REG - Sanderson Design Grp - Half Year Trading Update

Sanderson DesignAnnouncement

04/08/2022 07:15

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RNS Number : 8538U  Sanderson Design Group PLC  04 August 2022

 For immediate release
                        4 August 2022

SANDERSON DESIGN GROUP PLC

("Sanderson Design Group", the "Company" or the "Group")

Half Year Trading Update

 

Sanderson Design Group PLC (AIM: SDG), the luxury interior design and
furnishings group, is pleased to announce its trading update for the six
months ended 31 July 2022.

Group sales in the six-month period of £57.9 million (comprising Brand
product and external Manufacturing sales along with licensing revenue) were up
1% compared with the same period last year (H1 FY22: £57.5 million),
unchanged on a constant currency basis.

Adjusted underlying profit before tax for the half year is anticipated to be
in line with the Board's expectations.

 

Brand product, manufacturing and licensing revenue

                              Six months to July 31 of financial year (£ million)       Change (%)

                              2023                         2022                         Reported  Constant currency
 Brand product
 UK                           22.1                         22.3                         (1%)      (1%)
 Northern Europe              5.5                          6.9                          (20%)     (17%)
 North America                9.7                          8.6                          13%       4%
 Rest of the World            4.9                          5.5                          (11%)     (9%)
 Total Brand product revenue  42.2                         43.3                         (3%)      (3%)
 Manufacturing
 External                     11.9                         12.2                         (2%)      -
 Internal                     9.7                          8.8                          10%       -
 Total Manufacturing revenue  21.6                         21.0                         3%        -
 Licensing
 Total Licence revenue        3.8                          2.0                          90%       89%
 Total revenue                57.9                         57.5                         1%        0%

 

Brand product

Brand product revenue was driven by a strong performance in the targeted
growth market of the US, along with continuing strong growth from the Morris
& Co. brand.

Brand product revenue in the prior year benefited from approximately £0.6
million of predominantly European dispatches delayed from FY21 due to customs
delays that occurred following Brexit.  Additionally, Brand product sales in
Northern Europe were impacted by the previously announced decision to cease
trade in Russia, resulting in the loss of £0.8 million of sales compared with
H1 FY22.  Excluding these two factors, Brand product revenue at £42.2
million was up 1% year-on-year at reported rates, unchanged on a constant
currency basis.

Manufacturing

Overall, third-party manufacturing has performed robustly in the first six
months of the year, given the strong comparator at the same time last year as
customers emerged from Covid and commenced restocking.

Licensing

Total licensing revenue was up 90% at £3.8 million (H1 FY22: £2.0 million),
driven by £1.9 million (H1 FY22: £0.5 million) of accelerated income from
recently signed licence agreements.

The progress within licensing continues with the recently announced NEXT
contract extension, extending its partnership with Morris & Co. to 2025.
In addition, the Williams Sonoma kitchenware partnership with Morris &
Co., initially signed in August 2021, has been extended by two years to 2025,
displaying the major US retailer's confidence in the brand and products, which
are due to launch in September this year.

 

Balance sheet

The Group's liquidity position remains strong with net funds of approximately
£15.0 million as of 31 July 2022 (H1 FY22: £15.4 million), compared with
£19.1 million on 31 January 2022. This reduction partially reflects a
strategic investment in inventory of our best-selling collections.

 

Outlook

As set out in our AGM statement on 12 July 2022, we remain vigilant in respect
of the world economic environment. Current market conditions are difficult to
predict and we are planning for a wide range of possible scenarios in the
second half. Despite this, full year trading currently remains in line with
the Board's expectations. The Group's strong cash position enables continued
investment in the business and also provides protection in the event of any
material adverse changes in trading conditions.

 

Lisa Montague, Chief Executive Officer of Sanderson Design Group, commented:
"I am pleased to be reporting good strategic progress in the first six months
of the year. It is encouraging to see licensing partnerships with major
retailers both in the UK and US being extended, underpinning their belief in
our brands and products.

"The two-year contract extension with Williams Sonoma, a leading US retailer,
signals the confidence it has in the strength of a collection that is yet to
launch, and emphasises the progress we are making in the US, a core growth
market for the Group.

"We retain a rather cautious outlook, mindful of the cost, supply chain and
consumer confidence issues that impact the macro-environment, though we are
committed to delivering further strategic progress during the remainder of the
year."

 

Notice of Results

Sanderson Design Group expects to announce its interim results for the six
months ended 31 July 2022 on 11 October 2022.

 

For further information:

 Sanderson Design Group PLC                        c/o Buchanan +44 (0) 20 7466 5000
 Lisa Montague, Chief Executive Officer
 Mike Woodcock, Chief Financial Officer
 Caroline Geary, Company Secretary

 Investec Bank plc (Nominated Adviser and Broker)  +44 (0) 20 7597 5970
 David Anderson / Alex Wright / Ben Farrow

 Buchanan                                          +44 (0) 20 7466 5000
 Mark Court / 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, Scion, Clarke & Clarke and Archive by Sanderson Design.

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 600 people, and its products are
sold worldwide. It has showrooms in London, New York, Chicago, Amsterdam and
Dubai.

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)

 

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