Half-year Report

7 September 2017

Sanne Group plc

("the Company") together with its subsidiaries ("the Group" or "SANNE")

Interim results for the six months ended 30 June 2017

1. The items classified as non-underlying items are as detailed in note 4.

Highlights

- Group revenue for 2017 H1 increased by 104% to £56.3m (2016 H1: £27.6m) of which 15.3% was organic growth.

- Continued strong performance within each of the Group's business segments.

- New business with annualised fees of approximately £10m won in the first six months with a healthy pipeline continuing into the second half.

- Integration of prior year acquisitions progressing well with continued focus into the second half.

- Acquisition of IFS in Mauritius completed, broadening geographic footprint and significantly increasing scale and expertise.

- Continued strengthening of senior management team to deliver strategic capacity.

- Successful implementation of the new global operating structure.

- Development and expansion of the Group's fund technology capability continues to be a key focus.

- Larger office space secured in Hong Kong, Shanghai and Singapore to support growth in Asia-Pacific.

- Due to a change in the Group's expected effective tax rate, the Board now expects to deliver underlying EPS for the full year marginally ahead of its previous expectations.

Dean Godwin, Chief Executive Officer of Sanne Group plc, said:

"We are pleased with the performance of the Group in the first half. We have continued to see strong growth in new business wins, with the increase in cross-selling opportunities across our regional business segments particularly encouraging, and we have a healthy pipeline moving into the second half of the year. Our recent strategic acquisitions are being successfully integrated and already yielding benefits. As our business grows, during the second half of the year, we will continue to invest in our people, processes and technology."

Enquiries:

A presentation for analysts will be held at 9.30am today at the offices of Tulchan Communications, 85 Fleet Street, London, United Kingdom. This presentation can be viewed live on the Sanne Group website: https://www.sannegroup.com/investor-relations/interimsh12017/

Participants can also dial into the presentation in listen-only mode using the following details:

Telephone: +44 20 3713 5011

Access Code: 492-915-541

A copy of this announcement will be available online at www.sannegroupplc.com at 7am today.

Notes:

SANNE provides administration, reporting and fiduciary services to leading alternative asset managers, financial institutions, family offices and corporates.

The Group employs more than 1,000 people worldwide and administers structures and funds that have in excess of £160 billion of assets.

The Group has a presence in 15 established strategic locations spread across the Americas, EMEA and Asia-Pacific. 

This announcement contains inside information.

SANNE is listed on the Main Market of the London Stock Exchange.

sannegroupplc.com

INTERIM MANAGEMENT REPORT

First half review

The Group has continued to see strong growth in the first half of the year, primarily driven by strong momentum from new business delivered throughout 2016. Continued focus on both organic and inorganic revenue strategies coupled with cost control has resulted in revenue increasing by 104% to £56.3m (growth has been largely generated through the acquisitions made in 2016/2017 and organic growth continues to be strong at 15.3%) and underlying operating profit increasing by 109% to £21.5m, compared with the same period in the prior year.

In the first six months of the year the Group secured new business from both new and existing clients totalling approximately £10m on a projected annualised fee basis (compared to £6.7m in the same period in 2016). Of this approximately £5m was from new clients to SANNE. The Group is seeing an increase in cross-selling opportunities as a result of our acquisitions. As in previous reporting periods the full revenue impact of many of these new structures will commence in the second half of the year and, in some cases, will continue into 2018 as implementation is completed.

On 1 January 2017, the Group completed the acquisition of International Financial Services ("IFS"). Headquartered in Mauritius, IFS provides fund and corporate services to clients in the attractive growth markets of Asia and Africa. The acquisition broadens SANNE's geographic footprint and increases scale and operational capability across the Group. The Group will also be able to utilise the highly skilled talent pool in this jurisdiction to support client service and operational initiatives.

There has been a continued demand for regulatory services as clients seek to meet requirements of Common Reporting Standards (CRS) and the imminent implications of MiFID II, which comes into force in January 2018. The Group also continues to see an increase in demand for Luxembourg and Dublin structures as clients look to hedge positions against the final outcome of the Brexit negotiations.

The Group continues to invest in staff at both senior and operational levels of the business in order to strengthen the Group's operating platform globally and add further capacity to drive the business forward. Senior appointments have been made in both Client Services and Group Services to support the integration of the acquisitions made in 2016/2017.

