REG - Sanderson Design Grp - Full Year Results
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RNS Number : 7188G Sanderson Design Group PLC 30 April 2025
30 April 2025
SANDERSON DESIGN GROUP PLC
("Sanderson Design Group", the "Company" or the "Group")
Financial Results for the year ended 31 January 2025
Sanderson Design Group PLC (AIM: SDG), the luxury interior furnishings group,
announces its audited financial results for the year ended 31 January 2025.
Financial highlights
Year ended 31 January 2025 2024 Change
Revenue £100.4m £108.6m -7.6%
Adjusted underlying profit before tax* £4.4m £12.2m -63.9%
Adjusted underlying EPS* 3.92p 13.74p -71.5%
Statutory (loss)/profit before tax £(13.9)m £10.4m -233.7%
Basic EPS (21.22)p 11.46p -285.2%
Dividends per share 1.5p 3.5p -57.1%
Cash** £5.8m £16.3m -64.4%
* Excluding share-based incentives, defined benefit pension charge
and non-underlying items as summarised in note 7.
** Cash is defined as cash and cash equivalents less borrowings. For
the purpose of this definition, borrowings does not include lease liabilities.
● Revenue of £100.4m (FY2024: £108.6m), down 8% in what has
been a sustained challenging consumer environment
● Continued strong performance from licensing, with sales up 1%
at £11.0m (FY2024: £10.9m)
● Total manufacturing sales fell 10% to £31.7m (FY2024:
£35.0m)
● Our Future Factory initiative has identified annualised cost
savings of £1.5m from FY2026 onwards
● The Arthur Sanderson and William Morris archive has been
independently valued at £10.0m
● A £16.3m non-cash impairment of intangible assets related to
goodwill arising from the acquisition of Clarke & Clarke in October 2016.
Whilst the impairment aligns the brand with current industry valuations, the
Board remains confident in its importance to the Group
● Adjusted underlying profit before tax of £4.4m (FY2024:
£12.2m), reflecting the impact of the consumer environment on brand product
sales and manufacturing. Reported loss before tax of £(13.9)m (FY2024: profit
£10.4m)
● Liquidity and headroom of £15.8m (FY2024: £26.3m) with cash
position of £5.8m (FY2024: £16.3m) and banking facilities of £10.0m
(FY2024: £10.0m)
● Proposed final dividend of 1.00p per share (FY2024: 2.75p) to
give a total dividend for the year of 1.50p (FY2024: 3.50p)
Operational highlights
● The Sanderson brand being granted the Royal Warrant of
Appointment by His Majesty King Charles III
● A significant number of new multi-year licensing agreements
signed with a wide range of international businesses
● Launch of a direct-to-consumer Morris & Co. online shop to
showcase the strength of the Morris & Co. full portfolio of core products
and finished goods to the UK, USA and EU.
● Strong product launches from our brands, including a
collaboration for Sanderson with designer and illustrator Giles Deacon
● The Group's head office relocated during the year to the
Sanderson brand's historic home in Chiswick, west London at Voysey House
Sustainability highlights
● Planet Mark certification for Year 7 of carbon reduction,
reflecting our Live Beautiful sustainability pledge
● CO(2) emissions reduced by 8.1% in FY2025 on location basis,
ahead of our plan to reach carbon neutrality.
● We are now FSC™ certified, which ensures that the majority
of our wallpapers are printed on responsibly sourced paper.
Dianne Thompson, Sanderson Design Group's Chairman, said:
"In response to market conditions, we continue to focus on accelerating
strategic initiatives to position the Group for future success.
"North America remains a key growth opportunity, and the Group does not
currently expect a material direct impact from tariffs imposed on imports into
the USA. The evolving tariff regime is, however, a potential threat to US and
global consumer confidence and we will continue to monitor closely.
"Our balance sheet remains robust, with over £5.0m of cash and an undrawn
£10.0m bank facility. We are also making good progress in further
strengthening our net cash position through planned inventory reduction.
"The Board is confident in its agility and its acceleration of strategic
initiatives in response to the ongoing global market challenges and
unpredictability. At this early stage in the current financial year, the Board
continues to anticipate that the full year outturn will be in line with its
expectations."
Analyst meeting and webcast
A meeting for analysts and institutional investors will be held at 9.30am
today, 30 April 2025, at the offices of Burson Buchanan, 107 Cheapside, London
EC2V 6DN. For details, please contact Burson Buchanan at SDG@buchanan.uk.com
(mailto:SDG@buchanan.uk.com) .
A live webcast of the meeting will be available via the following link:
https://webcasting.buchanan.uk.com/broadcast/67ea8a6ca8f35502bea6504e
(https://webcasting.buchanan.uk.com/broadcast/67ea8a6ca8f35502bea6504e)
A recording of the webcast will be made available following the meeting at the
Company's investor website, www.sandersondesign.group
(http://www.sandersondesign.group) .
For further information:
Sanderson Design Group PLC c/o Burson Buchanan +44 (0) 20 7466 5000
Lisa Montague, Chief Executive Officer
Mike Woodcock, Chief Financial Officer
David Gracie, Company Secretary
Investec Bank plc (Nominated Adviser and Joint Broker) +44 (0) 20 7597 5970
David Anderson / Ben Farrow / Charlotte Young
Singer Capital Markets (Joint Broker) +44 (0) 20 7496 3000
Tom Salvesen / Jen Boorer / James Todd
Buchanan +44 (0) 20 7466 5000
Mark Court / Sophie Wills / Toto Berger / Abigail Gilchrist
SDG@buchanan.uk.com (mailto:SDG@buchanan.uk.com)
Notes for editors:
About Sanderson Design Group
Sanderson Design Group PLC is a luxury interior furnishings company that
designs, manufactures and markets wallpapers, fabrics and paints. In addition,
the Company derives licensing income from the use of its designs on a wide
range of products such as bed and bath collections, rugs, blinds and
tableware.
Sanderson Design Group's brands include Zoffany, Sanderson, Morris & Co.,
Harlequin, Clarke & Clarke and Scion.
The Company has a strong UK manufacturing base comprising Anstey wallpaper
factory in Loughborough and Standfast & Barracks, a fabric printing
factory, in Lancaster. Both sites manufacture for the Company and for other
wallpaper and fabric brands.
Sanderson Design Group employs approximately 550 people and its products are
sold worldwide. It has showrooms in London, New York and Chicago.
Sanderson Design Group trades on the AIM market of the London Stock Exchange
under the ticker symbol SDG.
For further information please visit: www.sandersondesigngroup.com
(http://www.sandersondesigngroup.com)
CHAIRMAN'S STATEMENT
Introduction
A key focus for the Board in the financial year ended 31 January 2025 was the
acceleration of strategic initiatives to align the cost base with current
consumer and industry demand and, importantly, to position the Group for
future growth. These strategic initiatives centre on three core areas:
digitalisation across the business; North America as a key growth opportunity;
and Future Factory to transform the efficiency of our manufacturing
operations. The decision to accelerate these initiatives was driven by market
conditions, which remained challenging throughout the year, particularly in
the UK, our largest market.
It is pleasing to report that we are making good progress with these strategic
initiatives and have recently identified annualised cost savings of £1.5m in
our manufacturing operations, adjusting the cost base to current volumes and
focusing staffing on our digital-first printing strategy. This move to
digital-first printing has been enabled by significant recent advances in
digital printing technology. Traditional printing techniques remain a core
part of our offering but will be used only when craft skills add value to a
product or when requested by third-party customers.
Market conditions impacted our brand sales and third-party manufacturing
revenues during the year, mitigated in part by another strong performance from
licensing. In last year's Chairman's Statement, I reported that licensing had
become firmly established as the third strategic pillar of the Group,
complementing brand sales and manufacturing. Licensing has continued to
perform well, delivering another record result and contributing £11.0m in
sales in the year ended 31 January 2025, a slight increase on the prior period
(FY2024: £10.9m). This performance represents a significant achievement as
FY2024 included a new agreement with NEXT which contributed £3m of
accelerated income and a major agreement with J Sainsbury plc.
The ability to license our designs highlights the unique intellectual property
in the Group's brands and design archive, and also our designers' skill at
transferring designs from fabric and wallpaper to many different substrates
and product types.
The value of the design archive at our Voysey House head office was recently
independently valued at £10.0m, marking the first time that the archive has
been valued since the acquisition of Sanderson and Morris & Co. in 2003.
Progress was made during the year with our strategic growth market of North
America; whilst sales were up just 1% at constant currency, the comparator
period included a large number of contract orders. The Sanderson brand, the
re-energising of which has been an important strategic focus, has performed
particularly well in North America, with brand sales up 24% driven by enhanced
brand awareness. Our focus on developing licensing in North America delivered
a number of exciting deals including an extension deal with Ruggable LLC for
the Sanderson brand.
North America will continue to be the Group's most important geographic growth
opportunity. The strategy for the UK and other geographic regions is to
control costs and drive efficiency whilst ensuring that the Group is
positioned to take advantage of any upturn in consumer confidence.
During the year, we have continued to advance our Live Beautiful
sustainability strategy. In the year to 31 January 2025, our total carbon
footprint was 5,246 tonnes, a decrease on FY2024's 5,707 tonnes reflecting
continued progress in our journey to net zero.
