Nomination
Committee
meetings
Remuneration
Committee
meetings(i)
Number of
meetings
in 2021
P. Moody
K. Lyons-Tarr
D. Seekings
L. Beardsell (ii)
C. Brady
J. Gibney (iii)
J. Rabadia (ii)
C. Southall
J. Warren (iv)
9
9
9
9
2
9
7
3
9
4
2
2*
2*
2*
0
2
2**
0
2
1
5
5*
5*
5*
1*
5
3**
1*
5
3
3
3*
3*
3*
1*
3
1
1*
3
2
* By invitation.
** One meeting 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 joined the Board on 1 September 2021.
(iii) John Gibney joined the Board on 8 March 2021.
(iv) John Warren retired from the Board on 18 May 2021.
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.
53
4imprint Group plc Annual Report & Accounts 2021
STATEMENT ON CORPORATE GOVERNANCE CONTINUED
Board activities in 2021
Strategy
– Consideration of the Group’s strategy and associated
planning in the context of ongoing challenges presented
by the COVID-19 pandemic
– Consideration and approval of proposed responses to
the pandemic, including continued re-shaping of the
marketing portfolio
– Consideration of employee matters including
prioritisation of employee health and wellbeing
throughout the pandemic and the development of hybrid
working arrangements
– Consideration of environmental initiatives to support
CarbonNeutral® goal and review and approval of solar
panel project to commence in 2022
Governance
– Recruitment and induction of three new Non-Executive
Directors, including one to act as Chair of the Audit
Committee
Finalisation of the Remuneration Policy for approval at
the 2021 AGM
–
– Discussion of company culture and employee
engagement in light of continuing pandemic and evolving
working from home arrangements, including reports from
the Employee-Voice NED
– Oversight of Group environmental initiatives
– Review of Group’s key corporate policies and procedures,
matters reserved for the Board and Terms of Reference
of Committees
Internal Board Effectiveness Review
–
Finance
– Review and approval of full year and half year results
– Review and approval of 2022 budget and three-year plan
including scenario planning
– Regular market updates on trading throughout COVID-19
pandemic and supply chain challenges in H2 2021
– Consideration of dividend policy throughout 2021
including re-establishment of dividend payments through
the 2021 interim dividend
Risk management
– Ongoing consideration and discussion throughout 2021
on impact of and response to COVID-19 pandemic
– Discussion of supply chain challenges and actions to
address them
– Review of principal risks and uncertainties
– Ongoing development of Group risk matrix and internal
control procedures
Initial planning to address requirements of BEIS proposals
–
Throughout the period ending 1 January 2022 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 longer-term 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 36 to 43.
The Board has assessed the future prospects of the Group in accordance with provision 31 of the Code. Based on the results of this
analysis, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they
fall due over the three-year period of their assessment. Details of the assessment performed by the Board, including an assessment
of those risks most likely to impact the Group’s future prospects and viability, have been set out on pages 34 and 35.
Board Effectiveness Review
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 2019 a Board Effectiveness Review was undertaken by independent external consultants
Odgers Berndtson. In 2020 an internal Board Effectiveness Review was carried out by the Chairman and Company Secretary and
during 2021, the Board has addressed the feedback from the review as set out as follows:
Feedback from 2020 Board
Effectiveness Review
2021 Activities
Board interaction with the
Senior Management team
Ongoing travel restrictions imposed due to the COVID-19 pandemic have made
interaction between the Senior Management Team in the US and the UK-based NEDs
more challenging. During 2021 online Board meetings have included presentations
from members of the Senior Management Team; the Group Environmental Committee;
and the Business Risk Management Committee.
Tina Southall, the Employee-Voice NED, continues to have regular update calls with
members of the US Human Resources Team and provides feedback to the Board.
Board communication
with stakeholders
Progress has been made on this during 2021, despite the communication challenges
arising from the COVID-19 pandemic (see s172 statement on pages 44 to 47).
54
4imprint Group plc Annual Report & Accounts 2021
Feedback from 2020 Board
Effectiveness Review
2021 Activities
Succession planning
John Gibney was appointed as a Non-Executive Director on 8 March 2021 and became
Chair of the Audit Committee in May 2021 following the retirement of John Warren.
environmental initiatives
Jaz Rabadia and Lindsay Beardsell were appointed as Non-Executive Directors on
1 September 2021. The induction of the new NEDs has been a key area of focus during
H2 2021 and will continue in 2022.
The Nomination Committee has reviewed the succession plan for the Executive
Directors. This has been developed into a plan with aims to address the training and
experience gaps identified amongst the potential internal candidates.
Following the Board approval of the Environmental Framework in October 2020,
considerable work has been undertaken during 2021 on environmental initiatives,
primarily focussing on our stated CarbonNeutral® goal and our better choices™ initiative.
For more information see pages 25 and 29.
During 2021, the internal Board Effectiveness Review was repeated. 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 questionnaire was supplemented by one-
to-one discussions between the Chairman and each of the Directors. The output of the evaluation was presented in a report to the
Board at its December 2021 meeting and the Directors discussed the points raised by the review. Overall, the feedback from the
evaluation was very positive. The main areas of focus identified for 2022 are set out below.
topic
Feedback
Succession planning and
Senior Management team
engagement
Considerable progress was made during 2021 in building the succession plan for the
Executive Directors. 2022 will bring a sharper focus by adding appropriate resource
to release time for potential internal candidates to build their broader Company
knowledge and address knowledge/skill gaps.
eSG focus and initiatives
BeIS planning
Post-pandemic recovery
Additionally, the NED group will increase their engagement with members of the Senior
Management Team to continue to enhance their view about the talent strength and
depth in the Group. Although the pandemic and the associated travel restrictions of
the last two years have made this more challenging, progress has been made with
members of senior management participating in meetings virtually.
Although still at an early stage, during 2021 the Group made great progress in relation
to developing and executing a sustainability strategy, initially centred on achieving
Carbon Neutrality with respect to aspects of the business operations directly under
our control, and initiatives to further develop our offering of products with verified
sustainability characteristics. 2022 will see continued emphasis on our work to reduce
our environmental impact. In addition, we will further expand our efforts to increase
the positive impact that we have on our communities and continue to build the already
very strong culture and values of our Group.
The Board members will ensure that they constructively monitor, contribute to
and support the development of systems and reporting mechanisms that will be
necessary to address the governance responsibilities likely to be required under
the BEIS proposals.
Throughout 2021, Board members were closely and regularly engaged in supporting
the Executive Team to navigate through the broad implications of the pandemic. The
Board will continue to bring challenge, support and advice to the Executive Team as a
return to a more stable market occurs, recognising that many financial, operational and
cultural changes will potentially have long-term effects.
The Board plans to conduct an external performance review during 2022.
In November 2021 the Senior Independent Director undertook an assessment of the performance of the Chairman throughout
2021. This assessment took the form of individual interviews between the Senior Independent Director and each Board member,
excluding the Chairman, and the feedback from the assessment was presented in a report to the Board and discussed at its
December 2021 meeting. The feedback on the Chairman was entirely positive and the Board members were fully satisfied with his
performance during 2021.
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4imprint Group plc Annual Report & Accounts 2021
STATEMENT ON CORPORATE GOVERNANCE CONTINUED
Corporate Governance Policies
The following Corporate Governance Policies were reconsidered and approved by the Board at a meeting on 14 December 2021.
– Anti-bribery, Financial Crime and Sanctions Policy.
– Disclosure Policy.
– Dealing Policy and Code.
– Whistleblowing Policy.
In addition, the following Company Statements were reconsidered and approved by the Board at a meeting on 19 January 2022.
Copies of these statements can be found on our IR website at http://investors.4imprint.com
–
–
– Diversity, Equity and Inclusion Principles Statement.
– Modern Slavery Statement in respect of the financial year ended 1 January 2022.
Environmental Principles Statement.
Social & Ethical Principles Statement.
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.
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 44 to 47 sets out how the Board has
engaged with these different stakeholder groups.
56
4imprint Group plc Annual Report & Accounts 2021
NOMINATION COMMITTEE REPORT
2021 HIGHLIGHtS
Recruitment and induction of a new Independent Non-
Executive Director to be Chair of the Audit Committee
following the retirement of John Warren.
Recruitment of two additional Independent Non-Executive
Directors to further strengthen the skills and experience of
the Board and improve diversity.
Review of succession considerations and options for the
Executive Directors and Senior Management Team.
Development of Diversity, Equity and Inclusion Policy
and framework.
2022 PRIORItIeS
Continuing the induction process for the new Non-Executive
Directors including engagement with members of the Senior
Management Team.
A visit to the Oshkosh site during 2022 is a priority if travel
restrictions allow.
Implementation of actions for succession planning for the
Executive Directors and Senior Management Team.
Further development of specific Diversity, Equity and
Inclusion initiatives.
Members and attendance
Tina Southall (Chair from 18 May 2021)
Charles Brady (Chair until 18 May 2021)
John Warren (member to 18 May 2021)
John Gibney (member from 18 May 2021)
* One by invitation
5/5
5/5
3/5
3/5*
Chair’s overview
As Chair of the Nomination Committee, I am pleased to present
my report for 2021. The focus of the Committee in 2021 has
been on strengthening the Board through the recruitment
of three new Independent Non-Executive Directors and
on the further development of the succession plan for the
Executive Directors.
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4imprint Group plc Annual Report & Accounts 2021
NOMINATION COMMITTEE REPORT CONTINUED
– Reviewing and discussing with the Executive Directors a
specific plan for talent management and succession planning
to focus on the development of potential internal candidates
for vacancies that arise. 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.
– Development of the Company’s Diversity, Equity and
Inclusion strategy with a view to developing specific initiatives
to support this (see pages 22 and 23 for details).
– Participation in the Internal Board Effectiveness Review
undertaken in November 2021 (see pages 54 and 55
for details).
New Board appointments in 2021
The retirement of John Warren from the Board of Directors and
as Chair of the Audit Committee with effect from the 2021 AGM
after nine years of service, prompted a number of changes to
the composition of the Board and its Committees.
Following an external recruitment process, John Gibney joined
the Board of Directors on 8 March 2021 as an Independent Non-
Executive Director and to replace John Warren as Chair of the
Audit Committee. The Committee recommended to the Board,
and the Board accepted the following recommendations, which
became effective from the close of the AGM on 18 May 2021:
John Gibney was appointed Chair of the Audit Committee.
–
Tina Southall was appointed Chair of the Nomination
–
Committee, replacing Charles Brady who stood down from
this position.
– Charles Brady was appointed Senior Independent Director,
replacing John Warren who previously held this position.
Charles Brady remains as Chair of the Remuneration
Committee.
In order to further strengthen the skills, competencies and
relevant experience of the Board and to increase Board
diversity, in 2021 the Company undertook a further search
process to recruit an additional Independent Non-Executive
Director. After conducting interviews, and following discussion by
the Committee, the Committee recommended to the Board the
appointment of two new Independent Non-Executive Directors,
each with very different skills and experience to bring to the
role. As a consequence, Lindsay Beardsell and Jaz Rabadia were
appointed to the Board with effect from 1 September 2021.
Lindsay brings a breadth of legal, governance and commercial
experience to the Board and Jaz brings expertise in the areas
of energy management and sustainability. The Directors’
biographies are included on pages 50 and 51.
Induction process
During the year the Committee has overseen the induction
process for the three new Non-Executive Directors. This
included meetings and discussions with other Board members
and the Company Secretary; introductory meetings with
members of the Senior Management Team; meetings with the
external auditor and other professional advisers; training from
external advisers; and ongoing mentorship from the Chairman.
A visit to the Oshkosh site and further face-to-face meetings
with members of the Senior Management Team and external
advisers are planned for 2022.
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 14 December 2021. These terms of
reference are available for inspection on the Company’s website.
Composition of the Nomination Committee
I have chaired the Nomination Committee since 18 May 2021,
taking over from Charles Brady, and I am an Independent
Non-Executive Director. The other members of the Committee
during the period were John Warren, until his retirement from
the Board of Directors on 18 May 2021; Charles Brady, the
Senior Independent Non-Executive Director; and, from 18 May
2021, John Gibney, an Independent Non-Executive Director.
Paul Moody, the Non-Executive Chairman of the Company, is
usually invited to attend formal meetings of the Committee, as
are the two new Non-Executive Directors, Lindsay Beardsell and
Jaz Rabadia. Executive Directors may also be invited to attend
meetings of the Nomination Committee. The Company Secretary
also attends the meetings.
Meetings of the Nomination Committee
The Nomination Committee meets as frequently as is required
to fulfil its duties. During the period ended 1 January 2022 there
were five meetings of the Nomination Committee, three more
than usual, reflecting the Committee’s role in the recruitment
of three new Non-Executive Directors in the year. Details on
attendance of meetings of the Nomination Committee is set out
in the Statement on Corporate Governance, found at page 53.
–
Main activities of the Nomination Committee during
the period ended 1 January 2022
The Nomination Committee’s principal activities during the
year included:
– Recruiting a new Independent Non-Executive Director to
be Chair of the Audit Committee following the retirement
of John Warren in May 2021.
Scoping and initiation of a recruitment exercise to identify
candidates for an additional Non-Executive Director role
to further strengthen the skills, experience and diversity
of the Board.
Interviewing and considering potential candidates for this
role and making recommendations to the Board, culminating
in the appointment of two further Non-Executive Directors.
Implementing an induction process for new Non-Executive
Directors.
–
–
– Reviewing the membership of the Board’s committees and
recommending changes to the Board.
58
external search consultancy
Odgers Berndtson, external recruitment consultants, were
engaged to conduct the search process for the recruitment of
an Independent Non-Executive Director to join the Board and
Chair the Audit Committee, and for the search process that led
to the recruitment of two additional Independent Non-Executive
Directors in September 2021.
Odgers Berndtson was also engaged to conduct the recruitment
of Tina Southall in May 2019 and a Board Effectiveness Review
in October 2019 but otherwise has no connection with the
Company or any individual Directors.
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 37.5% female (three women out of eight Board
members). In November 2021 the Company took part in the
FTSE Women Leaders Review (formerly the Hampton-Alexander
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 2021, 52.2%
of the Senior Management Team including direct reports were
female (54.6% based on data at 31 October 2020 and 42.9%
based on data at 30 June 2019).
In November 2021, 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 following the appointment of Jaz Rabadia as an
Independent Non-Executive Director, the Company has met the
recommendation of the Parker Review that by 2024, FTSE 250
companies should have at least one director who identifies as
a Director of Colour.
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.
4imprint Group plc Annual Report & Accounts 2021
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 50 and
51. Each Director named therein will be seeking re-election at
the 2022 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, Charles Brady, 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 Diversity, Equity and Inclusion Principles.
tINA SOUtHALL
CHAIR OF tHe NOMINAtION COMMIttee
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
AUDIT COMMITTEE REPORT
2021 HIGHLIGHtS
Reviewing key judgments and estimates taken by
management in the preparation of the financial statements.
Overseeing the management and the satisfactory
conclusion of the year-end audit process in the light of the
challenges presented by the pandemic.
Overseeing the development and implementation of the
enhanced risk management and internal control framework.
Ensuring appropriate consideration of the ongoing impact
of the COVID-19 pandemic and supply chain challenges in
the disclosures throughout the Annual Report and Accounts
and in the preparation of the financial statements.
Ensuring that the Group’s internal controls continue to
operate effectively.
Review of the disclosures made for the first time in
the Annual Report in relation to the TCFD reporting
requirements.
Consideration of environmental risks and related disclosure
across the Annual Report and Accounts, including the
potential impact on viability, going concern, and the
financial statements.
2022 PRIORItIeS
Development and documentation of the internal control
framework in preparation for the potential introduction of
the BEIS proposals.
Further embedding the new risk management and
internal control framework and consideration of principal
risks identified.
Review of cyber risk, mitigations and effectiveness
of controls.
Members and attendance
John Warren (Chair, retired 18 May 2021)
John Gibney (Chair from 18 May 2021)
Charles Brady
Tina Southall
* One by invitation
1/2
2/2*
2/2
2/2
Chair’s overview
I am pleased to present my report for 2021, my first as Chair
of the Audit Committee. The focus of the Committee in 2021
has continued to be on the impact of the pandemic on the
Group’s results, risk and controls, the audit process and
ensuring that our external reporting remains fair, balanced and
understandable. In addition, the Committee has continued its
oversight of the implementation and development of the risk
management and internal control framework.
Responsibilities of the Audit Committee
The Audit Committee is responsible for maintaining an
appropriate relationship with the Group’s external auditor,
monitoring the audit process and for reviewing the Group’s
internal financial controls and risk management. It assists the
Board in seeking to ensure the integrity of the financial and
non-financial information supplied to Shareholders and that
such information presents a fair, balanced and understandable
assessment of the Group’s performance and position.
The Audit Committee has terms of reference which were
considered and approved by the Board of the Company at its
meeting on 14 December 2021. These terms of reference are
available for inspection on the Company’s website.
The Board considers that the Audit Committee members have
an understanding of the following areas:
–
The principles of, and developments in, financial reporting
including the applicable accounting standards and
statements of recommended practice.
Key aspects of the Group’s operations including corporate
policies and the Group’s internal control environment.
–
– Matters which may influence the presentation of the
financial statements.
The principles of, and developments in, company law,
sector-specific laws and other relevant corporate legislation.
The role of internal and external auditing and
risk management.
The regulatory framework for the Group’s businesses.
–
–
–
The Committee reviews the effectiveness, objectivity and
independence of the external auditor and also considers the
scope of their work and fees paid for audit and non-audit
services.
60
Composition of the Audit Committee
I am an Independent Non-Executive Director and I have chaired
the Audit Committee since 18 May 2021 following the retirement
of the previous Audit Committee Chair, John Warren. I am a
Chartered Accountant and was Chief Financial Officer of Britvic
plc for 17 years. The Board is of the view that I have recent
and relevant financial knowledge and experience derived in
particular from recent roles as Non-Executive Director and Chair
of the Audit Committee at PureCircle PLC and Dairy Crest PLC.
The other members of the Committee during the period were
Charles Brady and Tina Southall, both Independent Non-Executive
Directors. The Company Secretary attends meetings of the Audit
Committee and the Chairman, other Non-Executive Directors and
the Chief Financial Officer are normally invited to attend meetings
of the Audit Committee as are, from time to time, the Chief
Executive Officer and the Group Financial Controller. The external
audit partner also attends meetings that consider the auditor’s
planning report, the half year results announcement, full year
results announcement and Annual Report and Accounts.
How the Audit Committee discharges
its responsibilities
The Committee has unrestricted access to Company documents
and information, as well as to employees of the Company and
the external auditor. Members of the Committee may, in pursuit
of their duties, take independent professional advice on any
matter, at the Company’s expense. The Audit Committee Chair
reports the outcome of Audit Committee meetings to the Board.
The Audit Committee meets at least twice each year and has
an agenda linked to events in the Group’s financial calendar.
The Audit Committee met twice during 2021.
In order to fulfil its terms of reference, the Audit Committee
receives and reviews presentations and reports from the
Group’s senior management and the external auditor.
Main activities of the Committee in regard to the
period ended 1 January 2022
In regard to the period ended 1 January 2022, the Audit
Committee’s business has included the following items:
– Consideration and approval of half year results
announcement.
– Consideration and approval of full year results
announcement and the Annual Report and Accounts.
– Principal judgmental accounting matters affecting the Group
based on reports from both the Group’s management and
the external auditor, in particular the key judgments and
estimation uncertainties relating to the continuing impact
of COVID-19, associated disruption to the supply chain and
impact of environmental risks on viability, going concern and
the financial statements.
– Review of external audit.
–
Interaction with the Financial Reporting Council following
their review of the 2020 Annual Report and Accounts.
Input into the risk management and internal control
framework, including the consideration of current and
emerging risks in relation to the environment.
–
– Consideration of the internal controls within the Group.
– Consideration and approval of risk assessments relating to
the Group’s businesses.
– Review of the Annual Report and Accounts to ensure
that, taken as a whole, the document is fair, balanced and
understandable.
– Consideration and discussion of the BEIS Corporate
Governance Proposals.
4imprint Group plc Annual Report & Accounts 2021
Annual Report and Accounts and
results announcements
During the period, the Audit Committee formally reviewed draft
half and full year results announcements and the Annual Report
and Accounts. These reviews considered:
–
The accounting principles, policies and practices adopted
in the Group’s financial statements and proposed changes
to them.
Significant accounting issues and areas of judgment
and complexity.
The integrity of the financial and non-financial information.
–
–
The Committee was satisfied with management’s presentation
of the 2021 half and full year results announcements and
the Annual Report and Accounts for the period ended
1 January 2022.
The external auditor confirmed to the Committee that they were
not aware of any material misstatements during the course of
their audit.
After reviewing the presentation from management and
following discussions with the external auditor, the Committee is
satisfied 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 and Accounts taken as a whole are fair,
balanced and understandable and provide the information
necessary for Shareholders to assess the Group’s position
and performance, business model and strategy and should
be recommended to the Board.
–
–
In arriving at the conclusion that the Annual Report and
Accounts were fair, balanced and understandable the
Committee considered:
– Any feedback provided by Shareholders on the Group’s
2020 Annual Report and Accounts and trading updates, and
information received by the Board throughout the period.
Feedback from the FRC following their review of the 2020
Annual Report and Accounts.
–
– Climate-related disclosures, including those in relation to the
TCFD reporting requirements.
The processes underpinning the compilation of the
Annual Report and Accounts and the Group’s reporting
governance framework.
The reviews and findings of the Group’s external auditor.
–
–
As necessary, the Audit Committee holds private meetings with
the external auditor to review key issues within their spheres of
interest and responsibility.
Financial reporting and significant
financial judgments
The Committee assesses whether suitable accounting policies
have been adopted and whether management has made
appropriate estimates and judgments. Where necessary the
Committee discusses accounting policies, judgments and
estimates with management.
The Committee also reviews reports by the external auditor on
the full year results which highlight any issues arising from the
work undertaken in respect of the year-end audit.
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4imprint Group plc Annual Report & Accounts 2021
AUDIT COMMITTEE REPORT CONTINUED
Specific areas of audit and accounting estimates reviewed by
the Committee were:
is the intention of the Committee that the Company tender the
external audit at least every ten years.
