H1 trading driven by US and Licensing

Sanderson Design Group (SDG) has reported on its H1 trading performance for the six months to 31 July. The continued strong performances of both the Licensing channel and the US market, echoing last year, have offset the previously anticipated tougher market conditions in the UK. Thus, while group revenues eased back by 2.1% on a reported basis, H1 FY24E’s adjusted underlying profit before tax, supported also by some UK cost savings, is expected to be marginally ahead of last year’s £6.3m, driven by Licensing’s 82% year-on-year increase.

H1 trading driven by US and Licensing


IG Design’s FY23 results delivered a welcome return to underlying profitability as headlined in its April trading update. The group’s planning now shifts from turnaround to a growth-focused strategy beyond its initial aim of recovering pre-pandemic operating margins. IG Design has strengthened its central and DG Americas teams to support this strategy, with experienced hires boasting strong commercial credentials.

Formulating a new course for profitable growth with the ship successfully steadied

G4M delivered FY23 full year results in line with the guidance given in its April trading update. EBITDA came in at £7.4m with year-end net debt of £14.5m. The consumer backdrop remains challenging, especially for retailers of primarily discretionary items. In March, G4M launched its second-hand platform, which plays to both customer service and convenience as well as to its own circular economy credentials. This enhanced margin service will be expanded in terms of product and geographic coverage over the coming year.

Adopting a balanced approach for FY24E

IG Design has announced a successful and favourable outcome to the refinancing of its lending facilities. The new arrangement replaces the previous revolving credit facility (RCF) agreement from 2019, which was subsequently renegotiated in 2022. The new three-year facility is for $125m through an Asset Backed Lending (ABL) structure. This flexes in line with the group’s US receivables and provides ample headroom to finance the key working capital needs over the duration of the facility. In a world of rising central bank interest rates, the lower quantum of the facility coupled with the lower margin than the previous facility should help manage the direct finance charges associated with the facility, as well as provide savings in non-utilisation fees.

Successful refinancing of lending facilities – with lower quantum and margins

IG Design (IGD) has announced the appointment of its new Group Chief Financial Officer (CFO). The group had indicated in its April pre-close trading statement that it was well-advanced in the search for a new CFO, expecting it to be completed shortly. The incoming CFO is Rohan Cummings. He joins from Devro Limited, formally Devro plc, which was listed on the London Stock Exchange until its recent takeover by Dutch company SARIA Nederland BV. His appointment will be effective from 3 July 2023, taking on the role from the Group CEO and CFO, Paul Bal.

Appointment of new Group CFO

Sanderson Design Group (SDG) continues to deliver on its key strategic initiatives and growth drivers despite a challenging global backdrop. The group’s FY23 performance showed flat revenue, with adjusted underlying PBT rising £0.1m to £12.6m. Net cash dropped back to £15.4m, with the total dividend maintained at 3.5p. The star performers were Licensing (reported revenue +25%), the Morris & Co brand (+16%) and the US market (+20%). Our forecast revisions assume more modest sales progression, with global uncertainties offsetting speed of delivery from SDG’s strategy but with profits growing over our forecast horizon.

Delivering to strategy against an unhelpful global backdrop

IG Design Group’s post-close trading update on FY23 to 31 March reveals outperformance in terms of profitability and cash against market expectations. Compared with upgraded guidance to a small adjusted profit before tax for FY23 at the time of the interims, management anticipates a figure of $9m (cf Progressive forecast of $1.9m). Year-end cash of $50m represents around a 66% increase on FY22’s closing position.

FY23 to beat expectations for profit and cash, boding well for longer-term objectives

Distil’s FY23E trading performance has been disappointing, with full-year revenue more than halving, resulting in a higher loss before tax. The disappointing optics primarily reflect the change in business model, moving from a distributor-based model to Distil assuming direct control of supplying its major UK customers. This strategic shift required a one-off but prolonged clearing of stocks from the previous distributor’s supply chain. With this complete, Distil can focus on driving domestic and export revenue growth through multi-channel marketing activities and new product launches.

Q4 revenue performance best of the year, though slightly shy of market expectations

Weaker-than-expected Q4 trading, notably in February and March against soft comparatives, has resulted in G4M guiding to an FY23E EBITDA outturn of between £7.3m and £7.7m, below market expectations. Gross margin of 25.7% (vs 27.8% in FY22) reflected inventory reduction in a tough trading environment. However, year-end net debt of £14.5m is £3m better than expectations of £17.5m, and comfortably within G4M’s borrowing facility.

Forecasts cut on weaker trading, but net debt reduction beats market expectations

Following the February announcement of a major extension of its licensing partnership with NEXT, Sanderson Design Group (SDG) has announced a new multi-year licensing agreement with J Sainsbury plc, marking the first collaboration between the companies. The agreement will see Sainsbury’s Habitat homewares brand and Tu clothing brand partnering with SDG’s Morris & Co and Scion brands to develop a broad range of products for omnichannel distribution to customers. This agreement is testament to both the strength of SDG’s brand portfolio and the strategic rationale of leveraging its unique archive through high-margin licensing agreements.

Major licensing deal with J Sainsbury