SIG PLC Trading Update and Strategy Day (0187X)
November 21 2017 - 2:00AM
UK Regulatory
TIDMSHI
RNS Number : 0187X
SIG PLC
21 November 2017
21 November 2017
SIG plc
Trading Update and Strategy Day
SIG plc ("SIG" or "the Group"), a leading European supplier of
specialist building products
with strong positions in its core markets of Insulation &
Interiors, Roofing & Exteriors, and Air Handling, today issues
a trading update for the period from 1 July 2017 to 31 October 2017
("the Period").
Trading summary
Group revenues from continuing operations increased by 6.7% in
the Period, with currency contributing 2.5% to growth, offset by
the effect of fewer working days (0.2)% and the impact of
acquisitions (0.2)%. As a result, Group like-for-like(1) ("LFL")
revenues were ahead by 4.6%, in line with expectations.
July to
LFL revenue October
growth 2017 H1 2017 YTD 2017
SIGD 4.3% 1.6% 2.7%
SIGE (2.6)% 0.3% (1.0)%
Ireland 9.6% 4.6% 6.7%
Offsite Construction 8.9% (2.9)% 1.1%
---------------------- --------- -------- ---------
UK & Ireland 2.5% 1.3% 1.8%
---------------------- --------- -------- ---------
France 8.1% 5.0% 6.2%
Germany 5.1% 1.8% 3.2%
Poland 18.2% 9.6% 13.4%
Benelux (5.0)% (4.8)% (4.9)%
Air Handling 1.6% 12.0% 7.7%
---------------------- --------- -------- ---------
Mainland Europe 6.6% 4.3% 5.2%
---------------------- --------- -------- ---------
SIG Group 4.6% 2.8% 3.5%
---------------------- --------- -------- ---------
(1) like-for-like is defined as sales per day in constant
currency excluding acquisitions and disposals.
LFL revenues were up by 2.5% in the UK & Ireland during the
Period, with the revenues of SIGD, the Group's Insulation &
Interiors business in the UK, continuing to benefit from price
increases.
Trading conditions in construction markets across Mainland
Europe continued to show signs of improvement, with LFL revenues up
by 6.6% during the Period, underpinned by strong performances in
France, Germany and Poland.
Leverage
Leverage reduction remains a key medium term priority and the
Group remains focused on working capital reduction and profit
improvement to drive leverage structurally lower. As previously
indicated, SIG anticipates that headline financial leverage at the
year end will remain broadly unchanged from the first half of this
year. The Group continues to target a 1.0 - 1.5x range during 2018
and is aiming to maintain leverage below 1.0x over the medium
term.
Outlook
Ongoing macroeconomic uncertainty in the UK remains the key risk
to performance, although the continuing improvement in confidence
in Mainland European markets is helping to mitigate weaker second
half performance in the UK. As a result, whilst we have seen some
changes in our mix, Group margins remain stable and our overall
expectations for underlying profitability for the full year remain
unchanged.
Strategy day
Following the appointment of new management earlier this year,
SIG has completed a comprehensive review of its strategy, cost base
and use of capital. The aim of the review has been to assess the
potential profits and returns achievable by the Group over the
medium term and to identify the key strategic levers that will
drive a step change in performance.
The conclusions of this review will be presented to analysts and
investors today at 2.30pm at Etc. Venues, 200 Aldersgate,
Aldersgate Street, London, EC1A 4HD. Management will set out its
intention to deliver a step change in the operational and financial
performance of the Group, as a leading supplier of specialist
building products across its existing core markets in the UK and
Mainland Europe, targeting a return on sales of c.5% and a return
on capital employed of c.15% over the medium term.
The key strategic levers that will drive this step change in
performance are a refocus by the Group on customer service and
customer value, whilst delivering operational efficiency through
reductions in both the operational cost base and the working
capital of the Group. Execution of these levers will be underpinned
by strong capital discipline, including disposals of some
peripheral businesses, and selective investment in key strategic
enablers around data, IT and capability.
No new material trading information will be provided at the
presentation and a webcast of the presentation will be available on
www.sigplc.com later in the day.
Enquiries
SIG plc
Meinie Oldersma, Chief Executive +44 (0) 114 285
Officer 6300
Nick Maddock, Chief Financial +44 (0) 114 285
Officer 6300
Hilary Kendrick, Group Communications +44 (0) 114 285
Director 6300
FTI Consulting
+ 44 (0) 20 3727
Richard Mountain / Nick Hasell 1340
Jefferies Hoare Govett
+44 (0) 20 7029
Chris Dickinson / Paul Nicholls 8000
Peel Hunt LLP
+44 (0) 20 7418
Justin Jones / Charles Batten 8900
Cautionary Statement
This Trading Statement is prepared for and addressed only to the
Company's shareholders as a whole and to no other person. The
Company, its directors, employees, agents or advisors do not accept
or assume responsibility to any other person to whom this Trading
Statement is shown or into whose hands it may come and any such
responsibility or liability is expressly disclaimed.
Certain information included in this Trading Statement is
forward looking and involves risks and uncertainties that could
cause the actual results to differ materially from those expressed
or implied by forward looking statements. It is believed that the
expectations set out in these forward looking statements are
reasonable but they may be affected by a wide range of variables
which could cause future outcomes to differ from those foreseen in
forward looking statements, including but not limited to, changes
in risks associated with the level of market demand, product
availability and pricing, competitor risk, credit risk, credit
insurance, restructuring of SIG and exchange rates. More
information about the risks and uncertainties that may affect the
Group's performance is contained in the Annual Report to
Shareholders for the year ended 31 December 2016. All statements in
this release are based upon information known to the Company at the
date of this Trading Statement. The Company undertakes no
obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or
otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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