Interim Results

20 August 2015

Sanne Group plc

("Sanne", "the Group" or "the Company")

Interim results for the six months ended 30 June 2015

Sanne, the specialist provider of outsourced corporate and fund administration, reporting and fiduciary services,is pleased to announce its maiden results for the six months from 1 January 2015 to 30 June 2015.

1. Group's earnings before interest, tax, depreciation and amortisation, share based payments and exceptional operating expenses related to the Group's IPO and non-continuing, pre-IPO costs

2. Adjustment is for exceptional operating expenses related to the Group's IPO and non-continuing, pre-IPO costs

3. Adjustment is for exceptional operating expenses and exceptional finance costs related to the Group's IPO and non-continuing, pre-IPO costs

4. Net debt as at 31 December 2014

Financial highlights:

Operational highlights

Successful IPO on the London Stock Exchange

Outlook and current trading

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

"The first six months of 2015 has been an important period for Sanne. Strong revenue and underlying profit growth have been achieved alongside a number of new business wins, and our listing on the Main Market of the London Stock Exchange in April provides us with an excellent opportunity for Sanne to build on its established operational platform and drive growth."

"There has been strong momentum in the business since the IPO and trading has been in line with the Board's expectations. With a healthy pipeline of new business and with the full revenue impact of a number of recent client wins still to be realised in H2, the Board remains confident on the outlook for the remainder of the year."

For further information contact:

A presentation for analysts will be held at 9.30am today at the offices of Citigate Dewe Rogerson, 3 London Wall Buildings, London Wall, London, EC2M 5SY.

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

Notes:

Sanne is a specialist global provider of outsourced corporate and fund administration, reporting and fiduciary services.

Established for over 25 years and listed on the Main Market of the London Stock Exchange, Sanne employs more than 300 people worldwide and has in excess of €100 billion of assets under administration.

As leaders in alternative asset administration, Sanne delivers tailored fiduciary services to a highly valued international client base through a global network of regulated businesses within nine leading financial jurisdictions.

www.sannegroup.com

INTERIM MANAGEMENT REPORT

First half review

The first six months of the year have been an important period for the Company. On 1 April Sanne listed on the Main Market of the London Stock Exchange marking a new chapter in the Company's history. The successful listing has provided Sanne with a stable capital base on which to progress further its objective of building scale in established and emerging markets with a particular focus on alternative asset classes that have high barriers to entry and require specialist expertise in order to deliver service.

Reflecting both continued positive underlying markets and the Company's successful strategy to drive growth, Sanne delivered a strong operating performance in the six months to 30 June 2015. Revenue increased by 26.0% to £21.1 million, gross profit increased by 24.8% to £13.5 million, operating profit before exceptional items increased by 32.5% to £7.1 million, and adjusted EBITDA increased by 27.5% to £8.3 million, all compared with the same period in the prior year.

The Company has continued to grow across its six business lines through increasing revenue from existing clients and attracting new clients. In the first six months of the year the Company secured new business totalling approximately £7.8 million on a projected annualised fee basis which compares with circa £4.2 million of annualised fees won during the same period in 2014. Of this approximately £4.1 million was from new clients to Sanne and it is hoped further revenues can be generated over time as these mandates are broadened across a wider range of services. 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 to increase into 2016 as implementation is completed.

Sanne has also continued expanding its service provision through the development of new reporting services, and the roll out of capabilities across the existing global network and operating platform. Examples of this include the development of regulatory reporting services in response to FATCA and AIFMD Annex IV requirements where Sanne has worked with clients to deliver multi-jurisdictional reporting solutions.

Performance in the period reflects the conversion of a strong pipeline of new business from existing and new clients across all core asset classes as well as delivering the full revenue impact of new structures secured in 2014. The Company has invested in staff at both a senior and operational level to ensure new work can be serviced effectively, particularly in fast growing divisions such as Real Estate, and capabilities at a Group level keep pace with business requirements, particularly within key control functions such as risk and compliance.

