Paul Scott Interview With Lisa Montague, CEO Of Sanderson Design Group (SDG)

19th Oct '22 by Paul Scott

22 comments 2670 reads

I'm doing a series of audio interviews with CEOs of companies that I think look interesting. In particular, I'm only inviting companies to be interviewed if I think they meet these criteria -

Issued a recent, positive or in line trading update, and reasonably sound outlook comments,
Strong balance sheet (so little to no dilution or insolvency risk - very important in a downturn)
Good management (partly subjective!) with a clear strategy, executing well, and a good business model
Reasonable or cheap valuation, so a possible buying opportunity (long-term).

I don't charge any fees for my interviews, so I'm free to ask anything, and it doesn't become PR for any old company. They're obviously for general interest, and are never tips, recommendations, nor advice. As you know, our whole ethos here at Stockopedia is about everyone doing your own research & taking responsibility for managing your own portfolios.

Here is my audio interview with Sanderson Design (LON:SDG)

It's also available on podcast platforms, just search for "Paul Scott small caps" and my channel should come up. It's aimed at Stockopedia subscribers, but for now is open to all, because we haven't got the facility to put it behind the subscriber paywall, but longer term that's the plan.

Mindful of the fact that not everyone wants to listen, or might be hard of hearing, I've typed up the interview, which follows below. It started off as a summary, but morphed into almost a transcript, as there were so many interesting points made. I've bolded the points that struck me as the most important.

I hope you find this interesting! Do leave feedback, as these things are a lot of extra work to do, so I need to know if it's time well spent or not. (says he, brazenly fishing for compliments!) Thanks, Paul.

Paul Scott’s interview with CEO, Lisa Montague, of SDG, 18 Oct 2022

Introduction & disclaimers - not advice or a recommendation, no personal holding (but is on my watchlist to buy at some point), not charging a fee, please always do your own research.

Q1. Please give a general overview of the business.

A1. Design & make interior fabrics & wall-coverings. 7 consumer brands. 2 factories (in UK). Turnover £112m LY. Two thirds brands, the rest manufacturing for third parties. We have heritage brands (e.g. Morris & Co), and more modern brands. UK biggest market 52%, 48% export (mainly US - and growing…

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Martin_576

19th Oct '22

Huge effort Paul - much appreciated

tic_tac_toe

have you tried recording these interviews on microsoft Stream, the built in transcription is very good from my experience

BClegg

Hi Paul,

I really appreciate your podcasts and audio interviews, I find them easy to listen to and very useful so thanks for taking the time to do them.

As for the interview write-ups, for me they aren’t such a good use of your time as I find the richness and tone that come across in the audio can’t be communicated so well in a write-up.

But I think the any important feedback on the question of whether write-ups are worthwhile needs to come from anyone who relies on them.

planetx

She’s impressive . Clear concise and seems to love the business .

Good to have it confirmed licensing is “pure profit” but interesting to note it is accounted for up front .

I hold a reasonable chunk and am somewhat underwater .

I’ve actually held a chunk of these for 20 years ever since my old FD and his group tried to takeover the company in some sort of boardroom coup when they summised the incumbent CEO at the time was not very good (not the words he used )

Obviously way before Lisa Montague who does seem a real concise safe pair of hands .

Caper4

Agree a summary of the conversation would be fine as obviously anyone really interested can listen to the podcast . Thanks so much Paul for your superb podcasts which certainly add quite a bit to your normal output .

mammyoko

Hugely useful insight that I hope Lisa Montague takes note of. I also know Japan quite well and had exactly the same reservation about expansion in Japan. China is a different matter but good luck with licensing there!

Camtab

These interviews are nothing short of invaluable in my opinion Paul. Thanks. They give the little guy an insight to the big world out there!

grumpy5

What a joy to hear a CEO who enjoys her job, and is so open - without all the 21stC management bulls**t that mediocre CEO's seem to resort to.

Jef Warwick

Yeah, a simple search on the internet of “Modern Japanese interior” will show you its not quite at home here.

Anyway - I wish them well, but I’d skip Japan

Paul Scott

Thanks for the suggestion, tic_tac_toe - I've tried various other transcription services (e.g. Dragon Naturally Speaking), and others, but they're always riddled with errors, which take me almost as long to edit, as typing it from scratch! So I then find I have to speak in a stilted way for the software to understand me. The recorded phone line does muffle the audio quality a bit too, but it's so convenient.

