Profits return faster than expected at building products group
Building products group SIG is delivering on the firm foundations of its turnaround strategy, declaring its 2021 profits will be ahead of expectations.
The Sheffield-based group now expects underlying operating profits to be at least £40m this year. This will return the business to its 2019 levels, bouncing back from a £53.3m operating loss last year.
Turnaround specialist Steve Francis was brought in as chief executive in February 2020 – before the start of the pandemic – to drive rapid improvements in the group’s performance.
In a statement, SIG said: “The board is pleased to report that the group has continued to trade well in Q4, and ahead of expectations.
“This has increased visibility and confidence in the full year underlying operating profit outturn, which is now expected to be ahead of prior expectations and no less than £40m.”
SIG’s share price fell 90% in a 12-month period to the early stages of the pandemic. Although it has shown signs of recovery, last night’s closing share price of 45p remains 60% below its level at the start of 2020.
Last month it revealed a successful £300m refinancing, raising £257m via senior secured notes and agreeing a new revolving credit facility of up to £50m.
Speaking at the time, Francis said: “This will provide a strong base from which to drive forward our ‘Return to Growth’ strategy, which has delivered notable improvements in growth and profitability to date, and which we are increasingly confident will continue to deliver value for all stakeholders in the near and longer term.”