Sanderson
HOLDSanderson, the software and services group chaired by Christopher Winn, has made its fourth and largest acquisition since floating on AIM in late 2004.
Retail Business Solutions (RBS), a keenly priced acquisition, boosts Sanderson’s ‘multi-channel retail’ client base to more than 600 and means the group now derives 80 per cent of its sales from this ‘active’ sector, as opposed to manufacturing, its traditional stronghold now showing little or no growth.
Sanderson is paying up to £14m in cash and shares for RBS and all of its senior management is sticking with the business and taking Sanderson shares as part of the deal. Well established and Milton Keynes-based, RBS markets and supports ‘front and back office’ electronic point-of-sales systems as well as a full range of IT services. Its 200-strong customer base includes Blacks Leisure, Harrods, French Connection and Wyevale Garden Centres, and Winn sees cross-selling opportunities arising from a dramatically increased product range.
Bearing cash balances of £3.5m, RBS made a £1.34m profit on £11.98m of sales last year and improves Sanderson’s growth prospects by further altering the group’s sector focus. Winn says Sanderson is trading well and results for the year to September should meet forecasts.
Floated at 50p and recommended by GCI at 52.5p earlier this year, Sanderson remains well worth holding with its growth profile improving and given traditional dividend strength based on a strong recurring revenue base. Based on the 2.6p total dividend paid last year, the stock yields more than 5%.
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Market cap: £21.12m
Share price: 50.5p
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