Firm slumps to 拢112m loss in 2019
SIG has become the latest firm in the sector to turn to a cash raising plan with the embattled materials company announcing it plans to raise 拢150m in new equity in the coming weeks.
The firm, which today said it had slumped to a 拢112m pre-tax loss in 2019, revealed New York private equity firm Clayton, Dubilier & Rice had agreed to pump in up to 拢85m into the business on condition the remaining 拢65m was raised elsewhere giving it a 25% stake in the business.
Yesterday Costain completed a 拢100m cash-raising move which will give a Dubai-based contractor a 15% stake in the business.
SIG, which earlier this month was forced to pull the plug on plans to sell its insulation panels business to Kingspan for 拢37.5m, said impairment charges and restructuring costs of close to 拢130m helped send it crashing into the red in 2019 from a 拢10m profit last time.
And the firm said revenue in March and April this year slumped 拢139m, a one third fall on the equivalent months last year, because of the covid-19 crisis. But it said trading was now returning to pre-coved levels as more and more construction sites reopened.
It added it was beginning to bring back some of the 2,000 staff it furloughed during the crisis but said capital investment on initiatives such as overhauling IT remained on hold.
New chief executive Steve Francis, who was appointed in February, has made a host of changes to the firm鈥檚 senior management including bringing in former SIG executive Phil Johns to head up the UK business and a new chief financial officer Ian Ashton, who joins from rival materials firm Low & Bonar in July. Former Wickes chief operating officer Simon King joins as a non-executive director.
The firm is targeting operating margins of 5% in the longer term and growth after what Francis called a 鈥渄ecade of contraction鈥�.
But the firm warned turnover this year is expected to be 拢500m down on 2019 and would not return to those levels until 2022.
The firm made an underlying pre-tax profit of 拢41.9m. Turnover fell to 拢2.1bn from 拢2.4bn in 2018.
SIG also said it would spell out further details on the action it has taken after it called in accountants PwC in January to investigate divisional financial forecasting issues. This, SIG said, meant 鈥渦nderlying forecasts were both poorly classified and poorly reported at group level, with the result that the board was unsighted as to the overall picture鈥�.
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