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20 Jul 2021 07:00
For immediate release | 20 July 2021 |
SANDERSON DESIGN GROUP PLC
("Sanderson Design Group", the "Company" or the "Group")
AGM Trading Update
Recovery continues with forward momentum
Sanderson Design Group PLC (AIM: SDG), the luxury interior design and furnishings group, will hold its Annual General Meeting ("AGM") at 9.00am today. Ahead of the AGM, which will take place as a closed meeting as detailed in the Notice of AGM, the Company provides the following trading update in respect of the first 23 weeks of the current financial year ending 31 January 2022.
The positive trading in February, March and April 2021, outlined in our full year results announcement on 18 May 2021, has continued throughout the 23-week period with the result that profits for the six months ending 31 July 2021 are expected to be ahead of Board expectations.
Strong performances from manufacturing, the Morris & Co brand and the US market contributed to total Group sales in the first 23 weeks of the current financial year of £50.9 million (comprising Brand product and Manufacturing sales of £47.9 million along with licensing revenue and carriage), up 39.8% compared with the same period in FY 2021 and up 1.4% compared with the same period in FY 2020 in reported currency.
The comparison with the 2020 financial year is encouraging, 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.
The Board believes the Group is benefiting from the convergence of three positive impacts: (1) pent up demand for home interiors, (2) the trend towards maximalism, and (3) the post-Brexit increased demand for British design and manufacturing.
Brand product sales
| First 23 weeks of the financial year to January 31 (£m) | Change (%) 2022 compared with 2021 | Change (%) 2022 compared with 2020
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| 2022 | 2021 | 2020 | Reported | Constant currency | Reported | Constant currency |
UK | 19.1 | 13.4 | 19.9 | 42.5% | 42.5% | (4.0%) | (4.0%) |
International | 17.9 | 13.3 | 18.1 | 34.6% | 38.8% | (1.1%) | 3.5% |
- Northern Europe | 6.0 | 4.8 | 5.7 | 25.0% | 25.0% | 5.3% | 5.3%
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- North America | 7.3 | 4.7 | 7.0 | 55.3% | 69.8% | 4.3% | 14.1% |
- Rest of the World | 4.6 | 3.8 | 5.4 | 21.1% | 21.1% | (14.8%) | (11.5%) |
Total Brand product sales | 37.0 | 26.7 | 38.0 | 38.6% | 40.7% | (2.6%) | (0.5%) |
In export markets, North America has delivered exceptional performance with strong demand signalling renewed consumer confidence since the change of administration in the US. Clarke & Clarke through the Kravet distribution arrangement, and all other brands through the WG Inc subsidiary, are all delivering strong sales. 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 the Maro Itoje campaign launched in April 2021, indicating that the appetite for more decorative style is not confined to Morris & Co.
Manufacturing
| First 23 weeks of the financial year to January 31 (£m) | Change (%) 2022 compared with 2021 | Change (%) 2022 compared with 2020
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| 2022 | 2021 | 2020 | Reported | Reported |
Total Manufacturing sales | 19.4 | 12.8 | 16.1 | 51.6% | 20.5% |
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Total Brand product and Manufacturing sales (excl interco.) | 47.9 | 34.4 | 46.7 | 39.2% | 2.6% |
Manufacturing has performed strongly in the first 23 weeks of the current financial year with sales of £19.4 million, up more than 50% from the same time last year, a period during which both manufacturing sites were affected by Covid-19 closures, and up more than 20% from the same period in FY2020. Both of the manufacturing sites are benefiting from buoyant order books from UK and export customers.
Licensing
Core licensing income, which excludes the recognition of fixed minimum guaranteed licensing income under IFRS 15 and income from apparel contracts, was up 43.9% in the 23-week period compared with the same period last year and up 28.6% compared with same period in FY 2020, driven by online retail Licensing income from apparel has also performed ahead of expectations, with the Morris & Co apparel collaboration at NEXT performing very strongly in the first few weeks since launch.
Balance sheet
The Group's liquidity position remains strong with net funds of £13.9 million as at 16 July 2021 compared with £15.1 million on 31 January 2021, with the decrease primarily reflecting the payment of corporation tax in the current half and a seasonal effect. As anticipated, in June 2021 we received USD 566k in forgiveness for a loan under the Paycheck Protection Payment scheme.
Dianne Thompson, Chairman of Sanderson Design Group, commented: "Our trading performance in the first 23 weeks of the current financial year is ahead of Board expectations, reflecting the strength of our UK manufacturing along with continued demand for home interior products and a sustained trend towards decorative styles.
"We have continued to make good strategic progress in the year to date, including the launch last month of scionliving.com, the direct-to-consumer website collaboration. Initial reactions to the launch have been positive.
"We also continue to make good progress with our sustainability initiative, Live Beautiful. One of our key objectives is to become the employer of choice in our industry. We are, therefore, very pleased that our recent employee engagement survey gave an overall employee satisfaction rating of 78%, which compares with 58% two years ago when the survey was last conducted.
"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.
"As stated in the full year results announced on 18 May 2021, the Board's objective is to return to dividend payments. An update on dividends, and a further update on trading, will be provided with the Company's half year results, which are expected to be announced in mid-October 2021."
For further information:
Sanderson Design Group PLC |
c/o Buchanan +44 (0) 20 7466 5000 |
Lisa Montague, Chief Executive Officer |
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Michael Williamson, Chief Financial Officer |
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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 / Sophie Wills / Toto Berger / Charlotte Slater |
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SDG@buchanan.uk.com
This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
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, Anthology and Clarke & Clarke.
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, Paris, 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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