Further details on the Group's strategic and operational progress are included
in the Chief Executive Officer's Strategy and Operating Review.
Financial results
Group turnover for the year ended 31 January 2025 was £100.4m (FY2024:
£108.6m), reflecting the challenging consumer environment. Adjusted
underlying profit before tax at £4.4m was down 64% on the previous year
(FY2024: £12.2m).
This year's reported results include a one-off, non-cash impairment of
goodwill associated with the acquisition of the Clarke & Clarke brand in
2016. The valuation of brands across the interior furnishings industry has
declined since 2016 and this non-cash impairment of £16.3m for Clarke &
Clarke aligns the brand to the current industry environment. The Board remains
confident in the future performance of the brand, in its licensing potential
and its overall importance to the Group's brand portfolio.
The difficult trading conditions, together with the impact of the non-cash
impairment, led to a reported loss before tax of £(13.9)m (FY2024: profit
£10.4m).
The Group's balance sheet remains strong with cash at the year end of £5.8m
compared with £16.3m at 31 January 2024 and £9.6m at 31 July 2024. The cash
position at the year end reflects the one-off £2.3m pension contribution in
June 2024, one-off capital expenditure items of approximately £3m and
slightly increased inventory. Cash is expected to build in the first half of
the current financial year.
Dividend
The Directors recommend a final dividend of 1.0p (FY2024: 2.75p) taking the
full year dividend to 1.5p (FY2024: 3.50p). Payment of the final dividend, if
approved at the Company's forthcoming Annual General Meeting, will be made on
8 August 2025 to shareholders on the Company's register at 11 July 2025, with
an ex-dividend date of 10 July 2025. The Board remains committed to
returning to a progressive dividend policy when trading conditions improve.
People
On behalf of the Board, I would like to thank all our colleagues for their
commitment, energy and creativity during another year of challenges and
opportunities for the business. I would also like to thank Christopher Rogers,
who stepped down as Non-executive Director on 1 February this year after more
than six years of service both as a Non-executive Director and as Interim
Executive Chairman.
Outlook
In response to market conditions, we continue to focus on accelerating
strategic initiatives to position the Group for future success.
The restructuring at our UK factories has reduced costs to align with
anticipated volumes and the trend to digital printing.
North America remains a key growth opportunity, and the Group does not
currently expect a material direct impact from tariffs imposed on imports into
the USA. The evolving tariff regime is, however, a potential threat to US and
global consumer confidence and we will continue to monitor closely.
The first two months of our current financial year started strongly in the USA
with our core brand sales showing double-digit revenue growth compared with
the same two months last year. The UK and Northern Europe performed in line
with expectations during the same period. The announcement of tariffs at the
beginning of April and its impact on global markets has, however, impacted
order intake in all regions.
The recently announced launch of the Highgrove by Sanderson collaboration with
The King's Foundation, a collection of fabric and wallpaper designs inspired
by the gardens transformed by His Majesty King Charles III in the grounds of
his private residence, has been extremely well received by press and designers
and launches to market on 1(st) May.
We also look forward to the launch in September this year of the first Morris
& Co. and Huntington collection titled The Unfinished Works, featuring
some of the museum's archive designs by William Morris and his studio artists,
creating art history with the release of a new body of work.
Morris & Co.'s omnichannel site launches in the UK and USA have started
well, giving great confidence in the important strategic investment in digital
consumer platforms to mitigate structural market changes.
Our balance sheet remains robust, with over £5.0m of cash and an undrawn
£10.0m bank facility. We are also making good progress in further
strengthening our net cash position through planned inventory reduction.
The Board is confident in its agility and its acceleration of strategic
initiatives in response to the ongoing global market challenges and
unpredictability. At this early stage in the current financial year, the Board
continues to anticipate that the full year outturn will be in line with its
expectations.
Dianne Thompson
Non-executive Chairman
29 April 2025
.
CHIEF EXECUTIVE OFFICER'S STRATEGY AND OPERATING REVIEW
Introduction
The results for the year ended 31 January 2025 reflect challenging market
conditions which persisted throughout the year. Of the three pillars of our
business model - brands, licensing and manufacturing - licensing delivered
another excellent year though this was insufficient to overcome the impact of
weak consumer markets on brand and manufacturing sales. We continue to
accelerate strategic initiatives to position the Group for future growth and
to align the Group's cost base with current market dynamics. These strategic
initiatives centre on three core areas: digitalisation across the business;
North America as a key growth opportunity; and Future Factory to transform the
efficiency of our manufacturing operations and leverage the benefit of
verticality.
Digitalisation
Digitalisation at the Group has two main strands: digital as a route to market
and digital production at our manufacturing sites.
To advance our strategy of digital as a route to market, we launched the
Morris & Co. online shop (www.wmorrisandco.com
(http://www.wmorrisandco.com) ) in September 2024 in the UK. This
direct-to-consumer site brings together Morris & Co. wallpapers, fabrics,
paints and licensed products and is performing in line with expectations. The
site was subsequently launched in the USA in March 2025, where it has started
very strongly and ahead of expectations. The site's customer base represents
completely new, digital native customers for the Group.
To improve the Group's digital presence for trade customers, the Group's Trade
Hub will be re-platformed in the coming months to a scalable platform that
includes all of the Group's brands and gives much better visual tools, product
sampling and order management. An omnichannel approach will then be adopted
with each brand's presence tailored to attract its audience, working with all
of our customers to deliver optimal inspiration and service.
The other main strand of digitalisation is at our printing factories where we
have invested in the latest digital printing equipment and adopted a
digital-first strategy for both fabrics and wallpapers, using traditional
printing methods where they add value through expertise and craft skills. The
quality of product from our newest digital printers is excellent, with
designers being highly impressed by the results and trialling heritage prints
that previously would only have been printed traditionally. That said, we will
continue to preserve traditional printing techniques and use them where the
value of craft and highly skilled expertise are recognised and required.
North America
We continue to see North America as a key growth market and are accelerating
our efforts on this strategic initiative. Whilst sales were up just 1% at
constant currency during the year, the comparator period included some large
contract orders. The contract market was slow during the year though we have a
good pipeline of orders and goods awaiting shipment, which gives us confidence
in the ongoing demand.
In November 2024, we announced the appointment of Scott Hans, Senior Vice
President of Sales, to lead business development in North America, and
continue to strengthen the team to deliver our ambitions.
Wallpaper has sold more strongly than fabric in North America. Historically in
the UK, we sold about 65% fabric and 35% wallpaper whereas last year in North
America it was 55% wallpaper and 45% fabric. Wallpaper is on trend but it's
also a reflection of the way that wallpaper is purchased more directly through
e-commerce. Wallpaper sales in North America grew 7% during the year whereas
fabric sales declined by 5%, as a result of reduced contract sales.
We remain excited by the opportunity in North America with two key events this
year.
This month, we announced the Highgrove by Sanderson celebration of the royal
gardens and are sponsoring Kip's Bay's 50th Anniversary New York Showhome
later in the year, with one of the main reception rooms designed exclusively
with the collection.
The second half sees the September launch in California of a new collection
from Morris & Co. in collaboration with the Huntington Library, Art
Museum, and Botanical Gardens ('The Huntington'), based on largely unseen
and unfinished William Morris designs. This is an important and significant
new chapter of Morris & Co., being privileged to bring to life some 50
unique "new designs" relative to around 250 produced over the past 165 years.
Morris & Co. notably holds the exclusive IP rights to these designs which
will be celebrated for years to come, adapted, recoloured and rescaled to
offer many versions to delight our Morris fans with authentic, crafted
creativity that is true to its origins. We thank the Huntington team for the
once-in-a-lifetime chance for our talented designers to work on this important
moment in art history.
Future Factory
The third strategic initiative that was accelerated during the year was our
Future Factory initiative. Digital printing creates the opportunity to print
more efficiently, reducing lead times and inventory and simplifying
operations. During the year, manufacturing volumes from our own brands and
from third-party customers were impacted by the challenging consumer and
industry environment with demand for higher margin repeat orders declining and
some customers delaying planned product launches.
In order to align the factories' expected volumes with their cost base, we
recently completed a review with our new Group Operations Director resulting
in a 15% reduction in our manufacturing workforce, and annualised cost savings
of £1.5m at an exceptional cost of £0.7m.
STRATEGY AND PROGRESS
Our core strategy for the Group, which is set out below, is underpinned and
guided by our Live Beautiful sustainability strategy.
Driving the brands: The Group has a strong and broad portfolio of powerful
brands, each with clear market positioning. Our intention is to focus
precisely on the individuality of each brand, giving each its own market,
channel, product, and communications strategy; thereby strengthening their
appeal to drive demand in their respective marketplaces.
Focusing on core products: The Group has two strong manufacturing arms that
benefit the brands' business. Our strategy is to focus on our core products of
wallpaper and fabric, and to continue to build our finished goods offer with
our expert partners through licensing.
Partnering with key customers: The strategic focus on the individuality of
each brand, and our tailored service, cements relationships with key
customers, while enhanced communication through partnership drives demand for
both heritage and contemporary brands from consumers, through our interior
design partners, retail channels and hospitality partners. We continue to
deepen our relationships with existing licensing partners and seek new
opportunities, strategically targeted by brand, category and market.
