Sondrel Plc Regulatory News (SND)

FOR IMMEDIATE RELEASE 25 October 2013

SANDERSON GROUP PLC

Pre-close Trading Update

"Strong Trading Momentum complemented by Increased Levels of Business from New Customers"

Sanderson Group plc ('Sanderson' or 'The Group'), the software and IT services business specialising in multi-channel retail and manufacturing markets in the UK and Ireland, announces the following trading update ahead of the publication of its preliminary results for the year ended 30th September 2013, scheduled to be released on Tuesday, 26th November 2013.

The trading results for the year ended 30th September 2013 are in line with market expectations and will show Group revenues of approximately £13.8m (2012: £13.37m), an improved gross margin of 87% (2012: 83.6%) and operating profit in line with market expectations.

Sanderson has continued to invest in the further development of the Group's businesses which address the expanding multi-channel retail and ecommerce markets, as well as on selected niche markets within the manufacturing sector. Product investment has been concentrated on further extending the products and services which are based upon the Group's own proprietary solutions, especially those which enable warehouse and manufacturing automation, together with solutions designed for deployment on mobile devices, including smart phones and tablets. By supplying customers with more of the Group's own products and services, gross margins have continued to improve, rising to over 87% from 83.6% in 2012. Sanderson has also continued to expand its sales and marketing capabilities and as a result of its improved competitive market position, the value of contracts signed with new customers during the year has risen by 10% to over £1.6m (2012: £1.46m; 2011: £1.27m).

In order to augment the Group's organic growth, two complementary acquisitions have been completed within the past three months. The two acquisitions comprise of Catan Marketing Limited, providing ecommerce solutions under the PRIAM trading name, for a maximum consideration of £644,600, completed in August 2013 and, at the start of the new financial year, One iota Limited on 7th October 2013 for a maximum aggregate consideration of £5.43m.

Whilst general economic conditions have shown some slight improvement in 2013, the outlook continues to be uncertain and business confidence, although increasing, still appears quite fragile. The Group's strong order book, improved market position and the two recent acquisitions provide the Board with an expectation that Sanderson will achieve significant progress during the current financial year ending 30th September 2014.