REG - Sanderson Design Grp - Interim Results
11/10/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221011:nRSK4086Ca&default-theme=true
RNS Number : 4086C Sanderson Design Group PLC 11 October 2022
11 October 2022
SANDERSON DESIGN GROUP PLC
("Sanderson Design Group", the "Company" or the "Group")
Interim Results for the six months ended 31 July 2022
Profit growth driven by licensing income, US sales and the Morris & Co.
brand
Full year trading remains in line with Board expectations
Sanderson Design Group PLC (AIM: SDG), the luxury interior design and
furnishings group, announces its unaudited financial results for the six
months ended 31 July 2022.
Financial
highlights
Six months % Change Year ended 31 January
ended 31 July
2022 2021 2022
Revenue £57.9m £57.5m 0.7% £112.2m
Adjusted underlying profit before tax* £6.3m £5.6m** 12.5% £12.5m
Adjusted underlying EPS* 6.90p 6.11p** 12.9% 13.75p
Statutory profit before tax £5.5m £4.9m 12.2% £10.4m
Statutory profit after tax £4.2m £3.8m 10.5% £7.8m
Basic EPS 5.89p 5.31p 10.9% 10.93p
Net cash*** £15.0m £15.4m (2.6%) £19.1m
Dividend per share 0.75p 0.75p - 3.50p
*excluding share-based incentives, defined benefit pension charge and
non-underlying items as summarised in note 5
** refer to note 5(b) for details on the prior year reclassification
*** Net cash is defined as cash and cash equivalents less borrowings. For the
purpose of this definition, borrowings do not include lease liabilities
· Revenue up 0.7% at £57.9m (H1 FY22: £57.5m), representing a
resilient sales performance in a challenging market
· Strong performance from licensing with revenue up 90.0% at £3.8m
(H1 FY22: £2.0m) in reported currency
· Brand product sales down 2.5% in reported and constant currency at
£42.2m (H1 FY22: £43.3m), impacted by cessation of trade in Russia and
Brexit customs benefit in prior period
o Strong growth from the Morris & Co. brand, with sales up
20.8% in the UK and up 53.7% in North America in reported currency (up 42.3%
in constant currency)
o North America continues to deliver a strong performance,
particularly with the Morris & Co., Sanderson and Clarke & Clarke
brands
· Third party manufacturing performed robustly against a strong
comparator with sales down 2.5% in reported currency at £11.9m (H1 FY22:
£12.2m)
· Adjusted underlying profit before tax of £6.3m up 12.5% (H1 FY22:
£5.6m), reflecting management actions and the significant contribution from
higher margin licensing activities. Statutory profit before tax of £5.5m is
up 12.2% (H1 FY22: £4.9m)
· Strong balance sheet with net cash of £15.0m at 31 July 2022 (31
January 2022: £19.1m), following a strategic investment in core stock lines
· Interim dividend of 0.75p per share (H1 FY22: 0.75p)
Operational highlights
· Significant licence renewals in the year-to-date including Bedeck, NEXT
and Williams Sonoma along with strong generation of new collaborations and a
resilient performance from core bedding and Japanese partnerships
· Growth in Morris & Co. brand product sales led by continued
increase in demand for classic designs and sales of Simply Morris, launched
last year
· Harlequin exclusive edit with Brewers/wallpaperdirect created in H1
FY22 and launched to market in September 2022
· US distribution of Harlequin with Perigold and McGee & Co online
has attracted a new customer
Dianne Thompson, Sanderson Design Group's Chairman, said:
"Thanks to the Group's strong and rich portfolio of valuable brands, and the
creative design talent and agility of our teams, we have managed to navigate
the trading challenges of the first half, taking opportunities where possible
to support the strategic progress of the Group.
"I am delighted to see positive developments in North America, where we have
been under-distributed in the past and where management continues to focus.
The UK performance of our top customers is encouraging, whilst challenges
abound in the wider economy.
"Our current year performance to date is testament to the diversity of our
model, and we continue to anticipate meeting Board expectations for the full
year. Given the uncertainties in the current macro-economic and consumer
environment, we look forward with caution and continue to actively manage the
headwinds. We have a high-quality brand portfolio, growing US presence and
strong cash balances to support ongoing investment. Alongside continued
management action to reduce costs and increase efficiency, we remain confident
in the strategy for the business."
Analyst meeting and webcast
A meeting for analysts and institutional investors will be held at 10.00 a.m.
today, 11 October 2022, at the offices of Buchanan, 107 Cheapside, London EC2V
6DN. For details, please contact 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/630e0ad7da906b287e9a13ac
(https://webcasting.buchanan.uk.com/broadcast/630e0ad7da906b287e9a13ac)
A replay 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 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 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, 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) .
This announcement contains certain forward-looking statements that are based
on management's current expectations or beliefs as well as assumptions about
future events. These are subject to risk factors associated with, amongst
other things, the economic and business circumstances occurring from time to
time in the countries and sectors in which Sanderson Design Group operates. It
is believed that the expectations reflected in these statements are reasonable
but they may be affected by a wide range of variables which could cause actual
results, and Sanderson Design Group's plans and objectives, to differ
materially from those currently anticipated or implied in the forward-looking
statements. Investors should not place undue reliance on any such statements.
Nothing in this announcement should be construed as a profit forecast.
CHIEF EXECUTIVE OFFICER'S STRATEGY AND OPERATIONAL REVIEW
INTRODUCTION
We are pleased to report a resilient performance during the six months to 31
July 2022. Most notably, it was a period of improved profitability and margin
progression, driven by operational efficiencies, licensing income, improved US
sales and continued strong growth from the Morris & Co. brand. Whilst the
macro-economic and consumer environments remain difficult to predict, we have
mitigated reduced volumes in brand sales and protected our gross margin
through price increases in February and August 2022. We have continued to make
significant strategic and operational progress, particularly on new licensing
collaborations and on initiatives focused on driving the brands' future
growth.
