TIDMSND
RNS Number : 9353O
Sanderson Group PLC
23 May 2018
FOR IMMEDIATE RELEASE 23 MAY 2018
SANDERSON GROUP PLC
Interim Results for the six months ended 31 March 2018
"Strong performance across the Group with EPS increasing by 44%;
November acquisition has made a good start; Dividend up 14%;
further significant progress anticipated."
Sanderson Group plc ('Sanderson' or 'the Group'), the software
and IT services business specialising in digital retail technology
and enterprise software for businesses operating in the
manufacturing, wholesale distribution and logistics sectors,
announces Interim Results for the six month period ended 31 March
2018.
Commenting on the results, Chairman, Christopher Winn, said:
"The Group trading results for the six month period ended 31
March 2018, are slightly ahead of management's expectations;
revenue increased by 34% to GBP14.61 million (2017: GBP10.90
million) and operating profit* rose by 34% to GBP2.08 million
(2017: GBP1.55 million). Sanderson continues to generate cash in
line with operating profit and is committed to maintaining a strong
balance sheet. To supplement organic growth, selective acquisitions
are under continued consideration. The Board remains focused on
continuing to deliver both organic and acquisitive growth,
achieving 'on target' results, increased earnings, good cash
generation and a robust balance sheet, thereby further increasing
shareholder value and growing dividend returns."
Highlights - Financial
-- Revenue increased by 34% to GBP14.61 million (2017: GBP10.90
million); 'like-for-like' revenue (excluding Anisa) rose to
GBP11.08 million (2017: GBP10.90 million).
-- Pre-contracted recurring revenue increased to GBP8.25 million
(2017: GBP5.40 million), representing 56% of total revenue in the
period (2017: 50%); 'like-for-like' recurring revenue grew by 11%
to GBP5.99 million (2017: GBP5.40 million).
-- Operating profit* rose by 34% to GBP2.08 million (2017:
GBP1.55 million); 'like-for-like' operating profit (excluding
Anisa) grew by over 12% to GBP1.74 million reflecting a more
efficient, lower cost delivery of the Group's solutions.
-- Continued cash generation in line with operating profit with
net cash balance at 31 March 2018 of GBP1.39 million. The cash
balance, excluding the Anisa loan (term debt facility of GBP4.12
million) remains strong at GBP5.06 million (2017: GBP4.51
million).
-- Increased Interim Dividend declared, up 14% to 1.25 pence per share (2017: 1.10 pence).
-- Basic earnings per share* increased 44% to 2.3 pence (2017: 1.6 pence).
* Operating profit and basic earnings per share are stated
before amortisation of acquisition-related intangibles, share-based
payment charges, acquisition-related and restructuring costs.
Highlights - Operational
-- Strong performances from both Digital Retail and Enterprise
divisions with order books of GBP3.42 million (2017: GBP0.84
million) and GBP5.19 million (2017: GBP1.93 million)
respectively.
-- Digital Retail revenue grew 20% to GBP4.25 million (2017:
GBP3.54 million) whilst operating profit* more than doubled to
GBP0.70 million (2017: GBP0.34 million); sales orders gained during
period included Richer Sounds plc, Thorntons Limited, Beaverbrooks
The Jewellers Limited and Scotts of Stow;
-- Enterprise division, comprising manufacturing, wholesale
distribution and logistics and supply chains, significantly
enhanced and strengthened by acquisition of Anisa during the
period; revenue and operating profit* (including Anisa) increased
to GBP10.36 million (2017: GBP7.36 million) and GBP1.38 million
(2017: GBP1.21 million) respectively. Anisa's global customer base,
active during the period, with orders from Culina Group and DHL
Supply Chain.
-- Total Group order book at period-end (including Anisa) of
GBP8.61 million (2017: GBP2.78 million); like-for-like order book
rose 16% to GBP3.22 million (2017: GBP2.78 million).
