REG - SIG PLC - Full year results for year ended 31 December 2024
05/03/2025 07:00
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RNS Number : 3599Z SIG PLC 05 March 2025
5 March 2025
SIG plc
Full year results for the year ended 31 December 2024
SIG plc ("SIG", "the Group" or "the Company") today announces its results for
the full year ended 31 December 2024 ("FY24" or "the year").
( ) 2024 2023
Underlying revenue £2,611.8m £2,761.2m
LFL(2) sales (4)% (2)%
Gross margin 24.5% 25.3%
Underlying(1) operating profit £25.1m £53.1m
Underlying(1) operating margin 1.0% 1.9%
Underlying(1) (loss)/profit before tax £(14.3)m £17.4m
Underlying(1) (loss)/earnings per share (1.7)p 0.4p
Net debt £497.3m £458.0m
Statutory results 2024 2023
Revenue £2,611.8m £2,761.2m
Operating (loss)/profit £(3.8)m £4.0m
Loss before tax £(44.8)m £(31.9)m
Total loss after tax £(48.6)m £(43.4)m
Basic loss per share (4.2)p (3.8)p
Financial highlights
· FY24 results reflect a robust performance in the face of ongoing
challenging market conditions, supported by extensive cost and restructuring
actions
· Full year Group like-for-like(2) ("LFL") sales down 4%, with revenues
of £2.61bn (2023: £2.76bn)
o Sequential improvement in H2 LFL sales performance to (2)%, vs (6)% in H1
· Underlying(1) operating profit of £25.1m, in line with expectations
· Good progress on strategic actions to benefit medium and longer term
profitability, with efficiencies and productivity gains mitigating much of the
near-term impact of lower volumes and operating cost inflation
o £32m reduction in reported year over year operating expenses, and £42m
reduction before inflation and FX
· Underlying(1) loss before tax of £14.3m; statutory loss before tax
of £44.8m, reflecting £30.5m of Other items, including £13.4m restructuring
costs, £5.3m refinancing costs and a £7.3m non-cash impairment in the UK
Interiors business
· Operating cash inflow(3) of £4m and free cash outflow(3) of £39m,
reflecting lower profitability
· Successful refinancing of €300m Bond and £90m RCF in October 2024
extended debt maturies to 2029 and ensured ongoing robust liquidity
· Year-end net debt of £497m (2023: £458m), including £321m (2023:
£327m) of net lease liabilities; year-end cash balances of £87m (2023:
£132m) along with undrawn RCF of £90m
Operational and strategic highlights
· UK Roofing LFL sales growth rate increased in H2 to 5% from (2)% in
H1, despite UK market weakness
· Ireland LFL sales growth acceleration to 17% in H2 from 9% in H1,
with 170bps FY margin improvement from operating leverage as volumes recover
· French and German businesses continued to face the most subdued
market conditions, but growing ahead of markets through differentiated
offering and continued strong execution
· Headcount reduction of 430 across the Group within the year,
including closure of 17 underperforming branches, with an acceleration of
restructuring actions in UK Interiors and Benelux in Q4
· Good progress on Group wide 'GEMS' strategy (Grow, Execute,
Modernise, Specialise), with modernisation initiatives including new
e-commerce customer sales platform launched in Germany, and specialisation
including expansion of specialist markets product ranges and contracts in UK
Commenting, Gavin Slark, Chief Executive Officer, said:
"The Group's 2024 results reflect a robust trading performance in challenging
markets. We continued to experience lower volumes from weak end-markets across
the UK and EU, but we have used this period to reshape our operations, through
cost reduction and restructing actions, and to create better performing
businesses across the Group. This will help to significantly improve our
future profitability when markets recover.
"We also maintained a keen focus on our customers and delivering great
service. I am proud of the energy and resilience our people have continued to
demonstrate in this tough environment. Across all our operations we are
implementing a range of initiatives under our 'GEMS' strategy, which will lead
to a higher-value sales mix, continually stronger commercial execution, and
more efficient operations, all of which will support delivery of our 5%
medium-term operating margin target.
"The operational gearing in our business model applies equally strongly in
conditions of rising demand, and, accordingly, the Board believes the Group
remains very well positioned to benefit from the market recovery when it
occurs."
Notes
1. Underlying represents the results before Other items. Other items relate to
the amortisation of acquired intangibles, impairment charges, net
restructuring costs, cloud based ERP implementation costs, costs associated
with refinancing and other specific items.
2. Like-for-like is defined as sales per working day in constant currency,
excluding completed acquisitions and disposals, and adjusted to exclude the
net impact of branch closures and openings. The latter adjustment for branch
changes was incorporated for the first time in our January trading statement,
and the previously reported H1 numbers restated accordingly. The change had an
impact of 1% on Group LFL growth rates in both H1 and H2.
3. Free cash flow is defined as all cash flows excluding M&A transactions,
dividend payments, and financing transactions. Operating cash flow represents
free cash flow before interest and financing and tax.
An Investor and Analyst presentation will be available on www.sigplc.com from
7:15am UK time today. A live presentation of the results followed by Q&A,
hosted by Gavin Slark, CEO, and Ian Ashton, CFO, will take place at 10:00am UK
time today.
Please click the link below to join the webinar:
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(https://storm-virtual-uk.zoom.us/webinar/register/WN_kCVdaS1XT02LnnKVd8G1XA)
Webinar ID: 869 3075 2496
Or One tap mobile:
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Or join by phone:
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5240 United Kingdom; International numbers available:
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Enquiries
SIG plc +44 (0) 114 285 6300
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
LEI: 213800VDC1BKJEZ8PV53
About
SIG plc is a leading pan-European supplier of specialist building products to
trade customers across the UK, France, Germany, Ireland, Benelux and Poland.
With leading market positions in specialist insulation, interiors and roofing
products, as well as a growing position in construction accessories, SIG
facilitates one-stop access to an extensive product range, provides expert
technical advice and coordinates often complex delivery requirements. For
suppliers, SIG offers a channel through which products can be brought to a
highly fragmented market of smaller customers and sites that are of
insufficient scale to supply direct. SIG employs approximately 6,700 employees
across Europe and is listed on the London Stock Exchange (SHI). For more
information, please visit the Company's website, www.sigplc.com
(http://www.sigplc.com) .
Trading overview
Reported Group revenues were 5% lower in the year, including a 1% negative
impact from exchange rates that was offset by a similar size benefit from the
number of working days. There was also a 1% impact on reported revenue from
branch closures during the year. These closures had the biggest impact in UK
Interiors, reducing that business's full year reported sales by 3%.
Group LFL revenues, which are now adjusted to exclude the impact of branch
closures and openings, declined 4% compared to prior year. Selling price
deflation (including net input cost deflation) had a negative 3% impact on the
year overall, being 3% in H1 and 2% in H2. Volumes were down 3% in H1, and
flat in H2, reflecting softer H2 prior year comparatives but also some
stabilisation of absolute volumes in the latter part of the year. Whilst weak
demand has continued to be a factor in the majority of the Group's markets,
reflecting the ongoing softness in the European building and construction
sector, LFL performance improved sequentially in H2 as expected, and in Q4
compared to Q3.
LFL sales growth H1 H2 FY FY24 sales
2024 vs 2023
£m
UK Interiors (13)% (6)% (10)% 495
UK Roofing (2)% 5% 2% 381
UK Specialist Markets (7)% (2)% (5)% 238
UK (8)% (1)% (5)% 1,114
France Interiors (7)% (7)% (7)% 200
France Roofing (11)% (5)% (8)% 410
Germany (3)% (1)% (2)% 439
Poland 3% (7)% (2)% 241
Benelux (12)% (4)% (8)% 104
Ireland 9% 17% 13% 104
EU (5)% (3)% (4)% 1,498
Group (6)% (2)% (4)% 2,612
In the UK Interiors business a new Managing Director with extensive industry
experience has been in place since 1 October 2024, and he has already
accelerated the strategic and operational changes that were underway to enable
that business to sustainably improve its operating margin. The business also
delivered a robust performance against the market in FY24, especially in H2.
In UK Roofing we have positive momentum and delivered a notably strong set of
results, driven by excellent commercial execution. In the UK Specialist
Markets business, revenue was affected by weaker demand in the agricultural
and commercial warehousing sectors, but there was more resilience in our
construction accessories business.
In France, both businesses continue to execute effectively on their strategic
plans and to manage well through a very subdued market. Larivière, our
roofing business in France, was impacted by the weak French construction
market with the rate of decline reducing in H2 as the business lapped the
weaker prior year comparator. Larivière has increased its sales focus on
larger customers and higher value products alongside its core ranges. LiTT,
our interiors business in France, has experienced weaker demand and volume as
well as market pressure on price, with notable weakness in new residential
projects. Despite this, the business has grown its market position in 2024
with a continued strong focus on commercial initatives.
The German business continued its robust recovery of the last three years,
performing extremely well in what is also a very challenging current market.
Poland's growth in H1 softened to a decline in the second half due to an
unexpectedly weaker Q3, and with year on year weakness in the commercial
project market in particular, but has stabilised since.
Benelux executed a significant restructuring in its Netherlands business in
Q4, closing a number of branches, to narrow its focus to higher value
categories in interiors and technical insulation. This is a key step on their
way to an improved margin and positive cash generation.
Ireland delivered stronger results in 2024, partly due to market recovery
after a very soft 2023, but also thanks to strong commercial execution across
all our businesses, including the three specialist contracting businesses,
which cover office fit-out, kitchen and bathroom fit-out, and industrial
infrastructure painting. Ireland's operating margin improved 170 bps year over
year due to the positive impact of operating leverage.
Strategic progress
Our vision is to be the best provider of specialist construction and
insulation products in Europe. As an enabler of this, we have a core objective
to improve our operating performance, and we are focused on four key pillars
to drive our performance over the medium-term to our 5% operating profit
margin target. These pillars are to Grow, Execute, Modernise and Specialise
(GEMS). Key areas of strategic progress in 2024 can be summarised as follows:
Grow
Despite continued market contraction in 2024, we kept our focus on delivering
great service, having the right products in the right place at the right time,
coupled with excellent logistics and hence being the 'best' in the eyes of our
customers.
Our 2024 LFL sales growth rates in our largest operating companies continued
to show good performance relative to the local markets. Notably, in the United
Kingdom, our UK Roofing business continued to trade with robust momentum
against the wider market and continues to benefit from investments made in
sales and marketing, notably the customer service experience in our branches.
Our German business has also significantly outperformed its local market. In
February 2025, we hosted a major trade show in Frankfurt, the first of its
kind in the German market in our space, bringing together over 1,500
representatives of our customers and suppliers under one roof. This event was
an excellent example of industry leadership in action and an example of why
our German business is performing so strongly.
Execute
We are committed to improving execution in all facets of our business in order
to deliver consistent and profitable growth.
During 2024, we took further restructuring actions to reduce our permanent
cost base to mitigate the impact of lower volumes on profitability. These
measures, together with those commenced in the second half of 2023, are
expected to generate £37m in annualised cost savings, and a £25m profit
benefit including the overall impact of branch closures.
We have also reduced headcount by around 430 over the course of 2024. This
included approximately 290 from restructuring.
We closed 17 branches that were either consistently underperforming, had seen
a negative change in local market growth dynamics or were in locations which
we believe we can service more effectively from another branch.
