SIG sees 'significant' improvement in H2 as UK mkt weakens

Speciality building products supplier SIG said it was expecting a big improvement in second half fortunes as like-for-like group revenues fell 3.6% in the four months to end-October in challenging conditions.

The company said the UK construction environment had weakened during the autumn as commercial construction demand was “dampened by macro-economic uncertainty”.

Slowing house price inflation and falling secondary housing market transactions also hit revenues.

“This weaker trading environment impacts demand for SIG's products and is a key factor behind the lower like-for-like revenues in the UK and Ireland, down 8.7% in the period,” the company said.

“Trading conditions in construction markets across mainland Europe have also softened since June, notably in France as anticipated, where like-for-like revenues were down by 1.6% during the period.”

Like-for-like revenues were 2.1% lower in Germany as the business sought to reduce its exposure to loss-making customers and improve gross margins.

In contrast, it continued to see robust demand and good top-line growth in Poland, Benelux and its air handling business.

“While market conditions are challenging, the transformation of SIG's businesses progresses as planned,” SIG said.

“As such, management remains confident that the group will see significant profit improvement in the second half of the year and deliver a result in line with its expectations, driven by higher gross margins and lower operating costs.”