Shares in Sanderson Design Group PLC (AIM:SDG) rose 10% to 52.65p on Tuesday after the company reported a solid full-year trading update with stronger profitability, a growing US footprint and a positive start to the new financial year.
For the year ended 31 January 2026, group revenue was broadly flat at £99.5 million, slightly down from £100.4 million a year earlier.
Adjusted underlying profit rose to at least £5 million, up from £4.4 million, reflecting the company’s ongoing cost-saving efforts and operational discipline.
Net cash increased to £9.8 million from £5.8 million a year earlier, helped by further inventory reductions, careful working capital management and controlled capital expenditure.
Brand product sales in North America rose 6% in reported terms and 10% in constant currency, with underlying sales excluding tariff surcharges up 5% and 9%, respectively.
Following a Q2 decline due to tariff-related uncertainty, the US market rebounded strongly in the second half, supported by new customer engagement and a growing direct-to-consumer (DTC) presence.
DTC sales increased sharply to £1.8 million, up from £0.4 million, driven primarily by Morris & Co., which launched its US website in March 2025. Other brands, including Sanderson, Harlequin and Zoffany have since launched their own DTC channels.
Third-party manufacturing revenue rose 5% to £18.9 million, benefiting from stronger order momentum, while licensing revenue remained resilient at £10.5 million.
Underlying licensing income rose 35% to £9.0 million, supported by guaranteed minimums and royalties above contractual thresholds. Notable agreements included an extended partnership with Sangetsu and a broader product offering with Ruggable.
Manufacturing performance improved markedly, reaching a break-even position for the year. Cost efficiency initiatives and workforce flexibility contributed to the turnaround.
UK brand product sales declined 9% as trading conditions remained subdued, but the group saw gains in Northern Europe and other overseas markets in the second half, helped by contract orders.
Chief executive Lisa Montague said recent appointments to the senior leadership team will support growth ambitions, particularly in digital and the US.
Charlotte O’Sullivan joined as Group Digital & Innovation Director to oversee the DTC strategy, while Scott Christopher Hans was promoted to President of the North American business.
Looking ahead, Sanderson Design said it enters the new financial year with growing momentum, particularly in the US and DTC segments. Despite continued softness in the UK, the board said it remains confident in the Group’s strategy, brand portfolio and international growth prospects.