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Outsourcing demand boosts Sanne

More asset managers are looking to outsource back-office functions
March 22, 2018

Progress at Sanne (SNN) has been little short of explosive, with turnover and profits up sharply in the year to December 2017. Part of this has been through acquisitions made during the year, but attracting new business has also been a key driver.

IC TIP: Hold at 671p

The core operation centres on providing administration and other services to alternative asset managers, where the time and cost of dealing with regulatory issues and other back-office functions in-house is better addressed through outsourcing.

Fund managers want to manage funds rather than paperwork, and Sanne scores heavily because its business model is globally available and, crucially, it offers the level of local market knowledge and expertise that fund managers look for. And the solid progress made in 2017 looks set to continue, given the strong growth in global alternatives markets, and growing workloads on asset managers that will encourage more outsourcing.

Acquisitions included International Financial Services based in Mauritius and IFS Trustees, and after the year-end it bought Luxembourg Investment Solutions and Compliance Partners. There is also a useful pipeline of new business in the core alternatives division, covering debt, real estate, private equity and hedge funds as well as new clients in its corporate and treasury business lines.

SANNE (SNN)    
ORD PRICE:671pMARKET VALUE:£962m
TOUCH:671-677p12-MONTH HIGH:837pLOW: 579pp
DIVIDEND YIELD:1.9%PE RATIO:51
NET ASSET VALUE:109p*NET DEBT:13%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201326.06.1nanil
201435.67.86.14.9
201545.62.41.47
201663.815.011.49.6
2017113.222.413.112.6
% change+77+50+15+31