| 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:
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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 | |
| |
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| Investec Bank plc (Nominated Adviser and Broker) | +44 (0) 20 7597 5970 |
| David Anderson / Alex Wright / Ben Farrow | |
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| Buchanan | +44 (0) 20 7466 5000 |
| Mark Court / Toto Berger / Abigail Gilchrist | |
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
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