29th Jul 2019 09:03
(Alliance News) - Shares in fund administrator Sanne Group PLC slumped Monday as it warned on full-year margins, despite revenue growth remaining solid.
Sanne was 32% lower on Monday morning at 509.00 pence a share.
For the six months to June, Sanne, a member of the FTSE 250 index, sees an underlying operating margin of around 26%, below previous guidance.
This has been hit by a "disappointing" lack of delivery of operating efficiencies, and some extra overhead spend. These are unlikely to be compensated for in the second half of the year, Sanne continued.
As a result, the underlying operating margin for 2019 is set to be between 28% to 30%, below previous expectations, and underlying earnings per share will be below expectations.
In 2018, underlying earnings per share was 24.1 pence, up 8.6% year-on-year, and the underlying operating profit margin was 31.1%, from 34.3%.
"The first half margin is a disappointing outcome and well below the optimal margin for the business. We have taken action to address the increased spend and delay in operating efficiencies being realised," said Chief Executive Martin Schnaier.
"We remain committed to investing in the significant growth opportunities that we are delivering on in our core markets and products. Although this investment is impacting our margin guidance for the current year, the priority is to ensure the group is well-positioned to deliver sustainable growth in the medium and long term."
Organic growth at constant currency in the first half was 13%, and 17% including acquisitions. This was due to "very" strong performance in all core Alternatives business segments, though partially offset by European Corporate and Private Client operations.
Alternatives revenue growth was 22%, but the Corporate unit's revenue growth was flat and Private Client declined. Combined, revenue in Corporate and Private Client fell 11%.
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