Considering the amount of new business that Sanne Group (SNN) secured last year, the £6.9m expense for becoming a listed entity was clearly worth every penny. Chief executive Dean Godwin said the administration outsourcer secured various new contracts with annualised fees of roughly £13m, which is a third more than in 2014. Not only that, but half of this interest came from new clients. This, Mr Godwin says, makes sense given the "trend in the market where fund managers are looking to outsource" due to the growing complexity and burden put on them by regulation.
The group has seven divisions, but management lumps debt, real estate and private equity together as its 'alternatives' business. Mr Godwin claimed data suggested the alternatives investment market was projected to grow by 10 per cent year on year for roughly the next decade, which should benefit the group, alongside the general rise in outsourcing.
Elsewhere, Mr Godwin said the business had continued to invest in its technology to make sure its infrastructure could deal with any forthcoming changes in regulation. But "maintaining financial discipline" meant operating profit margins still rose 270 basis points to 34.4 per cent.
House broker Investec expects adjusted pre-tax profits of £20.9m in 2016, leading to EPS of 15.5p, up from £16.7m and 14.5p in 2015.
| SANNE GROUP (SNN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 350p | MARKET VALUE: | £396m | |
| TOUCH: | 340-350p | 12-MONTH HIGH: | 387p | LOW: 200p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 250 | |
| NET ASSET VALUE: | 17p* | NET CASH: | £1.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012** | 18.7 | 4.4 | n/a | n/a |
| 2013** | 26.0 | 6.1 | n/a | n/a |
| 2014 | 35.6 | 7.8 | 6.1 | 4.9 |
| 2015 | 45.6 | 2.4 | 1.4 | 7.0 |
| % change | +28 | -69 | -77 | +43 |
Ex-div: 7 Apr Payment: 29 Apr *Includes intangible assets of £7.7m, or 6.8p a share **Pre-IPO figures | ||||
