10th Jan 2008 07:00
SIG PLC10 January 2008 TRADING STATEMENT 10 JANUARY 2008 SIG plc, the leading supplier of insulation, roofing, commercial interiors andspecialist construction products, issues the following trading update for theyear ended 31 December 2007, in advance of the preliminary results which will beannounced on 13 March 2008. All figures stated throughout this statement excludethe USA business, which was sold in November 2006. Strong organic growth, together with the impact of the on-going acquisitionactivity, produced record sales and profits in 2007. Total sales for the yearwere c.£2,450m, an increase of approximately £590m (32%) over 2006 (£1,860m).Like for like * sales growth was c.10.8%. Underlying ** profit before tax is expected to be not less than £139m, anincrease of approximately £30.7m (28.3%) on 2006 (£108.3m), and ahead ofanalysts' consensus expectations. UK and Ireland (c.62% of Group Sales) Total sales increased by c.21% over prior year, with like for like growthc.9.5%. Operating profits were significantly ahead of 2006. Good levels of growth in sales and operating profits have been achieved in allfour key business streams, i.e. Insulation, Roofing, Commercial Interiors andSpecialist Construction Products. As reported in September 2007, insulation demand from the new-build sector isbeginning to reflect the new higher standards set by the 2006 change to theBuilding Regulations (Part L). Mainland Europe (c.38% of Group Sales) Total sales in Mainland Europe increased by c.53%, with like for like growthc.13% in Sterling and c.12% in local currency. Operating profits weresignificantly higher than prior year. Sales and operating profits were significantly increased in total and on a likefor like basis in all countries in which the Group has trading operations, i.e.Germany and Austria, France, Benelux and Poland. The newly acquired operationsin Slovakia and the Czech Republic traded profitably. Acquisitions During 2007 the Group had a record year of acquisition activity, completing 27transactions for a total consideration including assumed debt of c.£325m.Combined annualised sales on an historical basis amounted to c.£440m. Of this,£300m is in Mainland Europe and £140m in the UK and Ireland. Of the c.£440mannualised sales, c.£220m impacted 2007. These businesses are being successfully integrated into the Group and aretrading in line with our expectations. Trading Sites In 2007 the Group increased the number of trading sites by 161 to 779(31 December 2006: 618). Outlook The Group has strong positions in the markets and countries in which it tradeswith experienced operational management throughout its activities and has strongoperational cash flow and sound finances. The Board believes that the Group's largest single product group, that ofinsulation and related materials, will continue to increase in demand at afaster rate than other building materials due to the now global drive to reduceenergy consumption. Over time, we expect to see further increases in regulationsand other initiatives introduced to stimulate demand for insulation. In the UK,we are presently investing to increase capacity to meet the expected increaseddemand driven by the new scheme for upgrading insulation in existing homes,which begins in April 2008 and runs for three years. There is a significant range of other expansion opportunities, both organic andacquired, being actively pursued. The number of trading sites has increasedsubstantially over recent years in the UK and Ireland and in Mainland Europe.This programme of greater density and coverage of trading sites is planned tocontinue. The product range has also been extended year on year in the Group's corebusinesses, and through the development of new business streams. This programmeof product range expansion is planned to continue. The Board believes that the substantial pipeline of work in progress offully-funded public and private non-residential construction programmes willcontinue to provide opportunities. The Group's bias towards non-residentialconstruction together with its growing geographic diversity will be helpfulgoing forward. In summary, the Board believes that the on-going programmes of expansion, bothorganic and through acquisition, will enable SIG to continue its track record ofoutperforming market conditions. The Group is in excellent shape and the Boardis confident of further progress in 2008 and beyond. Definitions * 'Like for like' is defined as the business excluding the impact of acquisitions made since 1 January 2006. ** 'Underlying' is before the amortisation of acquired intangibles and hedge ineffectiveness. EnquiriesDavid Williams, Chief Executive SIG plc Today: 020 7251 3801 Gareth Davies, Finance Director Thereafter: 0114 285 6300 Faeth Birch / Gordon Simpson Finsbury 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SIG