Shares in luxury interior furnishings firm Sanderson Design (SDG:AIM) skipped 12.5% higher to 166p on the news profits for the six months to July 2021 are expected to be ahead of management expectations.
The latest upgrade follows continued positive trading in February, March and April, with the wallpapers-to-fabrics maker profiting from pent-up demand for home interiors, a ‘sustained trend towards decorative styles’ and increased demand for British design and manufacturing post-Brexit.
POSITIVE MOMENTUM CONTINUES
Over the first 23 weeks of the financial year to January 2022, Sanderson Design generated sales of £50.9 million thanks to strong performances from its manufacturing business, the Morris & Co brand and the US market.
This was 39.8% ahead of the Covid-impacted period last year and up 1.4% on the same period in the pre-pandemic year to January 2020.
‘The comparison with the 2020 financial year is encouraging,’ insisted Sanderson Design, ‘given that the brands have continued to be affected by Covid-related restrictions in the UK and other key European markets during the current half year’.
STRONG DEMAND STATESIDE
In export markets, North America has delivered ‘exceptional performance’ with strong demand signalling ‘renewed consumer confidence since the change of administration in the US’, according to the company.
Sanderson Design said Northern Europe continues to benefit from the strength of the Morris & Co brand, whilst sales in the Republic of Ireland are recovering from the disruption of Brexit and Southern Europe ‘still lags’.
By brand, Sanderson is performing well, with the 160th anniversary collection having been well received along with the positive impact of a recently launched campaign with England rugby star Maro Itoje.
‘Whilst the Covid-19 pandemic and potential cost inflation continue to create some uncertainties for the near-term outlook, our focus remains on mitigating the potential impact of those uncertainties and continuing to progress the company’s strategic development,’ said chairman Dianne Thompson.
Sanderson Design is making good progress under the leadership of CEO Lisa Montague, delivering on her strategy to launch fewer but stronger collections.
In May, the company posted better than expected profits for the year to January 2021, prompting Investec to upgrade its January 2022 pre-tax profit estimate by 52% to £9.5 million.
Investors can expect an update on a return to dividend payments and a further update on trading with the half year results in mid-October.
