Strong order book boosts software group Sanderson

SOFTWARE and IT services group Sanderson has seen a small drop in interim revenues although operating profits for the six months to March 31, 2011 rose.

The Coventry based firm, which supplies and designs software packages for manufacturers and retailers which help monitor everything from sales to stock levels, recorded half-year revenues of £13.1m, which compares with £13.3m in the same period last year. Operating profits rose to £0.8m, compared with £0.7m last year.

It said that despite continuing economic uncertainty, new products and a strong order book gave rise to confidence for the second half.

Commenting on the results, chairman Christopher Winn said: “Whilst the group’s trading has continued to be impacted by the slow pace of recovery in the UK economy, improvements in the group’s competitive market position driven by the introduction of new products and services, have resulted in a continued recovery from the financial year ended September 30, 2009.

“Improved trading momentum has been maintained with pre-contracted recurring revenues continuing to grow and with both gross margin and order book values increasing.  As with the previous financial year, we expect the benefits of the larger order book to be reflected in the result for the second half year, during which most of the projects are scheduled for implementation and delivery.”

The group’s order book at period-end increased to £3.3m from £3m last year, with much of the work scheduled for delivery in the second half of the current financial year.

Gross margins were up 3.5%, reflecting delivery of more proprietary IPR and other owned services. Recurring revenues rose to £7.1m, representing 54% of total revenues.

Mr. Winn added: “Whilst the board remains cautious with regard to the general economic outlook for the UK manufacturing and retail markets in which Sanderson operates, the group has built and maintained a good level of business momentum over the past two years.  Its improved competitive market position, latest products and strong order book give the board confidence regarding the outlook for the financial year ending on September 30, 2011.”
 
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