SND.L Regulatory News (SND)

EMBARGOED UNTIL 26 APRIL 2016

SANDERSON GROUP PLC

Pre-close Trading Update

"Continued progress: very strong sales order intake"

Sanderson Group plc ('Sanderson' or 'the Group'), the software and IT services business specialising in digital retail technology and enterprise software for businesses operating in the manufacturing, wholesale distribution and logistics sectors, announces the following trading update ahead of the announcement of its interim results for the six months ended 31 March 2016, scheduled to be released on Wednesday, 8 June 2016.

The Group's trading results for the six month period ending 31 March 2016 are in line with market expectations and will show both revenue and profit growth. Together with this good start to the year, a strong sales order intake and a high order book as at 31 March 2016, will place the Group in a good position to achieve market forecasts for the year ending 30 September 2016.

Revenue will show growth to just below £10 million, compared with £9 million and operating profit will be just under £1.5 million compared with £1.37 million in the equivalent period last year. Sales order intake was over £6 million (compared with £4.94 million in the prior year period) and included over £2 million of business gained from new customers, exceeding the total value of business gained from new customers during the whole of the financial year ended 30 September 2015. Reflecting this sales success, the Group's order book at 31 March 2016 stood at £3.20 million (31 March 2015: £2.84 million), whilst pre-contracted recurring revenues continued to grow and now represent 53% of total revenue. The net cash balance at 31 March 2016 was £3.39 million, reflecting strong cash generation and included the payment of the final deferred consideration of £1.54 million in respect of 2013 and 2014 acquisitions.

The Sanderson Digital Retail businesses which operate in very active and rapidly developing markets continued to make progress. Digital Retail grew revenue in the period, although short-term profitability in the six month period was affected by the planned further investment in management, sales and delivery capacity in anticipation of continued rapid growth in the digital retail market. Sales prospects remain good and notwithstanding some current nervousness in the retail sector, a strong full year performance is expected.

As reported in the trading statement which accompanied the Annual General Meeting on 3 March 2016, the Group's Enterprise businesses which have benefited from increased investment in their sales and marketing capability over the last two years, have made further strong progress in the year to date. The Manufacturing business, very much driven by the food and drink processing sector, has gained almost a million pounds of orders from new customers. The Group businesses which focus on the supply of solutions to the wholesale distribution and logistics sectors have also traded very well and gained a high level of sales orders. The Enterprise businesses go into the second half with very strong order books, the majority of which is scheduled to be delivered before the Group's financial year-end on 30 September 2016.

The Group continues to seek complementary acquisitions and a number of opportunities are being developed. Management continue to adopt a careful and measured approach to acquisitions with the priority being very much focused on delivering shareholder value through continued growth and 'on target' results.

The Board remains cautious in its approach but a strong order book and healthy balance sheet, together with a good list of sales prospects, provides the Board with confidence that the Group will continue to make further progress and deliver trading results in line with market expectations for the current year ending 30 September 2016.

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