Capital Markets Day

RNS Number : 1148U

SIG PLC

28 November 2013

 



28 November 2013

SIG plc

Capital Markets Day

Targeting net annual benefit of c.£30m from strategic initiatives by 2016

SIG plc ("SIG" or "the Group"), a leading distributor of specialist building products in Europe, is hosting a Capital Markets Day in London this afternoon, the key theme of which is "making the whole greater than the sum of the parts".  A webcast and copy of the presentation will be available on www.sigplc.com following the event.

At the meeting the Group will provide more details on its key strategic initiatives to improve business performance, covering procurement, branch network, commercial vehicles and eCommerce.  Of these SIG believes procurement has the most potential and is targeting a 1.5% reduction in purchasing costs by 2016.

The table below sets out the targeted total annual benefits and expected additional operating costs of all the strategic initiatives, together with the Group's new UK ERP system, which is integral to the delivery of the programme, on a cumulative basis.

	2014	2015	2016 (recurring)
Gross benefit	£8-12m	£25-30m	c.£42m
Additional operating costs	£7m	£10m	£12m
Net annual benefit	£1-5m	£15-20m	c.£30m

In addition SIG is expecting to invest an additional c.£8m of capital expenditure relating to these projects in 2014.

The strategic initiatives reinforce SIG's confidence in achieving its return on capital employed target, which remains to exceed the Group's weighted average cost of capital by 300bps by 2015 assuming flat markets.  SIG's longer-term aspiration is to seek a return on capital employed beyond this target.

Commenting, Stuart Mitchell, Chief Executive, SIG plc, said:

"Although many of the building blocks to improve business performance are already in place and implementation is commencing, there is a significant step-up in activity going forward.  2014 is expected to be a year of investment and change, with meaningful payback from 2015 onward.  We are excited about the targets we have set ourselves and will update the market regularly on our performance." 

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

Certain information included in this announcement is forward looking and involves risk 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, the level of market demand in SIG's operating markets, competitors and margin management, commercial relationships, government legislation, debt, working capital/credit management, IT infrastructure and resilience and availability of key resources.  All statements in this announcement are based upon information known to the Company at the date of this announcement. 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. This statement does not constitute a profit forecast for the current financial period or for any future period. In addition, this statement should not be taken to mean that the earnings per share of SIG will necessarily match or exceed the historic reported earnings per share of SIG.

 

END

 

 

MSCBLBDBBUDBGXR