Sanderson Design Group - a “royally” good first half after North America drives sales
Shares in Sanderson Design Group (AIM: SDG), the luxury interior design and furnishings group, have edged up by 1.5p to 79p today in reaction to a decent trading update for the six months to end-July 2026.
Sanderson is a luxury interior furnishings company that designs, manufactures and markets wallpapers, fabrics and paints. Brands include Zoffany, Sanderson, Morris & Co., Harlequin, Clarke & Clarke and Scion. The company also derives licensing income from the use of its designs on a wide range of products such as bed and bath collections, rugs, blinds and tableware.
A UK manufacturing base comprises the Anstey wallpaper factory in Loughborough and Standfast & Barracks, a fabric printing factory, in Lancaster, with both sites manufacturing for the company and for other wallpaper and fabric brands. Elsewhere, Sanderson has showrooms in London, New York and Chicago.
In May, Sanderson welcomed His Majesty King Charles III to its London headquarters at Voysey House in Chiswick. The visit marked the centenary of Sanderson, the group's quintessential British fabric and wallpaper brand, first being awarded a Royal Warrant by King George V in 1924, which was renewed by King Charles in December 2024. His Majesty was presented with new patterns for the collection, including 'The King's Rose', which was then launched at the 2026 RHS Chelsea Flower Show.
HRH visits Sanderson HQ. Source: Company
Royally good news
In the six months to July 2026 Sanderson’s revenue increased by 6% to £51.4 million. Full-year trading (to January 2027) is expected to be in line with market expectations which are for adjusted underlying pre-tax profits of £6.5 million. That compares to £5.3 million in FY 2026 and £4.4 million in FY 2025.
Across the business segments, total Brands product revenue was up by a modest 2% to £35.5 million, with significant growth in North America (+19% in constant currency) offsetting weakness in the UK, which was down by 8%. Sanderson has a strategic priority to expand its presence in North America, the world's largest market for textiles and wallpapers, and it looks like this is paying off. North America continues to be the highest margin and most profitable region for Sanderson, as well as the fastest growing. The company was keen to point out that its Highgrove Collection, launched in May 2025, was creating a “halo effect”, with very strong sales growth in every region (up 45% in the US) and ahead of expectations.
Meanwhile, management continues to focus on engaging and attracting new audiences to its brands. Within Brands, direct-to-consumer revenue in the half surged by 137% to £1.6 million (from £0.7 million) and is said to be an important, high margin, growth area. Growth reflects the channel becoming better established following its launch in the UK in September 2024 and the US in April 2025.
There was a good performance from Third Party Manufacturing where revenue increased by 19% to £11 million, with “excellent” demand having been seen from US brands and buyers. During the period, results were seen from a restructuring of operations together with the "Future Factory" initiative, which is said to have sustained the strong recovery in the segment's financial performance. In contrast, last year’s first half update reported external manufacturing revenues down by 1%.
Total Licensing revenue was up by 13% to £4.9 million, driven by the renewal of a global agreement with Blinds2Go which resulted in £1.4 million of accelerated income. The overall split was £3.6 million expected accelerated income and £1.3 million expected net underlying income.
On the balance sheet there was a net cash position of £10.2 million at the period end, up slightly from £9.8 million at the full year end in January after the firm purchased £1.4 million of shares for the employee benefit trust. With a current valuation of £57.1 million, net cash covers 18% of Sanderson’s market cap.
Sanderson Design Group 5-year share price chart
All in all a good performance from Sanderson, with expected headwinds in the UK being offset by a strong performance in the US, an area in which management is sensibly prioritising growth. After a tough year in 2025, when a statutory loss before tax of £13.9 million was posted (mainly due to a £16.3 million non-cash impairment), management have taken actions and implemented initiatives which are now delivering results.
We note that several directors have recently bought shares in the company: Lisa Montague, CEO, bought 26,532 shares taking her holding to 0.9%; Juliette Stacey, Non-executive Director, purchased 6,389 shares taking her holding to 0.024%; and Mauricio Solodujin, Global Commercial Director, purchased 6,633 shares, taking his holding to 0.17%.
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Disclosures
Sanderson Design Group is not a corporate client of Optimo Research Ltd.
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