On current trading and outlook, Group Chief Executive, Ian
Newcombe, added:
"We continue to be measured in our business approach, sensitive
to the general economic environment and we monitor customer
confidence and market conditions carefully. Whilst the Group has
not detected any major loss of confidence amongst its customers and
that the value of prospects is increasing, sales cycles can still
be protracted, especially where major projects are under
consideration. Notwithstanding any potential uncertainty
surrounding the ongoing Brexit negotiations, Sanderson, now
strengthened by the November acquisition, has a large order book,
robust recurring revenue and a healthy balance sheet. Combined with
the Group's proven reputation, well-established track record and
continuing sales momentum, the Board has a good level of confidence
that Sanderson will make significant further progress during the
current financial year ending 30 September 2018."
Enquiries:
Christopher Winn, Chairman Telephone: 0333 123 1400
Ian Newcombe, Group Chief Executive
Richard Mogg, Finance Director
Mark Taylor/James White
N+1 Singer Telephone: 020 7496 3000
(Nominated Adviser and Broker)
Paul Vann, Walbrook PR Limited Telephone: 0117 985 8989
Mobile: 07786 807631
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
SANDERSON GROUP PLC
Interim Results for the six months ended 31 March 2018
CHAIRMAN'S STATEMENT
Sanderson Group plc ('Sanderson' or 'the Group'), the software
and IT services business specialising in digital retail technology
and enterprise software for businesses operating in the
manufacturing, wholesale distribution and logistics sectors,
announces its interim results for the six month period ended 31
March 2018.
November acquisition
Sanderson was expanded and enhanced by the acquisition of the
Anisa Group ('Anisa') on 23 November 2017, for an enterprise value
of GBP12 million. The acquired business specialises in the delivery
and support of world-class integrated supply chain and enterprise
resource planning ('ERP') solutions on a global basis. The
acquisition has significantly increased the size and strength of
the Group, considerably enhancing the range of solutions and
services which Sanderson can now offer customers, particularly in
managed services.
Financial results
The Group trading results for the six month period ended 31
March 2018, are slightly ahead of management's expectations;
revenue increased by 34% to GBP14.61 million (2017: GBP10.90
million) and operating profit* rose by 34% to GBP2.08 million
(2017: GBP1.55 million). On a 'like-for-like' basis, excluding the
acquisition, revenue rose to GBP11.08 million (2017: GBP10.90
million) and operating profit* grew by over 12% to GBP1.74 million
(2017: GBP1.55 million), very much reflecting a more efficient,
lower cost of delivery of the Group's solutions.
Gross margin remained high at 80% (81% on a 'like-for-like'
basis of comparison) (2017: 82%). Growing pre-contracted recurring
revenues reached GBP8.25 million (2017: GBP5.40 million) and
represented 56% of total revenue in the period. 'Like-for-like'
recurring revenue grew by 11% to GBP5.99 million (2017: GBP5.40
million) and the Group continues to focus on building its
pre-contracted recurring revenues including growing subscription,
cloud and managed services revenues.
The total order book, including Anisa and the remaining element
of a large order gained in June 2017, was valued at GBP8.61 million
at the end of March 2018. The increased Group order book is now
much better balanced and at a more manageable level across the
Group's businesses. Measured on a 'like-for-like' basis, the order
book stood at GBP3.22 million at 31 March 2018 (2017: GBP2.78
million), over 16% ahead of the comparable order book at the end of
March 2017.
Sanderson continues to generate cash in line with operating
profit and is committed to maintaining a strong balance sheet.
Following the acquisition in November 2017, which was financed from
the Group's own cash resources, by the assumption of Anisa's
utilised five year repayable term debt facility of GBP4.12 million
and by the issue of 3,990,653 Sanderson shares, the Group's net
cash balance was GBP1.39 million at 31 March 2018. The cash balance
excluding the loan facility remains strong at GBP5.06 million
(2017: GBP4.51 million).
Dividend
The Board continues to maintain a progressive dividend policy
and is pleased to declare a further increase of 14% in the level of
the interim dividend to 1.25 pence per share (2017: 1.10 pence).
The dividend will be paid on 10 August 2018 to shareholders on the
register at the close of business on 27 July 2018. The ex-dividend
date will be 26 July 2018.
