12/12/2006
Investors looking for sustainable income at a reasonable price should look no further than Sanderson, the UK and Ireland-focused software and IT services group guided by Chris Winn.
Final figures to September demonstrated steady, if unspectacular, growth, in spite of flagging levels of discretionary spend from manufacturing clients. On turnover up a modest 4.5% to �16.2m, Winn announced a 7.6% increase in ‘normalised’ operating profits to �3.1m and a pre-tax profit of �1.9m (�562,000).
Encouragingly, the dividend was raised 4% to 2.6p, which means the shares offer investors a very appealing 5.3% yield.
And despite the rather flat top line performance, gross profits rose 10% to �13.5m, giving improved gross margins of 84% (80%), with gains reflecting an increase in the supply of owned IP to clients. Recurring revenues grew from 53% to 55% and 25 new clients were added (17 last time).
Though manufacturing, with the exception of food, proved lacklustre, February acquisition SRS boosted Sanderson's presence in the multi-channel retail market, where competition is forcing companies to drive efficiencies through IT investment. New wins here included Help the Aged and Homeserve and the sector will be a strong area of focus this year.
SRS also made a decent profit contribution and Winn is working on a number of other acquisitions this year. He says lowly geared Sanderson can move swiftly on such deals. Buy/Hold.
James Crux
People who read this article also read ... |
| 15/12/2006 |
| 14/12/2006 |
| 12/12/2006 |
| 08/12/2006 |
| 08/12/2006 |
| AIM | �20.49m |
49.00p
|
0.00p
|
|
Other company articles: |
| 12/12/2006 |
| 02/12/2005 |
| 01/03/2005 |
| 15/08/2002 |
| 03/05/2002 |
Sign Up to a Free Stock Market Course
Learn how our course graduate averaged �500 profit a week using only �2000. Visit online today for more information on the secrets of the stock market millionaires.
Commission-Free CFD Trading in Shares and Indices
Our award-winning trading platform offers free charting, news, analysis and mobile trading. CMC Markets UK Plc is authorised and regulated by the Financial Services Authority.
Sell Shares with City Index
City Index spread betting - tax free dealing in shares, indices no commission, no stamp duty and CFDs (contracts for difference).