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Sanderson

  • BY: Andrew Hore |
  • POSTED: 12/06/2008 |

Sanderson’s interim figures show the benefits from last year’s acquisition of retail software provider RBS.

RBS helped Sanderson increase revenues by 60% to £13m in the six months to March 2008, while profits before amortisation and share based payments rose from £1.29m to £1.51m. RBS was bought with debt so net debt was £12.5m. There is also potential deferred consideration of £1.44m.

The existing activities made a significant contribution to this improvement. There was 10% organic growth in revenues and 20% growth in pre-interest profit. The manufacturing business improved both revenues and profits. The organic revenue growth of the multi-channel retail side of the business was 15%.

Recurring revenues make up 52% of the total and incremental revenues from existing clients contribute 41%. The remaining 7% came from new customers. 

RBS sells third party Retail J software, which is lower margin than Sanderson-developed software. Even so 63% of revenues and 80% of gross profits relate to Sanderson’s own software and services.

RBS has won a £1m plus order with a large retailer, which is made up of third party software plus services. A smaller wholesale distribution company order has also been won.

Sanderson continues to look for further acquisitions.

House broker Arden is sticking with its full year profit forecast of £3.9m. At 38.5p, up 1.5p on the day, the shares are trading on less than seven times prospective earnings. The forecast total dividend for the year is 2.8p a share. That would leave the shares yielding 7.3%. 

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