As outlined further above, we also accelerated restructuring actions in
Benelux and UK Interiors in Q4 to improve their performance and profitability.
Modernise
The progressive modernisation and digitalisation of our operations creates an
important opportunity for the Group to increase overall profitability and
efficiency.
In 2024 we expanded our customer facing e-commerce platforms, with a new
omnichannel sales model and e-commerce platform launching in Germany in
August.
In France, an e-commerce platform for France Interiors is also being
progressed, towards a targeted launch later in 2025. In both we are developing
these platforms by leveraging our successful e-commerce experience in Poland.
Both platforms will allow us to provide a more seamless and convenient
customer experience, by allowing them to purchase from SIG through the channel
most convenient for them anywhere, anytime.
Specialise
We aim to accelerate our growth in more specialist, higher margin
opportunities.
In 2024 our UK Specialist Markets business developed a number of innovative
new products in our performance materials manufacturing and fabricating
businesses. Some of these new products will target future market demand for
even greater fire protection in high rise and other buildings, following
changes under the UK Building Safety Act.
More broadly, our performance materials business has already launched a number
of new products during the year, and has a strong product development
pipeline. The launches have been supported by new training modules to support
the specification of our new products earlier in the building design process.
Sustainability
Growing sustainably as a responsible business is another of our key
objectives. During 2024 we made good progress on a number of our long-term
targets.
One of our targets is to reach zero SIG waste to landfill by the end of the
2025 financial year. In 2024, we further improved our rate of diversion of
waste to landfill, reaching 96%, an improvement from 94% in 2023. On carbon,
our net zero emissions fell by 6% in the year, and have decreased by 18%
against our 2021 baseline.
The significant driver of our carbon emissions remains our fleet, which we
rely on to deliver our products. We continue to make progress towards our
long-term reduction targets, although progress will not always be in a
straight line each year as it is also influenced by market-driven changes in
delivery volumes and by the rate at which commercially viable new low-carbon
HGV technologies are brought to market.
Our safety performance also improved in 2024, with a good reduction in our
Lost Time Injury Frequency Rate ('LTIFR') to 8.0 from 8.4 in 2023, driven by
our ongoing safety programme to keep 'Everyone Safe, Every Day'.
Our employee engagement levels also remained broadly stable, with an employee
engagement net promoter score of +9 (2023: +14), remaining positive despite
the actions we have taken to reduce headcount and costs. This engagement is
reflected in the strong commitment our colleagues have shown in managing, in a
very agile way, through these difficult markets.
Balance Sheet
In October 2024 the Group successfully refinanced its €300m bond and £90m
RCF facility, which extended debt maturies to 2029 and provides ongoing robust
liquidity. Further details are set out in the Financial Review. The Group's
balance sheet was impacted by the lower underlying operating profit, resulting
from weaker market demand, which led to a free cash outflow of £39m,
resulting in year end cash balances of £87.4m (2023: £132.2m). The movement
in cash balances in the year reflects the free cash outflow, together with
unfavourable currency movements and deferred acquisition costs, partially
offset by the small net proceeds of the bond refinancing. The Group's
revolving credit facility ("RCF") of £90m was undrawn throughout 2024, and
remains undrawn at the date of this report.
Year-end net debt was £497.3m (2023: £458.0m). Combined with the lower
profitability in the year, this resulted in year-end leverage of 4.7x (2023:
3.5x). A small increase in net lease liabilities and an increase in bond debt
including accrued interest was more than offset by a favourable currency
movement on the bond debt and lease liabilities.
Dividend
No dividend will be paid for 2024. The Board reiterates its commitment to
return to paying a dividend, appropriately covered by underlying earnings,
when it is prudent to do so. Continued successful strategic execution,
including sensible investment where appropriate, will deliver sustainable,
profitable growth and cash generation as markets recover, allowing the Board
to consider a range of capital allocation options.
Outlook
The Group continues to expect softness in market conditions in 2025 and, to
the extent there is a recovery, that it is more likely to drive demand in the
second half of the year. Trading trends in early 2025 have been largely as we
would have expected, and LFL sales for the first two months of the year were
flat on prior year.
During this period of market weakness we will continue to focus on our
execution, manage near-term margin pressure and strengthen our operating
platform. Alongside ongoing targeted investment to support our strategic
growth enablers, the benefits from productivity and cost initiatives will
contribute incrementally as the year progresses.
The operational gearing in our business model applies equally strongly in
conditions of rising demand, and, accordingly, the Board believes the Group
remains very well positioned to benefit from the market recovery when it
occurs. This also underpins our continued belief that the Group will deliver
its targeted 5% operating margin in the medium-term.
FINANCIAL REVIEW
The Group managed effectively the impact of challenging market conditions
during 2024. The impact of declining volumes and falling prices were mitigated
by extensive cost reduction, including ongoing restructuring and productivity
initiatives. These actions also position the business to deliver a step-up in
profitability when markets return to growth. The Group has maintained robust
liquidity, and successfully refinanced its €300m bond and £90m RCF in
October 2024, with these facilities now maturing in 2029.
Revenue
Group revenue of £2,611.8m (2023: £2,761.2m) was 5% lower on a reported
basis, including a negative 1% impact from foreign exchange rates, a 1%
increase from differences in the number of working days and a net 1% negative
impact from branch closures and openings. LFL revenues, which are now adjusted
to exclude the impact of branch closures and openings, reduced by 4%
year-on-year. Within this 4%, the impact of sales price deflation was
approximately 3%, about two thirds of which was related to input cost
deflation, and there was a decline in volumes of approximately 1%.
Operating costs and profit
Gross profit decreased 8.5% to £640.0m (2023: £699.6m) with a gross profit
margin of 24.5% (2023: 25.3%). The reduction in gross margin reflects greater
than normal pricing pressure as a result of the weak demand environment. The
businesses continue to manage these dynamics effectively and were able to
offset the volume weakness in part through mix benefits.
The Group's underlying operating costs decreased by 4.9% to £614.9m (2023:
£646.5m). The decrease was primarily due to operating cost initiatives,
including restructuring actions taken from H2 2023 onwards, and partly due to
lower volumes. These benefits were partially offset by operating cost
inflation, with the biggest impact being on wages and salaries. The movement
in year over year operating costs was also affected by a one-off £3.7m profit
recorded in 2023 from the sale of the former French Roofing head office
building in Angers.
The Group's underlying operating profit decreased to £25.1m (2023: £53.1m),
at an operating margin of 1.0% (2023: 1.9%). Reported operating loss was
£3.8m (2023: £4.0m profit) after Other items of £28.9m (2023: £49.1m).
Other items includes £13.4m restructuring costs, £3.9m refinancing costs and
a £7.3m non-cash impairment in the UK Interiors business.
Segmental analysis
UK
Revenue Revenue LFL sales Underlying operating Underlying operating (loss)/profit
2024 2023 vs 2023 (loss)/profit 2023
£m £m 2024 £m
£m
UK Interiors 495.0 556.5 (10)% (3.5) (1.6)
UK Roofing 380.6 369.4 2% 13.2 10.6
UK Specialist Markets 238.1 247.6 (5)% 4.8 10.3
UK 1,113.7 1,173.5 (5)% 14.5 19.3
Revenue in UK Interiors, a specialist insulation and interiors distribution
business, decreased to £495.0m (2023: £556.5m). Revenue was 11% lower
year-on-year due to the impact of a decline in market volumes and input price
deflation in a very competitive market. The drop in sales included a c3%
reduction related to branch closures within a wider programme of strategic
initiatives that are underway to transform the performance and profitability
of this business over the medium-term. LFL revenue declined 10%. The H1 LFL
decline of 13% reduced to an H2 decline of 6%, reflecting a softening in
comparables as well as a stablisation in absolute volumes in H2. The decline
in revenue, together with pricing pressure affecting gross margin, partially
offset by operating cost reductions, resulted in an underlying operating loss
of £3.5m (2023: £1.6m).
Revenue in UK Roofing, a specialist roofing merchant, increased by 3% to
£380.6m (2023: £369.4m), with LFL revenue up 2%. This was driven by a strong
sales performance relative to a weak UK market, as a result of the business's
early successful execution of its multi-year programme of business development
and growth initiatives. In particular, H2 LFL growth of 5% reflected a robust
outperformance of its market as well as the lapping of a weaker prior year
comparative. Full year volume growth was only partially offset by a small
purchase price deflation headwind. A small reduction in gross margin due to
pricing dynamics was offset by operating cost reduction, and resulted in
improved underlying operating profit of £13.2m (2023: £10.6m).
Revenue in UK Specialist Markets decreased to £238.1m (2023: £247.6m). LFL
revenue declined 5%, driven by a softer market, and by input price deflation
in steel, which is a bigger element of these businesses than elsewhere in the
Group. H1 LFL revenue decline of 7% eased to a decline of 2% in H2, due to a
stabilisation in market conditions and the effect of weaker prior year
comparables. These factors, coupled with operating cost inflation, resulted in
a reduction in underlying operating profit to £4.8m (2023: £10.3m).
France
Revenue Revenue LFL sales Underlying operating Underlying operating
2024 2023 vs 2023 profit profit
£m £m 2024 2023
£m £m
France Interiors 200.4 218.9 (7)% 6.2 10.4
France Roofing 410.1 458.0 (8)% 8.0 19.3
France 610.5 676.9 (8)% 14.2 29.7
France Interiors, a structural insulation and interiors business trading as
LiTT, saw reported revenue decrease by 8% to £200.4m (2023: £218.9m), and by
7% on a LFL basis, with the rate of decline steady between H1 and H2. This was
driven by lower market demand and volumes together with input price deflation,
as opposed to the price inflation seen in 2023. The revenue decline, coupled
with increased margin pressure, was partially mitigated by various actions to
reduce operating costs, and resulted in a £4.2m decrease in underlying
operating profit to £6.2m (2023: £10.4m).
Revenue in France Roofing, a specialist roofing business trading as
Larivière, decreased by 10% to £410.1m (2023: £458.0m), and by 8% on a LFL
basis, including a small impact of strategic branch closures made during the
year. Demand and volumes were lower for the year due to continued softening of
the residential new-build market and input price deflation. The H1 LFL revenue
decline of 11% eased to a decline of 5% as the business lapped the weak H2
comparator in the prior year, and as volumes saw some stablisation. The
decrease in revenue and reduced gross margin was partially offset by reduced
operating costs, resulting in an underlying operating profit decrease of
£11.3m to £8.0m (2023: £19.3m). The year on year change in underlying
operating profit includes the one-off operating profit benefit in H2 2023 of
£3.7m from the sale of the business's former headquarters in Angers.
Germany
Revenue Revenue LFL sales Underlying operating Underlying operating
2024 2023 vs 2023 profit profit
£m £m 2024 2023
£m £m
Germany 438.5 462.1 (2)% 4.7 15.6
Revenue in Wego/Vti, our specialist insulation and interiors distribution
business in Germany, decreased by 5% to £438.5m (2023: £462.1m), including a
small impact from closures of underperforming branches. LFL revenue decreased
2%, with deflation being offset by marginal volume growth, the latter despite
weaker market conditions in the very subdued German construction market. H2
was slightly better than H1 due to the lapping of softer prior year
comparators. Despite the headline LFL decline and consequential impact on
profitability, the business continued to demonstrate very positive momentum
and execution on strategic initiatives during the year, as set our earlier in
this report. Gross margin also declined due to increased price competition,
whilst operating costs increased, with restructuring partially offsetting
inflation. This resulted in reduced underlying operating profit of £4.7m
(2023: £15.6m).