Impact of COvID-19
The impact of the COVID-19 pandemic has required careful
consideration in the preparation of the financial statements.
The Committee has reviewed the material assumptions in the
forecast financial performance and cash flows of the Group
that underpin management estimates and critical accounting
judgments in relation to going concern, viability, adequacy of
provisions and potential impairments, and is satisfied that they
are appropriate.
Supplier rebates
As in previous years, the businesses accrued rebates due from
key suppliers based on agreed fixed rates relating to the volumes
of goods purchased in a calendar year. The Committee does
not consider the Group’s rebates to be highly complex as: they
are volume-related; agreement periods are coterminous with
the Group’s accounting period; there are written agreements in
place with suppliers; and historically rebates have been collected.
However, FRC guidance has highlighted this as an area of focus
and the rebates are material to the results for the period.
The Committee has discussed, with management and the
external auditor, any estimates made in accruing supplier
rebates and the collectability of these amounts. The Committee
is satisfied that the amounts accrued are appropriate and
are recoverable.
expected credit loss provision on unbilled
accrued revenue
Supply chain issues have led to a significantly higher backlog of
orders at the year-end. It is common for a customer order to
include several different product lines. Individual order lines are
separately priced, have separately agreed delivery dates, and are
capable of being used or enjoyed by the customer on their own,
separately from any other order lines included in the overall
customer order. The Group, therefore, considers each order line
to constitute a separate performance obligation. However, it is
the policy not to invoice a customer until all items on the order
have been delivered.
As a result of the above, there was a much higher than usual
revenue accrual at year-end of $28m (2020: $8m). Management
have made assumptions as to the level of expected credit loss
provision required, based upon knowledge of the customer,
terms of payment and ageing of the accrual.
The Committee has discussed, with management and the external
auditor, any estimates made in calculating the provision. The
Committee is satisfied that the amounts provided are appropriate.
external audit
The Audit Committee is responsible for the development,
implementation and monitoring of the Group’s policy on
external audit, overseeing relations with the external auditor
and making recommendations to the Board on appointment or
reappointment of the external auditor.
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
and Accounts. Following this process Ernst & Young LLP was
appointed as the Group’s external auditor at the 2019 AGM for
the financial year commencing 30 December 2018. Chris Voogd
has been the partner in charge of the audit since that date. It
62
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 objectivity
and independence 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 objectivity and independence. This process
includes discussion with the audit partner at Ernst & Young LLP.
The matter is then referred to the Audit Committee for approval,
prior to commissioning.
Details of fees paid to the auditor in respect of audit services are
shown in note 2 to the consolidated financial statements.
To fulfil its responsibility regarding the independence of the
existing external auditor, the Audit 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.
–
To assess the effectiveness of the external auditor, the Audit
Committee reviewed:
–
The relevant skills and experience of the audit partner and
team and their knowledge of the business.
–
– A review of the auditor’s planning report detailing scope of
the audit, materiality, identification of areas of audit risk,
audit team members and audit timelines.
The engagement with senior management in planning
the audit.
Execution of the audit plan.
Formal reports presented to the Audit Committee, prior to
meetings, by senior management and the auditors about the
audit process.
–
–
–
–
–
To fulfil its responsibility for oversight of the external audit
process, the Audit Committee reviewed:
–
The terms, areas of responsibility, associated duties and
scope of the audit as set out in the external auditor’s
engagement letter for the forthcoming year.
The external auditor’s overall work plan for the
forthcoming year.
The external auditor’s fee proposal.
The major issues that arose during the course of the audit
and their resolution.
Key accounting and audit judgments.
The levels of errors identified during the audit.
–
–
– Recommendations made by the external auditor in their
management letters and the adequacy of management’s
response.
Based upon its reviews, the Committee has recommended
the reappointment of Ernst & Young LLP, as external auditor,
to the Board.
4imprint Group plc Annual Report & Accounts 2021
Interaction with the Financial Reporting Council
During the year the FRC conducted a review of the Company’s
2020 Annual Report and Accounts, which resulted in a request
for further information about the classification of dividends
received in the Company cash flow statement and tax on
defined benefit pension contributions. In addition, the FRC
provided some observations on a small number of other
areas to take into account when considering improvements in
future reporting.
The members of the Audit Committee have reviewed all
correspondence between the Company and the FRC, and the
points raised have been discussed with both the Board and
senior management. The changes made to the 2021 Annual
Report and Accounts in response to the FRC correspondence
have been approved by the Audit Committee. The Chair of the
Audit Committee has been closely involved at all stages.
In relation to the Company cash flow statement, the Company
has acknowledged that dividends received from subsidiary
undertakings have previously been incorrectly classified as a
financing activity and, as agreed with the FRC, a restatement has
been made in the Company financial statements to reclassify
these as an investing activity (page 125). This had no impact on
the cash position of the Company or Group.
On the tax on defined benefit pension contributions, the
Company agreed to state its treatment more clearly in the
related accounting policy note and reconsider the allocation
of this tax between the income statement and other
comprehensive income in future accounting periods. Any
reallocation would have no net impact on the tax charge in the
income statement but would change the split between current
and deferred tax.
The FRC’s queries regarding the above matters were resolved
to their satisfaction and the review has been closed. In their
correspondence, the FRC states that its review is based on
the Company’s 2020 Annual Report and Accounts; it does not
benefit from a detailed understanding of underlying transactions
and provides no assurance that the Company’s 2020 Annual
Report and Accounts are correct in all material respects.
Risk management and internal control
The Audit Committee is required to assist the Board to fulfil its
responsibilities relating to the adequacy and effectiveness of
the control environment and the Group’s compliance with the
Corporate Governance Code. To fulfil these duties, the Audit
Committee reviewed:
–
The external auditor’s review of internal controls and audit
highlights memoranda.
– Reports on the systems and effectiveness of internal controls
and risk management.
The Group has made good progress in implementing its risk
management process during the year with the commencement
of meetings of the newly formed Business Risk Management
Committee, the development of the Group risk and control
registers, and improvements in the reporting of principal risks.
The consideration of current and emerging environmental
risks is now embedded into this risk management process.
Please refer to the Principal Risks & Uncertainties section of
the Strategic Report on pages 36 to 43 for further information.
The establishment of a separate internal audit function is not
currently considered to be necessary due to reasons which
have previously been stated: the present nature of the business
model and structure of the Group with one main operating site;
stable operating and financial systems; the close involvement
of the Executive Directors in the day-to-day running of the
business; regular review by senior management of detailed
management information; other self-monitoring; no history of
control breakdown or fraud; and when considered necessary,
external advice. However, this matter will continue to be
reviewed by the Board at least annually, taking into account any
changes in the business structure and risk, and any changes
to Corporate Governance regulations and requirements. The
absence of internal audit may result in additional substantive
testing by the external auditor, but the overall impact is difficult
to assess.
The Group has a Whistleblowing Policy which contains
arrangements for the Company Secretary to receive, in
confidence, complaints on accounting, risk issues, internal
controls, auditing issues and related matters for reporting to
the Audit Committee as appropriate.
The control system of the Group is intended to manage 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 effectiveness of the control system including financial,
operating, compliance and risk management is reviewed by
the Board at least annually.
Additionally, through the management process outlined in the
Statement on Corporate Governance on pages 52 to 56, the
Group operates a continuous process of identifying, evaluating
and managing the significant risks faced by each business and
the Group as a whole. This process, which has been in place
throughout 2021 and up to the date of the approval of this
Annual Report, complies with the FRC guidance and includes
the following:
– A defined organisational structure with appropriate
delegation of authority.
–
Formal authorisation procedures for all 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 96 and 97.
The internal control process will continue to be monitored and
reviewed by the Board, which will, where necessary, ensure
improvements are implemented. During the period the Audit
Committee has undertaken a review of the effectiveness
of internal controls and systems. No material matters
were identified.
The 2022 AGM will provide an opportunity to ask questions on
this report, matters within the scope of the Audit Committee’s
responsibilities and any significant matters brought to the Audit
Committee’s attention by the external auditor.
JOHN GIBNeY
CHAIR OF tHe AUDIt COMMIttee
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
ANNUAL STATEMENT BY THE CHAIR OF THE
REMUNERATION COMMITTEE
Members and attendance
Charles Brady (Chair)
Tina Southall
John Warren (member to 18 May 2021)
John Gibney (member from 18 May 2021)
3/3
3/3
2/3
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On behalf of the Remuneration Committee (the “Committee”)
I am pleased to present the Directors’ Remuneration Report for
the year ended 1 January 2022. 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.
The Remuneration Report for the year ended 1 January 2022
(see pages 66 to 77) which details how our Remuneration
Policy was implemented in the year ended 1 January 2022
and how we intend to implement our Remuneration Policy
in 2022.
–
– A copy of the Remuneration Policy approved by
Shareholders at the AGM in 2021.
2021 HIGHLIGHtS
Obtained approval for the new Remuneration Policy at the
2021 AGM.
Monitored our remuneration strategy in the context of
business developments and the impact of the COVID-19
pandemic on business performance.
Monitored governance, regulatory and investor
developments on executive compensation matters.
Considered broader employee pay and conditions.
2022 PRIORItIeS
Set bonus targets for 2022 and review business
performance against these 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.
64
Business context for executive remuneration
As with many businesses, during 2021 4imprint Group plc
(the “Group”) continued to be impacted by the ongoing
COVID-19 pandemic. However, during the year the promotional
products market has shown a steady recovery and following a
strong second half to the year, order count for 2021 was 90% of
the 2019 comparative (the most recent ‘normal’ year). Further
challenges remain regarding the supply chain, inflationary
pressures and the lingering effect of COVID restrictions on the
Group’s business operations. For 2021 the financial results of
the business included:
– Group revenue up by 41%.
Increase in operating profit of 672%.
–
Increase in basic earnings per share of 629%.
–
–
2021 interim dividend paid and final dividend declared.
– Continued investment in marketing and people, positioning
the business well for a strong recovery.
– Retained a strong financial position and good liquidity with
net cash at the year-end of $41.59m.
Decisions on executive remuneration during 2021 have been
made in the context of the factors outlined above.
Committee decisions and undertakings in 2021
Rewarding performance
At its meeting in January 2021, the Remuneration Committee
made the following decisions regarding the remuneration of
the Chief Executive Officer and the Chief Financial Officer:
– No 2021 basic salary increase was awarded, consistent with
the approach taken across the business.
– No bonus arrangement was set for the Executive Directors
for 2021. Given the significant uncertainty around the timing
and scale of the economic recovery, it was not considered
appropriate to set annual bonus performance targets for
2021 based on revenue growth and operating profit.
The Committee was also mindful of the position of other
stakeholders and was supportive of management’s view that pay
rises and bonus/gain share schemes should be reintroduced
across the business before implementing a specific bonus
plan for the Executive Directors, an approach which reaffirms
a key element of the 4imprint culture. The Committee was also
cognisant of the views of Shareholders and did not want to
reintroduce any bonus scheme for the Executive Directors until
a return to dividend payments had been made.
This Committee reviewed its decision during 2021 but decided
not to reintroduce the bonus scheme part way through the year.
Accordingly, no bonuses are payable to the Executive Directors
in respect of 2021.
4imprint Group plc Annual Report & Accounts 2021
Committee decisions and undertakings for 2022
Implementation of the Remuneration Policy in 2022
At its meeting in January 2022, the Remuneration Committee
agreed to the request from the Chief Executive Officer and the
Chief Financial Officer that they receive no increase in basic
salary. However, this decision will be kept under review and
revisited by the Committee later in 2022.
The Committee also approved the reintroduction of the
Deferred Bonus Plan for the Executive Directors and approved
performance targets based on the 2022 budget approved by
the Board. As at January 2022, the Committee was confident that
the targets set were appropriately stretching.
The Group does not operate a long-term incentive plan.
UK SAYe and US eSPP
The Company has updated the rules of its UK Save As You
Earn Scheme (“SAYE”) and US Employee Stock Purchase Plan
(“ESPP”) and will be putting them forward for approval by
Shareholders at the AGM in May 2022. The rules were last
approved by Shareholders at the 2012 AGM. The new rules have
been updated to reflect best practice but are not substantially
different from the previously approved rules.
Conclusion
I look forward to receiving your support at the upcoming AGM.
CHARLeS BRADY
CHAIR OF tHe ReMUNeRAtION COMMIttee
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
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 2018. This report is unaudited except where otherwise stated. An ordinary resolution to approve this
report will be put to the AGM on 24 May 2022.
The Remuneration Policy approved by Shareholders at the 2021 AGM has also been included for reference.
Remuneration governance
Remuneration Committee composition
The Remuneration Committee is comprised solely of Independent Non-Executive Directors. The members of the Committee during
the period were Charles Brady (Chair of the Committee and the Senior Independent Non-Executive Director); Christina Southall; John
Warren, until his retirement from the Board of Directors on 18 May 2021; and John Gibney from 18 May 2021. The Company Secretary
also attends the meetings. The Committee meets at least twice a year and may invite other attendees as it sees fit. There were three
Remuneration Committee meetings in 2021. Attendance at Committee Meetings in 2021 is shown in the table on page 53.
Remuneration Committee responsibilities
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 schemes 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 14 December 2021. 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 return on value passed on to 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 2021
were £31,500 (2020: £68,785).
Directors’ Remuneration Policy
The Company has a well-established and clear Remuneration Policy which includes a simple and transparent approach to both fixed
and variable pay. The Remuneration Policy is structured to focus on incentivisation and to avoid reward for failure and is designed
not to promote unacceptable behaviour or encourage unacceptable risk-taking, in line with the Company’s culture and purpose. The
Committee has responsibility for reviewing the Remuneration Policy on an ongoing basis with a view to ensuring that it appropriately
reflects the Company’s strategy.
The current Directors’ Remuneration Policy was approved at the Company’s AGM on 18 May 2021 and this can be found on the
corporate website at https://investors.4imprint.com/investors/shareholder-information/agm-company-documents/.
Remuneration Policy
The following section sets out an overview of 4imprint Group plc’s Directors’ Remuneration Policy (the “Policy”) which was approved
by Shareholders at the 2021 AGM.
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 and 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 are:
(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;
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4imprint Group plc Annual Report & Accounts 2021
(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, 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.
executive Director Policy table
element and
purpose
Base salary
Enables 4imprint
to attract and
retain executive
talent
Retirement
benefits
To provide a
competitive level
of retirement
benefit in order to
attract and retain
executive talent
Other benefits
To maintain
competitiveness
in attracting and
retaining talent
Opportunity
Operation
Performance measures
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.
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.
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 or insurance
premiums.
Not applicable.
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.
Not applicable.
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).
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.
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67
4imprint Group plc Annual Report & Accounts 2021
REMUNERATION REPORT CONTINUED
element and
purpose
Deferred
Annual Bonus
Scheme
(“DABS”)*
To encourage
share ownership
and to incentivise
and reward
strong annual
performance
* The Deferred Annual
Bonus Scheme
(“DABS”) has been
renamed the
Deferred Bonus Plan
(“DBP”)
Opportunity
Operation
Performance measures
The ongoing maximum potential
annual bonus opportunity is
100% of base salary for FY21.
50% of the annual bonus is
delivered in cash.
Performance may be assessed
using financial and non-financial
measures.
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 further
details.
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.
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.
Cash bonus and deferred share
awards are typically allocated
to participants following the
audit of the Annual Report and
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 31 December of the
financial year to which annual
performance relates.
The cash bonus and deferred
share awards are subject to
clawback and malus provisions.
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. Further details can be
found in the Annual Report on
Remuneration.
Once awarded, the deferred
component of the annual award
will not be subject to further
performance targets.
Not applicable.
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.
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.
Savings are capped at an agreed
monthly contribution rate, and
the option price is set at the
outset of the plan.
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 one
year following cessation of
employment, reduced to a
holding of at least 100% of
base salary for the second year
following cessation. See Leaver
Policy for further details.
Not applicable.
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.
Share
ownership
guidelines
Provides alignment
with Shareholders
whilst encouraging
sustainable,
long-term
value creation
68
4imprint Group plc Annual Report & Accounts 2021
Notes to the Policy table
Remuneration
Committee discretion
Malus and clawback
Discretion to amend
the future operation
of the DBP
Minor amendments
to the Policy and
remuneration
under previous
arrangements
Performance
measures
When assessing incentive plan results and performance, the Committee retains the discretion
to reduce (including to nil) incentive pay-out levels if it is considered appropriate in exceptional
circumstances, for example, in the context of a significant health and safety failure, or an exceptional
negative event significantly impacting employees or Shareholders.
Malus and clawback provisions apply to both cash and deferred share elements of the DBP.
Malus includes the reduction (including to nil) of in-year and/or future year bonus amounts; and the
forfeiture or withholding of unvested deferred share awards and clawback involves the recovery of
annual bonus 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 share 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
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.
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;
the 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.
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.
executive Director service contracts
Executive Directors have rolling service contracts, notice periods are 12 months from the Company and 6 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 for the purposes of a ‘buyout’ award.
– An increased award limit exists under the DBP of 150% of base salary which may be used upon recruitment of a new Executive Director.
– For external and internal appointments, the Committee may agree that the Company will meet certain relocation expenses and
legal fees that it considers to be appropriate. Assistance will be subject to reasonable clawback for service of less than 12 months.
69
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4imprint Group plc Annual Report & Accounts 2021
REMUNERATION REPORT CONTINUED
Corporate events
Upon a takeover, unvested deferred share awards under the DBP would normally vest in full immediately. Awards may be exchanged
to the extent that an offer to exchange awards for new awards is made and accepted by the award holder.
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.
–
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 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 44 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
varied views put forward.
70
4imprint Group plc Annual Report & Accounts 2021
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
are not paid for Committee chairmanship and membership.
Operation
Fee levels are reviewed periodically by the Board to maintain competitiveness relative
to other listed companies of a similar size, complexity and type.
Opportunity
Non-Executive Directors do not participate in any incentive schemes and do not receive
a pension.
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.
Annual report on remuneration
Salaries
The Chief Executive Officer and the Chief Financial Officer received no increase in basic annual salary during 2021 and have received
no increase in 2022 to the date of this report.
Pension and benefits
The Executive Directors’ Pension 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 rules of the Company’s DBP were approved by Shareholders at the AGM on 18 May 2021. These rules replaced the rules of
the 2015 Incentive Plan which were approved by Shareholders in April 2011 for a ten-year period. The DBP (previously called the
Deferred Annual Bonus Scheme or “DABS”) operates in substantially the same way as the 2015 Incentive Plan.
At its meeting in January 2021, the Remuneration Committee agreed that due to the ongoing impact of the COVID-19 pandemic
on the business, it would not be appropriate to set annual bonus performance targets for 2021 for the Executive Directors. The
significant uncertainty around the timing and scale of the economic recovery meant that it was not possible to set meaningful bonus
targets for revenue growth and operating profit.
The Committee was also mindful of the position of other stakeholders and was supportive of management’s view that pay rises and
bonus/gain share schemes should be reintroduced across the business before implementing a specific bonus plan for the Executive
Directors, an approach which reaffirms a key element of the 4imprint culture. The Committee was also cognisant of the views of
Shareholders and did not want to reintroduce any bonus scheme for the Executive Directors until a return to dividend payments
had been made.
The Committee reviewed its decision during 2021 but decided not to reintroduce the bonus scheme part way through the year.
Accordingly, no bonuses are payable to the Executive Directors in respect of 2021.
For details of the annual bonus plan’s operation in FY20 please see page 67 of the 2020 Annual Report and Accounts.
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71
4imprint Group plc Annual Report & Accounts 2021
REMUNERATION REPORT CONTINUED
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:
K. Lyons-Tarr
2021
2020
D. Seekings
2021
2020
P. Moody
2021
2020
L. Beardsell (i)
2021
2020
C. Brady
2021
2020
J. Gibney (ii)
2021
2020
J. Rabadia (i)
2021
2020
C. Southall
2021
2020
J. Warren (iii)
2021
2020
Base
salary
£
Benefits
£
372,463
6,499
398,338
14,266
248,309
17,286
265,559
18,701
150,000
150,000
15,000
–
45,000
45,000
36,865
–
15,000
–
45,000
45,000
17,077
45,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Annual
bonus
Long-term
incentives
£
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
£
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Pension
£
Total
£
Fixed
pay
£
Variable
pay
£
7,352
386,314
386,314
9,828
422,432
422,432
8,392
273,987
273,987
8,908
293,168
293,168
–
–
–
–
–
–
–
–
–
–
–
–
–
–
150,000
150,000
150,000
150,000
15,000
15,000
–
–
45,000
45,000
45,000
45,000
36,865
36,865
–
–
15,000
15,000
–
–
45,000
45,000
45,000
45,000
17,077
17,077
45,000
45,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(i) Lindsay Beardsell and Jaz Rabadia joined the Board on 1 September 2021.
(ii) John Gibney joined the Board on 8 March 2021.
(iii) John Warren retired from the Board on 18 May 2021.
Kevin Lyons-tarr and David Seekings US dollar remuneration
Base
salary
$
Benefits
$
512,323
8,940
511,586
18,321
341,549
23,777
341,057
24,018
Annual
bonus
Long-term
incentives
$
–
–
–
–
$
–
–
–
–
Pension
$
Total
$
Fixed
pay
$
Variable
pay
$
10,113
531,376
531,376
12,623
542,530
542,530
11,543
376,869
376,869
11,441
376,516
376,516
–
–
–
–
K. Lyons-Tarr
2021
2020
D. Seekings
2021
2020
72
4imprint Group plc Annual Report & Accounts 2021
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:
Kevin Lyons-Tarr
David Seekings
Paul Moody
Lindsay Beardsell
Charles Brady
John Gibney
Jaz Rabadia
Tina Southall
John Warren
* Or date of resignation.
Holding at
1 January
2022
Holding at
2 January
2021
265,909
263,201
186,779
184,974
9,500
9,500
–
2,000
3,000
–
3,000
5,000*
–
1,000
–
–
3,000
5,000
The value 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 1 January 2022 to the date of this report.