Of our three key geographic segments - the UK, Northern Europe and North
America, brand product sales showed resilience. In the UK, they were almost
unchanged at £22.1m (H1 FY22: £22.3m) whilst in North America they benefited
from strong currency markets and were up 12.8% in reported currency (3.3% in
constant currency). As previously reported, the decision to cease trade in
Russia, which contributed £0.8m of sales in H1 FY22, impacted brand product
sales in Northern Europe in the first half, down 20.3% in reported currency
and down 16.8% in constant currency.
Overall, third-party manufacturing performed robustly in the first six months
of the year, given the strong comparator at the same time last year as
customers began restocking following the Covid pandemic. We are continuing to
invest in our manufacturing operations to build further on our competitiveness
post-Brexit for both UK and overseas customers and capitalise on future
opportunities.
In support of our focused strategy, our higher margin licensing revenue
performed particularly strongly during the first half, with sales up 90.0% in
reported currency to £3.8m (H1 FY22: £2.0m). This growth was driven by
accelerated income under IFRS 15 of £1.9m (H1 FY22: £0.5m), reflecting new
and extended licensing agreements, along with a robust performance by core
licensees.
Notable licensing agreements signed in the first half include a three-year
renewal with Bedeck, one of our core licensees which has rights in multiple
geographies to a wide range of bedlinen and towelling for the Morris &
Co., Sanderson, Harlequin and Scion brands, and a renewal with NEXT for up to
two years for Morris & Co. womenswear.
The momentum in licensing has continued into the current half with the
announcement in August 2022 of a Sanderson collaboration with Disney. In
addition, the Morris & Co. kitchenware partnership with major US retailer
Williams Sonoma, initially signed in August 2021, has been extended by two
years to 2025. The initial products from the partnership will be fully
launched across the Williams Sonoma retail network on 17 October 2022.
The Morris & Co. brand grew strongly in the first half, with the brand's
product sales up 53.7% in North America in reported currency (up 42.3% in
constant currency) and up 20.8% in the UK.
Overall, brand product sales growth was focused on North America, a key growth
market for us, where, in addition to the strong performance from Morris &
Co., the Clarke & Clarke brand was up 9.2% in reported currency (up 0.9%
in constant currency) and Sanderson was up 6.6% in reported currency (down
1.6% in constant currency).
The Group's net cash balances remained strong at the half year end at £15.0m
(31 January 2022: £19.1m), with the decrease from the end of the last
financial year in part reflecting a strategic investment in inventory to
ensure that our best-selling lines of wallpaper and fabric are always in
stock. In line with our typical buying cycle, inventory peaked at the half
year end and the subsequent focus has been the turn of stock and efficiency to
optimise cover on a reduced portfolio of collections (SKUs) in the current
trading environment.
The strength of our balance sheet protects our business in a time of
macro-economic uncertainty and enables investment in future growth
opportunities and initiatives, including achieving our ZeroBy30 pledge.
Live Beautiful
Our Live Beautiful sustainability strategy, launched in April 2021, has a
broad range of initiatives including two major commitments: for the Company to
be net carbon zero by 2030 and to be the employer of choice in the interior
design and furnishings industry.
Initiatives in the current financial year have included the planned
installation of solar panels at our Standfast & Barracks fabric printing
factor in Lancaster. These panels will cover 3,000 sq. m and, in addition to
contributing electricity to the factory, will result in a carbon reduction of
141.72 tonnes of carbon per annum according to an independent forecast.
LED lighting is being installed across all our locations and the shift towards
digital printing from traditional methods is also reducing our energy
consumption.
Last month, Scion launched a capsule collection of wallpapers and fabrics
created in collaboration with Designs in Mind, a social enterprise that uses
art and design to support people with mental health challenges. The
collection, which was created through workshops hosted by the Scion design
team and is available via the Scion online shop, demonstrates our commitment
to the positive power of design.
People
Sanderson Design Group is a people business that remains committed to the Real
Living Wage. I would like to thank all colleagues for their energy, talent and
commitment during the year to date. I would also like to welcome Shailini
Revel to the Group Leadership Team as Group Marketing and Digital Director,
replacing Nigel Hunt, who left the Company last month after three years of
valued contribution to the business.
OPERATIONAL REVIEW
The table below shows the Group's sales performance in the six months ended 31
July 2022 ('H1 FY23'), compared with H1 FY22.
Six months to July 31 of financial year (£m) Change (%)
2022 2021 Reported Constant currency
Brand product
UK 22.1 22.3 (0.9%) (0.9%)
Northern Europe 5.5 6.9 (20.3%) (16.8%)
North America 9.7 8.6 12.8% 3.3%
Rest of the World 4.9 5.5 (10.9%) (9.6%)
Total Brand product revenue 42.2 43.3 (2.5%) (3.5%)
Total Licensing revenue 3.8 2.0 90.0% 89.3%
Total Brand revenue 46.0 45.3 1.5% 2.5%
Manufacturing*
External 11.9 12.2 (2.5%) -
Internal 9.8 8.8 11.4% -
Total Manufacturing revenue 21.7 21.0 3.3% -
Intercompany eliminations* (9.8) (8.8) 11.4% -
TOTAL REVENUE* 57.9 57.5 0.7% -
*does not report in constant exchange rate
The Brands
The brands segment comprises Morris & Co, Sanderson, Clarke & Clarke,
Harlequin, Zoffany, Scion, and Archive by Sanderson Design. It also includes
licensing income as well as global trading from the brands, including our
overseas operations in the US, Dubai, Netherlands and Germany.
Morris & Co.
Morris & Co. sales in the first half were £9.5m in reported currency, an
increase of 15.5% on the first half last year. Sales in the UK were up 20.8%,
in Northern Europe were down 13.2% and in North America were up 53.7% in
reported currency (in constant currency, Northern Europe sales were down 9.1%
and North America sales were up 42.3%).
Morris & Co. continues to be the Group's fastest growing brand and the
focus of exciting licensing collaborations. Brand product sales in the first
half have been driven by the launch of a second collection by Ben Pentreath,
the influential architect and designer, and also by sales of the Simply Morris
collection, which was launched last year.
