Trading Update

RNS Number : 2185V

SIG PLC

10 January 2013

 



SIG plc

("SIG" or "the Group")

Trading Update

SIG plc, 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, today issues a Trading Update for the twelve months ended 31 December 2012.

Total revenues* in 2012 were c.£2,635m, flat on a constant currency basis, though down by 4% in Sterling due to exchange rate movements.

Trading in the second half year benefited from continued resilience in Mainland Europe and a strong performance in SIG Energy Management, as energy suppliers increased volumes to meet their CERT targets. Consequently the Board is confident that 2012 underlying** profit before tax will be no less than £82m.

In Mainland Europe full year sales increased by c.1.5% in constant currency but fell by c.5% in Sterling, with France in particular continuing to perform well through to year end.  In the UK & Ireland sales from continuing operations were down c.2% in constant currency, with the UK down c.1.5%.

In line with previous guidance the Group's net debt is expected to have reduced to c.£110m as at 31 December 2012. This is after £8m of expenditure on five infill acquisitions. 

Cost savings target increased to c.£10m

In its Interim results in August the Group announced it was targeting a further £7m of cost savings.  SIG has subsequently identified c.£3m of additional efficiencies from its branch network, thereby increasing the target to c.£10m, around three-quarters of which will fall in 2013.  The associated net exceptional charge is now expected to be c.£18m in 2012.

Disposal of Central European business

SIG has agreed the sale of its Czech and Slovak businesses, which together account for only 1% of the Group's revenues, to the Woodcote Group, a recent management buyout from Wolseley plc. The Slovak element of this transaction is subject to regulatory approval, which is expected to be granted within a short period of time.  SIG has decided to concentrate its management and resources in the region on further strengthening its position in Poland, a market to which the Board remains fully committed.

Outlook

In the absence of any clear signs of macroeconomic improvement in the Group's main countries of operation, SIG expects construction markets in 2013 to remain challenging and likely to decline at a rate similar to 2012.  The Group also anticipates a reduction in volumes for its SIG Energy Management business, due to the end of CERT and a likely slow start-up of the successor Green Deal scheme.  

Against this background, and building on recent performance, SIG expects to make further progress in 2013 by continuing to focus on sales outperformance, gross margin enhancement and improved operational efficiency.

Full year results

SIG will announce its full year results for the year ended 31 December 2012 on 7 March 2013.

Conference call

There will be a conference call with management at 8.00am today to discuss this trading update.  The dial in number is 0203 139 4830, Participant Pin: 30663115#.

Enquiries

Chris Davies, Chief Executive Doug Robertson, Finance Director Simon Bielecki, Head of Investor Relations	SIG plc	0114 285 6300 07515 794359
Richard Mountain / Nick Hasell	FTI Consulting	020 7269 7291

* Excluding businesses divested in 2011.

** Underlying profit before tax is stated before the amortisation of acquired intangibles, impairment charges, restructuring costs, other one-off items, acquisition expenses, profit and loss on disposals, trading profits and losses from disposed businesses, net losses on derivative financial instruments and pension scheme curtailment gain.

Cautionary Statement

This Trading Update 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 Trading Update is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.

Certain information included in this Trading Update 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 Trading Update.  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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