SIG profits slump as building weakness persists

20th Aug 2009 07:05

Building products group SIG posted a sharp fall in profits as weakness in the construction market persisted into the first half of 2009.Pre-tax profits in the six months to June 30 fell to £15.4m from £48.5m over the same period the previous year as revenue fell to £1.34bn from £1.44bn. Sales in the UK and Ireland slumped 21.5% to £667.1m, while mainland Europe sales climbed by 5.2% to £667.6m due to currency factors, but were hit by cold weather over the first quarter which curtailed building site activity.It said that by the end of the first half of 2009 the new build housing segment had shown some modest signs of stabilising at a very low level, but that discretionary spending has continued to fall. In mainland Europe, residential new building has continued falling, it said.'Trading conditions in the first half of 2009 have been exceptionally challenging in all of our end markets, which negatively impacted Group trading,' said chairman Les Tench.'We expect trading in the near term to remain difficult and management therefore continues to run the business tightly, reducing costs and focusing on cash management.'