Full-Year Results Point to A Positive Outlook

Sanderson Group has announced its results for the 12 months ended 30th September 2017. Key highlights include revenue growth of 1.1%, adjusted operating profit growth of 5.7% and better than expected net cash of £6.18 million. The software and IT services business added that it is well positioned in its target markets, and that it has a good level of confidence that it will make further progress and deliver trading results that are, at least, in-line with market expectations for FY18. With the results in-line with our expectations, we maintain our forecasts for FY18. We also introduce forecasts for FY19, and continue to classify the shares as a hybrid growth and income stock, with the shares offering investors exposure to the high-growth Enterprise Resource Planning software market as well as a decent prospective dividend yield of 4.16%.

Strategic acquisition

In a move aimed at creating both revenue upside and cost saving synergies, Sanderson has acquired Anisa Consolidated Holdings, a holding company that specialises in the provision of information technology-based offerings across the entire supply chain management market, for a maximum value of £12.0 million. The acquisition was made at an attractive valuation of 5.8x adjusted EBITDA, and made with the objective of scaling-up Sanderson’s enterprise division. We update our forecasts for FY18, and we continue to classify the shares as a hybrid growth and income stock, with the shares offering investors exposure to the high-growth Enterprise Resource Planning software market and a decent prospective dividend yield of 4.1%.

Trading Update

Sanderson Group has announced a trading update for the 12-month period ended 30th Sept. 2017. Key highlights include a better than expected cash balance of over £6.0m (vs. GECR forecast of £5.2m), in-line with expectation adjusted operating profit of £3.9m and slightly below expectation revenue of £21.5m (vs. GECR forecast of £22.1m). The software and IT services group added that it’s well positioned to make further progress during the current financial year (FY18). Accordingly, we update our forecasts for both FY17 and FY18. We will issue forecasts for FY19 on the back of the full-year results announcement, which is scheduled for release on 28th Nov. 2017. We continue to classify the shares as a hybrid growth and income stock, with the shares offering investors exposure to the high-growth Enterprise Resource Planning software market and a decent prospective dividend yield of 4.17%.

‘Demographic Trend’ Investing Company

Quoted on the AIM Market (AIM) of the London Stock Exchange (LSE), Limitless Earth Plc is an investing company with a particular focus on sectors where changing demographics are important drivers of growth. The directors have extensive contact bases and many years of experience in setting up, managing and growing businesses across a wide range of sectors, including health and wellness, energy, media, real estate, finance, internet and leisure. Limitless has so far made four investments, all of which are privately-held (Exogenesis Corporation, Chronix Biomedical, V-Nova and Saxa Gres SPA), and with all the investments offering significant growth opportunities, we classify Limitless Earth shares as a growth stock.

Progressing as expected

Sanderson Group has announced a trading update, covering the six months ended 31st March 2017. Results are in-line with management expectations, with revenue increasing by 10.5% to £10.90m (H1 2016: £9.86m) and operating profit (before amortisation of acquisition-related intangibles, share-based payment charges and acquisition-related costs) increasing by 5.4% to £1.55m (H1 2016: £1.47m). The software and IT services group said it is confident of making further progress during the remainder of FY17. We keep our forecasts pretty much unchanged, albeit adjusting our tax payments slightly after speaking with management. We continue to classify the shares as a hybrid growth and income stock, with the shares offering investors exposure to the high-growth Enterprise Resource Planning software market, as well as offering a decent prospective dividend yield of 3.4%.