AGM Statement

RNS Number : 1619B

Sanderson Group PLC

28 February 2014

 



FOR IMMEDIATE RELEASE                                                                                  

28 FEBRUARY 2014           

SANDERSON GROUP PLC

Annual General Meeting ('AGM') Statement

Sanderson Group plc ('Sanderson' or 'the Group'), the software and IT services business specialising in multi-channel retail and manufacturing markets in the UK and Ireland, will hold its AGM in Coventry at 10.00 am today.  At the AGM, Chairman, Christopher Winn, will make the following statement to shareholders:

"The Group has made a good start to the current financial year ending 30 September 2014 ('current year').  Order intake and the order book, measured on a 'like-for-like' basis, excluding acquisitions, are ahead of the comparative period and have been underpinned by a continued increase in the level of business from new customers.  One iota, which was acquired just after the start of the current financial year on 7 October, has made a very positive start.

"The Sanderson business which addresses the food and drink processing market, is driving the growth of the Group's manufacturing division and its performance is more than offsetting continuing weakness in the Group's general manufacturing business.  Food and drink processing represents one of the fastest growing sectors of UK manufacturing and Sanderson is well placed to continue growth in this sector, with an excellent product suite (which includes enhanced ingredient and raw material tracking ensuring traceability through the manufacturing process and supply chain) which is very ably supported by a team of experienced industry consultants.  The Group also has a strong and growing presence in the online sales, ecommerce and catalogue sectors which are continuing to experience double digit growth rates, fuelled by the adoption of mobile solutions across all markets.  This growth is more than offsetting a gradual decline in the Group's business which addresses the traditional mail order market.  Catan Marketing, trading under the name of Priam, which was acquired in August 2013, has made a steady start and we are currently consolidating the business into our main Coventry centre.  This move will enable Priam to operate more efficiently and ensure a lower cost base from the start of the next financial year.

"Sanderson continues to develop a robust business model with over half of Group sales being derived from pre-contracted recurring revenues, the margin from which covers over two-thirds of business overheads.  Solutions delivered by the Group offer customers a strong ROI ('Return on Investment') opportunity, driven by a constantly evolving and continuously developing suite of product solutions.  Businesses generally invest in Sanderson solutions to secure tangible business benefits and to achieve cost savings within a relatively short time frame, often within the first twelve months.  One new customer recently reported a threefold 'ROI' from his Sanderson system within the first year!  Product development, especially in the area of mobile solutions across the Group's businesses is at a very high level but, in line with the Board's cautious and conservative approach, it is planned that most of these development costs will continue to be expensed as they are incurred.

"The Board's strategy is to achieve organic growth, supplemented by selective acquisitions which are expected to become earnings and value enhancing.  In the short term, the priority will be to successfully integrate the Priam and especially the One iota acquisitions into the Group, to maximise the growth opportunities in terms of earnings and revenues which they present.

"Business confidence is reportedly increasing within the UK and whilst we have experienced some improvement in business sentiment, recent experience is that small and medium sized businesses have moved to being 'cautiously optimistic' and this is reflected in the fact that to date capital spending has been relatively subdued.  Many customers remain cautious in making investment decisions and generally, sales cycles for our solutions are still prolonged and there are often delays towards the end of the sales cycle.  Whilst the Board continues to be cautious in its approach to risk, the Group does have a very cash generative business model which supports and underpins the commitment to maintain its progressive dividend policy.

"A strong balance sheet, a robust business model and an improved market position provide the Board with a good level of confidence that the Group will make further significant progress in the current year".

Enquiries:

Sanderson Group plc	0333 123 1400
Christopher Winn, Chairman
Adrian Frost, Finance Director
Charles Stanley Securities - Nominated Advisor and Broker	020 7149 6000
Mark Taylor
Winningtons Financial   Paul Vann	0117 985 8989 or 07768 807631

 

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