Walker Greenbank is a luxury interior furnishings group combining specialist design skills with high-quality upstream manufacturing facilities. Leading brands include Harlequin, Sanderson, Morris & Co, Scion, Anthology, Zoffany and Clarke & Clarke.
The headline FY19 revenue drivers were well trailed with the pre-close statement with normalised PBT (-25% y-o-y) and EPS (-27% y-o-y) in line with our revised estimates at that time. Higher licence and international revenues were bright spots but weak UK demand proved to be a significant headwind, most visibly affecting Brands’ profitability. Free cash flow improved significantly against the prior period and contributed to a modest net funds position at the end of the year. An in line AGM update (14 June) was welcome after a tough trading year in FY19. Market conditions have yet to show any marked improvement, but UK cost savings and some international progress support our existing estimates. The new management team expects to deliver a strategy update in the Autumn.
The UK interior furnishings industry has experienced uncertainty for many years under the influence of economic shifts and fashion changes. Many brands have failed to grow, while significant production capacity has been closed down, with manufacture for the volume segment largely moved overseas. Success continues to be delivered by businesses able to differentiate themselves from competition by consistently offering innovative and high-quality design and products.