Movement in scheme interests during the financial year (audited information)
During the period, the Executive Directors exercised options under the 2015 Incentive Plan in relation to awards made in April 2018
in respect of the 2017 financial year.
During the period no awards of conditional shares were made under the DBP as, owing to the impact of the COVID-19 pandemic, the
financial results of the North American business were significantly below the targets set for 2020. Owing to the continued uncertainty
around the impact of the COVID-19 pandemic on the financial results of the North American business no bonus targets were set for
2021. No awards of conditional shares will be made in 2022 in respect of 2021.
Directors’ interests in share schemes
Details of share options and conditional share awards held by the Directors are set out below:
Holding at
2 Jan 2021
Granted
during
the year
Exercised
Holding at
1 Jan 2022
Date
of grant
Share price
at date
of grant
Exercise
price
Exercisable
From
To
K. Lyons-Tarr
US ESPP
–
516
–
516
2015 Incentive Plan
4,514
2015 Incentive Plan
10,196
–
–
4,514
–
–
10,196
17 May
2021
15 Apr
2018
28 Mar
2019
£23.00
$27.61
£15.80
£24.00
nil
nil
25 July
2023
15 Apr
2021
28 Mar
2024
25 July
2023
15 Apr
2021
28 Mar
2024
Holding at
2 Jan 2021
Granted
during
the year
Exercised
Holding at
1 Jan 2022
Date
of grant
Share price
at date
of grant
Exercise
price
Exercisable
From
To
D. Seekings
US ESPP
–
722
–
722
2015 Incentive Plan
3,009
2015 Incentive Plan
6,797
–
–
3,009
–
–
6,797
17 May
2021
15 Apr
2018
28 Mar
2019
£23.00
$27.61
£15.80
£24.00
nil
nil
25 July
2023
15 Apr
2021
28 Mar
2024
25 July
2023
15 Apr
2021
28 Mar
2024
Gains made on exercise of options in the period were £111,270 for Kevin Lyons-Tarr and £74,172 for David Seekings (2020: £83,199
for Kevin Lyons-Tarr, £58,109 for David Seekings and, after leaving, £1,417 for Andrew Scull, a past Director of the Company).
73
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4imprint Group plc Annual Report & Accounts 2021
REMUNERATION REPORT CONTINUED
During 2021 the middle-market value of the share price ranged from £22.05 to £31.70 and was £28.20 at the close of business on
1 January 2022.
Details of share options granted by 4imprint Group plc as at 1 January 2022 are given in note 22.
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.
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.
2,500
2,000
1,500
1,000
500
0
Dec
2011
— 4Imprint Group Plc — FTSE 250
Dec
2012
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2020
Dec
2021
Total remuneration of Executive Chairman/Chief Executive Officer
2012
£’000
2013
£’000
2014
£’000
738
738
1,380
1,380
180
180
2015
£’000
326
45
371
2016
£’000
481
2017
£’000
564
2018
£’000
738
2019
£’000
603*
2020
£’000
422
2021
£’000
386
481
564
738
603
422
386
n/a
n/a
100
60
40
50
100
50*
0
–
0
–
Vesting rate (%)
33.30
66.70
–
–
–
–
–
–
*
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:
Wages and salaries
Dividends paid
74
2021
$m
59.62
4.13
2020
$m
Percentage
change
57.32
0.00
4%
n/a
K. Lyons-Tarr
J.W. Poulter
Total remuneration
Annual variable award
Percentage versus
max opportunity (%)
Long-term incentive
4imprint Group plc Annual Report & Accounts 2021
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 2021 and 2020.
Average pay based on all employees
Kevin Lyons-Tarr
David Seekings
Paul Moody
Lindsay Beardsell
Charles Brady
John Gibney
Jaz Rabadia
Tina Southall
Salary
Bonus
8%
0%
0%
0%
0%
0%
0%
0%
0%
n/a
0%
0%
–
–
–
–
–
–
Taxable
benefits
-7%
-51%
-1%
–
–
–
–
–
–
Average pay based on all employees increased in the year as salary increases were reintroduced following a period of no increases
the previous year. Additionally, above inflation increases have been required for certain roles in order to recruit and retain employees
in a competitive US labour market. The all-employee gain share bonus was reintroduced for the second half of 2021 and, as there
were no bonuses paid in 2020, the calculated percentage increase figure is anomalous.
CeO pay ratio
Year
2021
2021
2020
2020
Country
Method
UK
US
UK
US
A
A
A
A
25th percentile
pay ratio
24.4 : 1
17.7 : 1
33.5 : 1
25.2 : 1
Median
pay ratio
18.4 : 1
14.5 : 1
26.5 : 1
19.9 : 1
75th percentile
pay ratio
12.9 : 1
10.6 : 1
19.0 : 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 45
UK employees (2020: 47) compared with 1,162 US employees (2020: 1,097), 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 1 January 2022 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.
The calculations were carried out by identifying the 25th, 50th and 75th percentile employee based on total remuneration for
the 2021 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.
Gender pay gap
The tables below show the gender pay gap as at April 2021. As 4imprint has less than 250 employees in the UK it is not required by
the regulations to publish gender pay gap data. However, the Company believes it would be good practice to provide this data and
has published data for both the US and UK businesses separately.
Gender pay gap in hourly pay
As at 5 April 2021
4imprint US
4imprint UK
No. of men
No. of women
280
15
786
31
Mean
average
%
16.64
38.40
Median
average
%
4.95
15.09
75
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4imprint Group plc Annual Report & Accounts 2021
REMUNERATION REPORT CONTINUED
As at 5 April 2020
4imprint US
4imprint UK
No. of men
No. of women
312
15
851
32
Mean
average
%
12.53
47.38
Median
average
%
(1.97)
6.52
The mean pay gap is the difference in the average hourly pay for women compared to men.
In 4imprint US, men’s mean pay is 16.6% higher than women’s mean pay (2020 – 12.5% higher). In 4imprint UK, men’s mean pay is
38.4% higher than women’s mean pay (2020 – 47.4% higher). This is due to the higher representation of men in more senior roles in
the employee group.
The median pay gap represents the difference in hourly pay between the salary mid-point average of women and men. In 4imprint
US, the median hourly pay is slightly higher for men than for women in 2021 (2020 – 1.97% lower). In 4imprint UK, the median hourly
pay is 15.1% higher for men than for women (2020 – 6.5% higher for men).
Gender pay gap – bonus pay
Employees receiving a bonus
Year to 5 April 2021
4imprint US
4imprint UK
As at 5 April 2020
4imprint US
4imprint UK
Gender Pay Gap in bonus pay
Year to 5 April 2021
4imprint US
4imprint UK
As at 5 April 2020
4imprint US
4imprint UK
Male
%
1.79
0.00
Male
%
96.47
100.00
Mean
average
%
91.05
0
Mean
average
%
76.29
83.98
Female
%
0.25
0.00
Female
%
97.90
93.75
Median
average
%
16.17
0
Median
average
%
0.00
0.00
No. of men
No. of women
5
0
2
0
No. of men
No. of women
312
15
851
32
No bonuses were paid in the year to 5 April 2021. The bonuses shown above relate to the vesting of share awards in March 2021
which were awarded in April 2018 to the two Executive Directors and five members of the Senior Management Team. The effect of
this is to render the data anomalous.
4imprint US
4imprint UK
26%
24%
20%
35%
74%
Lower quartile
18%
76%
Lower middle quartile
27%
80%
Upper middle quartile
42%
65%
Upper quartile
42%
■ Male ■ Female
82%
73%
58%
58%
This is the proportion of men and women in each pay quartile. Each quartile represents 266 employees of 4imprint US and
12 employees of 4imprint UK.
76
4imprint Group plc Annual Report & Accounts 2021
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
2021 22,471,759
95.98
941,989
Approval of Remuneration Policy
2021 21,870,335
94.94
1,164,452
4.02
5.06
1,980
380,941
Implementation of Policy in 2022
At its meeting in January 2022 the Committee agreed to the Executive Directors’ request that they receive no base annual salary
increase with effect from 1 January 2022. This decision will be reviewed by the Committee later in 2022. In addition, the Committee
approved the reintroduction of the Deferred Bonus Plan for 2022.
Operation of the DBP
The Executive Directors participate in a single variable incentive plan, the DBP (formerly the 2015 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 nil
cost options or conditional share awards. The deferral period for shares awarded to the Executive Directors is five years from date
of award.
Bonus outcomes under the Plan 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.
The 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 is achieved in motivating attainment of 4imprint’s strategic priorities. Given that
the bonus measures and targets are inter-related, potential bonus outcomes are expressed in a matrix format with different bonus
outcomes dependent on the revenue growth percentage and operating profit achieved in the year.
Specific performance targets for 2022 have been set by the Committee with reference to the 2022 budget approved by the Board.
As at January 2022, the Committee was confident that the targets set were appropriately stretching.
CHARLeS BRADY
CHAIR OF tHe ReMUNeRAtION COMMIttee
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
DIRECTORS’ REPORT
The Directors present their report and the audited consolidated
and Company financial statements for the period ended
1 January 2022. The Company’s Statement on Corporate
Governance is included in the Corporate Governance section
on pages 52 to 56 of this Annual Report. The Statement on
Corporate Governance forms part of the Directors’ Report and
is incorporated 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 determined in US dollars and paid in Sterling,
converted at the exchange rate at the time the dividend
is determined.
An interim dividend of 15.00c (10.83p) per ordinary share was
paid on 21 September 2021 and the Directors recommend a
final dividend of 30.00c (22.99p) per share. The proposed final
dividend, if approved, will be paid on 31 May 2022 in respect of
shares registered at close of business on 29 April 2022.
The total distribution paid and recommended for 2021 on
the ordinary shares is $12.5m (2020: $nil) or 45.00c per share
(2020: nil).
Cross-reference to Strategic Report
The Strategic Report is set out on pages 6 to 47 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, TCFD reporting, 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 reviewed the Company’s risk management
processes at a Board meeting in January 2022. 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 36.
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 policies and practices demonstrate the
importance which the Directors place on fostering the Group’s
relationships with its employees, customers and suppliers.
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
page pages 50 and 51. The Directors served throughout the
period ended 1 January 2022 and up to the date of signing of
these financial statements, with the exception of John Gibney
who was appointed on 8 March 2021, Lindsay Beardsell who
was appointed on 1 September 2021 and Jaz Rabadia who was
appointed on 1 September 2021. In addition, John Warren was
a Non-Executive Director from the start of the period until his
retirement on 18 May 2021.
78
The interests of the Directors in the shares of the Company are
shown on page 73.
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 1 January 2022 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
note 20.
The Company has a single class of share capital which is divided
into ordinary shares of 386/13p 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 Annual General
Meeting (“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 or regulation.
Relations with Shareholders
Substantial interests
At 1 January 2022 the Company had been notified of the
following interests in the issued ordinary share capital of
the Company:
BlackRock, Inc.
Montanaro Asset Management Limited
Baillie Gifford & Co
abrdn plc
Mawer Investment Management
Majedie Asset Management Limited
FIL Limited
Invesco Perpetual Asset Management
Number
of shares
2,408,538
1,979,711
1,949,985
1,580,804
1,410,192
1,398,525
1,160,653
847,147
%
8.57
7.05
6.94
5.63
5.02
4.98
4.13
3.02
The Company has received notifications of changes in holdings
since 1 January 2022 from BlackRock, Inc that it now holds
3,310,846 shares (11.78%), abrdn plc that its holding had fallen
below 5% and Baillie Gifford & Co that it now holds 2,828,328
shares (10.07%).
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.
4imprint Group plc Annual Report & Accounts 2021
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, Charles Brady, John Gibney,
Jaz Rabadia and Tina Southall with effect from the date of their
respective appointments to the Board of Directors.
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.
Political donations
No political donations were made in the period ending 1 January
2022 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 2022 AGM, together with a
resolution granting the Directors the authority to determine
EY’s remuneration.
Remuneration Report
Details of the procedures and guidelines used by the
Remuneration Committee in determining remuneration are
outlined in its report on pages 66 and 67.
Purchase of own shares
Following approval at the 2021 AGM of Resolution 15, the
Company is authorised, generally and without conditions, to
make market purchases, as defined in the Companies Acts, of
its ordinary shares of 386/13p subject to the provisions set out
in such Resolution. This authority applies from 18 May 2021
until the earlier of the end of the 2022 AGM or 17 August 2022
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 22,500
(2020: 42,000) ordinary shares.
waiver of dividends
The dividend income in respect of the 22,488 shares (2020:
16,578 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 35.
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, is set out in the Sustainability section on
pages 20 to 29.
Greenhouse gas emissions report
Details regarding the Group’s carbon emissions, energy
consumption and energy efficiency are included in the Strategic
Report on pages 28 and 29.
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 2021 for UK entities
and EPA conversion factors for US entities.
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
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
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 hence
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.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website.
Each of the Directors, whose names and functions are listed in
the Board of Directors on pages 50 and 51, 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 the 15 March 2022 by
KevIN LYONS-tARR
CHIeF eXeCUtIve OFFICeR
DAvID SeeKINGS
CHIeF FINANCIAL OFFICeR
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
in conformity with the requirements of the Companies Act 2006
(“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
required to:
–
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.
80
4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC
Opinion
In our opinion:
–
4imprint Group plc’s Group financial statements and parent company financial statements (the “financial statements”) give a true
and fair view of the state of the Group’s and of the parent company’s affairs as at 1 January 2022 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 parent 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 “parent company”) and its subsidiaries (the “Group”) for the year
ended 1 January 2022 which comprise:
Group
Parent company
Consolidated balance sheet as at 1 January 2022
Balance sheet as at 1 January 2022
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 O to the financial statements including a
summary of significant accounting policies
Consolidated statement of cash flows for the year then ended
Related notes 1 to 27 to the financial statements, including a
summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards and as regards the parent 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 parent 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 parent company and we
remain independent of the Group and the parent 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 parent
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 incorporated their Going Concern period (to
the period ending 1 July 2023) into their wider assessment of viability which covers the period to 28 December 2024. In these
assessments management consider the key factor that would prejudice the going concern basis of preparation of the Group to
be a severe downturn in demand, which negatively impacts new customer acquisition and existing customer retention;
– We obtained the Board’s Going Concern assessment, including cash flow forecasts which cover the period to 1 July 2023. The
Board prepared a ‘base case’ and a ‘downside case’ cash flow forecast model. The downside case forecast incorporates the
effects of a downside scenario based on severe, but plausible, demand assumptions;
– We tested the key assumptions included in each of the cash flow forecast models. We tested the assumption regarding
the impact of COVID-19 uncertainty and significant additional declines in revenue included in each forecasted scenario. We
considered the appropriateness of the methods used to calculate the cash forecasts and determined, through inspection and
testing of the methodology and calculations, that the methods utilised were appropriately sophisticated to be able to make an
assessment for the entity. 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 in the going concern period
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4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC CONTINUED
including the achievement of the Group’s carbon neutral status, commitment to build a solar panel array at the US distribution
centre and sustainable product initiatives;
– We have checked the amount and maturity of the $20m line of credit and £1m UK overdraft facility, which expire on 31 May 2023
and 31 December 2022, respectively, to facility agreements. Covenant requirements for the $20m line of credit have also been
validated to the facility agreement. There are no covenants on the £1m UK overdraft;
– We obtained the Board’s forecast covenant calculations which cover the period until expiry (31 May 2023) with respect to
the committed but undrawn $20m line of credit facility. We validated inputs into the covenant forecast calculations back to
management’s base case and confirmed the Group has significant headroom. Both the base case and the downside case cash
flow forecasts assume no utilisation of the $20m line of credit or £1m UK overdraft facility;
– We performed reverse stress testing in order to identify what reduction in demand would be required before liquidity is
exhausted. The $20m line of credit and £1m UK overdraft facility have been excluded from our own reverse stress test model;
– We considered the mitigating factors that are within the control of the Group. This includes the Company’s ability to reduce
marketing costs and headcount that are not reflected in either the base case or downside case forecast but would, if required,
be fully under the Group’s control;
– We evaluated management’s consideration of the conflict in Ukraine arising after the year end, noting the Group has no
operations in Russia, Ukraine or Belarus. The possible impact to the Group would likely manifest itself in inflationary pressure.
The Group has demonstrated its ability to manage through historic recessions and the more recent COVID-19 pandemic. We
assessed sensitivities in respect of increased costs and potential reduction in demand; and
– We read the Group’s going concern disclosures included in the annual report in order to assess that the disclosures were
appropriate and in conformity with the reporting standards.
We have observed that both the North America and UK & Eire operating segments experienced disruption from the impact of the
COVID-19 pandemic which has resulted in a significant reduction in revenue in the current and prior year when compared to pre-
pandemic trading levels. However, we noted the improving performance of the business since the second quarter of 2021, the net
cash of $41.6m (2020: $39.8m) at the balance sheet date and trading results in the first few weeks of 2022.
Management’s base case and downside case forecasts demonstrate that the Group retains sufficient liquidity in the Going Concern
period to 1 July 2023.
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 parent company’s ability to continue as a going concern for
a period to 1 July 2023.
In relation to the Group and parent 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 five 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;
– Management override of internal controls through manual journals to supplier rebate income; and
– Management override of internal controls related to the expected credit loss provision on unbilled
accrued revenue.
Materiality
– Overall Group materiality of $1.5m which represents 5% of the average profit before tax of $29m using the
results of the prior two financial periods and the current period.
An overview of the scope of the parent 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.
We take into account size, risk profile, the organisation of the Group and effectiveness of group-wide controls, changes in the
business environment and other factors such as recent Internal audit results 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 7 (2020: 7) reporting components of the Group, we selected 7
(2020: 7) components covering entities within the United States of America and the United Kingdom, which represent the principal
business units within the Group.
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4imprint Group plc Annual Report & Accounts 2021
Of the 7 (2020: 7) components selected, we performed an audit of the complete financial information of 2 (2020: 2) components
(“full scope components”) which were selected based on their size or risk characteristics. For the remaining 5 (2020: 5) 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 of the size of these
accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 100% (2020: 100%) of the Group’s profit before tax,
100% (2020: 100%) of the Group’s revenue and 100% (2020: 100%) of the Group’s total assets.
For the current year, the 2 (2020: 2) full scope components contributed 104% (2020: 139%) of the Group’s Profit before tax, 98%
(2020: 98%) of the Group’s Revenue and 98% (2020: 97%) of the Group’s Total assets.
The 5 (2020: 5) specific scope components contributed (4)% (2020: (39)%) of the Group’s profit before tax, 2% (2020: 2%) of the
Group’s revenue and 2% (2020: 3%) 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.
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. These procedures were undertaken by another EY global network firm operating under the Group audit teams
instruction and were attended in person.
The Group audit team adapted their approach to interact with management in response to the COVID-19 pandemic. Due to
COVID-19 travel restrictions imposed by governments, we did not complete our planned visits to the Group’s locations in the
United States. We were able to visit the Group’s UK operation as part of our interim testing.
The year end audit was also required to be conducted remotely. This was supported through remote access to the Group’s financial
systems and the use of EY software collaboration platforms for the secure and timely delivery of requested audit evidence.
In lieu of these visits, we have maintained regular dialogue and meetings with management via videoconference calls. We attended
all meetings with local management to conclude the audit procedures at each location by videoconference with the exception of the
inventory existence procedures which were attended in person as noted above. The Group audit engagement partner participated in
the closing meetings for all components.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact 4imprint Group plc. The Group has
determined that the most significant future impacts from climate change on its 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.
These are explained on pages 25 to 29 in the required Task Force for Climate related Financial Disclosures and on pages 36 to 43 in
the principal risks and uncertainties, which form part of the “Other information”, rather than the audited financial statements. Our
procedures on these 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.
As explained in the viability statement, governmental and societal responses to climate change risks are still developing, and
are interdependent upon each other, and consequently financial statements cannot capture all possible future outcomes as
these are not yet known. The degree of certainty of these changes may also mean that they cannot be taken into account when
determining asset and liability valuations and the timing of future cash flows under the requirements of UK adopted international
accounting standards.
Our audit effort in considering climate change was focused on ensuring the Group’s achievement of CarbonNeutral® status in
October 2021 as disclosed on page 25 has been appropriately reported. We also challenged the Directors’ considerations of climate
change in their assessment of going concern and viability and associated disclosures.
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4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC CONTINUED
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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 – 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, and consequently operating
profit, through inappropriate manual journal entries.
Investors typically focus on the Group’s revenue performance and operating profit which were significantly impacted by the effects
of the COVID-19 pandemic in 2020. This remains applicable in 2021 with investor focus taking particular interest in the pace and
scale of recovery following the height of the pandemic.
Whilst it was not considered appropriate to set annual bonus performed targets for 2021 based on revenue growth and operating
profit targets given the uncertainty, there remains an incentive for management to manipulate revenue recognition.
We concluded there was a risk that management may override controls to intentionally:
a) overstate revenue, and therefore operating profit, in order to report an improved recovery 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.
There are no significant judgements involved in the recognition of revenue and our audit risk is focussed on manual journals to the
revenue accounts.
Revenue for the year was $787m (2020: $560m) and operating profit was $31m (2020: $4m).
Refer to the Accounting policies (page 99); and note 1 of the consolidated financial statements (page 103).
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 operating effectiveness 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.
In respect of revenue from 4imprint Inc. and 4imprint Direct Limited, which together form 100% of the Group’s revenue, we
performed data analytics testing over the entire revenue process from revenue recognition through to invoice settlement. Where
the postings did not follow our expectation, we investigated outliers and tested these 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 also introduced unpredictability into our manual journal testing.
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% (2020: 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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4imprint Group plc Annual Report & Accounts 2021
risk – management override of internal controls through manual journals to supplier rebate income
Description of risk
The Group receives significant rebate income from its suppliers, primarily through 4imprint Inc. These relate to volume-based
rebates on purchases made from key product suppliers throughout the financial period.
The rebates received are determined by formal signed agreements with suppliers and depend on the level of spend and product
mix within the financial period. Supplier agreements are coterminous with the Group’s year end. The percentage of purchases paid
as a rebate from certain suppliers increases based on predetermined purchase thresholds within supplier agreements.