Poland
Revenue Revenue LFL sales Underlying operating Underlying operating
2024 2023 vs 2023 profit profit
£m £m 2024 2023
£m £m
Poland 241.4 237.9 (2)% 4.6 7.1
In our Polish business, a market-leading distributor of insulation and
interiors, revenue increased to £241.4m (2023: £237.9m), including a c1%
increase due to two new branches. LFL sales decreased by 2%. LFL growth
shifted from 3% growth in H1 to a 7% decline in H2, as the H1 benefit of
government housing stimulus slowed and macroeconomic factors saw a sequential
weakening in construction market demand. This was more marked in Q3, and Q4
saw some stablisation. The full year decline was primarily driven by input
price deflation, with underlying volumes growing. Together with operating cost
inflation, partially offset by gross margin improvement, this resulted in a
reduction in underlying operating profit to £4.6m (2023: £7.1m).
Benelux
Revenue Revenue LFL sales Underlying operating Underlying operating
2024 2023 vs 2023 (loss) (loss)
£m £m 2024 2023
£m £m
Benelux 103.6 116.9 (8)% (4.5) (3.0)
Reported revenue from the Group's business in Benelux decreased to £103.6m
(2023: £116.9m) with a c1% impact from the strategic decision to close seven
branches in late H2. LFL revenue was down 8%, with the H1 LFL decline of 12%
improving to a decline of 4% in H2. The revenue decline resulted from
continued market softness, albeit this saw some stabilisation due to lapping
of weak comparables in H2. The profit impact of this was only partially offset
by operating cost savings, resulting in an underlying operating loss of £4.5m
(2023: £3.0m).
Ireland
Revenue Revenue LFL sales Underlying operating Underlying operating
2024 2023 vs 2023 profit profit
£m £m 2024 2023
£m £m
Ireland 104.1 93.9 13% 3.3 1.4
Our operations in Ireland comprise a specialist distributor of interiors and
exteriors, and three separate specialist contracting businesses offering
office fit-out, industrial infrastructure coatings services and
kitchen/bathroom interiors fit-out. Reported revenue increased by 11% to
£104.1m (2023: £93.9m), and by 13% on a LFL basis. This was partially a
result of improved market conditions after a very weak 2023, but also due to
good execution of commercial initiatives to improve profitable market share.
Underlying operating profit increased as a result to £3.3m (2023: £1.4m).
Reconciliation of underlying to statutory result
Other items, being items excluded from underlying results, amounted to £30.5m
for the year (2023: £49.3m) on a pre-tax basis. The key comparable changes in
Other items year-on-year are the higher prior year impairment charge in 2023,
the one-off costs of refinancing in 2024, and higher restructuring costs in
2024. The numbers for both years are summarised in the table below:
2024 2023
£m £m
Underlying (loss)/profit before tax (14.3) 17.4
Other items - impacting profit before tax:
Amortisation of acquired intangibles (2.1) (2.8)
Impairment charges (7.3) (33.8)
Cloud based ERP implementation costs (1.0) (2.2)
Costs associated with acquisitions - (3.2)
Net restructuring costs (13.4) (8.0)
Onerous contract costs - (0.2)
Costs associated with refinancing (3.9) -
Other specific items (1.2) 1.1
Non-underlying finance costs (1.6) (0.2)
Total Other items (30.5) (49.3)
Statutory loss before tax (44.8) (31.9)
Other items are disclosed separately in order to provide a better indication
of the underlying earnings of the Group. Further details of other items in
2024 are as follows:
· Impairment charges in the year relate to right-of-use asset
impairment in the UK Interiors business.
· Net restructuring costs in the year comprise £6.5m redundancy and
related staff costs and £6.9m branch closure costs, including £2.9m
impairment of right-of-use assets and tangible fixed assets, all related to
restructuring across the Group.
· Costs associated with refinancing in the year relate to the new
€300m bond issuance and the extension of the RCF. These consist of £3.9m of
transaction costs, and also a £1.4m write-off of unamortised fees, included
within non-underlying finance costs in the above table, relating to the prior
refinancing in 2021.
· Cloud based ERP implementation costs relate to project configuration
and customisation costs associated with strategic cloud computing
arrangements, which are expensed, rather than being capitalised as intangible
assets.
· Other specific items comprises the estimated impact of a property
lease dispute, including impairment of right-of-use and fixed assets of
£0.7m, and costs relating to an investment property no longer in use by the
Group.
Taxation
The effective tax rate for the Group on the total loss before tax of £44.8m
(2023: £31.9m loss) is a "negative tax rate" of 8.5% (2023: negative 36.1%).
The tax charge for the year of £3.8m is related to taxable profits made in
the majority of our EU markets. Tax losses in the UK and Benelux, which cannot
be surrendered or utilised cross border, are not currently recognised as
deferred tax assets, and this impacts the effective tax rate. Due to a
reduction of the profit before tax in the overseas operating companies and the
ongoing losses in the UK, the Group has generated an overall loss before tax
which, alongside the positive P&L tax charge in the overseas operating
companies, has resulted in the negative effective tax rate.
In accordance with UK legislation, the Group publishes an annual tax strategy,
which is available on our website (www.sigplc.com (http://www.sigplc.com) ).
Pensions
The Group operates a number of pension schemes, four of which provide defined
benefits based upon pensionable salary. One of these schemes, in the UK, has
assets held in a separate trustee administered fund, and three are overseas
book reserve schemes. The largest defined benefit pension scheme is the UK
scheme, which was closed to further accrual in 2016.
The Group's total pension charge for the year, including amounts charged to
interest after Other items, was £8.3m (2023: £8.9m), of which a charge of
£1.1m (2023: £1.4m) related to defined benefit pension schemes and £7.2m
(2023: £7.5m) related to defined contribution schemes.
The total net liability in relation to defined benefit pension schemes at 31
December 2024 was £18.2m (2023: £20.3m). The latest triennial actuarial
valuation of the UK scheme was as at 31 December 2022 and was concluded in
March 2024. The scheme remains well funded.
Financial position
Overall, the net assets of the Group decreased by £48.7m to £179.8m (2023:
£228.5m), with a cash position at year end of £87.4m (2023: £132.2m) and
net debt of £497.3m (2023: £458.0m), which includes net lease liabilities of
£321.4m (2023: £326.5m).
The movement in net debt mainly reflects the movement in cash noted below. A
small constant currency increase in net lease liabilities, more than offset by
a favourable currency movement, resulted in net lease liabilities reducing by
£5.1m.
Cash flow
2024 2023
£m £m
Underlying operating profit 25.1 53.1
Add back: Depreciation 78.9 76.6
Add back: Amortisation 1.2 2.4
Underlying EBITDA 105.2 132.1
(Increase)/decrease in working capital (6.6) 2.8
Repayment of lease liabilities (67.5) (63.6)
Capital expenditure (16.1) (15.8)
Other 2.2 3.8
Operating cash flow pre exceptional cash items(1) 17.2 59.3
Cash exceptional items (13.0) (6.4)
Operating cash flow(1) 4.2 52.9
Interest and financing (34.8) (34.7)
Tax (8.0) (14.0)
Free cash flow(1) (38.6) 4.2
Acquisitions and investments (8.4) (0.7)
Drawdown/(repayment) of debt 7.3 (0.8)
Total cash flow (39.7) 2.7
Cash and cash equivalents at beginning of the year(2) 132.2 130.1
Effect of foreign exchange rate changes (5.1) (0.6)
Cash and cash equivalents at end of the year(2) 87.4 132.2
1. Free cash flow is defined as all cash flows excluding M&A
transactions, dividend payments, and financing transactions. Operating cash
flow represents free cash flow before interest and financing and tax.
2. Cash and cash equivalents at 31 December 2024 comprise cash at bank
and on hand of £87.4m (2023: £132.2m) less bank overdrafts of £nil (2023:
£nil).
During the period, the Group delivered £17.2m of operating cash flow before
exceptional cash spend, which represents a 68% conversion of the underlying
operating profit. Post exceptional cash the conversion was 18%. The lower
profit in the year was the key driver of lower year on year operating cash
flow, coupled with slightly higher lease repayments and capex. Working capital
at the end of the year remained broadly in line with the previous year. The
Group reported a free cash outflow of £38.6m (2023: £4.2m inflow). This
decline versus the prior year resulted from the lower operating cash flow.
Capex during the period was £16.1m (2023: £15.8m).
Cash exceptional items are those that are related to "Other items" in the
Consolidated income statement, and include restructuring costs and refinancing
costs. "Other" in the cash flow includes payments to the Employee Benefit
Trust to fund share plans of £0.8m (2023: £1.7m), £2.5m payment to the
defined benefit pension scheme in the UK, add back of non-cash P&L items,
provision movements, and proceeds on sale of property, plant and equipment.
Financing and funding
The Group's debt funding comprises €300m of 9.75% and €13.5m of 5.25%
fixed rate secured notes, maturing in October 2029 and November 2026
respectively, and an RCF of £90m which matures in April 2029. The 9.75% notes
were issued in October 2024 through a refinancing of the Group's previous bond
and RCF, which were both due to mature in 2026. The new secured notes are
subject to incurrence-based covenants only. The RCF has a leverage maintenance
covenant set at 6.5x for 2025, 5.5x for 2026, and 5.0x thereafter, all of
which only apply if the facility is over 40% drawn at a quarter end reporting
date. The RCF was undrawn throughout 2024, and remains undrawn at the date of
this report.
The Group's liquidity position remained robust throughout 2024, and at the end
of the period stood at £177m, consisting of cash of £87m and the £90m
undrawn RCF noted above.
2024 2023
£m £m
Cash and cash equivalents at end of the year 87.4 132.2
Undrawn RCF at end of the year 90.0 90.0
Liquidity 177.4 222.2
Net debt 497.3 458.0
Leverage 4.7x 3.5x
Directors' responsibility statement on the Annual Report
The responsibility statement below has been prepared in connection with the
Company's full Annual Report for the year ended 31 December 2024. Certain
parts solely thereof are not included within this announcement.
We confirm that to the best of our knowledge:
(a) the financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole;
(b) the Strategic report includes a fair review of the development and
performance of the business and the position of the Company, and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
(c) the Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
This responsibility statement was approved by the Board of Directors on 4
March 2025 and signed on its behalf by:
By order of the Board
Gavin Slark Ian Ashton
Director Director
4 March 2025 4 March 2025
Cautionary statement
The securities of the Group have not been and will not be registered under the
US Securities Act of 1933, as amended (the "Securities Act"), or under the
securities laws of any state or other jurisdiction of the United States, and
may not be offered, sold, pledged or transferred, directly or indirectly, in,
into or within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and in compliance with any applicable securities laws of any relevant
state or other jurisdiction of the United States. There has been and will be
no public offering of the securities of the Group in the United States.
This announcement has been prepared to provide the Company's shareholders with
a fair review of the business of the Group and a description of the principal
risks and uncertainties facing it. It may not be relied upon by anyone,
including the Company's shareholders, for any other purpose.
