Sanderson Design Group Revenue Rises 6% as US and Manufacturing Growth Offset UK Weakness

Sanderson Design Group's first-half update shows a business making useful progress in its chosen growth areas, even as demand in its home market remains subdued.

For the six months ended 31 July 2026, group revenue increased by 6% to £51.4 million. Strong performances in North America, third-party manufacturing, licensing and direct-to-consumer sales more than compensated for an 8% decline in UK brand product revenue.

Most importantly, the board expects full-year trading to remain in line with market expectations. The announcement identifies the current FY27 market expectation as adjusted underlying profit before tax of £6.5 million.

Investors can read the original company announcement for the full details.

Sanderson Design Group's key first-half figures

Metric	H1 FY27	H1 FY26	Change
Group revenue	£51.4 million	£48.3 million	6%
Brand product revenue	£35.5 million	£34.7 million	2%
External manufacturing revenue	£11.0 million	£9.2 million	19%
Licensing revenue	£4.9 million	£4.4 million	13%
Direct-to-consumer revenue	£1.6 million	£0.7 million	137%
Period-end net cash	£10.2 million	£9.8 million at 31 January 2026	Not disclosed on a comparable H1 basis

The headline numbers are encouraging. However, the quality and source of the growth matter just as much as the reported percentage.

North America is becoming increasingly important

North American brand product revenue rose by 16% on a reported basis to £13.0 million. At constant currency, which removes the effect of exchange-rate movements, growth was 19%.

That performance comfortably outpaced every other geographic market. The company describes North America as its highest-margin, most profitable and fastest-growing region, making the continued expansion particularly meaningful for investors.

Morris & Co. sales in North America increased by 14%, helped by the Morris & Co. x The Huntington Collection. Sanderson brand sales in the US rose by 45%, supported by the Highgrove Collection, which management says is performing ahead of expectations.

The attraction is straightforward. Sanderson is using its design archive, British heritage brands and relationships with designers and showroom partners to build demand in a much larger market.

That strategy appears to be delivering, although the update does not disclose regional profit figures or quantify how much North American growth contributed to group profit.

UK trading remains the main weak point

UK brand product revenue declined by 8% to £14.0 million, compared with £15.1 million in the previous first half.

Management describes this softness as anticipated, but it remains the clearest negative in the update. North America is growing quickly, yet the UK was still the group's largest individual brand product market during the period.

Elsewhere, Northern Europe revenue increased by 2% on a reported basis to £4.4 million but declined by 3% at constant currency. Rest of the World revenue was unchanged at £4.1 million on a reported basis and fell by 1% at constant currency.

Overall brand product revenue therefore increased by a relatively modest 2% to £35.5 million. The geographic mix is improving, but broad-based brand growth has not yet arrived.

Manufacturing recovery adds another growth engine

External third-party manufacturing revenue rose by 19% to £11.0 million, driven by demand from US brands and buyers.

Sanderson manufactures fabrics and wallpapers at Standfast & Barracks in Lancaster and Anstey in Loughborough. These factories produce goods both for the group's own brands and external customers.

Including internal activity, total manufacturing revenue increased by 19% to £17.2 million. Internal manufacturing revenue is not additional group revenue because it relates to production for Sanderson's own brands, but it provides a measure of activity across the factories.

Management credits restructuring and its Future Factory initiative for the improvement. It also says momentum from external customers is continuing into the second half.

This is a positive development because it suggests the manufacturing base is becoming better aligned with customer demand. The update does not disclose divisional profit or margins, however, so investors will need to wait for the interim results to assess the financial contribution in more detail.

Licensing growth comes with an important caveat

Licensing revenue increased by 13% to £4.9 million. This was driven by the renewal of Sanderson's global agreement with Blinds2Go, which contributed £1.4 million of accelerated income.

The company expects first-half licensing revenue to comprise £3.6 million of accelerated income and £1.3 million of net underlying income.

Accelerated income means revenue has been recognised earlier under the relevant arrangements. It can support current-period results, but investors should distinguish it from underlying income when judging the repeatability of growth.

Licensing remains an attractive part of Sanderson's model because it allows third parties to use its designs across products including blinds, rugs, tableware and bed and bath collections. Still, the size of the accelerated element means the 13% headline increase should not be viewed as purely organic recurring growth.

Direct-to-consumer sales are growing rapidly

Direct-to-consumer revenue increased by 137% from £0.7 million to £1.6 million. This channel covers sales made through the company's brand websites, launched in the UK in September 2024 and the US in April 2025.

The revenue contribution remains small relative to group sales, but management describes it as a high-margin growth area. Selling directly can also give the company greater control over customer relationships and how its brands are presented.

The re-platformed Trade Hub has separately improved ordering and sampling for business customers, contributing to growth in Sanderson's contract category.

Net cash provides financial flexibility

Sanderson ended the period with net cash of £10.2 million, up from £9.8 million at 31 January 2026. Net cash means cash and cash equivalents exceeded borrowings.

The balance was achieved after the company spent £1.4 million purchasing shares into its employee benefit trust, or EBT. An EBT can hold shares for employee incentive schemes.

The cash position offers some reassurance while Sanderson invests in international growth, digital sales and manufacturing. However, the update does not include a full cash flow statement, so the detailed drivers of the movement are not disclosed.

For additional company coverage, see the Sanderson Design Group PLC share page and the earlier FY2026 profit growth and cash update.

What investors should watch next

The first half has delivered progress where management said it would: North America, manufacturing, licensing and digital sales. The 6% increase in group revenue and maintained full-year expectations are both supportive signals.

The main questions are whether US momentum can continue, whether UK demand stabilises and how much of the revenue improvement reaches profit. Licensing income quality also deserves attention because accelerated revenue forms a large part of the first-half total.

Sanderson expects to publish its interim results on 21 October 2026. Those figures should provide a clearer view of margins, cash generation and progress towards the £6.5 million adjusted underlying profit before tax expectation. This measure is profit before tax excluding items the company treats as non-underlying, although the adjustments are not detailed in this trading update.