SIG revenues up, says H1 performance to be weaker than last year

FTSE 250 building products distributor SIG posted a rise in revenue for the period from 1 January to the end of April but said it expects its first half performance to be lower than that achieved in the same period a year ago.

In a trading a statement ahead of its annual general meeting, the company said group revenues from continuing operations rose 6.5%, with currency contributing 5% to growth and acquisitions 0.7%, offset by fewer working days. As a result, group like-for-like revenue was up 1.4%, in line with expectations.

LFL revenues were up 0.5% in the UK and Ireland and 2.4% in mainland Europe, with France recording a much improved performance as LFLs increased 3.1% thanks to an improving residential construction markets.

SIG said leverage reduction remains a key short-term priority and management continues to pursue a number of actions to strengthen the balance sheet, including asset disposals, more tightly focusing on cash generation and working capital management, and moderating capital expenditure.

As a result, the group reckons leverage will drop in the second half of this year and is targeting leverage to return to its 1.0 - 1.5x range in 2018.

"The group's 2016 results were weighted towards the first half of the year. Accordingly SIG expects its H1 2017 performance to be lower than that achieved in H1 2016, and to be comparable with H2 2016. For the full year 2017 the board expects the business to show a stronger second half, as is usual.

"This year has started in line with expectations. Whilst some increased supplier price inflation is being seen and there exists political uncertainty in some of SIG's major countries of operation, the Group will continue to focus on driving improved customer service and operational performance in competitive markets."