Home furnishing group Sanderson Design (SDG) delivered a 7.9% increase in underlying pre-tax profit despite a 2.1% slide in first-half sales due to a challenging UK market. It said that UK trading – which represents half of brand sales – had seen revenues down 11.8%, but that had been offset by a strong performance in North America, where constant currency sales climbed 5.9%, and a significant increase in licensing revenue.
Having signed licensing deals with Next and Sainsbury’s, high margin licensing revenues climbed 81.6% to £6.9m. That included £3m of accelerated income from the five-year Next deal, which is expected to see first products launched in spring 2024. Sanderson said it had a “quality” pipeline of new licensing opportunities.
North American sales – which account for a quarter of group revenues – benefitted from the relaunch of its New York showroom, and the renewal of its distribution agreement with US interiors giant Kravet for a further five-years.
And although the UK performance was weak, new product launches including Sophie Robinson's Harlequin collection and a collaboration with Disney are prompting significant interest from trade buyers. A reorganisation of its UK business in response to lower volumes is also
View from Vox
This was a decent performance in a difficult market, and the strategic focus on North America – where Sanderson says it is under-indexed – and on licensing revenues should underpin future growth.
The company said full year expectations remain unchanged, with sales and pre-tax profits expected to slip marginally to £110m and £12.2m, respectively, before resuming growth in FY25.