This announcement contains forward-looking statements that are subject to risk
factors including the economic and business circumstances occurring from time
to time in countries and markets in which the Group operates and risk factors
associated with the building and construction sectors. By their nature,
forward-looking statements involve a number of risks, uncertainties and
assumptions because they relate to events and/or depend on circumstances that
may or may not occur in the future and could cause actual results and outcomes
to differ materially from those expressed in or implied by the forward-looking
statements. No assurance can be given that the forward-looking statements in
this announcement will be realised. Statements about the Directors'
expectations, beliefs, hopes, plans, intentions and strategies are inherently
subject to change and they are based on expectations and assumptions as to
future events, circumstances and other factors which are in some cases outside
the Group's control. Actual results could differ materially from the Group's
current expectations.
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 actual results or trends to differ materially,
including but not limited to, changes in risks associated with the level of
market demand, fluctuations in product pricing and changes in foreign exchange
and interest rates.
The Company's shareholders are cautioned not to place undue reliance on the
forward-looking statements. This announcement has not been audited or
otherwise independently verified. The information contained in this
announcement has been prepared on the basis of the knowledge and information
available to Directors at the date of its preparation and the Company does not
undertake any obligation to update or revise this announcement during the
financial year ahead.
Consolidated income statement
For the year ended 31 December 2024
Underlying(1) Other items(1) Total Underlying(1) Other items(1) Total
2024 2024 2024 2023 2023 2023
Note £m £m £m £m £m £m
Revenue 2 2,611.8 - 2,611.8 2,761.2 - 2,761.2
Cost of sales (1,971.8) - (1,971.8) (2,061.6) - (2,061.6)
Gross profit 640.0 - 640.0 699.6 - 699.6
Other operating expenses 3 (609.1) (28.9) (638.0) (640.6) (50.2) (690.8)
Impairment (losses)/gains on financial assets 3 (5.8) - (5.8) (9.6) 1.1 (8.5)
Gain on disposal of property 3 - - - 3.7 - 3.7
Operating profit/(loss) 25.1 (28.9) (3.8) 53.1 (49.1) 4.0
Finance income 4 2.7 - 2.7 2.2 - 2.2
Finance costs 4 (42.1) (1.6) (43.7) (37.9) (0.2) (38.1)
(Loss)/profit before tax (14.3) (30.5) (44.8) 17.4 (49.3) (31.9)
Income tax (expense)/credit 5 (5.4) 1.6 (3.8) (13.0) 1.5 (11.5)
(Loss)/profit after tax (19.7) (28.9) (48.6) 4.4 (47.8) (43.4)
Attributable to:
Equity holders of the Company (19.7) (28.9) (48.6) 4.4 (47.8) (43.4)
Loss per share
Basic 6 (4.2)p (3.8)p
Diluted 6 (4.2)p (3.8)p
( )
(1) Underlying represents the results before Other items. Other items have
been disclosed separately in order to give an indication of the underlying
earnings of the Group. Further details are disclosed in Note 3.
Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024 2023
£m
£m
Loss after tax for the year (48.6) (43.4)
Items that will not subsequently be reclassified to the Consolidated income
statement:
Remeasurement of defined benefit pension liability (0.2) 1.1
Deferred tax movement associated with remeasurement of defined benefit pension - (0.1)
liability
(0.2) 1.0
Items that may subsequently be reclassified to the Consolidated income
statement:
Exchange difference on retranslation of foreign currency goodwill and (2.2) (1.1)
intangibles
Exchange difference on retranslation of foreign currency net investments (13.1) (2.8)
(excluding goodwill and intangibles)
Exchange and fair value movements associated with borrowings and derivative 12.3 5.8
financial instruments
Losses and gains on cash flow hedges (1.1) (1.1)
Transfer to profit and loss on cash flow hedges 1.0 (1.5)
(3.1) (0.7)
Other comprehensive (expense)/income (3.3) 0.3
Total comprehensive expense (51.9) (43.1)
Attributable to:
Equity holders of the Company (51.9) (43.1)
Consolidated balance sheet
As at 31 December 2024
2024
2023
£m £m
Non-current assets
Property, plant and equipment 64.9 65.4
Right-of-use assets 250.3 263.1
Goodwill 129.0 131.2
Intangible assets 12.5 15.3
Lease receivables 1.9 2.2
Deferred tax assets 4.6 4.4
Non-current financial assets 0.3 0.2
463.5 481.8
Current assets
Inventories 253.8 259.1
Lease receivables 0.3 1.1
Trade and other receivables 370.8 389.1
Current tax assets 2.3 3.6
Current financial assets 0.1 -
Cash at bank and on hand 87.4 132.2
714.7 785.1
Total assets 1,178.2 1,266.9
Current liabilities
Trade and other payables 358.6 385.8
Lease liabilities 64.9 64.9
Interest-bearing loans and borrowings 5.2 0.8
Deferred consideration - 1.8
Derivative financial instruments 1.3 1.0
Current tax liabilities 1.7 6.9
Provisions 7.6 7.9
439.3 469.1
Non-current liabilities
Lease liabilities 258.7 264.9
Interest-bearing loans and borrowings 256.9 260.0
Derivative financial instruments 0.1 0.1
Other payables 2.8 3.0
Retirement benefit obligations 18.2 20.3
Provisions 22.4 21.0
559.1 569.3
Total liabilities 998.4 1,038.4
Net assets 179.8 228.5
Capital and reserves
Called up share capital 118.2 118.2
Treasury shares reserve (8.6) (11.6)
Capital redemption reserve 0.3 0.3
Share option reserve 7.8 7.6
Hedging and translation reserves 0.7 3.8
Cost of hedging reserve 0.1 0.1
Merger reserve 92.5 92.5
Retained (losses)/profits (31.2) 17.6
Attributable to equity holders of the Company 179.8 228.5
Total equity 179.8 228.5
Consolidated statement of changes in equity
For the year ended 31 December 2024
Treasury shares reserve Capital redemption reserve Share option reserve Hedging and translation reserves Cost of hedging reserve Merger reserve Retained profits/ (losses) Total
Called up share capital
£m £m £m £m £m £m £m £m £m
As at 1 January 2023 118.2 (16.4) 0.3 8.6 4.5 0.1 92.5 60.0 267.8
Loss after tax - - - - - - - (43.4) (43.4)
Other comprehensive (expense)/income - - - - (0.7) - - 1.0 0.3
Total comprehensive expense - - - - (0.7) - - (42.4) (43.1)
Purchase of treasury shares - (1.7) - - - - - - (1.7)
Credit to share option reserve - - - 5.5 - - - - 5.5
Settlement of share options - 6.5 - (6.5) - - - - -
As at 31 December 2023 118.2 (11.6) 0.3 7.6 3.8 0.1 92.5 17.6 228.5
Loss after tax - - - - - - - (48.6) (48.6)
Other comprehensive expense - - - - (3.1) - - (0.2) (3.3)
Total comprehensive expense - - - - (3.1) - - (48.8) (51.9)
Purchase of treasury shares - (0.9) - - - - - - (0.9)
Credit to share option reserve - - - 4.1 - - - - 4.1
Settlement of share options - 3.9 - (3.9) - - - - -
As at 31 December 2024 118.2 (8.6) 0.3 7.8 0.7 0.1 92.5 (31.2) 179.8
The share option reserve represents the cumulative equity-settled share option
charge under IFRS 2 "Share-based payment" less the value of any share options
that have been exercised.
The hedging and translation reserves represent movements in the Consolidated
balance sheet as a result of movements in exchange rates and movements in the
fair value of cash flow hedges which are reflected in equity through Other
comprehensive income.
Treasury shares relate to shares purchased by the SIG Employee Benefit Trust
to satisfy awards made under the Group's share plans which are not vested and
beneficially owned by employees.
The merger reserve represents the premium on ordinary shares issued in a
previous year through the use of a cash box structure.
Consolidated cash flow statement
For the year ended 31 December 2024
2024
2023
Note £m £m
Net cash flow from operating activities
Cash generated from operating activities 8 83.5 128.4
Income tax paid (8.0) (14.0)
Net cash generated from operating activities 75.5 114.4
Cash flows from investing activities
Finance income received 2.7 2.2
Purchase of property, plant and equipment and computer software (16.1) (15.7)
Initial direct costs of right-of-use assets (0.6) (0.1)
Proceeds from sale of property, plant and equipment 1.8 5.6
Settlement of amounts payable for previous purchases of businesses (4.4) (0.7)
Net cash flow from investing activities (16.6) (8.7)
Cash flows from financing activities
Finance costs paid (37.5) (36.9)
Repayment of lease liabilities (67.5) (63.6)
Repayment of borrowings (239.7) (0.8)
Proceeds from borrowings 247.0 -
Acquisition of treasury shares (0.9) (1.7)
Net cash flow from financing activities (98.6) (103.0)
(Decrease)/increase in cash and cash equivalents in the year 9 (39.7) 2.7
Cash and cash equivalents at beginning of the year(1) 132.2 130.1
Effect of foreign exchange rate changes (5.1) (0.6)
Cash and cash equivalents at end of the year(1) 87.4 132.2
( )
(1) Cash and cash equivalents comprise cash at bank and on hand of £87.4m
(2023: £132.2m) less bank overdrafts of £nil (2023: £nil)
1. Basis of preparation
The Group's financial information has been prepared in accordance with the
recognition and measurement requirements of UK adopted international
accounting standards. It has been prepared on a basis consistent with that
adopted in the previous year. The Financial statements have been prepared
under the historical cost convention except for derivative financial
instruments and unquoted investments which are stated at their fair value.
Whilst the financial information included in this Preliminary Results
Announcement has been prepared in accordance with the recognition and
measurement criteria of IFRS, this announcement does not itself contain
sufficient information to comply with IFRS. The Preliminary Results
Announcement does not constitute the Company's statutory accounts for the
years ended 31 December 2024 and 31 December 2023 within the meaning of
Section 435 of the Companies Act 2006 but is derived from those statutory
accounts.
The Group's statutory accounts for the year ended 31 December 2023 have been
filed with the Registrar of Companies, and those for 2024 will be delivered
following the Company's Annual General Meeting. The Auditor has reported on
the statutory accounts for 2024 and 2023. Their report for 2024 and 2023 was
(i) unqualified, (ii) included no matters to which the auditor drew attention
by way of emphasis and (iii) did not contain statements under Sections 498 (2)
or 498 (3) of the Companies Act 2006 in relation to the financial statements.
Going concern
The Group closely monitors its funding position throughout the year, including
monitoring compliance with covenants and available facilities to ensure it has
sufficient headroom to fund operations.
The Group's financing facilities comprise €300m fixed rate secured notes,
due October 2029, €13.5m fixed rate secured notes, due November 2026, and a
£90m Revolving Credit Facility (RCF) that expires in April 2029. One of the
trading businesses also has a £1.3m bank loan repayable over the period to
June 2026. The secured notes are subject to incurrence-based covenants only,
and the RCF has a leverage maintenance covenant which is only effective if the
facility is over 40% (i.e. £36m) drawn at a quarter end reporting date. The
RCF was undrawn at 31 December 2024 and has remained undrawn subsequent to the
year end.
