Trading Statement

SIG PLC
13 January 2005

                                                                 13 January 2005
                                TRADING STATEMENT


SIG plc, the leading supplier of insulation, roofing and commercial interiors
products, issues the following trading update in advance of the preliminary
results for the year ended 31 December 2004 which will be announced on 8 March
2005.

The previously reported very strong performance in the first six months of 2004
continued throughout the second half of the year, with continued growth in like
for like sales compared with the corresponding period in 2003.

The Group expects to report full year pre-tax profits ahead of consensus and at
the top end of market expectations. Whilst the gross margin gains made as a
result of the price increases were, as anticipated, less significant in the
second half year than in the first half, performance in the second half was
boosted by higher than expected sales volume in some areas, and the positive
impact of recent acquisitions.

Total sales for the year exceeded £1,395m, an increase of approximately £126m
(10%) over 2003. Adverse currency movement compared with prior year reduced
sales by £17m, and the sales growth on a constant currency basis was over 11%.

During the year, the Group increased the number of trading locations by 42, to a
total of 412 at the year end.

Like for like sales growth was over 7% in Sterling, and approximately 9% at
constant currency.


UK and Republic of Ireland (c. 65% of Group sales)

Total sales in our largest geographic region increased by approximately 11% over
2003. The like for like sales growth was in excess of 8%.

Operating profits increased strongly, due to the operational gearing effect of
the additional sales revenue and the margin improvements which were in part the
result of careful management of stocks in a period of significant product price
inflation.

Sales and operating profits were increased in all businesses on a like for like
basis, against the background of generally good demand in all construction and
building related markets.

Of the three larger business streams, like for like sales growth in roofing,
which is more biased towards housing repairs and maintenance, was less than that
achieved in both insulation and commercial interiors. Non-residential building
activity, partly influenced by increased Government investment in health and
education sectors was robust throughout the year. Demand for insulation in new
buildings continued to rise, albeit at a slower rate than in the previous year.
This trend is in line with the expected pattern of demand following phase one of
the tightening of the thermal performance requirements in the UK Building
Regulations (April 2002).


Mainland Europe (c. 30% of Group sales)

Sales in Mainland Europe were up 12% in local currencies and 10% in Sterling.

Like for like sales growth was achieved in all countries in which we operate,
Germany, France, The Netherlands and Poland.

Operating profits rose substantially compared with prior year in both local
currency and in Sterling. Compared with a relatively strong performance in the
second half of 2003, further growth was achieved in the second half of 2004,
though not at the exceptional rate reported for the first half. Again, the
margin benefits which chiefly occurred in the first half year in the Mainland
European businesses were a factor.

Market conditions in Germany and France were stable, depressed in The
Netherlands and buoyant in Poland.


USA (c. 5% of Group sales)

Sales and operating profits increased in local currency. On conversion to
Sterling, the weakness of the Dollar resulted in a reduction in sales, though
the operating profit shows a significant improvement over prior year.

Market conditions were a little stronger than the prior year, and whilst there
was a sharp upturn in the level of enquiries and quotations for project work in
the key Petrochemical and Energy related markets, few of these programmes
actually began work in 2004.


Acquisitions

A total of 13 acquisitions were completed during the year, all of which
complement existing businesses and are within our existing geographic reach.
Total spend on acquisitions was circa £47m (including assumed debt and deferred
consideration). With the exception of the French commercial interiors business
acquired in May which was loss making at the time of acquisition, all acquired
trading locations have been retained, and all the businesses are performing in
line with our expectations.

In total, acquisitions added 31 additional trading sites by the end of 2004.


Outlook

The strong performance in 2004 has been achieved against the background of
market conditions which have been generally more favourable compared with prior
year, in most of the main markets in which the Group operates. The beneficial
impact of significant price inflation and stock holding gains has been marked,
particularly in the first half of the year.

Looking into 2005, market conditions are expected to remain broadly similar in
Mainland Europe, Ireland and the USA.

In the UK, whilst the Group would clearly not be immune from any weakness in the
RM&I housing market, activity levels in new construction, both residential and
non-residential are expected to remain solid. Government expenditure on social
housing and related upgrading programmes and in the health and education
building sectors is expected to continue in 2005.

Price inflation in 2004 was driven by rising manufacturers' input costs for
materials and energy. A number of these influences are still in place, and some
further price inflation can be anticipated during 2005, though it is not
expected to have as significant an impact as in 2004.

Acquisitions made in 2004 are performing well, and are on course to make a
meaningful contribution on a full-year basis in 2005. The Group continues to
seek growth opportunities and expects to increase further the number of trading
sites during the year. Further investments are being made to increase product
storage and handling facilities, and to enhance customer service. These
investments include several UK operations moving to larger sites, and the
continued programme of upgrading existing premises.

The Board is confident that further progress will be made in 2005.

Enquiries:

David Williams, Chief Executive
Gareth Davies, Finance Director       SIG plc    0114 285 6300

Gordon Simpson / Kirsty Flockhart     Finsbury    020 7251 3801



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