Christopher Winn, the executive chairman of enterprise software provider Sanderson Group, has bought nearly all of private equity firm Alchemy's stake in the company.
Alchemy was involved in the original management buy out of Sanderson in December 1999, which was split into three companies including Sanderson Group, which was floated on AIM on 16 December 2004. The placing price was 50p a share.
Winn spent £2.15m to buy the 10.76m shares at 20p each. Winn led the original management buy out of Sanderson and also the flotation of Sanderson Group. The purchase takes his stake from 5.16% to 29.97%. He could not have bought many more shares without being obliged to make a mandatory bid for Sanderson.
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Alchemy still owned 1.238% of Sanderson after the transaction. The second biggest shareholder is Framlington with 7.8%. Sanderson, which supplies software to retail and manufacturing firms, reported its full year figures before Christmas. Recurring revenues accounted for 55% of revenues of £24.9m in the year to September 2009 - the previous year's revenues were £27.6m. Underlying profits fell from £3.2m to £1.4m. Activity levels are improving but most of the deals fell into the current financial year. Admin expenses have been reduced to just over £14m a year, against just under £15.6m last year.
The contributions of both the manufacturing and multi-channel retail divisions were lower. The latter contributes more than two-thirds of profits and new products will be launched in 2010. Food is increasing in importance to the manufacturing division.
The final dividend is unchanged at 0.2p a share, although the total for the year is down from 1.4p a share to 0.4p a share.
Despite the slump in profit Sanderson still managed to cut net debt by £700,000 to £9.96m in the year to September 2009. House broker Charles Stanley believes that cash generation could cut net debt to £5m by the end of September 2012. The company's bank facility was renegotiated in July. Charles Stanley forecasts a recovery in underlying pre-tax profits to £1.9m in the year to September 2010.
Top Director Buys
Sanderson Group (SND) Director name: Mr Christopher WinnAmount purchased: 10,761,801 @ 20.00p Value: £2,152,360
Connaught (CNT) Director name: Mr Mark William TincknellAmount purchased: 100,000 @ 319.50p Value: £319,500
Standard Life European Private Equity Trust (SEP) Director name: Mr Edmond WarnerAmount purchased: 25,000 @ 100.40p Value: £25,100
ITM Power (ITM) Director name: Dr Graham Cooley Amount purchased: 104,156 @ 19.65p Value: £20,467
Witan Pacific Inv Trust (WPC) Director name: Mr Sarah C BatesAmount purchased: 6,500 @ 168.00p Value: £10,920
Top Director Sells
IG Group Holdings (IGG) Director name: Mr Jonathan R DavieAmount sold: 200,000 @ 404.49p Value: £808,980
Mitchells & Butlers (MAB) Director name: Mr Jeremy TownsendAmount sold: 4,213 @ 279.70p Value: £11,784
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