Strategy
The strategy of the Board is to sustain growth by continuing to
develop and to build the Sanderson business. The deployment and
adoption of the Group's solutions allow customers to make
productivity and efficiency gains, as well as to reduce operating
costs. Investment is planned across all of the Group's businesses,
but particular emphasis will again be placed on enhancing mobile
and ecommerce solutions in order to capitalise on the drive for
digital transformation in the retail, wholesale distribution and
logistics sectors. Mobile solutions continue to be developed to
address all of the Group's markets. The November acquisition
expands the Group's offering with complementary products covering
the logistics and supply chain sectors and brings exciting new
opportunities to grow subscription, cloud and managed services
revenue across the Group.
To supplement organic growth, selective acquisition
opportunities are under continued consideration. Management adopts
a careful and measured approach to acquisitions and cautiously
considers any risks which might be involved. The Board remains
focused on continuing to deliver both organic and acquisitive
growth, achieving 'on target' results, increased earnings, good
cash generation and a robust balance sheet, thereby further
increasing shareholder value and growing dividend returns.
Management and staff
Following the acquisition in November 2017, Sanderson now
employs over 320 staff with specialist expertise and a very high
level of experience in the market sectors which the Group
addresses. On behalf of the Board, I would like to express the
Board's appreciation and thank everyone for their hard work,
support, dedication and valued contribution to the ongoing
development of the Group.
Christopher Winn
Chairman
23 May 2018
* Operating profit is stated before the amortisation of
acquisition-related intangibles, share-based payment charges,
acquisition-related and restructuring costs.
SANDERSON GROUP PLC
Interim Results for the six months ended 31 March 2018
GROUP CHIEF EXECUTIVE'S BUSINESS REVIEW
The target market for Sanderson products and services primarily
comprises SMEs (small and medium-sized enterprises). The Group's
well-developed business model is based on developing long-term
relationships with its customers. These relationships result in a
high proportion of sales arising from pre-contracted recurring
revenue, complemented by incremental sales to the Group's strong,
well-established and growing customer base. This robust revenue
stream typically accounts for around 90% of Group revenue.
Sanderson proprietary software is marketed and sold under a 'right
to use' licence, with all sales, marketing, delivery, support and
services carried out by the Group's own expert staff. Both
on-premise and cloud-based solutions are available to customers on
a subscription basis.
The Sanderson proprietary solutions are designed in anticipation
of technological developments, often in conjunction and
collaboration with customers. Solutions thereby deliver 'value for
money', with cost effective, timely and tangible business benefits.
Such benefits typically enable customers to grow sales whilst also
achieving improved productivity, additional efficiencies and cost
savings. Sanderson customers usually achieve rapid return on
investment (often within a year of implementation) and gain
competitive advantage which is particularly important in
challenging market times. The Group continues to invest in the
development of its software and services, as well as in its sales
and marketing. Particular emphasis has been placed on the Group
businesses specialising in UK food and drink processing, in
wholesale distribution and most especially, in the market for
digital retail solutions. Digital transformation is a key business
driver for retailers as they strive to deliver a seamless shopping
journey for their customers. Sanderson partners with retailers in
their digital transformation programmes to deliver in-store
technology, mobile and ecommerce solutions. This enables retailers
to capitalise on the significant growth and widespread use of
smartphones and tablets, exploiting 'mobile' as a sales channel
fully integrated with existing business systems, increasing sales
conversions and improving the customer experience.
Review of Digital Retail
The Group provides comprehensive IT solutions to businesses
operating in the ecommerce, mobile commerce and retail sectors of
the UK. 'Digital retail' continues to be a very active and rapidly
developing sector of the market.
The Digital Retail division, which works with leading retailers
such as JD Sports and Superdry, continues to make strong progress.
Revenue grew again by 20% in the six month period to 31 March 2018
compared with the comparable prior year period, to GBP4.25 million
(2017: GBP3.54 million). Operating profit* doubled at GBP0.70
million (2017: GBP0.34 million). We continue to invest in product
innovation and delivery capacity to address this expanding market.