Licence income during the first half has been driven both by accelerated
income from new and extended licensing agreements and by income from existing
licensees, with apparel collections from NEXT performing particularly well. In
July 2022, NEXT extended its licensing agreement for Morris & Co.
womenswear for up to two years, starting from April 2023.
Morris & Co. paints were relaunched in February 2022, after being
unavailable since 2008 owing to a change in manufacturing regulations. The new
range of paints, based on historic William Morris colour recipes and
documents, have been well received and are now available through national
retailers.
Exciting collaborations signed in the first half include a sponsorship
agreement with the Emery Walker Trust, a charity that preserves the London
home of Emery Walker, a typographer, engraver and dear friend of William
Morris. The Morris & Co. brand will next year launch a collection of
fabrics, wallpapers, bedding and homewares based on inspirational items and
stories from the house.
One of the Company's incubator initiatives to test direct-to-consumer sales is
a Morris & Co. concession in Harrods at its flagship location in
Knightsbridge. The Morris & Co. Home Emporium at Harrods opened in April
this year and will be launched online at Harrods.com ahead of the peak trading
season.
Sanderson
Sanderson sales in the first half were £7.2m in reported currency, a decrease
of 4.4% on the first half last year. Sales in the UK were down 0.8%, in
Northern Europe were down 29.4% and in North America were up 6.6% in reported
currency (in constant currency, Northern Europe sales were down 27.8% and
North America sales were down 1.6%).
Sanderson also attracts licensing income, and in August 2022, the Company
announced an exciting licensing agreement with Disney. The Sanderson archive
includes a unique collection of original wallpapers and fabrics, dating back
to the 1930s, based on classic Disney characters. Products created under this
licensing agreement will be distributed internationally from next year.
In October 2022, we announced another exciting development for the Sanderson
brand in a collaboration with Giles Deacon, the renowned, London-based couture
designer and illustrator, who will create a capsule collection of fabrics,
wallpapers and apparel. The collection will be based on an innovative
reworking of original Sanderson designs and launch in Spring 2024, bringing
fashion to the Sanderson brand to create future nostalgia from classic
creations.
Zoffany
Zoffany sales in the first half were £4.2m in reported currency, a decrease
of 5.3% on the first half last year. Sales in the UK were down 3.6%, in
Northern Europe were down 15.8% and in North America were down 2.6% (in
constant currency, Northern Europe sales were down 13.9% and North America
sales were down 10.0%).
Designer Ruth Blanke's addition to the Palladio collection of wallpapers,
Avalonis, was launched in February 2022. Ruth won last year's Royal College of
Art award to create a new wallpaper for the Palladio wallpaper collection, an
award for new designers offered annually by the Company.
Clarke & Clarke
Clarke & Clarke sales in the first half were £11.8m in reported currency,
a decrease of 6.0% on the first half last year. Sales in the UK were down
8.2%, in Northern Europe were down 9.1% and in North America were up 9.2% (in
constant currency, Northern Europe sales were down 7.1% and North America
sales were up 0.9%).
Sales in North America, where the brand is distributed by Kravet Inc, were
resilient against a strong comparator. The brand's exciting partnership with
heritage tableware company Wedgwood resulted in the launch of Wedgwood
homewares in March this year, including fabrics and wallpapers for
international distribution through both brands' networks.
Harlequin
Harlequin sales in the first half were £8.3m in reported currency, a decrease
of 9.0% on the first half last year. Sales in the UK were down 1.6%, in
Northern Europe were down 34.6% and in North America were down 3.0% (in
constant currency, Northern Europe sales were down 33.0% and North America
sales were down 10.4%).
The brand has performed well at John Lewis Partnership. In September 2022,
Brewers/wallpaperdirect launched exclusively a special edit of designs backed
by a stock commitment.
The focus for the Harlequin brand has been to drive renewed impetus through
colour science, expressed in the Own the Room campaign and colour quiz, which
seek to empower consumers to choose the best designs and colours for their
individual emotional and physical well-being. Harlequin collections are
presented as colour stories to suit each of four profiles: Rewild, Reflect,
Retreat and Renew.
The collaboration with Sophie Robinson, known as the "Queen of Colour"
announced in June 2022, is a further step in inspiring people to put colours
together to suit individual styles. Working with Harlequin, Sophie will create
a capsule collection of wallpapers and fabrics using her signature bright
colours and exuberant styling for launch in Autumn 2023.
Scion
Scion sales in the first half were £1.0m in reported currency, a decrease of
17.2% on the first half last year. Sales in the UK were down 9.3%, in
Northern Europe were down 39.5% and in North America were down 11.6% (in
constant currency, Northern Europe sales were down 38.1% in North America
sales were down 18.7%).
As part of advancing the Group's digital strategy, Scion products are also
sold direct-to-consumer via www.scionliving.com (http://www.scionliving.com) ,
an online shop created by the leading internet retailer Jane Clayton and
Company. Scion designs are also highly suited to out-licensing across a wide
range of homewares.
Archive by Sanderson Design
Archive by Sanderson Design is a new, direct-to-consumer brand launched in
September 2021 to test the route to market. This maximalist offer targets
digitally native consumers, new customers for the Group, and is an important
part of our strategy to test with new routes to market. The first-year
performance of this heritage-powered brand indicates that there is a broader
direct-to-consumer opportunity to be further explored with online wholesale
partners ahead of further investment in the digital platform to support this
venture.
Manufacturing
Our manufacturing operations performed robustly in the first half, with
third-party orders down 2.5% in reported currency compared with the first half
last year reflecting a strong comparator characterised by restocking
post-Covid.
Our fabric printers, Standfast, continue to benefit from import duties imposed
post Brexit which encourages UK customers to source domestically. Standfast
also has a high proportion of customers in a relatively buoyant US market
which has helped boost revenues in the first half. Conversely our wallpaper
manufacturer, Anstey has traditionally been more focussed on the European
market where current trading conditions are significantly tougher.
