SIG reports downturn in its figures after sales decline
BUILDING SUPPLIES firm SIG blamed economic uncertainty for contributing to tough conditions in the construction industry as the group posted a disappointing set of figures.
Like-for-like sales at the Sheffield-based company dropped 4.7 per cent in the six months to December 31, with comparable revenue 2.3 per cent lower over the full year.
It means adjusted annual pre-tax profit is set to come in at £75m, down from the £79.2m booked in 2017.
“As previously reported, the UK construction environment became increasingly challenging in the second half of 2018,” SIG said.
“Commercial construction demand remained dampened by macro-economic uncertainty, house price inflation slowed and secondary housing market transactions continued to fall.”
Several surveys have shown that Brexit is leading to investments being delayed and construction projects being put on hold.
SIG also saw difficult trading in mainland Europe, particularly in
France and Germany, where likefor-like revenues were down by 3.2 per cent and 4.6 per cent respectively.
In Ireland, comparable sales fell 8.8 per cent.
However, the firm insisted that its transformation continues to progress at pace, with a better focus on pricing management and the withdrawal from unprofitable business increasing profit margins.
Analyst Graeme Kyle at Shore Capital said management had failed to adequately explain the deterioration in trading with France and Germany but said it expected further progress in respect of its margins during 2019.
He said: “Management report that gross margins are moving up and are ahead of its expectations, which lends credibility to the strategy of re-shaping SIG into a smaller but more profitable group.”
In December, SIG sold its shareholding in its UK offsite manufacturing business, RoofSpace, and the assets of Proteus, a facade panel systems manufacturing business.
Total revenue from continuing operations in the year to the end of December fell by 1.4 per cent, with a further 0.7 per cent decrease from currency and 0.2 per cent from more working days.
In 2017, the company generated revenue of £2.78bn.
Commercial construction demand remained dampened.
A spokesperson for SIG