Sanderson Electronics Plc, which was becoming even more embarrassed by the performance of US affiliate General Automation Inc than by the recent results in the Premier League of the football club it sponsors, Sheffield Wednesday, has got itself back on an even keel after drastically reducing its exposure to the General and chairman Paul Thompson is pleased with progress. The increase in pre-tax profits by 19% to UKP3.3m is an excellent achievement in difficult trading conditions. The increase in earnings per share of 6% to 25.4p was achieved despite the return to a normal tax charge this year after the abnormally low tax charge last year, when tax losses brought forward increased per share earnings by 4p per share. Total dividends have increased by 10% to 9.9p per share. Gearing is down to 90% from 147%, largely as a result of the disposal of much of Sanderson’s investment in General Automation – the company cut its stake to 27% in August, and to 21% in October, and at the start of this month its Sanderson Technology Ltd subsidiary sold another 150,000 General Automation shares, for UKP114,000, taking the stake down to 19.98%, at which point the holding can be treated as an investment and Sanderson need only show its share of any profits rather than having to reflect losses, as it did when the General was an associated company. It intends to cut its stake still further. Overall, the Sheffield Pick-popper says that 73% of overheads are covered by annual recurring revenues of over UKP10m per year. The company says it is continually developing application software for the UK National Health Service and for local government, where we has just developed a new Parking Enforcement System. It also launched its new Galaxy software product for hotels and significant new opportunities have been identified within the hotel market. It continues to invest some UKP1m a year in marketing, which includes around UKP250,000 a year for sponsorship of Sheffield Wednesday Football Club Plc, which paid off handsomely last year when the club reached both the cup finals.