I try to avoid Microsoft products, as they frustrate me so much. I find Google much better for my purposes, I see they have a transcription service, so I might take a free trial of that.

Regards, Paul.

Thanks, interesting points about Japan.

Although bear in mind that Sanderson Design (LON:SDG) is only doing a tiny amount of business in overseas markets, so it's very niche.

Also, it would be licensing business, so just free money. The license partners would do all the investment & choose/make the products, etc.

Thanks Fishcake.

I agree. When typing up this post, I noticed several important points that I just hadn't picked up from the audio originally, recording it, and then listening back. So both audio & text are good IMO.

Derek12

Sounds like a really good company, nearly bought yesterday but didnt like the spread. Nearly 5.3%. Perhaps it will come down soon.

Michael C

@planetx Since you've had these for 20 years you might find this chart nostalgic, or interesting, or something.

Stocko won't let me do a 20 year chart, or weekly charts for long periods, but Stockcharts does and here's Sanderson Design (LON:SDG) (albeit Stockcharts haven't clocked the name and ticker change yet).

I know chart readers are a minority on here but I think the chart suggests that the 90p level has turned from resistance to support (I added the line) so I now have SDG firmly on my watch list if it pulls back towards 90p. I would buy now if it wasn't for (1) the spread - which as Derek12 says is over 5% & is too much for me, and (2) the forecast dividend of 3.5p - I need a minimum 4% on "value" shares at the moment so either the dividend needs to increase a bit or the bid needs to be 87p. I am very picky at the moment. But obviously I do hope the business succeeds (and they don't spend all the profits on the DB pension schemes!).

Zipmanpeter

I hold and listened to the interview. Nice to put a voice to what has been such a good mgt job. I loved the simplification from 20 to 12 (LT 11) thousand skus. From experience, this is a pain to do but once done is fantastic - a true 'more from less' strategy.

The one piece I would have liked more insight on was she feels the potential of the business is from organic growth - 50% growth in 3-5 years (based on US take off and some expansion into Homewares?)

I am happy to hold for now but wont buy a bigger position until she can prove she can grow the business as well as run a nice creative shop - although my money is she can.

Can I suggest Angling Direct as nother for the CEO treatment. (and FWIW I don't think you typing these interviews up adds much to your usually stellar analysis).

Gray Woods

Hi, Paul, thanks for the great information as always! I notice you said that it took you three hours to write this interview up, I don't know if you use transcription software, so voice to text software, but I use it for writing up interviews. I use Dragon NaturallySpeaking's transcription software's, but there are many other versions of transcription software out there, it turns in minutes your entire interview into text, and is highly accurate, then all you have to do is edit it. It saves so much time when typing up interviews! Just thought it might be helpful if you didn't use such software!

Thanks again for the great work!

jamesalastair

Wonderful interview Paul ... thank you. Absolutely loved her last comment on working with creatives .... she obviously loves her job and the brand. You see the same sort of enthusiasm at Sosandar.

I am in the minority here for sure, but I really valued your write up as my hearing is not what it was. I appreciate the effort it must take.

jonno

Great interview Paul. I met Lisa Montague at Mello in May. An impressive lady, with a sense of style. I believe that she was originally at Mulberry, so a very apposite CEO for £SDG.

portugull

21st Oct '22

Paul I just listened to your interview with Lisa Montague CEO of Sanderson Design (LON:SDG) and I found it hugely beneficial in aiding my understanding of the Company.

However it was the last 8 to 10 minutes which really pricked my interest when Lisa was talking about the USA Market. The US does seem to present a huge opportunity and Lisa said so much to inform Investors or, in my case potential investors, as Sanderson Design (LON:SDG) is on my Watch List.

I think some of the decisions made in the last 12 months could have a dramatic effect in increasing sales in the US which is such a big affluent market.

A really great initiative to chat in your relaxed style particularly when your chosen CEO is so eloquent and enthusiastic. Brilliant stuff.

Paul Scott interview with Lisa Montague, CEO of Sanderson Design Group (SDG)

Paul Scott’s interview with CEO, Lisa Montague, of SDG, 18 Oct 2022

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Paul Scott

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