The Group has significant available liquidity and on the basis of current
forecasts is expected to remain in compliance with all banking covenants
throughout the forecast period to 31 March 2026 ("the going concern period").
The Directors have considered the Group's forecasts which support the view
that the Group will be able to continue to operate within its banking
facilities and comply with its banking covenants. The Directors have
considered the following principal risks and uncertainties that could
potentially impact the Group's ability to fund its future activities and
adhere to its banking covenants, including:
· prolonged challenging trading conditions in the Group's larger
businesses, leading to lower volumes;
· pricing pressure on sales and modest net input cost deflation;
and
· current economic and political uncertainties, potentially further
impacting market demand.
The forecasts on which the going concern assessment is based have been subject
to sensitivity analysis and stress testing to assess the impact of the above
risks and the Directors have also reviewed mitigating actions that could be
taken. Following two years of market-driven downturn, with a LFL revenue
decline of 2% in 2023 and 4% in 2024, and continued market uncertainty, a
severe but plausible downside scenario has been modelled, which factors in a
2.5% reduction in revenue, a reduction in gross margin and a resulting 32%
reduction in underlying operating profit from the base forecast for the 12
months to 31 March 2026. Certain mitigations are also included, for example
delaying non-essential capital expenditure. Under this scenario the analysis
shows that sufficient cash would be available without triggering a covenant
breach, as the RCF is not expected to be drawn above the £36m at a relevant
quarter end date, and furthermore the leverage covenant would also be below
the required threshold. Reverse stress testing has also been performed, which
shows that the Group could withstand up to an 11% reduction in revenue from
the base forecasts for the nine months to the forecast liquidity low point of
30 September 2025, or up to 13% reduction for the 12 months to 31 March 2026,
before triggering a covenant breach. Up to £90m RCF is available to meet
working capital requirements during the month, providing this is reduced to
£36m before the quarter end date if the leverage covenant is expected to be
breached. Further cash phasing mitigations would also be available to avoid
the requirement to draw over £36m at a quarter end date if required.
The Directors have considered the impact of climate-related matters on the
going concern assessment and this is not expected to have a significant impact
on the Group's going concern assessment to 31 March 2026.
On consideration of the above, the Directors believe that the Group has
adequate resources to continue in operational existence for the forecast
period to 31 March 2026 and the Directors therefore consider it is appropriate
to adopt the going concern basis in preparing the 2024 Consolidated financial
statements.
New standards, interpretations and amendments adopted
The Group has adopted the following new standards, amendments and
interpretations which apply for the first time in 2024:
· Amendments to IAS 1: Classification of liabilities as current or
non-current and non-current liabilities with covenants
· Amendments to IFRS 16: Lease liability in sale and leaseback
· Amendments to IAS 7 and IFRS 7: Supplier finance arrangements
As a result of the adoption of the amendments to IAS 7 and IFRS 7, the Group
has provided new disclosures relating to liabilities under supplier finance
arrangements in the Consolidated financial statements. The other amendments
have not had a material impact on the Financial statements of the Group.
2. Revenue and segmental information
In accordance with IFRS 8 "Operating Segments", the Group identifies its
reportable operating segments based on the way in which financial information
is reviewed and business performance is assessed by the CODM. Reportable
operating segments are grouped on a geographical basis.
UK Interiors UK Roofing UK Total France Interiors France Roofing Total Germany Benelux Ireland Poland Eliminations Total Group
Specialist Markets UK France
2024 £m £m £m £m £m £m £m £m £m £m £m £m £m
Type of product
Interiors 495.0 - 170.0 665.0 200.4 - 200.4 438.5 103.6 60.1 241.4 - 1,709.0
Exteriors - 380.6 68.1 448.7 - 410.1 410.1 - - 44.0 - - 902.8
Inter-segment revenue 4.1 1.1 15.2 20.4 0.1 11.8 11.9 - - 0.2 - (32.5) -
Total underlying and statutory revenue 499.1 381.7 253.3 1,134.1 200.5 421.9 622.4 438.5 103.6 104.3 241.4 (32.5) 2,611.8
Nature of revenue
Goods for resale 499.1 381.7 253.3 1,134.1 200.5 421.9 622.4 438.5 103.6 96.2 241.4 (32.5) 2,603.7
(recognised at point in time)
Construction contracts - - - - - - - - - 8.1 - - 8.1
(recognised over time)
Total underlying and statutory revenue 499.1 381.7 253.3 1,134.1 200.5 421.9 622.4 438.5 103.6 104.3 241.4 (32.5) 2,611.8
Segment result before Other items (3.5) 13.2 4.8 14.5 6.2 8.0 14.2 4.7 (4.5) 3.3 4.6 - 36.8
Parent company costs (11.7)
Underlying operating profit 25.1
Other items (Note 3) (28.9)
Operating loss (3.8)
Net finance costs before Other items (39.4)
Non-underlying finance costs (1.6)
Loss before tax (44.8)
Income tax expense (3.8)
Loss for the year (48.6)
UK Interiors UK Roofing UK UK France Interiors France Roofing France Germany Benelux Ireland Poland Eliminations Total Group
Specialist Markets Total Total
2023 £m £m £m £m £m £m £m £m £m £m £m £m £m
Type of product
Interiors 556.5 - 173.9 730.4 218.9 - 218.9 462.1 116.9 54.5 237.9 - 1,820.7
Exteriors - 369.4 73.7 443.1 - 458.0 458.0 - - 39.4 - - 940.5
Inter-segment revenue 7.2 1.0 18.4 26.6 0.1 13.3 13.4 - - 0.2 - (40.2) -
Total underlying and statutory revenue 563.7 370.4 266.0 1,200.1 219.0 471.3 690.3 462.1 116.9 94.1 237.9 (40.2) 2,761.2
Nature of revenue
Goods for resale 563.7 370.4 266.0 1,200.1 219.0 471.3 690.3 462.1 116.9 88.5 237.9 (40.2) 2,755.6
(recognised at point in time)
Construction contracts - - - - - - - - - 5.6 - - 5.6
(recognised over time)
Total underlying and statutory revenue 563.7 370.4 1,200.1 219.0 471.3 690.3 462.1 116.9 94.1 237.9 (40.2) 2,761.2
266.0
Segment result before Other items (1.6) 10.6 10.3 19.3 10.4 19.3 29.7 15.6 (3.0) 1.4 7.1 - 70.1
Parent company costs (17.0)
Underlying operating profit 53.1
Other items (Note 3) (49.1)
Operating profit 4.0
Net finance costs before Other items (35.7)
Non-underlying finance costs (0.2)
Loss before tax (31.9)
Income tax expense (11.5)
Loss for the year (43.4)
Other segment information
UK Interiors UK Roofing UK UK France Interiors France Roofing France Germany Benelux Ireland Poland Parent company Total Group
Specialist Markets Total Total
2024 £m £m £m £m £m £m £m £m £m £m £m £m £m
Depreciation and amortisation of fixed assets, right-of-use assets and 11.7 12.9 6.3 30.9 8.0 13.2 21.2 17.0 2.0 3.1 5.7 0.2 80.1
computer software
UK Interiors UK Roofing UK Specialist Markets UK France Interiors France Roofing France Germany Benelux Ireland Poland Parent company Total Group
Total Total
2023 £m £m £m £m £m £m £m £m £m £m £m £m £m
Depreciation and amortisation of fixed assets, right-of-use assets and 15.5 12.4 5.1 33.0 7.4 12.6 20.0 15.9 2.2 3.0 4.6 0.3 79.0
computer software
Profit on sale of property - - - - - 3.7 3.7 - - - - - 3.7
Geographic information
The Group's non-current operating assets (including property, plant and
equipment, right-of-use assets, goodwill and intangible assets but excluding
lease receivables, deferred tax and derivative financial instruments) by
geographical location are as follows:
2024 2023
£m £m
United Kingdom 225.0 240.0
Ireland 14.6 16.1
France 129.1 136.4
Germany 60.0 56.6
Poland 21.0 16.7
Benelux 7.0 9.2
Total 456.7 475.0
( )
3. Other operating expenses
a) Analysis of operating expenses
2024 2023
Before Other items Other items Total Before Other items Other items Total
£m £m £m £m £m £m
Other operating expenses:
Distribution costs 316.1 10.3 326.4 320.9 4.3 325.2
Selling and marketing costs 172.5 1.1 173.6 179.8 2.6 182.4
Management, administrative and central costs 120.5 17.5 138.0 139.9 43.3 183.2
Total other operating expenses 609.1 28.9 638.0 640.6 50.2 690.8
Impairment losses/(gains) on financial assets 5.8 - 5.8 9.6 (1.1) 8.5
Gain on disposal of property - - - (3.7) - (3.7)
Total net operating expenses 614.9 28.9 643.8 646.5 49.1 695.6
b) Other items
(Loss)/profit after tax includes the following Other items which have been
disclosed in a separate column within the Consolidated income statement in
order to provide a better indication of the underlying earnings of the Group:
2024 2023
Other items Tax impact Tax impact Other items Tax impact Tax impact
£m £m % £m £m %
Amortisation of acquired intangibles (2.1) 0.1 4.8% (2.8) 0.1 3.6%
Impairment charges(1) (7.3) - - (33.8) - -
Net restructuring costs(2) (13.4) 1.0 7.5% (8.0) 1.2 15.0%
Costs related to acquisitions - - - (3.2) 0.1 3.1%
Cloud based ERP implementation costs(3) (1.0) 0.2 20.0% (2.2) 0.1 4.5%
Onerous contract costs(4) - - - (0.2) - -
Costs associated with refinancing(5) (3.9) - - - - -
Other specific items(6) (1.2) 0.3 25.0% 1.1 - -
Impact on operating profit (28.9) 1.6 5.5% (49.1) 1.5 3.1%
Non-underlying finance costs(7) (1.6) - - (0.2) - -
Impact on (loss)/profit before tax (30.5) 1.6 5.2% (49.3) 1.5 3.0%
(1) Impairment charges in the current year relate to right-of-use asset
impairment in the UK Interiors CGU. Impairment charges in the prior year
related to the UK Interiors CGU and comprised £2.6m relating to goodwill,
£2.2m customer relationships, £3.6m tangible fixed assets and £25.4m
right-of-use assets.
(2) Net restructuring costs in the year comprise £6.5m (2023: £6.7m)
redundancy and related staff costs and £6.9m (2023: £2.4m) other branch
closure costs, including £2.9m (2023: £1.6m) impairment of right-of-use
assets, tangible fixed assets and software costs, all related to restructuring
across the Group. Costs in the prior year were also offset by £1.1m gain on
the sublease and termination of property leases previously impaired.
(3) Cloud based ERP implementation costs relate to costs incurred on strategic
projects which are expensed as incurred rather than being capitalised as
intangible assets.
(4) Onerous contract costs in the prior year related to the final settlement
of provisions recognised in previous years for licence fee commitments where
no future economic benefit was expected to be obtained.
(5) Costs associated with refinancing relates to legal and professional fees
incurred in connection with the refinancing of the Group's debt arrangements
in the year.
(6) Other specific items in the current year comprises the estimated impact of
a property lease dispute, including impairment of right-of-use and fixed
assets of £0.7m, and costs relating to an investment property no longer in
use by the Group. In the prior year, other specific items comprised £1.1m
reversal of provision for lease receivables, the reversal of onerous lease
provisions and impairment of right-of-use assets in relation to a branch which
was reopened, offset by additional impairment of the investment property which
is no longer in use by the Group.
