SIG offloads home insulations unit

24th Apr 2014 12:47

Building materials distributor SIG has sold off its home insulation business for a nominal sum to private boiler and home heating firm Help-Link.The FTSE 250 company will provide £5.3m in cash to insulation installation and contracting business Miller Pattison, which was formerly known as SIG Energy Management, and expects to incur an associated exceptional charge in 2014 of around £13m.SIG will receive a nominal initial cash consideration of £1, with £1.5m cash deferred until December 31st 2016 and an earn-out of up to £6.5m cash in 2017 depending on performance over the period until end-2016.The Sheffield-headquartered company said future proceeds from the divestment will be used for working capital purposes and that the disposal came in the wake of the significant downturn in market volumes after the government's Carbon Emissions Reduction Target scheme ended, with a subsequent "lack of traction" from the Green Deal and continued market uncertainty surrounding the Energy Company Obligation.For the 2013 financial year the home insulation business made a loss before tax of £5.2m after incurring £2.1m of net restructuring costs and goodwill impairment, on reported sales of £25.4m. Following the sale SIG said it remained "committed to the development of its wider energy management and services offering in all its countries of operation".SIG shares were up 0.27% to 201.05p at 12:45 on Thursday. OH