There is a risk that management may override controls to intentionally misstate supplier rebate income, and consequently
operating profit, through inappropriate manual journal entries. The incentives for doing so are consistent with those noted in our
“Management override of internal controls through manual journals to revenue” matter noted above.
Our assessment considers the risk that management may override controls to intentionally:
a) overstate supplier rebate income when compared to the eligible amounts set out in the rebate agreements and/or are
recognised in advance of achievement of the right to earn the income; or
b) understate supplier rebate income when compared to the eligible amounts set out in the rebate agreements and/or recognition
is incorrectly deferred to the following period when the achievement of the right to earn the income has been met.
Rebate contracts include variable rebate rates which are dependent on product categories and volumes purchased. There are no
significant judgements involved in the recognition of supplier rebate revenue or the supplier rebate receivable.
There is, however, an element of judgement included in assessing the recoverability of the rebate income receivable at the balance
sheet date. For the current year the Group has recognised $18m (2020: $14m) of rebate income including a rebate receivable
balance of $13m (2020: $9m) at the balance sheet date.
Refer to the Accounting policies (page 99); and note 13 of the consolidated financial statements (pages 111 and 112).
Our response to the risk
We identified, documented and confirmed our understanding of the Group’s supplier rebate recognition policies and performed a
walkthrough to assess the design and operating effectiveness of key controls over the revenue process.
For a sample of supplier rebates, we obtained rebate agreements and inspected them to assess whether rebates received, and
receivable, by the Group had been accounted for in the correct financial period and in accordance with specific terms agreed
with suppliers.
We recalculated expected supplier rebate income and receivables based upon spend with suppliers in the period, taking account
of agreed rebate rates per signed agreements and cash received during the year for rebate income.
We obtained direct confirmations from a sample of suppliers to agree rebate receivables due at the balance sheet date.
We compared a sample of cash receipts received in the year to the prior year receivables balances to assess the historical accuracy
of management’s rebate calculations and assessment of recoverability of amounts outstanding at the year end.
We checked a sample of purchase transactions to the purchase reports used in the rebate calculations to assess whether rebate
transactions were recorded in the correct period and with regard to the relevant supplier. We inspected a sample of post year end
credit notes to check the recoverability of rebate receivable balances.
We tested journal entries to rebate income accounts by applying parameters designed to identify entries that were not in
accordance with our expectations. This included analysing and selecting journals for testing and corroborating to source
documentation to confirm that the entries supported the recognition of rebate income and that the entries were appropriate.
We performed audit procedures over this risk area on 4imprint Inc. which covered 92% (2020: 85%) of supplier rebate income and
90% (2020: 84%) of the rebate income receivable balance at the reporting date.
Key observations communicated to the Audit Committee
Rebate income was recorded in accordance with contractual terms, in the correct period and the related year end receivables
balance was appropriately valued.
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4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC CONTINUED
risk – management override of internal controls to the expected credit loss provision on unbilled accrued revenue
Description of risk
Disruption to the Group’s supply chain in the second half of 2021 caused by the pandemic has resulted in an increase in unbilled
accrued revenue on orders in process at the year-end.
It is common for a customer order to include several different products, i.e., several ‘order lines’ in an overall customer order. Each
order line is a separate performance obligation and revenue is recognised when control of the related goods has transferred to
the customer.
However, a sales invoice is only raised once goods from all order lines have transferred to the customer. The supply chain issues
experienced in the second half of 2021 have resulted in an increase in unbilled accrued revenue on order lines which have been
delivered to customers but where other products on the overall customer order have not yet been delivered.
There is a risk that management may override controls to intentionally misstate expected credit loss (“ECL”) provisions on
unbilled accrued revenues and consequently operating profit. The incentives for doing so are consistent with those noted in our
“Management override of internal controls through manual journals to revenue” matter noted above.
Our assessment considers the risk that management may override controls to intentionally:
a) Understate the ECL provision, and therefore overstate operating profit, in order to report an improved recovery to the market; or
b) Overstate the ECL provision, and therefore understate operating profit, in order to meet targets for management rewards and
incentive schemes in the next financial period.
This estimation is inherently more difficult in the current year because of the uncertainty in the timing of when customer orders
will be fulfilled in full and the appropriateness of default rates of customers in light of the delayed time from delivery to invoice, the
customer’s method of payment and the COVID-19 pandemic environment.
Gross unbilled accrued revenue at the year-end was $28m (2020: $8m) and related expected credit loss provisions were $0.5m
(2020: $0.1m).
Refer to the Accounting policies (page 101); and note 13 of the consolidated financial statements (pages 111 and 112).
Our response to the risk
We identified, documented and confirmed our understanding of the Group’s ECL provision policy and performed a walkthrough to
assess the design and operating effectiveness of key controls over the process.
We tested the accuracy of input data and the clerical accuracy of the ECL provision workings. We verified that the provision was
calculated in accordance with management’s policy and that appropriate journal entries were processed to record the provision
in the financial statements.
We assessed the significant assumptions used by management in the ECL provision on unbilled accrued revenues. The most
significant of these being the probability of default of customers based on historic default rates for the previous 36 months.
We challenged default rates used by management through the recalculation of our own ECL provision. The difference between our
own calculation and management’s provision was not material. We validated inputs used in our recalculation as follows:
a) We validated the ageing of the unbilled accrued revenue balance by testing the average lag time between original order date
and delivery date to external logistic company delivery reports and applied this to age the unbilled accrued revenue balance.
b) We segmented the customer population by credit default risk factors. We considered there to be two populations depending on
whether a customer pays by credit card or not. We tested the accuracy of historic default rates for both populations to analysis
of historic write offs over the last 36 months.
c) We performed integrity testing over these data sets to ensure they were reliable and complete, agreeing back to source
documentation such as invoices and journal write offs.
d) The risk of default over an element of the unbilled accrued revenue population is mitigated where payments are received up-
front from customers at the time an order is processed.
We have validated the accuracy of this input into our calculation by agreeing a sample of transactions back to order and cash
receipt. We have ensured cash received up-front has been appropriately allocated against the ageing of the unbilled accrued
revenue balance.
We assessed the adequacy of the disclosures in the financial statements for the provision for ECL’s on unbilled accrued revenue.
We performed audit procedures over this risk area on 4imprint Inc. and 4imprint Direct Limited which covered 100% (2020: 100%)
of unbilled accrued revenue at the year end.
Key observations communicated to the Audit Committee
We did not identify evidence of management override through inappropriate ECL provisions on unbilled accrued revenue at
the year end.
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4imprint Group plc Annual Report & Accounts 2021
In the prior year, our auditor’s report included a key audit matter in relation to the valuation of pension assets. In 2020 the Group
made a special contribution of $9.1m (£7.5m) to the pension scheme resulting in a material reduction in the net pension deficit. Also,
in 2020 the investment strategy for pension assets changed, resulting in a change in the mix of underlying pension asset investments.
Some of the asset investments were made into managed funds which were harder to value than an investment in a single security.
In 2021 there has been no special contribution or significant change in the nature or mix of the Group’s pension asset portfolio
therefore reducing the level of audit risk and effort.
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.
Setting materiality when the Group has been impacted by the COVID-19 pandemic requires greater auditor judgement. We consider
the users of the financial statements are primarily focused on the speed at which underlying operations, revenues and profitability of
the business return to normal or a new normalised level.
The Group remains in a period of recovery following the impact of the pandemic which has distorted results in the current year. For
the current period we have sought to derive a basis for estimating normalised profit before tax. We have calculated a mean average
based on the actual result of the prior two financial periods and the current period. Hence, we determined materiality for the Group
to be $1.5 million (2020: $1.7 million), which is 5% (2020: 5%) of the average profit before tax for the three periods of $29m (2020:
average underlying profit before tax for the equivalent three periods of $34m).
In previous Annual Reports and Accounts, we set materiality using underlying profit before tax which excluded defined benefit
pension administration charges and past service costs. The adjustment for defined benefit pension administration charges and
past service costs was not material and as disclosed in the Financial Review of the Strategic Report (page 31), these charges are now
included in the definition of underlying profit before tax. There is no difference between IFRS reported profit before tax (from here
on “profit before tax”) and underlying profit before tax in the current year.
Our current year materiality has been calculated using profit before tax. If we had calculated our prior year materiality in a consistent
manner, using profit before tax, this would have remained consistent at $1.7m.
We determined materiality for the parent company to be £2.42 million (2020: £2.39 million), which is 1% (2020: 1%) of equity. Equity
is the most appropriate measure given the parent company is an investment holding company with no revenue.
There was no change in our final materiality from our original assessment at planning for the Group or Company.
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 judgement
was that performance materiality was 75% (2020: 75%) of our planning materiality, namely $1.10m (2020: $1.28m). We have set
performance materiality at this percentage based on our assessment of the appropriateness of the Group’s internal controls, the
nature 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 $0.28m to $0.83m (2020: $0.26m
to $0.96m).
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 $0.07m (2020:
$0.08m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting
on qualitative 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.
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4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC CONTINUED
Other information
The other information comprises the information included in the annual report set out on pages 1 to 80, including the Strategic
Report, set out on pages 6 to 47, Governance, set out on pages 48 to 80, and Additional information set out on pages 134 to 136,
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 in
this report, we do not express any form of assurance conclusion thereon.
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 are
prepared 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 and
supervisory 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 parent 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 parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent 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 Code
specified 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 35;
– Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period
is appropriate set out on pages 34 and 35;
– Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation and
meets its liabilities set out on page 35;
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4imprint Group plc Annual Report & Accounts 2021
– Directors’ statement on fair, balanced and understandable set out on page 80;
– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 36;
–
The section of the annual report that describes the review of effectiveness of risk management and internal control systems set
out on pages 36 and 63; and;
The section describing the work of the audit committee set out on pages 60 to 63.
–
responsibilities of directors
As explained more fully in the Directors’ responsibilities statement set out on page 80, 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 the
Directors 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 parent company’s ability to continue
as a going 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 parent company or to cease operations, or have no realistic alternative but
to do so.
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 of these
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 relating 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
management, those responsible for legal and compliance procedures and the Company Secretary. We corroborated our
enquiries through our review of Board minutes, papers provided to the Audit Committee and attendance at meetings of the Audit
Committee and 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. We
also considered investor focus and management remuneration in the current year and next year which may create an incentive
for management to manipulate profit. 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.
– Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved testing details of journal entries which met our defined risk criteria based on our understanding of the
business, enquiries of legal counsel, Group management and full and specific scope management and review of the volume and
nature of complaints by the whistleblowing hotline during the year;
– 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.
89
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4imprint Group plc Annual Report & Accounts 2021
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF 4IMPRINT GROUP PLC CONTINUED
Other matters we are required to address
–
Following the recommendation from the audit committee, we were appointed by the company on 18 May 2021 to audit the
financial statements for the year ending 1 January 2022 and subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and reappointments is three years, covering the 52 week period ended 28 December
2019, the 53 week period ended 2 January 2021 and the 52 week period ended 1 January 2022.
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, or for
the opinions we have formed.
CHrIStOPHer vOOGd
(SenIOr StAtUtOrY AUdItOr)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Birmingham
15 March 2022
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4imprint Group plc Annual Report & Accounts 2021
GROUP INCOME STATEMENT
for the 52 weeks ended 1 January 2022
revenue
Operating expenses
Operating profit
Finance income
Finance costs
Pension finance charge
Net finance cost
Profit before tax
Taxation
Profit for the period
earnings per share
Basic
Diluted
2021
52 weeks
$’000
2020
53 weeks
$’000
787,322
560,040
(756,676)
(556,068)
30,646
3,972
33
(435)
(15)
(417)
30,229
(7,643)
22,586
168
(193)
(104)
(129)
3,843
(753)
3,090
Cents
Cents
80.46
80.26
11.03
11.00
Note
1
2
1
4
5
6
6
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4imprint Group plc Annual Report & Accounts 2021
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 52 weeks ended 1 January 2022
Profit for the period
Other comprehensive (expense)/income
Items that may be reclassified subsequently to the income statement:
Currency translation differences
Items that will not be reclassified subsequently to the income statement:
Return on pension scheme assets (excluding interest income)
Re-measurement gains/(losses) on post-employment obligations
Tax relating to components of other comprehensive income
total other comprehensive expense net of tax
total comprehensive income for the period
Note
23
17
17
11
2021
52 weeks
$’000
2020
53 weeks
$’000
22,586
3,090
(97)
863
(1,391)
1,261
2,506
(5,550)
(1,411)
1,241
(393)
(2,185)
22,193
905
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4imprint Group plc Annual Report & Accounts 2021
GROUP BALANCE SHEET
at 1 January 2022
non-current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax assets
Retirement benefit asset
Current assets
Inventories
Trade and other receivables
Current tax debtor
Cash and cash equivalents
Current liabilities
Lease liabilities
Trade and other payables
Current tax creditor
net current assets
non-current liabilities
Lease liabilities
Retirement benefit obligation
Deferred tax liabilities
net assets
Shareholders’ equity
Share capital
Share premium reserve
Other reserves
Retained earnings
total Shareholders’ equity
Note
2021
$’000
2020
$’000
8
9
10
11
17
12
13
24,667
24,832
1,045
1,100
11,725
13,065
600
1,974
4,272
–
40,011
43,269
20,559
11,271
63,589
36,799
2,034
1,976
14
41,589
39,766
127,771
89,812
15
16
15
17
18
(1,150)
(1,117)
(71,877)
(49,569)
–
(432)
(73,027)
(51,118)
54,744
38,694
(10,939)
(12,089)
–
(3,310)
(850)
(1,193)
(11,789)
(16,592)
82,966
65,371
21
18,842
18,842
68,451
68,451
23
6,020
6,117
(10,347)
(28,039)
82,966
65,371
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The financial statements on pages 91 to 122 were approved by the Board of Directors on 15 March 2022 and were signed on its
behalf by
KevIn lYOnS-tArr
CHIef eXeCUtIve OffICer
dAvId SeeKInGS
CHIef fInAnCIAl OffICer
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4imprint Group plc Annual Report & Accounts 2021
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
for the 52 weeks ended 1 January 2022
Balance at 29 December 2019
18,842
68,451
5,254
(3,029)
(26,570)
62,948
Retained earnings
Share capital
$’000
Share
premium
reserve
$’000
Other
reserves
(note 23)
$’000
Own shares
$’000
Profit
and loss
$’000
Total
equity
$’000
Profit for the period
Other comprehensive income/(expense)
Currency translation differences
Re-measurement losses on post-employment obligations
Deferred tax relating to components of other comprehensive
income (note 11)
Total comprehensive income
Proceeds from options exercised
Own shares utilised
Own shares purchased
Share-based payment charge
Deferred tax relating to share options (note 18)
Deferred tax relating to losses attributable to share options
(note 11)
Balance at 2 January 2021
Profit for the period
Other comprehensive income/(expense)
Currency translation differences
Re-measurement gains on post-employment obligations
Deferred tax relating to components of other comprehensive
income (note 11)
Total comprehensive income
Own shares utilised
Own shares purchased
Share-based payment charge
Deferred tax relating to share options (note 18)
Deferred tax relating to losses attributable to share options
(note 11)
Dividends
863
863
3,090
3,090
863
(4,289)
(4,289)
1,241
1,241
42
905
2,170
2,170
3,677
(3,677)
–
(1,229)
(1,229)
625
(83)
625
(83)
35
35
18,842
68,451
6,117
(581)
(27,458)
65,371
22,586
22,586
(97)
(97)
1,115
1,115
(1,411)
(1,411)
(97)
22,290
22,193
573
(843)
(573)
602
5
–
(843)
602
5
(228)
(228)
(4,134)
(4,134)
Balance at 1 January 2022
18,842
68,451
6,020
(851)
(9,496)
82,966
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4imprint Group plc Annual Report & Accounts 2021
GROUP CASH FLOW STATEMENT
for the 52 weeks ended 1 January 2022
Cash flows from operating activities
Cash generated from operations
Tax paid
Finance income received
Finance costs paid
Lease interest
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
Net cash used in investing activities
Cash flows from financing activities
Capital element of lease payments
Proceeds from share options exercised
Purchases of own shares
Dividends paid to Shareholders
Net cash used in financing activities
net movement in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Exchange (losses)/gains on cash and cash equivalents
2021
52 weeks
$’000
2020
53 weeks
$’000
Note
24
18,257
3,184
(6,414)
33
(65)
15
(377)
(507)
168
(49)
(132)
11,434
2,664
(3,083)
(3,427)
(382)
–
(390)
93
(3,465)
(3,724)
15
(1,117)
(1,418)
–
2,170
(843)
(1,229)
7
(4,134)
–
(6,094)
(477)
1,875
(1,537)
39,766
41,136
(52)
167
Cash and cash equivalents at end of the period
14
41,589
39,766
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE 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 Group presents the consolidated financial statements in US dollars and numbers are shown in US dollars thousands.
A substantial portion of the Group’s revenue and earnings are denominated in US dollars and the Board is of the opinion that
a US dollar presentation gives a more meaningful view of the Group’s financial performance and position.
Accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have
been consistently applied to all the periods presented.
Basis of preparation
The financial statements have been prepared under the historical cost convention in accordance with UK-adopted International
Accounting Standards. 2020 was a 53 week period which started on 29 December 2019. Please refer to the Financial Review on
page 31 for a discussion of the impact on the Group’s key metrics of a 52 week period versus a 53 week comparative period.
New accounting standards applicable for the first time in this reporting period have no impact on the Group’s results or balance
sheet.
environmental risks
In preparing the financial statements, management has considered the impact of environmental risks. Whilst the impact of
environmental risks are still developing and therefore all possible future outcomes are uncertain, risks known to the Group have
been considered in judgments, estimates and assumptions and in assessing viability and going concern. These considerations did not
have a material impact on the financial statements.
Going concern
In making their assessment of going concern from the date of approval of these financial statements until 1 July 2023, the Directors
have carefully considered the Group’s prospects:
–
The Group’s strategy, market position and business model, as set out in the Strategic Report section on pages 9 to 19 of the 2021
Annual Report.
The principal risks and uncertainties facing the Group, as outlined in the Principal Risks & Uncertainties section on pages 36 to 43
of the 2021 Annual Report.
Information contained in the Financial Review concerning the Group’s financial position, cash flows and liquidity position.
–
–
– Regular management reporting and updates from the Executive Directors.
– Recent detailed financial forecasts and analysis.
Whilst the lingering effect of the COVID-19 pandemic continues to present challenges, including on the supply chain and inflationary
pressures, the Board considers that the Group’s strategy, competitive position, and business model remain entirely relevant and,
indeed, have proved to be resilient and flexible under stress.
Business operations have adapted successfully to the challenging and rapidly changing external conditions in a timely manner.
The marketing portfolio was reconfigured during 2020 and 2021, providing flexibility over expenditure and the agility to invest
in opportunities for growth in recovering markets. Discretionary overhead and capital spend continues to be tightly controlled,
demonstrating the essentially minimal fixed cost base of the direct marketing model.
These actions, coupled with the strong financial position of the Group that has been maintained throughout this global pandemic,
give the Board confidence that despite residual uncertainty as to future market conditions, the Group will be in a good position both
to withstand further economic stress and to take market share opportunities as demand continues to recover.
As a primary strategic objective of the Group and as noted above in the assessment of prospects, environment-related risks and
opportunities are specifically considered by the Board in their assessment of viability and going concern.
The Group has established an appropriate governance structure, in the form of the Group Environmental Committee and Business
Risk Management Committee, to identify new and emerging risks related to climate change and the environment.
As detailed more fully in the Principal Risks & Uncertainties section, environmental risks have the potential to impact the Group’s
ability to achieve its strategic objectives through damage to our reputation, our operational facilities and those of our supplier
partners, and the failure to respond to trends and shifts in consumer product preferences.
As detailed more fully in the Sustainability section, the Group has proactively responded to these risks with several initiatives. These
include the achievement of CarbonNeutral® company status in October 2021, committed plans to build a solar panel array at our
distribution centre in Oshkosh, plans to review ESG-linked executive remuneration with the inclusion of climate-related metrics, and
the launch of our better choicesTM programme to make it easier for our customers to find products with the characteristics that are
most important to them. The flexible nature of our ‘drop-ship’ model and close relationships maintained with key and alternative
suppliers allows for relatively rapid adjustment to episodes of extreme weather.
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4imprint Group plc Annual Report & Accounts 2021
Whilst governmental and societal responses to climate change risks are still developing, and therefore all possible future outcomes
are not known, the Group has embedded environmental matters into our strategic objectives and sees climate change and other
aspects of environmental stewardship as a fundamental part of our commitment to build a commercially and environmentally
sustainable business that delivers value to all stakeholders.
The cash flow impact of our environmental initiatives are incorporated into the financial forecasts used to assess viability and
going concern.
The Board considers that the key factor that would prejudice the ongoing viability and liquidity of the Group would be a severe
downturn in demand, which negatively impacts new customer acquisition and existing customer retention.
The ‘base case’ three-year plan, developed for the purposes of the Group’s strategic planning process, provides the basis for the
financial modelling used to assess viability. The commercial underpin to this ‘base case’ is the Board’s view that whilst the promotional
products market contracted in 2020, for example due to the cancellation of trade shows and physical events, our recent experience
is that market demand is resilient across the product range and customer base, as evidenced in the rapid recovery in demand during
2021. The ‘base case’ started with the total order count at 90% of pre-pandemic 2019 levels, as achieved in 2021, with consistent and
sustained top-line growth throughout the three-year period. Marketing costs were modelled to increase in line with revenue with the
Group’s revenue per marketing dollar KPI remaining stable at historic levels. This ‘base case’ shows improving financial results, an
accumulating cash balance and no liquidity concerns.
Severe, but plausible, downside demand assumptions were then determined and used to adjust the ‘base case’ forecast to model the
effects on the Group’s liquidity. This ‘downside’ scenario assumes a significant deterioration in demand patterns during 2022, similar
to those experienced in 2020 when the pandemic started, with order volumes for the full year dropping back to around 70% of 2019
levels, before gradually recovering back to 2019 order levels by 2024. Marketing and direct costs were flexed in line with revenue, but
other payroll and overhead costs remained at 2021 levels with some allowance for inflationary increases. This ‘downside’ scenario
was intended to simulate a severe shock to demand, similar to the experience from COVID-19, that results in sustained diminished
corporate demand in a downsized promotional products market.
