8th Jul 2014 06:51
LONDON (Alliance News) - Building products distributor SIG PLC Tuesday said it is expecting to report a strong rise in pretax profit in the first half of the year, as strong sales growth in the UK and Ireland helped offset a hit on revenue earned elsewhere due to the strength of sterling.
The company warned that sales growth moderated in the last two months of the half, but kept its guidance for "good progress" for the year as a whole despite currency movements going against it.
In a trading update, SIG said it expects to report underlying pretax profit of at least GBP40 million for the first six months of 2014, up from GBP33.6 million last year excluding the sale of its former German roofing and Miller Pattison businesses, as sales from continuing operations rose by about 6.5% to about GBP1.29 billion.
It said its sales performance moderated in May and June, with like-for-like sales up 2.9% for both months combined. It blamed the stronger comparative figures for those months.
It said like-for-like sales in the whole first half were up 11.5% in the UK & Ireland, 3.2% in mainland Europe, 2.1% in France and 5.1% in Germany.
The company added that it's on track to achieve GBP1 million to GBP5 million in benefits from its business improvement initiatives this year, and is still committed to delivering about GBP30 million of benefits in 2016.
"While construction markets in mainland Europe remain variable, with France continuing to decline, the outlook for the UK remains positive," the company said in its statement. "The group's first half performance provides a strong platform from which to deliver its full year expectations, which remain unchanged despite adverse movements in foreign exchange rates."
"SIG continues to expect to achieve good progress in 2014 based on the trading environment, operational efficiency savings and a modest net benefit from the strategic initiatives," it added.
The company will put out its first half results on August 12.
By Steve McGrath; [email protected]; @SteveMcGrath1
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