ANNOUNCING its half year results, SIG plc reports flat sales to 30 June 2023, with revenue of £1,423m as the Group experienced falling sales volumes offset by price inflation.
The specialist insulation and building materials company says it has reported weaker trading conditions across all the countries it operates in although inflation tailwinds have moderated as it expected. Group underlying operating profit was £33m with an operating margin of 2.3%.
Tough Trading and Margin Pressure
Despite the challenging markets, UK Interiors revenue increased by 4% and France Exteriors by 2%. Margins were temporarily impacted by difficult market conditions and higher than normal operating cost inflation, but they remained resilient in France at approximately 5%, and both Germany’s and the UK’s Interiors division improved margins year-over-year.
SIG is expecting market conditions to remain tough across the Group’s European markets in the second half of the year, although it anticipates price inflation will moderate.
Productivity initiatives are focusing on delivering an improved operating margin of 5% in the near and medium term. Strategic actions taken over last three years mean that the Group is in a strong position, operationally and financially, to navigate current markets, the company says. It’s full year underlying operating profit is expected to be in line with SIG’s recently revised guidance of around £65.3m.
Gavin Slark, SIG plc Chief Executive Officer
Gavin Slark, SIG plc Chief Executive Officer, said: “Our performance in the first half reflects the challenging market conditions we are currently facing, with the Group’s LFL revenue growth flat year-on-year.
“Despite these conditions, I’m very pleased with the progress we are making on many fronts to improve the business, notably with the initiatives across our Operating Companies to improve our ability to drive higher levels of profitable growth when market conditions recover.
“In the first half these initiatives reflected a continuing focus on our people, our branches, and our productivity, creating a platform that will allow us to capture and maximise the significant opportunities I see for the medium term.
“Looking ahead, while we expect market conditions in the second half to remain difficult, we remain confident the business will grasp the opportunities it has to continue to improve its underlying operational performance. This will, in turn, deliver higher levels of profitability as we drive towards our medium-term margin target of 5%. The Group is financially and commercially well placed to drive meaningful shareholder value in the medium and long term.”
The Group will hold a capital markets presentation in London on 23 November 2023, including anupdate on strategy from CEO Gavin Slark, who joined the company in February 2023.
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