Weakening demand eats into profits at building products group

SIG, a supplier of specialist insulation and building products, says market conditions remain difficult, with a further softening in demand in September notably in the new build residential sector.

The Sheffield-headquartered business, which has today published a trading update for the three months to 30 September 2023, says it expects to deliver full year underlying operating profit of £50m to £55m.

Group LFL revenue was down 2% year-on-year in the period to £681m, and is down 1% for the nine months to 30 September 2023, with the group noting that sales prices and volumes were lower than expected in the period.

SIG adds it expects weaker demand conditions to persist through the rest of the year.

However, the group notes its second half profitability is benefiting from ongoing productivity initiatives, including the early impact of restructuring which will deliver £4m worth of annualised benefits.

These restructuring includes streamlining of central costs and a review of certain operating company cost structures, particularly in the UK.

SIG’s update states: “Notwithstanding short-term market weakness, we continue to progress the strategic and operational initiatives which underpin our ambition for the group.  

“We remain confident in our ability to further improve our market positions, and to continue to improve our profitability when market conditions recover.”