Revenues and profits slump at listed building group
Sheffield-based building materials specialist SIG has seen its underlying operations revenue fall by more than 23% to £818m from £1.1m in its results for the six months ended 30 June 2020.
The company made an underlying pre-tax loss of £53.7m, compared to pre-tax profits of £17.4m in 2019. The Group’s underlying operating loss was £43.2m (H1 2019: £29.1m profit).
Like-for-like first half sales were down 23.9% on the prior year, due to the impact of Covid-19.
However, in the same period the business was able to restructure its financing facilities and complete a capital raise of £165m in July, which includes £83m equity investment by Clayton, Dubilier & Rice LLC.
Following the capital raise, SIG says it now has substantial liquidity headroom to provide security against ongoing market uncertainty.
And SIG adds that it has confidence to invest in its new growth strategy, with a net cash position at 31 August of £29m, pre IFRS 16.
Steve Francis, chief executive officer, said: “Long term fundamentals remain sound in the Group’s markets across Europe.
“In the short term, significant economic uncertainty remains in all of our markets, although government stimulus for the construction sector, notably in the UK, is welcome.
“Trading was better than anticipated during the peak lockdown months of March to May, compared to our initial estimates of the possible Covid-19 impact, and the Board now expects full year sales to be moderately higher than guided in May.
“Group sales in July and August were encouraging although down year on year, and market share losses during 2019, particularly in the UK distribution business, will take time to recover.
“The second half of 2020 is expected to remain loss making, but at a lower rate than the first despite some increased pressure on gross margin in the UK.
“The Group demonstrated agility and resilience in the first half of the year, dealing with an unprecedented external challenge, and significant internal change and activity.
“Coupled with a strengthened balance sheet, the foundations are now in place for the business to grow.”