Sanne has continued to recruit in operational centres outside of its Jersey headquarters as the Company expands its service offering and customer base globally. In London, new office premises have been taken on to support this expansion and provide space for further recruitment. Sanne also continues to evaluate alternative service centres to deliver operational leverage and offer new jurisdictional opportunities.

The Company has also invested in its existing treasury function which continues to work closely with the business divisions to deliver competitive foreign exchange and treasury management services to client structures. It is anticipated that this will continue to grow as strategic relationships are built with banking providers.

This investment in growth in the period has been balanced with a strong control of central overhead which has delivered an adjusted EBITDA margin improvement of 0.5% compared to the same period last year (2015 Adjusted EBITDA margin: 39.3%, 2014: 38.8%).

Strategy for growth

The Company's growth strategy continues to focus on organic and acquisition opportunities. Organic strategies are focused around developing the service proposition and building scale within existing asset and market specialisms while pursuing initiatives to build revenue from a wider geographical base. During the first six months of the year Sanne has undertaken business development activities to build brand awareness within local markets.

The Company continues to review acquisition opportunities which complement existing growth objectives and which deliver greater jurisdictional and product diversity with defined areas of focus. Sanne operates in a consolidating market place that presents a number of attractive opportunities.

An article published by McKinsey & Company[1] in February 2015 indicates that, since 2005, assets under management within the alternatives sector have grown at an annualised rate of 10.7%, nearly twice the rate of traditional investments. The Company's focus on the alternatives and corporate sector positions it well for future growth.

Divisional review:

Debt

Revenues for the first six months were £6.5 million (6 months to June 2014 on a pro forma basis[2]: £5.4 million) with a gross profit of £4.3 million. The division has focused on maintaining its strong market position in the provision of administration services to non-bank lenders including peer-to-peer lenders and asset managers. The division has also seen a strong pipeline of loan agency business across a range of institutional clients. Operational capabilities have been increased in London and Dublin to reflect new work flows and this is enabling further business development opportunities driven by an ability to deliver services across a wider geographic footprint.

Real Estate

Revenues for the first six months were £4.4 million (6 months to June 2014 on a pro forma basis2: £2.6 million) with a gross profit of £2.7 million. There have been new business wins from new and existing clients as the UK real estate market continues to attract significant investment. New client mandates are also being driven by a trend for fund managers to outsource non-core roles such as accounting back-office. A new funds platform has been implemented in the division which will enhance Sanne's administration capabilities and service clients' increasing reporting requirements. Recruitment continues in key operational centres (Jersey, London and Luxembourg) to service new work and create capacity to grow existing relationships.

Private Equity

Revenues for the first six months were £2.9 million (6 months to June 2014 on a pro forma basis2: £2.1 million) with a gross profit of £1.7 million. A number of large mandates for new clients were secured in the first six months reflecting a strong service proposition and better alignment with the private equity manager community supported by a growth in fund raising. The funds platform continues to be enhanced to deliver more efficient service and reporting to clients across the division and enhanced client reporting will continue to be developed to meet the requirements of key service relationships. The division continues to invest in its platform in Asia and Luxembourg to drive future growth.

Corporate and Institutional

Revenues for the first six months were £2.0 million (6 months to June 2014 on a pro forma basis2: £1.9 million) with a gross profit of £1.2 million. During this period there has been a continued focus on developing a distinct product suite not only suitable to those clients directly serviced through this business division but also for selling across all business divisions. Examples include the development of regulatory reporting services to meet the specific requirements of FATCA and AIFMD Annex IV reporting. Furthermore, there has been continuing investment in Sanne's depositary service proposition delivered from an operational base in the UK (where Sanne is regulated to provide such a service) to be promoted across the alternatives focused business divisions.

