SIG anticipates slump in half year profits

9th Jul 2013 09:32

SIG, which distributes specialist building products in Europe, expects first half profit to fall as a weak market and an extended winter gripped sales. Underlying profit for the first six months of the year is anticipated to be in the range of £29-£31m, compared to £35.5m the previous year, according to a trading update on Tuesday.Group sales from continuing operations in the first half were down 1.0% in Sterling and 3.0% in constant currency terms. Trading improved as the weather reverted to seasonal norms with flat sales in May and June compared to a 4.0% decline in the first four months. "As anticipated, despite this improving trend the group was unable to recover fully the weather-related shortfall in sales during the period," the company said in a statement. In Mainland Europe, sales per day fell by 4.0% in constant currency. France and Germany dropped 4.0% and 5.0% respectively. SIG's German roofing business was particularly affected by difficult trading conditions.Sales per day in the UK and Ireland, excluding SIG Energy Management ,increased by 2.0% in constant currency, driven by strong performance of the group's distribution businesses. Net debt at the end of the period came to £141m, £11m higher than a year ago due to acquisition expenditure and movements in foreign exchange rates. Looking ahead, the group said there are signs of improvement in market conditions in the UK but construction activity in Europe remains weak."With the improving sales trend and the group's firm action to reduce discretionary expenditure, SIG continues to expect to make further progress in 2013 consistent with its previous expectations, assuming normal weather conditions in the second half," SIG said."The group is moving forward on its strategic initiatives to improve business performance and will provide further details at its half year results announcement in August."Shares fell 0.93% to 169.70p at 10:13.RD