Profit warning at building products group amidst slump in demand

Insulation and building supplies firm, SIG, warns its 2024 full year underlying operating profits will drop below expectations due to weaker than forecast recent trading.

In a trading update for the year ending 31 December 2024 to date, the Sheffield-headquartered group says it now expects operating profits for the period of £20m to £30m, down from the current analyst range of £36.7m to £43m.

SIG says market conditions have remained challenging, with a 7% group like-for-like (LFL) sales decline compared to last year’s May and June.

It explains subdued demand has continued to be a factor in most of its markets, reflecting the ongoing softness in the building and construction sector.

This impact has been most notable in the French and German markets, and in the end markets of its UK Interiors business.

While SIG is seeing more robust demand in its Poland, Ireland and UK Exteriors businesses, group sales overall were weaker than expected in May and June to date.

The group adds that it continues to perform well “relative to its markets” and is also continuing to drive cost reductions and efficiency initiatives.

SIG says it still expects a stronger second half performance, which will help drive higher profitability as markets recover.

The business will publish its half one 2024 results on 6 August 2024.

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