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Sanderson Group

  • BY: Andrew Hore |
  • POSTED: 18/05/2011 |

Enterprise software supplier Sanderson Group improved its interim profit even though revenues declined.

Revenues from the manufacturing sector are recovering and the order book has strengthened. March, April and May have been particularly strong and the order book continues to rise. The retail sector remains tough and that order book is flat.

Group revenues fell from £13.3m to £13.1m in the six months to March 2011. Sanderson sold more of its own software so gross margins improved from 67.1% to 70.6%. Underlying pre-tax profit improved from £756,000 to £891,000. The improvement in profit is mainly down to a combination of an improved contribution from the retail division and lower interest charges. 

The retail division also supplies software to catering operations. This includes NHS Trusts which are using the software to reduce wastage in their kitchens.

Sandersonís power management software can save £29 of power per electronic till each year. There is plenty of scope to increase sales of this product.

The interim dividend has been raised by 20% to 0.3p a share. Net debt has fallen to £7.2m at the end of March 2011. Sanderson is considering refinancing its borrowings. The pension deficit is £3.96m.

Full year profit is expected to rise from £1.9m to £2.4m.

At 29p a share, Sanderson is valued at £12.6m. The shares are trading on less than six times prospective earnings.

Sanderson believes that it can continue to grow organically. It is also considering small, add-on acquisitions.

Download the May 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFMay2011_20.pdf

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