(7) Non-underlying finance costs in the current year includes £1.4m write-off
of arrangement fees in relation to the previous debt arrangements and £0.2m
(2023: £0.2m) relating to the investment property referred to above.
The total impact of the above amounts on the Consolidated cash flow statement
is a cash outflow of £17.1m (2023: £6.4m), including costs accrued in the
prior year and paid in the current year.
4. Finance income and finance costs
2024 2023
£m £m
Finance income
Interest on bank deposits 2.7 2.2
Total finance income 2.7 2.2
Finance costs
On bank loans, overdrafts and other associated items(1) 3.5 3.6
On secured notes(2) 15.9 14.1
On obligations under lease contracts 22.1 19.4
Net finance charge on defined benefit pension schemes 0.6 0.8
Total finance costs before Other items 42.1 37.9
Non-underlying finance costs(3) 1.6 0.2
Total finance costs 43.7 38.1
Net finance costs 41.0 35.9
(1) Other associated items includes the amortisation of arrangement fees of
£0.2m (2023: £0.2m).
(2) Included within finance costs on the secured notes is the amortisation of
arrangement fees of £0.5m (2023: £0.5m).
(3) See Note 3 for further details on non-underlying finance costs.
5. Income tax
The income tax expense comprises:
2024 2023
£m £m
Current tax
UK & Ireland corporation tax - Charge for the year 0.5 0.1
- Adjustments in respect of previous years (0.1) (0.1)
0.4 -
Mainland Europe corporation tax - Charge for the year 3.7 12.2
- Adjustments in respect of previous years 0.1 0.5
3.8 12.7
Total current tax 4.2 12.7
Deferred tax
Origination and reversal of deductible temporary differences (0.7) (0.7)
Adjustments in respect of previous years 0.3 (0.4)
Effect of change in rate - (0.1)
Total deferred tax (0.4) (1.2)
Total income tax expense 3.8 11.5
As the Group's profits and losses are earned across a number of tax
jurisdictions an aggregated income tax reconciliation is disclosed, reflecting
the applicable rates for the countries in which the Group operates.
The total tax charge for the year differs from the expected tax using a
weighted average tax rate which reflects the applicable statutory corporate
tax rates on the accounting profits/losses in the countries in which the Group
operates. The differences are explained in the following aggregated
reconciliation of the income tax expense:
2024 2023
£m % £m %
Loss before tax (44.8) (31.9)
Expected tax (credit)/charge (11.8) 26.3% (6.6) 20.7%
Factors affecting the income tax expense for the year:
Expenses not deductible for tax purposes(1) 3.8 (8.5)% 2.8 (8.8)%
Non-taxable income (0.4) 0.9% (0.5) 1.6%
Impairment and disposal charges not deductible for tax purposes(2) - - 0.6 (1.9)%
Deductible temporary differences not recognised for deferred tax purposes(3) 11.9 (26.5)% 15.3 (48.0)%
Other adjustments in respect of previous years 0.3 (0.7)% - -
Effect of change in rate on deferred tax - - (0.1) 0.3%
Total income tax expense 3.8 (8.5)% 11.5 (36.1)%
(1) The majority of the Group's expenses that are not deductible for tax
purposes are mainly in relation to share based payments, business
entertainment, non-qualifying depreciation and other disallowable expenditure
in the current year. The expenses not deductible for tax purposes in the prior
year also included acquisition related costs and non-qualifying depreciation.
(2) During the year the Group incurred impairment charges of £nil (2023:
£4.2m) in relation to goodwill and other non-current assets which are not
deductible for tax purposes.
(3) Deductible temporary differences not recognised for deferred tax purposes
mainly relate to losses in the UK and Benelux and interest restricted under
the UK corporate interest restriction rules which are not recognised as
deferred tax assets.
The effective tax rate for the Group on the total loss before tax of £44.8m
(2023: £31.9m loss) is negative 8.5% (2023: negative 36.1%). The tax impact
of Other items is shown in Note 3. The tax charge for the year of £3.8m
(2023: £11.5m) is related to taxable profits made in the majority of the EU
businesses. Tax losses in the UK and Benelux, which cannot be surrendered or
utilised cross border, are not currently recognised as deferred tax assets,
and this impacts the overall effective tax rate. Due to a reduction in the
profit before tax of the overseas operating companies and the ongoing losses
in the UK, the Group has generated an overall loss before tax, which alongside
the positive tax charge in the overseas operating companies, has resulted in
the negative effective tax rate.
Factors that will affect the Group's future total tax charge as a percentage
of underlying profits are:
· the mix of profits and losses between the tax jurisdictions in
which the Group operates;
· the impact of non-deductible expenditure and non-taxable income;
· agreement of open tax computations with the respective tax
authorities; and
· the recognition or utilisation (with corresponding reduction in
cash tax payments) of unrecognised deferred tax assets.
Pillar Two legislation has been enacted or substantively enacted in certain
jurisdictions in which the Group operates. The legislation is effective for
the Group's financial year beginning 1 January 2024. The Group is in scope of
the enacted or substantively enacted legislation and based on an assessment of
the rules, the Pillar Two effective tax rates in most of the jurisdictions in
which the Group operates are above 15% or one of the other transitional safe
harbour reliefs are available. Management is not currently aware of any
circumstances under which this might change and therefore the Group does not
expect additional liabilities to arise as a result of Pillar Two top-up taxes.
In addition to the amounts charged to the Consolidated income statement, the
following amounts in relation to taxes have been recognised in the
Consolidated statement of comprehensive income:
2024 2023
£m £m
Deferred tax movement associated with remeasurement of defined benefit pension - (0.1)
liabilities(1)
Exchange rate movements (0.1) 0.1
Total (0.1) -
(1) This item will not subsequently be reclassified to the Consolidated income
statement.
6. (Loss)/earnings per share
The calculations of (loss)/earnings per share are based on the following
(losses)/profits and numbers of shares:
Basic and diluted
2024 2023
£m £m
Loss attributable to ordinary equity holders of the parent for basic and (48.6) (43.4)
diluted loss per share
Add back:
Other items (see Note 3) 28.9 47.8
(Loss)/profit attributable to ordinary equity holders of the parent for basic (19.7) 4.4
and diluted earnings per share before Other items
Weighted average number of shares
2024 2023
Number Number
For basic (loss)/earnings per share 1,159,276,035 1,148,348,913
Effect of dilution from share options - -
Adjusted for the effect of dilution 1,159,276,035 1,148,348,913
Share options are considered antidilutive in the current year as their
conversion into ordinary shares would decrease the loss per share. The
calculation of diluted (loss)/earnings per share does not assume conversion,
exercise, or other issue of potential ordinary shares that would have an
antidilutive effect on (loss)/earnings per share.
The weighted average number of shares excludes those held by the SIG Employee
Benefit Trust which are not vested and beneficially owned by employees.
(Loss)/earnings per share
2024 2023
(Loss)/earnings per share
Basic and diluted loss per share (4.2)p (3.8)p
Earnings per share before Other items(1)
Basic and diluted (loss)/earnings per share before Other items (1.7)p 0.4p
(1) (Loss)/earnings per share before Other items (also referred to as
underlying (loss)/earnings per share) has been disclosed in order to present
the underlying performance of the Group.
7. Acquisitions
The Group has not made any business acquisitions during the current or prior
year. Certain amounts of deferred and contingent consideration in relation to
previous acquisitions remained payable at 31 December 2023 and 2024, and a
reconciliation of the movement in each of these balances during the year is
shown below.
Deferred consideration
A reconciliation of the movement in deferred consideration is provided below:
2024 2023
£m £m
Liability at 1 January 1.8 2.5
Amounts paid relating to previous acquisitions (included in cash flows from (1.8) (0.7)
investing activities)
Liability at 31 December - 1.8
Included in current liabilities - 1.8
Total - 1.8
Contingent consideration
A reconciliation of the movement in the fair value measurement of contingent
consideration is provided below:
2024 2023
£m £m
Liability at 1 January 3.1 3.0
Amounts paid relating to previous acquisitions (included within cash flow from (2.6) -
investing activities)
Unrealised fair value changes recognised in profit or loss - 0.1
Liability at 31 December 0.5 3.1
Included in current liabilities (within accruals and other payables) 0.5 3.1
Total 0.5 3.1
Consideration dependent on vendors remaining within the business
Amounts which may be paid to vendors of recent acquisitions who are employed
by the Group and are contingent upon the vendors remaining within the business
are, as required by IFRS 3 "Business Combinations", treated as remuneration
and charged to the Consolidated income statement as earned. A reconciliation
of the movement in amounts accrued is as follows:
2024 2023
£m £m
Liability at 1 January 4.0 1.2
New amounts accrued - 2.8
Amounts paid (included within cash flow from operating activities) (4.0) -
Liability at 31 December - 4.0
Included in current liabilities (within accruals and other payables) - 4.0
Total - 4.0
8. Reconciliation of loss before tax to cash generated from operating
activities
2024 2023
£m £m
Loss before tax (44.8) (31.9)
Net finance costs 41.0 35.9
Depreciation of property, plant and equipment 12.5 12.7
Depreciation of right-of-use assets 66.4 63.9
Amortisation of computer software 1.2 2.4
Amortisation of acquired intangibles 2.1 2.8
Impairment of property, plant and equipment 1.2 4.4
Impairment of goodwill - 2.6
Impairment of acquired intangibles and computer software - 2.5
Impairment of right-of-use assets 9.8 26.2
Reversal of impairment of lease receivables - (1.1)
Gain on lease transactions - (1.1)
Gain on disposal of property, plant and equipment (1.0) (4.3)
Share-based payment expense 4.1 5.5
Net foreign exchange differences (0.2) -
Decrease in provisions (1.2) (0.2)
Working capital movements:
- (Increase)/decrease in inventories (1.5) 9.2
- Decrease in receivables 10.1 45.2
- Decrease in payables (16.2) (46.3)
Cash generated from operating activities 83.5 128.4
Included within the cash generated from operating activities is a defined
benefit pension scheme employer's contribution of £2.5m (2023: £2.5m)
9. Reconciliation of net cash flow to movements in net debt
2024 2023
£m £m
(Decrease)/increase in cash and cash equivalents in the year (39.7) 2.7
Net cash outflow from repayment of leases and other debt(1) 95.3 84.5
Decrease in net debt resulting from cash flows 55.6 87.2
Non-cash movement in lease liabilities and lease receivables (92.0) (105.8)
Non-cash items(2) (17.5) (3.3)
Exchange differences 14.6 7.9
Increase in net debt in the year (39.3) (14.0)
Net debt at 1 January (458.0) (444.0)
Net debt at 31 December (497.3) (458.0)
(1) Including interest element of lease payments.
(2) Other non-cash items relates to the fair value movement of debt and
derivative financial instruments recognised in the year which does not give
rise to a cash inflow or outflow.