Even under the severe stress built into the ‘downside’ model, the Group retains sufficient liquidity throughout the assessment period.
This liquidity is in the form of cash balances. 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 distressed forecast 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 or working capital requirements, a reverse stress testing scenario has not been undertaken. The Group has proven during
2020 its ability to flex its marketing and other costs to mitigate the impact of falls in revenue driven by COVID-19 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 2023, and a small overdraft facility
with its UK bankers, that expires on 31 December 2022, the modelling in both the ‘base case’ and ‘downside’ scenarios shows the
maintenance of positive cash balances throughout the assessment period and, as such, there is no current requirement to utilise the
facilities or intention to secure any additional facilities.
The assumptions used in the ‘base case’ and ‘downside’ scenarios and resulting financial forecasts 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 very low fixed cost base,
and enters the 2022 financial year with a strong net cash position of $41.6m, enabling it to remain cash positive even under severe
economic stress.
Based on the assessment outlined above, the Directors have reasonable expectations that the Group and Company will have
adequate resources to continue to operate from the date these financial statements were approved until at least 1 July 2023.
Accordingly, they continue to adopt the going concern basis in preparing the Group’s and Company’s financial statements.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries for the period.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. The financial statements of subsidiaries, as amended to conform to Group
accounting policies, are included in the consolidated financial statements from the date that control commences until the date that
control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is
measured as the fair value of the consideration paid. Identifiable assets and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the acquisition date. The excess of the cost of acquisition over the Group’s
share of identifiable net assets is recorded as goodwill. Acquisition-related costs are expensed as incurred.
All subsidiaries have the same year-end date as the Group.
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Judgments, estimates and assumptions
Impact of COvId-19 on estimates
The impact of COVID-19 and subsequent disruptions to the supply chain on the consolidated financial statements has been
considered in determining the estimates required for credits and impairment provisions in relation to trade and other receivables,
inventory provisioning, impairment of property, plant and equipment, and intangibles, and the recoverability of deferred tax assets.
Whilst the uncertainty surrounding the ultimate impact of the COVID-19 pandemic has resulted in significant estimation in respect to
the future cash flows of subsidiary companies and in determining appropriate discount rates, growth rates, and probability of default
rates necessary for undertaking impairment reviews and assessing the recoverability of assets (please refer to note 8 for further
information on the impairment review process) and levels of provisions required, these are not considered to represent critical
accounting judgments or key sources of estimation uncertainty in the preparation of the financial statements.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions
that affect the application of 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.
The estimates and associated assumptions are based on historical experiences and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Critical accounting policies are those that require significant judgments or estimates and potentially result in materially different
results under different assumptions or conditions. Management considers the following to be the critical accounting policies:
Critical accounting judgments
Revenue
For most of its product line, the Group operates a ‘drop-ship’ business model whereby suppliers hold blank inventory, imprint the
product and ship directly to customers. In order to determine the amount of revenue to recognise, it is necessary for the Group to
make a judgment to assess if it is acting as principal or an agent in fulfilling the performance obligations and promises to customers
for these transactions.
The Group has full discretion to accept orders, agrees artwork with the customer, sets the transaction price, selects the suppliers
used to fulfil orders, and considers its customer satisfaction promises (‘on-time or free’, price and quality guarantees) to be integral to
meeting its performance obligations.
Accordingly, the Group is of the opinion that it acts as principal in providing goods to customers and recognises the gross amount of
consideration as revenue.
Leases
The Group signed an extension to its Oshkosh office lease commencing on 1 October 2020 for a five-year period with an option to
renew for a further five years from 2025 to 2030. In accordance with the requirements of IFRS 16, the Group has made a judgment
on the likelihood of exercising the new option to extend in determining the lease term. See note 15 for further information.
Retirement benefit asset
At the balance sheet date, the fair value of the defined benefit assets exceeded the present value of the defined benefit obligations
of the 4imprint 2016 Pension Plan. Although the Group anticipates that the surplus will be utilised during the life of the plan to
address members’ liabilities, the Group recognises the surplus in full on the basis that it is managements’ judgment that there are no
restrictions on the return of residual plan assets in the event of a winding up of the plan after all member obligations have been met.
Key sources of estimation uncertainty
Pensions
As detailed in note 17, the Group sponsors a defined benefit pension scheme closed to new members and future accruals.
Period-end recognition of the liabilities under this scheme requires a number of significant actuarial assumptions to be made,
including inflation rate, discount rate and mortality rates. Small changes in assumptions can have a significant impact on the
amounts recorded in other comprehensive income and on the pension liabilities in the balance sheet. Sensitivities to changes in
these assumptions are disclosed in note 17. In addition, the assets held by the scheme include funds that may contain gilt repos
and reverse gilt repos, the valuations of which are complex.
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4imprint Group plc Annual Report & Accounts 2021
Other accounting policies
revenue
The activity from which the Group derives revenue is the sale and delivery of promotional products.
The Group primarily operates a ‘drop-ship’ model in which it acts as principal as it has control over the goods and services before
transfer to the customer. The Group also acts as principal for apparel goods that are decorated within the Group’s facilities and
shipped directly to the customer. The Group recognises the gross amount of consideration as revenue in both instances.
It is common for a customer order to include several different product lines. Individual order lines are separately priced, have
separately agreed delivery dates, and are capable of being used or enjoyed by the customer on their own, separately from any
other order lines included in the overall customer order. The Group therefore considers each order line to constitute a separate
performance obligation. Revenue is recognised at a point in time upon delivery and acceptance by the customer as this is when
control of the goods has transferred.
The price for each order line is fixed at the time of order, inclusive of any discounts given for that order line. Revenue is shown net of
discounts, credits, refunds, VAT and sales tax. The value of provisions for credits and refunds is determined using the expected value
methodology based upon historical experience of credits/refunds issued and levels of revenue.
Payment terms vary by customer but are generally either payment with order or within 30 days of delivery.
Supplier rebates
Amounts due under rebate agreements are recognised based upon volumes of products purchased during the period to which
the rebates relate at the relevant rebate rates, per supplier agreements. Amounts are credited to the cost of purchase of goods
for resale and any accrued income is included in other receivables. Provision is made against such receivables to the extent it is
considered that the amounts are not recoverable.
Segmental reporting
The reporting requirements of IFRS 8 require operating segments to be identified based on internal reports about components of
the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess
their performance. The chief operating decision maker has been identified by the Directors as the Board.
leases
A lease is defined as a contract that conveys the right to control the use of an identified asset for a period of time in exchange
for consideration. At the commencement date of a lease a right-of-use asset and a lease liability are recognised in the financial
statements.
The lease liability is initially measured at the present value of expected future lease payments discounted at the interest rate implicit
in the lease or, if that rate cannot be determined, the lessee’s incremental borrowing rate. Subsequently the lease liability decreases
by the lease payments made, offset by interest on the liability, and may be re-measured to reflect any reassessment of expected
payments or to reflect any lease modifications.
The right-of-use asset is initially measured at cost. This comprises the amount of the initial lease liability plus: any lease payments
made on or before the commencement date less incentives received; any incremental costs of obtaining the lease; and, if any, the
costs of decommissioning the asset and any restoration work to return the asset to the condition required under the terms of the
lease. Subsequently the right-of-use asset is measured using the cost model. The asset is amortised on a straight-line basis over the
expected term of the lease, adjusted for any re-measurement of the lease liability, and is shown net of the accumulated depreciation
and any impairment provisions.
The Group has elected to use the recognition exemptions for low value assets and short-term leases, with a duration of 12 months or
less, which are expensed to operating profit on a straight-line basis over the term of the lease.
Share-based payments
Share options, which are all equity-settled, are measured at fair value at the date of grant allowing for any market conditions, if
applicable. The fair value is charged to the income statement over the vesting period of the share option schemes on a straight-line
basis. The value of the charge is adjusted each year to reflect any non-market or service conditions that impact the expected number
of options that will become exercisable. All options cancelled are fully expensed to the income statement upon cancellation.
exceptional items
Income or costs which are both material and non-recurring, whose significance is sufficient to warrant separate disclosure in the
financial statements, are referred to as exceptional items. The Directors consider that the separate disclosure of these items assists
in understanding the Group’s financial performance.
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Other accounting policies continued
taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive income, or directly in equity in which case the tax is recognised in other
comprehensive income or directly in equity, respectively. Tax attributable to the defined benefit pension scheme is recognised in the
income statement except to the extent it relates to actuarial movements recognised in other comprehensive income.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the Group’s subsidiaries operate and generate taxable income.
Transactions and calculations for which the ultimate tax determination is uncertain may arise during the ordinary course of business.
Should an uncertain tax position arise, where a risk of an additional tax liability has been identified and it is considered probable that
the Group will be required to settle that tax, a tax provision is recognised. This is assessed on a case-by-case basis.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Group’s financial statements. However, deferred income tax is not accounted for if
it arises from initial recognition of an asset or liability in a transaction, other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income
tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which
the temporary differences can be utilised. Deferred tax movements in respect of losses recognised or derecognised in the period are
allocated between the income statement, other comprehensive income and equity in proportions to the origin of those losses.
dividends
Final equity dividends are recognised in the Group’s financial statements in the period in which the dividends are approved by the
Shareholders. Interim equity dividends are recognised when paid.
foreign currency
The functional and presentation currency of the Company is Sterling. However, the Group’s financial statements are presented in
US dollars, reflecting that most of the Group’s revenues and transactions are generated in North America in US dollars.
Transactions in currencies other than the functional currency of the Company or subsidiary concerned are recorded at the exchange
rate prevailing at the date of the transaction. At each balance sheet date, monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rate prevailing at the balance sheet date. Translation differences on monetary items are
taken to the income statement.
On consolidation the balance sheets of Sterling enterprises are translated into US dollars at the exchange rate ruling at the balance
sheet date and income statements are translated at average rates for the period under review. One-off material transactions are
translated at the spot rate on the transaction date. The resulting exchange differences are taken to the cumulative translation
differences reserve and are reported in the statement of comprehensive income.
On disposal of an operation any cumulative exchange differences held in Shareholders’ equity are recycled to the income statement.
derivative instruments
Derivatives are recognised initially at fair value and are re-measured at fair value at each reporting date.
The Group only uses derivative forward foreign exchange contracts to hedge highly probable cash flows that meet the qualifying
criteria for hedge accounting and never for maturities more than 12 months. The fair value of the hedging derivative is classified as a
current asset or liability.
The Group applies hedge accounting to these transactions designating them as cash flow hedges. The effective portion of changes
in these cash flow hedges are deferred in a hedging reserve, where material, and then charged to the income statement when the
forecast sale or purchase occurs or if the forecast transaction is no longer expected to occur. Any ineffective portion of the cash flow
hedge is recognised immediately in the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. No depreciation is
provided on freehold land. For all other property, plant and equipment, depreciation is calculated to write off their cost less residual
value by equal annual instalments over the period of their estimated useful lives, which are reviewed on a regular basis. Leasehold
assets are depreciated over the shorter of the term of the lease or their estimated useful lives.
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4imprint Group plc Annual Report & Accounts 2021
Cost comprises the purchase price plus costs directly incurred in bringing the asset into use.
The principal useful lives currently fall within the following ranges:
Freehold and long leasehold buildings
Short leasehold buildings
Plant, machinery, fixtures and fittings
Computer hardware
50 years
Life of lease
3–15 years
3 years
Profits and losses on disposal which have arisen from over or under depreciation are accounted for in arriving at operating profit and
are separately disclosed when material.
Intangible assets
Acquired software licences and expenditure on developing websites and other computer systems, providing they meet the criteria
for recognition under IAS 38, are capitalised, held at historic cost and amortised from the date of commissioning on a straight-line
basis over their useful economic lives (currently three to five years). Amortisation is charged to operating expenses. Internal
non-development costs are expensed to operating expenses as incurred.
An expense is recognised in operating expenses for advertising and promotional activities when, in the case of goods, the business
has a right of access to the goods or, for services, when the business has received the service.
Impairment of assets
All property, plant and equipment and intangible assets are reviewed for impairment in accordance with IAS 36 ‘Impairment
of Assets’ if there is an indication that the carrying value of the asset may have been impaired. Where an impairment review is
required, the carrying value of the assets is measured against their value in use based on future estimated cash flows, discounted
by the appropriate discount rate, resulting from the use of those assets. Assets are grouped at the lowest level for which there
is a separately identifiable cash flow (cash-generating unit). An impairment loss is recognised for the amount at which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use.
Inventories
Inventories are valued at the lower of cost and net realisable value using the first in first out basis. Net realisable value is the
estimated selling price in the ordinary course of business, less applicable variable selling expenses. Items in transit where the Group
has control are included in inventories.
trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment of trade receivables is established based on the expected credit
loss. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables, which are grouped based on shared credit risk characteristics and the days past due. The amount
of the provision is recognised in the income statement. Trade receivables are discounted when the time value of money is considered
material. Receivables also include credit and debit card sales which have not reached the bank at the reporting date.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held on call with banks and other short-term highly liquid investments
with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance
sheet. In the cash flow statement, cash and cash equivalents are shown net of bank overdrafts. Cash deposits and other short-term
highly liquid investments with an original maturity in excess of three months are classified as other financial assets.
trade payables and contract liabilities
Trade payables are recognised initially at fair value and subsequently measured at amortised cost. Trade and other payables are
discounted when the time value of money is considered material.
Contract liabilities reflect the Group’s obligation to transfer goods to a customer and arise where a customer has paid an amount of
consideration in advance of receiving the goods.
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Other accounting policies continued
Pensions
The Group operates defined contribution plans for the majority of its UK and US employees. The regular contributions are charged to
the income statement as they are incurred.
The Group sponsors a defined benefit scheme, which is closed to new members and future accruals. The Group accounts for the
defined benefit scheme under IAS 19 ‘Employee Benefits’. The deficit of the defined benefit pension scheme is recognised in full on
the balance sheet if the present value of the defined benefit obligation exceeds the fair value of plan assets at the balance sheet
date. If the assets exceed the obligations then a judgment is made to determine the level of refund available from the scheme
in recognising the amount of the surplus to be recognised. A full actuarial valuation is carried out at least every three years and
the defined benefit obligation is updated on an annual basis, by independent actuaries, using the projected unit credit method.
Lump sum contributions to the defined benefit scheme to reduce the deficit are included within ‘cash generated from operations’,
alongside the regular contributions.
Pension charges recognised in the income statement consist of administration costs of the scheme, past service costs, and a finance
charge/credit based on the net pension scheme position calculated in accordance with IAS 19.
Differences between the actual and expected return on assets, experience gains and losses and changes in actuarial assumptions
are included directly in the statement of comprehensive income.
Borrowings
Borrowings are measured initially at fair value net of transaction costs incurred and subsequently carried at amortised costs using
the effective interest rate method. Arrangement fees are amortised over the life of the borrowing. Borrowings are discounted when
the time value of money is considered material.
Own shares held by employee share trusts
The Company is the sponsoring entity of an employee benefit trust (“EBT”) and, notwithstanding the legal duties of the Trustees,
the Group considers that it has ‘de facto’ control of the EBT. The trust is accounted for as assets and liabilities of the Company
and included in the consolidated financial statements. The Company’s equity instruments held by the EBT are accounted for as
if they were the Company’s own equity and are treated as treasury shares. No gain or loss is recognised in profit or loss or other
comprehensive income on the purchase, sale or cancellation of the Company’s own equity held by the EBT.
Government grants
Government grants are recognised at fair value when there is reasonable assurance that the conditions associated with the grants
have been complied with and the grants will be received. Grants compensating for expenses incurred are recognised as a deduction
of the related expenses in the consolidated income statement on a systematic basis in the same periods in which the expenses are
incurred. Grants deducted from expenses are included in ‘cash generated from operations’ in the consolidated cash flow statement
on a consistent basis with the related expenses.
IFRS standards effective in future financial statements
The IASB and IFRS IC have issued new or amended standards and interpretations which are effective for accounting periods as noted
below. Standards and interpretations which have been issued but are not yet effective will be applied by the Group in the accounting
period that they become effective. Management does not believe the impact of adopting the new or amended standards and
interpretations listed below will have a material impact on the results or net assets of the Group.
Amendments to IFRS 3 – Reference to the Conceptual Framework (effective 1 January 2022)
IFRS 17 ‘Insurance Contracts’ (effective 1 January 2023)*
Amendments to IAS 1 ‘Presentation of Financial Statements’ (effective 1 January 2023)*
Annual Improvements to IFRS Standards 2018-2020 (effective 1 January 2022)
Amendments to IAS 16 ‘Property, Plant and Equipment’: Proceeds before Intended Use (1 January 2022)*
Amendments to IAS 8 – Definition of Accounting Estimates (1 January 2023)*
Amendments to IAS 37 – Onerous Contracts: Cost of Fulfilling a Contract (1 January 2022)
Amendments to IAS 12 – Deferred Tax relating to Assets and Liabilities arising from a Single Transaction (1 January 2023)*
* Not yet endorsed by the UK.
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4imprint Group plc Annual Report & Accounts 2021
1 Segmental reporting
The chief operating decision maker has been identified as the Board of Directors and the segmental analysis is presented based on
the Group’s internal reporting to the Board.
At 1 January 2022, the Group has two operating segments, North America and UK & Ireland. The costs of the Head Office are
reported separately to the Board, but this is not an operating segment.
revenue
North America
UK & Ireland
total Group revenue
Profit
North America
UK & Ireland
Operating profit from Direct Marketing operations
Head Office costs
Operating profit
Net finance cost (note 4)
Profit before tax
Other segmental information
2021
$’000
2020
$’000
773,710
13,612
549,873
10,167
787,322
560,040
2021
$’000
36,006
(1,464)
34,542
(3,896)
30,646
(417)
30,229
2020
$’000
9,170
(1,605)
7,565
(3,593)
3,972
(129)
3,843
North America
UK & Ireland
Head Office
Assets
Liabilities
Capital expenditure
Depreciation
Amortisation
2021
$’000
2020
$’000
2021
$’000
2020
$’000
120,284
3,017
44,481
86,755
2,055
44,271
(81,674)
(2,618)
(524)
(62,216)
(1,673)
(3,821)
2021
$’000
3,415
50
–
2020
$’000
3,780
33
4
2021
$’000
(3,135)
(99)
(3)
2020
$’000
(2,919)
(72)
(1)
2021
$’000
(1,756)
(21)
–
2020
$’000
(1,878)
(23)
(40)
167,782 133,081
(84,816)
(67,710)
3,465
3,817
(3,237)
(2,992)
(1,777)
(1,941)
Head Office assets include cash and cash equivalents, deferred tax assets and retirement benefit assets. Head Office liabilities
included retirement benefit obligations in 2020.
Geographical analysis of revenue and non-current assets
2021
Total revenue by destination
Property, plant and equipment
Intangible assets
Right-of-use assets
2020
Total revenue by destination
Property, plant and equipment
Intangible assets
Right-of-use assets
north
America
$’000
773,755
23,812
996
11,725
North America
$’000
549,932
23,892
1,052
13,065
UK
$’000
13,084
855
49
–
UK
$’000
9,326
940
48
–
All other
countries
$’000
483
–
–
–
All other
countries
$’000
782
–
–
–
total
$’000
787,322
24,667
1,045
11,725
Total
$’000
560,040
24,832
1,100
13,065
103
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 Operating expenses
The following items have been charged/(credited) in arriving at operating profit:
Purchase of goods for resale and consumables
Changes in inventories
Impairment loss on trade receivables
Staff costs
Marketing expenditure (excluding staff costs)
Depreciation of property, plant and equipment
Amortisation of intangible assets
Amortisation of right-of-use assets
Short-term and low value operating lease payments
Defined benefit pension scheme administration costs
Net exchange losses
Other operating expenses
Note
2021
$’000
2020
$’000
13
3
8
9
10
15
17
518,944
(9,288)
1,669
66,918
120,317
3,237
437
1,340
168
340
67
52,527
361,488
186
865
60,475
85,312
2,992
443
1,498
137
343
58
42,271
756,676
556,068
During the period the Group obtained the following services from its auditor at costs as detailed below:
Fees payable to the Company’s auditor for the audit of the parent company, non-statutory audits of
overseas subsidiaries and audit of consolidated financial statements
Fees payable to the Company’s auditor and its associates for other services:
– the audit of Company’s subsidiaries pursuant to legislation
3 employees
Staff costs
Wages and salaries
Social security costs
Pension costs – defined contribution plans
Pension – past service costs
Government job retention credits
Share option charges
Social security costs in respect of share options
2021
$’000
457
28
485
2021
$’000
59,616
4,578
2,117
–
–
602
5
66,918
2020
$’000
425
23
448
2020
$’000
57,315
4,563
2,023
77
(4,137)
625
9
60,475
Note
17
17
22
22
Government grants and other COvId-19 assistance
In 2020 the Group accessed certain government support schemes aimed at mitigating the potential impact on liquidity and job losses
resulting from the impact of COVID-19. Support received includes $3.93m of employee retention credits under the US CARES Act and
$0.21m under the UK Coronavirus Job Retention Scheme. No government support schemes were accessed in 2021.
