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Regulatory Story Go to Market News Section 3/19/2020 Final Results - RNS - London Stock Exchange Regulatory Story Go to market news section Sanne Group PLC - SNN Final Results Released 07:00 19-Mar-2020 RNS Number : 7255G Sanne Group PLC 19 March 2020 19 March 2020 Sanne Group plc (the Group, SANNE or the Company) Preliminary Results for the year ended 31 December 2019 SANNE, a leading global provider of alternave asset and corporate services, announces its results for the year ended 31 December 2019. Constant currency 2019 2018 Change change3 Underlying Total Group1 Total group revenues1 £165.4m £143.0m 15.7% 14.7% Operang profit £46.7m £44.4m 5.2% 2.9% Profit before tax £42.4m £42.6m -0.5% -2.1% Diluted earnings per share 23.6p 24.1p -2.1% -4.2% Free cash flow aributable to equity holders4 £35.1m £23.0m 52.6% n.a. Operang profit margin 28.2% 31.1% Underlying Connuing Operaons2 Operang profit £44.3m £41.4m 7.0% 4.7% Profit before tax £40.4m £39.8m 1.5% -0.5% Diluted earnings per share 22.3p 22.4p -0.4% -2.5% Statutory Connuing Operaons Connuing operaons revenue £159.7m £136.2m 17.3% 16.2% Operang profit £14.3m £21.5m -33.5% -36.3% Profit before tax £9.6m £19.6m -51.0% -53.2% Diluted earnings per share 3.8p 10.1p -62.4% -64.2% Full year dividend per share 14.1p 13.8p 2.2% 1. Underlying Total Group results show the combined results for both connuing and disconnued operaons presented aer the exclusion of non-underlying items. Disconnued operaons refers to the Jersey Private Client business. 2. Underlying connuing operaons performance measures show the contribuon from connuing operaons only presented aer the exclusion of both non-underlying items and a cost allocaon in relaon to the disconnued operaons. A detailed reconciliaon is presented later in the statement. 3. Constant currency represents the 2019 performance based on 2018 FX rates to eliminate movements due to FX. 4. Free cash flow aributable to equity holders is the total cash generated in the year before acquisions, capital expenditure, financing acvies and cash non-underlying costs Highlights: - Strong revenue momentum: o Connuing operaons revenue growth of 16.2%3 with organic growth from connuing operaons of 13.5%3 o Total Group revenue growth of 14.7%3,1 with organic total sales growth of 12.1%3,1 o Strong new business wins, with annualised revenue of approximately £24.5 million secured in 2019 (2018: £24.5m) with momentum connuing into 2020 - Second half recovery, as ancipated, and strong cash flow: o Material improvement in second half underlying operang profit margin to deliver 28.2% for the full year (H1: 26.4%), following decisive acon addressing first half challenges https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SNN/14467979.html 1/55 3/19/2020 Final Results - RNS - London Stock Exchange o Underlying operang cashflow generaon of 105% - Acve strategic development programme for growth and focus: o Disposal of legacy Private Client business for up to £12 million to focus on core alternave and corporate markets o Extension of global network with office openings in Tokyo, San Diego and Mumbai o Acquision of Inbhear establishing Cayman presence and strengthening Irish service offering o Investment in Colmore bringing new data analycs offering to our clients - Statutory profits reflect exceponal one-off costs largely related to earn out payments for LIS and AgenSynd (£6.3m) as well as intangible impairment in South Africa (£2.4m) - Final dividend of 9.4p (14.1p total), reflecng the Board's confidence in the prospects of the Group consistent with the Group's progressive dividend policy Outlook - Good momentum in Alternaves and Corporate businesses posions SANNE well for further growth in 2020 - Posive alternaves market backdrop with connued growth in addressable market - Healthy pipeline of acquision opportunies - Well prepared for potenal operaonal impacts from the COVID-19 outbreak, as a result of the Group's resilient business model - Board expects to deliver a resilient performance in 2020 and remains confident in the medium and long-term prospects for the Group Marn Schnaier, Chief Execuve Officer of Sanne Group plc, said: "During 2019 we have connued to build on our strong market posion and benefied from the structural growth drivers within the alternave asset markets that we address. We have also worked successfully to address the challenges facing the business during the first half of the year. We made the decision to connue to invest in our plaorm to support our growth aspiraons, expand our footprint and thereby connue to deliver the highest levels of client service. This investment for growth has been supported by a simplificaon of the Group through the sale of our legacy Jersey Private Client business. As we