Sanne Share Discussion Threads

[alphabeta4] 12/4/2018 11:06

Hi Chasbas. The Times yesterday had 'dealers unsettled by share placing' under their risers and fallers section.

FWIW I think it's likely to be an overreaction - it would be handy to have more detail but I suspect these are shares given under a buy as you earn scheme (I used to have something similar when I worked for a bank) with a three year vesting period, I.e. around the time of the Sanne listing in May 15. The share price in Sanne has nearly tripled in that time and certain employees have used it to take some chunky profits.

My thinking is I've looked back through the RNS list and unless I've missed something I can't see a RNS granting these awards to the employees (I may take a look at the finals in a minute to see if I can find anything in the share equity section). The closest I can find is some PDMR share awards in Apr-May 17. The PDMR list from that RNS shows thirteen eligible for awards so we know there are at least thirteen of them and we know from the placing list two were sellers. So basically none of the board and very few of the PDMRs were involved making it very much an employee exercise.

IMHO it looks a classic overreaction to me, luckily I had some trading shares I sold at £7 so I've today bought them back at £6.10! Looks a pretty good risk:reward to £7 from where I'm standing.

[chasbas] 11/4/2018 11:50

Share price now 610p: down 12% over last year.
Results on 22 March perfectly fine.
Placing on 5th April of 2.5% of equity at 660p (by employees but not Directors) probably was a negative warning.
Shares have been massively derated to approx 21x for current year but this is supposed to be a very high quality growth stock in an attractive industry.
Looked at chart - seems to me unlikely to fall below 580p.
12 month high was 837p!
I'm a strong holder unless I'm missing something?

[rampmeister] 30/3/2018 15:12

Thanks Alphabeta4 I stand corrected. With well run companies like this one I tend to concentrate on revenue and trust that other numbers will be up to snuff.

RM

[alphabeta4] 23/3/2018 00:06

Agreed - by my calcs the forecasts are pencilling in organic of around 11% and no acquisitions. If they keep to debt 1x EBITDA I have £35m of cash post div for the current year. Then just comes down to the multiple - if 14x like the last one is worth 6% on the 2019 numbers. Seeing as current organic is 14% if maintained looks like about a 9% beat on the forward in total on what is already a derated pe.
By the way the tu said about profits not revenue in line hence why the results were well received IMHO.

[rampmeister] 22/3/2018 11:42

Despite slight miss in projected/actual revenue no collapse in share price so far. Looking at the segmental revenue splits we can see that North America Alternatives and Asia & Mauritius Alternatives have increased revenue by 5 and 6 fold respectively year on year. From these two segments alone we now have revenue of 47m. As the company grows larger we can not expect to see stellar growth continuing unabated. However, if strong momentum continues in these two areas think we have reasons to be cheerful looking forward. Imo this is a good business model and shares are well worth holding on to.

RM

[chasbas] 09/2/2018 10:07

TU on 6th Feb was fine: "...continued momentum in the second half means the Group still expects to report underlying earnings per share in line with the Board's expectations."

I subscribe to Stockopedia and do not like its StockRank of only 17 with StockRank Style of "Sucker Stock". The calculation of the StockRank is purely quantitative and mainly backward looking. Whilst I do not agree with the StockRank it is what it is and should not be ignored completely.

I am a strong holder of Sanne. The latest acquisition should be positive, as should the results on 22 March. Can anybody explain the share price weakness? share price is down 12% over last year.

[alphabeta4] 30/1/2018 07:44

On the tu - last year was 31/1 as an ahead and year before 28/1 so I'm gathering would have been 4/2 but was pulled forward due to the ahead bit. So will probably be later this week before anyone asks :)

[rampmeister] 23/1/2018 08:28

Note that Last FY revenue was 64m. and by this year's interims they had already booked 56M. Consensus revenue amongst brokers is for 114m for approaching FY. Indications were at time of interims that they were confident that the 2nd half would be stronger than the first. All seems very healthy yet the share price has hardly moved since March 2017. Patience should be rewarded here imv.

RM

[volsung] 18/1/2018 09:32

Aye. Time to top up before the t/u so I have

[rampmeister] 17/1/2018 13:23

Note they produced a low key T/U on 31/01/17 but judging by interims think we can look forward to positive update for full year. Nice quiet board here.

