Chief executive pays the price for latest profit warning
THE chief executive of SIG, Stuart Mitchell, has stepped down from his role “by mutual agreement” and with immediate effect as the company warned investors to prepare for the third consecutive year of profit decline.
The company announced that underlying profit before tax for the year ending 31 December 2016 will be in the range of £75m to £80m, considerably lower than expected.
This would equate to three consecutive years of decline, with full year underlying pre-tax profits for 2015 coming in at £87.4m, and the year before £99.1m.
A gloomy picture emerged today which shed some light on the abrupt departure of the Sheffield firm’s chief executive. The company blamed the slowing of activity around the EU referendum and continuing poor sales and increased competition in domestic markets.
SIG also reported that UK & Ireland like-for-like revenues had decreased 1.1% in the latest quarter, with SIG Distribution and SIG Exteriors recording LFL sales declines of 1.2% and 1.7%.
SIG also said that performance had been affected by delays in the delivery of new equipment which has led to the deferral of some projects into 2017 – though the company says this is only temporary.
Shares in the company plummeted last year after it acknowledged weakening demand in the UK and Europe dropping 22% in a single session.
A non-executive director of the £2.5bn-turnover construction supplies business, Mel Ewell, has been appointed as interim group chief executive while the board searches for a more permanent placement.
Leslie Van de Walle, chairman of SIG plc, said:”On behalf of the Board and Group, I would like to thank Stuart for his commitment and all that he has contributed during his four year tenure as Group Chief Executive. Stuart brought together a loose federation of independent businesses; developed a new strategy and plans to improve our procurement and supply chain functions; and identified new areas of organic growth opportunities in Air Handling and Offsite.”
In October, SIG plc announced that 63 year-old Doug Robertson, will retire from the Group and the Board during the first quarter of 2017, succeeded by Nick Maddock, currently chief financial officer at McCarthy & Stone plc.