Following a successful pilot scheme, a phase one order has been
secured with another new customer and iconic global brand. Demand
from existing customers for the Group's latest omni-channel
solutions remains strong, with sales orders gained from a number of
customers including Richer Sounds plc, Thorntons Limited,
Beaverbrooks The Jewellers Limited and Scotts of Stow.
At 31 March 2018, the order book stood at GBP3.42 million (2017:
GBP0.84 million) including the remaining element of a large order
gained in June 2017 to be delivered over the next 15 months.
Excluding this large order, the order book increased by over 50%
from the previous year. With good sales prospects and a number of
pilot schemes being planned for initial deployment in the current
financial year, as well as strong partnerships with existing
customers, the Digital Retail business is well-positioned for
continued growth.
Review of Enterprise
The enlarged Enterprise division, which has been significantly
enhanced and strengthened by the acquisition of Anisa, now
comprises three market-focused businesses which operate in the
manufacturing, wholesale distribution and logistics and supply
chain sectors. Divisional revenue and operating profit* increased
to GBP10.36 million (2017: GBP7.36 million) and GBP1.38 million
(2017: GBP1.21 million) respectively. The Enterprise division has a
good order book which, at 31 March 2018, was valued at GBP5.19
million (2017: GBP1.93 million). With strong recurring revenue, the
good order book and a growing list of sales prospects, the
Enterprise division enters the second half of the financial year
well positioned for further progress. Productivity gains, improved
efficiency and cost savings are key drivers in these markets.
Enterprise - Manufacturing
Businesses in the engineering, plastics, aerospace, electronics,
print ('general manufacturing') and food and drink processing
sectors represent the main areas of specialisation for Sanderson in
manufacturing markets. Sanderson continues to invest in product
development and sales and marketing. The manufacturing business is
very much driven by activity in food and drink. Here, traceability
of ingredients through the supply chain and compliance with
increasingly stringent regulatory standards, are key industry
requirements and strong features of the Group's solution. Profit
achieved from this part of the business was higher than for the
comparable period last year and large orders from existing
customers included Newly Weds Foods Limited and Adelie Foods Group
Limited.
Enterprise - Wholesale Distribution and Logistics
Sanderson supplies solutions to the wholesale distribution, cash
and carry and fulfilment sectors, as well as to the specialist
warehousing and logistics markets. The businesses which focus on
the wholesale distribution and fulfilment sector remained very
profitable. The Group launched an innovative suite of digital
solutions in the wholesale industry at the end of the last
financial year. This suite offers the opportunity to improve and
increase productivity and is designed to capitalise on digital
transformation and the growing use of mobile devices in the sector.
Improved results in the second half year are anticipated.
Enterprise - Anisa Supply Chain Logistics
Anisa specialises in the delivery of world-class integrated
supply chain and ERP solutions. It employs over 90 staff in office
locations across the UK and in smaller operations in Singapore and
Australia, providing around 250 customers with 24-hour, 365 days a
year, support on a worldwide basis.
Anisa has made a good start as part of Sanderson. A number of
exciting sales prospects are being developed, including a major UK
port, where a scoping exercise is currently underway for a new
supply chain system. It is anticipated that this initial project
will lead to a more substantial order in the second half. The Anisa
customer base is also active, with orders from customers including
Moran Logistics Limited, a market leader in multi-temperature food
logistics, Culina Group and DHL Supply Chain.
The acquisition of Anisa considerably enhances the range of
solutions and services which Sanderson can now offer customers. In
particular, managed services provide an opportunity to exploit and
to accelerate expected market trends towards subscription and
cloud-based options for product delivery going forward.
Outlook
We continue to be measured in our business approach, sensitive
to the general economic environment and we monitor customer
confidence and market conditions carefully. Whilst the Group has
not detected any major loss of confidence amongst its customers and
that the value of prospects is increasing, sales cycles can be
protracted, especially where major projects are under
consideration. Notwithstanding any potential uncertainty
surrounding the ongoing Brexit negotiations, Sanderson, now
strengthened by the November acquisition, has a large order book,
robust recurring revenue and a healthy balance sheet. Combined with
the Group's proven reputation, well-established track record and
continuing sales momentum, the Board has a good level of confidence
that Sanderson will make significant further progress during the
current financial year ending 30 September 2018.
