REG - Sanderson Design Grp - Half Year Trading Update

Sanderson DesignAnnouncement

08/08/2023 07:00

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RNS Number : 5713I  Sanderson Design Group PLC  08 August 2023

 8 August 2023

SANDERSON DESIGN GROUP PLC

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

 

Half Year Trading Update

Strong performance from licensing underpins half year profitability

Company remains on track to meet the Board's full year profit expectations

 

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 2023.

A strong performance in the half year from the Group's high-margin licensing
activities and encouraging growth in the US have mitigated the difficult
market conditions in the UK discussed in the Company's AGM statement on 22
June 2023.

Group sales in the six-month period of £56.7 million (comprising Brand
product and external Manufacturing sales along with licensing revenue) were
down 2.1% in reported currency compared with the same period last year (H1
FY23: £57.9m), down 3.0% on a constant currency basis.

The strong contribution from licensing means that adjusted underlying profit
before tax for the half year is expected to be slightly ahead of the same
period last year (H1 FY23: £6.3m).

 

Brand product, manufacturing and licensing revenue

                              Six months to 31 July     Change (%)

                              (£ million)
                              2024         2023         Reported  Constant currency
 Brand product
 UK                           19.5         22.1         (11.8%)   (11.8%)
 North America                10.7         9.7          10.3%     5.9%
 Northern Europe              5.1          5.5          (7.3%)    (8.9%)
 Rest of the World            5.0          4.9          2.0%      0.0%
 Total Brand product revenue  40.3         42.2         (4.5%)    (5.8%)
 Manufacturing
 External                     9.5          11.9         (20.2 %)  -
 Internal                     7.6          9.7          (21.6%)   -
 Total Manufacturing revenue  17.1         21.6         (20.80%)  -
 Licensing
 Total Licence revenue        6.9          3.8          81.6%     -
 Total revenue                56.7         57.9         (2.1%)    (3.0%)

 

Brand product revenue in the first half was impacted by the challenging UK
market, which represented approximately 48% of total brand product revenue.
The targeted growth market of the US continued to perform well, with sales up
10.3% in reported currency. The Rest of the World market benefited from an
increasing number of contract sales to the hospitality market in the Middle
East.

Third-party manufacturing at £9.5 million was down 20.2% compared with the
strong comparator last year (H1 FY23: £11.9m), when customers restocked post
Covid, and reflects a return to more normalised trading conditions. Repeat
orders were down in the first half this year both from third-party and Group
brands, although orders for new collections have held up well.

Licensing performed strongly in the first half with total licensing revenue up
81.6% at £6.9 million (H1 FY23: £3.8m), driven by accelerated income of
£4.9 million (H1 FY23: £1.9m) from recently signed licence agreements.

Major new licensing deals were signed with NEXT and Sainsbury's in February
and March 2023 respectively and a considerable number of licence renewals were
also agreed, underlining the strength of our licensing relationships. Sangetsu
has recently launched Morris Chronicles in Japan, a collection of Morris &
Co. fabrics, wallpapers and floor coverings, and, this autumn, the Company
will launch the Disney Home x Sanderson collection of vintage-inspired fabrics
and wallpapers.

The Company has recently streamlined its UK support function, which is
expected to yield annualised savings of £0.6 million whilst maintaining a
high level of customer focus.

 

Balance sheet

The Group's balance sheet remains strong with net cash of approximately £15.9
million as at 31 July 2023 (H1 FY23: £15.0m), compared with £15.4 million on
31 January 2023.

 

Outlook

As expected, recent consumer trends in the UK have persisted, however, the
Group continues to benefit from significant brand strength and an increasingly
diverse product range and geographical reach. This has helped deliver a robust
Group performance and, in particular, a strong contribution from our
high-margin licensing activities, which has underpinned profitability in the
first half.

The Group remains cautious about the UK economic environment and is committed
to taking mitigating actions where necessary whilst also maintaining momentum
in delivering its strategic objectives.

Focus remains on the significant international growth opportunity in the US
market and the growing pipeline of licencing opportunities, both of which will
underpin trading in H2 FY24 and beyond.

The Group continues to benefit from a strong balance sheet and, whilst the
outlook is uncertain, the Board's expectations for the Group's full year
profits remain unchanged.

 

Notice of Results

Sanderson Design Group expects to announce its interim results for the six
months ended 31 July 2023 on 11 October 2023.

 

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

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

 Singer Capital Markets (Joint Broker)                   +44 (0) 20 7496 3000
 Tom Salvesen / Jen Boorer / Alex Emslie

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

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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