WHI Morning Comment: 4imprint (FOUR) - Outperforms again; positive FY update confirms strong H2

4imprint continues to make its mark with excellent results, the latest being anticipated in this morning's trading update as the company lowers the blinds on FY2019E. Growth rates of c.16% in H1 accelerated to c.17% in H2, generating results ahead of expectation across all of the sales, PBTA and cash categories. This is particularly pleasing given the contribution of the brand initiative (new sales methods) started early last year – a new departure which has proved highly effective. Over a decade-plus of double digit CAGR, FOUR has made this sort of success look easy; however the model involves a complex combination of techniques, including notably the highly effective use of data analytics, while FOUR fulfils significant multiples of sensitive individual orders, with very low error rates leading to very high rates of client retention. Significant entry barriers remain as the company continues to dig into a large ($US20bn-plus) and profitable market of which it still has a relatively small share. Our forecasts for the current year are tweaked slightly upwards in line with this morning's update; our forward forecasts are left unchanged for now; but the outlook will be revisited when FY results are reported on 03/03. Our current fair value estimate of 3750p equates to a forward PE in the early 20s.