Net debt is defined as follows:
2024 2023
£m £m
Non-current assets:
Derivative financial instruments 0.1 -
Lease receivables 1.9 2.2
Current assets:
Derivative financial instruments 0.1 -
Lease receivables 0.3 1.1
Cash at bank and on hand 87.4 132.2
Current liabilities:
Lease liabilities (64.9) (64.9)
Interest-bearing loans and borrowings (5.2) (0.8)
Deferred consideration - (1.8)
Derivative financial instruments (1.3) (1.0)
Non-current liabilities:
Lease liabilities (258.7) (264.9)
Interest-bearing loans and borrowings (256.9) (260.0)
Derivative financial instruments (0.1) (0.1)
Net debt (497.3) (458.0)
Of the cash at bank and on hand of £87.4m (2023: £132.2m), £0.6m (2023:
£1.0m) is required to be held to cover bank guarantees issued to third
parties and is therefore restricted for use by the Group.
Analysis of movements in net debt:
At 31 December 2023 Cash flows Non-cash items(1) Exchange differences At 31 December 2024
£m £m £m £m £m
Cash at bank and on hand 132.2 (39.7) - (5.1) 87.4
Lease receivables 3.3 (1.2) 0.1 - 2.2
135.5 (40.9) 0.1 (5.1) 89.6
Liabilities arising from financing activities
Financial assets - derivative financial instruments - - 0.2 - 0.2
Debts due within one year (3.6) 2.6 (5.5) - (6.5)
Debts due after one year (260.1) 3.0 (12.2) 12.3 (257.0)
Lease liabilities (329.8) 90.9 (92.1) 7.4 (323.6)
(593.5) 96.5 (109.6) 19.7 (586.9)
Net debt (458.0) 55.6 (109.5) 14.6 (497.3)
(1) Non-cash items include the fair value movement of debt recognised in the
year which does not give rise to a cash inflow or outflow, movements between
debts due within one year and after one year, and non-cash movements in lease
liabilities.
10. Dividends
No interim dividend was paid for the year ended 31 December 2024 and no final
dividend is proposed. No interim or final dividend was proposed or paid for
the year ended 31 December 2023. No dividends have been paid between 31
December 2024 and the date of signing the Financial statements.
11. Provisions
Onerous leases Leasehold dilapidations Other amounts Total
£m £m £m £m
At 1 January 2024 0.3 25.7 2.9 28.9
Unused amounts reversed in the period - (1.0) (0.5) (1.5)
Utilised (0.5) (2.1) (1.3) (3.9)
New provisions 0.8 3.4 2.5 6.7
Exchange differences - (0.1) (0.1) (0.2)
At 31 December 2024 0.6 25.9 3.5 30.0
2024 2023
£m £m
Included in current liabilities 7.6 7.9
Included in non-current liabilities 22.4 21.0
Total 30.0 28.9
Onerous leases
In accordance with IFRS 16, the future rental payments due over the remaining
term of existing lease contracts is included in the lease liability, with the
right-of-use asset impaired to reflect the future cost not covered through
sublease income. The remaining onerous lease provision relates to other
non-rental costs due over the remaining lease term based on expected value of
costs to be incurred and assumptions regarding subletting. The balance at 31
December 2024 is payable over the relevant lease terms, the longest unexpired
term being 17 years to 2041.
Leasehold dilapidations
This provision relates to contractual obligations to reinstate leasehold
properties to their original state of repair. The provision is calculated
based on both the estimated liability to rectify or reinstate leasehold
improvements and modifications carried out on the inception of the lease
(recognised on inception with corresponding fixed asset) and the liability to
rectify general wear and tear which is recognised as incurred over the life of
the lease. The costs will be incurred both at the end of the leases
(reinstatement) and during the lease term (wear and tear).
Other amounts
Other amounts relate principally to claims and warranty provisions based on
expected value and past experience and provisions for restructuring costs
based on expected value but where the amount and timing are uncertain. The
transfer of economic benefit is expected to be made between one and four
years' time.
12. Contingent liabilities
As at the balance sheet date, the Group had outstanding obligations under
customer guarantees, claims, standby letters of credit and discounted bills of
up to £10.8m (2023: £12.5m). Of this amount, £4.3m (2023: £6.1m) relates
to a standby letter of credit issued by HSBC Bank plc in respect of the
Group's insurance arrangements.
As part of the disposal of the Building Plastics business in 2017 a guarantee
was provided to the landlord of the leasehold properties transferred with the
business covering rentals over the remaining term of the leases in the event
that the acquiring company enters into administration before the end of the
lease term. The maximum liability that could arise from this would be
approximately £0.5m (2023: £0.6m) based on the remaining future rent
commitment at 31 December 2024. No provision has been made in these financial
statements as it is not considered likely that any loss will be incurred in
connection with this.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and have therefore not been
disclosed.
In 2024, SIG incurred expenses of £0.6m (2023: £0.3m) on behalf of the SIG
plc Retirement Benefits Plan, the UK defined benefit pension scheme.
Remuneration of key management personnel
The total remuneration of key management personnel of the Group, being the
Executive Leadership Team members and the Non-Executive Directors, is set out
below in aggregate for each of the categories specified in IAS 24 "Related
Party Disclosures".
2024 2023
£m £m
Short-term employment benefits 7.2 6.7
Termination and post-employment benefits - 0.3
IFRS 2 share-based payment expense 2.9 4.6
10.1 11.6
Principal risks and uncertainties
The Board, supported by the Audit Committee, sets the strategy for the Group
and ensures the associated risks are effectively identified and managed
through the implementation of the risk management and control frameworks.
The Group employs a three lines model to provide a simple and effective way to
enhance risk and control management processes and ensure roles and
responsibilities are clear. The Board maintains oversight to ensure risk
management and control activities carried out by the three lines are
proportionate to the perceived degree of risk and its own risk appetite across
the Group.
To identify our risks, we focus on our strategic objectives and consider what
might stop us achieving our plan within our strategic planning period. The
approach combines a top-down strategic Group-level view and a bottom-up
operational view of the risks at operating company level. Meetings are held
with our operating company leadership teams to identify the risks within their
operations. These are consolidated and, in conjunction with a series of
discussions held with Executive Leadership Team and Non-Executive Directors,
provide the inputs to identify and validate our principal risks.
The Board regularly monitors the Group risk register, which includes the ten
principal risks to the Group set out below. These risks, if they materialise,
could have a significant impact on the Group's ability to meet its strategic
objectives.
Risk Mitigations
Cyber security: Internal or external cyber attacks could result in system Cyber security continues to receive Board and Executive Leadership Team focus
disruption or sensitive date being compromised with an emphasis on ensuring that appropriate technologies are deployed across
IT infrastructure to manage cyber threats.
In the context of widespread dependency on increasingly complex digital
systems, growing cyber threats are outpacing societies' ability to effectively Regular and independent reviews are performed to assess the nature of
prevent and manage them. These risks are also exacerbated by a combination of potential cyber threats, security processes and initiatives. They also ensure
the increasing interconnectedness and interdependencies of our technology that we implement appropriate tools and processes to better identify and
remediate new and emerging cyber risks and vulnerabilities.
platforms and ecosystems, as illustrated by the widespread business disruption
caused by the 'Crowdstrike' IT outage in
the summer of 2024, an increasing willingness of nation states to engage in Cyber-incident response protocols are in place to support our ability to
asymmetric cyber warfare to achieve geopolitical aims and the relative ease effectively respond to and recover from a cyber threat or incident and ongoing
with which new artificial intelligence (AI) and machine learning (ML) cyber training campaigns and initiatives ensure employees are alert to the
technologies can be utlised for adversarial purposes. For example Generative nature and consequences of cyber-attacks.
AI is making cyberattacks more sophisticated through more believable social
engineering, automated phishing attacks and adaptive malware.
Cyber policies are regularly reviewed and updated to ensure they reflect the
nature of risks and threats and we continue to invest in our business
There is a risk that we lack the capabilities to effectively prevent, monitor, resilience and continuity management capabilities and arrangements.
respond to, or recover from, suspected cyber-attacks on our IT infrastructure.
Such attacks may result in a loss of data or disruption to IT services which
may have a significant impact on our ability to operate and comply with data
protection and privacy laws (e.g. GDPR), and may have a detrimental effect on
our reputation.
Health & Safety: Danger of incident or accident, resulting in injury or The Group Health, Safety and Environment Director is a member of the Executive
loss of life to employees, customers, or the general public Leadership Team and provides strategic leadership for all health, safety and
environmental matters. Local health and safety managers in each of our
businesses provide local leadership and support, monitor and report our
performance and key metrics, and implement actions and initiatives.
There is a risk that poor organisational arrangements or behavioural culture
with regards to health & safety causes harm to individuals and may result
in enforcement action,
A compliance standards framework is in place to ensure the adequacy of local
penalties, reputational damage, or adverse press coverage. health and safety standards and arrangements, with assurance provided through
a programme of compliance audits performed by suitably trained and experienced
health and safety professionals.
Macro-economic uncertainty: Macro-economic volatility may impact the Group's The Group's geographical diversity across Europe, serving customers across
ability to accurately forecast and to meet internal and external expectations residential, commercial, industrial and infrastructural sectors, combined with
our broad portfolio of categories, product offerings and specialisms, all
serve to reduce the impact of changes in a specific territory or market.
Geo-political and macroeconomic events can lead to a decline in general
economic activity and, or including, a decline in construction industry
activity. Industry-based KPIs, monitored monthly at a Group and operating company level,
help to ensure that warnings and indicators of risks and opportunities are
identified early, and appropriate mitigation strategies implemented.
While there are some indicators of a modest fiscal recovery in 2025, market
conditions are set to remain challenging, particularly in France and Germany,
which may continue to see political instability in 2025. This is in addition We continue to assess inflationary and other fiscal pressures and impacts on
to the existing and product pricing and will continue to work with our suppliers to identify
opportunities to ensure ongoing supply chain resilience.
ongoing turbulence and volatility caused by conflicts in other regions, such
as Ukraine.
Inflation remains uncertain and its effect on monetary policy, higher interest
rates and the costs of living will remain a cause
of uncertainty and possible volatility for the immediate future across our end
markets.
This volatility has the potential to impact customer demand, and create
financial and operational pressure, while adding costs to our operations and
making planning and forecasting more difficult.
Attract, recruit and retain our people: Failure to attract and retain people We continue to invest in learning and development programmes to ensure both
with the right skills, drive and capability to reshape and grow the business vocational and technical training needs are met whilst retaining an agile
workforce. Our apprenticeships and training academies help develop the near
and long-term skills of our employees.
SIG's ability to deliver its objectives and to compete effectively is, in
part, dependent on its ability to recruit and retain colleagues with the
necessary skills, experience and ability to deliver expected performance We regularly review our organisational structures and accountabilities, and
levels. ensure our structures optimise employee motivation and engagement. Employee
engagement is monitored through an annual survey and a Workforce Engagement
programme run by the Board.
A combination of medium-term structural labour and vocational skills shortages
in the construction sector, exacerbated by increased employee concerns
regarding the performance and stability of the construction sector, has the Ongoing enhancements to pay and conditions, including market benchmarking,
potential to negatively impact SIG's ability to attract, recruit and retain broadening variable remuneration elements and retention and succession
staff across the full spectrum of disciplines. planning also helps to mitigate this risk.
Our businesses have also introduced programmes to support employee health and
wellbeing. This includes training for all employees on keeping themselves and
their colleagues safe and well.
