Sanderson Group PLC Pre-Close Trading Update (4870M)
April 30 2018 - 1:02AM
UK Regulatory
TIDMSND
RNS Number : 4870M
Sanderson Group PLC
30 April 2018
FOR IMMEDIATE RELEASE 30 APRIL 2018
SANDERSON GROUP PLC
Pre-close Trading Update
"Results slightly ahead of management's expectations; positive
trading momentum maintained with strong balance sheet; November
acquisition makes a good start; current order book now standing at
GBP8 million."
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
interim results for the six months ended 31 March 2018, which are
scheduled to be released on 23 May 2018.
Sanderson Group was expanded and enhanced by the acquisition of
the Anisa Group ('Anisa') on 23 November 2017, for an enterprise
value of GBP12 million. Anisa specialises in the delivery and
support of world-class integrated supply chain and enterprise
resource planning ('ERP') solutions on a global basis. The size and
strength of the Sanderson Enterprise division has been
significantly enhanced and Anisa has made a good start as part of
Sanderson.
The Group's trading results for the six months ended 31 March
2018 are slightly ahead of management's expectations with revenue
and profit growing by over 30%. Group revenue was just above
GBP14.5 million (H1 2017: GBP10.9 million) and operating profit
(stated before the amortisation of acquisition-related intangibles,
share-based payment charges, acquisition-related and restructuring
costs) increased to over GBP2 million (H1 2017: GBP1.55 million).
On a 'like-for-like' basis, excluding the acquisition, revenues
have risen to just over GBP11 million (H1 2017: GBP10.9 million)
and operating profit, reflecting a more efficient and lower cost of
the delivery of Group solutions, at over GBP1.7 million (H1 2017;
GBP1.55 million) is more than 10% ahead. Gross margins continue to
run at a high level of over 80% and growing pre-contracted
recurring revenues increased to above GBP8 million ('like-for-like'
excluding Anisa, H1 2018: GBP5.9 million compares with H1 2017:
GBP5.40 million). The Group continues to focus on building
recurring revenues including growing subscription, cloud and
managed services revenues.
Sales order intake continues to be good and the value of the
Group order book measured on a 'like-for-like' basis at the end of
March 2018, was over 15% ahead of the comparable order book value
at the end of March 2017. The order book is much better balanced
and is now at a more manageable level across the Group's
businesses. The total order book, which now includes the
acquisition and reflects the remaining element of the large order
gained in June 2017, is now valued above GBP8 million.
The Board is committed to maintaining a strong balance sheet and
Sanderson continues to generate cash in line with operating profit.
Following the acquisition in November 2017 which was satisfied from
the Group's own cash resources, by the assumption of Anisa's
utilised five-year repayable term debt facility of GBP4.12 million
and by the issue of 3,990,653 Sanderson shares (which are
effectively 'locked-in' until November 2020), the net cash balance
at 31 March 2018 stood at over GBP1.3 million (31 March 2017:
GBP4.51 million).
Digital Retail Division
Digital Retail, which operates in very active and rapidly
developing markets, continues to make strong progress. In the
six-month period to 31 March 2018, revenue grew by over 20%
compared with the comparable period in the prior year, profits
almost doubled and the order book at 31 March was up by over 50%
compared with the order book at 31 March 2017. Following a
successful pilot scheme, a Phase One order has been secured with a
well-known global iconic fashion brand. Sales prospects remain
strong with pilot schemes for a number of prospective customers
being planned for initial deployment in the current financial
year.
Enterprise Division
The Group's Enterprise businesses, which have benefited from
increased investment in sales and marketing capability, have
continued to make progress. The Manufacturing business is
increasingly driven by the food and drink processing sector where
the Group has a strong presence and the profit achieved was higher
than for the comparable prior year period. The Group businesses
which focus on the supply of solutions to the wholesale
distribution sector remained very profitable with revenue and
profit being sustained at levels close to the comparable prior year
period. We expect this part of the business to deliver an improved
result for the second half year, which has started well. Anisa has
made a good start as part of Sanderson with a number of exciting
sales prospects being developed. The managed service product
offerings provide an opportunity to exploit and to accelerate
expected market trends towards subscription and cloud options for
product delivery and for access at customer sites. Anisa
considerably enhances the proven range of products, services and
solutions which Sanderson now offers to prospective and existing
customers in the target market sectors. The Enterprise division
enters the second half of the financial year with a strong
recurring revenue base, a good order book and a good list of sales
prospects.
Strategy and Outlook
The Board continues to be cautious in its approach, sensitive to
market conditions and endeavours to monitor the general economic
environment carefully. Notwithstanding any potential uncertainty
surrounding the ongoing Brexit negotiations, Sanderson, now
strengthened by the acquisition, has a large order book, robust
recurring revenues and a healthy balance sheet. The Group has a
good reputation, a strong track record and with continuing sales
momentum in its target markets, the Board has a good level of
confidence that Sanderson will make significant further progress
during the current financial 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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