MSL takeover aids Sanderson income

Results Focus on software and services helps company to produce 34 per cent profit rise.

Sanderson Group has recorded a 34 per cent increase in operating34 per cent profit rise. profit to £5.9 million and revenue of £54.4 million for the six months ended 31 March, buoyed by its recent acquisition of Management Software Limited (MSL) and an increased emphasis on software and services.

Overall revenue increased 56 per cent year-on-year to £54.4 million. Sanderson's IT Services division performed particularly well for the period, beating the IT Systems and International divisions in revenue for the first time, due to the MSL acquisition.

The IT Services arm recorded half yearly turnover of £23.4 million, up from £6.4 million in 1998. By comparison, Sanderson's IT Systems and International divisions showed modest revenue growth year-on-year of approximately 10 per cent and 14 per cent respectively.

Sanderson acquired the remaining 49 per cent of MSL - a desktop and network software support company - in February, having originally bought a 51 per cent stake in 1998.

But Christopher Winn, chief executive of Sanderson, claimed the IT Services unit showed organic growth of 50 per cent year-on-year, independent of the MSL acquisition.

Key deals with the NHS, Railtrack and the Scottish Parliament helped the unit record revenue of approximately £17 million, he said.

Sanderson's results also benefited from the recurring revenue of software licence fees and service and support contracts, which rose to £15 million during the half, and increased staff productivity, according to Winn.

He told PC Dealer Sanderson expects to record sales in excess of £100 million this year and is pursuing further acquisitions of up to £20 million to help achieve that target.

But Winn added: 'Acquisitions are not a priority. The key thing for us is to drive our organic growth.'