One-off costs blunt performance at software group

Software and IT group Sanderson has forecast relative flat full year results after incurring a series of one-off costs.

The performance means the Coventry-based group is unlikely to repeat it interim successes when it followed a 10% revenue boost with a 10% hike in interim dividend.

In an update, it said unaudited revenue for the year ended September 30, 2017 was likely to be approximately £21.5m (2016: £21.32m), with operating profit, adjusted for amortisation of acquisition-related intangibles, share-based payment charges and one-off non-recurring items, approximately £3.9m (2016: £3.69m).

“These non-recurring items, in the region of £0.5m, include costs relating to potential acquisitions during the year, the consolidation of office premises with internal reorganisation, as well as the costs incurred in changing the Group Finance Director,” it said.

“These costs are mitigated by the receipt in full of a licence fee from a former customer who had been disputing the payment relating to their access of the group’s software. Pre-contracted recurring revenues increased to over £11m (2016: £10.76m) and represent over half of total revenue.”

Sales order intake totalled £13.7m (2016: £12.26m), while the group order book at September 30, 2017 stood at an optimal £5.8m (2016: £3.02m) and includes a significant order from an existing customer which is scheduled to be delivered over the course of the next two financial years.

Of its operational sectors, Sanderson said Digital Retail continued to make good progress and comfortably achieved double digit growth.  The sector was responsible for the group’s significant order from an existing customer.

It has continued to build on its relationship with TV and hi-fi retailer Richer Sounds, while it is progressing a pilot scheme with a global fashion brand.

Its Manufacturing arm is driven by activity in the food and drink processing sector.  It said group businesses focussing on supplying the wholesale distribution and logistics sectors had traded solidly.

In outlook, it said: “Whilst the group has not yet detected any major loss of confidence from either existing or from prospective customers, Sanderson will continue to monitor the situation carefully.”

It said it continued to believe it remained well position to deliver continued growth.