fund

SANDERSON GROUP

PRICE (INC)

140.5p

PRICE (ACC)

-

INITIAL CHARGE

0%

ANNUAL MANAGEMENT CHARGE

0%

ONGOING CHARGE

0%

YIELD

0%

1 YEAR

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Prices as at 04 Nov 2022.

We don’t currently provide commentary on this fund.

Past performance is not an indication of future performance.

Capital at risk.

Sanderson is a profitable and established supplier of core business software solutions to medium sized companies in Britain and Ireland. Over the past three years the company has been restructured, which has resulted in considerable margin improvement. The group's strength is the level of recurring revenue achieved from its 500 customers through software licence sales, maintenance and IT support. Completely new business wins are difficult to come by as companies rarely scrap their computer systems and start again. They are more likely to tinker with existing computer systems. 2005 trading was marred by a weak manufacturing sector but the company has responded through acquisitions and reducing its dependence on this sector. The high yield, especially for an IT company, should provide support for the share price.

Fund summary

Sector	Software & Computer Services
Structure	X-AIM
Launched	December 2004
Size	£56m
Yield	0%
Dividends paid

Charges

Standard Initial Charge	0%
Initial Charge Via BestInvest	0%
Additional Bid/Offer Spread	0%
Annual Management Charge	0%
Ongoing Charges Figure	0%

Investment Process

The group was originally founded in 1983 and floated on the Unlisted Securities Market in 1988 before moving to the Official List in 1990. The current group is the result of restructuring following the company being taken private by its current management - Christopher Winn and David O'Byrne in 1999 when the two founders exited the business. The group supplies enterprise application software to wholesale distribution (20% of group turnover), mail order (21%), manufacturing (40%) and food and processing companies (19%). Recurring revenue is over 50% of the business, which includes software licensing, maintenance and support fees. Just under 90% of revenues comes from its existing 500 customers. The company is cash generative which will enable the group to pay a dividend at least twice covered by earnings. No single customer accounts for more than 3% of total revenue. At the heart of the software offering is the UNITY software suite, which was released in 2003. The software runs on Microsoft, Unix and IBM platforms, all accessible via a network.

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Past performance is not a guide to future performance. View full risk warning