SIG plc Reports Flat Sales in Trading Update

SIG PLC has reported overall flat revenues in a trading update for the six months to 30 June 2023 (H1).

Sales fell but were offset by input price inflation resulting in group revenue of £1,424m, representing flat like-for-like results compared to the same period last year, for the supplier of specialist insulation and building products across Europe.

The overall impact of inflation is estimated to have added around 9% to Group revenue growth, although price inflation moderated during H1, as the company expected, it says, compared to 2022.

Group revenue is reported to be 5% higher in the period, including circa 3% from acquisitions, and around 2% coming from movements on working days and exchange rates.

Challenging Conditions

Reporting “challenging” market conditions through H1 across SIG’s European operations, in the UK, SIG Exteriors (which includes SIG Roofing) saw a 2% reduction in revenue to £221m. SIG Interiors division achieved a 4% increase in revenue on the same period last year to sales of £381m, offsetting the Exteriors’ loss.

In the rest of Europe, SIG reports a “notable softening” in demand in France and Germany in the last two months. Volumes and market conditions were also weaker in Poland and Ireland for H1 after strong previous years.

Outlook

SIG expects “weak and uncertain demand conditions throughout the rest of the year”. It says price inflation will continue, but moderate.

Whilst trading in recent weeks led SIG to be more cautious about the timing of any improvement in overall demand conditions, it says H2 will “benefit from ongoing productivity initiatives as well as an expected profit on one specific property move”.

It means the SIG Board expects the Group to deliver full year underlying operating profit of within a range of £65.3m to £84.0m, “but towards the lower end of that range”.

The company says its strategic and operational initiatives continue to progress. It says as a leading European insulation supplier, and with 80% of sales covering insulation and the wider building envelope, that the business is “well-positioned” to benefit from long-term structural growth drivers in sustainable construction and the decarbonisation of buildings.

SIG says it also remains confident in its ability to further improve its market positions, and profitability when market conditions recover.

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