Sanderson Group PLC Trading Update and Notice of Preliminary Results (9041U)
October 30 2017 - 2:00AM
UK Regulatory
TIDMSND
RNS Number : 9041U
Sanderson Group PLC
30 October 2017
EMBARGOED UNTIL 30 OCTOBER 2017
SANDERSON GROUP PLC
Pre-close Trading Update
and Notice of 2017 Preliminary Results
Sanderson Group plc ('Sanderson' or 'the Group'), the software
and IT services business specialising in digital retail technology
and enterprise software for businesses operating in the
manufacturing, wholesale distribution and logistics sectors, issues
the following trading update ahead of the announcement of its
preliminary results for the year ended 30 September 2017, scheduled
to be released on 28 November 2017.
The Group's unaudited revenue for the year ended 30 September
2017 is expected to be approximately GBP21.5 million (2016:
GBP21.32 million) and operating profit, adjusted for amortisation
of acquisition-related intangibles, share-based payment charges and
one-off non-recurring items, is approximately GBP3.9 million (2016:
GBP3.69 million). These non-recurring items, in the region of
GBP0.5 million, include costs relating to potential acquisitions
during the year, the consolidation of office premises with internal
reorganisation, as well as the costs incurred in changing the Group
Finance Director. These costs are mitigated by the receipt in full
of a licence fee from a former customer who had been disputing the
payment relating to their access of the Group's software.
Pre-contracted recurring revenues increased to over GBP11 million
(2016: GBP10.76 million) and represent over half of total revenue.
Group margins were maintained at a high level of 82% in line with
the first half of the financial year.
Sales order intake totalled GBP13.7 million (2016: GBP12.26
million). The Group order book at 30 September 2017 stood at an
optimal level of GBP5.8 million (2016: GBP3.02 million) and
includes a significant order from an existing customer which is
scheduled to be delivered over the course of the next two financial
years.
The Group cash balance at 30 September 2017 was well ahead of
market expectations at over GBP6 million (30 September 2016:
GBP4.34 million) and this reflects the Group's continuing strong
cash generation and is after the payment of GBP1.38 million of
dividends paid to shareholders during the financial year ended 30
September 2017.
Digital Retail Division
Digital Retail, which operates in very active and rapidly
developing markets, continued to make good progress and comfortably
achieved double digit growth. Digital Retail gained the significant
order from an existing customer, referred to above. We previously
reported that a large new retail customer had been gained towards
the end of the financial year ended 30 September 2016 ('prior
year'); this was Richer Sounds and with a high level of effort and
teamwork, both from the excellent Richer team, as well as from our
own support team, the Sanderson solution was successfully installed
and implemented during the financial year ending 30 September 2017.
Following the receipt of an initial order worth over GBP200,000, a
large pilot scheme is now underway with a leading global fashion
brand. We continue to invest in management, sales and delivery
capacity in anticipation of continued rapid growth in the digital
retail market. Sales prospects remain good.
Enterprise Division
The Enterprise Division delivered another solid year's trading
performance and though sales prospects are good, sales cycles do
remain extended.
The Manufacturing business is very much driven by activity in
the food and drink processing sector. The Group businesses which
focus on the supply of solutions to the wholesale distribution and
logistics sectors have also traded solidly. A large order gained
during the 'prior year' was successfully delivered during the
course of the current year to DPD Logistics, one of the UK's major
delivery, logistics businesses. The Enterprise business has good
sales prospects but as ever, the timing of the receipt of sales
orders will be critical to business performance.
Outlook
Whilst the Group has not yet detected any major loss of
confidence from either existing or from prospective customers, the
Sanderson Board will continue to monitor the situation
carefully.
The Board remains keen to enhance the strength of the Group by
selective complementary acquisitions. Management will continue to
adopt a careful and measured approach to acquisitions with the
priority being very much focused on continuing to deliver
shareholder value.
Sanderson has a good order book and together with a healthy
balance sheet, strong reputation and good track record in its
markets, the Group is well positioned to make further progress
during the current year ending 30 September 2018.
Enquiries:
0333 123
Sanderson Group plc 1400
Christopher Winn, Chairman
Ian Newcombe, Chief Executive
Richard Mogg, Finance Director
020 7496
N+1 Singer (Nominated Adviser and Broker) 3000
Mark Taylor/James White
Walbrook PR Limited 0117 985
Paul Vann 8989
or 07768
807631
This information is provided by RNS
The company news service from the London Stock Exchange
END
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