SIG revenues fall as European markets deteriorate but profits jump

12th Mar 2015 09:04

SIG, the supplier of insulation, roofing, commercial interiors and construction products, said its full-year results were hurt by deteriorated European markets.Revenues fell 3.2% to £2.6bn, but profits before tax jumped to £39m from £2.1m the year before.As a result, earnings per share rose to 5.6p from losses of 2.5p in 2013.The drop in revenues was driven by a weaker second half, when the business suffered with a downturn in the macroeconomic environment in mainland Europe. Sales decreased by 5.4% to £1.3bn, affected by movements in foreign exchange rates. However, in a like-for-like basis, the decrease of only by 1%.In the UK, sales increased 11.5% helped by a strong residential market. SIG said it expects robust growth in 2015 despite a slower rate of expansion than in 2014.The general election and uncertainty in the Eurozone may also affect the company's outlook.Showing confidence in the business, the group increased its dividend by 24.2% to 4.4p.Chief executive Stuart Mitchell said: "We anticipate that trading conditions will remain variable across the group's countries of operation in 2015, with continued good growth in the UK & Ireland and uncertainty persisting in mainland Europe."While the group also notes the continuing weakening of the Euro and potential adverse translational effect on profit, it expects this headwind to be partially offset by lower fuel costs."N+1 Singer analysts said the group has a "fundamentally strong position as the leading supplier of insulation product in Europe", and believes its strong presence will be "a major beneficiary of mainland economic recovery".Shares were down 0.73% to 190.1p on Thursday at 09:49.