REG - Sanderson Design Grp - Half Year Trading Update

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RNS Number : 3178U  Sanderson Design Group PLC  07 August 2025

 7 August 2025

SANDERSON DESIGN GROUP PLC

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

 

Half Year Trading Update

Group trading on track to meet full year expectations and net cash continues
to build

 

Sanderson Design Group PLC (AIM: SDG), the luxury interior design and
furnishings group, announces its trading update for the six months ended 31
July 2025.

 

Highlights

·      Group sales in the six-month period were in line with Board
expectations at £48.3 million (H1 FY25: £50.5 million), down 4% in reported
currency and down 3% in constant currency

·      Licensing revenue performed well at £4.4 million (H1 FY25: £4.1
million), with strong growth of 22% in underlying performance (licensing
revenue excluding accelerated income under IFRS 15)

·      Strategic focus on North America continues to deliver sales
growth, with brand product sales up 4% in constant currency (H1 FY25: 6%)

·      The previously announced restructuring at our factories has
resulted in a strong recovery in manufacturing's financial performance and we
continue to expect manufacturing to achieve break-even, or slightly better,
for the current financial year

·      Continued focus on cost efficiencies - management is
well-advanced with a new initiative to further reduce central overhead costs
by approximately £1 million on an annualised basis

·      Strengthened Group balance sheet with net cash of approximately
£7.5 million at 31 July 2025 (31 January 2025: £5.8 million), reflecting a
planned inventory reduction

·      Brand sales in the nine-week period of June and July 2025,
although slightly below last year, performed better than the full six months
to 31 July 2025, providing an early indication of stabilisation in trading

·      Overall, the Group is on track to achieve the Board's
expectations for the full year

 

Brand product, manufacturing and licensing revenue

                              Six months              Change

                              ended 31 July           (%)
                              2025        2024        Reported  Constant currency

                              (H1 FY26)   (H1 FY25)
 Brand product
 UK                           £15.1m      £16.7m      (9%)      (9%)
 North America                £11.2m      £11.1m      1%        4%
 Northern Europe              £4.3m       £4.8m       (10%)     (9%)
 Rest of the World            £4.1m       £4.6m       (10%)     (9%)
 Total Brand product revenue  £34.7m      £37.2m      (7%)      (5%)
 Manufacturing
 External                     £9.2m       £9.2m       (1)%      -
 Internal                     £5.3m       £8.0m       (34%)     -
 Total Manufacturing revenue  £14.5m      £17.2m      (16%)     -
 Licensing
 Total Licensing revenue      £4.4m       £4.1m       6%        -
 Group total revenue          £48.3m      £50.5m      (4%)      (3%)

 

The strategic focus on North America continues to deliver sales growth with
progress in the first half being driven by contract orders.  The heritage
brands, Morris & Co. and Sanderson, continue to perform well in the USA
and the re-energised Harlequin brand is performing strongly.

Our Morris & Co. direct-to-consumer site launched in the USA in March 2025
and has performed ahead of expectations, which is encouraging for the upcoming
launch of direct-to-consumer sites for the Sanderson and Harlequin brands.

The Highgrove by Sanderson collection, whose retail launch was in May 2025,
has been very well received internationally, with requests for samples running
at unprecedented levels for the brand.

Third-party manufacturing at £9.2 million was in line with the same period
last year and, as mentioned earlier, our factories' future financial
performance has been transformed by the restructuring initiatives implemented
earlier this year. The decrease in internal manufacturing revenue at £5.3
million (H1 FY25: £8.0m) was in line with our planned inventory reduction
strategy.  We continue to expect manufacturing to achieve break-even, or
slightly better, for the current financial year.

Licensing revenue was up 6% at £4.4 million (H1 FY25: £4.1m) with underlying
revenue, which excludes the impact of the IFRS 15 accounting standard, growing
strongly to £3.9 million (H1 FY25: £3.2m) and contributing to the Group's
cash generation.

First half accelerated income was £2.4 million (H1 FY25: £2.7m), reflecting
the signing of new licensees, renewals and extensions. Notable agreements
signed in the first half include a renewal in the USA for The Tile Shop with
the Morris & Co. brand, and an extension for the Sanderson brand with
Portmeirion's Royal Worcester tableware. We continue to expect licensing
revenue in the current year to be broadly the same as last year.

 

Balance sheet

The Group's balance sheet has strengthened in the first half with net cash of
approximately £7.5 million as at 31 July 2025 compared with £5.8 million at
31 January 2025 (H1 FY25: £9.6 million). The increase in cash reflects a
planned reduction in inventory and net cash is expected to continue to build
in the remainder of the financial year.

 

Outlook

The Company remains focused on the growth opportunity in North America and on
strategic cost-saving initiatives to align the Group with the current demand
environment, particularly in the UK, and position the Group for future growth.
Through the new cost-saving initiative mentioned above, we expect to save
approximately £1 million on an annualised basis.

The retail launch of Morris & Co.'s first collection with The Huntington
Library, Art Museum and Botanical Gardens ("Huntington"), California, will
take place internationally at the beginning of next month. This collection,
titled The Unfinished Works, includes 26 original but unfinished Morris &
Co. designs, which have rarely been seen and never produced before. The
collaboration with the Huntington represents an exciting new opportunity for
the Morris & Co. brand, bringing a completely new body of work to the Arts
& Crafts community and marking a major event in art history.

Our digitalisation initiatives are progressing well and we are on track to
launch our improved Trade Hub followed by direct-to-consumer sites for the
Sanderson and Harlequin brands.

The Board's expectations for the full year remain unchanged.

 

Notice of Results

Sanderson Design Group expects to announce its interim results for the six
months ended 31 July 2025 on 15 October 2025.

 

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

 Investec Bank plc (Nominated Adviser and Joint Broker)       +44 (0) 20 7597 5970
 David Anderson / Charlotte Young

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

 Burson 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 500 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)

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