Investing in people: People, and creativity, are at the heart of our business.
In our industry, Sanderson Design Group is a favoured destination for emerging
new designers. We benefit from doing more to bring in new creative and other
talent, nurturing it and creating a high-performance culture whilst also
ensuring that the Group's cost base is aligned with demand.
Growing key geographies: Our brands have significant international market
potential, reflected in them being sold worldwide. To maximise return, we are
focused on building market share in key geographies. North America is our
first priority, where our brands are under-represented, although highly
appreciated by top designers. Opportunities are strong in Europe and the
Middle East, while we support our UK base. Our approach is tailored to each
individual region.
Operational review
The table below shows the Group's sales performance in the year ended 31
January 2025, compared with FY2024. The table shows our three key revenue
streams of brand product sales, licensing income and manufacturing. It also
gives the four key geographies of our brand product sales: the UK, Northern
Europe, North America and Rest of the World.
Year to 31 January % Change
(£m) FY
20
25
v
FY
20
24
2025 2024 Reported Constant Currency
Brands
UK 32.8 37.9 (14)% (14)%
North America 21.0 21.4 (2)% 1%
Northern Europe 9.1 9.9 (7)% (4)%
Rest of the World 8.4 9.6 (12)% (11)%
Total Brand product revenue 71.3 78.8 (9)% (8)%
Manufacturing
External 18.1 18.9 (5)% (5)%
Internal (eliminated on consolidation) 13.6 16.1 (15)% (15)%
Total Manufacturing revenue 31.7 35.0 (10)% (10)%
Total Licensing revenue 11.0 10.9 1% 1%
TOTAL GROUP REVENUE 100.4 108.6 (8)% (8)%
BRANDS
The Brands segment comprises heritage brands Morris & Co., Sanderson, and
Zoffany and contemporary brands Clarke & Clarke, Harlequin, and Scion. The
table below shows the sales performance of each brand.
Year ended 31 January (£m) 2025 versus 2024
Brands 2025 2024 Reported Constant currency
Morris & Co. 18.0 19.1 (6)% (5)%
Sanderson 13.5 13.6 (1)% 1%
Zoffany 6.7 8.2 (18)% (16)%
Clarke & Clarke 19.7 22.4 (12)% (11)%
Harlequin 12.2 14.0 (13)% (11)%
Scion 1.1 1.3 (16)% (15)%
Other 0.1 0.2 (72)% (62)%
Total 71.3 78.8 (9)% (8)%
The table clearly shows the impact of the consumer environment on the sales of
each brand, with the heritage brands, Sanderson and Morris & Co.,
performing better than contemporary brands.
The Sanderson brand has been a strategic focus for the Group in the past two
years and it is pleasing to report another year of growth for the brand in
North America with sales up 24% in constant currency, offsetting softness in
the UK and the Rest of the World whilst sales were up 6% in Northern Europe.
The Giles Deacon capsule collection for Sanderson performed well throughout
the year. In December 2024, His Majesty King Charles III granted the Royal
Warrant of Appointment to Sanderson, marking the milestone of 100 years since
the brand first received a Royal Warrant from King George V in 1924. Earlier
this month, we were honoured to announce the launch of the Highgrove by
Sanderson Gardens collection, which celebrates the series of gardens at
Highgrove and donates a percentage of sales to the King's Foundation, the
global charity preserving the built and natural environment and heritage
crafts.
The Morris & Co. brand is our only brand where sales in North America
exceed those in the UK. North American sales during the year were flat in
constant currency but sales were up 7% in Northern Europe owing to a recovery
in sales in Scandinavia. Domestic sales were down 13%, the main contributor to
the brand's total sales being down 5% in constant currency.
The first products will be launched this September from the Morris & Co.
brand's exciting collaboration agreement with the Huntington a renowned
education and research institution in San Marino, California. The Huntington
has a vast archive of William Morris's work, including unique, unfinished
designs. Under the terms of the collaboration agreement, the Group is using
this unfinished work as the inspiration for an entirely new generation of
Morris & Co. wallpapers and fabrics.
The Disney Home x Sanderson capsule collection of fabrics and wallpapers,
based on original Sanderson wallpapers, continues to enjoy growing market
presence.
The collection from the Harlequin collaboration with Henry Holland was
launched in September 2024 and has had the strongest sampling of any
collection ever launched by the Group. Whilst Harlequin's North America sales
are down 1% in the year in constant currency, they were stronger in the second
half of the year owing to the Henry Holland launch. The feedback we've
received from the USA is that we are now launching exactly the type of product
that US customers have briefed, which is encouraging for future sales.
Harlequin remains the biggest selling wallpaper and fabric brand in the John
Lewis Partnership although UK sales were down 16% owing to the difficult
consumer environment.
The Zoffany brand's most recent launch, the Rare Textiles Collection, has been
well received but a major contract order in the USA in the prior year, which
didn't repeat this year, means that the brand has a tough comparator period.
Clarke & Clarke is our biggest selling brand, with the majority of its
sales in the UK where sales were down 14% during the year. A new collection
with Emma Shipley, who has worked with the brand for many years, was launched
in the second half. This collection, Mythica, will be distributed in North
America through our relationship with Kravet Inc. In addition, the brand is
growing in the John Lewis Partnership. Despite the one-off, non-cash
impairment of £16.3m attributed to goodwill, we remain confident in the
future performance of this brand, in both its licensing potential and its
overall importance to the Group's brand portfolio.
Scion is predominantly a licensing brand, and its licensing revenue makes a
strong contribution to the Group. Scion is also a direct-to-consumer brand
from the scionliving.com website, which brings all Scion products onto one
platform.
In September 2024, Kravet Inc. became the North American distributor of the
Scion brand, adding it to Kravet's boutique brands concept to be built out
across the showroom network in 2025. The initial response is encouraging.
MANUFACTURING
Our two factories, Standfast & Barracks textiles and Anstey Wallpaper
Company, print for our own brands and for third party customers, positioning
the factories at the centre of our industry. Our third-party sales, in the UK,
Europe and the USA, reflect our premium print technologies and world-class
excellence in design, manufacturing, customer service and innovation.
Manufacturing volumes, from our own brands and third-party customers, reflect
the challenging consumer and industry environment and a key focus for the
Board is to improve the efficiency of the factories and return them to
profitability.
In November 2024, Tim Preston, a manufacturing and supply chain specialist,
was appointed Group Operations Director, a key role in which he will lead the
Group's manufacturing activities and the Group's Future Factory initiative. In
this role, Tim is focused on improving efficiency, optimising digital
printing, reducing lead times and inventory, challenging procurement and
simplifying operations. Tim and the team are making significant progress on
all fronts and will deliver improved performance this year.
The factories have benefited from considerable recent investment, including a
new digital printer at Standfast, which was purchased and commissioned during
the year at a total cost of approximately £1m.
The table below details the Group's internal and external manufacturing sales
for the year ended 31 January 2025.
Year ended 31 January (£m) 2025 versus 2024
2025 2024 Reported
Sales to Group brands 13.6 16.1 (15)%
Third-party sales 18.1 18.9 (5)%
Total Manufacturing sales 31.7 35.0 (10)%
Standfast & Barracks, our fabric printing factory, celebrated its
Centenary in the year and is internationally regarded as a focal point for
creative, innovative and high-quality fabric printing. Standfast continues to
exploit the Group's extensive archive and original artwork, with a talented
design studio that reinterprets designs for commercial use today.
Anstey, our wallpaper printing business, is an unrivalled factory in its range
of wallpaper printing techniques on one site.
Total sales at Standfast in the year were £16.9m (FY2024: £19.1m), with
total sales at Anstey of £14.8m (FY2024: £15.9m). Overall, digital printing
as a proportion of both factories output was 54% (FY2024: 50%).
During the year, annualised cost savings of £1.1m were realised following the
initial consultation and change of workflows in January 2024. In the current
financial year, we have continued to focus on efficiency, adjusting the cost
base to current volumes and focusing staffing on our digital-first printing
strategy in which traditional techniques will be used where specifically
needed. Further, we have recently identified annualised cost savings of £1.5m
through a 15% reduction in our manufacturing workforce, resulting in a total
manufacturing workforce of 195 individuals.
LICENSING
Licensing is the most profitable part of the Group and a key area of strategic
focus. Our licensing activities leverage our designs and design archives and
bring wider consumer awareness of our brands across multiple categories of
finished goods. Licensing brings additional visibility for our brands and the
potential to stimulate sales of our core products of fabric, wallpaper and
paint.
The Group works closely with licensing partners throughout the product
development process and has strong creative skills in scaling and colouring
designs so they can be transferred successfully to a multitude of different
licensed products.
Licensing had a record year, with revenues of £11.0m (FY2024: £10.9m)
including £7.3m of accelerated income (FY2024: £6.5m) from licence
agreements signed during the year, including new deals with large retailers
and category specialists along with contract renewals and extensions.
