Sanderson buoyant after strong six months
COVENTRY-based software and IT services group Sanderson has seen a hike in both revenue and profit for the six months to March 31.
In a pre-close trading update, the firm told the Stock Exchange that the trading results will show revenue growing to almost £6.4m and profit from operating activities growing by more than 10% to around £0.9m compared with the first six months of the previous year to 31st March 2012.
Reflecting a sales mix which includes more Sanderson owned proprietary products and services, gross margins improved to almost 88% compared with 85% last year and 82% in the previous year.
During the period, pre-contracted recurring revenues rose to £3.96m, representing just over 60% of total revenues.
Whilst order intake during the first half has been slower than last year, the order book remains strong and sales prospects, going into the second half year, are very good, the firm suggests.
Since the year end, Sanderson says it has not detected any noticeable improvement in general UK economic trading conditions which remain challenging.
“Uncertainty surrounding the economy affects the confidence of our customers and of prospective customers in making investment decisions. General manufacturing and traditional mail order fulfilment markets remain sluggish, but there are better levels of business activity in the wholesale cash and carry, catalogue, online sales and e-commerce markets,” it said.
Sanderson says it also has an established and good presence in the active and growing food manufacturing market where activity levels are high.
The firm says it is continuing to invest in its products and services as well as to innovate with new solutions, especially those deploying mobile technologies, in response to and in anticipation of customer demand.
A major furniture manufacturer with retail outlets has implemented the Sanderson mobile sales solution across its stores nationwide. The solution runs on iPads and the touchscreens integrate with the Sanderson Unity Enterprise System, enabling orders to be configured exactly for the customer ‘on the spot’ and then instantly forwarded to the production department from the showroom, improving efficiency, delivery times and customer service.
Order intake for mobile solutions is currently accounting for around 10% of all new business and this percentage is expected to increase further in the future.
Sanderson says it has a strong balance sheet, is debt-free and continues to convert profit to cash at around 100% with the cash balance at the end of March being £4.5m (31st March 2012: £3.5m).
It also remains alert to acquisition opportunities.
“The strategy of the Sanderson Board is to achieve growth, both organically as well as by selective, complementary and low risk acquisitions which become earnings and value enhancing,” it said.
“A number of small opportunities continue to be considered.”