We are committed to continued investment in digital capacity in both our
manufacturing plants. Investment in the current financial year is expected to
focus on Anstey, where, in line with our capital expenditure plan, two digital
printers with different capabilities are planned for installation this year at
a cost of approximately £1.5m. One of the printers allows white backgrounds
to be printed digitally at Anstey for the first time and the other offers very
rapid print speeds. Both are more environmentally friendly than traditional
techniques and are expected to enable the factory to compete for additional
business. The introduction of a new ERP system at Standfast & Barracks
which will capture data far more effectively than our legacy system and allow
us to generate further efficiencies is expected to complete in H1 FY24.
CURRENT TRADING AND OUTLOOK
The Board remains confident in the strategy for the business and accepts that,
in challenging markets, we need to look ahead with caution. Uncertainties
abound in the current macro-economic and consumer environment so we remain
focused on mitigating the potential impact of these issues on our business
where we can.
We have focused on building a diversified model backed by our world class
brand portfolio and strong balance sheet to enable self-funded growth. To that
end, our performance in the first half of the financial year was resilient,
with a profit performance driven by licensing income and margin improvement,
as a result of operational efficiencies, growing US sales and the Morris &
Co. brand. August 2022 was a softer summer month than last year but September
and the first week of October 2022 have shown growth. Our key Autumn selling
weeks in October 2022 and November 2022 have just started and, whilst we are
vigilant in respect of ongoing external factors, we continue to anticipate
meeting Board expectations for the full year.
CHIEF FINANCIAL OFFICER'S REVIEW
Key Financial Indicators
We measure and monitor key performance and financial indicators across the
Group. We set out below a summary of the Group's key financial indicators.
Six months ended 31 July
2022 2021
Revenue (£m) 57.9 57.5
Profit before tax (£m) 5.5 4.9
Profit before tax (%) 9.5% 8.5%
Basic earnings per share (pence) 5.89p 5.31p
Adjusted underlying profit before tax* (£m) 6.3 5.6
Adjusted underlying profit before tax* (%) 10.9% 9.7%
Adjusted earnings per share* (pence) 6.90p 6.11p
Net cash (£m) 15.0 15.4
Inventory (£m) 26.7 18.7
Capital expenditure (£m) 1.5 1.2
*excluding share-based incentives, defined benefit pension charge and
non-underlying items as summarised in note 5
Revenue
Group sales in the six-month period of £57.9m (comprising Brand product and
external Manufacturing sales along with licensing revenue) were up 0.7%
compared with the same period last year (H1 FY22: £57.5m), unchanged on a
constant currency basis.
Six months ended 31 July
2022 2021 Change
Revenue £m £m %
Brands 42.2 43.2 (2.5%)
Licensing 3.8 2.0 90.0%
Total Brands 46.0 45.3 1.5%
Manufacturing - External 11.9 12.2 (2.5%)
Group 57.9 57.5 (0.7%)
Brand product
Brand product revenue was driven by a strong performance in the targeted
growth market of the US, along with continued strong growth from the Morris
& Co. brand.
Brand product revenue at £42.2m was down 2.5% against H1 FY22 at reported
rates, unchanged on a constant currency basis. Revenue in the prior year
benefited from approximately £0.6m of predominantly European dispatches
delayed from the financial year ended 31 January 2021, due to customs delays
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 £0.8m of sales compared with H1 FY22. Excluding
these two factors, Brand product revenue was up 0.9% against H1 FY22 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, with third-party orders down 2.5% in reported currency
compared with the first half last year reflecting a strong comparator as
customers emerged from the Covid pandemic and commenced restocking.
Licensing
Total licensing revenue was up 90.0% at £3.8m (H1 FY22: £2.0m), driven by
£1.9m (H1 FY22: £0.5m) of accelerated income.
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 October 2022.
Gross profit
Gross profit for the period was £38.1m, compared with £35.9m in H1 FY22,
whilst the gross profit margin at 65.8% represents an increase of 340 basis
points over H1 FY22.
Excluding the impact of licence income, which generates 100% gross profit,
margins improved to 63.4% in the current period versus 61.1% for H1 FY22. This
improvement continues to be driven by changes in sales mix towards higher
margin brands, and increased levels of digital production in our two
manufacturing locations.
Cognisant of the inflationary environment during the period, price increases
were put through in February and August 2022.
Six months ended 31 July
2022 2021
Product Revenue (£m) 54.1 55.5
Gross profit (£m) 34.3 33.9
% 63.4% 61.1%
Licence Revenue (£m) 3.8 2.0
Gross profit (£m) 3.8 2.0
% 100% 100%
Total Revenue (£m) 57.9 57.5
Gross profit (£m) 38.1 35.9
% 65.8% 62.4%
We benefit from a fixed price Gas contract that was signed in June 2021 and is
not due for renewal until October 2023. Our fixed term electricity agreement
was due for renewal on 1 October this year and we are now paying at the
government capped rate which represents a £700,000 per annum increase on
previous levels. Without this support our electricity bills would increase
by a further £2m per annum (an increase we would seek to mitigate through a
variety of measures including energy reduction strategies coupled with ongoing
price reviews).
Profit before tax
Profit before tax for the period was £5.5m, up from £4.9m for H1 FY22.
Six months ended 31 July (£m)
2022 2021
Revenue 57.9 57.5
Gross profit 38.1 35.9
Distribution and selling expenses (12.7) (12.0)
Administration expenses (22.4) (21.0)
Other operating income 2.3 2.0
Net finance income 0.1 -
Profit before tax 5.5 4.9
In the prior year costs, particularly in H1 FY22, continued to be impacted by
cuts to discretionary expenditure and a hiring freeze that had been put in
place in response to Covid. In H2 FY22, many of these activities recommenced
and the full year-impact can be seen in the results to 31 July 2022.
Distribution and selling expenses of £12.7m represented 21.9% of revenue in
the period compared with 20.8% in H1 FY22 and 22.3% for the full year ended 31
January 2022.
