Construction National

SIG wary despite return to black

Roofing and insulation materials supplier SIG has returned to profit but warned its UK business is beginning to feel the bite of Government austerity cuts.

The Sheffield-based group reported pre-tax profits of £7.5 million in the year to December 31, compared with losses of £80.8 million the previous year, as it outperformed its markets and benefited from a restructuring.

In the UK and Ireland, sales increased by 3.6% despite it reducing branch numbers by 34 to 330, as trade was boosted by a slight increase in its residential markets and by strong commercial demand in the South East.

The division swung back into the black but SIG warned a reduction in public sector demand towards the end of the year will be more pronounced in 2012.

The group sold three of its UK businesses in June as part of its plan to focus on its core markets of insulation and energy management, interiors and exteriors.

Underlying profits across the group were up 27% to £81.7 million. Revenues rose 7.1% to £2.7 billion, driven by a strong performance in mainland Europe, which accounts for more than half of its business.

But sales growth across the group has slowed to 1% in the first weeks of its new financial year and it says it expects its overall markets to contract this year although it will continue to gain share.

The group recently announced it is to close more of its stores, including 15 in the UK and Ireland, as part of plans to save £5 million.
But it will also continue to open new sites, mainly under the Builders Express format in London and the South East, having opened four over the past year.