Denham-based Sanderson Design Group says licensing and US activity have boosted half year

A strong licensing performance and encouraging activity in the US helped Buckinghamshire-headquartered interior furnishings company Sanderson Design Group mitigate difficult conditions in the UK in its latest half year, it said.

In a trading update, the company, which designs and manufactures wallpapers, fabrics and paints, said group revenue for the six months to end-July was £56.7 million compared to £57.9 million in the year-earlier period - down 3% on a constant currency basis.

Total licensing revenue was up 81.6% at £6.9 million (H1 FY23: £3.8 million), driven by the accelerated income from recently signed licence agreements.

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Adjusted underlying profit before tax for the half year was expected to be slightly ahead of the same period last year (H1 FY23: £6.3 million), it said.

"Brand product revenue in the first half was impacted by the challenging UK market, which represented approximately 48% of total brand product revenue," the company told investors.

"The targeted growth market of the US continued to perform well, with sales up 10.3% in reported currency. The Rest of the World market benefited from an increasing number of contract sales to the hospitality market in the Middle East."

Major new licensing deals were signed with NEXT and Sainsbury's in February and March this year respectively, while a "considerable" number of licence renewals were also agreed, the company said.

Sangetsu has recently launched Morris Chronicles in Japan, a collection of Morris & Co. fabrics, wallpapers and floor coverings, and this autumn, the company will launch the Disney Home x Sanderson collection of vintage-inspired fabrics and wallpapers.

Looking ahead, Sanderson said that, as expected, recent consumer trends in the UK have persisted, however, it continues to benefit from "significant brand strength and an increasingly diverse product range and geographical reach".

The balance sheet remains strong, it added, with net cash of around £15.9 million at the end of July, compared with £15.4 million on January 31 this year.

While the outlook is uncertain, the board's expectations for full year profits remain unchanged, it added.