Decent start for Sanderson as acquisitions kick in

SOFTWARE and IT services group Sanderson has reported positive trading performance, a strong order intake and a good contribution from recent acquisitions.

In a pre-close trading update ahead of its interim results for the six months ended March 31, the Coventry group, which specialises in multi-channel retail and manufacturing markets in the UK and Ireland, said its results will show revenue growing by more than 20% to just over £7.90m, compared with £6.37m for the same period last year. 

Underlying organic revenue growth measured on a ‘like-for-like’ basis (before the effect of acquisitions) was more than 4%. 

During the period, pre-contracted recurring revenues rose to £4.41m (last year: £3.96m) representing more than 55% of total revenues.

At the end of the period, the group had a large order book in excess of £2.46m (last year: £1.58m), reflecting strong sales order intake from existing and new customers.

During the period, the profit from operating activities (before adjustments for acquisition-related intangibles, acquisition related costs and share-based payment charges) rose by more than 20% to £1.20m (last year: £988,000). 
 
Sanderson acquired Catan Marketing, which provides e-commerce solutions under the Priam trading name in August 2013 and it made a positive contribution during the period. 

The group also acquired One iota, a provider of cloud-based multi-channel retail solutions in October 2013 and it has made a good start as part of Sanderson, it suggests. 

One iota has helped to expand group sales into the areas of mobile-enabled online sales, ecommerce and catalogue sectors.

Overall, the group sales order intake grew by more than 50% in the period compared with last year.  Orders for mobile and ecommerce continued to grow, accounting for more than 30% of total order intake during the period.
Sanderson will report a cash balance at the end of the period of just over £5m (31 March 2013: £4.50m). 

The group’s board says it 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,” it said.