12th May 2016 06:53
LONDON (Alliance News) - Building products distributor SIG PLC on Thursday reported like-for-like sales growth across its divisions since the start of 2016, although noted some uncertainty in the construction markets in Mainland Europe.
FTSE 250-listed SIG said revenue was up 9.3% over the four months to the end of April, with acquisitions contributing 4.9% to growth, currency 3.0% and working days 0.2%. As a result, the company said like-for-like sales were up 1.1%.
Reported revenue in the UK & Ireland division grew 9.1% for the period, with like-for-like sales up 2.8%. Like-for-like sales for SIGD, the SIG's insulation and interiors business, were up 3.1%, as it continued to benefit from "an increased customer focus and a resilient UK new build residential market".
Within the exteriors business, however, like-for-like sales fell 1.0%, although this was an improvement over recent quarters, SIG said, which suggested that there were some signs of a stabilising in the UK repairs, maintenance and improvement market.
SIG said reported revenue in the Mainland Europe division were up 9.6%, but like-for-like sales were down 1.0% over the period. Like-for-like sales in France fell 3.1% as the "trajectory of the recovery in this construction market continues to be uncertain", SIG said. However, the group added that leading housing indicators remain positive, with new residential starts up 3.1% on a rolling twelve months basis to March 2016.
Like-for-like revenue in SIG's German business were down 1.0% for the period, although SIG said it delivered positive LFL growth in its other markets of Benelux and Poland.
SIG said its gross margin continues to benefit from procurement savings, and was up 20 basic points during the period, which further builds on the 40 basic point gross margin improvement in the first two years of its procurement initiative since 2014.
SIG said it continues to make progress on its initiatives to improve business performance and "high degree of confidence in achieving its 2016 targets of a net incremental benefit of GBP3.0 million in supply chain and at least GBP10.0 million in procurement". SIG noted that it continues to expect to make progress in 2016 in line with its previous expectations.
However, SIG added that construction markets in Mainland Europe remain uncertain and competitive pressures persist.
By Hannah Boland; [email protected]; @Hannaheboland
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