SANDERSON DESIGN GROUP
PLC
("Sanderson Design Group", the "Company" or the
"Group")
Full Year Trading
Update
Results in line with
expectations with profitability driven by
Licensing
Sanderson Design Group PLC (AIM: SDG), the luxury interior design and furnishings group,
is pleased to announce its trading update for the financial year
ended 31 January 2024.
The Group has traded in line with
management expectations with the strong growth reported in the half
year results from the Group's licensing activities and North
America continuing in the second half, mitigating the challenging
conditions in the UK which persisted throughout the
year.
Group sales for the year were 3.1%
below the prior year at approximately £108.5 million (FY2023:
£112.0m) in reported currency, down 3.0% in constant currency.
High-margin licensing contributed more than £10 million of Group
sales for the first time at £10.9 million (FY2023: £6.5m).
Licensing has become an important strategic pillar for the Group,
complementing the Group's brands and manufacturing activities and
driving profitability.
Underlying profits for the financial
year ended 31 January 2024 are expected to be approximately £12m
(FY2023: £12.6m), reflecting the strong contribution from licensing
along with the impact of trading conditions in the UK, the Group's
largest market.
The Group's balance sheet remains
strong with net cash of approximately £16.2 million at 31 January
2024 (FY2023: £15.4m; H1 FY24: £15.9m).
Brand product, manufacturing and licensing
revenue
|
Year to 31
January
|
% Change
|
% Change
(CER)
|
(£
million)
|
FY2024 v
FY2023
|
FY2024 v
FY2023
|
|
2024
|
2023
|
REP
|
CER
|
H1
|
H2
|
Brand product
|
UK
|
37.9
|
42.6
|
(11.0)%
|
(11.0)%
|
(11.8)%
|
(10.2)%
|
North America
|
21.2
|
19.8
|
7.1%
|
8.2%
|
5.9%
|
10.5%
|
Northern Europe
|
9.9
|
10.8
|
(8.3)%
|
(8.3)%
|
(8.9)%
|
(7.7)%
|
Rest of the World
|
9.7
|
10.2
|
(4.9)%
|
(5.8)%
|
0%
|
(11.3)%
|
Total Brand product
revenue
|
78.7
|
83.4
|
(5.6)%
|
(5.5)%
|
(5.8)%
|
(5.2)%
|
Manufacturing
|
External
|
18.9
|
22.1
|
(14.5)%
|
(14.5)%
|
(20.2)%
|
(7.4)%
|
Internal
|
16.1
|
16.9
|
(4.7)%
|
(4.7)%
|
(21.6)%
|
19.8%
|
Total Manufacturing
revenue
|
35.0
|
39.0
|
(10.3)%
|
(10.3)%
|
(20.8)%
|
3.7%
|
Licensing
|
Total Licence
revenue
|
10.9
|
6.5
|
67.7%
|
67.7%
|
82.9%
|
46.3%
|
|
TOTAL GROUP
REVENUE
|
108.5
|
112.0
|
(3.1)%
|
(3.0)%
|
(3.0)%
|
(3.0)%
|
The targeted growth market of North
America performed strongly in the year, with brand product sales up
7.1% in reported currency, up 8.2% in constant currency.
Accelerated growth in the second half was driven by Kravet Inc.,
the US distributor of our Clarke & Clarke brand, and reflects
increased momentum following the renewal for five years of Kravet
Inc.'s distribution agreement, which commenced in September
2023.
Outside of North America, and as
already reported, challenging market conditions continued to impact
the UK, Northern Europe and the Rest of the World, primarily
reflecting the subdued consumer backdrop.
Total licensing revenue was up 67.7%
at £10.9 million (FY2023: £6.5m), driven by accelerated income of
£6.5 million (FY2023: £2.4m) from licence agreements signed during
the year, including major new deals with NEXT and Sainsbury's along
with a number of smaller deals, contract renewals and
extensions.
Renewals signed during the year
include a three-year renewal with Bedeck, which was recently
extended by a further two years, and the Morris & Co. deal with
US retailer Williams Sonoma, which was recently extended by a
further year, until August 2026 with new product categories added.
In addition, Williams Sonoma's monogrammed gifting brand Mark &
Graham has recently signed a three-year agreement with the
Sanderson brand for the USA and Canada.
Third-party manufacturing, at £18.9
million, was down 14.5% (FY2023: £22.1m) against a strong
comparator in FY2023, which included restocking post-Covid, and
reflects a return to more normalised inventory requirements.
Digital printing continues to grow at Standfast & Barracks and
at Anstey, where, in light of the current consumer environment and
the reduced resource requirement of digital printing, a review of
the cost base is ongoing.
Outlook
Licensing has become a significant
strategic pillar for the Group whilst, geographically, North
America continues to be a key growth market. We intend to focus on
these two growth drivers and also take advantage of any other
international growth opportunities.
Whilst trading conditions are
expected to remain challenging in the UK and Europe, at this early
stage of the current financial year ending 31 January 2025 the
Board's full year revenue outlook remains unchanged. Certain cost
pressures are expected, including the increase in the Real Living
Wage and property-related costs, such that profitability in the
current financial year is expected to be similar to that of the
year ended 31 January 2024.
The Group continues to benefit from
the strength of its balance sheet, including a strong net cash
position. In addition, the Group's banking facility with Barclays
Bank PLC was renewed on 1 February 2024 for a further five years,
comprising a £10 million revolving credit facility and an
uncommitted £7.5 million accordion to provide further flexibility
if needed.
The Group has a strong pipeline of
product initiatives in the year ahead, including the strategic
focus on the Sanderson brand. Giles Deacon's capsule collection of
Sanderson designs has just been launched, and last year's
successful launch of the Disney Home x Sanderson collection brings
further potential in the current year.
The Group's full year results,
including a detailed update on outlook, are expected to be
announced in April 2024.
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
|
|
|
|
Investec Bank plc (Nominated Adviser and Joint
Broker)
|
+44 (0) 20 7597
5970
|
David Anderson / Ben
Farrow
|
|
|
|
Singer Capital Markets (Joint Broker)
|
+44 (0) 20 7496
3000
|
Tom Salvesen / Jen Boorer / James
Todd
|
|
|
|
Buchanan
|
+44 (0) 20 7466
5000
|
Mark Court / Sophie Wills /
Toto Berger / Abigail Gilchrist
|
|
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 600 people and its products are sold worldwide. It
has showrooms in London, New York, Chicago and
Amsterdam.
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