SANDERSON DESIGN GROUP
PLC
("Sanderson Design Group", the "Company" or the
"Group")
Trading
Update
Sanderson Design Group PLC (AIM: SDG), the luxury interior design and furnishings group,
announces a trading update for the financial year ending 31 January
2025.
The Group's half year results
announced on 16 October 2024 stated that the Board's expectations
for the full year were reliant on a projected improvement in the
trading environment. The Board now expects Group sales for the year
to be approximately £101 million (FY24: £108.6m), a shortfall of
less than 5% to its earlier expectations, but the resultant sales
mix will have a significant impact on full year
profitability.
Brand product sales for the year are
expected to be down approximately 9% compared with last year (FY24:
£78.8m) after a recent worsening of trading conditions. Brand sales
of wallpapers and fabrics in our retail channel were 5% up in
December 2024, compared with the same month in 2023, whereas sales
in the first two weeks of January are down 13% compared with the
same time last year, with the downturn in consumer confidence being
most significant in the UK, our largest market.
Subdued customer demand,
particularly for fabric, is expected to result in a greater than
anticipated level of year-end stock provisioning although this
inventory is expected to unwind in the coming months. Softness in
the contract market at the end of the year, particularly in North
America, has also impacted Brand product sales although the
pipeline of potential contract orders remains strong.
Licensing has shown good momentum
since the half year results and is expected to end the year
delivering revenue in the region of £10.1 million to £10.9 million
(FY24: £10.9m), with the final outturn dependent on the timing of
signature of contracts in work.
In Manufacturing, third-party orders
have reflected the challenging consumer and industry environment.
Expectations of an improved trading environment towards the end of
the year have not been realised, demand for higher-margin repeat
orders has recently declined and some customers are delaying
planned launches. Although there has been success in new business
wins, this is for smaller print runs of new designs which are at
lower margins owing to initial set up costs.
As a result of the factors outlined
above the Board now expects underlying pre-tax profits for the year
ending 31 January 2025 to be in the region of £4.0 million to £4.8
million.
The Group benefits from a robust
balance sheet and continues to focus on cash generation. Net cash
at 31 January 2025 is expected to be approximately £5 million (H1
FY25: £9.6m; FY24: £16.3m), reflecting the one-off £2.3 million
pension contribution in June 2024, one-off capital expenditure
items of approximately £3 million and slightly increased inventory
levels. Net cash is expected to build in the first half of the new
financial year. In addition, the Group has a committed
undrawn £10 million revolving credit facility and uncommitted £7.5
million accordion.
The Group is continuing to
accelerate strategic changes and focusing on efficiency and cost
savings to better position the business for the current trading
environment and for future growth. The Group benefits from a strong
portfolio of brands, a valuable archive and exciting upcoming
product launches. The Board remains confident in the Group's future
performance once trading conditions improve.
The Group expects to announce its
results for the financial year ending 31 January 2025 in April
2025.
This announcement contains inside information for the purposes
of UK MAR. The person responsible for arranging the release
of this announcement on behalf of the Company is Mike Woodcock,
Chief Financial Officer.
For
further information:
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Sanderson Design Group PLC
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c/o Buchanan +44 (0) 20 7466
5000
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Lisa Montague, Chief Executive
Officer
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Mike Woodcock, Chief Financial
Officer
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Investec Bank plc (Nominated Adviser and Joint
Broker)
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+44 (0) 20 7597
5970
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David Anderson / Ben Farrow /
Charlotte Young
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Singer Capital Markets (Joint Broker)
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+44 (0) 20 7496
3000
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Tom Salvesen / Jen Boorer / James
Todd
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Burson Buchanan
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+44 (0) 20 7466
5000
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Mark Court / Sophie Wills /
Toto Berger / Abigail Gilchrist
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SDG@buchanan.uk.com
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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 580 people and its products are sold worldwide. It
has showrooms in London, New York and Chicago.
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