Administration expenses grew to £22.4m in the current period from £21.0m for
H1 FY22. Marketing spend has returned to pre-pandemic levels and the full year
impact of recruitment in H2 FY22 also impacted this area.
Despite the inflationary pressures in the wider economy, the benefits of our
restructuring and ongoing cost efficiency can be seen in that administration
expenses remain £0.5m below (the pre-Covid) H1 FY20 levels.
Other operating income of £2.3m (H1 FY22: £2.0m) comprises consideration
received from marketing materials.
Adjusted underlying profit before tax
Adjusted underlying profit before tax was £6.3m, up from £5.6m in H1 FY22.
Six months ended 31 July (£m)
2022 2021
Profit before tax 5.5 4.9
Amortisation of acquired intangible assets 0.5 0.5
Forgiveness of loan under the Paycheck Protection Programme - (0.4)
Underlying profit before tax 6.0 5.0
LTIP accounting charge - 0.4
Net defined benefit pension charge 0.3 0.2
Adjusted underlying profit before tax 6.3 5.6
Non-underlying items comprise:
- Amortisation of intangible assets: £0.5m in respect of the acquisition
of Clarke & Clarke in October 2016.
- Forgiveness of loan: In April 2021 the Group successfully applied for
the forgiveness of a £0.4m loan awarded under the US Paycheck Protection
Programme.
Taxation
Tax for the period is charged on profit before tax based on the forecast
effective tax rate for the full year. The estimated effective tax rate (before
adjusting items) for the period is 23.4% (H1 FY22: 21.4%). This is driven by
permanent differences (non-qualifying depreciation and the super deduction),
and the differential between the current and deferred tax rate. Tax charge for
the period was, therefore, £1.3m (H1 FY22: £1.2m).
Earnings per share
Representative of the improved financial performance for the period, basic
reported EPS for the period was 5.89p (H1 FY22: 5.31p). The Group also reports
an adjusted underlying EPS which adjusts for the impact of the LTIP accounting
charge, net defined benefit pension charge and non-underlying items. The
adjusted underlying basic EPS for the period was 6.90p (H1 FY22: 6.11p). The
diluted EPS for the period was 5.83p (H1 FY22: 5.19p).
Working capital
(all figures in £m) 31 July 2022 31 July 2021 31 January 2022
Inventories 26.7 18.7 22.7
Trade debtors 12.6 14.0 13.5
Trade creditors (9.9) (9.2) (11.7)
Inventories
Inventory levels have increased as we have made strategic investments in
products with long lead times to ensure we are never out of stock on our
best-selling collections and can fully support new product launches. Inventory
levels peaked at 31 July 2022 and the subsequent focus has been the turn of
stock to more normalised levels.
Trade receivables
The Group continues to experience limited bad debts across our customer base.
However, in the current economic environment we maintain a strong focus on our
credit management procedures to improve controls and to mitigate potential
credit risk.
Capital expenditure
Capital expenditure in the period totalled £1.5m (H1 FY22: £1.2m). We
continue to focus investment in enhancing our digital printing capability in
our manufacturing locations and projects that support our "Live Beautiful"
target of being net carbon ZeroBy30.
Cash position and banking facilities
Cash at the half year was £15.0m compared with £19.1m at 31 January 2022 and
£15.4m at 31 July 2021.The cash outflow for the period was driven mainly
strategic inventory investments of £4.0m in best-selling collections and a
reduction of trade creditors of £1.8m, and partially offset by improvements
in trade debtors of £0.9m.
The Group has banking facilities provided by Barclays Bank plc. The Group has
a £12.5m multi-currency revolving committed credit facility which is due for
renewal in October 2024, further details of which can be found in the Group's
Annual Report and Accounts 2022. The agreement also includes a £5m
uncommitted accordion facility option to further increase available credit
which provides substantial headroom for future growth. Our covenants under the
facility are EBITDA and interest cover measures.
Defined benefit pension
The Group operates two defined benefit pension schemes in the UK both of which
are closed to new members and to future service accrual. In the six months
ended 31 July 2022, the Group made contributions of £1.2m (H1 FY22: £1.1m)
to these schemes. The schemes recorded a surplus of £2.6m at 31 July 2022 (H1
FY22: deficit of £4.7m; 31 January 2022: surplus of £2.6m).
Dividend
A final dividend of 2.75p in respect of the year ended 31 January 2022 was
paid on 12 August 2022 to the shareholders on the Company's register on 15
July 2022.
The Board is announcing a maintained interim dividend of 0.75p for the six
months ended 31 July 2022 (H1 FY22: 0.75p), payable on 25 November 2022 to
shareholders on the register on 28 October 2022. The ex-dividend date is 27
October 2022. This dividend reflects the progress made by the business in the
first half and the strength of the Group's balance sheet whilst also
acknowledging the uncertainties in the current macro-economic and consumer
environment.
Unaudited Consolidated Income Statement
For the six months ended 31 July 2022
Note 6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Revenue 2 57,922 57,515
Cost of sales (19,788) (21,574)
Gross profit 38,134 35,941
Net operating expenses:
Distribution and selling expenses (12,652) (12,014)
Administration expenses (22,371) (21,037)
Other operating income 3 2,272 2,034
Profit from operations 5,383 4,924
Finance income 166 88
Finance costs (83) (84)
Net finance income 83 4
Profit before tax 5,466 4,928
Tax expense 4 (1,282) (1,161)
Profit for the period attributable to owners of the parent 4,184 3,767
Earnings per share - Basic 5 5.89p 5.31p
Earnings per share - Diluted 5 5.83p 5.19p
Adjusted earnings per share - Basic* 5 6.90p 6.11p
Adjusted earnings per share - Diluted* 5 6.82p 5.97p
*the prior year comparatives have been amended to align treatment with the
Annual Report 2022 - see Note 5(b) for details.