RM

[chasbas] 08/11/2017 19:14

Sanne is one of my bigger holdings. I hope this does not sound stupid but does anyone think there is any risk in connection to the current Paradise Papers pallava? share price is down a bit.
Sanne lists its top 10 risks facing the group in its H1 results which are expanded upon in its 2016 annual report. Here it is:
"The following top ten risks facing the Group are unchanged from those set out in the Annual Report 2016: Acquisition Risk; Strategic Risk; Competitor Risk; Business Change Risk; Data Security Risk; Process Risk; Staff Resourcing Risk; Political/Regulatory Change Risk; Regulatory Licence (Compliance) Risk; and Intangible Asset Risk."
RBC Capital Markets in a note dated 15.2.17 says Sanne "...acts in a fiduciary capacity, any breach of its legal obligations could lead to a claim or regulatory sanction"
The Private Client division is strategically focused on "institutionally minded Ultra High Net Worth families and their family offices, with a continued focus on outsourcing of their fiduciary and admin needs."
Any views are welcome!

[chasbas] 23/10/2017 14:33

Topped up at 774p. Berenberg TP 915p. Liberum TP 905p.
IMO a quality stock to tuck away.

[ryry0707] 04/10/2017 14:39

TMF Group announce prospective £1bn float on LSE

[grabster] 29/9/2017 07:43

From today's acquisition notice:
". The Acquisition is expected to be immediately earnings enhancing .."

[grabster] 07/9/2017 07:22

Interim results for the six months ended 30 June 2017

compared with 6m to June 30 2016

Revenue +104%
Underlying operating profit (1) +109%
Operating profit +59%
Underlying profit before tax (1) +105%
Profit before tax +54%
Underlying operating profit margin (1) +0.9%
Underlying diluted earnings per share (1) +60%
Underlying operating cash conversion (1) -18.4%
Interim dividend per share +31%


Highlights
- Group revenue for 2017 H1 increased by 104% to £56.3m (2016 H1: £27.6m) of which 15.3% was organic growth.
- Continued strong performance within each of the Group's business segments.
- New business with annualised fees of approximately £10m won in the first six months with a healthy pipeline continuing into the second half.
- Integration of prior year acquisitions progressing well with continued focus into the second half.
- Acquisition of IFS in Mauritius completed, broadening geographic footprint and significantly increasing scale and expertise.
- Continued strengthening of senior management team to deliver strategic capacity.
- Successful implementation of the new global operating structure.
- Development and expansion of the Group's fund technology capability continues to be a key focus.
- Larger office space secured in Hong Kong, Shanghai and Singapore to support growth in Asia-Pacific.
- Due to a change in the Group's expected effective tax rate, the Board now expects to deliver underlying EPS for the full year marginally ahead of its previous expectations.

[alphabeta4] 01/8/2017 12:22

Some calculations I've been doing for my own research this morning:

New business wins were £6.7m H1 2016, £7.1M H2 2016 so the £10m is quite an increase. Whilst they're guiding trading in line these look like a beat to me, I've got the starting revenue including last years acquisitions less the revenue they already had from them at £97m, if add 1/4 of £6.7m (as if on average the wins were 3 months through last year means had 9 months benefit last year) and 3/4 of the £7.1m, 3/4 of the £10m just announced and say 1/4 if they do £10m again H2 then that's £16m to add for £114m. This also ignores the currency benefit this year on the dollar sales in H1 17 vs H1 16.

Morningstar has projected revenue of £110m so looks 4%+ ahead, they also had £126m for next year. If they're running at £10m of wins every 6 months that £126m also looks out, if £114m this year probably looking at around £134m if it continues.

If the previous high was £7.40 in Mid April and eps growth is running at c18% pa to keep the forward PE unchanged I've got a new target of £7.40 x (3.5/12 x 18%) + ((£7.40 x (134/126))- £7.40) = £8.26.

[grabster] 01/8/2017 07:36

Trading update

SANNE REPORTS GOOD GROWTH

StockMarketWire.com

SANNE said its core business lines saw good growth in the first half of the year driven by strong momentum from new business opportunities delivered in the latter part of 2016.

In the first six months of the year, the group continued this momentum, securing new business from both new and existing clients totaling approximately £10 million on a projected annualised fee basis.

Following the completion of the acquisition of IFS (Mauritius) at the start of the year, the business is integrating well into the Group and performing in line with expectations.

Likewise our US acquisition, completed in November 2016, continues to perform well, operating in a market with very favourable outsourcing and growth trends.

The pipeline of new business wins and performance of acquisitions gives the Board confidence that it will deliver results for the year in line with its expectations.

