Interim Management Statement

RNS Number : 7240R

SIG PLC

09 November 2011

 



9 November 2011

SIG plc

Interim Management Statement

SIG plc, a leading European specialist supplier of insulation, interiors and exteriors today issues its Interim Management Statement for the period from 1 July 2011.

Trading summary

Trading has remained in line with management's expectations since SIG's Interim Results announcement on 25 August 2011.  As anticipated, given tougher comparators and the weaker macro environment, year on year sales growth in Mainland Europe has moderated from the high single digit percentage growth achieved in July, but stayed comfortably ahead of the UK & Ireland, where growth has remained slightly positive since the end of H1.

Accordingly, Group sales from continuing operations were up by c.8% (c.7% on a constant currency basis) for the ten months to the end of October, compared with the same period last year. 

Based on this sales growth SIG believes it has continued to outperform its markets, as it did in the first half of the year.  Furthermore this outperformance has not been achieved at the expense of gross margin, which remains at a similar level to the comparable period in 2010.

In Mainland Europe (H1 2011: 56% of Group sales) revenues for the year to date were up by c.12% and by c.10% on a constant currency basis, with France continuing to demonstrate the strongest progress of the countries in which SIG operates.   

In the UK & Ireland (H1 2011: 44% of Group sales) revenues from continuing operations were up by c.3% for the year to date.  Sales from the Group's UK distribution and merchanting businesses (c.92% of UK sales) also grew by c.3%.  

Financial position

In line with previous guidance SIG remains on track to reduce the level of net debt at the year end to well below the £163m reported at 30 June 2011.

Organic growth initiatives

In line with its strategy of growing the business organically, subject to suitable opportunity and economic backdrop, SIG has opened six new branches in H2 to date, of which three were in the UK (including two Builders Express branches) and three were in France. 

As in the first half of the year, this investment in growth, along with some cost inflation, will moderate slightly some of the gains from improving operational gearing.

Board changes

As previously announced, Doug Robertson joined the Group as Finance Director Designate on 1 November, and will take over as Finance Director and join the Group Board on 1 December. Accordingly, Gareth Davies will step down from the Board on that date and leave the business at the end of the year.

After 10 years of service as Executive Director and 36 years in total with the Company, John Chivers, Managing Director of the UK Exteriors Division, will step down from the Board and leave the Company at the end of the year.

The Board would like to thank Gareth and John for the very significant contribution they have each made to the Group over the years, and to wish them both well for the future.

Summary and outlook

SIG has made good progress so far this year in delivering on both its financial targets and key strategic initiatives.  In particular the Group has been encouraged by the level of outperformance and market share gains achieved, whilst maintaining gross margins, against the backdrop of continuing tough economic conditions.

While the full year result for 2011 will, as usual, be subject to any exceptional seasonal weather factors which may occur in the final few weeks, management does not anticipate any significant change to underlying trading patterns for the remainder of the year.

Looking ahead to 2012, overall demand levels in SIG's countries of operation are likely to remain subdued. The UK and Irish markets are expected to show some modest decline compared with 2011, reflecting lower consumer spending and the impact of government austerity measures.  While performance in individual countries may differ, overall SIG expects demand in Mainland Europe to range from flat to slightly positive. The Group continues to believe that in the medium term growth opportunities are likely to be greater in Mainland Europe than in the UK & Ireland.

Against this background, the Group will continue to manage cash and working capital carefully and drive for further operational efficiencies, being prepared to take further action should the trading environment so demand. Continuing operational improvements and commercial initiatives, together with the Group's record of market outperformance, provide a solid platform going forward.

Conference call

There will be a conference call for analysts and investors at 8.00am today to discuss the statement.  The dial-in details are [phone], PIN code: 351680#. 

Enquiries

SIG plc

Chris Davies, Chief Executive                                             + 44 (0) 114 285 6300

Gareth Davies, Finance Director

Simon Bielecki, Head of Investor Relations                        + 44 (0) 7515 794359

FTI Consulting

Richard Mountain/ Sue I Ong                                               + 44 (0) 20 7269 7291 

Cautionary Statement

This Interim Management Statement is prepared for and addressed only to the Company's shareholders as a whole and to no other person.  The Company, its directors, employees, agents or advisors do not accept or assume responsibility to any other person to whom this Interim Management Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.

Certain information included in this Interim Management Statement is forward looking and involves risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by forward looking statements.  It is believed that the expectations set out in these forward looking statements are reasonable but they may be affected by a wide range of variables which could cause future outcomes to differ from those foreseen in forward looking statements, including but not limited to, changes in risks associated with the level of market demand, product availability and pricing, competitor risk, credit risk, credit insurance, restructuring of SIG and exchange rates.  More information about the risks and uncertainties that may affect the Group's performance is contained in the Annual Report to Shareholders for the year ended 31 December 2010.  All statements in this release are based upon information known to the Company at the date of this Interim Management Statement.  The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.

 

END

 

 

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