REG - SIG PLC - Q3 Trading Update

SIGAnnouncement

12/10/2023 07:00

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RNS Number : 8514P  SIG PLC  12 October 2023

12 October 2023

 

SIG plc Q3 Trading Update

 

SIG plc ("SIG", or "the Group"), a leading supplier of specialist insulation
and building products across Europe, today issues a trading update for the
three months to 30 September 2023 ("Q3" or "the period").

 

Key points

·   Group like-for-like(1) ("LFL") revenue for the period down 2% versus
prior year

·   Market conditions remain challenging, with a further softening in
demand in September, most notably in new build residential segments across all
geographies

·   H2 2023 profitability benefiting from ongoing productivity initiatives,
including early impact of restructuring actions already executed

·   In light of the weaker short term demand outlook, the Board now expects
the Group to deliver full year underlying operating profit(2) in the range of
£50m to £55m

 

Trading Summary

Group LFL revenue was down 2% year-on-year in the period, and is down 1% for
the nine months to 30 September 2023.  Sales prices and volumes were lower
than expected in the period, with the overall impact of input cost inflation
on Group revenue growth estimated to have been neutral, and sales volumes 2%
down.

 

 1 July to 30 September      LFL      £'m

 Revenue                     growth
 UK Interiors                (3)%     189
 UK Exteriors                0%       115
 UK                          (2)%     304

 France Interiors            (2)%     48
 France Exteriors            (4)%     95
 Germany                     (1)%     117
 Poland                      7%       68
 Benelux                     (8)%     25
 Ireland                     (13)%    24
 EU                          (2)%     377

 Group                       (2)%     681

 

Market conditions remained challenging across all our geographies. Whilst the
year-on-year volume performance in H2 has improved from H1, as expected due to
prior year comparators, the extent of this has been less than anticipated,
with a notable softening in demand in September.  Although this applies to
most segments, it has been most marked in new build residential in all
markets.  We believe we are continuing to outperform the markets in which we
operate, reflecting the strengthened performance across our branch network
over the last two to three years.  Working capital and capex remain tightly
managed across the Group.

 

Outlook

We expect weaker demand conditions to persist through the rest of the year,
with a negligible impact overall from input price inflation or deflation.
 Our second half profitability is benefitting from ongoing productivity
initiatives, including the early impact of already executed restructuring
actions that will deliver £4m of annualised benefits.  These include a
streamlining of central costs and a review of certain OpCo cost structures,
notably in the UK.  We also expect a profit of c£3m on one specific property
move in France, as previously reported.  Despite the positive early impact of
these initiatives, the lower than anticipated sales mean that the Board now
expects the Group to deliver full year underlying operating profit in the
range of £50m to £55m.

 

Notwithstanding short-term market weakness, we continue to progress the
strategic and operational initiatives which underpin our ambition for the
Group.  We remain confident in our ability to further improve our market
positions, and to continue to improve our profitability when market conditions
recover. We will present on these topics at our Capital Markets Event on the
afternoon of 23 November 2023.

 

1.      Like-for-like is defined as sales per working day in constant
currency, excluding completed acquisitions and disposals

2.      Underlying represents the results before Other items. Other items
relate to the amortisation of acquired intangibles, impairment charges,
profits and losses on agreed sale or closure of non-core businesses and
associated impairment charges, net operating profits and losses attributable
to businesses identified as non-core, net restructuring costs, and other
non-underlying profits or losses.

 

 

Contacts

 SIG plc                                           +44 (0) 114 285 6300 / ir@sigplc.com
 Gavin Slark           Chief Executive Officer

 Ian Ashton            Chief Financial Officer
 Sarah Ogilvie         Head of Investor Relations

 FTI Consulting                                    +44 (0) 20 3727 1340
 Richard Mountain

 Peel Hunt LLP - Joint broker to SIG               +44 (0) 20 7418 8900
 Mike Bell / Charles Batten

 Investec Bank plc - Joint broker to SIG           +44 (0) 20 7597 5970
 Bruce Garrow / David Anderson

 

 

LEI: 213800VDC1BKJEZ8PV53

 

This announcement contains inside information for the purposes of UK MAR.
The person responsible for arranging the release of this announcement on
behalf of SIG is Andrew Watkins, Group General Counsel & Company
Secretary.

 

Cautionary Statement

 

This document contains certain forward-looking statements concerning the
Group's business, financial condition, results of operations and certain
Group's plans, objectives, assumptions, projections, expectations or beliefs
with respect to these items. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should',
'expects', 'believes', 'intends', 'plans', 'potential', 'targets', 'goal',
'forecasts' or 'estimates' or similar expressions or negatives thereof.

 

Forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the Group's actual financial condition,
performance and results to differ materially from the plans, goals, objectives
and expectations set out in the forward-looking statements included in this
document.

 

All written or verbal forward-looking statements, made in this document or
made subsequently, which are attributable to the Group or any persons acting
on its behalf are expressly qualified in their entirety by the factors
referred to above. Accordingly, readers are cautioned not to place undue
reliance on forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised; actual events or
results may differ materially as a result of risks and uncertainties facing
the Group. Subject to compliance with applicable law and regulation, the Group
does not intend to update the forward-looking statements in this document to
reflect events or circumstances after the date of this document and does not
undertake any obligation to do so.

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