Drop in sales reflect ‘challenging times’ for region’s businesses

The economic challenges facing companies across Yorkshire have been exemplified by three very different stock market-listed businesses reporting a drop in sales.

Billion-pound turnover building products group SIG, flooring business AIREA, and gin maker Slingsby all revealed first-half sales were down 5-7%. This was despite two of the three outperforming their market trend.

The figures highlight the fragile nature of the economy, despite an improvement in business confidence since the general election last month.

The global picture remains mixed, and economists at Goldman Sachs have just raised their probability forecast of an American recession in the next year from 15% to 25%.

It highlights the pressures and uncertainty businesses face, with many prioritising a focus on controlling costs.

Building products group SIG has reported a £14m pre-tax loss after sales fell by more than £100m in the first half of the year.

Its 7% fall in like-for-like revenues was blamed on “prolonged challenging trading conditions in our larger businesses”, leading to lower volumes, and pressure on pricing.

However it said “all businesses continue to perform well relative to their markets”.

SIG’s chief executive Gavin Slark said: “Our results in the first half reflect the prolonged challenging market conditions we are currently facing across most of our European businesses. In light of these conditions, we took further actions to reduce our permanent cost base in the half, which will benefit us in the future.”

Flooring group AIREA revealed it was hit by “an unforeseen slowdown” in the second quarter, although said its drop in sales was slightly better than the overall market.

Despite the Ossett-based group being more optimistic about the rest of the year, it “has moderated its full year sales growth and profit expectations”.

Harrogate drinks company H C Slingsby reported “challenging times” and a 6% drop in sales in the first half of the year, which resulted in a small pre-tax loss.

The group, which has decided not to pay an interim dividend, said it “remains cautious regarding the outlook for the remainder of the financial year”.

It added: “This is particularly the case given the recent lower levels of sales and order intake, the uncertainty caused by the change in government and the risk that the UK economy could re-enter recession as unemployment rises. There is also the potential for credit related issues should customers become insolvent.”