Ian Newcombe
Group Chief Executive
23 May 2018
* Operating profit is stated before the amortisation of
acquisition-related intangibles, share-based payment charges,
acquisition-related and restructuring costs.
CONSOLIDATED INCOME STATEMENT
For the six months to 31 March 2018
Unaudited Unaudited Audited
six months six months year to
Note to 31/03/18 to 31/03/17 30/09/17
GBP000 GBP000 GBP000
Revenue 2 14,608 10,900 21,559
Cost of sales (2,973) (1,912) (3,830)
------------ ------------ ---------
Gross profit 11,635 8,988 17,729
Other operating expenses (10,051) (7,877) (14,849)
------------ ------------ ---------
Results from operating
activities 2 1,584 1,111 2,880
Results from operating
activities before adjustments
in respect of the following: 2 2,081 1,552 3,896
Amortisation of acquisition-related
intangibles (225) (246) (491)
Acquisition-related and
restructuring costs (264) (175) (485)
Share-based payment charges (8) (20) (40)
------------ ------------ ---------
Results from operating
activities 2 1,584 1,111 2,880
Net finance expense (152) (91) (165)
Acquisition-related finance
expense - (6) (2)
------------ ------------ ---------
Profit before taxation 1,432 1,014 2,713
Taxation (94) (141) 154
------------ ------------ ---------
Profit for the period
attributable to equity
holders of the parent 1,338 873 2,867
============ ============ =========
Earnings per share
From profit attributable
to the owners of the
parent undertaking during
the period
Basic earnings per share 42.3p 1.6p 5.2p
Diluted earnings per
share 42.3p 1.5p 5.2p
==== ==== ====
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 31 March 2018
Unaudited Unaudited Audited
six months six months year to
to 31/03/18 to 31/03/17 30/09/17
GBP000 GBP000 GBP000
Profit for the period 1,338 873 2,867
Other comprehensive
income/(expense)
Items that will not
subsequently be reclassified
to profit or loss
Remeasurement of net
defined benefit liability - - 1,802
Deferred taxation effect
of defined benefit pension
plan items - - (413)
------------- ------------- ----------
- - 1,389
Items that will subsequently
be reclassified to profit
or loss
Change in the fair value
of available for sale
financial asset 26 (4) (22)
Foreign exchange translation
differences (28) (15) 3
Total comprehensive
income for the period 1,336 854 4,237
------------- ------------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2018
Unaudited Unaudited Audited
as at as at as at
31/03/18 31/03/17 30/09/17
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 43,199 30,316 30,419
Property, plant & equipment 979 543 467
Deferred tax asset 1,294 1,645 1,244
Investments 150 150 150
---------- ---------- ----------
45,622 32,654 32,280
---------- ---------- ----------
Current assets
Inventories 32 30 35
Trade and other receivables 9,395 5,496 5,139
Current tax - - 270
Other short-term financial
assets 213 205 187
Cash and cash equivalents 5,060 4,509 6,176
---------- ---------- ----------
14,700 10,240 11,807
---------- ---------- ----------
Current liabilities
Bank loans and overdrafts (916) - -
Loan notes (1,047) - -
Trade and other payables (6,471) (3,361) (3,653)
Deferred consideration (1,138) (102) (24)
Current tax liabilities (174) (374) -
Deferred income (8,985) (5,044) (5,519)
---------- ---------- ----------
(18,731) (8,881) (9,196)
---------- ---------- ----------
Net current (liabilities)/assets (4,031) 1,359 2,611
Total assets less current
liabilities 41,591 34,013 34,891
Non-current liabilities
Bank loans and overdrafts (2,751) - -
Deferred tax liabilities (775) (749) (784)
Deferred consideration (500) (110) -
Pension and other employee
obligations (6,086) (8,066) (6,176)
(10,112) (8,925) (6,960)
---------- ---------- ----------
Net assets 31,479 25,088 27,931
---------- ---------- ----------
Equity
Called-up share capital 5,964 5,500 5,507
Share premium 11,804 9,094 9,133
Available for sale reserve 101 75 57
Foreign exchange reserve (99) (71) (53)
Retained earnings 13,709 10,490 13,287
---------- ---------- ----------
Total equity 31,479 25,088 27,931
---------- ---------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months to 31 March 2018
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2017 5,507 9,133 4 13,287 27,931
Shares issued as consideration 399 2,394 - - 2,793
Exercise of share options 58 277 - - 335
Dividend paid - - - (924) (924)
Share-based payment
charge - - - 8 8
Transactions with owners 457 2,671 - (916) 2,212
--------- --------- ---------- ---------- --------
