First half trading hit by bad weather and 鈥榤acro uncertainty鈥�
SIG has blamed what it called a 鈥渃hallenging鈥� UK market for a near-22% slump in profit in the first six months of 2018.
SIG said that while it had seen growth in new housing starts the commercial new build market had slowed significantly in the past 12 months, and demand in the residential repair, maintenance and improvement market 鈥渞emains weak, reflecting subdued levels of secondary housing market transactions鈥�.
The building materials group said the domestic market had 鈥渘ot provided a helpful backdrop so far this year鈥�.
Group turnover for the six months to the end of June 2018 rose 1% to 拢1.36bn but underlying pre-tax profit fell 21.8% to 拢26.9m.
The firm also said prior year figures had been restated following a series of profit overstatements and the replacement of its previous auditor, Deloitte, with Ernst & Young.
Meinie Oldersma, SIG鈥檚 chief executive, said the bad weather at the start of the year and 鈥渃ontinuing macro uncertainty鈥� had not helped operations in the UK and Ireland, although the trading environment in mainland Europe had been positive.
Revenue in the UK fell 2.1% to 拢624.6m, while operating profit fell 40% to 拢14.2m. Across the Channel, turnover rose nearly 4% to 拢736m, with operating profit up nearly 11% at 拢27m.
Net debt fell 19% to 拢176m as part of the firm鈥檚 work to address it balance sheet.
Oldersma said the issues in the UK market meant his firm had sped up a number of planned changes to its activities. 鈥淲hilst there remains considerable work to be done we remain confident in our ability to deliver our transformational plan,鈥� he added.
Despite the firm鈥檚 confidence in meeting its expectations for the full year Cenkos analyst Kevin Cammack said it was a 鈥渂ig ask鈥�.
Cammack said SIG would need to post a second half pre-tax profit of 拢51.6m 鈥渙r almost twice what was reported in the first half and better than has been achieved in any six-month period since 2014.
鈥淚n short the market will have its doubts about a downgrade deferred but, if it makes numbers, surely we should take the pace and integrity of SIGs transformational recovery more seriously.鈥�
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