In This Article:
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Revenue: Declined to GBP 100.4 million from GBP 108.6 million in the previous year.
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Adjusted Underlying Profit Before Tax: Decreased to GBP 4.4 million from GBP 12.2 million.
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Reported Loss: GBP 13.9 million, including a GBP 16.3 million goodwill write-off.
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Licensing Revenue: Achieved record revenues of GBP 11 million.
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Cash Balance: GBP 5.8 million.
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Gross Profit: GBP 68.4 million, with a gross profit margin of 68.2%.
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Capital Expenditure: GBP 4.1 million, including investments in a new digital pigment printer and factory roof.
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Dividend: Proposed final dividend of 1 penny per share, totaling 1.5p for the year.
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Cost Savings: Annualized savings of GBP 1.5 million from a 15% reduction in manufacturing workforce.
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North America Sales: Core US business increased by 5%, excluding contract sales.
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UK Sales: Domestic sales down 14% at GBP 32.8 million.
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Manufacturing Loss: Both factories reported a loss due to reduced volumes and high fixed costs.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sanderson Design Group PLC (LSE:SDG) successfully launched its first online shop for Morrison Co. in the UK and US, showing promising initial results.
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The company retained a robust balance sheet with a cash balance of GBP 5.8 million and proposed a final dividend of 1 penny per share.
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Licensing revenues reached a record GBP 11 million, with significant contributions from major renewals and new agreements.
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The Sanderson brand saw revenue growth in North America, with sales up 24%, offsetting declines in other regions.
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Strategic initiatives, including digital transformation and cost-saving measures, are expected to improve efficiency and profitability moving forward.
Negative Points
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Revenues declined to GBP 100 million, impacting profitability, with a significant decline in the second half of the year.
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The company reported a loss of GBP 13.9 million, partly due to a GBP 16.3 million goodwill write-off related to the Clark and Clark acquisition.
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Manufacturing volumes were down, leading to losses at both factory sites due to reduced high-margin repeat orders.
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The UK market faced challenging conditions, with domestic sales down 14%, impacting small independent retailers.
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Inflationary pressures increased costs, particularly staff costs, affecting overall profitability.
Q & A Highlights
Q: Could you discuss the future drivers behind gross margin and the impact of omnichannel developments? Also, how flexible is your cost base if consumer confidence doesn't recover? A: Gross margin has shown steady improvement over the past years, and we expect this trend to continue. The shift to direct sales through omnichannel will significantly enhance margins, though the full impact will be seen in the coming years. Regarding cost flexibility, selling and distribution costs are variable, while administration costs are largely fixed. We have levers to adjust costs, including marketing and restructuring, if necessary. Lisa Montague, CEO, and Mike Woodcock, CFO