Turnaround aims distract building products group in ‘disappointing’ year
THE chief executive of building products group SIG said 2016 was a “disappointing” year for the company as its turnaround programme distracted the business from its customers.
Mel Ewell took over from Stuart Mitchell, who stepped down from his role in November as the company warned investors to prepare for the third consecutive year of profit decline.
He said: “While the competitive environment, particularly in the UK, was challenging, our transformational change programme, although taking the group in the right strategic direction, distracted us somewhat from our customers.”
In a trading update for the year to December 31, group sales in 2016 were around £2.7bn, an increase of 11.2% compared to prior year, having benefited from foreign exchange movements.
The group said it continues to expect that underlying profit before tax for period will be around the £75m to £80m range, 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.
Mr Ewell said: “Going forward we need to better balance business change with the day-to-day operations of the group. Our principal aims for 2017 are therefore to restore our customer focus, place an increased emphasis on sales growth, and reduce leverage.”