Strategy for growth

The Group's ongoing strategic focus is to continue building scale in established and emerging markets and to be recognised as one of the world's leading providers of alternative asset and corporate administration services.

The Group continues to invest in its infrastructure, as well as its people, in support of its strategic objectives while maintaining financial discipline. This includes further leveraging of the technology platform in support of client service initiatives and an increasing demand for timely and transparent client reporting.

While there has been a focus in the period on integration and delivering organic growth, the Group has continued to evaluate acquisition opportunities that enable SANNE to take advantage of a consolidating market.

Operational Review:

Transition from divisional to global operating structure

From 1 January 2017, the Group established four core management and reporting business units to better reflect the continued growth and increasingly global nature of the service platform. These consist of North American Alternatives, EMEA Alternatives, Asia-Pacific and Mauritius (APM) Alternatives and Corporate and Private Clients (CPC). Each business unit is led by a Managing Director with significant experience delivering business performance and strategic growth.

Across each of the regions in which the global business operates, the Group will continue to take advantage of the growing outsourcing trends and increasing level of regulation by positioning itself as a leading expert in asset class and market administration and reporting services.

SANNE's core focus continues to be on providing clients with high quality services and access to a highly skilled and expert workforce who understand the fluctuating requirements that both alternative asset and corporate clients require.

North American Alternatives

Revenues for the first six months were £9.5m with a gross profit of £4.7m. There are no comparatives for the prior year as the segment was born out of the acquisition of FLSV Fund Administration Services LLC that completed on 1 November 2016.

Our North American Alternatives business achieved a number of new wins from existing clients in H1 as they increased their share of wallet from key client relationships. The business is also starting to build a good pipeline of opportunities from cross-selling into existing EMEA Alternatives clients. Technology enabled fund administration services from our New York office continue to be the core services provided to clients.

The Group has added senior management capacity in the New York office to support expansion both in New York and also focus on the wider North American market.

EMEA Alternatives

SANNE's EMEA Alternatives business includes all of the Group's four key alternative asset strategies (Debt, Real Estate, Private Equity and Hedge). Revenues for the first six months were £23.1m (H1 2016: £17.2m) with a gross profit of £14.2m (H1 2016: £11.2m). Comparisons to prior period numbers are impacted by acquisitions made in Ireland and South Africa on 1 March 2016 and 1 June 2016 respectively.

EMEA Alternatives saw positive growth in business wins from new clients, as well as from existing clients. Fund related work contributed to the majority of that growth.

The Debt business division continues to benefit from market leadership in private debt administration services and has seen some good traction within the capital markets space for structured finance.

The Real Estate business division continues to grow quickly across the range of core international jurisdictions with a good mix of new and existing clients.

Due to the internal promotions of Martin Schnaier and Zena Couppey the Debt and Real Estate business divisions have transitioned to new leadership.

During the first half of 2017, the Private Equity business division has continued to grow its offering to institutional private equity houses. In particular, the division has seen a number of opportunities arising through relationships introduced by the North American Alternatives business.

The Hedge business division has performed well given the backdrop of a relatively depressed local market in South Africa. The division successfully completed a highly intensive, long running project to migrate a large portfolio of clients on to a new regulated management company platform, in accordance with regulatory changes in South Africa.

Operational capability in EMEA Alternatives has been increased across Luxembourg, Dublin and Cape Town. The continued development and expansion of SANNE's funds technology capability across the business has considerably strengthened the Group's ability to provide market leading technology solutions to Asset Managers and their investors. These increased capabilities have been beneficial for all asset classes.

Asia-Pacific & Mauritius (APM) Alternatives

The APM Alternatives business is predominantly made up of real estate, private equity and a smaller proportion of credit funds across Asia-Pacific and Mauritius. Revenues for the first six months were £14.0m (H1 2016: £1.9m) with a gross profit of £10.9m (H1 2016: £1.3m). The prior period comparatives do not include results of the Mauritius business that was acquired on 1 January 2017.

During the first half of the year, strong growth has been delivered within the real estate and private equity asset classes in Hong Kong, Shanghai and Singapore, with advantage being taken of good cross-selling opportunities from EMEA Alternatives clients.

In Mauritius the integration of IFS-Sanne remains on track. The Group is also seeing an increase in cross-selling opportunities to and from the region, expanding the client offering for both SANNE and IFS-Sanne's client portfolios.

