TIDMSHI
RNS Number : 9766E
SIG PLC
05 July 2023
5 July 2023
This announcement contains inside information
SIG plc H1 Trading Update
SIG plc ("SIG", or "the Group"), a leading supplier of
specialist insulation and building products across Europe, today
issues a trading update for the six months to 30 June 2023 ("H1" or
"the period"), in advance of the release of its H1 results on 8
August 2023.
Key points
-- Group revenue of GBP1,424m, representing flat
like-for-like(1) ("LFL") revenue versus prior year, reflecting
volume declines offset by input price inflation
-- Market conditions remained challenging and variable, with
notably softer demand in May and June, particularly in Germany and
France
-- Underlying operating profit(2) expected to be c.GBP33m, with
early impact of productivity initiatives partially offsetting
demand weakness and inflationary impact on operating costs
-- Whilst timing of demand recovery remains uncertain, H2 profit
is expected to benefit further from the ongoing productivity
initiatives
-- Consequently the Board continues to expect the Group to
deliver full year underlying operating profit within the current
range of market expectations(3) , but towards the lower end of that
range
-- Cash performance in the period in line with expectations, and
reflecting the normal seasonal increase in working capital. The
Board expects to report net debt at 30 June of GBP470m (post IFRS
16) and GBP176m (pre IFRS 16)
Trading Summary
Group LFL revenue was flat year-on-year in the period, with the
continued positive tailwind from input price inflation being offset
by lower volumes. The overall impact of inflation is estimated to
have added c.9% to Group revenue growth in the period. As expected,
price inflation moderated during H1 compared to the impact during
2022, as we annualise some of the significant prior year price
increases.
Reported Group revenue was 5% higher in the period, including
c.3% from acquisitions, together with c.2% in aggregate from
movements on working days and exchange rates.
1 January to LFL GBP'm
30 June growth
Revenue
UK Interiors 4% 381
UK Exteriors (2)% 221
UK 2% 602
------------------- -------- ------
France Interiors 1% 117
France Exteriors 2% 250
Germany 0% 236
Poland (9)% 109
Benelux 7% 62
Ireland (18)% 48
EU (1)% 822
------------------- -------- ------
Group 0% 1,424
------------------- -------- ------
Market conditions were challenging through H1 across our
geographies, including a notable softening in demand in France and
Germany in the last two months. Volumes and market conditions were
notably weaker in Poland and Ireland over the period as a whole,
with both also coming up against especially strong prior year
comparators.
Outlook
We expect weak and uncertain demand conditions throughout the
rest of the year, along with a continued, but further moderating,
revenue tailwind from input price inflation. Whilst trading in
recent weeks leads us to be more cautious as to the timing of any
broad-based improvement in demand conditions, the second half will
benefit from ongoing productivity initiatives as well as an
expected profit on one specific property move. Consequently, the
Board continues to expect the Group to deliver full year underlying
operating profit within the current range of market expectations,
but towards the lower end of that range.
Notwithstanding short-term market weakness, we continue to
progress the strategic and operational initiatives which underpin
our ambition for the Group. As a European market leader in the
supply of specialist insulation, and with 80% of the Group's sales
covering insulation and the wider building envelope, we are
well-positioned to benefit from long-term structural growth
drivers, notably sustainable construction and decarbonisation of
buildings. We also remain confident in our ability to further
improve our market positions, and to continue to improve our
profitability when market conditions recover.
1. Like-for-like is defined as sales per working day in constant
currency, excluding completed acquisitions and disposals
2. Underlying represents the results before Other items. Other
items relate to the amortisation of acquired intangibles,
impairment charges, profits and losses on agreed sale or closure of
non-core businesses and associated impairment charges, net
operating profits and losses attributable to businesses identified
as non-core, net restructuring costs, and other non-underlying
profits or losses.
3. Company collated analyst expectations is for Full Year 2023
underlying operating profit (EBIT) of GBP74.2m, within a range of
GBP65.3m to GBP84.0m, as at 4 July 2023
Contacts
SIG plc +44 (0) 114 285 6300 /
ir@sigplc.com
Gavin Slark Chief Executive Officer
Ian Ashton Chief Financial Officer
Sarah Ogilvie Head of Investor Relations
FTI Consulting +44 (0) 20 3727 1340
Richard Mountain
Peel Hunt LLP - Joint broker to
SIG +44 (0) 20 7418 8900
Mike Bell / Charles Batten
Investec Bank plc - Joint broker
to SIG +44 (0) 20 7597 5970
Bruce Garrow / David Anderson
LEI: 213800VDC1BKJEZ8PV53
This announcement contains inside information for the purposes
of UK MAR. The person responsible for arranging the release of this
announcement on behalf of SIG is Andrew Watkins, Group General
Counsel & Company Secretary.
Cautionary Statement
This document contains certain forward-looking statements
concerning the Group's business, financial condition, results of
operations and certain Group's plans, objectives, assumptions,
projections, expectations or beliefs with respect to these items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'potential',
'targets', 'goal', 'forecasts' or 'estimates' or similar
expressions or negatives thereof.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the Group's actual
financial condition, performance and results to differ materially
from the plans, goals, objectives and expectations set out in the
forward-looking statements included in this document.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to the Group
or any persons acting on its behalf are expressly qualified in
their entirety by the factors referred to above. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised;
actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Subject to compliance with
applicable law and regulation, the Group does not intend to update
the forward-looking statements in this document to reflect events
or circumstances after the date of this document and does not
undertake any obligation to do so.
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END
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July 05, 2023 02:00 ET (06:00 GMT)
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