Accelerated income, recognition of which is a requirement of IFRS 15,
represents the total minimum guaranteed sales associated with newly signed
contracts with a discount rate applied to them to reflect the timing of the
future cash flows arising from the agreements.
Of the total number of 44 licensing deals signed during the year, 18 of these
were renewals and extensions, demonstrating the traction that the Group's
brands have with licensees. Major renewals included window coverings company
Blinds2Go, rugmaker Brink & Campman and Japanese licensees Nishikawa and
Kawashima. The current financial year is expected to have fewer renewals owing
to the renewal cycle. Notable extensions signed during the year included
Ruggable with the Sanderson brand and Sangetsu with the Harlequin brand,
marking the first time that Harlequin has been licensed in Japan and
underlining the strength of our relationship with Sangetsu.
Morris & Co. continues to be the Group's most licensed brand, and it
continues to win new licensees. It is positive to see businesses such as
Sangetsu and Ruggable, which have initially licensed the Morris & Co.
brand, adding further of our brands to their product portfolios.
An exciting new licensing agreement was signed in the second half of the year
with a Chinese bedding company, Mine, with the Morris & Co. brand. Mine
has already opened a Morris & Co. branded store in the MIXC shopping mall
in Changsha, China, and plans to open further branded stores in Shanghai and
other cities. The agreement covers Morris & Co. bedding, quilts, bedding
accessories and bath towels for that territory.
Also with Morris & Co., Zara Home has recently launched a bedding and
cushions collection which it is rolling out in more than 50 stores
internationally.
A wide range of homewares products were launched in autumn 2024 under the
Habitat x Morris & Co. licensing agreement signed in March 2023.
The Disney Home x Sanderson collection is continuing to gain traction with
licensees and now features on a range of licensed product. In January 2025,
H&M Home launched a capsule range of nurseryware featuring the
collection's Bambi design, which is expected to contribute to revenues in the
current year.
The Company is continuing to progress a pipeline of further licensing
opportunities, leveraging its brands and design archives.
SUMMARY
We have confidence in our brands, products, people and strategy and we will
continue to drive the required strategic changes to best position the Group
for the current environment and for future growth, ensuring that we remain
agile to address future market conditions.
We are excited by the retail launch of the Highgrove by Sanderson collection
and also by the upcoming autumn launch by Morris & Co. of The Unfinished
Works, a momentous collection of previously incomplete designs by William
Morris and his collaborators, from the Huntington in California. Both these
collections highlight the Group's core commitment to design, creativity and
collaboration to produce outstanding, innovative products.
Lisa Montague
Chief Executive Officer
29 April 2025
CHIEF FINANCIAL OFFICER'S REVIEW
Both the Chairman's Statement and the Chief Executive Officer's Strategic and
Operating Review provide analysis of the key factors contributing to our
financial results for the year ended 31 January 2025 which reflected the
challenging market conditions which persisted throughout the year.
Revenue
Our reported revenue for the year was £100.4m compared with £108.6m in
FY2024.
FY2025 FY2024 Change
Revenue £m £m FY2024
Brand Product 71.3 78.8 (9.5)%
Manufacturing - External 18.1 18.9 (4.7)%
Licensing 11.0 10.9 1.0%
Group 100.4 108.6 (7.6)%
Gross profit
Gross profit for the full year was £68.4m compared with £73.7m in FY2024
whilst the gross profit margin at 68.2% represents an increase of 30 basis
points over FY2024. Excluding the impact of licence income, which generates
100% gross profit, margins remained broadly flat at 64.2%.
FY2025 FY2024
Brands and Manufacturing
Revenue (£m) 89.4 97.7
Gross profit (£m) 57.4 62.8
% 64.2% 64.3%
Licensing
Revenue (£m) 11.0 10.9
Gross profit (£m) 11.0 10.9
% 100% 100%
Total
Revenue (£m) 100.4 108.6
Gross profit (£m) 68.4 73.7
% 68.2% 67.9%
Within the Brands division product gross margin improved by 180 basis points
driven by reduced clearance activity, a stronger North American market mix,
and lower sales of low-margin homeware products (which are now largely sold by
licence partners).
Conversely, our Manufacturing division has been impacted by reduced volumes of
both internal and external orders. Given the high fixed cost base of both of
our factories, manufacturing gross margins fell by nearly 300 basis points
despite a number of cost-saving measures that were implemented during the
year.
Prior to the year-end, to align the factories' expected volumes with their
cost base, a further restructuring exercise was announced. This has resulted
in a 15% reduction of the manufacturing workforce and will produce an
annualised cost saving of £1.5m at an exceptional cost of £0.7m.
(Loss)/Profit before tax
The loss before tax was £13.9m, compared with a profit before tax of £10.4m
in FY2024.
This was heavily impacted by a number of one-off costs including an impairment
charge of £16.3m related to goodwill that arose on the acquisition of Clarke
& Clarke in October 2016. The valuation of brands across the interior
furnishings industry has declined since 2016 and this non-cash impairment of
Clarke & Clarke aligns the brand to the current industry environment. The
Board remains confident in the future performance of the Clarke & Clarke
brand, in its licensing potential and its overall importance to the Group's
brand portfolio.
FY2025 FY2024
£m £m
Revenue 100.4 108.6
Gross profit 68.4 73.7
Distribution and selling expenses (25.7) (25.3)
Administration expenses (44.8) (43.5)
Impairment of intangible asset (16.3) 0
Other operating income 4.0 4.9
Finance income - net 0.5 0.6
(Loss)/profit before tax (13.9) 10.4
Distribution and selling expenses increased by £0.4m compared with FY2024
largely driven by an increase in the cost of marketing materials (mainly
pattern books).
Excluding £1.0m (FY2024: £0.6m) of restructuring and reorganisation costs,
administration expenses grew by £1.0m versus FY2024. Inflationary pressures
impacted all areas of spend, particularly staff costs where the Real Living
Wage increased by over 10% for the second consecutive year. However, we
continued to implement cost efficiency measures, including the restructuring
of our UK Sales and Support functions which meant that ongoing administration
expenses only increased by 230 basis points compared with the prior year.
Adjusted underlying profit before tax
The adjusted underlying profit before tax was £4.4m, down from £12.2m in
FY2024.
FY2025 FY2024
£m £m
(Loss)/profit before tax (13.9) 10.4
Impairment and amortisation of acquired intangible assets 16.5 0.3
Restructuring and reorganisation costs 1.0 0.6
Share-based payment charge 0.3 0.5
Net defined benefit pension charge 0.5 0.4
Adjusted underlying profit before tax 4.4 12.2
In calculating the adjusted underlying profit before tax, the Group excludes
material non-recurring items or items considered to be non-operational in
nature and that do not relate to the operating activities of the Group.
Adjusted measures are used as a way for the Board to monitor the performance
of the Group and are not considered to be superior to, or a substitute for,
statutory definitions. They are provided to add further depth and
understanding to the users of the financial information and to allow for
improved assessment of performance. The Group considers adjusted underlying
profit before tax to be an important measure of Group performance and is
consistent with how the business is reported to and assessed by the Board.
This measure is used within the Group's incentive plans - see the Directors'
Remuneration Report.
Items excluded for the purposes of calculating the adjusted underlying profit
before tax comprise:
· An impairment charge of £16.3m relating to the goodwill
recognised on the acquisition of Clarke & Clarke in October 2016
· The amortisation of other intangible assets in respect of the
acquisition of Clarke & Clarke
· Restructuring and reorganisation costs of £1.0m (FY2024: £0.6m)
arising out of changes to our UK Sales and Sales Support functions and both
factories
· Share-based payment charges of £0.3m (FY2024: £0.5m) are
excluded as they are a non-cash measure
· Administration costs of £0.5m (FY2024: £0.4m) related to the
Group's two legacy defined benefit pension plans
Taxation
The tax charge for the year is £1.4m. Excluding the (non-deductible)
£16.3m impairment of goodwill this represents a 57% effective rate. The
effective rate is impacted by a £0.6m movement in deferred tax related to the
derecognition of certain historical losses.
Our tax payable position in FY2025 reduced by £1.0m from a Corporation Tax
credit relating to pension scheme contributions that is recorded in the
Consolidated Statement of Changes in Equity.
Capital expenditure
Capital expenditure in the year totalled £4.1m (FY2024: £3.3m).
Significant investments in the year included a new digital pigment printer and
factory roof at Standfast & Barracks and the fit out of the Group's new
head office and archive at Voysey House in Chiswick, West London.
With the leases on both warehouses having been renewed in FY2025 there are no
major capital expenditure projects planned for FY2026. As a result, we would
expect capital expenditure to reduce to around £2m per annum. Our forward
expenditure programme is closely aligned to our Live Beautiful strategy with
capital maintenance projects only being approved if they can be proven to
support us on our journey.
Minimum guaranteed licensing receivables
In accordance with IFRS 15, the Group recognises the fair value of fixed
minimum guaranteed income that arises under multi-year licensing agreements,
in full upon signature of the agreement, provided there are no further
performance conditions for the Group to fulfil. A corresponding receivable
balance is generated which then reduces as payments are received from the
license partner in accordance with the performance obligations laid down in
the agreement (usually the passing of time). Licensing revenues above the
fixed minimum guaranteed amount are recognised as income in the period in
which they are generated. Because of the way minimum guaranteed revenue is
recognised, the revenue profile can be uneven depending on when contracts are
signed and the guaranteed minimum royalty arrangements contained.
