Primary Recommendations

Sanderson - Profits significantly ahead of expectation

March 2022

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Having enjoyed a spectacular run to a high of 234p (a 92% gain-to-high on my main write-up price last May at 122p) the shares are gradually regaining a second wind. Sanderson has announced revenues will only be slightly above expectations at £112m for the year ended 31 January (FY’21: £93.8m) but profitability is expected to be significantly ahead. That reflects the operational gearing effect of recent manufacturing sales and additional higher margin licencing income. Brand sales performed in line, with Morris & Co especially strong while the USA (20% divisional sales) grew 40% at constant currency.Licencing growth was powered by new agreements with longstanding client NEXT and new US client Williams Sonoma. Existing lice ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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