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4imprint Group plc Annual Report & Accounts 2021
Average monthly number of people (including executive directors) employed
Distribution and production
Sales and marketing
Administration
Key management compensation
Salaries, fees and short-term employee benefits
Social security costs
Pension costs – defined contribution plans
Share option charges
Social security costs in respect of share options
2021
number
2020
Number
446
494
209
1,149
2021
$’000
1,332
87
22
79
1
1,521
458
514
216
1,188
2020
$’000
1,261
70
24
(6)
–
1,349
Key management compensation in the period comprised the emoluments of all Directors (which are disclosed separately in the
Remuneration Report).
directors’ remuneration
Aggregate emoluments
Pension costs – defined contribution plans
4 Net finance cost
Finance (cost)/income
Bank and other interest receivable
Bank interest payable
Lease interest charge (note 15)
Pension finance charge (note 17)
Net finance cost
5 taxation
Current tax
UK tax – current
Overseas tax – current
Overseas tax – prior periods
total current tax
Deferred tax
Origination and reversal of temporary differences
Adjustment in respect of prior periods
total deferred tax (notes 11 and 18)
taxation
2021
$’000
1,332
22
2020
$’000
1,261
24
2021
$’000
33
(58)
(377)
(15)
(417)
2021
$’000
–
5,910
15
5,925
1,718
–
1,718
7,643
2020
$’000
168
(61)
(132)
(104)
(129)
2020
$’000
–
(845)
(53)
(898)
1,575
76
1,651
753
105
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 taxation continued
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:
Profit before tax
Profit before tax for each country of operation multiplied by rate of corporation tax
applicable in the respective countries
Effects of:
Adjustments in respect of prior periods
Expenses not deductible for tax purposes and non-taxable income
Other differences
Adjustments in respect of tax losses
De-recognition of deferred tax asset for UK losses
US BEAT liability
taxation
2021
$’000
30,229
7,087
15
4
62
(274)
749
–
7,643
2020
$’000
3,843
523
23
20
101
(806)
–
892
753
The net deferred tax asset at 1 January 2022 has been calculated at a tax rate of 19% in respect of deferred tax items that are
expected to reverse before 1 April 2023 (2020: 19%) and 25% in respect of deferred tax items expected to reverse after 1 April 2023
(2020: 19%); and 25% (2020: 25%) in respect of US deferred tax items.
Management does not consider that there are any material uncertain tax positions.
‘Other differences’ comprises adjustments in respect of share options and US leases.
‘Adjustments in respect of tax losses’ includes the tax effect of brought forward UK tax losses utilised in the year and in 2020 includes
the tax effect of US tax losses incurred in 2020 and carried back to prior years.
Following a review of forecast UK taxable profits, the deferred tax asset for UK tax losses has been de-recognised in the period.
US BEAT is an additional US federal tax imposed on US corporations that make certain types of payment to foreign related parties.
The US Group had no BEAT liability for 2021.
6 earnings per share
Basic and diluted
The basic and diluted earnings per share are calculated based on the following data:
Profit after tax
Basic weighted average number of shares
Adjustment for employee share options
Diluted weighted average number of shares
Basic earnings per share
Diluted earnings per share
2021
$’000
22,586
2021
number
‘000
28,072
68
28,140
2021
Cents
80.46
80.26
2020
$’000
3,090
2020
Number
‘000
28,003
95
28,098
2020
Cents
11.03
11.00
The basic weighted average number of shares excludes shares held in the 4imprint Group plc employee benefit trust. The effect of
this is to reduce the average by 13,888 (2020: 82,090).
The basic earnings per share is calculated based on the profit for the financial period divided by the basic weighted average number
of shares.
For diluted earnings per share, the basic weighted average number of ordinary shares in issue is adjusted to assume conversion of
all potential dilutive ordinary shares. The potential dilutive ordinary shares relate to those share options granted to employees where
the exercise price is less than the average market price of the Company’s ordinary shares and which are likely to vest at the balance
sheet date.
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4imprint Group plc Annual Report & Accounts 2021
7 dividends
equity dividends – ordinary shares
Interim paid:
Final paid:
15.00c (2020: 00.00c)
00.00c (2020: 00.00c)
2021
$’000
4,134
–
4,134
2020
$’000
–
–
–
The Directors are proposing a final dividend in respect of the period ended 1 January 2022 of 30.00c. Subject to Shareholder
approval at the AGM, these dividends are payable on 31 May 2022 to Shareholders on the register of members at close of business
on 29 April 2022. These financial statements do not reflect this proposed dividend.
8 Property, plant and equipment
Cost:
At 3 January 2021
Additions
Transfers
Disposals
Exchange difference
At 1 January 2022
Depreciation:
At 3 January 2021
Charge for the period
Transfers
Disposals
Exchange difference
At 1 January 2022
net book value at 1 January 2022
Freehold
land and
buildings
$’000
18,584
383
13
–
(10)
Plant,
machinery,
fixtures &
fittings
$’000
19,775
1,445
(13)
(24)
(6)
Computer
hardware
$’000
2,079
1,255
–
(453)
(1)
Total
$’000
40,438
3,083
–
(477)
(17)
18,970
21,177
2,880
43,027
3,126
586
1
–
(2)
11,125
2,091
(1)
(24)
(4)
3,711
13,187
15,259
7,990
1,355
560
–
(453)
–
1,462
1,418
15,606
3,237
–
(477)
(6)
18,360
24,667
Freehold land with a value of $1,034,000 (2020: $1,038,000) has not been depreciated.
Cost:
At 29 December 2019
Additions
Disposals
Exchange difference
At 2 January 2021
Depreciation:
At 29 December 2019
Charge for the period
Disposals
Exchange difference
At 2 January 2021
Net book value at 2 January 2021
Freehold
land and
buildings
$’000
18,565
–
(14)
33
Plant,
machinery,
fixtures &
fittings
$’000
17,227
2,852
(326)
22
18,584
19,775
2,559
564
(1)
4
3,126
15,458
9,445
1,995
(326)
11
11,125
8,650
Computer
hardware
$’000
1,976
575
(476)
4
2,079
1,395
433
(476)
3
1,355
724
Total
$’000
37,768
3,427
(816)
59
40,438
13,399
2,992
(803)
18
15,606
24,832
107
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8 Property, plant and equipment continued
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. For the purposes of impairment testing, the Group is considered to have two cash-generating units (“CGU’s”), being the US
and UK businesses.
In the prior year, COVID-19 was considered an indication of impairment because of the material adverse effect it had on the trading
activity of both CGU’s. Whilst the Group is still being impacted by the effects of COVID-19, it is not of itself considered an indication of
impairment for the current year.
An assessment of the US CGU did not identify any indications of impairment and accordingly, no indicator-based impairment
testing has been undertaken. This is supported by the strong recovery in both demand and the financial results during 2021 of the
trading business.
The UK CGU continued to be affected throughout 2021 by various COVID-19 restrictions that impacted the demand, net cash flows
and operating results of the business. These are considered indications of impairment and therefore full impairment testing of the
assets ascribed to the UK CGU has been undertaken in accordance with IAS 36.
Management has estimated the recoverable amount of these assets from value in use (“VIU”) calculations. The key assumptions for
the VIU calculations are operating cash flow forecasts, and the long-term growth rate and pre-tax discount rate. Operating cash flow
forecasts are derived from the most recent financial budgets and forecasts approved by the Board of Directors covering a three-
year period and are consistent with the forecasts used in the going concern and viability assessments. These forecasts include
assumptions around revenue and operating margins and reflect external factors, including the impact of COVID-19 and environment
related risks. A long-term growth rate of 2.5% has been used, based upon external research data for the UK promotional products
markets. A pre-tax discount rate of 10.0% has been determined based upon the calculation of a weighted average cost of capital
using the capital asset pricing model.
The recoverable amounts calculated exceeded the carrying values of the assets ascribed to the UK CGU of $0.9m, and therefore
no impairment losses have been recognised. An independent valuation of the freehold land and buildings held by the UK CGU
(comprising $0.7m of the total UK CGU carrying value of $0.9m) was undertaken at the end of 2021 and confirmed the fair value less
costs of disposal exceeds the carrying value of the asset. Excluding land and buildings, the remaining carrying value of the UK CGU
assets is immaterial to the Group.
2021
$’000
2020
$’000
2,546
382
(417)
(2)
2,509
1,446
437
(417)
(2)
1,464
1,045
2,569
390
(419)
6
2,546
1,417
443
(419)
5
1,446
1,100
9 Intangible assets
Computer software
Cost:
At start of period
Additions
Disposals
Exchange difference
At end of period
Amortisation:
At start of period
Charge for the period
Disposals
Exchange difference
At end of period
net book value at end of period
The average remaining life of intangible assets is 2.4 years (2020: 2.5 years).
Impairment review
See note 8 for details of the impairment review undertaken for the Group’s non-current assets.
108
4imprint Group plc Annual Report & Accounts 2021
10 right-of-use assets
Cost:
At 3 January 2021
Addition
Disposals
Exchange difference
At 1 January 2022
Depreciation:
At 3 January 2021
Charge for the period
Disposals
Exchange difference
At 1 January 2022
net book value at 1 January 2022
Cost:
At 29 December 2019
Addition*
Disposals
Exchange difference
At 2 January 2021
Depreciation:
At 29 December 2019
Charge for the period
Disposals
Exchange difference
At 2 January 2021
Net book value at 2 January 2021
* The addition relates to the renewal of the Oshkosh office lease from 1 October 2020 (see note 15).
Impairment review
See note 8 for details of the impairment review undertaken for the Group’s non-current assets.
Leasehold
land and
buildings
$’000
Plant,
machinery,
fixtures &
fittings
$’000
15,784
–
–
–
15,784
2,719
1,340
–
–
4,059
11,725
–
–
–
–
–
–
–
–
–
–
–
Leasehold
land and
buildings
$’000
Plant,
machinery,
fixtures &
fittings
$’000
3,405
12,579
(197)
(3)
15,784
1,423
1,495
(197)
(2)
2,719
13,065
13
–
(13)
–
–
10
3
(13)
–
–
–
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S
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P
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A
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I
t
I
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n
A
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I
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f
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A
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I
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Total
$’000
15,784
–
–
–
15,784
2,719
1,340
–
–
4,059
11,725
Total
$’000
3,418
12,579
(210)
(3)
15,784
1,433
1,498
(210)
(2)
2,719
13,065
109
4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 deferred tax assets
At start of period
Income statement charge
Deferred tax (charged)/credited to other comprehensive income
Deferred tax (charged)/credited to equity
Exchange difference
At end of period
2021
$’000
4,272
(2,055)
(1,411)
(228)
22
600
2020
$’000
4,338
(1,510)
1,241
35
168
4,272
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries. No tax is expected to be payable on them in the
foreseeable future.
Trading forecasts approved by the Board of Directors and covering a three-year period support the recoverability of the recognised
deferred tax assets.
All of the deferred tax asset ($0.6m) is expected to reverse within the next twelve months (2020: $1.0m).
The movement in the deferred tax asset during the period is shown in the following table:
deferred tax analysis
At 3 January 2021
Income statement charge
Deferred tax charged to other comprehensive income
Deferred tax charged to equity
Exchange difference
At 1 January 2022
Depreciation/
capital
allowances
$’000
3
–
–
–
–
3
Pension
$’000
2,111
(1,306)
(213)
–
5
597
UK tax
losses
$’000
2,158
(749)
(1,198)
(228)
17
–
Depreciation/
capital
allowances
$’000
Pension
$’000
UK tax losses
$’000
At 29 December 2019
Income statement charge
Deferred tax credited to other comprehensive income
Deferred tax credited to equity
Exchange difference
At 2 January 2021
4
(1)
–
–
–
3
2,091
(1,123)
1,057
–
86
2,111
The deferred income tax (debited)/credited to other comprehensive income is as follows:
Tax relating to post-employment obligations
Effect of change in UK tax rate
Tax relating to losses
2,243
(386)
184
35
82
2,158
2021
$’000
(213)
–
(1,198)
(1,411)
Total
$’000
4,272
(2,055)
(1,411)
(228)
22
600
Total
$’000
4,338
(1,510)
1,241
35
168
4,272
2020
$’000
816
241
184
1,241
Deferred tax assets have been recognised where it is considered that there will be sufficient taxable profit available in future against
which the deductible temporary timing differences can be utilised. Following a review of forecast UK taxable profits, the deferred tax
asset for UK tax losses has been de-recognised in the period.
Deferred tax is recognised in the income statement, other comprehensive income or in equity when the items it relates to are
recognised, in the same or a different period, in those categories. Deferred tax recognised or de-recognised on losses is allocated
between the income statement, other comprehensive income and equity in proportion to how the losses arose.
No deferred tax asset has been recognised for UK losses carried forward of $34.0m (2020: $24.4m). These losses have no expiry date
and may be available for offset against future profits in these companies.
110
4imprint Group plc Annual Report & Accounts 2021
12 Inventories
Finished goods and goods for resale
2021
$’000
2020
$’000
20,559
11,271
During both the current and previous period, inventory was carried at cost less appropriate provisions. The carrying values did not
exceed their net realisable value. $16,753,000 (2020: $7,934,000) of the inventories balance relates to goods in transit to customers
at the balance sheet date. Provisions held against inventory total $70,000 (2020: $181,000).
During the period there was a credit to the income statement of $111,000 in respect of provisions for slow-moving and obsolete
stock (2020: $nil). There has been no impact on the carrying value of inventory from the effects of COVID-19 due to 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.
13 trade and other receivables
Trade receivables – gross
Provision for credits
Provision for impairment of trade receivables
Trade receivables – net
Other receivables
Prepayments
2021
$’000
48,700
(1,808)
(1,669)
45,223
14,104
4,262
63,589
2020
$’000
23,270
(865)
(866)
21,539
10,185
5,075
36,799
The provision for credits, which covers promises made in our proposition to customers (page 18), has increased due to the longer
supply chain lead times this year and is now a material amount. Therefore, it has been split out from trade receivables in the
analysis above.
Trade terms are a maximum of 30 days credit.
Due to their short-term nature the fair value of trade and other receivables does not differ from the book value.
Trade and other receivables are only written off when the Group has exhausted all options to recover the amounts due and provided
for in full when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include,
amongst others, the failure of the debtor to engage in a repayment plan with the Group or a subsequent failure to make agreed
payments. An expected credit loss provision is then calculated on the remaining trade and other receivables.
Management has assessed the expected credit losses for trade receivables, which takes account of the uncertainty arising from
COVID-19 and the related impact on the supply chain. In addition, certain individual customers (where there is objective evidence of
credit impairment) have been provided for on a specific basis. This has resulted in an impairment charge to the income statement of
$1,669,000 (2020: $865,000). The resultant provision for impairment of trade receivables continues to represent a small percentage
of the trade receivables balance, reflecting the high volume and low value nature of customer transactions.
Other receivables include rebates receivable of $12,596,000 (2020: $9,283,000).
Management has reviewed other receivables and concluded that there is no impairment required of any receivables other than trade
receivables. Certain measures have been undertaken during the course of the pandemic to reduce the Group’s credit exposures,
particularly in relation to rebates receivables, where more interim receipts of rebates due have been agreed with suppliers.
The ageing of past due trade receivables which are not impaired, based on the customer’s creditworthiness and payment history, is
as follows:
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P
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P
O
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A
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f
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I
t
I
O
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I
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f
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I
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time past due date
Up to 3 months
3 to 6 months
Over 6 months
2021
$’000
12,169
2,660
199
15,028
2020
$’000
5,519
426
52
5,997
111
4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 trade and other receivables continued
The ageing of impaired trade receivables is as follows:
time past due date
Current
Up to 3 months
3 to 6 months
Over 6 months
2021
$’000
657
581
344
87
1,669
2020
$’000
329
369
131
37
866
The trade receivables impairment provision for 2021 is calculated using the simplified approach to the expected credit loss model.
The provisions made are based on the following percentages:
Age of trade receivable
Current
31 – 60 days
61 – 90 days
91 – 180 days
181 – 365 days
Over 365 days
2021
2020
Amount
$’000
Provision
%
Amount
$’000
Provision
%
30,852
8,109
4,641
3,004
270
16
2.1
2.8
7.6
11.5
27.4
81.3
15,871
4,562
1,326
557
80
9
2021
$’000
2,356
57,357
75
3,801
63,589
2021
$’000
866
(866)
1,669
–
1,669
2.1
4.4
12.6
23.5
35.0
100.0
2020
$’000
1,230
33,265
37
2,267
36,799
2020
$’000
966
(966)
865
1
866
2021
$’000
2020
$’000
41,589
39,766
These percentages are based on a combination of historical experience and current economic conditions.
The carrying amounts of trade and other receivables are denominated in the following currencies:
Sterling
US dollars
Euros
Canadian dollars
Movements in the provision for impairment of trade receivables are as follows:
At start of period
Utilised
Provided
Exchange difference
At end of period
14 Cash and cash equivalents
Cash at bank and in hand
112
4imprint Group plc Annual Report & Accounts 2021
15 leases
The Group leases office space in facilities in Oshkosh. The Oshkosh lease has a five-year term with a five-year extension option.
In addition, there are various items of leasehold land and buildings (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.
Details on right-of-use assets, including analysis by asset class, are shown in note 10.
lease liabilities
Due within one year
Due in two to three years
Due in four to five years
Due in over five years
The movement in lease liabilities in the period is shown below:
At start of period
Additions
Interest charge
Lease interest payments – operating cash flow
Lease capital payments – financing cash flow
At end of period
The amounts recognised in the income statement are as follows:
Depreciation of right-of-use assets (note 10)
Interest expense on lease liabilities
Short-term and low value leases
2021
$’000
1,150
2,407
2,733
5,799
2021
$’000
13,206
–
377
(377)
(1,117)
12,089
2021
$’000
1,340
377
168
1,885
2020
$’000
1,117
2,336
2,515
7,238
2020
$’000
2,045
12,579
132
(132)
(1,418)
13,206
2020
$’000
1,498
132
137
1,767
The cash outflow on leases in the period was $1,662,000 (2020: $1,687,000).
The Oshkosh office lease that was due to end on 31 March 2020 was extended for a six-month period to 30 September 2020 under
the same terms as the expiring lease and then extended for a five-year period to 30 September 2025 under an option contained in
the original lease, in late August 2020. The lessor has additionally granted the Group a further five-year option to renew the same
office space for the period 1 October 2025 to 30 September 2030.
Following a detailed review of its options and requirements for office space after the end of the previous reporting period, the Group
has assessed the likelihood of exercising the new option to extend as reasonably certain. Consequently, a lease term of ten years has
been reflected in calculating the lease liability and right-of-use asset. A lease term of five years would have led to the adjustments to
the right-of-use asset and lease liability being $6.5m lower than recognised.
The interest rate inherent in the lease could not be ascertained; therefore, estimates have been used based upon incremental costs
of borrowing for a similar term and asset, obtained from the Group’s US bankers. A change of plus or minus 1.0% in the interest rate
would result in a decrease/increase in the lease liability at the year-end of $0.6m respectively.
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G
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P
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G
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A
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C
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f
I
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I
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S
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 trade and other payables – current
Trade payables
Other tax and social security payable
Other payables
Contract liabilities
Accruals
2021
$’000
51,065
3,708
186
10,434
6,484
71,877
2020
$’000
32,138
5,726
197
5,897
5,611
49,569
All trade payables have a maturity of 30 days or less from the balance sheet date. Due to their short-term nature, the fair value of
trade and other payables does not differ from the book value.
Included within ‘Other tax and social security payable’ in 2020 was $2.28m of deferred US employer social security taxes. These were
paid during 2021.
Contract liabilities represents the Group’s obligation to transfer goods to customers for which payment has been received in
advance. The closing balance has increased to $10.43m from $5.90m in 2020. This is attributable to the recovery in demand during
the year after the unprecedented trading environment in 2020, and supply chain disruption in the second half of 2021 increasing
the time for performance obligations to be satisfied. The opening contract liabilities balance of $5.90m has been recognised as
revenue in 2021 (opening contract liabilities balance recognised as revenue in 2020 was $4.66m). The Group expects to complete its
remaining performance obligations in respect of the closing contract liabilities balance of $10.43m and recognise the full amount as
revenue in 2022.
17 employee pension schemes
The Group operates defined contribution plans for its UK and US employees. The regular contributions are charged to the income
statement as they are incurred. The charges recognised in the income statement are:
Defined contribution plans – employers’ contributions (note 3)
2021
$’000
2,117
2020
$’000
2,023
The Group also sponsors a UK defined benefit pension scheme which is closed to new members and future accrual.
The amounts recognised in the income statement are as follows:
Administration costs paid by the scheme
Past service costs – GMP equalisation on transfers
Pension finance charge (note 4)
Total defined benefit pension charge
2021
$’000
340
–
15
355
2020
$’000
343
77
104
524
The past service cost in 2020 relates to an estimate of the Guaranteed Minimum Pension (“GMP”) equalisation provision on transfers
out of the scheme following the High Court ruling in the Lloyds case in November 2020. The charge is an estimate calculated by the
Company’s actuaries and the actual result may differ from this estimate.
The amounts recognised in the balance sheet comprise:
Present value of funded obligations
Fair value of scheme assets
net asset/(obligation) recognised on the balance sheet
2021
$’000
2020
$’000
(37,826)
39,800
(42,627)
39,317
1,974
(3,310)
The funds of the scheme are held in trust and administered by a corporate Trustee to meet pension liabilities for around 341 past
employees of the Group. The level of retirement benefit is principally based on salary earned in the best three consecutive tax years
in the ten years prior to leaving active service and is linked to changes in inflation both pre- and post-retirement.
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This,
together with documents issued by the Pensions Regulator, and Guidance Notes adopted by the Financial Reporting Council, set out
the framework for funding defined benefit occupational pension plans in the UK.
114
4imprint Group plc Annual Report & Accounts 2021
The Trustee of the scheme is required to act in the best interest of the scheme’s beneficiaries. The appointment of trustees is
determined by the scheme’s trust documentation.
The scheme typically exposes the Company to actuarial risks such as investment risk, interest rate risk, mortality risk and longevity
risk. A decrease in corporate bond yields, a rise in inflation or an increase in life expectancy would result in an increase to scheme
liabilities. This would detrimentally impact the balance sheet position, potentially require an increase in future cash contributions
from the Company and may give rise to increased charges in future income statements. Caps on inflationary increases are in place
to protect the scheme against extreme inflation. Assets are held in a multi-asset credit fund designed to give lower volatility than
equities, a Sterling liquidity fund and in gilt funds, with the overall objective of providing a hedge against movement in the liabilities
due to interest rate fluctuation and inflation. The leveraged gilt funds use the repurchase of bonds to assist in the hedging of risks.