Profit for the period - - - 1,338 1,338
Other comprehensive
income:
Foreign exchange translation
difference - - (28) - (28)
Change in market value
of short-term financial
asset - - 26 - 26
Total comprehensive
income/(expense) - - (2) 1,338 1,336
--------- --------- ---------- ---------- --------
At 31 March 2018 5,964 11,804 2 13,709 31,479
--------- --------- ---------- ---------- --------
For the six months to 31 March 2017
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2016 5,485 9,056 23 10,367 24,931
Exercise of share options 15 38 - - 53
Dividend paid - - - (770) (770)
Share-based payment
charge - - - 20 20
Transactions with owners 15 38 - (750) (697)
--------- --------- ---------- ---------- --------
Profit for the period - - - 873 873
Other comprehensive
income:
Foreign exchange translation
difference - - (15) - (15)
Change in market value
of short-term financial
asset - - (4) - (4)
Total comprehensive
income/(expense) - - (19) 873 854
--------- --------- ---------- ---------- --------
At 31 March 2017 5,500 9,094 4 10,490 25,088
--------- --------- ---------- ---------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
For the year ended 30 September 2017
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2016 5,485 9,056 23 10,367 24,931
Exercise of share
options 22 77 - - 99
Dividend paid - - - (1,376) (1,376)
Share-based payment
charge - - - 40 40
Transactions with
owners 22 77 - (1,336) (1,237)
--------- --------- ---------- ---------- --------
Profit for the year - - - 2,867 2,867
Other comprehensive
income:
Remeasurement of net
defined benefit liability - - - 1,802 1,802
Deferred tax on above - - - (413) (413)
Foreign exchange translation
differences - - 3 - 3
Change in fair value
of available for sale
financial asset - - (22) - (22)
--------- --------- ---------- ---------- --------
Total comprehensive
income/(expense) - - (19) 4,256 4,237
--------- --------- ---------- ---------- --------
At 30 September 2017 5,507 9,133 4 13,287 27,931
--------- --------- ---------- ---------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months to 31 March 2018
Unaudited
six Unaudited Audited
months six months year to
to 31/03/18 to 31/03/17 30/09/17
Note GBP000 GBP000 GBP000
Profit for the period 1,338 873 2,867
Adjustments for:
Depreciation and amortisation 637 669 1,285
Share-based payment charges 8 20 40
Net finance expense 152 97 167
Release of contingent consideration - - (165)
Income tax charge/(credit) 94 141 (154)
============= ============= ==========
Operating cash flow from
continuing operations before
working capital movements 2,229 1,800 4,040
Movement in working capital (640) (5) 1,212
============= ============= ==========
Cash generated by continuing
operations 1,589 1,795 5,252
Income tax received/(paid) 258 - (394)
Payments to defined benefit
pension scheme (180) (180) (360)
Net cash from operating
activities 1,667 1,615 4,498
------------- ------------- ----------
Investing activities
Purchases of property,
plant & equipment (122) (134) (180)
Acquisition of subsidiary
undertakings, net of cash
acquired 3 (1,291) - -
Investment in unlisted
company - (150) (150)
Deferred consideration
paid (13) (62) (83)
Dividend received 9 - 15
Bank interest received 2 - 3
Expenditure on product
development (321) (387) (994)
============= ============= ==========
Net cash used in investing
activities (1,736) (733) (1,389)
============= ============= ==========
Financing activities
Equity dividends paid 5 (924) (770) (1,376)
Issue of shares, net of
costs 335 53 99
Bank loan repayments (458) - -
Net cash used in financing
activities (1,047) (717) (1,277)
============= ============= ==========
(Decrease)/increase in
cash and cash equivalents (1,116) 165 1,832
Cash and cash equivalents
at start of the period 6,176 4,344 4,344
Cash and cash equivalents
at end of the period 5,060 4,509 6,176
------------- ------------- ----------
NOTES TO THE INTERIM RESULTS
1. Basis of preparation
The Group's interim results for the six month period ended 31
March 2018 are prepared in accordance with the Group's accounting
policies which are based on the recognition and measurement
principles of International Financial Reporting Standards ('IFRS')
as adopted by the EU and effective, or expected to be adopted and
effective, at 30 September 2018. As permitted, this interim report
has been prepared in accordance with the AIM rules and not in
accordance with IAS34 'Interim financial reporting'.