Executive Incentives

Revenues for the first six months were £2.3 million (6 months to June 2014 on a pro forma basis2: £2.1 million) with a gross profit of £1.7 million. The division continues to position itself as a leading provider of specialist trusteeship of employee share trusts and associated administration services. The division often works in partnership with other large UK based share plan administration businesses to deliver best of breed service solutions to clients and this approach has ensured that they have been able to increase their share of the UK listed companies market. Further initiatives are underway to identify cross selling opportunities across the wider Group's client base.

Private Client 

Revenues for the first six months were £2.7 million (6 months to June 2014 on a pro forma basis2: £2.6 million) with a gross profit of £1.8 million. There have been a number of significant client wins which ensure the continued development of the division around outsourced family office services which enables the division to build specialist capabilities around a targeted ultra-high-net-worth private client base. The division has benefited from the recruitment of experienced resource from institutional providers which it is hoped will drive further business development opportunities.

Working capital and cashflow

The Company delivered an impressive adjusted EBITDA[3]/ operating cash conversion rate of 131.6% (2014: 103.2%) for the period. A strong focus on cash collection resulted in working capital falling to 27.1% as a percentage of the 30 June 2015 annualised revenue (2014: 30.1%).[4]

The Company's net debt position at 30 June 2015 was £8.6 million (December 2014: £33.6 million).[5]The variance on the previous year is primarily due to the repayment of debt at the time of the IPO.

During 2014, quarterly invoicing was processed in the month following a quarter end. Following the successful roll out of a new billing system, invoices are now and will continue to be processed within the quarter to which they relate. This change has impacted on the make-up of the working capital of the Company presented in the interim financial statements. Specifically, it has led to the increase in trade receivables and decrease in accrued income at the period end when reviewed in comparison to previous reporting periods. The change of billing system has also enabled the accurate presentation of deferred revenue where elements of deferred revenue were netted in accrued income in previous reporting periods.

Dividend and dividend policy

The Board has adopted a dividend policy which will allow us to maximise shareholder value while allowing the business to retain sufficient capital to fund ongoing operating requirements and to invest in the Company's long term growth. Given the IPO took place halfway through the first half of the year, the Board has declared an interim dividend of 1.4 pence per share.

The dividend will be paid on 30 September 2015 to shareholders on the register as at the close of business on 3 September 2015.

Our people

As a people business, the strength and depth of Sanne's management teams and employees is a core contributor to the Company's success. In the period, further key appointments have been made across both business divisions and within group services to augment the depth and capability of skills required to continue to build the business. It is anticipated that further senior hires will be made throughout the remainder of the year to support strategic initiatives.

Board

Sanne was pleased to strengthen its Board with the appointment of Rupert Robson as independent Chairman together with Andy Pomfret and Nicola Palios as independent non-executive directors, as part of the IPO. The Board look forward to working together to further develop the Group.

There have been no Board changes since the plc Board was formally appointed on Thursday 26 March.

Outlook

The Board remains confident about the outlook for the remainder of the year, based on half-year performance, new business wins and the continued focus by divisions on driving through successful business development strategies.

The Company continues to review strategic initiatives in the context of its stated objective to be a leading specialist provider of outsourced corporate and fund administration, reporting and fiduciary services. In particular Sanne will continue to focus on market share development through the deepening of key client relationships, the expansion of a core asset-led offering as well as the targeted entry of new asset classes through acquisition.

Furthermore, the Company will continue to expand its global network and platform by building presence in existing and new jurisdictions to support operational growth and diversification and expand Sanne's suite of services in order to meet the evolving requirements of existing and future clients and in response to the developing regulatory landscape.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE INTERIM STATEMENT

We confirm to the best of our knowledge that:

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

20 August 2015

Sanne Group plc

Notes to the consolidated results

For the period from 1 January 2015 to 30 June 2015

1. Basis of preparation

Sanne Group plc (formerly Album Group plc, the "Company") is a company incorporated in Jersey, Channel Islands. The unaudited, condensed and consolidated financial statements for the six months ended 30 June 2015 comprise the Company and its subsidiaries (collectively the "Group").

