SIG boosts full-year guidance, shares spark

Updating on trading ahead of next week’s annual general meeting, SIG said group like-for-like sales were ahead 29% in the four months to 30 April.

Within that, the UK was up 47% year-on-year, while the European Union was 19% higher.

“After a solid start in January and February, sales volumes then picked up strongly, and March and April traded ahead of management expectations,” SIG noted.

Compared to the same four-month period in 2019, group like-for-like sales were down 4%.

SIG said: “While the evolving backdrop will continue to create uncertainty in the short term, more so in our EU markets, the strong demand across territories and sectors in the first four months of the year was encouraging, and gives the board increased confidence for the full-year performance.

“We now expect the group to deliver an underlying operating profit in the first half, returning the group to profitability earlier than expected.”

It continued: “We continue to expect the second half to both profitable and cash generative, and in light of the stronger-than-anticipated recent performance, we now expect full-year revenues to be slightly ahead of prior expectations, and profits also to be higher than previously expected.”

As at 1045 GMT, shares in SIG were trading 5% higher at 49.66p.

Numis, which has a ‘hold’ rating on the stock, said: “SIG, like others in the sector, is benefiting from the impressive bounce-back in construction activity as we emerge from the Covid-19 crisis.

“However, we believe that it will still take some time to gain comfort that the group is only on. The path towards profitability but also to management’s medium term earnings before interest and tax margin target of 3% and beyond.”

SIG's AGM will take place on 13 May.