Interim Management Statement

RNS Number : 8310E

SIG PLC

16 May 2013

 



16^th May 2013                                                              

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 an Interim Management Statement for the period from 1 January 2013. 

The Group's Annual General Meeting will be held on 23 May at 12 noon at the Aston Hotel, Britannia Way, Catcliffe, Sheffield, S60 5BD.

Trading

As anticipated, trading conditions have remained challenging in the first four months of the year.  In addition European construction markets were affected by the harsh winter weather, which continued through to mid-April.

Despite these conditions, SIG has continued to outperform its markets in the first quarter, by around 2%, somewhat mitigating the effects of the prevailing market environment. 

Group sales per day from continuing operations fell by c.2.5% in Sterling and by c.4.0% in constant currency for the first four months compared to the same period last year. 

In Mainland Europe sales per day in constant currency for the first four months were down by c.4.5%, with France and Germany both down by a similar amount.  In the UK & Ireland sales per day fell by c.1.0% excluding SIG Energy Management, which, as anticipated, has been significantly impacted by the ending of CERT and slow start-up of the Green Deal.

Trading improved from mid-April onwards as the weather conditions reverted to seasonal norms, with Group sales per day for April marginally ahead of last year in Sterling. 

Gross margin has been maintained for the first four months compared to prior year.

Alongside the strategic initiatives aimed at improving performance as outlined at SIG's full year results, the Group is also reviewing its discretionary expenditure, with benefits expected in the second half of the year.

Consistent with its infill acquisition strategy, the Group has purchased four businesses so far this year for a combined total consideration of £13m.  

Financial position

There has been no material change to the financial position of the Group since the beginning of 2013 other than normal seasonal movements.

Outlook

The combination of challenging markets and harsh weather in the first four months of the year is expected to affect SIG's first half performance adversely, as the Group does not anticipate that the shortfall in sales to date will be fully recovered in May and June.  However, management has moved quickly to mitigate the impact on the full year by tightening discretionary expenditure.

While the extreme weather conditions have made it difficult to discern underlying trading patterns so far, SIG continues to expect to make further progress in 2013 by focusing on sales outperformance, gross margin enhancement and improved operational efficiency. 

The Group's medium term target to achieve a return on capital employed 300bps ahead of its weighted average cost of capital, assuming flat markets, remains unchanged.

Conference call

There will be a conference call with management at 8.45am today to discuss this statement.  The dial in number is [phone], Pin: 78661336#.  The replay number is [phone], Pin: 639188#.

Enquiries

SIG plc

Stuart Mitchell, 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 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.  All statements in this release are based upon information known to the Company as at the date of this 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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