SIG sees signs of UK construction market improving
THE longer winter and weak markets hit sales at specialist building products group SIG but it said today that it is starting to see signs of improvement in the UK construction sector.
The Sheffield-based group, which is focused on the insulation and energy management and interior fit out and roofing markets, said sales in the first of its trading year to June 30 were down by 1% in sterling and 3% in constant currency which will see pre-tax profits of between £29m and £31m for the period, down from £35.5m last year.
However the group said that improvements in weather conditions combined with “prompt action” to cut costs will mean full year profitability will be maintained.
SIG said it will provide an update on strategic initiatives to improve performance when it announces half year results on August 15.
The group said sales were flat in May and June, compared to a 4% decline for the first four months.
The company said that while market conditions are starting to improve in the UK, construction activity remains weak in Europe with sales down 4% in France and 5% in Germany.
Net debt at June 30 was £141m, around £11m higher than a year ago due to acquisition expenditure and movements in foreign exchange rates.
SIG, which is run by chief executive Stuart Mitchell, said in the trading statement: “With the improving sales trend and the group’s firm action to reduce discretionary expenditure, SIG continues to expect to make further progress in 2013 consistent with its previous expectations, assuming normal weather conditions in the second half.”
