SIG back in the black after implementing ‘transformation strategy’

Sheffield-based SIG, a supplier of specialist building products in Europe, has returned to profit after delivering its transformation programme over the last 12 months.

Reporting on the year to December 31 2018, the listed firm said pre-tax profits stood at £28.5m; returning to profitability for the first time in several years – in 2017, the firm reported pre-tax losses of £54.7m. Revenues in the last year, however, dropped 1.2% from £2.7bn to £2.6bn. 

Meinie Oldersma, Chief Executive Officer, said: “As expected, our transformation strategy began to deliver during the year and we saw significant operational and financial progress in the second half. Despite challenging market conditions and lower revenue in our largest markets, our focus on pricing and profitability over volume, coupled with tighter control over operating costs, has enabled us to grow our gross margins and profit.

“We have continued to strengthen our balance sheet during the year, enhanced by the disposal of peripheral businesses and structural reductions in levels of working capital, particularly stock.  We have now reduced debt by over a third since the start of 2017.  Leverage reduction remains a key priority for the Group and we expect further significant progress during 2019 towards our medium term target of headline financial leverage below 1.0x.

“The Group brings considerable financial benefits into 2019 and the delivery of a step change in performance in SIG Distribution has given us confidence to accelerate the pace of transformation in other major Group businesses.  Trading conditions remain challenging, with the outlook in many of our end markets uncertain, and the Group expects continuing like-for-like sales declines in the first part of the year.  Notwithstanding these headwinds, the margin and cost actions taken in 2018 give us good visibility of further significant progress in the current year.

“While much work remains to be done, our delivery in 2018 and the momentum brought into 2019 confirm that our transformation of SIG is on track.”