Sheffield building materials supplier Sig Plc says it expects to post revenues of £2.61bn after a year of cost-reductions in a challenging market.
Earlier this year the Sheffield business, which has operations in Europe, announced around 250 jobs losses and the closure of 10 branches amid what it described as “prolonged challenging trading conditions”. Now a trading update for FY24 has shown that restructuring initiatives delivered around £19m of savings in the year, leading the board to expect to report FY24 revenues of £2.61bn – down on last year’s £2.76bn – and underlying operating profit of approximately £25m, in line with market expectations.
The group said it continued to perform well relative to its markets during the second half of 2024, while also delivering further significant benefits from its cost reduction and efficiency programmes – moved which are supporting near-term performance and strengthening its commercial and operational capability. Cash generation was affected by the decline in profit, and year-end gross cash balances were £87m compared to last year’s £132m.
The group’s revolving credit facility of £90m remained undrawn, and it expects to report net debt of £496m, up from £458m. While group revenues were 5% down the firm said there was also a 1% impact on reported revenue from the branch closures made during the year, which had the biggest impact in UK Interiors, reducing that business’s full year reported sales by 3%.
The firm said that its French businesses continued to execute effectively on strategic plans, and to manage well through a very subdued market.
The firm added: “The German business, meanwhile, continued its robust recovery of the last three years, performing extremely well in what is also a very challenging current market. Poland’s growth softened in the second half due to an unexpectedly weaker Q3, but has stabilised since. Benelux has recently executed a significant restructuring in its Netherlands business, closing a number of branches, which is a key part of its margin improvement plan. Ireland’s results were encouraging throughout the year, partly due to market recovery after a very soft 2023, as well as to strong commercial execution.”
Gavin Slark, CEO, said: “Whilst demand across the European building and construction sector remained weak throughout 2024, the Group delivered a robust trading performance relative to the market, through a strong focus on our customers and the great efforts of all our people. I remain confident that the actions we have taken, and the opportunities that exist within SIG’s portfolio for further strengthening our operating performance and accelerating growth in our specialist businesses, will enable us to deliver increasingly profitable growth over the medium term.
“Whilst we expect continued softness in market conditions, at least through the first half of 2025, we are confident in our ability to manage through this current phase of the cycle, whilst also strengthening our operations. We remain ready to take advantage of the significant long-term opportunities for the Group as markets recover.”
The company is due to publish full year results on March 5.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