Licensing had a record year, with sales of £11.0m (FY2024: £10.9m) including
£7.3m of accelerated income (FY2024: £6.5m) from agreements signed during
the year. Several long-term licenses were agreed, including new deals with
large retailers and category specialists along with contract renewals and
extensions. As a result, on 31 January 2025, minimum guaranteed licensing
receivables due after more than one year grew to £11.3m (FY2024: £7.3m) and
those due within one year grew to £3.0m (FY2024: £2.1m).
Inventories
Both gross and net inventories increased slightly during the year.
Reduced production volumes in our factories have meant that raw material and
work-in-progress levels remain above their optimum level and reducing
inventory levels will be an area of focus for us in FY2026.
Trade receivables
Net trade receivables remained at £10.8m (FY2024: £10.8m).
Our business model means that most customers for our Brands Product segment do
not hold inventory. We are able to quickly react to any aged accounts in order
to mitigate potential credit risks. As a result, despite the current economic
environment, we have experienced limited bad debts in this segment in the last
year. The aging profile of trade debtors shows that the majority of customers
are close to terms although the wider economy presents an enhanced level of
credit risk.
The customers of our manufacturing facilities do however hold inventory and
consequently place larger individual orders with us that present greater
credit risk. Additional provisions of £0.3m have been made against specific
customers who are believed to represent a significant credit risk.
At a Group level, in addition to specific provisions against individual
receivables, a provision has been made of £0.2m (FY2024: £0.3m), which is a
collective assessment of the risk against non-specific receivables calculated
in accordance with IFRS 9.
Cash position and banking facilities
Net cash from operating activities resulted in an outflow of £2.1m (FY2024:
inflow of £9.1m).
The principal driver for the year-on-year decline was a reduction in operating
profit and a one-off contribution of £2.3m to one of our defined benefit
pension schemes (see below).
All foreign currencies are bought and sold centrally on behalf of the Group.
Regular reviews take place of our foreign currency cash flows. The Group
undertakes hedging only where there are highly probable future cash flows and
to hedge working capital exposures. The strong performance of the Group's
North American business creates a requirement to put in place a limited level
of hedging contracts against the US dollar surplus that is expected to arise.
The Group's banking facilities are provided by Barclays Bank plc. The Group
has a £10.0m multi-currency revolving credit facility which was renewed in
February 2024. The agreement also includes a £7.5m uncommitted accordion
facility to further increase available credit. This provides substantial
headroom for future growth. Our covenants under this facility are EBITDA and
interest cover measures, which have both been met throughout the year.
Net defined benefit pension
The Group operates two defined benefit schemes in the UK. These comprise the
Walker Greenbank Pension Plan and the Abaris Holdings Limited Pension Scheme.
These were both closed to new members and to future service accrual from 30
June 2002 and 1 July 2005 respectively.
Contributions to the Walker Greenbank Pension Plan were made based on the
deficit contribution schedules previously agreed with the schemes' trustees
and include payments towards the ongoing expenses incurred in the running of
the scheme.
During the year, the Company has made a one-off contribution of £2.3m to the
Abaris Holdings Pension Scheme to support a Trustee decision to transfer all
the scheme's risks to an insurer under a buy-in insurance policy investment.
In addition to the agreed cash amount, the insurer has also received the
Abaris Scheme's existing investments. Scheme administration and advisory
costs, estimated to be approximately £0.7m in total (of which £0.3m was paid
in FY2025), will continue to be paid by the Group over the life of the pension
scheme but the core financial and demographic risks associated with funding
member benefits has transferred to the insurer. The ongoing costs will not
impact the Group's adjusted profit before tax. The agreement means that the
Group will no longer be required to fund shortfalls to the Abaris Scheme,
which might arise from changes in market conditions.
The methodology and assumptions prescribed for the purposes of IAS 19 mean
that the Balance Sheet surplus or deficit, the Profit or Loss figures and the
Statement of Comprehensive Income figures are inherently volatile and vary
greatly according to investment market conditions at each accounting date. The
Group has reported a net surplus of £2.3m on 31 January 2025 compared with a
£0.9m net liability on 31 January 2024.
Dividend
During the financial year, an interim dividend of 0.50p per share was paid on
29 November 2024.
A final dividend of 1.00p is now proposed taking the full year dividend to
1.50p. This payment will be made on 8 August 2025 to the shareholders
registered on the Company's register on 11 July 2025 if approved at the
Company's forthcoming Annual General Meeting, with an ex-dividend date of 10
July 2025.
This 1/3 : 2/3 split between the interim and final dividend is possible,
despite the challenging market conditions, due to the strength of the Group's
balance sheet and our cash reserves of over £5m.
The Board remains committed to returning to a progressive dividend policy when
trading conditions improve.
Capital allocation policy
We remain committed to retaining a strong balance sheet.
Our forward capital expenditure programme is closely aligned to our Live
Beautiful strategy with capital maintenance projects only being approved if
they can be proven to support us on our journey.
We continue to support the defined benefit Walker Greenbank Pension Plan and
will look at whether there is appropriate action which could be taken to help
reduce the risks of this Plan within our wider business objectives.
Going concern
The Directors reviewed a Management Base Case model and considered the
uncertain political and economic environment that we are operating in. In our
assessment of going concern the Directors consider that, having reviewed
forecasts prepared by the management team which have been stress tested, the
Group has adequate resources to continue trading for the foreseeable future.
For this reason, they continue to adopt the going concern basis in preparing
the financial statements. Further details of the review are disclosed in note
1.
Mike Woodcock
Chief Financial Officer
29 April 2025
Consolidated Income Statement
Year ended 31 January 2025
Note 2025 2024
£000 £000
Revenue 3 100,388 108,636
Cost of sales (31,946) (34,954)
Gross profit 68,442 73,682
Net operating (expenses)/income:
Distribution and selling expenses (25,695) (25,320)
Administration expenses (44,858) (43,559)
Impairment of intangible assets (16,250) -
Other operating income 4 4,010 4,932
(Loss)/profit from operations (14,351) 9,735
Finance income 1,057 847
Finance costs (586) (228)
Net finance income 5 471 619
(Loss)/profit before tax (13,880) 10,354
Tax expense 6 (1,356) (2,157)
(Loss)/profit for the year attributable to owners of the parent (15,236) 8,197
(Loss)/earnings per share - Basic 7 (21.22)p 11.46p
(Loss)/earnings per share - Diluted 7 (21.22)p 11.34p
Adjusted earnings per share - Basic* 7 3.92p 13.74p
Adjusted earnings per share - Diluted* 7 3.83p 13.59p
*These are alternative performance measures.
All of the activities of the Group are continuing operations.