Data quality and governance: Poor data quality could impact our financial Product and customer data quality remains a focus area for our operating
management, fact-based decision making, business efficiency, and credibility companies, who continue to monitor, assess and upgrade their product data
with customers requirements, capabilities and governance considering ongoing changes in
business needs and regulation. During 2024, we continued to enhance our data
management and governance capabilities though the ongoing
There is a risk that we lack the necessary quality of systems and processes to development of new product information systems across
ensure sufficient granularity, completeness, and accuracy of vendor, product
and pricing master data. This has the potential to impact our ability to our UK and French businesses. We also continue to maintain, and where
deliver a digital customer experience, provide enhanced product and customer necessary, upgrade our ERP systems where relevant to ensure these systems
analytics or insight and comply with both existing and new regulatory support the required data quality and governance required.
requirements.
Environmental, social and governance (ESG): Reputational impacts from poor Our ESG commitments include a focus on health and safety leadership, reaching
environmental, social and governance arrangements and performance net zero carbon, sending zero SIG waste to landfill, partnering to reduce
carbon and waste across the supply chain, and becoming an employer of choice
in our industry.
Public and commercial consciousness, driven in part by ongoing regulatory
pressures, continues to evolve on a wide range of environmental, social and
governance issues, including climate change, employee wellbeing and how an These commitments will be supported by verified data to ensure that progress
organisation contributes to society. in achieving these aims and ambitions is monitored and subject to appropriate
rigour. To do this, we have enhanced our sustainability reporting and
budgeting processes (particularly in relation to carbon emissions and waste)
to ensure that we are able to effectively track both the progress and
While SIG has a long and rich heritage in helping the construction industry financial impacts of commitments.
deliver energy efficient solutions and products, risks remain in terms of how
we deliver our ESG agenda.
We have also ensured we are able to monitor new an emerging ESG legislation
and implement the appropriate management arrangements, systems and processes,
This is particularly the case in how we ensure we achieve our stated aims with particularly with regards to the ensuring compliance with new legislation
regards to climate change and decarbonisation. These risks include the cost implemented in the EU, including the Corporate Sustainability Reporting
and complexity of compliance, the challenges presented by the decarbonisation Directive (CSRD) and the Corporate Sustainability Due Diligence Directive
of our vehicle fleet and estate and how we engage with the wider industry to
reduce product and supply-chain carbon impacts. (CSDDD).
As regards employee wellbeing, each of our businesses has introduced
programmes and initiatives to support employees, underpinned by a Group-wide
employee health and wellbeing policy and training for all employees to
understand their responsibilities to keep themselves and their colleagues safe
and well.
Mergers and acquisitions: Inability to successfully execute, integrate and We have appropriate M&A resource across the organisation, and utilise
leverage merger and acquisition opportunities external advisors where necessary for the effective identification and
prioritisation of acquisition opportunities.
Where necessary, we may from time to time acquire new businesses. Such
decisions are based on detailed plans that assess the value creation Resource is also available in the organisation to ensure that transactions are
opportunity for the Group. By their nature, there is an inherent risk that we subject to the necessary pre and post-acquisition and integration activities
fail to manage the execution and integration risks which may result in delays and processes.
or additional costs and impact the future value and revenues generated.
Clear accountability and authority limits for the initiation and approval of
M&A activity are defined in the Group Delegation of Authority.
Legal or regulatory compliance: Failing to comply with or breaching legal or Our Group General Counsel is a member of the Executive Leadership Team and is
regulatory requirements supported by appropriately skilled in-house legal and company secretarial
resource at Group and operating company level, with further support provided
by an approved panel of external lawyers and advisors.
The Group's operations are subject to an increasing and evolving range of
regulatory and other requirements in the markets in which it operates. A major
corporate failure resulting from a non-compliance with legislative, regulatory Policies and procedures are in place to ensure compliance with legal and
or other requirements would impact our brand and reputation, could expose us regulatory frameworks, including health and safety, environmental, ethical,
to significant operational disruption or result in enforcement action or fraud, data protection and product safety.
penalties.
The Group's internal controls function ensures that appropriate and effective
controls are in place against material financial misstatement, errors,
omissions or fraud.
Our Code of Conduct is available on our website and forms part of our employee
induction programme. E-learning tools are also deployed across the
organisation to ensure employees are aware of, and understand, their
obligations.
A whistleblowing hotline, managed and facilitated by an independent third
party, is in place throughout the Group. All calls are followed up and
investigated fully with all findings reported to the Board.
Modernisation: Failure to deliver the digital capabilities necessary to We continue to evaluate new technologies and make investments in the digital
support improved efficiency and productivity or to remain competitive in the workplace to ensure that we maintain a competitive digital proposition.
marketplace
Across our markets each operating company is responsible for ensuring that it
Increased technological innovation and change has accelerated the increasing has an appropriate technology roadmap to identify how it implements the
role digitalisation will have in the construction materials supply chain. We necessary technologies and ways of working to ensure that it can maximise
continue to seek opportunities to ensure we can deliver digital solutions to digital opportunities in terms of enhancing the customer experience and
enable a more efficient, integrated, and frictionless experience for our optimising transactional, fulfilment or process efficiencies.
colleagues, customers and suppliers.
During 2024 we have invested in a new ERP system for our Polish business.
This risk may be exacerbated by legacy systems and technologies which are
heavily customised, require significant system maintenance to prevent outages
and lack the functionality to allow their integration into a more modern
digital infrastructure.
Change management: Inability to change and grow the organisation as planned in Operating companies continue to manage change portfolios through programme
order to meet growth targets management governance committees. Increased monitoring has been implemented,
particularly regarding progress against growth initiatives, in line with our
strategy.
The Group is committed to improving its operating performance, with a
strategy, key actions and progress on these.
Monitoring of business growth metrics and early warning indicators or trends
continues as part of business reviews at both the management and Board level.
This will inevitably require changes to organisational structures, roles, and
ways of working, supported by investments to modernise existing and implement
new IT systems. Our ongoing employee engagement surveys continue to facilitate the early
identification of change impact in terms of our employees, and action plans
are implemented and monitored accordingly.
There is a risk that these initiatives, allied to the impacts of challenging
market conditions for our business and employees, results in 'change fatigue'
and either future changes are not implemented as planned, or the benefits are
not realised.
Non-statutory information
The Group uses a number of alternative performance measures, which are
non-IFRS, to describe the Group's performance. The Group considers these
performance measures to provide useful historical financial information to
help investors evaluate the underlying performance of the business.
Alternative performance measures are not a substitute for or superior to
statutory IFRS measures.
These measures, as shown below, are used to improve the comparability of
information between reporting periods and geographical units and to adjust for
Other items (as explained in further detail within the Accounting policies).
This also reflects how the business is managed and measured on a day-to-day
basis. Measures presented are aligned with the key performance measures used
in the business and as included in the Strategic report.
a) Leverage
Leverage is the financial covenant applicable to the RCF and is used as a key
performance metric for the Group. It is calculated as net debt divided by the
last twelve months underlying EBITDA.
2024 2023
£m £m
Underlying operating profit 25.1 53.1
Add back:
Depreciation of right-of-use assets and property, plant and equipment 78.9 76.6
Amortisation of computer software 1.2 2.4
Underlying EBITDA 105.2 132.1
Reported net debt 497.3 458.0
Leverage 4.7x 3.5x
b) Operating margin
This is used to enhance understanding and comparability of the underlying
financial performance of the Group and is calculated as underlying operating
profit as a percentage of underlying revenue.
2024 2023
£m £m
Underlying revenue 2,611.8 2,761.2
Underlying operating profit 25.1 53.1
Operating margin 1.0% 1.9%
c) Like-for-like sales
Like-for-like sales is calculated on a constant currency basis and represents
the growth in the Group's sales per working day, excluding any acquisitions or
disposals completed or agreed in the current and prior year, and adjusted to
exclude the net impact of branch closures or openings. This measure shows how
the Group has developed its revenue for comparable business relative to the
prior period. As such it is a key measure of the growth of the Group during
the year. Underlying revenue is revenue from continuing operations excluding
non-core businesses.
UK Interiors UK Roofing UK Specialist Markets UK France Interiors France Roofing France Germany Benelux Ireland Poland Total Group
Total Total
£m £m £m £m £m £m £m £m £m £m £m £m
Statutory and underlying revenue 2024 499.1 381.7 253.3 1,134.1 200.5 421.9 622.4 438.5 103.6 104.3 241.4 2,644.3
Less inter-segment revenue (4.1) (1.1) (15.2) (20.4) (0.1) (11.8) (11.9) - - (0.2) - (32.5)
External revenue 495.0 380.6 238.1 1,113.7 200.4 410.1 610.5 438.5 103.6 104.1 241.4 2,611.8
Statutory and underlying revenue 2023 563.7 370.4 1,200.1 219.0 471.3 690.3 462.1 116.9 94.1 237.9 2,801.4
266.0
Less inter-segment revenue (7.2) (1.0) (18.4) (26.6) (0.1) (13.3) (13.4) - - (0.2) - (40.2)
External revenue 556.5 369.4 247.6 1,173.5 218.9 458.0 676.9 462.1 116.9 93.9 237.9 2,761.2
% change year on year:
Underlying revenue (11.1)% 3.0% (3.8)% (5.1)% (8.5)% (10.5)% (9.8)% (5.1)% (11.4)% 10.9% 1.5% (5.4)%
Impact of currency - - - - 2.5% 2.5% 2.5% 2.6% 2.5% 3.0% (2.3)% 1.1%
Impact of branch changes 2.6% (0.1)% - 1.3% (0.3)% 0.3% 0.1% 0.2% 1.2% - (1.1)% 0.5%
Impact of working days (1.1)% (1.2)% (1.1)% (1.1)% (0.7)% (0.4)% (0.5)% - (0.7)% (0.9)% (0.3)% (0.7)%
Like-for-like sales (9.6)% 1.7% (4.9)% (4.9)% (7.0)% (8.1)% (7.7)% (2.3)% (8.4)% 13.0% (2.2)% (4.5)%
d) Free cash flow
Free cash flow is defined as all cash flows excluding M&A transactions,
dividend payments and financing transactions. Operating cash flow represents
free cash flow before interest and financing and tax. These measures are used
to enhance understanding and comparability of the cash generation of the
Group.
2024 2023
£m £m
Increase/(decrease) in cash and cash equivalents in the year (39.7) 2.7
Add back:
Settlement of amounts payable for previous purchases of businesses (included 4.4 0.7
within cash flows from investing activities)
Settlement of amounts payable for previous purchases of businesses (included 4.0 -
within cash flows from operating activities)
Repayment of borrowings 239.7 0.8
Proceeds from borrowings (247.0) -
Free cash flow (38.6) 4.2
Add back:
Finance costs paid 37.5 36.9
Finance income received (2.7) (2.2)
Tax paid 8.0 14.0
Operating cash flow 4.2 52.9
e) Other non-statutory measures
In addition to the alternative performance measures noted above, the Group
also uses underlying EPS (as set out in Note 6), underlying net finance costs
(as set out in Note 4) and average trade working capital to sales ratio.
Average trade working capital to sales ratio is calculated as the average
trade working capital each month end (net inventory, gross trade creditors,
net trade receivables and supplier rebates receivable) divided by underlying
revenue.
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