The region displays good growth potential within the existing jurisdictional offering.

Within APM, operational capability has been expanded in Shanghai, Hong Kong and Singapore in line with client requirements and a new Managing Director has now been appointed to head up the regional business.

Corporate & Private Clients (CPC)

CPC comprises four business divisions: Corporate & Institutional, Executive Incentives, Private Client and Treasury. Revenues for the first six months were £9.6m (H1 2016: £8.5m), with strong growth in all divisions. Gross profit was £6.1m (H1 2016: £5.5m).

The Corporate & Institutional (C&I) division showed good revenue growth resulting from strong new business wins and cross selling opportunities arising from Alternatives in respect of our Depository offering. There is also increased demand from clients for regulatory reporting services.

The Private Client (PC) division showed growth and continues its strategic focus on institutionally minded Ultra High Net Worth (UHNW) families and their family offices, with a continued focus on outsourcing of their fiduciary and administrative needs.

The Executive Incentives (EI) division showed growth in revenue despite some new larger engagements won in late 2016/early 2017, taking longer to implement. Global trends in regard to executive compensation, including toward equity based plans, deferred compensation & carried interest structures, bode well for the sustained growth of the EI division over the longer term.

The Treasury division showed revenue growth resulting from cash management and foreign exchange transactions wins and strong pipeline has been developed through cross selling initiatives across the global business.

Cash flow and working capital

The Group delivered an impressive level of operating cash flow in the first half with cash from operations of £20.9m (£11.4m; 2016). This was delivered largely due to the strong profits growth in the period as well as the continued focused management of working capital. Underlying operating cash conversion was 98.9% for the first half (117.3%; 2016). Working capital as a percentage of annualised revenue is 11.8% (30 June 2016: 20.9%).

The Group's net debt position at 30 June 2017 was £23.4m (30 June 2016: £7.2m).

Dividend

The Board has declared an interim dividend, up 31.3%, of 4.2 pence per share (2016: 3.2 pence). The dividend will be paid on 13 October 2017 to shareholders on the register as at the close of business on 15 September 2017.

Risk

The following top ten risks facing the Group are unchanged from those set out in the Annual Report 2016: Acquisition Risk; Strategic Risk; Competitor Risk; Business Change Risk; Data Security Risk; Process Risk; Staff Resourcing Risk; Political/Regulatory Change Risk; Regulatory Licence (Compliance) Risk; and Intangible Asset Risk.

Detailed explanations of these principal risks together with key mitigants can be found on pages 27 to 30 of the Annual Report 2016.

Outlook

The Board remains confident in the continued growth of the Group. The new business performance in the first half, and healthy pipeline of further opportunities, provide good momentum in the second half and beyond. The successful execution of the Group's organic growth strategy, supported by strategic acquisitions, is deepening SANNE's asset capabilities, broadening its product offering and delivering greater jurisdictional diversification.

The underlying fundamentals in SANNE's markets remain compelling. Increasing regulation, cross-border investment and the growing expectation of independent oversight are driving demand for the outsourcing of administration services. SANNE's brand, market position, high levels of service and strong client base provide a strong platform for continued success.

As a result of continued investments across the Group in support of its growth, with a focus on people, processes, and technology, this year the Board expects to see a more even half one/half two split of profitability than the Group has reported in prior years.

The Board continues to believe that the Group will meet its expectations for underlying profits before tax for the full year and as a result of a lower expected effective tax rate, expects to be able to report underlying EPS marginally ahead of its previous expectations.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE INTERIM STATEMENT

We confirm to the best of our knowledge that:

- The condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and

- The interim management report includes a fair review of the information required by:

A. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

B. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

The interim statement contains certain forward looking statements which are made by the directors in good faith based on the information available to them at the time of their approval of this interim statement. Forward looking statements contained within the interim statement should be treated with some caution due to the inherent uncertainties, including economic, regulatory and business risk factors, underlying any such forward looking statements.

We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise. The interim statement has been prepared by Sanne Group plc to provide information to its shareholders and should not be relied upon by any other party or for any other purpose.

Dean Godwin

Chief Executive Officer

7 September 2017

INDEPENDENT REVIEW REPORT TO SANNE GROUP PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union and in accordance with IFRSs as issued by the IASB. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

St Helier, Jersey

7 September 2017