Sondrel Plc Regulatory News (SND)

FOR IMMEDIATE RELEASE 27 OCTOBER 2015

SANDERSON GROUP PLC

Pre-close Trading Update

"On-target results; strong trading momentum maintained, with growing presence in the rapidly developing digital retail market"

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, issues the following trading update ahead of the announcement of its preliminary results for the year ended 30 September 2015, scheduled to be released on 1 December 2015.

The trading results for the year ended 30 September 2015 ('year-end') are in line with market expectations and will show Group revenue growing to over £19.0 million (2014: £16.4 million) and adjusted operating profit (stated before the amortisation of acquisition-related intangibles, share-based payment charges and acquisition-related costs) growing to over £3.3 million (2014: £2.8 million).

The Group continues to invest in its product and service offerings, which are very much designed to provide customers with sustainable and tangible business benefits often visible within a short timeframe. A particular focus of Group investment is in the multi-channel retail business to further enable the adoption and application of digital and mobile technologies into the retail market. The application of new and emerging digital technologies, in particular mobile and social media, is transforming the customer shopping experience. One iota, the Group's mobile commerce business focused on delivering cloud-based solutions accessed via mobile, tablet and in-store devices, achieved revenue growth of over 75% in the year. The Group expects that it will continue to achieve significant growth in this rapidly developing digital retail market, as retailers seek to adopt technology in order to transform the shopping experience for their connected customers, as well as, to boost their revenues.

Within the manufacturing division, the part of the business which is focused on supplying customers operating in the food and drink processing market experienced slower trading conditions with some project and order delays. However, a large new customer order has been received since the year-end and trading prospects for the current financial year are much improved.

The Group acquired Proteus Software Limited, a provider of specialist warehouse management solutions in December 2014 and Proteus has made a positive contribution in its first year as part of Sanderson. Notwithstanding the ongoing investment in product development and complementary acquisitions which have been funded by the Group's cash generative business model, the Sanderson balance sheet remains strong with a cash balance in excess of £4.4 million at the year-end (31 March 2015: £4.2 million).

The overall economic environment appears 'mixed' and sales cycles continue to be protracted. The deployment and use of mobile technologies is continuing to develop with market demand accelerating. In the coming year, management expects to focus further efforts on delivering growth across the Group's businesses but especially from the newly emerging digital retail market. Further complementary acquisitions will continue to be carefully considered by the Board.

Sanderson has maintained a strong balance sheet and has a robust business model built upon long-term relationships with customers which generate strong recurring revenues, currently representing over 52% of total revenue. Sanderson is well positioned in its target markets. Together, these factors provide the Board with a good level of confidence that, at this early stage of the new financial year, the Group will make further progress and deliver trading results which are, at least, in line with market expectations for the year ending 30 September 2016.

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