Consolidated Statement
of Comprehensive Income
Year ended 31 January 2025
2025 2024
£000 £000
(Loss)/profit for the year (15,236) 8,197
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension schemes (367) (116)
Deferred tax charge relating to pension scheme liabilities (801) (404)
Corporation tax credit relating to pension scheme contributions 970 399
Investment-related defined benefit pension costs (305) (218)
Cash flow hedge (45) (86)
Total items that will not be reclassified to profit or loss (548) (425)
Items that may be reclassified subsequently to profit or loss
Currency translation differences 58 (402)
Other comprehensive expense for the year, net of tax (490) (827)
Total comprehensive (loss)/income for the year attributable (15,726) 7,370
to the owners of the parent
Consolidated Balance Sheet
As at 31 January 2025
Note 31 January 31 January
2025 2024
£000 £000
Non-current assets
Intangible assets 8 10,901 26,695
Property, plant and equipment 9 12,938 12,444
Right-of-use assets 10 10,588 4,986
Retirement benefit surplus 2,310 -
Minimum guaranteed licensing receivables 11,299 7,304
48,036 51,429
Current assets
Inventories 11 27,201 26,706
Trade and other receivables 12 12,900 13,996
Minimum guaranteed licensing receivables 2,999 2,144
Financial derivative instruments - 26
Corporation tax receivable 251 -
Cash and cash equivalents 5,814 16,342
49,165 59,214
Total assets 97,201 110,643
Current liabilities
Trade and other payables 13 (12,837) (14,077)
Corporation tax payable - (806)
Lease liabilities 10 (1,988) (1,450)
Financial derivative instruments (19) -
Provision for liabilities and charges 14 (733) (1,437)
(15,577) (17,770)
Net current assets 33,588 41,444
Non-current liabilities
Lease liabilities 10 (9,244) (3,696)
Deferred income tax liabilities (2,679) (1,747)
Retirement benefit obligations - (897)
Provision for liabilities and charges 14 (969) -
(12,892) (6,340)
Total liabilities (28,469) (24,110)
Net assets 68,732 86,533
Equity
Share capital 720 717
Share premium account 18,682 18,682
Retained earnings 9,534 27,396
Other reserves 39,796 39,738
Total equity 68,732 86,533
Consolidated Cash Flow Statement
Year ended 31 January 2025
Note 2025 2024
£000 £000
Cash flows from operating activities
(Loss)/profit from operations (14,351) 9,735
Intangible asset amortisation 8 806 817
Impairment of intangible assets 8 16,250 -
Property, plant and equipment depreciation and impairment 9 2,341 2,333
Right-of-use asset depreciation 10 2,392 2,381
Share-based payment charge 245 480
Defined benefit pension charge 554 360
Employer contributions to pension schemes (4,369) (2,314)
(Increase)/decrease in inventories (495) 1,068
Decrease in trade and other receivables 1,091 2,000
Increase in minimum guaranteed licensing receivables (3,991) (4,747)
Decrease in trade and other payables (1,206) (2,611)
Increase in provision for liabilities and charges 15 400
Tax paid (1,340) (810)
Net cash (to)/from operating activities (2,058) 9,092
Cash flows from investing activities
Finance income received 5 134 216
Purchase of intangible assets 8 (1,262) (1,064)
Purchase of property, plant and equipment 9 (2,824) (2,195)
Net cash used in investing activities (3,952) (3,043)
Cash flows from financing activities
Repayment of lease liabilities 10 (1,854) (2,434)
Capitalisation of lease acquisition costs (355) -
Interest paid 5 (30) (17)
Dividends paid (2,333) (2,501)
Net cash used in financing activities (4,572) (4,952)
Net (decrease)/increase in cash and cash equivalents (10,582) 1,097
Net foreign exchange movement 54 (156)
Cash and cash equivalents at beginning of year 16,342 15,401
Cash and cash equivalents at end of year 5,814 16,342
Consolidated Statement Of Changes in Equity
Year ended 31 January 2025
Attributable to owners of the parent
Share capital Share premium account Retained earnings Other Total equity
reserves
£000 £000 £000
£000
£000
Balance at 1 February 2023 715 18,682 21,779 40,140 81,316
Profit for the year - - 8,197 - 8,197
Other comprehensive
income/(expense):
Remeasurements of defined benefit pension schemes - - (116) - (116)
Deferred tax charge relating to pension scheme assets - - (404) - (404)
Corporation tax credit relating to pension scheme contributions - - 399 - 399
Investment-related defined benefit pension costs - - (218) - (218)
Cash flow hedge - - (86) - (86)
Currency translation differences - - - (402) (402)
Total comprehensive - - 7,772 (402) 7,370
income/(expense)
Transactions with owners, recognised directly in equity:
Dividends - - (2,501) - (2,501)
Issuance of share capital for share-based payment vesting 2 - (2) - -
Share-based payment equity charge - - 422 - 422
Related tax movements on share-based payment - - (74) - (74)
Balance at 31 January 2024 717 18,682 27,396 39,738 86,533
Consolidated Statement Of Changes in Equity
Year ended 31 January 2025
Attributable to owners of the parent
Share capital £000 Share premium account Retained earnings £000 Other reserves Total equity £000
£000
£000
Balance at 1 February 2024 717 18,682 27,396 39,738 86,533
Loss for the year - - (15,236) - (15,236)
Other comprehensive income/(expense):
Remeasurements of defined benefit pension schemes - - (367) - (367)
Deferred tax charge relating to pension scheme assets - - (801) - (801)
Corporation tax credit relating to pension scheme contributions - - 970 - 970
Investment-related defined benefit pension costs - - (305) - (305)
Cash flow hedge - - (45) - (45)
Currency translation differences - - - 58 58
Total comprehensive - - (15,784) 58 (15,726)
(loss)/income:
Transactions with owners, recognised directly in equity:
Dividends - - (2,333) - (2,333)
Issuance of share capital for share-based payment vesting 3 - (3) - -
Share-based payment equity charge - - 287 - 287
Related tax movements on share-based payment - - (29) - (29)
Balance at 31 January 2025 720 18,682 9,534 39,796 68,732
Notes to the Consolidated Financial Statements
1. Accounting policies and general information
General information
Sanderson Design Group PLC ('the Company') and its subsidiaries (together 'the
Group') is a luxury interior furnishing group whose brands include Morris
& Co., Sanderson, Zoffany, Clarke & Clarke, Harlequin and Scion. The
brands are targeted at the mid to upper end of the premium market. They have
worldwide distribution including prestigious showrooms at Chelsea Harbour,
London and the D&D Building, Manhattan, New York. Part of the brands'
inventory is sourced in-house from the Group's own specialist manufacturing
facilities of Standfast & Barracks, the fabric printing business situated
in Lancaster, and Anstey Wallpaper Company, situated in Loughborough. The
manufacturing businesses produce for other interior furnishing businesses both
in the UK and throughout the world. The licensing business is the third
revenue pillar of the Group. The Company is a public limited company which is
listed on the Alternative Investment Market of the London Stock Exchange and
is registered, domiciled and incorporated in the UK. The Company registration
number is 61880 and the address of its registered office is Voysey House,
Sandersons Lane, London, W4 4DS.
Basis of preparation
The financial information contained within this announcement for the year
ended 31 January 2025 and the year ended 31 January 2024 is derived from but
does not comprise statutory financial statements within the meaning of section
435 of the Companies Act 2006. Statutory accounts for the year ended 31
January 2024 have been filed with the Registrar of Companies and those for the
year ended 31 January 2025 will be filed following the Company's Annual
General Meeting.
The auditors' report on the statutory accounts for the year ended 31 January
2025 and the year ended 31 January 2024 is unqualified, does not draw
attention to any matters by way of emphasis, and does not contain any
statement under section 498 of the Companies Act 2006. The statutory
consolidated financial statements, from which the financial information in
this announcement has been extracted have been prepared in accordance with
UK-adopted international accounting standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The accounting policies applied are consistent with those set out in the
Sanderson Design Group PLC Annual Report and Accounts for the year ended 31
January 2024.
Going concern
In the context of the continuing economic and political uncertainties, the
Board of Sanderson Design Group PLC has undertaken an assessment of the
ability of the Group and Company to continue in operation and meet its
liabilities as they fall due over the period of its assessment. In doing so,
the Board considered events throughout the period of their assessment from the
date of signing of the report to 31 January 2027, including the availability
and maturity profile of the Group's financing facilities and covenant
compliance. These financial statements have been prepared on the going concern
basis which the Directors consider appropriate for the reasons set out below.
The Group funds its operations through cash generated by the Group and has
access to a £10.0m (2024: £10.0m) Revolving Credit Facility ('RCF') which is
linked to two covenants. These covenants are tested quarterly at 30 April, 31
July, 31 October and 31 January each year until the facility matures on 31
January 2029. Throughout the financial year and up to the date of this report,
the Company has met all required covenant tests and maintained available
liquidity of over £5m. The total available liquidity of the Group at 31
January 2025 was £15.8m (2024: £26.3m), including cash and cash equivalents
of £5.8m (2024: £16.3m) and the committed facility of £10.0m (2024:
£10.0m). The Group has access to an uncommitted accordion facility of £7.5m
(2024: £7.5m).
A Management Base Case ('MBC') model has been prepared, together with
alternative stress tested scenarios, given the uncertainties regarding the
impact of economic difficulties (including continuing inflationary pressures
and high interest rates) and a lack of consumer confidence. These scenarios
indicate that the Group retains adequate headroom against its borrowing
facilities and bank covenants for the foreseeable future.
The actual results which will be reported will be undoubtedly different from
the MBC and other scenarios modelled by the Group. If there are significant
negative variations from the MBC, management would act decisively to protect
the business, particularly its cash position.
Having considered all the comments above, the Directors consider that the
Group and the Company have adequate resources to continue trading for the
foreseeable future and will be able to continue operating as a going concern
for a period of at least 21 months from the date of approval of the financial
statements. For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
2. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning future events. The
resulting accounting estimates will seldom precisely equal the related actual
results. The Group applies its best endeavours in setting accounting
estimates, and uses historical experience and other factors, including input
from experienced management and specialist third-parties, where required.
Estimates and assumptions are periodically re-evaluated and the resulting
accounting balances updated as new information, including actual outcomes,
become apparent.
The estimates and judgements that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
a) Retirement benefit obligations
The Group recognises its obligations to employee retirement benefits. The
quantification of these obligations is subject to significant estimates and
assumptions regarding life expectancy, discount and inflation rates, wage and
salary changes, the rate of increase in pension payments, and the market
values of equities, bonds and other pension assets. In making these
assumptions the Group takes advice from a qualified actuary about which
assumptions reflect the nature of the Group's obligations to employee
retirement benefits. The assumptions are regularly reviewed to ensure their
appropriateness.
The Group determines the appropriate discount rate at the end of each year.
This is the interest rate that should be used to determine the present value
of estimated future cash outflows expected to be required to settle pension
obligations. In determining the appropriate discount rate, the Group considers
the interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity
approximating the terms of the related pension liability.
b) Impairment of non-financial assets
The Group tests annually whether goodwill or its indefinite life intangible
asset have suffered any impairment, in accordance with its accounting policy.
Other intangibles and property, plant and equipment are also reviewed whenever
impairment triggers are apparent. The recoverable amounts of cash-generating
units have been determined based on value in use ('VIU') calculations. These
calculations require use of estimates of future sales, margins, and other
operating and administration expenses, and of discount rates.