An actuarial valuation was undertaken as at 30 September 2019 in accordance with the scheme funding requirements of the
Pensions Act 2004. The actuarial valuation showed a deficit of £19.4m. A recovery plan has been agreed with the Trustee under which
the Company commits to a revised schedule of contributions. The recovery plan period is five years and under the plan a lump sum
of £7.5m was paid in May 2020 and ongoing contributions of £2.46m per annum are payable by the Company. These contributions
commenced on 1 July 2020 and increase by 3% annually. In addition, an annual allowance of £0.30m, rising by 3% annually, is payable
towards costs of administration of the scheme.
For the purposes of IAS 19, numbers from the actuarial valuation as at 30 September 2019, which was carried out by a qualified
independent actuary, have been updated on an approximate basis to 1 January 2022. There have been no changes in the valuation
methodology adopted for this period’s disclosures compared to the previous period’s disclosures.
Changes in the present value of the net defined benefit obligation are as follows:
Present value
of obligations
$’000
Fair value of
scheme assets
$’000
Net asset/
(obligation)
$’000
Balance at 29 December 2019
Administration costs paid by the scheme
Past service costs
Interest (expense)/income
Return on scheme assets (excluding interest income)
Re-measurement losses due to changes in scheme experience
Re-measurement gains due to changes in demographic assumptions
Re-measurement losses due to changes in financial assumptions
Contributions by employer
Benefits paid
Exchange (loss)/gain
Balance at 2 January 2021
Administration costs paid by the scheme
Interest (expense)/income
Return on scheme assets (excluding interest income)
Re-measurement gains due to changes in scheme experience
Re-measurement gains due to changes in demographic assumptions
Re-measurement gains due to changes in financial assumptions
Contributions by employer
Benefits paid
Exchange gain/(loss)
(36,322)
(343)
(77)
(677)
–
(1,119)
50
(4,481)
–
2,163
(1,821)
(42,627)
(340)
(523)
–
33
106
2,367
–
2,708
450
24,017
–
–
573
1,261
–
–
–
13,278
(2,163)
2,351
39,317
–
508
(1,391)
–
–
–
4,589
(2,708)
(515)
Balance at 1 January 2022
(37,826)
39,800
The major categories of scheme assets as a percentage of total scheme assets are as follows:
Multi-asset credit fund
Sterling liquidity fund
Gilt funds
Index-linked gilt funds
Leveraged gilt funds
Leveraged index-linked gilt funds
Cash
2021
2020
$’000
9,624
7,051
5,980
4,376
7,901
3,737
1,131
%
24.2
17.7
15.0
11.0
19.9
9.4
2.8
$’000
9,635
4,253
6,471
4,227
9,787
4,764
180
The scheme holds no 4imprint Group plc shares or any property occupied by the Group.
(12,305)
(343)
(77)
(104)
1,261
(1,119)
50
(4,481)
13,278
–
530
(3,310)
(340)
(15)
(1,391)
33
106
2,367
4,589
–
(65)
1,974
%
24.5
10.8
16.5
10.7
24.9
12.1
0.5
115
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
17 employee pension schemes continued
It is the policy of the Trustee and the Company to review the investment strategy from time to time and at the time of each funding
valuation. Following the completion of the 2019 valuation and agreement from the Company to the lump sum contribution, after due
consideration, this resulted in a switch from the previous investment portfolio to a de-risked portfolio containing: a multi-asset credit
fund; a Sterling liquidity fund; and a revised selection of gilt funds designed to match the interest rate and inflation exposure of the
scheme liabilities, with the aim of being fully funded on a gilts+0% p.a. basis by the end of the current recovery plan in mid-2024.
The Trustee investment objectives and the processes undertaken to measure and manage the risks inherent in the scheme
investment strategy are documented in the scheme’s Statement of Investment Principles, which can be found on the Company’s
website at investors.4imprint.com/governance/4imprint-2016-pension-plan.
The assets are held in: (i) multi-asset credit fund, investing in debt and debt like assets, including but not limited to, debt instruments
with a fixed, variable or floating rate coupon; and (ii) gilt and index-linked gilt funds, some of which are leveraged to provide a hedge
against movements in the pension liabilities due to interest rate fluctuation and inflation. These funds invest in gilts, index-linked
gilts, gilt repos, reverse gilt repos and a Sterling liquidity fund, with the aim to provide similar interest rate and inflation sensitivities to
those of the scheme. The Sterling liquidity fund invests in certificates of deposit, fixed and floating rate notes, fixed rate commercial
paper and bonds listed or traded on one or more recognised exchanges.
None of the funds are quoted but they invest in quoted investments and, in the case of the leveraged funds, in gilt repos. The
funds are valued at net asset values by the fund managers, with the gilt repo valuations performed by the investment manager’s
valuation specialists.
The principal assumptions applied by the actuaries, as determined by the Directors, at each period end were:
Rate of increase in pensions in payment
Rate of increase in deferred pensions
Discount rate
Inflation assumption – RPI
– CPI
2021
%
3.25
2.75
1.80
3.35
2.75
2020
%
2.85
2.30
1.25
2.90
2.30
The mortality assumptions adopted at 1 January 2022 reflect the most recent version of the tables used in the September 2019
triennial valuation. The assumptions imply the following life expectancies at age 65:
Male currently aged 40
Female currently aged 40
Male currently aged 65
Female currently aged 65
2021
Years
22.3
24.2
21.3
23.0
2020
Years
22.3
24.2
21.3
23.0
The sensitivities on the key actuarial assumptions at the end of the period were:
Discount rate
Rate of inflation
Rate of mortality
Decrease of 0.5%
Increase of 0.5%
Increase in life expectancy of one year
+8.80%
+3.30%
+4.50%
Change in assumption
Change in defined benefit obligation
The sensitivities shown above are approximate. Each sensitivity considers each change in isolation and is calculated using the same
methodology as used for the calculation of the defined benefit obligation at the end of the period. The inflation sensitivity includes
the impact of changes to the assumptions for revaluation and pension increases. In practice it is unlikely that the changes would
occur in isolation.
The weighted average duration of the defined benefit obligation at 1 January 2022 is 19 years (2020: 20 years).
116
4imprint Group plc Annual Report & Accounts 2021
18 deferred tax liabilities
At start of period
Prior year adjustment
Deferred tax (credited)/charged to income statement
Deferred tax (credited)/charged to equity
Exchange difference
At end of period
2021
$’000
1,193
–
(337)
(5)
(1)
850
2020
$’000
968
76
65
83
1
1,193
The movements in the net deferred tax liability (subject to the offsetting of balances within the same jurisdiction as permitted by
IAS 12) during the period, are shown in the following table. Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the balances net.
deferred tax analysis
At 3 January 2021
Deferred tax charged/(credited) to income statement
Deferred tax credited to equity
Exchange difference
At 1 January 2022
Depreciation/
capital
allowances
$’000
2,461
103
–
(1)
2,563
Other
$’000
(1,268)
(440)
(5)
–
(1,713)
Total
$’000
1,193
(337)
(5)
(1)
850
‘Other’ includes short-term timing differences and future deductions relating to conditional share awards for US employees of which
$151,000 (2020: $121,000) is expected to reverse within the next twelve months.
At 29 December 2019
Prior year adjustment
Income statement charge/(credit)
Deferred tax charged to equity
Exchange difference
At 2 January 2021
19 Borrowings
The Group had the following committed floating rate borrowing facilities available:
Borrowing facilities
Expiring in more than one year
Depreciation/
capital
allowances
$’000
2,171
49
240
–
1
2,461
Other
$’000
(1,203)
27
(175)
83
–
(1,268)
Total
$’000
968
76
65
83
1
1,193
2021
$’000
2020
$’000
20,000
20,000
Committed facilities comprise an unsecured US$20.0m line of credit for 4imprint, Inc., which expires on 31 May 2023. The Company
also has an unsecured UK overdraft facility of £1.0m that is repayable on demand, which expires on 31 December 2022.
These facilities were undrawn at the year-end (2020: undrawn).
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
20 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.
Currency risk
The Group operates internationally and is exposed to various currency movements. Risk arises predominantly from the remittance
of overseas earnings in US dollars. In addition, Group subsidiaries may make both sales and purchases in a currency other than their
functional currency and have foreign currency trade receivables and trade payables in relation to these transactions.
The Group uses derivative financial instruments to partly hedge foreign currency cash flows arising from sales and purchases of
goods, as well as remittances from its overseas subsidiaries. The Group does not hedge the currency exposure of profits and assets
of its overseas subsidiaries or other financial transactions.
At 1 January 2022 the Group had no forward currency contracts outstanding (2020: none).
The movement in the exchange rates compared to the prior period decreased profit after tax by $0.45m and decreased net assets by
$0.20m. The average rate used to translate profits was US$1.38 (2020: US$1.28) and the closing rate was US$1.35 (2020: US$1.36).
A strengthening in the Sterling exchange rate by 10% (the approximate range of movement of the exchange rate during the year)
would have reduced profit in the period by $0.68m and net assets would be increased at the period end by $1.60m.
Credit risk
Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to trade receivable balances due
from customers and other receivable balances due from suppliers.
The risk associated with banks and financial institutions is managed on a Group basis and all banking relationships must be approved
by the Chief Financial Officer or the Board based on the credit rating of the bank.
The Group holds cash balances on deposit with its principal US and UK banks.
financial instruments
The table below sets out the Group’s financial instruments by category:
financial assets at amortised cost
Trade and other receivables (excluding prepayments) (note 13)
Cash and cash equivalents (note 14)
financial liabilities at amortised cost
Trade and other payables (excluding non-financial liabilities) (note 16)
lease commitments
Due within one year
Due in two to three years
Due in four to five years
Due over five years
2021
$’000
2020
$’000
59,327
41,589
31,724
39,766
(61,443)
(43,672)
2021
$’000
1,494
2,987
3,161
6,123
2020
$’000
1,494
2,987
3,022
7,756
All trade receivables and payables have contracted maturities of 30 days or less from the balance sheet dates. All other receivables
and payables are due/payable within one year.
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. Other receivables are
non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. If collection of the
amounts is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are shown net of credits and expected credit losses. The expected credit losses on other receivables are $nil
(2020:$nil).
118
4imprint Group plc Annual Report & Accounts 2021
Cash was held with the following banks at the period end:
Lloyds Bank plc
JPMorgan Chase Bank, N.A.
Other
2021
rating
Aa3
Aa1
2021
deposit
$’000
12,712
28,862
15
41,589
2020
Rating
Aa3
Aa1
2020
Deposit
$’000
11,554
28,200
12
39,766
There is no concentration of credit risk with respect to trade receivables as the Group has a large number of customers.
Management of credit risk arising from customers is delegated to the senior management of each business to a maximum level
per customer, above which it is referred to the Chief Financial Officer for approval. External credit agency assessment reports are
referred to as part of this process.
liquidity risk
Group borrowing requirements are managed centrally and the majority of borrowing arrangements are currently with the Group’s
principal US bank. Terms are agreed which are considered appropriate for the funding requirements of the Group at that time.
Operating working capital is managed to levels agreed with the Group and cash forecasts are reviewed regularly by management.
The Group monitors its levels of cash and indebtedness to ensure adequate liquid funds are available to meet the foreseeable
requirements of the Group. The Group does not actively monitor a gearing ratio but seeks to maintain an appropriate level of
financial flexibility. Details of borrowing facilities are given in note 19 and lease liabilities in note 15.
At 1 January 2022 the cash position (note 14) of the Group was $41.59m (2020: $39.77m).
Capital risk management
The objective for managing cash, debt and equity capital is to safeguard the Company’s ability to continue as a going concern,
in order to provide returns for Shareholders and benefits for other stakeholders.
The policy for capital allocation is shown on page 33.
In 2021 the Company provided returns to Shareholders in the form of an interim dividend but no final dividend for 2020 was
paid, due to the impact of the pandemic on the business. Shares were purchased by an employee benefit trust, to cover options
maturing during the year and in 2022.
21 Share capital
Issued and fully paid
28,085,530 (2020: 28,085,530) ordinary shares of 386/13p each
All shares have the same rights.
2021
$’000
2020
$’000
18,842
18,842
The Company issued no ordinary shares in the period (2020: none). Share option exercises were satisfied by transfer of shares from
an employee benefit trust.
The following options have been granted and were outstanding under the Company’s share option schemes:
Scheme
US ESPP
UK SAYE
2015 Incentive Plan
2015 Incentive Plan
2015 Incentive Plan
total
Date of
grant
17/05/21
25/09/19
15/04/18
28/03/19
30/03/20
number
of ordinary
shares
2021
97,624
13,880
–
39,285
12,640
163,429
number
of option
holders
2021
Number
of ordinary
shares
2020
604
30
–
9
7
–
16,052
16,547
39,285
12,640
84,524
Date exercisable
Subscription
price
From
To
Jul 2023
Nov 2022
Apr 2021
Jul 2023
$27.61
Apr 2023
£22.70
$nil
Apr 2028
$nil Mar 2022 Mar 2029
$nil Mar 2023 Mar 2030
The weighted average exercise price for options outstanding at 1 January 2022 was £14.16 (2020: £4.31).
Details of share schemes are disclosed in note 22.
119
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Share capital continued
deferred Bonus Plan (formerly the 2015 Incentive Plan/deferred Annual Bonus Scheme)
Under the Deferred Bonus Plan (“DBP”) 50% of the annual bonus of the Chief Executive Officer, Chief Financial Officer and seven
senior managers will be 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, from 4 March 2019, will not be
exercisable until five years from the date of the award. No options or conditional shares will be awarded in respect of 2021 (2020: nil).
22 Share-based payments
Share options may be granted to senior management and, in addition, SAYE and ESPP schemes exist for all UK and US employees.
The exercise price for SAYE and ESPP 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 for SAYE and ESPP schemes and is spread over the vesting
period of the options. The significant inputs into the model are: an expected life of between 2.2 and 3.0 years for the ESPP and
SAYE options; volatility that is measured at 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; and a risk-free rate that is based on zero coupon
government bond yields.
Charge resulting from spreading the fair value of options
Social security costs in respect of share options
total
The fair value per option granted and the assumptions used in the calculation are as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk-free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option
2021
$’000
602
5
607
2020
$’000
625
9
634
US
ESPP
scheme
UK
SAYE
scheme
17/05/21
£23.00
$27.61
604
97,624
2.2
30%
2.2
2.2
0.09%
2.0%
2%
100%
£5.03
25/09/19
£29.90
£22.70
30
13,880
3.0
30%
3.5
3.0
0.36%
2.0%
5%
100%
£8.09
In respect of the executive awards under the 2015 Incentive Plan, now replaced by the DBP, the fair value of the awards of options
or conditional shares made in 2018, 2019 and 2020 are based on the share price at 31 December 2017, 31 December 2018 and
31 December 2019 respectively. The option life is between 4.25 to 6.25 years from the start of the financial year to which the awards
relate. There are no awards of options or conditional shares in respect of 2021 or 2020.
120
A reconciliation of option movements over the period is shown below:
Outstanding at start of period
Granted
Forfeited/cancelled
Exercised
Outstanding at end of period
exercisable at end of period
4imprint Group plc Annual Report & Accounts 2021
2021
2020
weighted
average
exercise price
(£)
4.31
20.07
21.18
0.05
14.16
–
number of
shares
84,524
100,630
(5,135)
(16,590)
163,429
–
Weighted
average
exercise price
(£)
11.19
0.00
18.58
14.99
4.31
–
Number
of shares
190,834
12,640
(6,222)
(112,728)
84,524
–
2021
2020
weighted
average
exercise
price
$0.00
$27.61
£22.70
number of
shares
51,925
97,624
13,880
weighted average
remaining life (years)
expected
Contractual
1.14 1.14 to 1.47
1.56
1.56
1.33
0.83
Weighted
average
exercise
price
$0.00
–
£22.70
Number of
shares
68,472
–
16,052
Weighted average
remaining life (years)
Expected
Contractual
1.69 1.69 to 2.01
–
2.33
–
1.83
Range of exercise prices
Nil
£20 – 21
£22 – 23
23 Other reserves
Balance at 29 December 2019
Currency translation differences
Balance at 2 January 2021
Currency translation differences
Balance at 1 January 2022
Capital
redemption
reserve
$’000
Cumulative
translation
differences
$’000
369
–
369
–
369
4,885
863
5,748
(97)
5,651
Total
$’000
5,254
863
6,117
(97)
6,020
The capital redemption reserve arose on the redemption of preference shares in 2000. The currency translation difference
represents the accumulated exchange movements on non-US dollar functional currency subsidiaries from 29 December 2003
(transition date to IFRS) to the balance sheet date.
24 Cash generated from operations
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Amortisation of right-of-use assets
Gain on disposal of property, plant and equipment
Share option charges
Net finance cost
Defined benefit pension administration charge and past service costs
Contributions to defined benefit pension scheme*
Changes in working capital:
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from operations
*
Includes a special pension contribution in 2020 of $9.14m.
2021
$’000
30,229
3,237
437
1,340
–
602
417
340
(4,589)
(9,288)
(26,831)
22,363
18,257
2020
$’000
3,843
2,992
443
1,498
(80)
625
129
420
(13,278)
186
16,119
(9,713)
3,184
121
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 Contingent liabilities
The Group has no known contingent liabilities (2020: none).
26 Capital commitments
The Group had capital commitments contracted for but not provided for in the financial statements at 1 January 2022 for property,
plant and equipment of $nil (2020: $0.3m).
27 related party transactions
Transactions and balances between the Company and its subsidiaries have been eliminated on consolidation. The Group did not
participate in any related party transactions with parties outside of the Group.
Key management compensation is disclosed in note 3.
122
4imprint Group plc Annual Report & Accounts 2021
COMPANY BALANCE SHEET
at 1 January 2022
non-current assets
Property, plant and equipment
Right-of-use assets
Investments
Deferred tax assets
Retirement benefit asset
Other receivables
Current assets
Other receivables
Cash and cash equivalents
Current liabilities
Lease liabilities
Amounts due to subsidiary companies
Other payables
net current assets
non-current liabilities
Retirement benefit obligation
Amounts due to subsidiary companies
net assets
Shareholders’ equity
Share capital
Share premium reserve
Capital redemption reserve
Retained earnings*
total equity
Note
2021
£’000
2020
£’000
A
B
C
D
H
E
3
–
5
–
105,030
104,746
445
1,465
3,130
–
–
243,034
106,943
350,915
E
244,948
9,083
254,031
–
(118,721)
(431)
(119,152)
558
7,790
8,348
–
–
(419)
(419)
134,879
7,929
–
–
–
(2,425)
(117,225)
(119,650)
241,822
239,194
F
I
G
H
I
K
10,802
10,802
38,575
38,575
208
208
192,237
189,609
241,822
239,194
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* 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 £6,220,000 (2020: £12,634,000) is included in the retained earnings of the Company.
The financial statements on pages 123 to 133 were approved by the Board of Directors on 15 March 2022 and were signed on its
behalf by
KevIn lYOnS-tArr
CHIef eXeCUtIve OffICer
dAvId SeeKInGS
CHIef fInAnCIAl OffICer
123
4imprint Group plc Annual Report & Accounts 2021
STATEMENT OF CHANGES IN COMPANY SHAREHOLDERS’ EQUITY
for the 52 weeks ended 1 January 2022
Balance at 29 December 2019
10,802
38,575
208
(2,276)
180,424
227,733
Share
premium
reserve
£’000
Capital
redemption
reserve
£’000
Retained earnings
Own
shares
£’000
Profit
and loss*
£’000
Total
equity
£’000
Share capital
£’000
Profit for the period
Other comprehensive income/(expense)
Re-measurement loss on post-employment
obligations
Deferred tax relating to components of other
comprehensive income (note D)
Total comprehensive income
Proceeds from options exercised
Own shares purchased
Own shares utilised
Share-based payment charge
Capital instrument granted to subsidiary
Deferred tax relating to losses attributable to
share options
12,634
12,634
(3,339)
(3,339)
966
966
10,261
10,261
1,625
1,625
(941)
2,807
(2,807)
4
485
27
(941)
–
4
485
27
Balance at 2 January 2021
10,802
38,575
208
(410)
190,019
239,194
Profit for the period
Other comprehensive income/(expense)
Re-measurement gain on post-employment
obligations
Deferred tax relating to components of other
comprehensive income (note D)
Total comprehensive income
Own shares purchased
Own shares utilised
Share-based payment charge
Capital instrument granted to subsidiary
Deferred tax relating to losses attributable to
share options
Dividends
6,220
6,220
812
812
(1,025)
(1,025)
6,007
6,007
(617)
–
39
395
(410)
39
395
(166)
(166)
(3,030)
(3,030)
(617)
410
Balance at 1 January 2022
10,802
38,575
208
(617)
192,854
241,822
* See note L.
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4imprint Group plc Annual Report & Accounts 2021
4imprint Group plc Annual Report & Accounts 2021
COMPANY CASH FLOW STATEMENT
for the 52 weeks ended 1 January 2022
Cash flows from operating activities
Cash used in operations
Tax paid
Finance income
Finance costs
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Dividends received
Return of capital contributions
Net cash generated from investing activities
Cash flows from financing activities
Capital element of lease payments
Proceeds from share options exercised
Own shares purchased
Dividends paid to Shareholders
Net cash (used in)/generated from financing activities
net movement in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Analysis of cash and cash equivalents
Cash at bank and in hand
* See Basis of preparation note on page 126.
2021
52 weeks
£’000
Note
2020
53 weeks
restated*
£’000
J
(5,395)
(13,292)
–
–
19,535
20,221
(9,386)
(10,064)
4,754
(3,135)
–
75
111
186
–
–
(617)
(3,030)
(3,647)
1,293
7,790
9,083
(3)
5,950
477
6,424
(31)
1,625
(941)
–
653
3,942
3,848
7,790
9,083
7,790
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4imprint Group plc Annual Report & Accounts 2021
4imprint Group plc Annual Report & Accounts 2021
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. Numbers are shown in pounds thousands.
Basis of preparation
The financial statements have been prepared on a going concern basis (see going concern in basis of preparation section of the
Group financial statements on pages 96 and 97 for further information), under the historical cost convention in accordance with
UK-adopted International Accounting Standards.
