With a reported 69% rise in normalised earnings (EBTDA), and an order book 22% ahead, the  results confirm the recovery that we described in our full note of May 2010 (stil available). Despite a sharp recovery in the share price over the course of 2010, Sanderson on a forward PER of only 6.7x (at 31p) is still much too cheap in relation to the market and compared with other suppliers to business and also with its only listed, 50% larger, comparator K3 Business Systems. On a historic cash flow multiple of only 3.9 times (at 31p) the shares are vulnerable to a predator despite (or perhaps because of) the executive chairman's 29.9% stake.

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