In assessing whether an impairment of goodwill is required, the carrying value
of the cash-generating unit ('CGU') or group of CGUs is compared with its
recoverable amount. The recoverable amounts for each CGU, being a division of
the business operated at a separate site, and collectively for groups of CGUs
that make up the segments of the Group's business, have been based on the VIU.
The Group estimates the VIU using a discounted cash flow model ('DCF'), where
the projected cash flows for separate or collective groups of CGUs are
discounted using a post-tax rate of 12.00% (2024: 11.18%). The discount rate
used is the same across all segments.
The Group has used formally approved budgets for the first year of its VIU
calculation, with extrapolation beyond the last explicit year using an
assumption of growth for future years at 2-4% (2024: 2%) depending upon the
CGU being tested, with 2% (2024: 2%) terminal growth (see note 8 for
sensitivity analysis).
The cash flows used in the calculation of the VIU are derived from experience
and are based on operating profit forecasts, which in turn rely upon
assumptions relating to sales growth, price increases, margins, and operating
and administration expenses. The cash flows have not included the benefits
arising from any future asset enhancement expenditure and therefore exclude
significant benefits anticipated from future capital expenditure. The 2-4%
growth rates included within the assumptions supporting the VIU calculations
do not therefore represent the Group's anticipated total forecast growth, but
rather only the growth deriving from capital expenditure completed at the
Balance Sheet date.
The Group makes provision for impairment in the carrying amount of its
inventories and marketing materials. The nature of the Group's products is
exposed to changes in taste and attitudes from time to time, which can affect
the demand for those products. The Group has skilled and experienced
management who utilise historical sales information, and exercise their
judgement, in making estimates about the extent of provisions necessary based
on the realisable value of inventory and expected future benefit to the Group
of marketing materials considering the estimated price and volume of future
sales or usage, less the further costs of sale and holding costs.
c) Absorption of overhead into inventory
The Group determines the basis of allocation of fixed production overhead
based on the actual performance of the manufacturing components of the Group
and arms-length sales prices when actual performance is considered to
approximate normal capacity. Where actual performance in the year is not
considered to represent normal levels, the Group uses the next year's budgeted
results to ensure operating inefficiencies are not included in the carrying
value of inventory.
3. Segmental analysis
The Group is a designer, manufacturer and distributor of luxury interior
furnishings, fabrics and wallpaper. The reportable segments of the Group are
aggregated as follows:
· Brands - comprising the design, marketing, sales and distribution of
Morris & Co., Sanderson, Zoffany, Clarke & Clarke, Harlequin and Scion
brands.
· Licensing - comprising the licensing activities of Morris & Co.,
Sanderson, Zoffany, Clarke & Clarke, Harlequin and Scion brands. Operating
costs are not separately allocated to this segment, although management will
continue to review this as the segment grows.
· Manufacturing - comprising the wallcovering and printed fabric
manufacturing businesses operated by Anstey and Standfast & Barracks
respectively.
Year ended 31 January 2025 Brands Licensing Manufacturing Unallocated Total
£000 £000 £000 £000 £000
UK revenue 32,756 4,275 10,539 - 47,570
International revenue 38,554 6,758 7,506 - 52,818
Revenue - external 71,310 11,033 18,045 - 100,388
Revenue - internal - - 13,605 (13,605) -
Total revenue 71,310 11,033 31,650 (13,605) 100,388
Impairment of intangible assets - - - (16,250) (16,250)
(Loss)/profit from operations before intercompany management charge (2,000) 11,033 (3,256) (20,128) (14,351)
(Loss)/profit from operations 10 11,033 (3,256) (22,138) (14,351)
Net finance (expense)/income (536) 859 (11) 159 471
(Loss)/profit before tax (526) 11,892 (3,267) (21,979) (13,880)
Tax expense - - - (1,356) (1,356)
(Loss)/profit for the year (526) 11,892 (3,267) (23,335) (15,236)
This is the basis on which the Group presents its operating results to the
Board of Directors, which is the CODM for the purposes of IFRS 8. Other
Group-wide activities and expenses, predominantly related to corporate head
office costs, defined benefit pension costs, long-term incentive plan
expenses, taxation, stock consolidation adjustments in Brands and eliminations
of inter-segment items, are presented within 'unallocated'. The segmental
Income Statement disclosures are measured in accordance with the Group's
accounting policies as set out in the accounting policies. Inter-segment
revenue earned by Manufacturing from sales to Brands is determined on normal
commercial trading terms as if Brands were any other third-party customer. Tax
charges have not been allocated to a segment.
a) Principal measures of profit and loss - Income Statement segmental
information
Year ended 31 January 2024 Brands Licensing Manufacturing Unallocated Total
£000 £000 £000 £000 £000
UK revenue 37,902 6,424 11,900 - 56,226
International revenue 40,870 4,496 7,044 - 52,410
Revenue - external 78,772 10,920 18,944 - 108,636
Revenue - internal - - 16,065 (16,065) -
Total revenue 78,772 10,920 35,009 (16,065) 108,636
Profit/(loss) from operations before intercompany management charge 3,729 10,920 (1,002) (3,912) 9,735
Profit/(loss) from operations 642 10,920 (1,002) (825) 9,735
Net finance income (98) 631 (10) 96 619
Profit/(loss) before tax 544 11,551 (1,012) (729) 10,354
Tax expense - - - (2,157) (2,157)
Profit/(loss) for the year 544 11,551 (1,012) (2,886) 8,197
b) Additional segmental revenue information
Brands revenue by geography 2025 2024
£000 £000
United Kingdom 32,756 37,902
North America 20,957 21,380
Northern Europe 9,146 9,857
Rest of the World 8,451 9,633
71,310 78,772
Brands revenue by brand 2025 2024
£000 £000
Clarke & Clarke 19,746 22,420
Morris & Co. 17,961 19,073
Sanderson 13,482 13,590
Harlequin 12,240 13,989
Zoffany 6,731 8,174
Scion 1,083 1,288
Other brands 67 238
71,310 78,772
Manufacturing revenue by division (including internal revenue) 2025 2024
£000 £000
Standfast & Barracks 16,843 19,103
Anstey 14,807 15,906
31,650 35,009
4. Other operating income
Other operating income of £4,010,000 (2024: £4,932,000) comprises
consideration received from the sale of marketing materials to support the
Group's core products.
5. Net finance income
2025 2024
£000 £000
Interest income:
Interest received on bank deposits 134 216
Unwind of discount on minimum guaranteed licensing income 859 631
Total interest received 993 847
Net pension interest income 64 -
Total finance income 1,057 847
Interest expense:
Bank facility fees (18) (34)
Interest paid (30) (17)
Lease interest (538) (106)
Total interest paid (586) (157)
Net pension interest costs - (71)
Total finance costs (586) (228)
Net finance income 471 619
6. Tax expense
2025 2024
£000 £000
Current tax:
- UK current tax 970 2,168
- UK adjustments in respect of prior years 280 (186)
- Overseas, current tax 1 27
Current tax 1,251 2,009
Deferred tax:
- Current year 429 356
- Adjustments in respect of prior years (324) (208)
Deferred tax 105 148
Total tax charge for the year 1,356 2,157
Reconciliation of total tax charge for the year: 2025 2024
£000 £000
(Loss)/profit on ordinary activities before tax (13,880) 10,354
Tax on (loss)/profit on ordinary activities at 25% (2024: 24.03%, pro-rated) (3,470) 2,488
Intangible assets impairment 4,063 -
Fixed asset differences 48 1
Non-deductible expenditure 22 6
Share-based payment 117 (30)
Adjustments in respect of prior years - current tax 280 (186)
Adjustments in respect of prior years - deferred tax (324) (208)
Deferred tax not recognised on losses 604 41
Effect of changes in corporation tax rates, including overseas 16 45
Total tax charge for the year 1,356 2,157
A current tax credit of £970,000 has been recognised in Other Comprehensive
Income (2024: £399,000) in relation to defined benefit pension contributions
made during the year.
7. Earnings per share
(a) Earnings per share
Basic earnings per share ('EPS') is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of shares
outstanding during the year, excluding those held in the Employee Benefit
Trust ('EBT') and those held in treasury, which are treated as cancelled. The
adjusted basic earnings per share is calculated by dividing the adjusted
earnings by the weighted average number of shares.
2025 2024
Earnings Weighted average number of shares Per share amount Earnings Weighted average number of shares Per share amount
£000 (000s) Pence £000 (000s) Pence
Basic (loss)/earnings per share (15,236) 71,804 (21.22) 8,197 71,520 11.46
Effect of dilutive securities:
Shares under share-based payment 1,675 788
Diluted (loss)/earnings per share* (15,236) 73,479 (21.22) 8,197 72,308 11.34
Adjusted underlying basic and diluted earnings per share:
Add back share-based payment charge (including National Insurance) 245 480
Add back defined benefit pension charge 490 431
Add back non-underlying items (see below) 17,515 905
Tax effect of non-underlying items and other add backs (200) (185)
Adjusted underlying basic earnings per share 2,814 71,804 3.92 9,828 71,520 13.74
Adjusted underlying diluted earnings per share 2,814 73,479 3.83 9,828 72,308 13.59
* As the result for 2025 is a basic loss per share, diluted loss per share is
equal to basic loss per share.
