(Sharecast News) - Sanne Group described its performance over the first half of the year as "robust", telling shareholders to expect a "strong" cash performance and growth in underlying earnings per share.
Nonetheless, fund managers' increased focus in the wake of the Covid-19 pandemic on managing existing funds instead of launching new ones had "temporarily" dented revenue growth.
"Whilst acknowledging the continuing lack of clarity around the medium and longer-term economic impacts of the global COVID-19 pandemic, the first half performance of the Group further demonstrates the resilience of its business model," management said in a statement.
The company, which provides fund administration and fiduciary services, amongst others, also reported improved underlying operating profit margins and one-off gains from foreign exchange.
Driving its improved margins were the cost reduction initiatives undertaken during the back half of 2019, together with the recurring revenues from existing closed-ended fund structures, management explained.
Indeed, underlying operating cash conversion in the first half of its financial year was expected to exceed 100%.
Management also credited years of investment in its platform for the seamless shift towards remote working amid the onslaught from Covid-19.
The non-discretionary nature of the firm's work also meant that the existing book of business was "largely unaffected" although the pandemic had weighed on new fund raisings and launches, led to delays in closing new funds and hence "slightly" dampened sales, particularly in the second quarter.
"Despite prevailing conditions, the business has delivered a robust new business wins performance equivalent to over £11m of annualised new revenue," the company said.
During the reporting period, Sanne acquired Inbhear Fund services and had purchased two other entities with the aim of boosting its new operations in Cayman Islands and Japan.
"Both transactions should help accelerate our growth ambitions in these jurisdictions as we are also acquiring the relevant trust company licences in each case," Sanne added.
"The transactions are subject to local regulatory approval and are expected to complete in the second half of the year."
Going the other way, on 1 July the group closed the sale of its Jersey-based private client unit.
The disposal of the Group's Jersey-based Private Client business completed on 1 July 2020.
On the outlook, Sanne said: "the performance to date and an encouraging pipeline of new business opportunities, gives the Board confidence in both delivering a full year performance in line with its expectations, as well as the long-term strategic opportunity."
The group was scheduled to post its interim results on 9 September.
As of 0830 BST, Sanne shares were down 1.24% at 637p.
4 Aug 2022 11:27
IN BRIEF: Sanne Group shares suspended on takeover by Apex
Sanne Group PLC - FTSE 250-listed asset management services provider - Reiterates that the Jersey Court has sanctioned its takeover by Apex Group Ltd on Tuesday. Thus, the acquisition has become effective, following delivery of a copy of the court order to the Registrar of Companies on Thursday. Says its shares have been suspended from 0730 GMT.
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