Urban Splash buys building systems division
Sheffield-based SIG, a leading distributor of specialist building products in Europe, has sold the trade and assets of its SIG Building Systems division – which made pre-tax losses of £5.7m in 2016.
Urban Splash Modular, a residential housing developer which is working on the Port Loop scheme in Birmingham, is to buy the division for £1. The Group will incur cash costs of £4.9m over the period to 31 March 2020, which will be funded from the Group’s existing resources.
SIG expects to incur an associated exceptional charge in 2017 of approximately £7.9m relating to the divestment.
The SIG Building Systems division is the firm’s modular offsite construction business, which reported sales of £9.2m in the year ended 31 December 2016 but pre-tax losses of £5.7m. Its gross assets, before write down to recoverable amounts, transferred on the sale are valued at £4.5m.
SIG said the divestment is part of the ongoing management of the Group’s portfolio and is in line with the Group strategy set out by the new management team in November last year. Following the closure of Metechno in 2017 and the closing of the divestment announced today, RoofSpace, a panelised room-in-roof manufacturer serving the UK new build residential market, will be SIG’s only remaining offsite construction business.
In addition to the sale of Building Systems, on 2 February 2018, the Group sold GRM, a small manufacturer of phenolic pipe insulation serving UK industrial and HVAC markets, to a subsidiary of Kingspan Group for an undisclosed sum.
The group had not assumed any net contribution from these businesses in 2017 and accordingly overall expectations for underlying Group profitability for 2017 and beyond remain unchanged.
