Sanne confident in prospects as it acquires Inbhear group
By Josh White
Date: Wednesday 29 Jan 2020
(Sharecast News) - Alternative asset and corporate services provider Sanne Group said it had continued to benefit from "structural growth" in demand for services to alternative asset managers on Wednesday, expecting to report full-year revenue growth of around 16%.
The FTSE 250 company said that was primarily driven by "strong" double digit growth rates in the EMEA, Asia Pacific and Mauritius, and North America segments.
It said the Channel Islands book delivered a "broadly flat" result in the year ended 31 December, following the previously-announced headwinds in the private client and corporate businesses.
The group was still seeing good new business win activity, with full year annualised new business wins expected to be around £24.5m, in line with the prior year, and "good "momentum continuing into 2020 with some "significant" wins falling into the New Year.
Sanne said good progress had been made in the second half in addressing the issues highlighted in its July trading update, with the second half underlying operating profit margin showing a "significant improvement" on the first half.
"As a result, whilst continuing to invest in growth initiatives, the group expects to report a full year underlying operating profit margin in line with expectations," the Sanne board said in its statement.
"Sanne has also continued to see strong cash conversion through the second half, with underlying operating cash conversion for the full year expected to be in excess of 100%."
The board said it expected to report underlying earnings per share for the year ended 31 December in line with its revised expectations, following the July trading update, and said it remained confident in the group's future prospects.
Sanne also announced that it has entered into an agreement to acquire Inbhear Fund Service and Inbhear Management Services for an upfront consideration of €6.6m (£5.58m), and an earn-out over the next three years capped at €7.8m.
It said Inbhear is a fund administration platform that would establish a physical presence in Cayman for the group, as well as enhance its existing Dublin capabilities and client base.
The acquisition is expected to complete on 1 March following regulatory clearance.
"The transaction is expected to be earnings neutral in 2020 due to the increased investment in the Cayman business and earnings enhancing from 2021 onwards," the board said.
"The strategic review of the group's Jersey-based private client business remains ongoing and is now at an advanced stage."
Sanne said it would announce its full-year results for the year ended 31 December on 19 March.
At 0929 GMT, shares in Sanne Group were down 1.17% at 593p.
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