(By Richard Holway 9.00am 30th Apr 09) Sanderson has issued a profits warning this morning. Revenues for the 6 months to 31st Mar 09 will be c3% but operating profit has been halved to c£1m. As well as the current economic conditions, Sanderson has seen a change in its mix away from larger, more profitable own-label software. Sales to manufacturing and smaller retailers have also suffered.
On a brighter note, the cash is still coming in and debt servicing (c£10m now compared with £11.7m in Sept 08) is on track.
Sanderson shares are down another 10% at 9.5p on this news. That gives them a market valuation of just £4.1m. Sanderson had revenues of £26m in FY08. All this is a far cry from the 50p IPO price back in Dec 04. Sanderson is one of those companies that really should form part of someone's consolidation exercise. If the price keeps falling, the odds on this happening just increase. But, of course, the price will not exactly be comforting for the long term loyal shareholder base.
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