RE: Sanderson7 Nov 2011 06:31
[SND] Observation! Results to 30 September. Overall, the group has continued to experience good trading momentum in its Manufacturing and Multi-Channel businesses although, unsurprisingly, the high street Retail market is becoming increasingly challenging. Nevertheless, the group continues to gain new customers, especially the Multi-Channel business, which has a focus on online sales, ecommerce and catalogue business.
[SND] has further improved its market position through continued and increased investment in product innovation as well as in sales and marketing. The group launched new SaaS and Cloud products earlier in the year, while, to date, its new ‘green’ IT products have won over £0.5 million of orders and future sales prospects remain good.
Although the outlook for the general economy remains uncertain, the group has successfully refinanced on more favourable terms, improved its competitive position, successfully launched new products and retains a strong order book, which encourages the maintining the existing 2012 forecast;
[SND] on a 2012 P/E multiple of 10 times, or 58p per share, a still substantial discount to the sector's multiple of 14.5 times. Nevertheless, as the group continues to deleverage the balance sheet and grow its order book, that valuation gap to continue narrowing. Moreover, an investment is supported by an attractive and growing dividend yield. Therefore, with the shares trading at 29p and an undemanding target price of 58p