SIG forecasts brighter future following cold snap

INSULATION, interiors, exteriors amd construction products supplier SIG today said its first quarter sales had been hit by poor weather with workers unable to access building sites and make deliveries.

The Sheffield-based group saw sales slump by 7% in sterling between January 1 and May 12 compared to the same period last year.

The reduction comes on the back of SIG, which operates across Europe, posting a loss before tax of £55.3m in 2009.

However, in an interim management statement today ahead of its annual general meeting, SIG said that excluding the “exceptional impact of the extreme weather”, underlying trading in its first quarter was in line with management expectations.

Also, the return of “normal seasonal weather” has helped the decline in sales while gross margins have remained stable.

SIG said demand in the residential building sector, which makes up about one third of the group’s sales, was improving.

In the UK, the group’s sales in the private sector non-residential market have continued to decline in 2010, while non-residential sales in Mainland Europe so far in 2010 have weakened compared to 2009.
 
SIG said it was continuing to save costs.

SIG added in the statement: “Following the disruption to loading patterns caused by the extreme winter weather in Q1, macroeconomic uncertainty still persists, with the general outlook for recovery in construction markets accordingly remaining unclear.

“Consequently the group remains duly cautious on the timing and rate of likely recovery in its specific sectors and geographies.

“However, there has been a clear slowing in the rate of decline in construction activity, led by residential new build and RMI, in all of SIG’s countries of operation, and recent trading trends continue to point to a levelling out in monthly sales sometime in late summer 2010.
 
“As previously anticipated, it now appears by year end that some of the sales lost in Q1 due to the extreme weather will be recovered, though not all, particularly in Europe where the duration of the disruption was longer than in the UK and Ireland.
 
“The combination of these factors means that the shape of the current year remains more heavily weighted to the second half than has historically been the case.”

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