Software group confirms strong results with profits up 37%

SOFTWARE and IT group Sanderson has confirmed strong full year results, with revenue ahead of expectations.

The Coventry-based group had alluded to the performance in a trading update last month (October) but has now confirmed the extent of the performance with the release of its annual results for the year ended September 30, 2016.

The group, which supplies IT and software services to the manufacturing, logistics and digital retail sectors, said revenue increased by 11% to £21.32m (2015: £19.18m), with adjusted operating profit growing by almost 12% to £3.69m (2015: £3.30m).  Pre-tax profit increased by 37% to £2.78m (2015: £2.03m).

Chairman Christopher Winn said gross margin remained strong at 84% (2015: 85%), a figure which reflected a continuing emphasis on the supply of Sanderson proprietary software and services.  Sales order intake grew by over 20% to £12.26m (2015: £10.03m) and this increase included £3.83m of business gained from new customers.

“Sanderson has a strong, cash-generative business model which has enabled the board to maintain a progressive dividend policy whilst continuing to invest in the further development of the group’s businesses,” said Mr Winn.
“The board is proposing an increase of 16% in the final dividend to 1.4p per share (2015: 1.2p).”

Operational; highlights during the year included the creation of a new reporting structure comprising two divisions:  Digital Retail and Enterprise Software, while order intake grew to £12.26m (2015: £10.03m).

The group’s order book up was up by more than 25% at year-end to £3.02m (2015: £2.35m). Digital Retail revenue increased by 8.8% to £6.40m (2015: £5.88m); with strong demand from existing customers including Axminster Tools & Machinery and Thorntons.

In the post-result period, group chief executive, Ian Newcombe, said Sanderson had maintained a strong balance sheet and strong recurring revenues.

“The board believe (this) positions the group well in its target markets,” he said.

“Together with a strong order book and good sales momentum, the board has a good level of confidence that, at this relatively early stage of the new financial year, the group will make further progress and deliver trading results which are again, at least, in line with market expectations.”

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