New accounting standards applicable for the first time in this reporting period have no impact on the Company’s results or
balance sheet.
environmental risks
In preparing the financial statements, management has considered the impact of environmental risks. Whilst the impact of
environmental risks are still developing and therefore all possible future outcomes are uncertain, risks known to the Company have
been considered in judgments, estimates and assumptions and in assessing viability and going concern. These considerations did not
have a material impact on the financial statements.
restatement of comparative information
The FRC’s Corporate Reporting Review department carried out a review of the Company’s 2020 Annual Report and Accounts and
noted that dividends received, from subsidiary undertakings, were classified as financing cash inflows, whereas IAS 7 paragraph 33
requires these to be classified either as operating or investing cash flows.
As a result of the review, the comparatives in the cash flow statement have been restated to move dividends received from financing
to investing activities. The impact of this is to increase the cash flow from investing activities by £5,950,000 and reduce the cash flow
from financing activities by the same amount. This had no impact on the cash position of the Company.
The FRC’s queries regarding the above matters have been resolved to their satisfaction and the review has been closed. In their
correspondence, the FRC states that their review is based on the Company’s 2020 Annual Report and Accounts; it does not benefit
from a detailed understanding of underlying transactions and provides no assurance that the Company’s 2020 Annual Report and
Accounts are correct in all material respects.
Judgments, estimates and assumptions
Impact of COvId-19 on estimates
The impact of COVID-19 on the financial statements has been considered in determining the estimates required in relation to the
impairment of investments, the expected credit loss provision for amounts due from subsidiary companies, and the recoverability of
deferred tax assets.
Whilst the uncertainty surrounding the ultimate impact of the COVID-19 pandemic has resulted in significant estimation in respect to
the future cash flows of subsidiary companies and in determining appropriate discount rates, growth rates, and probability of default
rates necessary for undertaking impairment reviews and assessing the recoverability of assets (please refer to note C ‘Investments’
and note E ‘Other receivables’ for further information on the impairment review processes), these are not considered to represent
critical accounting judgments or key sources of estimation uncertainty in the preparation of the financial statements.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the
application of 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.
The estimates and associated assumptions are based on historical experiences and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Critical accounting policies are those that require significant judgments or estimates and potentially result in materially different
results under different assumptions or conditions. Management considers the following to be the critical accounting policies:
Critical accounting judgments
Retirement benefit asset
At the balance sheet date, the fair value of the defined benefit assets exceeded the present value of the defined benefit obligations
of the 4imprint 2016 Pension Plan. Although the Group anticipates that the surplus will be utilised during the life of the plan to
address members’ liabilities, the Group recognises the surplus in full on the basis that it is managements’ judgment that there are no
restrictions on the return of residual plan assets in the event of a winding up of the plan after all member obligations have been met.
Key sources of estimation uncertainty
Pensions
As detailed in note 17, the Company sponsors a defined benefit pension scheme closed to new members and future accruals.
Period-end recognition of the liabilities under this scheme requires a number of significant actuarial assumptions to be made,
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4imprint Group plc Annual Report & Accounts 2021
including inflation rate, discount rate and mortality rates. Small changes in assumptions can have a significant impact on the
amounts recorded in other comprehensive income and on the pension liabilities in the balance sheet. Sensitivities to changes in
these assumptions are disclosed in note 17. In addition, the assets held by the scheme include funds that may contain gilt repos and
reverse gilt repos, the valuations of which are complex.
Accounting policies
The principal accounting policies adopted in the preparation of these financial statements are the same as those adopted in the
consolidated financial statements on pages 99 to 102 except for the investments and intercompany loans policies noted below.
These policies 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 owed by subsidiary undertakings
Amounts owed by subsidiary undertakings 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 12-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 owed by subsidiary undertakings are discounted when the time value of
money is considered material.
A. Property, plant and equipment
Cost:
At 29 December 2019
Additions
At 2 January 2021
Additions
At 1 January 2022
Depreciation:
At 29 December 2019
Charge for the period
At 2 January 2021
Charge for the period
At 1 January 2022
net book value at 1 January 2022
Net book value at 2 January 2021
B. Right-of-use assets
Cost:
At 29 December 2019
Disposal
At 2 January 2021 and at 1 January 2022
Depreciation:
At 29 December 2019
Charge for the period
Disposal
At 2 January 2021 and at 1 January 2022
net book value at 1 January 2022
Net book value at 2 January 2021
Fixtures &
fittings
£’000
48
3
51
–
51
45
1
46
2
48
3
5
Leasehold
land and
buildings
£’000
153
(153)
–
122
31
(153)
–
–
–
127
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
C. Investments
Cost:
At 29 December 2019
Capital contribution repaid by subsidiary undertaking
Capital contribution to subsidiary undertaking
At 2 January 2021
Capital contribution repaid by subsidiary undertaking
Capital contribution to subsidiary undertaking
At 1 January 2022
Shares in
subsidiary
undertakings
£’000
104,738
(477)
485
104,746
(111)
395
105,030
The capital contribution represents IFRS 2 ‘Share-based Payments’ charges in respect of subsidiaries which will not be recharged until
the options vest. £111,000 of prior years’ capital contributions have been repaid in the year.
Subsidiary undertakings
The subsidiaries at 1 January 2022 are set out below. All of these subsidiaries are wholly owned and have ordinary share capital only,
apart from 4imprint USA Limited and 4imprint US Group Inc., which also have preference shares.
Company
4imprint, Inc.
4imprint Direct Limited
4imprint UK Holdings Limited
4imprint USA Limited
4imprint North America Limited
4imprint US Group Inc.
4imprint Limited
Cavendish Place Newco No.1 Limited
Country of incorporation
and operation
Business
USA
England
England
England
England
USA
England
England
Promotional products
Promotional products
Holding company
Holding company
Holding company
Holding company
Dormant
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. 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. For the purposes of impairment testing, the Group is considered to have two cash-generating units (“CGU’s”), being the US
and UK businesses.
In the prior year, COVID-19 was considered an indication of impairment because of the material adverse effect it had on the trading
activity of both CGU’s. Whilst the Group is still being impacted by the effects of COVID-19, it is not of itself considered an indication of
impairment for the current year.
An assessment of the US CGU did not identify any indications of impairment and accordingly, no indicator-based impairment testing
has been undertaken. This is supported by the strong recovery in both demand and the financial results of the US trading business
for 2021.
The UK CGU continued to be affected throughout 2021 by various COVID restrictions that impacted the demand, net cash flows and
operating results of the UK trading business. These are considered indications of impairment and therefore full impairment testing of
the UK CGU has been undertaken in accordance with IAS 36.
The carrying amount of the investments balance attributable to the UK CGU is £101,000 (2020: £59,000).
Management has estimated the recoverable amount of this asset from a value in use (“VIU”) calculation.
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The key assumptions for the VIU calculation are operating cash flow forecasts, and the long-term growth and pre-tax discount rates.
Operating cash flow forecasts are derived from the most recent financial budget and forecast approved by the Board of Directors
covering a three-year period and are consistent with the forecasts used in the going concern and viability assessments of the Group
and Company. These forecasts include assumptions around revenue and operating margins and reflect external factors, including the
impact of COVID-19 and environment related risks. A long-term growth rate of 2.5% has been used, based upon external research
data for the UK promotional products market. A pre-tax discount rate of 10.0% has been determined based upon the calculation of
a weighted average cost of capital using the capital asset pricing model.
The recoverable amount calculated exceeded the carrying value of the investments in UK subsidiary undertakings of £101,000 and
therefore no impairment loss has been recognised.
D. Deferred tax assets
At start of period
Income statement charge
Deferred tax (debited)/credited to other comprehensive income
Deferred tax (debited)/credited to equity
At end of period
deferred tax analysis
At 3 January 2021
Income statement charge
Deferred tax debited to other comprehensive income
Deferred tax debited to equity
At 1 January 2022
At 29 December 2019
Income statement charge
Deferred tax credited to other comprehensive income
Deferred tax credited to equity
At 2 January 2021
Pension
£’000
1,546
(949)
(154)
–
443
Pension
£’000
1,597
(874)
823
–
1,546
ACA
£’000
2
–
–
–
2
ACA
£’000
3
(1)
–
–
2
The deferred income tax (debited)/credited to other comprehensive income is as follows:
Tax relating to post-employment obligations
Tax relating to losses
Effect of change in UK tax rate
2021
£’000
3,130
(1,494)
(1,025)
(166)
445
Losses
£’000
1,582
(545)
(871)
(166)
–
Losses
£’000
1,713
(301)
143
27
1,582
2021
£’000
(154)
(871)
–
(1,025)
2020
£’000
3,313
(1,176)
966
27
3,130
Total
£’000
3,130
(1,494)
(1,025)
(166)
445
Total
£’000
3,313
(1,176)
966
27
3,130
2020
£’000
635
143
188
966
The net deferred tax asset at 1 January 2022 has been calculated at a tax rate of 19% in respect of deferred tax items that are
expected to reverse before 1 April 2023 (2020: 19%), and 25% in respect of deferred tax items expected to reverse after 1 April 2023
(2020: 19%).
Deferred tax assets have been recognised where it is considered that there will be sufficient taxable profit available in future against
which the deductible temporary timing differences can be utilised. Following a review of forecast UK taxable profits, the deferred tax
asset for UK tax losses has been de-recognised in the period.
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
E. Other receivables
Amounts due from subsidiary companies
Expected credit loss allowance on amounts due from subsidiary companies
Net amount due from subsidiary companies
Other receivables
Prepayments and accrued income
Less non-current portion: Amounts due from subsidiary companies
2021
£’000
244,953
(329)
244,624
227
97
244,948
–
244,948
2020
£’000
243,434
(106)
243,328
184
80
243,592
(243,034)
558
Trading amounts due from subsidiary companies of £317,000 (2020: £294,000) are repayable on demand and are non-
interest-bearing.
Loans due from subsidiary companies of £244,636,000 (2020: £243,140,000) are repayable on 7 September 2022 and bear
interest at market rates ranging from 8.0% to 8.2%. Included within the total amount due is a US dollar denominated loan of
$160,000,000 (2021: £118,721,000; 2020: £117,225,000). The movement in the GBP equivalent balance between 2020 and 2021 is
due to an exchange gain of £1,496,000 (2020: exchange loss of £4,968,000) arising from the movement in the Sterling to US dollar
exchange rate.
It is the intention of the Directors that the intercompany loans repayable on 7 September 2022 will be refinanced at maturity.
Other receivables are only written off when the Company has exhausted all options to recover the amounts due and provided for
in full when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include,
amongst others, the failure of the debtor to engage in a repayment plan with the Company or a subsequent failure to make agreed
payments. An expected credit loss (“ECL”) provision is then calculated on the remaining other receivables.
An ECL provision of £329,000 (2020: £106,000) has been recognised on the $160,000,000 intercompany loan to 4imprint US Group
Inc. that is due on 7 September 2022. The emergence of COVID-19 and resulting adverse impact to the borrower’s credit profile from
a deterioration in the trading performance of its principal subsidiary is considered an indicator that the loan no longer presents a
low credit risk. Interest on the loan is still being received and cash flow forecasts demonstrate the ability of the borrower to continue
making interest payments through to maturity. Accordingly, the loan has been classified as ‘stage 2’ which requires lifetime expected
credit losses to be considered in determining the ECL.
Management has estimated the ECL over the remaining life of the loan using a common credit loss methodology that incorporates
probability of default, loss given default, and exposure at default inputs. Probability of default has been determined using historical
average cumulative default rates for US corporates for the remaining duration of the loan, as calculated by external rating agencies.
These have been adjusted to reflect prevailing economic conditions considering COVID-19 and are based on a synthetic rating
calculated at year-end. Loss given default has been estimated based upon the weighted expected credit losses of two scenarios
where no credit loss occurs, and the possibility that a credit loss occurs. The exposure at default is the outstanding balance of
the loan.
There is expected to be no credit losses in respect of the other receivables, reflecting the availability of sufficient liquid assets to the
borrowing entities to enable them to settle their obligations at short notice.
The carrying amounts of the Company’s trade and other receivables are denominated in the following currencies:
2021
£’000
2020
£’000
126,275
118,673
126,216
117,376
244,948
243,592
Sterling
US dollars
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4imprint Group plc Annual Report & Accounts 2021
F. Leases
The Company leases office space in a serviced office facility in London. This lease had a two-year term, which expired in March 2020.
A new licence agreement was then taken up on the offices which has only a one-year term and thus is classified as a short-term
lease. Rental on the new licence agreement has been expensed to operating profit on a straight-line basis. In addition, there is some
office equipment of low value. The Company applies the IFRS 16 exemptions for short-term and low value leases. No leases contain
variable payment terms.
Details on right-of-use assets are shown in note B.
lease liabilities
Expiring within one year
The movement in lease liabilities in the period are shown below:
At start of period
Interest charge
Lease payments
At end of period
The amounts recognised in the income statement are as follows:
Depreciation of right-of-use assets (note B)
Interest expense on lease liabilities
Short-term lease hire
Low value leases
The cash outflow on leases in the period was £119,000 (2020: £133,000).
G. Other payables
Other payables
Other tax and social security
Accruals
2021
£’000
–
2021
£’000
–
–
–
–
2021
£’000
–
–
116
3
119
2021
£’000
121
40
270
431
2020
£’000
–
2020
£’000
31
–
(31)
–
2020
£’000
31
–
99
3
133
2020
£’000
134
36
249
419
H. Retirement benefit asset/obligation
The amount recognised in the balance sheet represents the net asset (2020: obligation) in respect of the closed defined benefit
pension scheme. Full details of the defined benefit scheme are contained in note 17 on pages 114 to 116.
The Sterling analysis of the balance sheet amount is as follows:
Present value of funded obligations
Fair value of scheme assets
net asset/(obligation) recognised in the balance sheet
2021
£’000
2020
£’000
(28,067)
29,532
(31,231)
28,806
1,465
(2,425)
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4imprint Group plc Annual Report & Accounts 2021
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS CONTINUED
H. Retirement benefit asset/obligation continued
Changes in the present value of the net defined benefit obligation are as follows:
Balance at 29 December 2019
Administration costs paid by the scheme
Past service costs
Interest (expense)/income
Return on scheme assets (excluding interest income)
Re-measurement losses due to changes in scheme experience
Re-measurement gains due to changes in demographic assumptions
Re-measurement losses due to changes in financial assumptions
Contributions by employer*
Benefits paid
Balance at 2 January 2021
Administration costs paid by the scheme
Interest (expense)/income
Return on scheme assets (excluding interest income)
Re-measurement gains due to changes in scheme experience
Re-measurement gains due to changes in demographic assumptions
Re-measurement gains due to changes in financial assumptions
Contributions by employer
Benefits paid
Balance at 1 January 2022
*
Includes a special contribution of £7.5m.
Present value
of obligations
£’000
Fair value of
scheme assets
£’000
Net asset/
(obligation)
£’000
(27,740)
(267)
(60)
(527)
–
(871)
39
(3,489)
–
1,684
(31,231)
(248)
(379)
–
24
77
1,721
–
1,969
18,343
–
–
446
982
–
–
–
10,719
(1,684)
28,806
–
369
(1,011)
–
–
–
3,337
(1,969)
(28,067)
29,532
(9,397)
(267)
(60)
(81)
982
(871)
39
(3,489)
10,719
–
(2,425)
(248)
(10)
(1,011)
24
77
1,721
3,337
–
1,465
I. Amounts due to subsidiary companies
The amounts due to subsidiary companies are repayable on 7 September 2022. The loans are US dollar denominated and interest-
bearing at market rates of interest, ranging from 8.0% to 8.2%.
It is the intention of the Directors that the intercompany loans repayable on 7 September 2022 will be refinanced at maturity.
The movement in the amounts due are:
At start of period
Exchange movement
At end of period
J. Cash used in operations
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Share option charges
Impairment of loan to subsidiary
Dividends received
Net finance income
Defined benefit pension administration charge and past service costs
Contributions to defined benefit pension scheme (note H)
Changes in working capital:
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Movements in amounts due to/from subsidiary undertakings
Cash used in operations
132
2021
£’000
2020
£’000
117,225
1,496
122,193
(4,968)
118,721
117,225
2021
£’000
2020
£’000
7,714
13,810
2
–
39
223
(75)
(10,143)
248
(3,337)
(67)
24
(23)
1
31
4
106
(5,950)
(10,066)
327
(10,719)
(71)
(60)
(705)
(5,395)
(13,292)
4imprint Group plc Annual Report & Accounts 2021
K. Share capital
Allotted and fully paid
28,085,530 (2020: 28,085,530) ordinary shares of 386/13p each
2021
£’000
2020
£’000
10,802
10,802
During the period no ordinary shares were issued (2020: none). Share option exercises were satisfied by transfer of shares from an
employee benefit trust.
The options that have been granted and were outstanding under the Company’s share option schemes at the year-end are shown
in note 21 on pages 119 and 120. Full details of the share option schemes are given in note 22 on pages 120 and 121.
Employees of the Company had interests in 1,821 SAYE options (2020: 1,821).
L. Distributable reserves
The profit and loss reserve of £192,854,000 (2020: £190,019,000) in the Company includes £125,915,000 (2020: £125,915,000),
which is non-distributable.
M. Commitments and contingent liabilities
The Company has provided Letters of Support to its subsidiary companies, 4imprint Direct Limited, 4imprint UK Holdings Limited,
4imprint USA Limited, and 4imprint North America 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.
The Company had no known contingent liabilities at 1 January 2022 (2020: none).
N. Employees
Wages and salaries
Social security costs
Pension costs – defined contribution plans
Share option charges
2021
£’000
807
116
17
39
979
2020
£’000
764
136
9
4
913
The average number of people, including Executive Directors, employed by the Company during the period was 4 (2020: 4).
O. Related party transactions
During the period the Company has been party to a number of transactions with fellow subsidiary companies:
Income statement
Finance income due from subsidiary companies
Finance costs due to subsidiary companies
Balance sheet
Interest-bearing loans due from subsidiary companies at end of period
Interest-bearing loans due to subsidiary companies at end of period
Key management compensation, comprising remuneration of the Directors, was:
Salaries, fees and short-term employee benefits
Social security costs
Share option charges
2021
£’000
2020
£’000
19,535
(9,381)
20,214
(10,062)
244,307
(118,721)
243,034
(117,225)
2021
£’000
969
63
58
2020
£’000
982
54
(5)
1,090
1,031
All related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
133
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4imprint Group plc Annual Report & Accounts 2021
ALTERNATIVE PERFORMANCE MEASURES
An Alternative Performance Measure (“APM”) is a financial measure of historical or future financial performance, financial position, or
cash 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 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 6.
Underlying profit after tax is defined as profit after tax before exceptional items, net of any related tax charges. When applicable,
a reconciliation of profit before tax to underlying profit after tax is shown in note 6.
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 6.
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 net movement in cash and cash equivalents before distributions to Shareholders but including
exchange gains/(losses) on cash and cash equivalents. It is a measure of cash available for allocation in line with the Group’s capital
allocation policy (see page 33):
Net movement in cash and cash equivalents
Add back: Dividends paid to Shareholders
Less: Exchange (losses)/gains on cash and cash equivalents
Free cash flow
2021
$m
1.87
4.13
(0.05)
5.95
2020
$m
(1.54)
–
0.17
(1.37)
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, 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.
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.
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:
Cash generated from operations
Add back: Contributions to defined benefit pension scheme
Less: Purchases of property, plant and equipment and intangible assets
Add back: Gain on disposal of property, plant and equipment
Underlying operating cash flow
2021
$m
18.25
4.59
(3.47)
–
19.37
2020
$m
3.18
13.28
(3.82)
0.08
12.72
134
FIVE YEAR FINANCIAL RECORD
Income statement
revenue
Underlying* operating profit
Exceptional items
Operating profit
Finance income
Finance costs
Net pension finance charge
Profit before tax
Taxation
Profit for the period
4imprint Group plc Annual Report & Accounts 2021
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
787,322
560,040
860,844
738,418
627,518
30,646
–
30,646
33
(435)
(15)
30,229
(7,643)
22,586
3,972
–
3,972
168
(193)
(104)
3,843
(753)
3,090
53,620
–
53,620
818
(67)
(378)
53,993
(11,276)
45,043
(721)
44,322
250
(23)
(403)
44,146
(8,952)
41,738
(454)
41,284
3
(125)
(503)
40,659
(11,734)
42,717
35,194
28,925
* Underlying has been restated to include defined benefit pension charges in 2017 to 2020 and share option charges in 2017.
Basic earnings per ordinary share
Dividend per share – paid and proposed
80.46c
45.00c
11.03c
–
152.42c
25.00c
125.61c
70.00c
103.15c
118.10c
Balance sheet
Non-current assets (excluding deferred tax and retirement
benefit asset)
Deferred tax assets
Net current assets
Retirement benefit asset/(obligation)
Other liabilities (including lease liabilities)
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
37,437
600
54,744
1,974
(11,789)
38,997
4,272
38,694
(3,310)
(13,282)
27,506
4,338
44,792
(12,305)
(1,383)
20,096
5,636
33,482
(15,016)
(931)
19,967
5,912
35,083
(18,106)
(763)
Shareholders’ equity
82,966
65,371
62,948
43,267
42,093
net cash
41,589
39,766
41,136
27,484
30,767
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4imprint Group plc Annual Report & Accounts 2021
REGISTERED OFFICE AND COMPANY ADVISERS
4imprint Group plc
25 Southampton Buildings
London WC2A 1AL
Telephone +44 (0)20 3709 9680
E-mail
hq@4imprint.co.uk
registered number
177991 England
Independent auditor
Ernst & Young LLP
No. 1 Colmore Square
Birmingham B4 6HQ
Joint stockbrokers
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
Registrar and transfer office
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Bankers
Lloyds Bank plc
JPMorgan Chase Bank, N.A.
136
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Group plc
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
+1 920 236 7282
Fax
sales@4imprint.com
E-mail
UK
4imprint Direct Limited
5 Ball Green
Cobra Court
Trafford Park
Manchester M32 0QT
Freephone 0800 055 6196
Telephone +44 (0)161 850 3490
+44 (0)161 864 2516
Fax
sales@4imprint.co.uk
E-mail
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