28 July 2020
Sanne Group plc
(SANNE or the Group)
Trading update for six months ended 30 June 2020
SANNE, the global provider of alternative asset and corporate services, today provides a trading update for the six months ended 30 June 2020.
SANNE has delivered a robust first half performance with revenue growth, underlying operating profit margin improvement and one-off FX gains driving strong underlying EPS growth.
Revenues from existing closed-ended fund structures continued to be largely unaffected by the on-going COVID-19 pandemic which underpins the resilient nature of SANNE's business. This performance has driven another period of top line growth and year on year underlying operating profit margin improvement, which continued to benefit from the cost control initiatives taken during the second half of 2019.
The resilient nature of the Group's business model has been further demonstrated by a strong cash performance, with underlying operating cash conversion for the first half expected to be more than 100%.
Operationally, the Group benefitted from the recent years of platform investment as the business transitioned to working practices that prioritised the safety and wellbeing of our staff. The shift to remote working across our global footprint has been seamless and we have maintained our high levels of client service delivery.
Whilst our existing book of business remains largely unaffected so far given the non-discretionary nature of the work that we undertake, since the onset of the pandemic there has been a shift for a significant number of our clients in their focus, towards portfolio management and away from new fund raising. We expect this to be temporary but it has had an impact on new fund launches, caused some delays to closing of new funds and therefore slightly dampened revenue growth, particularly during Q2. Despite prevailing conditions, the business has delivered a robust new business wins performance equivalent to over £11m of annualised new revenue.
Continued strategic evolution
In addition to the acquisition of Inbhear Fund Services already announced in the first half, SANNE has undertaken two additional transactions to augment the Group's newest jurisdictions in Cayman and Japan.
In Cayman, SANNE has entered into agreement to acquire Avalon Trust & Corporate Services Limited and in Japan, the Group has agreed to a lift-out of Deutsche Bank's trust company operations. Both transactions should help accelerate our growth ambitions in these jurisdictions as we are also acquiring the relevant trust company licences in each case. The transactions are subject to local regulatory approval and are expected to complete in the second half of the year.
The disposal of the Group's Jersey-based Private Client business completed on 1 July 2020.
Whilst acknowledging the continuing lack of clarity around the medium and longer-term economic impacts of the global COVID-19 pandemic, the first half performance of the Group further demonstrates the resilience of its business model that is predicated on long-term recurring revenues, healthy margins and strong cash generation. This, together with the performance to date and an encouraging pipeline of new business opportunities, gives the Board confidence in both delivering a full year performance in line with its expectations, as well as the long-term strategic opportunity.
The Group will announce its interim results for the half year ended 30 June 2020 on Wednesday 9 September 2020.
Sanne Group plc
Martin Schnaier, Chief Executive Officer
James Ireland, Chief Financial Officer
+44 (0) 1534 722 787
Tulchan Communications LLP
+44 (0) 20 7353 4200
SANNE is a leading global provider of outsourced alternative asset and corporate business services. Established for over 30 years and listed as a FTSE 250 company on the Main Market of the London Stock Exchange, SANNE employs around 1,800 people worldwide and administers structures and funds that have in excess of £250 billion of assets.
Key clients include leading alternative asset managers, global financial institutions, family offices and international corporates.
SANNE operates from a global network of offices located in leading financial jurisdictions, which are spread across the Americas, Europe, Africa and Asia-Pacific.
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