SIG swings to loss; plans £150m equity raising

Fri, 29th May 2020

Building products supplier SIG swung to a full-year loss after its sales fell and it wrote down the value of assets, and said it planned to raise £150m from a share issue. SIG said investment manager Clayton, Dubilier & Rice had conditionally agreed to invest up to £85m in the company, via the equity raising, and take two board seats. Pre-tax losses from continuing operations in the year through December amounted to £112.7m, compared to a profit of £10.3m on-year. SIG said its underlying revenue slipped 9%, due to market share losses in UK and Germany. It pinned customer losses on 'poor execution of transformation initiatives, which the board believes disconnected the business from its customers, suppliers and its front-line colleagues'. SIG, which appointed a new chief executive Steve Francis in February as part of a management overhaul, said it planned to raise the equity 'in the coming weeks'. The raising would be structured in two tranches, with the first £60m being placed to CD&R at 25p per share. The second £90m tranche would be offered to a broader range of investors and incorporate a pre-emptive offer, in which CD&R would invest up to £25m. A new strategy at the company would be 'customer-centric strategy' and 'reprioritises sales'. 'The 2019 results, albeit in line with January guidance, are disappointing,' chairman Andrew Allner said. 'We welcome CD&R as a long-term, supportive shareholder and believe they will bring considerable value to SIG through their contribution on strategy, operational performance, culture and value creation, which will benefit all stakeholders.' Story provided by StockMarketWire.com

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