Sondrel Plc Regulatory News (SND)

FOR IMMEDIATE RELEASE WEDNESDAY 23 APRIL 2014

SANDERSON GROUP PLC

Pre-close Trading Update

Positive trading performance; strong order intake; good start by both recent acquisitions;

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 interim results for the six months ended 31 March 2014. The interim results are scheduled for release on Monday 9 June, 2014.

For the six month period to 31 March 2014 ('the period'), the trading results will show revenue growing by over 20% to just over £7.90 million, compared with £6.37 million for the same period last year ('last year'). Underlying organic revenue growth measured on a 'like-for-like' basis (before the effect of acquisitions) was over 4%. During the period, pre-contracted recurring revenues rose to £4.41 million (last year: £3.96 million) representing more than 55% of total revenues. At the end of the period, the Group had a large order book in excess of £2.46 million (last year: £1.58 million), reflecting strong sales order intake from existing and new customers.

Gross margin represented 87% of total revenues, reflecting a sales mix which includes a higher level of Sanderson owned proprietary products and services. During the period, the profit from operating activities (before adjustments for acquisition-related intangibles, acquisition related costs and share-based payment charges) rose by over 20% to £1.20 million (last year: £988,000).

Sanderson acquired Catan Marketing Limited, which provides ecommerce solutions under the 'Priam' trading name in August 2013 and it made a positive contribution during the period. The Group also acquired One iota Limited ('One iota'), a leading provider of cloud-based multi-channel retail solutions in October 2013 and it has made a good start as part of Sanderson. One iota has helped to expand Group sales into the areas of mobile enabled online sales, ecommerce and catalogue sectors ('mobile and ecommerce'). Overall, the Group sales order intake grew by over 50% in the period compared with last year. Orders for 'mobile and ecommerce' continued to grow, accounting for over 30% of total order intake during the period.

Sanderson has a strong balance sheet and will report a cash balance at the end of the period of just over £5 million (31 March 2013: £4.50 million). The Group's strong cash generative business model enables the Board to continue with the progressive dividend policy.

The Board remains cautious in its approach to risk but has detected some improvement in business sentiment from its customers. A strong order intake in the first half year has resulted in a large order book most of which is scheduled for delivery in the second half year, providing a good level of confidence that the Group will continue to make further significant progress in the current year ending 30 September 2014.