External mics will be of better quality. It really depends what you want to get out of the recording, though.
The mics in the H4N are, I believe, XY, which provides a fairly wide soundfield (see here:
http://en.wikipedia.org/wiki/File:XY_stereo.svg)
The H4N mics aren't completely terrible, and to only do one event a year, may be all you need. They're better than that Sony, in any event.
What you definitely should do is place the H4N appropriately - ideally, close to the performers (it sounds like this isn't amplified, so you should effectively place it almost directly in front of the group, maybe 2ft in front), and in a fixed and stable position, ideally using a small stand, which can be had for about $25.
Given that it's outdoors, I'd also be sure you use a sturdy windscreen. For outdoor work on a beach, I'd get a furry one like this:
http://www.amazon.com/Zoom-H4n-Furryhead-Windscreen-Black/dp/B004EJELS0