On 1 April 2015, the Company obtained control of the entire share capital of Sanne Holdings Limited via a share exchange, and thus control of the Group. There were no changes in rights or proportion of control exercised as a result of this transaction.

Although the share exchange resulted in a change of legal ownership, in substance these financial statements reflect the continuation of the pre-existing group, formally headed by Sanne Holdings Limited ("SHL"). As a result, the comparatives for 30 June 2014 and 31 December 2014 presented in these financial statements are the consolidated results of Sanne Holdings Limited. For the impact on the earnings per share calculation see note 8.

The consolidated balance sheets at 31 December 2014 and 30 June 2014 reflect the share capital structure of Sanne Holdings Limited. The consolidated balance sheet at 30 June 2015 presents the legal change in ownership of the Group, including the share capital of Sanne Group plc and the effects of the share exchange transactions.

The consolidated results have been prepared in accordance with International Financial Reporting Standards ("IFRS") interpretations adopted by the International Accounting Standards Board ("IASB") IAS34. The financial statements are therefore presented on a condensed basis as permitted and do not include all disclosures that would otherwise be required in a full set of financial statements and should be read in conjunction with the historical financial information ("HFI") within the prospectus available at www.sannegroupplc.com.

These condensed consolidated interim financial statements do not constitute statutory accounts. Statutory accounts for Sanne Holdings Limited for the year ended 31 December 2014 were approved by the Board of Directors of Sanne Holdings Limited on 2 March 2015. The report of the Auditors on the 2014 accounts was unqualified.

These condensed consolidated interim financial statements were approved by the Board of Directors on 19 August 2015. They have not been audited or reviewed by the Group's external auditors.

Going concern

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors have reviewed the Group's financial projections and cash flow forecasts and believe, based on those projections and forecasts, that it is appropriate to prepare the consolidated financial statements of the Group on the going concern basis. Accordingly, they have adopted the going concern basis of accounting in preparing the consolidated financial statements.

Accounting policies

The Group has applied consistent accounting policies, presentation and methods of calculation as those followed in the preparation of the Group's consolidated financial statements for the year ended 31 December 2014, in accordance with IFRS as issued by the International Accounting Standards Board.

The Group adopted accounting policies can be found in the appendices to these consolidated results.

2. Estimates

When preparing the condensed interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation of uncertainty, were the same as those applied in the Group's HFI.

3. Significant events and transactions

On 1 April 2015, the Company was successfully admitted to the London Stock Exchange achieving a premium listing for Ordinary shares at £2.00 per share, 102,000,000 shares being allocated to the existing owners. The placement of 14,000,000 new ordinary shares raised £27m (net of costs) which the Company used to repay loan financing that was in place before the Initial Public Offering (''IPO''), see note 12.

4. Segmental Reporting

All divisions engage in trust and corporate administration, declared revenue is generated from external customers.

The Group has seven reportable segments under IFRS 8: Private Equity, Debt, Real Estate, Corporate and Institutional, Executive Incentives, Private Client and Treasury following the business service lines representing its main services and type of customers. Business acquisitions (project names Delorean and Ariel) are now fully integrated into the relevant service lines, but are presented separately in prior years as it was not practical to restate the positions.

The chief operating decision maker has been identified as the board of directors of Sanne Group plc. Each segment is defined as a set of business activities generating a revenue stream determined by divisional responsibility and the management information reviewed by the board of directors. The board evaluates segmental performance on the basis of gross profit, after the deduction of the direct costs of staff, marketing and travel.

* The Ariel business was acquired in April 2014 and was managed as a separate business until integrated into the relevant divisions from 31 December 2014.

# The Delorean business was acquired in May 2013 and was managed as a separate business until integrated into the relevant divisions from 31 December 2014.

^ Revenue from all other activities is aggregated and included within 'Other'.