Cimpress plans Irish move

Cimpress is proposing to shift its official entity from the Netherlands to Ireland for tax purposes.

The $2.75bn (£2.26bn) turnover group’s shares trade on the US Nasdaq stock exchange. It has lodged a preliminary proxy statement with the Securities & Exchange Commission (SEC) there proposing that an extraordinary general meeting (EGM) be held, at which shareholders will vote on the proposal to carry out a “cross-border merger” that would result in shareholders holding shares in an Irish PLC rather than the present Dutch one, Cimpress NV.

The merger will have no effect on its trading entities, which include Vistaprint, Tradeprint, Exaprint and Pixartprinting.

In February Cimpress NV migrated its “place of effective management, and consequently its tax residence”, from the Netherlands to the Republic of Ireland. The group’s directors said they believed that the Irish regime represented “a more flexible and favourable environment for multinational groups with a profile like Cimpress NV and that Irish tax residency aligns better with Cimpress NV’s current international footprint and profile”.

Cimpress said the move would remove uncertainty over coming changes to the existing double taxation treaty between Ireland and the Netherlands. A new treaty was signed in June but is yet to be enacted.

The ‘new’ Cimpress PLC shares will continue to trade on Nasdaq under the same ticker symbol.

Part of the plans include a ‘Distributable Profits Proposal’ that could see the share premium of Cimpress PLC reduced as part of the merger “such that the reserve resulting from the cancellation of such share premium will be treated as distributable profits”. These profits could be paid as a divided.

However, Cimpress also stated: “We have never paid or declared any cash dividends on Cimpress NV shares, and we do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain all future earnings to finance the growth and operations of our business, investment in or acquisition of other businesses, share repurchases, or pay-down of our debt.”

The EGM will be held at a date yet to be specified for shareholders to vote on the proposals. Shareholders who vote against the proposal will have their shares cancelled and will receive cash compensation in lieu of shares in Cimpress PLC.

Cimpress shares closed at $116.67 prior to the filing (52-week high: $146.67, low: $73.74).

If approved, the Cimpress PLC HQ will be located at the Xerox Technology Park in Dundalk where Cimpress subsidiary National Pen already has a facility.

In its results for the year to 30 June 2019, Cimpress posted overall sales up 6% to $2.75bn, while operating margins slipped from 6.1% to 5.9% in a challenging 12 months that saw founder, chairman and chief executive Robert Keane take personal control of the underperforming Vistaprint business, and a shake-up at the group’s Upload & Print operations.

Vistaprint sales increased by just 0.7%, to nearly $1.473bn, while profits were up from $241,479m to $275,323m.

In the ultra-competitive Upload & Print part of the group, the division now reports under two new segments: PrintBrothers (including, Printdeal and WirMachenDruck) and The Print Group (Tradeprint, Pixartprinting, Exaprint and EasyFlyer).

PrintBrothers’ sales were up 8% at just under $444m, with profit margins effectively static at 8.3%. Sales at the Print Group nudged up by 1.7% to $325.9m, while profit margins increased from 14.1% to 14.5%.

“We continue to see price competition and online search competition negatively impacting these businesses,” Cimpress stated.

“We are responding by continuing to invest heavily to improve our performance and competitiveness and believe we can outperform and outlast competitors in the long term due to our geographic diversity, product selection, customer service, profitability and scale”.

Profits at National Pen, acquired for $211m in 2016, more than halved to $9.84m, while the All Other Businesses segment, which includes a number of early-stage investments, reduced its losses but still lost $29.64m.

In his annual letter to investors, Keane said: “I see the brutal facts of the past five years, in other words our disappointments, as parts of a corporate adolescence in which we learned hard lessons and matured toward today's larger organisation that, as we enter our corporate adulthood, knows where we want to go and has the capability to get there….

“Each year that passes provides an opportunity to confront brutal facts in service of building an enduring and transformational business that creates value for all of our constituents. Fiscal year 2019 was painfully full of such learning opportunity, but the discipline of our talented team members around the world to confront these facts gives me confidence in our future. In that regard, fiscal year 2019 laid the groundwork for what we need to accomplish in fiscal year 2020,” Keane stated.


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