Sanderson Design Group PLC Half Year Trading Update (8538U)

TIDMSDG

RNS Number : 8538U

Sanderson Design Group PLC

04 August 2022

 
 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 GBP57.9 million (comprising Brand product and external Manufacturing sales along with licensing revenue) were up 1% compared with the same period last year (H1 FY22: GBP57.5 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          Change (%) 
                             31 of financial 
                            year (GBP million) 
                            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 GBP0.6 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 GBP0.8 million of sales compared with H1 FY22. Excluding these two factors, Brand product revenue at GBP42.2 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 GBP3.8 million (H1 FY22: GBP2.0 million), driven by GBP1.9 million (H1 FY22: GBP0.5 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 GBP15.0 million as of 31 July 2022 (H1 FY22: GBP15.4 million), compared with GBP19.1 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:

 
 
   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 Broker)                                   [phone] 
 David Anderson / Alex Wright / Ben 
  Farrow 
 
 Buchanan                                       [phone] 
 Mark Court / Toto Berger / Abigail 
  Gilchrist 
 

[e-mail]

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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August 04, 2022 02:00 ET (06:00 GMT)