SIG growth slows as comparatives stiffen

8th Jul 2014 08:13

Sales growth slowed in the second quarter at building materials distributor SIG, as expected, with markets in mainland Europe and the strong pound proving a drag on numbers."While construction markets in mainland Europe remain variable, with France continuing to decline, the outlook for the UK remains positive," SIG said in a statement. Group sales from continuing operations increased by 6.5% in the first half to roughly £1,285m, it revealed in a pre-close trading update, with underlying profit before tax expected to increase by "at least" 19% to £40m.This was a slowdown from the 9.4% sales growth in the first four months of the year, which SIG put down to the strengthening of comparative numbers from the year before.Likewise, like-for-like sales were just 2.9% in May and June combined, also down from 9.4% in the first four months when the business benefited from the unseasonably mild start to the year. Like-for-like sales in the UK & Ireland were up 11.5% and 3.2% in Mainland Europe in the first half, decelerating from the respective 13.1% and 6% in the first four months. France saw like-for-likes slow to 2.1% from 6% and Germany to 5.1% from 6.4%.The FTSE 250 company said it continued to make good progress on its strategic initiatives to improve business performance and is on track to achieve its £1m-£5m net benefit target during the year, on top of operational efficiency savings. Looking forward, management's full-year expectations remain unchanged despite the adverse foreign exchange movement. Shares in SIG were down 0.78% to 191.50 by 8:09 on Tuesday.OH