When Sanne (SNN) spoke of minimal impact on its client service just days before the UK went into lockdown, investors swooned at a rare glint of corporate resilience in the March madness.
They were right to. Though client activity reportedly slowed in the second quarter, Sanne’s organic revenue grew 8.9 per cent in the six months to June. Set against a dip in overheads, this led to a 210-basis point rise in the underlying operating profit margin to 27.4 per cent, which would be impressive in any year. Cash generation also remained robust, with underlying operating cash flow coming in a touch ahead of group operating profits of £23m. Leverage should now ease slightly, following the £9m sale of the private client business post-period.
Sanne now sees signs that demand for corporate services from its asset management, private equity and hedge fund customers is picking up steam after that second quarter dip. Client wins secured in the first half of 2020 should lead to £11.1m of additional annualised revenues, and recent weeks have seen a further widening in the bid pipeline.
Berenberg forecasts adjusted earnings of 23.6p per share this year, rising to 26.7p per share in 2021.
| SANNE (SNN) | ||||
| ORD PRICE: | 678p | MARKET VALUE: | £993m | |
| TOUCH: | 678-682p | 12-MONTH HIGH: | 760p | LOW: 418p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 79 | |
| NET ASSET VALUE: | 125p* | NET DEBT: | 69% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 76.0 | 3.8 | 1.4 | 4.7 |
| 2020 | 86.5 | 11.6 | 6.2 | 4.8 |
| % change | +14 | +208 | +343 | +2 |
| Ex-div: | 17 Sep | |||
| Payment: | 16 Oct | |||
| *Includes intangible assets of £239m, or 163p a share | ||||