(b) Adjusted underlying profit before tax
The Group uses an Alternative Performance Measure, 'adjusted underlying profit
before tax'. This is defined as statutory profit before tax adjusted for the
exclusion of share-based incentives, defined benefit pension charge and
non-underlying items. This is recognised by the investment community as an
appropriate measure of performance for the Group and is used by the Board of
Directors as a key performance measure. The table below reconciles statutory
profit before tax to adjusted underlying profit before tax.
2025 2024
£000 £000
Statutory (loss)/profit before tax (13,880) 10,354
Amortisation of acquired intangible assets 276 281
Impairment of intangible assets 16,250 -
Restructuring and reorganisation costs* 989 624
Total non-underlying charge included in statutory profit before tax 17,515 905
Underlying profit before tax 3,635 11,259
Share-based payment charge 245 480
Defined benefit pension charge 490 431
Adjusted underlying profit before tax 4,370 12,170
* Restructuring and reorganisation costs of £989,000 (2024: £624,000).
These relate to the reorganisation of the Anstey and Standfast manufacturing
sites (£688,000) (2024: £624,000), in addition to the rationalisation of
certain operational and support functions in the Brands segment (£301,000).
8. Intangible assets
Goodwill £0001 Arthur Sanderson and William Morris Archive Collection design £000 Brand Customer-related intangibles Software Assets under construction Total
£000² £000 £000 £000 £000 £000
Cost
31 January 2023 17,091 4,300 2,292 5,566 4,427 2,794 482 36,952
Additions - - 499 - - 64 501 1,064
Disposals - - - - - (262) - (262)
31 January 2024 17,091 4,300 2,791 5,566 4,427 2,596 983 37,754
Additions - - 590 - - 301 371 1,262
Transfer - - - - - 1,354 (1,354) -
Disposals - - (145) - - - - (145)
31 January 2025 17,091 4,300 3,236 5,566 4,427 4,251 - 38,871
Accumulated amortisation
31 January 2023 841 - 823 1,767 4,427 2,646 - 10,504
Charge - - 432 281 - 104 - 817
Disposals - - - - - (262) - (262)
31 January 2024 841 - 1,255 2,048 4,427 2,488 - 11,059
Charge - - 433 276 - 97 - 806
Impairment 16,250 - - - - - - 16,250
Disposals - - (145) - - - - (145)
31 January 2025 17,091 - 1,543 2,324 4,427 2,585 - 27,970
Net book amount
31 January 2025 - 4,300 1,693 3,242 - 1,666 - 10,901
31 January 2024 16,250 4,300 1,536 3,518 - 108 983 26,695
31 January 2023 16,250 4,300 1,469 3,799 - 148 482 26,448
Impairment tests for goodwill and Arthur Sanderson and William Morris Archive
The total carrying value of goodwill at year end of £nil (2024: £16,250,000)
is attributable to the Brands segment.
The carrying value of the Arthur Sanderson and William Morris Archive at the
year end of £4,300,000 (2024: £4,300,000) is attributable to the Brands
segment. The archive was independently valued during the year ended 31 January
2025 at £9,980,000 and therefore the carrying value of this asset is
supported by the external valuation.
The Group has impaired the goodwill allocated to the Clarke & Clarke
acquisition following a review of the future cash flows for the CGU. The
impairment has been identified by assessing the future cash flows allocated to
the CGU, with a 12% post-tax discount rate and long-term growth rate of 2%
applied. The below sensitivities have been performed. As the goodwill is now
fully impaired, any further impairment would be allocated to the remaining
assets of the CGU on a pro rata basis.
Post-tax discount rate Impairment Variance to base model Long-term growth rate Impairment Variance to base model
£000 £000 £000 £000
11.00% (15,100) 1,150 0.00% (17,100) (850)
12.00% (16,250) - 1.00% (16,600) (350)
13.00% (16,900) (650) 2.00% (16,250) -
14.00% (17,600) (2,350) 3.00% (15,400) 850
The post-tax discount rate and long-term growth rates applied to the CGU have
been reviewed and approved by the Board.
9. Property, plant and equipment
Freehold Leasehold improvements £000 Plant, equipment and vehicles £000 Computer hardware £000 Assets under construction Total
land and buildings £000 £000 £000
Cost
31 January 2023 6,510 697 31,271 2,280 850 41,608
Additions - - 1,743 60 392 2,195
Disposals (238) 28 (332) (1,095) - (1,637)
Reclassifications (157) (210) 647 (90) (190) -
Currency movements - - (59) (33) (33) (125)
31 January 2024 6,115 515 33,270 1,122 1,019 42,041
Additions 44 1,087 1,230 241 222 2,824
Disposals (167) (400) (3,422) (7) - (3,996)
Transfers 619 606 16 - (1,241) -
Currency movements (6) - 37 1 - 32
31 January 2025 6,605 1,808 31,131 1,357 - 40,901
Accumulated depreciation
and impairment
31 January 2023 2,465 427 24,071 2,026 - 28,989
Charge 119 21 1,981 96 - 2,217
Impairment - 116 - - - 116
Disposals (238) 28 (332) (1,095) - (1,637)
Reclassifications 77 (77) - - - -
Currency movements - - (54) (34) - (88)
31 January 2024 2,423 515 25,666 993 - 29,597
Charge 205 106 1,942 88 - 2,341
Disposals (167) (400) (3,422) (7) - (3,996)
Currency movements (3) - 23 1 - 21
31 January 2025 2,458 221 24,209 1,075 - 27,963
Net book amount
31 January 2025 4,147 1,587 6,922 282 - 12,938
31 January 2024 3,692 - 7,604 129 1,019 12,444
31 January 2023 4,045 270 7,200 254 850 12,619
10. Right-of-use assets and lease liabilities
As a lessee
Information about leases for which the Group is a lessee is presented below:
Right-of-use assets
Leasehold properties Vehicles Plant and equipment Total
£000 £000 £000 £000
Cost
31 January 2023 12,331 915 1,079 14,325
Additions 2,686 203 17 2,906
Disposals - (208) (158) (366)
Currency movements (248) - (5) (253)
31 January 2024 14,769 910 933 16,612
Additions 8,005 159 - 8,164
Disposals (9,625) (350) (94) (10,069)
Currency movements 88 - 1 89
31 January 2025 13,237 719 840 14,796
Accumulated depreciation and impairment
31 January 2023 8,507 489 752 9,748
Charge 1,903 311 167 2,381
Disposals - (208) (158) (366)
Currency movements (133) - (4) (137)
31 January 2024 10,277 592 757 11,626
Charge 2,032 222 138 2,392
Disposals (9,446) (340) (78) (9,864)
Currency movements 53 - 1 54
31 January 2025 2,916 474 818 4,208
Net book amount
31 January 2025 10,321 245 22 10,588
31 January 2024 4,492 318 176 4,986
31 January 2023 3,824 426 327 4,577
Lease liabilities
Leasehold properties Vehicles Plant and equipment Total
£000 £000 £000 £000
Balance
31 January 2023 4,377 402 343 5,122
Additions 2,298 203 17 2,518
Amounts paid (1,921) (342) (171) (2,434)
Effect of discounting 84 15 7 106
Currency movements (166) - - (166)
31 January 2024 4,672 278 196 5,146
Additions 7,383 159 - 7,542
Disposals (176) - (15) (191)
Amounts paid (1,457) (238) (159) (1,854)
Effect of discounting 519 10 9 538
Currency movements 50 - 1 51
31 January 2025 10,991 209 32 11,232
Maturity analysis - contractual lease liabilities
2025 2024
£000 £000
Current 1,988 1,450
Non-current 9,244 3,696
Total lease liabilities 11,232 5,146
11. Inventories
2025 2024
£000 £000
Raw materials 4,588 4,314
Work in progress 1,298 1,984
Finished goods 20,316 19,371
Marketing materials 999 1,037
27,201 26,706
12. Trade and other receivables
Current 2025 2024
£000 £000
Trade receivables 11,590 11,413
Less: provision for impairment of trade receivables (801) (641)
Net trade receivables 10,789 10,772
Other taxes and social security - 582
Other receivables 83 68
Prepayments and accrued income 2,028 2,574
12,900 13,996
13. Trade and other payables
2025 2024
£000 £000
Trade payables 8,465 9,289
Other taxes and social security 901 1,159
Other payables 278 263
Accruals 3,193 3,366
12,837 14,077
14. Provision for liabilities and charges
Property Other Total
£000 £000 £000
31 January 2023 1,037 - 1,037
Charged 124 493 617
Utilised (217) - (217)
31 January 2024 944 493 1,437
Charged 250 989 1,239
Utilised (200) (774) (974)
31 January 2025 994 708 1,702
2025 2024
£000 £000
Current 733 1,437
Non-current 969 -
Total 1,702 1,437
Property
Property-related provisions consist of estimated rectification costs arising
from wear and tear that will fall due on exiting property leases.
Other provisions
Other provisions include restructuring provisions and employee termination
payments and are recognised when a detailed, formal plan has been established
and communicated to those parties directly affected by the plan.
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