SIG sees strong first half as profits rise

PROFITS have soared at building products group SIG.

For the six months to the end of June, the Sheffield-based business reported a 23.5% rise in underlying pre-tax profit to £41.5m and a 20.7% increase in underlying operating profit to £47.8m. Revenues from continuing operations increased 6.5% to £1,286.9m.

Stuart Mitchell, chief executive, said the group has benefitted from procurement savings, improving UK market conditions and the mild winter. Mitchell said the good results have been achieved while reinvesting in the business and commencing a culture change programme.
 
“We are pleased with progress on our strategic initiatives, which are ahead of our initial 2014 target,” he said.

“In particular we have exceeded our expectations for procurement and this has driven a 40bps improvement in gross margin in the first half.  For the full year we now expect to deliver a net benefit of around £7m, above the upper end of our previously stated £1-5m range.
 
“Trading conditions in the UK have continued to gather momentum, led by the revival in the housing market.  As anticipated, conditions in Mainland Europe remain variable, with the French construction market expected to weaken further in the second half. 
 
“Although SIG is exposed to ongoing currency headwinds and a challenging market backdrop in France, the group’s first half performance and progress on its strategic initiatives provide a strong base on which to achieve its full year expectations.”

SIG also said its acquisition pipeline remains strong and it expects to complete a number of further deals in the second half of the year.