21st Sep 2018 08:29
LONDON (Alliance News) - SIG PLC said Friday it swung to a profit for the first-half of its financial year as it did not incur losses on the sale of its non-core businesses as it had a year before.
For the six months to June 30, the building products supplier posted pretax profit of GBP19.9 million compared to a GBP15.8 million loss a year prior. This was due to the absence of a GBP50.2 million loss from the sale and closure of non-core businesses and other items related to the disposal of property in the first half of 2017.
Revenue slipped to GBP1.38 billion from GBP1.43 billion a year ago, but operating expenses were reduced to GBP338.4 million from GBP384.1 million. Difficult UK trading due to poor weather and political uncertainty offset progress in other geographies, SIG said.
Like-for-like sales increased 0.4% in the half-year period, with UK & Ireland down 2.3% as a result of a "weak maintenance and improvement market" in the UK. Performance just in Ireland was stronger, with like-for-like sales up 9.7%.
In Mainland Europe, like-for-like sales increased 2.8% Poland performed "particularly strongly" with operating profit up 31% year-on-year.
Operating profit in Germany and France was up 3% and 6%, respectively.
SIG Chief Executive Officer Meinie Oldersma said: "The first half did not provide the trading backdrop we wanted, with significant challenges in the UK market as a result of the poor weather in the early months of the year and continuing macro uncertainty.
"This has impacted both our UK revenues and operating profit in the year to date, which are behind where we had hoped they would be at the start of the year. In contrast, the trading environment across Mainland Europe and Ireland has been positive, which is reflected in the improved first half results from our non-UK businesses."
The FTSE 250 constituent maintained its interim dividend at 1.25 pence per share.
Looking ahead, SIG said that given the continuing challenging trading conditions in the UK, it has accelerated certain transformational workstreams and has increased visibility over delivery of significant profit improvement during the second half of 2018.
"As a result, we remain optimistic of delivering a full-year result in line with our expectations absent any further deterioration in trading conditions, notably in the UK. Whilst there remains considerable work to be done, we remain confident in our ability to deliver our transformational plans," Oldersma added.
SIG shares were trading flat at 121.04 pence each early Friday morning.
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