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 31 July 2022
6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Profit for the period 4,184 3,767
Other comprehensive income / (expense):
Items that will not be reclassified to profit or loss
Remeasurement of defined benefit pension schemes (856) -
Reduction of deferred tax asset relating 214 -
to pension scheme liability
Total items that will not be reclassified to profit or loss (642) -
Items that may be reclassified subsequently to profit or loss
Currency translation losses (84) (115)
Other comprehensive expense for the period, net of tax (726) (115)
Total comprehensive income for the period attributable to the owners of the 3,458 3,652
parent
Unaudited Consolidated Balance Sheet
As at 31 July 2022
Note As at As at
31 July 31 January
2022 2022
£000 £000
Non-current assets
Intangible assets 26,321 26,979
Property, plant and equipment 11,947 11,258
Right-of-use assets 4,712 3,923
Retirement benefit surplus 2,593 2,577
Minimum guaranteed licensing receivables 2,728 1,619
48,301 46,356
Current assets
Inventories 26,749 22,652
Trade and other receivables 15,586 16,792
Minimum guaranteed licensing receivables 1,327 879
Cash and cash equivalents 6 15,018 19,050
58,680 59,373
Total assets 106,981 105,729
Current liabilities
Trade and other payables (16,062) (20,115)
Lease liabilities (2,259) (1,983)
(18,321) (22,098)
Net current assets 40,359 37,275
Non-current liabilities
Lease liabilities (3,208) (1,920)
Deferred income tax liabilities (2,301) (1,998)
(5,509) (3,918)
Total liabilities (23,830) (26,016)
Net assets 83,151 79,713
Equity
Share capital 710 710
Share premium account 18,682 18,682
Foreign currency translation reserve (880) (796)
Retained earnings 24,132 20,610
Other reserves 40,507 40,507
Total equity 83,151 79,713
Unaudited Consolidated Cash Flow Statement
For the six months ended 31 July 2022
Note 6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Profit before tax 5,466 4,928
Depreciation and impairment of property, plant and equipment and right-of-use 2,588
assets
2,486
Amortisation 846 872
Share-based payment charge 28 353
Net finance income (83) (4)
Forgiveness of a loan into a grant 5(b) - (412)
Defined benefit pension charge 310 233
Defined benefit pension cash contributions (1,182) (1,130)
Cash generated from operating activities 7,871 7,428
(Increase)/decrease in inventories (4,097) 967
Increase in trade, other receivables and minimum guaranteed licensing
receivables
(579) (5,036)
(Decrease)/increase in trade and other payables (4,393) 1,241
Cash (used in)/generated from operations (1,198) 4,600
Corporation tax paid (133) (2,123)
Net cash (used in)/generated from operating activities (1,331) 2,477
Cash flows from investing activities
Interest received 10 11
Purchase of intangible assets (188) (174)
Purchase of property, plant and equipment (1,301) (1,016)
Net cash used in investing activities (1,479) (1,179)
Cash flows from financing activities
Payment of lease liabilities (1,175) (1,263)
Interest paid (83) (72)
Net cash used in financing activities (1,258) (1,335)
Net decrease in cash and cash equivalents (4,068) (37)
Cash and cash equivalents at the beginning of period 19,050 15,549
Effect of exchange rate fluctuations on cash held 36 (72)
Cash and cash equivalents at end of period 6 15,018 15,440
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 31 July 2022
Attributable to owners of the parent company
Other reserves
Share capital Share premium account Retained earnings Capital reserve Merger reserve Foreign currency translation Total
reserve
£000 £000 £000 £000 £000
equity
£000
£000
Balance at 1 February 2022 710 18,682 20,610 43,457 (2,950) (796) 79,713
Profit for the period 4,184 4,184
Other comprehensive income / (expense):
Remeasurements of defined benefit pension - (856) - - - (856)
schemes
Deferred tax relating to pension scheme liability - 214 - - - 214
Currency translation differences - - - - (84) (84)
Total comprehensive income / (expense) - - 3,542 - - (84) 3,458
Transactions with owners, recognised directly in equity:
Long-term incentive plan charge - - 89 - - - 89
Related tax movements on long-term incentive plan - - (109) - - - (109)
Balance at 31 July 2022 710 18,682 24,132 43,457 (2,950) (880) 83,151
Unaudited Consolidated Statement of Changes in Equity (cont'd)
For the six months ended 31 July 2022
Attributable to owners of the parent company
Other reserves
Share capital Share premium account Retained earnings Capital reserve Merger reserve Foreign currency translation Total
reserve
£000 £000 £000 £000 £000
equity
£000
£000
710 18,682 7,729 43,457 (2,950) (866) 66,762
Balance at 1 February 2021
Profit for the period - - 3,767 - - - 3,767
Other comprehensive expense:
Currency translation differences - - - - - (115) (115)
Total comprehensive expense - - 3,767 - - (115) 3,652
Transactions with owners, recognised directly in equity:
Long-term incentive plan charge - - 217 - - - 217
Related tax movements on long-term incentive plan - - 158 - - - 158
710 18,682 11,871 43,457 (2,950) (981) 70,789
Balance at 1 August 2021
Profit for the period - - 3,460 - - 3,460
Remeasurements of defined benefit pension schemes - 6,492 - - - 6,492
Deferred tax relating to pension scheme liability - (1,233) - - - (1,233)
Currency translation differences - - - - - 185 185
Total comprehensive expense - - 8,719 - - 185 8,904
Transactions with owners, recognised directly in equity: - - 36 - - - 36
Long-term incentive plan credit - - (16) - - - (16)
Balance at 31 January 2022 710 18,682 20,610 43,457 (2,950) (796) 79,713
Notes to the unaudited interim financial statements
1. Basis of preparation of unaudited interim financial statements
The interim financial statements have been prepared in accordance with the
accounting policies that the Group expects to apply in its annual financial
statements for the year ending 31 January 2023.
The consolidated financial statements 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 consolidated financial statements have been prepared under the historical
cost convention, except for those assets and liabilities measured at fair
value, as described in the accounting policies. The accounting policies set
out below have been consistently applied to all periods presented unless
otherwise indicated.
