Last checked at 15 Oct 2008 12:34
For immediate release 15 October 2008
Sanderson Group plc ("Sanderson" or "the Group")
Trading update
The Board of Sanderson, 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 Group's preliminary results for the year ended 30 September 2008, which will be published in November 2008.
Subject to final audit, revenues for the year ended 30 September 2008 are expected to be approximately £27.5 million, a 52% increase on last year, with adjusted profit before tax of not less than £3.0 million, both of which are below current market expectations.
The revenue and profit derived from the Group's Manufacturing business were in line with expectations as were the results of the Multi-Channel Sales business. The shortfall against expectations was caused primarily by a slowdown in the Retail businesses, mainly at the smaller end of the market, with several clients deferring or withdrawing new projects and related software licence purchases. This slowdown occurred against the backdrop of increasing economic uncertainty especially in the weeks immediately prior to the year end, traditionally a very profitable period for the Group.
However, cash flows have remained strong with an operating profit to cash conversion rate of around 100% for the year. In addition to paying £500,000 of deferred consideration from cash flows, the Group accelerated its loan repayments during the year and net bank debt at 30 September 2008 was reduced to below £11 million. Following a review of the taxation position, the Group expects to pay a considerably lower effective tax charge over the next 3 years.
The Group's proven business model generates approximately 50% of revenue from pre-contracted annual software licences and support services. The strength of the large, well established customer base is expected to enable the Group to trade robustly in the current financial year, subject, to the general market conditions prevailing within the UK economy.
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Enquiries:
Sanderson Group plc
David O'Byrne, Managing Director Telephone: 01709 787924
Adrian Frost, Finance Director Telephone: 02476 555466
Arden Partner plc
Richard Day Telephone: 0207 398 1600
Winningtons Financial
Paul Vann / Tom Cooper Telephone: 0117 920 0092