These interim results do not constitute full statutory accounts
within the meaning of section 434(5) of the Companies Act 2006 and
are unaudited. The unaudited interim financial statements were
approved by the Board of Directors on 22 May 2018.
The consolidated financial statements are prepared under the
historical cost convention as modified to include the revaluation
of financial instruments. The statutory accounts for the year ended
30 September 2017, which were prepared under IFRS, have been filed
with the Registrar of Companies. These statutory accounts carried
an unqualified Auditors' Report and did not contain a statement
under either Section 498(2) or (3) of the Companies Act 2006.
Adoption of new and revised standards
The directors considered the impact on the Group of other new
and revised accounting standards, interpretations or amendments.
The following revised and new accounting standards may have a
material impact on the Group and are currently issued but not yet
effective for the year ended 30 September 2018:
-- IFRS 15, "Revenue from Contracts with Customers" (effective date 1 January 2018)
-- IFRS 16, "Leases" (effective date 1 January 2019)
The Group is in the process of assessing the impact that the
application of these standards will have on the Group's Financial
Statements.
2. Segmental reporting
The Group is managed as two separate divisions: Enterprise and
Digital Retail. Substantially all revenue is generated within the
UK.
Enterprise Digital Retail Total
Six Six Year Six Six Year Six Six Year
months months Ended months months Ended months months Ended
31/03/18 31/03/17 30/09/17 31/03/18 31/03/17 30/09/17 31/03/18 31/03/17 30/09/17
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- --------- --------- --------- --------- --------- ---------
Revenue 10,358 7,363 14,277 4,250 3,537 7,282 14,608 10,900 21,559
--------- --------- ---------- --------- --------- --------- --------- --------- ---------
Operating
profit
before
adjustments* 1,383 1,208 2,713 698 344 1,183 2,081 1,552 3,896
--------- --------- ---------- --------- --------- --------- --------- --------- ---------
Amortisation (92) (113) (225) (133) (133) (266) (225) (246) (491)
Share-based
payment (4) (7) (14) (4) (13) (26) (8) (20) (40)
Acquisition-related
and restructuring
costs (253) (175) (287) (11) - (198) (264) (175) (485)
--------- --------- ---------- --------- --------- --------- --------- --------- ---------
Operating
profit 1,034 913 2,187 550 198 693 1,584 1,111 2,880
--------- --------- ---------- --------- --------- ---------
Net finance
expense (152) (97) (167)
Profit before tax 1,432 1,014 2,713
--------- --------- ---------
* Adjustments to operating profit in respect of amortisation of
acquisition-related intangibles, share-based payment charges and
acquisition-related and restructuring costs.