The accounting policies adopted in the preparation of these interim financial
statements to 31 July 2022 are consistent with the accounting policies applied
by the Group in its Annual Report and Accounts on, and for the year ended, 31
January 2022.
These interim financial statements for the six months ended 31 July 2022 have
been prepared in accordance with IAS 34, 'Interim Financial Reporting', as
adopted by the UK. The interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 January 2022 prepared in accordance with IFRS. All comparative information
is for the six-month period ended 31 July 2021, except for the Balance Sheet
information which is at 31 January 2022.
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective.
The interim financial statements do not represent statutory accounts for the
purposes of section 434 'Requirements in connection with publication of
statutory accounts' of the Companies Act 2006. The financial information for
the year ended 31 January 2022 is based on the statutory accounts for the
financial year ended 31 January 2022, on which the auditors issued an
unqualified opinion and did not contain a statement under section 498 'Duties
of auditor' of the Companies Act 2006 and have been delivered to the Registrar
of Companies. The interim financial statements for the six-month period ended
31 July 2022 have not been audited.
Critical accounting estimates and judgements
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates. In preparing
these interim financial statements, the significant judgements made by
management in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated
financial statements for the year ended 31 January 2022 - going concern which
is explained in further details below, retirement benefit pension obligations,
impairment of non-financial assets including inventories, revenue recognition
including licensing income and deferred tax recognition, except for changes in
estimates that are required in determining the provision for income taxes.
Going concern
A key accounting judgement for these interim financial statements for the six
months ended 31 July 2022 is the adoption of the going concern basis of
preparation.
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,
including the availability and maturity profile of the Group's financing
facilities and covenant compliance. These interim 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 £12.5m Revolving Credit Facility ("RCF") which is linked to two
covenants. These covenants are tested quarterly on 30 April, 31 July, 31
October and 31 January each year until the debt matures in October 2024.
Throughout the period and up to the date of this report the Company has met
all required covenant tests. The total headroom of the Group on 31 July 2022
was £27.5m (31 January 2022: £31.6m), including cash and cash equivalents of
£15.0m (31 January 2022: £19.1m) and the committed facility of £12.5m (31
January 2022: £12.5m). The Group has also access to an uncommitted accordion
facility of £5.0m with Barclays Bank plc.
In assessing going concern, management has taken account of the potential
further uncertainties caused by Covid-19, the war in Ukraine, inflationary
pressures, rises in interest rates and the depreciation of pound sterling. A
Management Base Case ('MBC') model has been prepared, together with
alternative stress tested scenarios. 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 undoubtedly be different from
the MBC and other scenarios modelled by the Group. If there are significant
negative variations from the MBC, management would act decisively, as they
have done in the last year, to protect the business, particularly its cash
position. Having considered all the comments above the Directors consider that
the Group has 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 12 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.
Principal risks
The Group's activities expose it to a variety of financial risks: market risk
(including foreign exchange risk and interest rate risk), credit risk,
liquidity risk and capital risk. The interim financial statements do not
include all risk management information and disclosures required in the annual
report and accounts; they should be read in conjunction with the Group's
Annual Report and Accounts on 31 January 2022. Information on the principal
risks can be found on page 44 to 46 of the Group's 2022 Annual Report and
Accounts on 31 January 2022 which comprise of trading environment,
competition, foreign exchange, recruitment and retention of key employees,
reputation risk, environmental risk, health and safety risk, major incident or
disaster such as a fire or flood, IT and supply chain pressure. There have
been no changes in either the principal risks or risk management policies
since the year end. The Board approved the interim financial statements on 11
October 2022.
2. 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, and
licensing activities of Morris & Co., Sanderson, Zoffany, Clarke &
Clarke, Harlequin, Scion and Archive by Sanderson Design brands operated from
the UK and its foreign subsidiaries in the US, France, Netherlands and
Germany.
- Manufacturing - comprising the wallcovering and printed fabric manufacturing
businesses operated by Anstey and Standfast & Barracks respectively.
This is the basis on which the Group presents its operating results to the
Board of Directors, which is considered to be 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 and eliminations of inter-segment items, are
presented within 'intercompany eliminations and unallocated'.
a) Principal measures of profit and loss - Income Statement segmental
information
6 months to 31 July 2022 Brands Manufacturing Inter-company eliminations and unallocated Total
£000 £000 £000 £000
UK revenue 22,039 7,827 - 29,866
International revenue 20,131 4,090 - 24,221
Licence revenue 3,835 - - 3,835
Revenue - external 46,005 11,917 - 57,922
Revenue - internal - 9,773 (9,773) -
Total revenue 46,005 21,690 (9,773) 57,922
Profit / (Loss) from operations 3,023 3,193 (833) 5,383
Net finance income - - 83 83
Profit / (Loss) before tax 3,023 3,193 (750) 5,466
Tax expense - - (1,282) (1,282)
Profit / (Loss) for the period 3,023 3,193 (2,032) 4,184
6 months to 31 July 2021 Brands Manufacturing Inter-company eliminations and Total
unallocated
£000 £000
£000
£000
UK revenue 22,263 7,253 - 29,516
International revenue 20,976 4,987 - 25,963
Licence revenue 2,036 - - 2,036
Revenue - external 45,275 12,240 - 57,515
Revenue - internal - 8,807 (8,807) -
Total revenue 45,275 21,047 (8,807) 57,515
Profit / (Loss) from operations 2,876 2,834 (786) 4,924
Net finance income - - 4 4
Profit / (Loss) before tax 2,876 2,834 (782) 4,928
Tax credit - - (1,161) (1,161)
Profit / (Loss) for the period 2,876 2,834 (1,943) 3,767
The segmental Income Statement disclosures are measured in accordance with the
Group's accounting policies as set out in note 1. The Group has revised its
segmental methodology for the year ended 31 January 2022 by reviewing the
allocation of central costs to the Brands unit and restated the prior period's
comparatives to improve the usefulness of the segmentation. 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.
b) Additional segmental revenue information
The segmental revenues of the Group are reported to the CODM in more detail.
