Profit warning wipes £240m off value of Sheffield group in early trading

BUILDING products group SIG had £240m wiped off its value when the markets opened this morning after it had warned deteriorating market conditions in Europe would hit profits.

Its share price was down more than 20% in the first 15 minutes of trading, as it fell to its lowest point since February 2013.

SIG, a FTSE 250 company, had a market value of £1.24bn in August which had steadily fallen by £200m by last night’s close of 178p.

However its value dropped by a further £240m this morning after it warned that a slowdown in France and the rest of mainland Europe has put the brakes on its improving performance.

In August the Sheffield-based group had expected an “improving sales trend” would drive year-on-year progress, but now warned “deteriorating market conditions” were likely to result in a fall in full-year profits.

SIG, which turns over £2.6bn, now expects its underlying pre-tax profit to be between £85m-£90m, compared with £98m last year.

The group has said it expects to save “at least £20m” following a supply chain review, and it is now accelerating this programme in response to the market downturn.

For the nine months to September 2015 like-for-like sales were up 0.2%, dragged down by a third-quarter decline on 0.9%. Mainland Europe’s sales fell 2.3% in its latest quarter, worsening its sluggish performance which now stands down 1.7% for the year to date.

SIG has three divisions – insulation and energy management, roofing and interiors – and mainly distributes other companies’ products, although it does make some bespoke products. It employs 9,000 people, predominantly in Europe while it also has a presence in the Middle East.