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Sanderson Group

  • BY: Andrew Hore |
  • POSTED: 23/01/2012 |

Enterprise software provider Sanderson Group has sold its Sanderson RBS business to Torex Retail for £11.75m and this will pay off all of the company’s borrowings.

Shares in Sanderson rose 4p to 33p a share, valuing the software company at £14.4m.

Sanderson will receive £11.5m immediately and £150,000 on 6 April. A further £100,000 is payable depending on receipt of customer payments by RBS. The cash will pay off borrowings and leave Sanderson with £4m in the bank which could be spent on acquisitions and investing in the existing operations. Sanderson had a pension deficit of £2.76m at the end of September 2011 and some of the cash could be used to reduce or eradicate this deficit. The dividend could also be enhanced.

RBS supplies electronic point-of-sale systems and software to high street retailers. RBS sells Torex’s Retail-J software so it fits well into the group.

RBS was acquired in September 20007 for an initial £12.5m, including £12.275m in cash. The cash outlay net of cash balances acquired was £9.05m. In the year to March 2007, RBS made an operating profit of £1.34m on revenues of £12m. In the year to September 2011, RBS generated an operating profit of £1.41m on revenues of £12.4m.

Sanderson will focus on online and ecommerce software for the multi-channel retail and manufacturing sectors. RBS had lower margins than the rest of the business.

Order intake in the continuing businesses was 10% ahead in the first quarter of the latest financial year.

House broker Charles Stanley has reduced its 2011-12 revenue estimate from £26.9m to £15.3m, while the pre-tax profit forecast is cut from £3m to £1.8m. The shares are trading on less than nine times 2011-12 earnings.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJanuary2012_28.pdf

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