Its full year results confirm the steady progress Sanderson has been pointing towards through a series of trading updates (see here), and mark the end of a year of transition that saw it sell off the last of its non-core assets and eliminate its debt.
The company is now totally focused on multi channel retail and manufacturing. This includes growth areas such as online sales and ecommerce, and mobile solutions and m-commerce which is set to become a hot spot. Highlights of the year to September 30 2012 include revenue from continuing operations (i.e. excluding three and a half months’ contribution from RBS of £13.37m (vs £14m in the previous year), with PBT from continuing operations a healthy £1.3m (vs £488K). Other metrics are strong and include an increase in gross margin from 82.3% to 83.6% arising from more sales of Sanderson’s own software which generates higher margins, a 40% order book increase, and c£6m debt transformed into £4m cash. Pre-contracted recurring revenue accounted for 57% of total revenue during the year and this reassuring model provides good visibility so the company is already in a strong position going into 2013.
With the transition period over it would be good to see product development ramp up, particularly around mobile (although there has been development in the area during the year) and SaaS. A more substantial increase in the new customer win rate would also be nice see – it stood at 7% last year and just 8% in 2012. However, Sanderson has had a positive year and managed it against a difficult economic background. It remains cautious but has cause to be quietly pleased.