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Sanne downgraded to 'add' by Numis Securities

Yesterday's update was solid enough but there was nothing in it to persuade Numis to push its target price higher

Untidy desk
New business won in the first half was around £11.5mln on an annualised basis

Following the stock’s recent rally, Numis Securities has downgraded Sanne Group PLC (LON:SNN) to ‘add’ while leaving its target price unchanged at 725p.

Yesterday’s trading update from the provider of administration services to the alternative assets sector, indicated that full-year results would be in line with expectations, prompting Numis to nudge up its revenue forecast by 4%.

Shares up despite downgrade

Numis’s full-year assumption for organic revenue growth remains 12% but it expects the rate to be around 8-9% in the first half and the low-to-mid-teens in the second, partly because of last year’s comparatives.

“We hold our underlying operating profit assumption at £46mln, which continues to experience currency headwinds (c.50% of the business is US$-denominated). However, we expect c.£21.3m in H1 (implying a 46:54 H1:H2 split vs a 54:46 split in 2017, but consistent with the split in 2014-16). Accordingly, we expect reported 1H18 PBTA to be flat (£20.3m), and reported EPS to be modestly down, owing to a higher share count,” the broker said.

Shares in Sanne were up 2p at 678p.  

Quick facts: Sanne Group PLC

Price: 634 GBX

LSE:SNN
Market: LSE
Market Cap: £929.03 m
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