**Summary of Sanderson Design Group PLC Half-Year Report (October 2025)**
**Financial Performance (H1 FY26 vs. H1 FY25):**
**Revenue** £48.3 million (down 4% from £50.5 million), with a 3% decline in constant currency. Weakness in the UK, Northern Europe, and Rest of the World offset growth in North America and licensing.
**Adjusted Underlying Profit Before Tax** £2.2 million (unchanged), reflecting cost-saving measures to protect margins.
**Statutory Profit Before Tax** £1.5 million (unchanged).
**Net Cash** Strengthened to £7.8 million (up from £5.8 million in January 2025) due to inventory reduction.
**Interim Dividend** Maintained at 0.50p per share.
**Operational Highlights**
**Licensing** Revenue up 6% to £4.4 million, with strong underlying growth of 22%. Notable agreements include renewals with The Tile Shop (Morris & Co.) and Portmeirion (Sanderson).
**Manufacturing** Third-party sales stable at £9.2 million. Restructuring initiatives completed in January 2025 reduced costs by £1.5 million annually, with manufacturing expected to break even or better.
**Cost Efficiencies** Central overhead costs reduced by £1 million annually, part of £2.5 million in total annualized savings.
**Brand Performance**
North AmericaSales up 4% in constant currency, led by Morris & Co., Sanderson, and Harlequin.
UK and other regionsSales declined due to weak consumer markets.
New launchesHighgrove by Sanderson and Morris & Co. x The Huntington collections well-received.
**Digital Strategy** Launched Morris & Co. direct-to-consumer site in North America, relaunched Trade Hub, and launched Harlequin direct-to-consumer site. Sanderson site planned for H2.
**Strategic Progress**
Focus on North America as a growth market, with accelerated sales growth post-H1.
Omnichannel strategy advancing, with digital platforms supporting trade and direct-to-consumer channels.
Inventory reduction and working capital management strengthened balance sheet.
**Challenges**
Macro-economic uncertainties and unpredictable consumer markets, particularly in the UK and Europe.
US tariff changes led to surcharges on shipments, though impact is being managed.
**Outlook**
Brand sales in the first 9 weeks of H2 up 5% at constant exchange rates, driven by North America, UK, and Rest of the World.
Management confident in meeting full-year expectations despite economic challenges.
Continued focus on cost controldigital expansionand strategic growth initiatives.
**Management Commentary**
Chairman Dianne Thompson and CEO Lisa Montague emphasized strategic progress, cost management, and confidence in the full-year outlook, despite global economic uncertainties.
**Key Metrics**
**Gross Profit Margin** 68.3% (down 60 basis points).
**Adjusted Underlying EPS** 2.22p (unchanged).
**Net Cash** £7.8 million (up from £5.8 million).
**Conclusion**
Sanderson Design Group demonstrated resilience in H1 FY26, with strategic initiatives and cost efficiencies offsetting revenue declines in weaker markets. The focus on North America, licensing, and digital transformation positions the Group for growth, with management confident in achieving full-year expectations despite macroeconomic challenges.