As a long term shareholder Ive been very patient!
Happy with the dividends but capital appreciation has been weak
Im of the opinion that the business needs scale so for me the acquisition is positive
Still has to be integrated and synergies achieved but I agree the vendors are taking a realistic view
Results due tomorrow so we may get some more information
Bit weak on top line but revenue is vanity.
Margins better, which is sanity.
Cashflow excellent which matters so much more.
Financial firepower with 6m quid burning a hole and they could easily leverage just a little.
Just need to get the right acquisitions, it requires patience to hold SND but at least we have a good dividend while we wait.
I am also surprised at the 25% drop since the results and now below the 200 day MA. The drop triggered my stop loss so am now out completely but at a profit. Should the decline continue, I will look to get back in at the appropriate time as my view on management hasn't really changed.
Yes I'd noticed the cost increase impacting on operating profit and agree with your analysis. The forward order book is also slightly down on last years interims.
Big spike in volumes both yesterday and today and the price has been punished accordingly. When investing in a small company like this, I always invest in the management not so much the product. My view is that it is extremely well managed and the board have made few mistakes so far.. If that continues then it will continue to be worth investing. I still have a target price of 101p slightly lower than the 102 I had before these interims.
Earnings were depressed by a hefty increase in costs, and some acquisition costs. Also a slightly higher tax charge. I thought these were good results and I liked the dividend hike - unlike many software companies SND charges development spend as it is incurred, with the result that profit from sales growth doesn't come through immediately. I thought the words about lengthy sales cycle were situation normal for this sort of business - there was an unusual number of large new contracts last year. The real issue is the willingness of their customers, especially the retailers, to continue upping their software spend. New software projects, however valuable, are always dumped when money is tight.
I was surprised too by the market reaction - I picked up some more as a limit order was triggered so we will see what happens.
I first bought into this in 2013 and have seen nothing during that time which altered my view that this is a very good company. It has a Quality rank of 97/100 on Stockopedia, is carefully run and a progressive dividend policy with a forward yield of over 3%. It isn't expensive either. It ticks all my boxes.
No idea, it's difficult to know what drives daily price moves on small cap AIM shares.
I'm more focused on the long term value - they will update last week of April normally which may be on peoples minds.
The other big thing is they have cash to structure some sought after acquisitions which will drive up earnings quite sharply. They are taking their time and being careful, which is great, but it will happen sooner or later and it should lead to a re-rating. Perhaps people are waking up to that as well.
Fantastic trading from JD Sports - clients of One Iota - thanks in no small part to the investment they have made in "innovative digital technology and a truly multi-channel environment"
Great to read that "We continue to invest in these areas, particularly visual merchandising systems, in store environment and creative marketing...."
That is a good read across for One Iota/Sanderson and continues to show that, whilst old style retail may be struggling, the work that Sanderson is involved in is critical to those retailers who are winning.
(Plus you get solid management, excellent track record, conservative approach, cash generative, cash at bank, AIM tax advantages etc.... ).
Some welcome clarity yesterday in a trading update from an AIM company full of actual numbers - respect.
Reassuringly, this continues to look an excellent investment prospect:
- Income: healthy dividend, current & forecast yield >3%
- Steady Growth: 10%+ organic top line and PBITA last year, with cash for acquisitive growth on top but very cautious management re splurging on acquisitions.
- Net cash and generates cash year after year - the track record here is impressive.
- AIM listed, conservative management - this is bang on perfect for IHT portfolios.
Marking the stock down based on its link to retail, which I think is what happened of late, seems exceptionally lazy analysis.
Just look at how Sanderson's clients are performing. As an example Hotel Chocolat conveniently updated yesterday - have a look how their omni channel strategy (Sanderson) is going and ask why every retailer is not investing in the sort of solution Sanderson delivers.
Manufacturing wise, the weak exchange rate should support continued investment by manufacturing companies and food and drink, Sanderson's main segment, is set for export growth if recent reports are to be believed.
This looks a very sound stock to own with limited downside and nice steady income and growth for more measured investors to achieve good long term returns.
The biggest negative is the pension deficit but this is under control and if bond yields have turned a corner (even Albert Edwards is saying this!) then the current deficit position should improve.
"How much notice should you really take of last Friday's grim Purchasing Managers Index (PMI) showing the UK economy in "dramatic deterioration" since the vote to leave the EU? Media seized on the bad news to grab readers, analysts at Pantheon ..."
Panmure published a note this morning on Research tree: Sanderson delivers an in line set of interims. For us the highlight is twofold (i) operating profit is back to the level at which Sanderson sold its EPOS business in 2012A, and (ii) strong cash conversion which fuels an 11% DPS hike. The business model continues to strengthen - 53% of revenue is now recurring. Sandersons acquisitions are bedded-in, the new three-year plan is off to a strong start, the new divisional structure (Digital Retail & Enterprise) creates better product integrity and customer engagement.
Read Panmure Gordon & Co's note on SANDERSON GROUP PLC (SND), out this morning, by visiting https://www.research-tree.com/company/GB00B04X1Q77
"Heres a thought Omnichannel customers display a higher level of loyalty to a brand and typically out-spend multichannel shoppers by over 20%. That factlet reminds us that as the market continues to mull over the BHS collapse its fail was the failure to modernise. We remind ourselves of Sandersons One Iota product, a digital offer helping retail clients to modernise their business a product which speaks to the future of retail. Of course Sanderson is going through a three year transformation geared to growing and mo ..."
News of another win for the food software business on the company website. Whilst I always take company marketing with a pinch of salt when added to the recent formal market updates the enterprise business does seem to have some compelling products that are winning in the market. Good to see as this side of the business is probably the less exciting bit compared to digital retail.
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