Double-digit moves in share prices have been a routine daily occurrence in recent weeks, but the heavy share-buying which greeted full-year numbers for Sanne (SNN) was still something of a surprise.
Numbers for the corporate business services group – including a 7 per cent rise in underlying operating profit to £44.3m, a surge in free cashflow and a 72 per cent increase in long-term liabilities – were solid if unspectacular. But a comment that the Covid-19 outbreak has so far had a minimal impact on client service delivery was enough for the market to pounce at the rare prospect of earnings resilience.
Three days before these numbers, the company announced the sale of its Jersey-based private client team to listed peer JTC (JTC), for £12m in cash. The subsidiary saw a 15.2 per cent contraction in revenue to £5.7m in 2019, though with a gross profit margin of 65 per cent – providing offshore services for the uber-wealthy is a lucrative business, after all – Sanne looks to have sold the arm at a knock-down valuation.
Consensus forecasts are for earnings of 27p per share this year, rising to 30.9p in 2021.
| SANNE GROUP (SNN) | ||||
| ORD PRICE: | 537p | MARKET VALUE: | £787m | |
| TOUCH: | 537-543p | 12-MONTH HIGH: | 762p | LOW: 418p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 141 | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 67%** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 45.6 | 2.4 | 1.4 | 7.0 |
| 2016 | 63.8 | 15.0 | 11.4 | 9.6 |
| 2017 | 113 | 22.4 | 13.1 | 12.6 |
| 2018 | 136 | 19.6 | 10.3 | 13.8 |
| 2019 | 160 | 9.6 | 3.8 | 14.1 |
| % change | +17 | -51 | -63 | +2 |
| Ex-div: | 23 Apr | |||
| Payment: | 20 May | |||
| *Includes intangible assets of £226m, or 154p a share. **Includes lease liabilities of £37.8m. | ||||