3. Acquisition
On 23 November 2017 the Group acquired control of Anisa
Consolidated Holdings Limited by purchasing the entire issued
ordinary share capital (and thereby 100% of the voting rights), for
an enterprise value of GBP12.0 million. The purchase consideration
for the acquisition comprises an initial GBP5.20 million, made up
of GBP2.41 million in cash which is being financed from existing
Sanderson cash resources and by the issue of 3,990,653 new
Sanderson 10p ordinary shares valued at 70p, which are subject to a
lock-in period of three years. Sanderson is also taking over
Anisa's utilised five-year repayable term debt facility (final
quarterly repayment being due in 2020) of GBP4.12 million as well
as a current account positive cash balance of just over GBP1
million. Furthermore, loan notes with a coupon of 5% to the value
of GBP1.05 million will be repaid by October 2018. Deferred
consideration, totalling GBP1.63 million is payable in three
tranches. The first payment of GBP563,000 is payable in April 2018
and the second payment for the same amount, payable in October
2018; both tranches are unconditional. A third and final deferred
payment of up to GBP500,000 is scheduled for April 2019, dependent
upon some pre-agreed trading performance criteria.
In the period from acquisition to 31 March 2018 the business
contributed revenue of GBP3,524k and an operating profit of GBP344k
before amortisation of acquisition-related intangibles and
acquisition-related costs.
It is estimated that the acquisition had the following effect on
the Group's assets and liabilities at the acquisition date, however
management has not yet completed its review of intangible and net
assets:
Pre-acquisition Fair value Recognised
carrying adjustment value on
amount acquisition
GBP000 GBP000 GBP000
Property, plant and
equipment 583 - 583
Cash 1,117 - 1,117
Bank loan (4,125) - (4,125)
Trade and other receivables 4,793 (169) 4,624
Trade and other payables (6,772) (1,572) (8,344)
Deferred taxation 73 - 73
---------------- ------------
Net identifiable assets
and liabilities (4,331) (1,741) (6,072)
---------------- ------------
Goodwill on acquisition 12,900
-------------
6,828
=============
Cash consideration paid at completion 2,408
Issue of 3,990,653 new 10p Sanderson
ordinary shares, fully paid
on completion 2,793
Deferred cash consideration
payable by instalments 1,127
Deferred contingent
cash consideration 500
-------------
Net discounted consideration
payable 6,828
=============
Goodwill arising on the acquisition is not tax deductible.
4. Earnings per share
Audited
Unaudited Unaudited year
six months six months to
to 31/03/18 to 31/03/17 30/09/17
GBP000 GBP000 GBP000
Earnings:
Result for the period from
continuing operations 1,338 873 2,867
Amortisation of acquisition-related
intangibles 225 246 491
Share-based payment charges 8 20 40
Acquisition-related and
restructuring costs 264 175 485
R&D tax credit - - (388)
Adjusted profit for the
period from continuing
operations 1,835 1,314 3,495
============ ============ =========
Number of shares: Audited
Unaudited Unaudited year
six months six months to
to 31/03/18 to 31/03/17 30/09/17
No. No. No.
In issue at the start of
the year 55,070,668 54,851,985 54,851,985
Effect of shares issued
in the period 3,358,016 102,058 136,646
Weighted average number
of shares at period end 58,428,684 54,954,043 54,988,631
Effect of share options 663,454 2,375,114 587,918
Weighted average number
of shares (diluted) 59,092,138 57,329,157 55,576,549
============ ============ ==========
Earnings per share: Audited
year
Unaudited Unaudited to
six months six months
to 31/03/18 to 31/03/17 30/09/17
(pence) (pence) (pence)
Total attributable to equity
holders of the parent undertaking:
Basic 2.3 1.6 5.2
Diluted 2.3 1.5 5.2
------------- ------------- ---------
Earnings per share, adjusted,
from continuing operations:
Basic 3.1 2.4 6.4
Diluted 3.1 2.3 6.3
--- --- ---
5. Equity dividends paid
Audited
Unaudited Unaudited Year
Six months Six months to
to 31/03/18 to 31/03/17 30/09/17
GBP000 GBP000 GBP000
Interim dividend - - 606
Final dividend 924 770 770
------------- ------------- ----------
Total dividend paid in
period 924 770 1,376
------------- ------------- ----------
6. Interim report
The Group's interim report will be sent to the Company's
shareholders. This report will also be available from the Company's
registered office and on the Company's website
www.sanderson.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EASSAASSPEFF
(END) Dow Jones Newswires
May 23, 2018 02:00 ET (06:00 GMT)
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