Sanderson Group PLC – 2019 Interim Results

Sanderson Group PLC – 2019 Interim Results

Sanderson Group plc, the specialist provider of digital technology solutions, innovative software and managed services for the retail, wholesale, supply chain logistics, food and drink processing and manufacturing market sectors, announces its interim results for the six month period ended 31 March 2019.  

Commenting on the results, Chairman, Christopher Winn, said:

“The Group has made further strong progress during the six month period ended 31 March 2019, with trading results, stated under the new IFRS 15 accounting standard, ahead of management’s expectations with strong performances from both the Digital Retail and Enterprise Divisions.” 

Highlights – Financial 

  • Revenue increased by 18% to £17.17 million (pre IFRS 15 revenue rose by 16% to £16.91 million from £14.61 million in 2018).
  • Operating profit* rose by 34% to £2.79 million (pre IFRS 15 operating profit* rose by over 20% to £2.53 million (2018: £2.08 million).
  • High gross margin of 79% (79% pre IFRS 15 and 80% in 2018).
  • Pre-contracted recurring revenues (including hosted managed solutions) grew to £9.53 million (£9.46 million pre IFRS 15 and £8.25 million in 2018) representing 55% of total revenue in the period.
  • Well-balanced order book of £8.20 million (2018: £8.61 million).
  • Net cash balance at 31 March 2019 ahead of management’s expectations, at £3.29 million (2018: £1.39 million).
  • Interim dividend increased by 20% to 1.50 pence per ordinary share (2018: 1.25 pence).
  • Basic earnings per share of 3.0 pence (2018: 2.3 pence); adjusted basic earnings per share** of 4.1 pence (2018: 3.1 pence).

* Operating profit is stated before amortisation of acquisition-related intangibles, share-based payment charges and ‘one-off’ non-recurring items
** Adjusted for amortisation of acquisition-related intangibles, share-based payment charges and ‘one-off’ non-recurring items

Highlights – Operational

  • High level of sales order intake at £8.34 million (2018: £7.71 million) with 15 new customers gained during period (2018: 7 new customers). 
  • Strong performances from both Digital Retail and Enterprise Divisions.
  • Digital Retail produced double digit revenue and operating profit growth with revenue of £5.98 million (£5.91 million pre IFRS 15 and £5.37 million in 2018) and operating profit* of £1.22 million (£1.10 million pre IFRS 15 and £0.94 million in 2018) respectively.
  • Enterprise Division included a full contribution from the November 2017 acquisition, recording increases in revenue and operating profit* of more than 20% to £11.20 million (pre IFRS 15 revenue of £11.00 million) and £1.57 million (£1.44 million pre IFRS 15 and £1.14 million in 2018) respectively. 
  • Large sales orders gained from several existing customers including Richer Sounds, Office Holdings Limited, NHS Blood and Transplant and Centrica plc; new customers gained during period include Hawes & Curtis Limited and Rhodes Freight Services Limited.
  • Launch of new “Lean Retailer” initiative aimed at continually improving operational efficiency generating good level of early interest.
  • Post period end acquisition of Gould Hall for a maximum consideration of £4 million in cash and shares.

* Operating profit is stated before amortisation of acquisition-related intangibles, share-based payment charges and ‘one-off’ non-recurring items

On current trading and prospects, Group Chief Executive, Ian Newcombe, added:

The Board continues to be cautious in its approach, monitoring the general economic environment carefully and being sensitive to market conditions.  Nevertheless, following the strong trading momentum built in the first half of the year, a healthy order book, high recurring revenue and a strong, cash-backed balance sheet, combined with the Group’s proven reputation and track record, the Board is confident that the Group is well positioned to make further progress in the current financial year ending 30 September 2019.  This will enable the Board to maintain its progressive dividend policy and to build further shareholder value.

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