Interim Management Statement

RNS Number : 0418R

SIG PLC

14 November 2012

 



14 November 2012

SIG plc

Interim Management Statement

SIG plc ("SIG" or "the Group"), a leading distributor of specialist building products in Europe, with strong positions in its core markets of insulation & energy management, interior fit out and roofing products, today issues this Interim Management Statement for the period commencing 1 July 2012. 

As detailed in a separate announcement released today, Chris Davies will leave SIG in March 2013 after 19 years' service to focus on non-executive roles.  He will be succeeded by Stuart Mitchell, who joins SIG from Wilkinson Hardware Stores.

Trading summary

Trading has been in line with expectations, with sales per day from continuing operations for the ten months to the end of October flat on a constant currency basis.  Sterling sales per day fell by c.4% compared to prior year due to exchange rate movements.

Year to date sales per day in Mainland Europe increased by c.2% in constant currency, but fell by c.6% in Sterling.  Benelux and France exhibited the strongest progress, with Germany marginally down.  In the UK & Ireland sales per day from continuing operations fell by c.2% in constant currency, with the UK down by c.1%.

Following some improvement in constant currency sales per day in Q3 compared to Q2 on a year-on-year basis, October was slightly negative, meaning that July to October was flat compared with prior year.

Overall gross margin remains ahead of the same period last year.  SIG continues to expect that the rate of improvement for the full year will be lower than the 50bps increase reported in H1.

The Group is also continuing to keep a tight control on operating costs and is on track to deliver further efficiency savings as detailed in its Interim Results.

Growth Initiatives

Three bolt-on acquisitions have been completed so far in the second half of the year.  They were:

·     a single site specialist insulation distribution business in Toulouse, France, the gross assets of which were €2.7m as at 31 March 2012;

·     a Heating, Ventilation and Air Conditioning (HVAC) distribution business in Charleroi, Belgium, the gross assets of which were €0.4m on completion; and

·     a roofing branch in Kings Lynn, UK, which was bought out of administration for a de minimis figure.

The Group is continuing to pursue a pipeline of small infill acquisition opportunities within its core markets.  SIG expects total acquisition expenditure in 2012 to be c.£8m.

In addition SIG has opened 6 new branches in H2 to date, bringing the total to 21 for the year.

Financial position

SIG has maintained its strong financial position and remains on track to meet its target of c.1x leverage at the year end.

Outlook

As the Group anticipated at the beginning of the year, market volumes have declined slightly in 2012.  Against this trading background SIG has focused on improving business performance, as set out in its pillars of profit recovery, and outperforming its markets.

Having benefited from these management initiatives, SIG remains on track to meet its expectations, subject, as usual, to any exceptional adverse weather conditions in the remainder of the year.

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: 844492#.

Enquiries

SIG plc

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

Doug Robertson, Finance Director

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

FTI Consulting

Richard Mountain/Nick Hasell                                                + 44 (0) 20 7269 7186

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 2011.  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

 

 

IMSQXLFFLFFEFBZ