8th Jan 2019 08:06
LONDON (Alliance News) - SIG PLC on Tuesday said its transformation continues to progress at pace, despite challenging market conditions and lower trading revenue in the second half of 2018.
The focus on better pricing management and the planned withdrawal from unprofitable business has reduced revenue in the second half of 2018, SIG said, but increased gross margins above the company's expectations.
In December, SIG sold its shareholding in its UK offsite manufacturing business, RoofSpace, and the assets of Proteus, the UK-based facade panel systems manufacturing business.
The mid-cap building materials supplier highlighted that falling headcount has contributed to reduced operating costs.
As a result, SIG expects to report adjusted pretax profit of GBP75 million, which includes a benefit of between GBP2 million and GBP3 million of property profits in the year. In 2017, SIG's underlying pretax profit was GBP79.2 million.
Revenue from continuing operations in the year to the end of December decreased by 1.4%, with a further 0.7% decrease from currency and 0.2% from more working days. In 2017, the company generated revenue of GBP2.78 billion.
SIG's like-for-like revenue is expected to come in 2.3% lower year-on-year.
In the UK, the company said commercial construction demand remained dampened by macroeconomic uncertainty, while house price inflation slowed and secondary housing market transactions continued to fall.
This weaker trading environment impacted on demand for SIG's products, it said, and is a key factor behind the lower like-for-like revenue in the UK & Ireland, which was down 8.8% in the second half of 2018.
Trading conditions in construction markets across mainland Europe also slowed materially, SIG said, particularly in France and Germany, where like-for-like revenue was down by 3.2% and 4.6%, respectively.
Looking ahead, the company expects its ongoing transformation to drive a significant increase in profitability in 2019.
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