CEO Dean Godwin said: "We are pleased with the performance of the group in the first half and the continued new business wins gives us confidence in future growth."

[woodcutter] 20/4/2017 15:40

Someone dumped a shed load of shares today, the only institutions with that kind of holding on the register are:
Standard life
Liontrust
Blackrock
Wellington management

There may have been some insti share intra share trading but it's hurt the share price that's for sure.

woody

Seems like it was PDMR's

[chasbas] 29/3/2017 12:36

Thanks Alpha, there should be an investor presentation on their website later today.

Frankly, I'm reassured that the share price has held up OK as the results I think only met rather than exceeded expectations.

As you demonstrate, valuing SNN at roughly 600p is sensible but does assume significant ongoing growth. My angle is that it is a very high quality global growth stock with excellent strategy and management. It has momentum. Yeah yeah...anyway I'm a fairly happy holder.

Let's see if those target prices are reconfirmed over the next few days.

[alphabeta4] 29/3/2017 11:24

Chasbas - Apologies if this is vague but it is from my old notes and whilst it's in a format I trust when calculating my target price it wasn't something I planned to share!

I've been trying to calculate revised target prices after the two acquisitions in October and 30/11 and I then revised further after the January upgrade. What I did was assume the profits acquired then traded on the same forward PE and then scaled up the share price using the close from 2nd October (the day before the first acquisition). To do this was a bit crude but what I did is used bits in the RNS like op prf or EBITDA and then guessed a cautious tax rate of around a third. For the first one this was easier as there were no shares issued and I got a new target of £5.34 based on a new forward EPS of 17.68p.

The second one I had a net impact on EPS such that £6 would then have equated to a forward of 25. My notes had them paying $127.3m for an op prf of $18.4m which I then took off a third for tax (prob too much) for a purchase PE of c10.

I then took the 'materially ahead' statement in Jan to add 10% to this to give me a minimum of £6.60 before acknowledging we'd moved into a new financial year and before any synergies etc. So my Dec 2017 PE remained 25.

Apologies if this somewhat vague but it would take me some time to give a perfect answer when I already trust what I have done (though of course I don't expect you to!) I hope it still adds some value though on the figures and process I used to arrive at it.

FWIW as of mid February RBC had an £8.10 target and Berenberg £7.65. I suspect they've got this from using lower tax rates than me along with some forecast synergies/growth.

[chasbas] 29/3/2017 09:21

Results appear in line. RBC had forecast FD Adj EPS 17.4p - exactly as delivered. Chairman says "growth prospects remain positive...Sanne is well placed to continue to deliver strong growth."
Only negative I can see is underlying operating profit margin falling to 35.5% v 37.9% but this follows a "transformational year" completing 4 acquisitions, so may not be relevant.
IMO shares are top quality but highly rated: PE 34x current year.
Can anyone help with forecasts?

[chasbas] 29/3/2017 09:13

Year to 31 Dec 2016
Financial highlights:

- Group revenue increased 40% to £63.8 million (2015: £45.6 million)

- Underlying operating profit up 31% to £22.7 million (2015: £17.3 million)

- Underlying profit before tax up 37% to £22.0 million (2015: £16.1 million)

- Operating profit up to £14.7 million (2015: £5.9 million)

- Profit before tax up to £15.0 million (2015: £2.4 million)

- Diluted Earnings per share (EPS) at 11.3 pence (2015:1.4 pence), underlying diluted EPS 17.4 pence (2015:13.9 pence)

- Recommended final dividend per share (DPS) of 6.4 pence, bringing the total dividend for the year to 9.6 pence, inclusive of the previously paid 3.2 pence interim dividend (2015:7.0 pence in total)


Operational highlights

- Strong pipeline of new business within Sanne's core alternatives focused business divisions (Debt, Real Estate, Private Equity and Hedge)

- Projected annualised value of new business won in the year of approximately £13.8 million (2015: £13.0 million)

- Acquisitions completed in United States, Mauritius (2017), South Africa, Ireland and the Netherlands broadening capabilities and geographic footprint

[alphabeta4] 31/1/2017 17:40

Added a few more today at £6.20. As I see it the company needed a price of £5.61 for 250 auto entry at 30th Dec and the market has weakened since. IMO that means Feb will have two tailwinds - buying ahead of the upgraded results and fund buying ahead of the 2nd March index review. Both events look pretty nailed on so thought I might as well take advantage.

[ryry0707] 06/12/2016 18:43

Yeah. 250 is a definite now