Sanderson Design Share Discussion Threads

[trombone_89] 04/11/2024 08:38

I don't get it, they need to take cost out of the business not add more in

[woozle1] 28/10/2024 09:06

V easy to upfront. Let's say they sign an agreement where a company guarantees to pay SDG £2m a year for 3 years. You can opt to account for that as £6m revenue in the year it is signed and create a corresponding receivable in the cashflow statement. So suddenly metrics like Gross Profit, Operating Profit, and EPS (on which management is no doubt incentivized) go up. That's why one needs to keep an eye on the cashflow statement (THE WHOLE TIME!).

In the meantime, senior NEDs and executives gorge themselves at the expense of shareholders. I do think there is a case for every board having a major shareholder on the board.

[joe say] 28/10/2024 08:16

Minimum guaranteed licensing receivables

In accordance with IFRS 15, the Group recognises the fair value of fixed minimum guaranteed income that arises under multi-year licensing agreements, in full upon signature of the agreement, provided there are no further performance conditions for the Group to fulfil. A corresponding receivable balance is generated which then reduces as payments are received from the licence partner in accordance with the performance obligations laid down in the agreement (usually the passing of time)

[bertiebingo] 26/10/2024 13:18

Interesting ! How can see the licensing revenue has been brought forward ?

[joe say] 26/10/2024 08:01

Your comment

It would appear that they accelerate some of this licensing revenue (that makes me nervous)

It shouldn't - in fact it should give you comfort as that's how the accounting standards insist its recorded.

But I do agree with your other observations (and those noting that the directors cheque books are locked away)

[barnesian] 25/10/2024 15:48

Woozle - or ripe for takeover. Great IP.

[woozle1] 25/10/2024 15:22

I'm an investor in CFX and thought I'd go through the report and accounts as a read-across and see if SDG is interesting. A few observations:

If you back out of the licensing business, it appears to be loss-making
It would appear that they accelerate some of this licensing revenue (that makes me nervous)
I'm surprised that they are loss-making on the luxury brands when you consider the cash generation at CFX
Chair and NEDs paid an awful lot of money for such a small company
There are too many accountants on the Board
Managing defined benefit pension schemes

On the plus side
CEO has a good pedigree
It has some excellent brands (which they could sell to CFX if it becomes unstuck)

The bottom line is that if the licensing does not deliver the business is in trouble.

[essentialinvestor] 25/10/2024 11:53

A bit late on the ..profit warning coming!.

But yes, the complete lack of any BOD buying looks.....

[skyracer] 25/10/2024 11:14

"Our forward expenditure programme is closely aligned to our Live Beautiful strategy with capital maintenance projects only being approved if they can be proven to support us on our journey to ZeroBy30."

LTIP performance condition "The third underpin is a sustainability measure, which includes making progress on the roadmap to the NetZeroby30 pledge."

Really ?

Not with my cash. I have done well with Walker Greenbank over the years but I think they have lost their business focus at a bad time. If the "improvement in trading" on which they are "reliant" does not come there could be a nasty profit warning coming.

[salver2] 18/10/2024 14:57

I don’t disagree with you -pretty poor -they need to pull a rabbit out of a hat somewhere

[essentialinvestor] 18/10/2024 14:43

Not a single BOD buy post update, oh my.

[salver2] 17/10/2024 13:25

All good points but I don’t know the answer-they’ve hung their hat on American growth but it’s not exactly great there either

[disc0dave46] 17/10/2024 12:49

Why was digital wallpaper printing only 19% of their production, with 81% being via traditional methods?. Isn't it the digital printing that they've invested heavily in too. Okay it's improved now to 27% but why do low, the digital printing for curtains is a lot higher. But combined is only about 52% (by my calcs) of total production.Don't tell me that a lot of their wallpaper designs aren't suitable for digital printing?, surely not.

[salver2] 17/10/2024 12:12

I still hold a little less than 2 percent of Colefax and about .5 percent of SDG -done very well in Colefax and now even to slightly down on Sdg having bought at various levels 37 pence to just over a pound (should have sold when they were over 2 pounds but that’s life!)but now regretting some of the Colefax I sold at 2.30!Somehow they need to move the dial somehow and get the capacities up in the factories-looking back they seem to have paid far too much for Clarke and Clarke -even with all these licences and celebrity tie ups they don’t seem to be moving the dial much-Lisa Montague seems a very clever and engaging lady I always thought she had a bigger plan for the group-the answer is and Disco Dave is correct in asking where is the growth or have they boxed themselves in with their manufacturing??

[essentialinvestor] 17/10/2024 11:27

salver, as you hold both and I'm aware you held about 2% of CFX at one stage (a wealthy gentleman!) - you are in a unique position to give a view here.

[salver2] 17/10/2024 11:23

Yes they haven’t really gone anywhere for 25 years just stayed at a low PE bought back shares and ran a very tight ship-when I first bought them there were something like 33 million shares in circulation and now there are about 6.2 million

[essentialinvestor] 17/10/2024 11:11

salver, you beat me to it.

CFX has little revenue growth, you can look back 20 years plus with that business.

Yet they have maintained profitability.

(I'm ignoring their huge increase in buy back driven EPS).

Colefax generate oodles of cash on modest revenues
and pretty much static turnover.

[salver2] 17/10/2024 10:07

Well Colefax have always been a consistent performer-up about 11-12 fold on my purchase price 26 years ago -they don’t seem to have many problems -65 percent of their business is in the states-they announced recently that their sales were down 12 percent in UK -Colefax are even more high end than Sanderson Group -the main difference is they don’t manufacture like Sanderson

[trt] 17/10/2024 09:18

Up 5% on my purchase from yesterday. Could see another 5% soonish. Yield good at these levels.

[disc0dave46] 17/10/2024 09:11

Sorry but completely disagree, it's a classless / open market. SDG just chose to target high end and it's not working.

[barnesian] 17/10/2024 09:03

Wallpaper used to be a very working class market, covering dodgy walls with cheap surface print design.

Now it is a middle class market. Often just feature walls with good designs at high prices. But it is a fashion market competing with Farrow and Ball etc. That's why a good geographical spread is important as the cycles are different in different markets.

The UK market is down and SDG have exited the top end Russian market but are doing well in the US albeit at small scale.

[disc0dave46] 17/10/2024 08:59

Who's going to pay £359 (sale now £251) for the paper below? (Just a one minute look so sure there's paper even more expensive and IMO even more repulsive!). IMO there digital printing is not gaining any productivity compared to traditional, they target high end which clearly has been suffering so they need to expand their customer base IMO.Https://wallpapersales.co.uk/217327-pygmalion-sanderson-x-giles-deacon-mural

[joe say] 17/10/2024 08:21

Shanklin - its wallpaper that's going out of fashion - curtains is a very small part of the business

And I agree - sales to me is the issue.

They're producing (stocks up) but they can't flog the stuff