Luxury wallpaper and furnishings group Sanderson Design slumped into the red last year as it warned US tariffs remain a “potential threat”.
The AIM listed company, which has a royal warrant from King Charles, revealed a pre-tax loss of £13.9 million for the year to end January, compared with a £10.4 million profit for the previous year.
Revenues were down 7.6% at £100.4 million in “a sustained challenging consumer environment.” The dividend is cut from 3.5p to 1.5p.
In early trading the shares fell 1.5p or 3.5% to 41.50p.
The company owns the Zoffany, Sanderson, Morris & Co., Harlequin, Clarke & Clarke and Scion brands and has showrooms in London, New York and Chicago .
It said that while it “does not currently expect a material direct impact from tariffs imposed on imports into the USA” , the announcement of tariffs by Donald Trump on “Liberation Day” at the beginning of April “has, however, impacted order intake in all regions.”
Branded product sales fell 14% to £32.8 million in the UK, the company’s biggest market but held up in North America, only falling marginally to £21 million.
Heritage brands such as Sanderson and Morris & Co generally performed better than contemporary brands.
Total manufacturing sales fell 10% to £31.7 million though licensing revenue held up better with sale up 1% at £11 million.
There was also a £16.3 million write down of the value of the Clarke & Clarke fabric brand bought in October 2016.
Clarke & Clarke is Sanderson’s biggest selling brand, with the majority of its sales in the weak UK market.
Chairman Dianne Thompson said: “In response to market conditions, we continue to focus on accelerating strategic initiatives to position the group for future success. “North America remains a key growth opportunity, and the group does not currently expect a material direct impact from tariffs imposed on imports into the USA.
“The evolving tariff regime is, however, a potential threat to US and global consumer confidence and we will continue to monitor closely.
“Our balance sheet remains robust, with over £5.0m of cash and an undrawn £10.0m bank facility. We are also making good progress in further strengthening our net cash position through planned inventory reduction.
“The Board is confident in its agility and its acceleration of strategic initiatives in response to the ongoing global market challenges and unpredictability.”
