30th Apr 2009 07:00
For Immediate release 30 April 2009
SANDERSON GROUP PLC
Sanderson Group plc
Trading Update
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, announces the following trading update ahead of the announcement of its interim results for the six month period ended 31 March 2009 which will be made in June 2009.
During the period the Group's trading has been affected by the challenging market conditions brought about by the economic downturn. Whilst order intake has increased from larger retail customers, expenditure has been focused on enhancing the performance of existing systems, especially in the areas of security and Chip & Pin devices. Sales to manufacturing clients and to smaller retailers have reduced.
Although new customers continue to be won, the Group has experienced the deferral of some larger, more profitable orders for the supply of Sanderson-owned software and services. This change in the sales mix has resulted in lower gross margins. For the six month period ended 31 March 2009, it is expected that Revenues will be approximately 3% below last year's level and that operating profit will be approximately £1million, compared with £1.97million last year.
Given current market conditions and continued economic uncertainty, the Board anticipates the trading performance of the Group for the financial year will be below current market expectations. However, the underlying business has performed satisfactorily and pre-contracted recurring revenues have continued to increase. Costs are being managed in line with the levels of current sales. Efficiency measures and cost reductions implemented during the first six months of the year are expected to save the Group in the region of £1million in the second half of the year.
The Group remains cash generative and is up to date with the servicing of its bank debt which continues to be repaid. Net debt at 31 March 2009 was just below £10million compared with £11.7million at 30 September 2008 and £12.5million at 31 March 2008.
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Enquiries:
Christopher Winn, Executive Chairman
Sanderson Group plc - 02476 555466
Paul Vann
Winningtons Financial - 0117 920 0092
Mark Taylor / Freddy Crossley
Charles Stanley Securities - 020 7149 6000
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