SIG 'disappointed' by full year numbers

SIG was disappointed with its 2015 numbers on Tuesday, having published final results for the calendar year, but remained confident in the market and in itself to see a return to growth in the current year.

The FTSE 250 specialist building products company saw revenue grow 3.7% on a constant currency basis, but dip 1.4% in real terms, to £2.57bn from £2.6bn in 2014.

Underlying operating profit was down 11.2% to £98.7m from £111.2m, and underlying profit before tax shrunk 11.8% to £87.4m from £99.1m. Underlying basic earnings per share were 11.2p, down 6.7% from 12p in the previous year.

On a statutory basis, operating profit grew to £65.9m from £53.2m, and basic earnings per share were 6.1p, compared to 5.6p last year.

SIG claimed that group sales were up 3.7% on a constant currency basis, and 0.3% on a like-for-like basis. UK and Ireland sales in particular grew by 5.7%, its board said.

During the year, the company spent £78.1m on infill acquisitions, and saw a £12.6m incremental net benefit from its strategic initiatives.

"While making good progress on the strategic initiatives and infill acquisition programme, we were disappointed by the group's 2015 performance, having been adversely affected by weak trading conditions in mainland Europe and the UK RMI market, as well as movements in foreign exchange," said SIG chief executive Stuart Mitchell.

"We have already taken a number of actions to improve performance including further increasing our customer focus, reducing procurement and supply chain costs, and growing our value added businesses," he added.

Mitchell said that this year, the firm was expecting good growth in the UK new-build construction market - particularly in residential. Lead indicators were also suggesting a pick-up in demand for the UK RMI sector as the year progressed.

The speed of any recovery in mainland Europe remained uncertain, the firm said, but trading conditions in France had improved, with the housing market stabilising and the company returning to growth there in the fourth quarter of 2015.

"Following an encouraging start to the year, with positive like-for-likes in both the UK & Ireland and mainland Europe, the scope for further cost savings and growth opportunities within the group mean that we expect to make progress in 2016," Mitchell concluded.

SIG's board proposed a final dividend of 2.91p per share, making for a full-year dividend of 4.6p - a 4.5% increase on 2014.