Sanderson Design : ANNUAL REPORT

Sanderson Design Group

(formerly Walker Greenbank PLC)

Annual Report and Accounts 2021

live beautiful

CONTENTS

Strategic Report

2 Highlights

4 Chairman's Statement

6 Chief Executive Officer's Strategy and Operational Review

14 Live Beautiful

1. Chief Financial Officer's Review

1. Key Performance Indicators

1. Principal Risks

1. Viability Statement

1. Section 172 Statement

Governance

44 Board of Directors

1. Group Leadership Team
2. Corporate Governance

1. Report of the Directors

1. Statement of Directors Responsibilities
2. Nomination Committee Report
3. Directors' Remuneration Report

1. Audit Committee Report

Financial Statements

59 Independent Auditors' Report to the Members of Sanderson Design Group

1. Consolidated Income Statement
2. Consolidated Statement of Comprehensive Income
3. Consolidated Balance Sheet
4. Consolidated Cash Flow Statement
5. Consolidated Statement of Changes in Equity
6. Notes to the Consolidated Financial Statements

1. Company Statement of Comprehensive Income
2. Company Balance Sheet
3. Company Statement of Changes in Equity
4. Notes to the Financial Statements

1. Five Year Record
2. Shareholder Information

Sanderson Design Group Annual Report and Accounts 2021

HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

• Board and leadership team completed in February 2020. The new team successfully took the business through the pandemic and continues to execute the strategy.
• Efficiency and cost-saving initiatives, including restructuring in August 2020 with the reduction of 68 positions, delivered £3m of annualised cost savings.
• Investment to elevate the brands and increase online presence through new brand websites and collaborations.
• Change of name to Sanderson Design Group PLC* in December 2020, and simplification of the corporate and business structures.

• Launch of Scion online shop expected in early June 2021 following agreement with leading internet retailer Jane Clayton and Company in November 2020.
• Clarke & Clarke's partnership with Kravet in North America performing ahead of expectations.
• Launch of Live Beautiful sustainability strategy in April 2021 with ESG targets and the second annual Planet Mark certification.

• formerly Walker Greenbank PLC

02	Sanderson Design Group PLC (formerly Walker Greenbank PLC)

Strategic Report

Governance

Financial Statements

Sanderson Design Group PLC (AIM: SDG),

the luxury interior furnishings group, is pleased

to announce its financial results for the 12-month period ended 31 January 2021.

£93.8m	£7.1m	7.5%
Group revenue	Group adjusted underlying PBT**	Group adjusted underlying
2020: £111.5m (-15.9%)	2020: £7.4m (-3.7%)	operating margin (%)
		2020: 6.6% (+0.9 bps)
£14.4m	£15.1m	8.00p
Net cash flow	Net cash excluding leases	Adjusted underlying EPS
2020: £0.9m (+1,430%)	2020: £1.3m (+1,033%)	2020: 9.26p (-13.6%)

FINANCIAL HIGHLIGHTS

• Revenue of £93.8m (2020: £111.5m), reflecting the difficult global marketplace in the first half year caused by the effects of lockdowns worldwide. Trading in the second half recovered to pre-pandemic levels resulting in the previously announced upwards revision to Board expectations for the financial year.
• Brand sales down 15.4% during the year but just 1.1% down in the second half compared with H2 2020:
• • Morris & Co. sales continue to exceed expectations, particularly in Northern Europe.
  • Brand product sales in Northern Europe were down just 5.0% in constant currency, 4.3% in reportable currency, with Scandinavia's performance proving resilient.
  • Core licensing income*** was up 3.3% despite the pandemic.

• Manufacturing sales down 20.2% reflecting first half-year factory closures, partly offset by strong demand from UK and export markets with third party sales of £11.0m in the second half
  (H2 2020: £11.7m).
• Adjusted underlying profit before tax £7.1m (2020: £7.4m), including net £2.7m Coronavirus Job Retention Scheme ('CJRS'), with stronger sales in the second half-year, coupled with the effect of the measures to reduce discretionary and fixed costs.
• Strong cash inflow from operating activities of £18.2m (2020: £9.6m) leading to increased liquidity and headroom of £30.5m at 31 January 2021 (2020: £13.8m) with net cash position of £15.1m (2020: £1.3m).

• Adjusted underlying profit before tax excludes accounting charges relating to share-based incentives, defined benefit pension charge and non-underlying items.
• Core licensing income excludes the recognition of fixed minimum guaranteed licensing income under IFRS 15.

Sanderson Design Group PLC (formerly Walker Greenbank PLC)

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