Furnishings group Sanderson Design Group PLC has announced a growth in half year sales with profit to be in line with expectations.
According to its trading update for the six months ended 31 July 2022, total sales rose 1% to £57.9m from £57.5m, with UK sales resulting at £22.1m – down 1% from £22.3m.
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 £0.6m 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 £0.8m of sales compared with H1 FY22.
Excluding these two factors, Brand product revenue at £42.2m was up 1% year-on-year at reported rates, unchanged on a constant currency basis.
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.
Total licensing revenue was up 90% at £3.8m, driven by £1.9m 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.
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.”
