Core business lines drive first half at Sanne Group

Alternative asset and corporate services provider Sanne Group updated the market on its trading for the six months ended 30 June on Thursday, reporting that its core business lines had continued to see both good growth in revenues on a constant currency basis, as well as further momentum in securing new business.

The FTSE 250 company said new business won in the first half from both new and existing clients totalled about £11.5m, up from £10m year-on-year, on a projected annualised fee basis.

It said its alternatives businesses saw good organic performance in the Europe, Middle East and Africa (EMEA), and the North America geographies.

EMEA also benefited from the acquisition of LIS in Luxembourg, which completed in February and was said to be performing well.

The board said continued investment in growth initiatives in its Asia Pacific and Mauritius region, following the acquisition of IFS in 2017, had delivered organic growth on a constant currency basis in the first half of 2018.

“This business is performing in line with expectations and growth will increase as the benefits of these initiatives are realised,” the directors said in their statement.

Sanne Group's corporate and private client (CPC) business was described as “broadly flat” on the same period in the prior year.

The corporate and institutional businesses performed in line with expectations, offsetting the impact of a decline in the private client business.

Sanne said the first half performance across its different businesses, as well as the unusually high first-half weighting of last year's results, meant that its organic growth expectations for the full year would exceed the first half organic growth rate on a constant currency basis.

Overall, it said revenues for the full year were expected to return to its traditional pattern of being second-half weighted, driven by continued organic growth momentum.

“As previously announced, the Group continues to invest in infrastructure, strengthening our capabilities to address the global opportunities as the alternative fund management market expands,” the board added.

“As with the second half results in 2017, this investment will result in lower reported margins in the first half of 2018, although the timing of this investment and the resultant benefits are expected to drive an improved result in the second half and for the full year.

“The group has also experienced an effective tax rate in the period that was lower than expected.”

Sanne said that, given the good performance in the first half, together with its pipeline of new business wins, the board continued to expect that results for the full year would be in line with its expectations.

The group is set to announce its interim results for the six months ended 30 June on 11 September.