The £94m capitalised Sanderson Design Group (LON:SDG) is a luxury interior furnishings company that designs, manufactures and markets wallpapers, fabrics and paints.
In its latest Trading Update the group reported strong performances from the Morris & Co. brand, licensing and North America were offset by the group’s withdrawal from the Russian market, and a small decrease in manufacturing revenue.
The company’s high-margin licensing activities performed very strongly in the year to end January 2023, with revenues up approximately 23% at £6.4m, buoyed by the signing of new agreements and the renewal or expansion of existing licensing arrangements.
Overall total revenue for the group for the last year was £112.0m (£112.2m), while the end-year net cash position was £15.2m.
The Business
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.
The group’s brands include Zoffany, Sanderson, Morris & Co., Harlequin, Scion, Clarke & Clarke and Archive by Sanderson Design. Its products are sold globally.
The group, which employs some 600 people, has showrooms in London, New York, Chicago, Amsterdam and Dubai.
Analyst Opinion – still rated as a Buy, looking for 205p
Matthew McEachran at Singer Capital Markets rates the group’s shares as a Buy, looking for 205p as his Target Price.
He goes for adjusted pre-tax profits of £12.7m (£12.5m), with earnings of 13.9p (13.0p) and a dividend of 3.69p (3.50p) per share.
His estimates for the current year now underway are for £116.1m sales and a slightly lower £12.0m profit, with earnings of 12.7p and a standstill dividend of 3.69p per share.
David Jeary at Progressive Research considers that the group managed to steer a steady course in uncertain times.
His estimates for the last year are for adjusted pre-tax profits of £12.7m, worth 14.3p per share in earnings.
He expects to review his 2024 estimates when the group reports its final figures in April.
Conclusion – treading water
The group’s shares at 131p are likely to tread water for a while yet.