connue into 2020, our core business remains resilient and is underpinned by a robust model. This resilience has been crical for us to have coped well to date with the COVID-19 outbreak from an operaonal perspecve. Many of our offices have been operang under business connuity plans with minimal impact on service delivery to our clients and I would like to thank all our staff for their connued efforts during a difficult me. We remain confident that SANNE is well posioned to capture the excing opportunies that exist within our core markets in the years to come." Enquiries: Sanne Group plc +44 (0) 1534 722 787 Marn Schnaier, Chief Execuve Officer James Ireland, Chief Financial Officer Tulchan Communicaons LLP Tom Murray +44 (0) 20 7353 4200 Tom Blundell The Company will be hosng a virtual investor and analyst presentaon at 9.30am (GMT) this morning. A webcast will be provided and is available by registering at the following link: hps://3xscreen.videosync.fi/20200319-sanne-fy19/register A dial-in facility is also available, and the details are as follows: Dial-in numbers: UK: 0800 408 7373 Internaonal Access Numbers: hp://www.speakservecloud.com/dial-in- numbers/ Parcipant PIN: 4297 A PDF copy of the 2019 Full Year results presentaon will be available to download on SANNE's Investor Relaons results and presentaon page aer the live webcast has ended. Notes: SANNE is a leading global provider of alternave asset and corporate services. Established for over 30 years and listed on the Main Market of the London Stock Exchange and a member of the FTSE 250 index, SANNE employs more than 1,700 people worldwide and administers structures and funds that have in excess of £250 billion of assets. Key clients include alternave asset managers, financial instuons, family offices, ultra-high net-worth individuals and corporates. SANNE operates from a global network of offices located in leading financial jurisdicons, which are spread across the Americas, Europe, Africa and Asia-Pacific. www.sannegroup.com https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SNN/14467979.html 2/55 3/19/2020 Final Results - RNS - London Stock Exchange THE ANNOUNCEMENT MAY CONTAIN "FORWARD-LOOKING STATEMENTS". FORWARD-LOOKING STATEMENTS SOMETIMES USE WORDS SUCH AS "AIM", "ANTICIPATE", "TARGET", "EXPECT", "ESTIMATE", "INTEND", "PLAN", "GOAL", "BELIEVE", "SEEK", "MAY", "COULD", "OUTLOOK" OR OTHER WORDS OF SIMILAR MEANING. BY THEIR NATURE, ALL FORWARD-LOOKING STATEMENTS INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO FUTURE EVENTS AND CIRCUMSTANCES WHICH ARE BEYOND THE CONTROL OF THE COMPANY. AS A RESULT, THE ACTUAL FUTURE FINANCIAL CONDITION, PERFORMANCE AND RESULTS OF THE COMPANY MAY DIFFER MATERIALLY FROM THE PLANS, GOALS AND EXPECTATIONS SET FORTH IN ANY FORWARD-LOOKING STATEMENTS. ANY FORWARD-LOOKING STATEMENTS MADE HEREIN SPEAK ONLY AS OF THE DATE THEY ARE MADE AND THE COMPANY DOES NOT ASSUME OR UNDERTAKE ANY OBLIGATION OR RESPONSIBILITY TO UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE EXTENT LEGALLY REQUIRED. Chairman's Statement 2019 has been an important year for SANNE, as the Group connued to build its global plaorm and capabilies in order to take advantage of the significant structural growth opportunity in our core markets. During the year, we have made a number of significant changes to the structure and operaons of the Group to ensure that our experse and resources are deployed as effecvely as possible. These changes have not been without their challenges, as evidenced by lower profit margins in the first half of the year, but I am pleased with the progress made in the second half to address these issues and restore the Group's margins. Importantly, SANNE connues to capture significant revenue growth across all our key markets as well as connuing to invest in our network and plaorm for profitable future growth. Operaonal Update We saw strong double-digit revenue growth across all regions during 2019, with the excepon of the Channel Islands, where the declining Private Client business diluted the overall result. In parcular, the Group's core Alternaves businesses, making up 88% of 2019's total revenues and 92% of connuing revenues, increased by 18% as demand for our services from exisng and new clients connued to grow. While revenue growth remained robust during 2019, underlying profit levels were flat as a result of operaonal challenges which affected margins during the first half of the year. The decisive acons taken to recfy these issues delivered a material improvement to profit margins during the second half. These acons, combined with the Group's strong cash conversion levels, make SANNE well placed to deliver both top line growth and increased levels of profitability in 2020 and beyond.
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