LONDON (ShareCast) - (Sharecast News) - Shares in Sanderson Design Group sparked on Wednesday, after the fabrics and wallpaper specialist said it remained well on track to meet guidance, despite a difficult start to the year.
Revenues at the AIM-listed firm eased 4% in the six months to 31 July to £48.3m, while pre-tax losses were flat at £1.5m, supported by a cost-cutting programme. Basic earnings per share softened 3% to 1.41p.

Sanderson - which owns the Zoffany, Harlequin and Morris & Co brands, among others - said sales growth in North America and licensing had been offset for ongoing weakness in the UK, Europe and the rest of the world.

However, looking to the full year and Sanderson said brand sales had shown an "improving performance" in the first nine weeks of the current half, up 5% on a constant currency basis.

It continued: "Growth in North America, UK and the rest of the world underpins the board's confidence in meeting full-year expectations despite the macroeconomic environment."

Shares in Sanderson were trading 5% higher at 50p as at 1415 BST.

Dianne Thompson, chair, said: "We enter the second half benefiting from actions to manage costs and with more momentum in the business than at this time last year.

"Global consumer markets do, however, remain unpredictable, with macroeconomic developments having the potential to undermine consumer confidence.

"We remain confident in our strategy, including our focus on North America."

Russ Mould, investment director at AJ Bell, said: "Sanderson has a rich heritage and strong brands, but the last three years have been ones to forgot. Weak consumer confidence has dampened sales across its brand, manufacturing and licensing activities, while the company has invested heavily in digital marketing and production.

"Many of the best returns from a stock come when the picture goes from truly awful to merely less bad, because expectations are low and valuations are often accordingly bombed out.

"Sanderson's valuation is indeed starting to look very depressed, based on past peak-earnings and asset value."

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