Listed building products supplier appoints new auditor as FRC investigation gets underway

Sheffield-based SIG has appointed EY as its external auditor, a move which comes days after it announced that accounting watchdog the Financial Reporting Council (FRC) has begun an investigation into the audit of its financial statements by Deloitte.

Last month, the FRC said the investigation would focus on the audit of cash and supplier rebates for the years ended 31 December 2015 and 2016. It will be conducted under the Audit Enforcement Procedure (AEP).

In March, the firm, which has a market capitalisation of £812m, published its annual results for the year to the end of December 2017, showing the business made pre-tax losses of £51m during 2017; an improvement on the £110m pre-tax losses reported in 2016. Its revenues for 2017 stood at £2.8bn.

In a half year trading update this morning, the company reported that like for like (LFL) revenues in the UK & Ireland were down by 3.1%, reflecting an improved performance during May and June following the “significant adverse impact” from poor weather conditions earlier in the year.

The group’s businesses across Mainland Europe continue to perform well, it said, with LFL revenues up by 2.9% during the first half of the year.

“Trading conditions remain mixed across the group’s markets, with continued confidence across Mainland Europe and Ireland but ongoing challenges in parts of the UK construction sector, particularly commercial new build and RMI markets,” SIG said.

“We continue to progress our plans to deliver a significant improvement in our operational and underlying financial performance.  Our transformational plans are expected to deliver meaningful cost benefits in the second half of the year, mitigating the adverse impact of weather on sales and profit in the UK businesses in the early part of the year.  Coupled with the group’s normal seasonality, this should enable us to deliver a significantly stronger second half to the year.

“Providing there is no further deterioration in UK market conditions, our expectations for underlying profitability for the full year remain unchanged.”