REG - SIG PLC - Trading Update

SIGAnnouncement

24/06/2024 07:00

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RNS Number : 4905T  SIG PLC  24 June 2024

 

24 June 2024

SIG plc: Trading Update

 

SIG plc ("SIG", or "the Group"), a leading supplier of specialist insulation
and building products across Europe, issues a trading update for the year
ending 31 December 2024 to date.

 

Key points

·   Market conditions have remained challenging, with Group
like-for-like(1) ("LFL") sales decline vs prior year in May and June to date
at c7%, which is similar to that seen in the first four months of the year,
but behind expectations.

·   Given the weaker than expected trading in recent weeks and a
consequently more cautious view of the timing of any potential market
improvements during H2, the Board now expects our 2024 full year underlying
operating profit(2) to be in the range £20m-£30m, which is below the current
analyst range.(3)

·   The Group continues to perform well relative to its markets and is also
continuing to drive cost reductions and efficiency initiatives, which support
the continued expectation of a stronger second half performance and will help
drive higher profitability as markets recover.

·   Cash performance to date remains in line with expectations.

 

Summary

Subdued demand has continued to be a factor in the majority of the Group's
markets, reflecting the ongoing softness in the building and construction
sector. This impact has been most notable in the French and German markets,
and in the end markets of our UK Interiors business. Whilst we continue to see
more robust demand in our Poland, Ireland and UK Exteriors businesses, Group
sales overall were weaker than expected in May and June to date.

 

Despite the difficult market backdrop, the Group continues to make good
progress on its strategic and operational initiatives. These have included
permanent cost restructuring to lower central and operating company overheads,
modernisation implementations which will lower our cost-to-serve and support
higher margin sales mix, and more robust commercial execution, which has seen
a continuation of the market share growth achieved over the last three years.
The Group also continues to prioritise and demonstrate effective working
capital and cash flow management, with year to date cash performance also
reflecting normal seasonal trends and the lower profit, and our RCF remaining
undrawn.

 

Outlook

Based on the  performance in the year to date, the Board now expects the
Group to report an H1 2024 LFL sales decline of c7%, and an underlying
operating profit in the range of £10m-£12m. Given the weaker than expected
trading in recent weeks and a consequently more cautious view of the timing of
any potential market improvements during H2, the Board now expects our full
year 2024 underlying operating profit to be in the range of £20m-£30m, which
is below the current analyst range. The increasing benefit from productivity
and cost initiatives underpins our continued expectation of a stronger second
half.  The extent of this improvement is subject to the evolution of demand
conditions, particularly given market uncertainties in France and Germany, and
recognising the sensitivity of operating profit to relatively small movements
in sales.

 

Whilst market conditions remaining challenging in a majority of areas, the
Board continues to expect its strategic and commercial initiatives to benefit
medium term margin and profit growth, also supported by meaningful operating
leverage when market volumes recover.

 

 

H1 Results

We will publish the Group's H1 2024 results on 6 August 2024, with a
presentation and conference call for analysts at 10.15am at the offices of FTI
Consulting.

 

1.      Like-for-like is defined as sales per working day in constant
currency, excluding completed acquisitions and disposals. It does not reflect
adjustments for branch closures, openings, or consolidations.

2.      Underlying represents the results before Other items. Other items
relate to the amortisation of acquired intangibles, impairment charges,
profits and losses on agreed sale or closure of non-core businesses and
associated impairment charges, net operating profits and losses attributable
to businesses identified as non-core, net restructuring costs, and other
non-underlying profits or losses.

3.      Company collated analyst expectations is for Full Year 2024
underlying operating profit (EBIT) of £41.1m, within a range of £36.7m to
£43.0m, as at 21 June 2024.

 

 

Contacts

 SIG plc                                       +44 (0) 114 285 6300 / ir@sigplc.com
 Gavin Slark       Chief Executive Officer

 Ian Ashton        Chief Financial Officer
 Sarah Ogilvie     Head of Investor Relations

 FTI Consulting                                +44 (0) 20 3727 1340
 Richard Mountain

LEI: 213800VDC1BKJEZ8PV53

 

This announcement contains inside information for the purposes of UK MAR.
The person responsible for arranging the release of this announcement on
behalf of SIG is Andrew Watkins, Group General Counsel & Company
Secretary.

 

Cautionary Statement

This document contains certain forward-looking statements concerning the
Group's business, financial condition, results of operations and certain
Group's plans, objectives, assumptions, projections, expectations or beliefs
with respect to these items. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should',
'expects', 'believes', 'intends', 'plans', 'potential', 'targets', 'goal',
'forecasts' or 'estimates' or similar expressions or negatives thereof.

 

Forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the Group's actual financial condition,
performance and results to differ materially from the plans, goals, objectives
and expectations set out in the forward-looking statements included in this
document.

 

All written or verbal forward-looking statements, made in this document or
made subsequently, which are attributable to the Group or any persons acting
on its behalf are expressly qualified in their entirety by the factors
referred to above. Accordingly, readers are cautioned not to place undue
reliance on forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised; actual events or
results may differ materially as a result of risks and uncertainties facing
the Group. Subject to compliance with applicable law and regulation, the Group
does not intend to update the forward-looking statements in this document to
reflect events or circumstances after the date of this document and does not
undertake any obligation to do so.

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