One of the analyses presented is revenue by export market for Brands.
Brands international revenue by export market 6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
North America 9,681 8,643
Northern Europe 5,521 6,847
Rest of the World 4,929 5,486
20,131 20,976
Revenue of the Brands reportable segment - revenue from operations in all
territories where the sale is sourced from the Brands operations, together
with contract and licence revenue:
Brands revenue analysis* 6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Clarke & Clarke 11,828 12,582
Morris & Co. 9,462 8,192
Harlequin 8,277 9,098
Sanderson 7,174 7,504
Zoffany 4,247 4,485
Scion 997 1,204
Other brands 185 174
Licensing 3,835 2,036
46,005 45,275
*The Brands reportable segments for the six months ended 31 July 2021 have
been redefined to provide additional focus on each Brand. Revenue of the
Manufacturing reportable segment - including revenues from internal sales to
the Group's Brands:
Manufacturing revenue analysis 6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Standfast 11,265 10,124
Anstey 10,425 10,923
21,690 21,047
3. Other operating income
Other operating income comprises consideration received from the sale of
marketing materials and additional services of £2,272,000 (H1 FY22:
£2,034,000).
4. Tax expense
6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Current tax:
- UK, current tax (759) (848)
- overseas, current tax (61) -
- overseas, adjustment in respect of prior year (54) -
Corporation tax (874) (848)
Deferred tax:
- current period (408) (313)
Deferred tax (408) (313)
Total tax expense for the period (1,282) (1,161)
5. 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 period, 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.
6 months to 31 July 2022 6 months to 31 July 2021*
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 earnings per share 4,184 70,983 5.89 3,767 70,935 5.31
Effect of dilutive securities:
Shares under LTIP 838 1,652
Diluted earnings per share 4,184 71,821 5.83 3,767 72,587 5.19
Adjusted underlying basic and diluted earnings per share:
Add back: LTIP accounting charge 28 353
Add back: Net defined benefit pension charge 310 233
Non-underlying items
(see below)
508 96
Tax effects of non-underlying items with other add backs
(134) (115)
Adjusted underlying basic earnings per share 4,896 70,983 6.90 4,334 70,935 6.11
Adjusted underlying diluted earnings per share 4,896 71,821 6.82 4,334 72,587 5.97
* the prior year comparatives have been amended to align with the treatment of
a forgiveness of loan in the Annual Report 2022 - see Note 5(b) for details.
The Group issued ordinary share capital with voting rights consists of
70,983,505 (H1 FY22: 70,983,505) ordinary shares of which nil (2021: nil)
ordinary shares are held in treasury and 220 (H1 FY22: nil) ordinary shares
are held by the Walker Greenbank PLC EBT. Shares held in treasury or by the
EBT are treated as cancelled when calculating EPS.
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.
Adjusted underlying profit before tax:
6 months to 31 July 2022 6 months to 31 July 2021
£000 £000
Statutory profit before tax 5,466 4,928
Amortisation of acquired intangible assets (a) 508 508
Forgiveness of loan under the Paycheck Protection Programme (b) - (412)
Net non-underlying charge included in 508 96
statutory profit before tax
Underlying profit before tax 5,974 5,024
LTIP accounting charge 28 353
Net defined benefit pension charge 310 233
Adjusted underlying profit before tax 6,312 5,610
In calculating the adjusted underlying profit before tax, the Group adjusts
for non-underlying items which are material non-recurring items or items
considered to be non-operational in nature. The nature of these adjustments is
outlined as follows:
-Amortisation of acquired intangible assets £508,000 (H1 FY22: £508,000).
-In May 2020, the Group entered a loan contract with Wells Fargo for
US$565,818 under the US Paycheck Protection Programme scheme. In June 2021,
this loan was forgiven, and the Group treated the forgiveness as a grant for
£412,000. For the period ended 31 July 2021 this grant was included within
the underlying profit before tax. In the audited annual report and accounts
for the period ended 31 January 2022, the Group reclassified this grant as a
non-underlying income. The comparative for the period ended 31 July 2021 is
therefore adjusted to treat this grant as a non-underlying income to aid
comparability.
6. Analysis of net funds
1 February 2022 Cash flow Other 31 July 2022
non-cash changes
£000 £000
£000
£000
Cash and cash equivalents 19,050 (4,068) 36 15,018
Total funds 19,050 (4,068) 36 15,018
Lease liabilities (3,903) 1,175 (2,739) (5,467)
Total debt (3,903) 1,175 (2,739) (5,467)
Net funds/(debts) 15,147 (2,893) (2,703) 9,551
Other non-cash changes are exchange gains/(losses) from the retranslation of
bank balances held in non-sterling bank accounts and new additions to
right-of-use assets.
7. Dividends
During the period to 31 July 2021, the Group has not paid any dividends.
For dividends related to the financial year ended 31 January 2022, the Company
paid:
- an interim dividend of 0.75p (£532,000) on 26 November 2021.
- a final dividend of 2.75p (£1,951,000) on 12 August 2022.
The Board has proposed an interim dividend of 0.75p per share to be paid on 25
November 2022 to the shareholders on the Company's register on 28 October
2022. The ex-dividend date is 27 October 2022.
These interim financial statements have not been audited or reviewed by
auditors pursuant to the Financial Reporting Council guidance on Review of
Interim Financial Information.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR DGBDGSGBDGDGRecent news on Sanderson Design
See all newsREG - Sanderson Design Grp - Renewal of Blinds 2go Licensing Agreement
AnnouncementRCS - Sanderson Design Grp - Collaboration agreement for Morris & Co in the US
AnnouncementREG - Sanderson Design Grp - Notification of Full Year Results
AnnouncementREG - Sanderson Design Grp - Head office move to West London
AnnouncementREG - Sanderson Design Grp - Collaboration for online shop for Morris & Co.
Announcement