Sanderson - Solid Start Provides Further Confidence

Sanderson Group Solid Start Provides Further Confidence Sanderson Group has made a solid start to the current financial year, which has led us to increase our prospective dividend forecasts and target price. We continue to be impressed by the high level of recurring revenues (57% for FY12), which cover just over two-thirds of business overheads, and therefore de-risks the group's investment case. The strong and growing range of products and services, the growing presence in the catalogue, online sales and ecommerce markets and the strengthened balance sheet augurs well for Sanderson. Accordingly, and with the shares offering a prospective dividend yield of 2.9%, we retain our stance of buy, but with an improved target price of 68p. Click to Download Full Report Table: Financial overview Year to 31st Sep. 2011A 2012A 2013E 2014E Revenue* (£m) 14.1 13.4 14.0 15.1 PBT(£m) 0.4 1.5 2.0 2.4 EPS* (p) 1.1 3.0 3.75 4.17 Dividend (p) 0.75 1.20 1.50 1.60 Yield (%) 1.63% 2.61% 2.75% 2.94% Source: GECR and company Notes: *Continuing operations Buy Target price 68p Key data Share Price 52.00p 52 week high/low 56.50p / 34.00p Primary exchange AIM EPIC SND Shares in issue 43.68m Market Cap £22.71m Sector Software & Computer Services Important: All disclaimer information can be found on the last page of the document

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