SIG sells subsidiaries as markets remain tough
SIG today said it has sold some its central European operations as it announced it is confident it can make progress this year despite flat revenues last year and no expectation of great improvement in its main markets in 2013.
The Sheffield-based distributor of specialist building products has agreed the sale of its Czech and Slovak businesses, which together account for only 1% of the group’s revenues, to the Woodcote Group, a recent management buyout from Wolseley.
It said the move would allow it to concentrate on strengthening its business in Poland.
The group, which operates in insulation and energy management, interior fit out and roofing in markets across Europe, said that it is confident that underlying pre-tax profits for 2012 will be at least £82m on revenues of £2.635bn, flat on a constant currency basis but down by. 4% in sterling due to exchange rate movements.
SIG said it plans to exceed its £7m cost savings target and aims to reach £10m of savings.
In a trading update it said: “In the absence of any clear signs of macroeconomic improvement in the group’s main countries of operation, SIG expects construction markets in 2013 to remain challenging and likely to decline at a rate similar to 2012.
“Against this background, and building on recent performance, SIG expects to make further progress in 2013 by continuing to focus on sales outperformance, gross margin enhancement and improved operational efficiency.
Trading in the second half year benefited from continued resilience in mainland Europe and a strong performance in SIG Energy Management, as energy suppliers increased volumes to meet their CERT targets.
However it said that it anticipates a reduction in volumes for in the energy management business, due to the end of CERT and a likely slow start-up of the successor Green Deal scheme.
SIG, which announces full year results on March 7, said net debt was £110m at the end of December.
