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Sanderson

  • BY: Andrew Hore |
  • POSTED: 30/06/2009 |

Software supplier Sanderson generated lower interim profits because of the lack of new software licence sales.

Revenues were flat at £13m in the six months to March 2009. Stripping out amortisation and exceptionals, profits fell from £1.4m to £669,000. Cash generation was strong with £1.28m coming from operations. Net debt fell from £10.7m to £9.5m - helped by the reduced final dividend last year. The interim dividend has been cut from 1.2p to 0.2p a share.

Fewer investment decisions are being made and that is why software licence sales are hard to come by. Recurring revenues accounted for 53% of total revenues, with most of the rest coming from additional spending by existing customers. Sanderson has made a point of taking care of existing customers and has done more work on anti-fraud systems for them. There has also been cross-selling of additional group products to some existing customers. Managed services revenues are being built up.

The borrowing facilities are being renegotiated and they will last until June 2014. 

At 10.5p a share, the enterprise software supplier is valued at £4.56m.

Costs have been reduced and this will benefit the second half.

House broker Charles Stanley is sticking with its full year profit forecast of £1.7m. That puts the shares on three times 2008-09 prospective earnings.

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