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SIG sees operating profits fall 93% amid inflation pressures and weaker demand

Yorkshire distribution specialist SIG UK has seen underlying profits drop amid inflation and a subdued market.

The Sheffield-based building materials firm has posted full year results for 2023 in which revenues increased from £2.74bn to £2.76bn, though like-for-like revenues fell 2%. Operating profit tumbled from £56.2m to £4m, while underlying operating profit dropped from £80.2m to £53.1m, but the firm said “effective cost actions” countered in part the impact of operating cost inflation and lowered market demand.

The company also posted underlying pre-tax profit of £17.4m and a statutory pre-tax loss of £31.9m, including a £33.8m non-cash impairment of its UK Interiors business. SIG carried out a restructure in the second half of the year which will give the business around £10m of cost savings a year. The move has simplified management structures in its corporate centre, while the UK business has been simplified “to provide greater focus and efficiency”.

The company said the results reflect continued strong execution, against a challenging market backdrop, highlighting how its diversified, pan-European portfolio helped the business to navigate challenging market conditions.

SIG said its UK Exteriors business delivered positive like-for-like sales growth, with good market momentum after revitalising its branches, the sales team skills, and training. Both French businesses also performed well in a tough market and in Poland it saw 5% growth in the second half of the year with local market conditions stabilising.

Gavin Slark, chief executive officer, said: “The group delivered robust results in 2023, despite ongoing market weakness, demonstrating the benefits and resilience of our diversified geographic and end-market profile. Alongside this, the group has also been effective in executing restructuring and productivity initiatives across the business. These are a key element of our strategic plan to drive operating margin growth over the medium-term to our target of 5%.

“By increasing focus on driving operational efficiencies, stronger commercial execution and employee engagement, the board is confident that the group’s leading market positions will continue to strengthen further when conditions improve across our markets. We remain financially and commercially well placed and are taking proactive steps to drive meaningful shareholder value in the medium and long-term.”

Original artice – https://business-live.co.uk/all-about/yorkshire-humber

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