Sanderson Group PLC – 2018 Interim Results

Sanderson Group PLC – 2018 Interim Results

Strong performance across the Group with EPS increasing by 44%; November acquisition has made a good start; Dividend up 14%; further significant progress anticipated.

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, announces Interim Results for the six month period ended 31 March 2018.

 Commenting on the results, Chairman, Christopher Winn, said:  The Group trading results for the six month period ended 31 March 2018, are slightly ahead of management’s expectations; revenue increased by 34% to £14.61 million (2017: £10.90 million) and operating profit* rose by 34% to £2.08 million (2017: £1.55 million).  Sanderson continues to generate cash in line with operating profit and is committed to maintaining a strong balance sheet.  To supplement organic growth, selective acquisitions are under continued consideration.  The Board remains focused on continuing to deliver both organic and acquisitive growth, achieving ‘on target’ results, increased earnings, good cash generation and a robust balance sheet, thereby further increasing shareholder value and growing dividend returns.

Highlights – Financial 

  • Revenue increased by 34% to £14.61 million (2017: £10.90 million); ‘like-for-like’ revenue (excluding Anisa) rose to £11.08 million (2017: £10.90 million).
  • Pre-contracted recurring revenue increased to £8.25 million (2017: £5.40 million), representing 56% of total revenue in the period (2017: 50%); ‘like-for-like’ recurring revenue grew by 11% to £5.99 million (2017: £5.40 million).
  • Operating profit* rose by 34% to £2.08 million (2017: £1.55 million); ‘like-for-like’ operating profit (excluding Anisa) grew by over 12% to £1.74 million reflecting a more efficient, lower cost delivery of the Group’s solutions.
  • Continued cash generation in line with operating profit with net cash balance at 31 March 2018 of £1.39 million.  The cash balance, excluding the Anisa loan (term debt facility of £4.12 million) remains strong at £5.06 million (2017: £4.51 million).
  • Increased Interim Dividend declared, up 14% to 1.25 pence per share (2017: 1.10 pence).
  • Basic earnings per share* increased 44% to 2.3 pence (2017: 1.6 pence).

 *Operating profit and basic earnings per share are stated before amortisation of acquisition-related intangibles, share-based payment charges, acquisition-related and restructuring costs.

Highlights – Operational

  • Strong performances from both Digital Retail and Enterprise divisions with order books of £3.42 million (2017: £0.84 million) and £5.19 million (2017: £1.93 million) respectively.
  • Digital Retail revenue grew 20% to £4.25 million (2017: £3.54 million) whilst operating profit* more than doubled to £0.70 million (2017: £0.34 million); sales orders gained during period included Richer Sounds plc, Thorntons Limited, Beaverbrooks The Jewellers Limited and Scotts of Stow;
  • Enterprise division, comprising manufacturing, wholesale distribution and logistics and supply chains, significantly enhanced and strengthened by acquisition of Anisa during the period; revenue and operating profit* (including Anisa) increased to £10.36 million (2017: £7.36 million) and £1.38 million (2017: £1.21 million) respectively. Anisa’s global customer base, active during the period, with orders from Culina Group and DHL Supply Chain. 
  • Total Group order book at period-end (including Anisa) of £8.61 million (2017: £2.78 million); like-for-like order book rose 16% to £3.22 million (2017: £2.78 million).

 On current trading and outlook, Group Chief Executive, Ian Newcombe, added: We continue to be measured in our business approach, sensitive to the general economic environment and we monitor customer confidence and market conditions carefully. Whilst the Group has not detected any major loss of confidence amongst its customers and that the value of prospects is increasing, sales cycles can still be protracted, especially where major projects are under consideration.  Notwithstanding any potential uncertainty surrounding the ongoing Brexit negotiations, Sanderson, now strengthened by the November acquisition, has a large order book, robust recurring revenue and a healthy balance sheet. Combined with the Group’s proven reputation, well-established track record and continuing sales momentum, the Board has a good level of confidence that Sanderson will make significant further progress during the current financial year ending 30 September 2018.”

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