Firm expects progress, despite slowdown

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SHEFFIELD-based roofing and insulation materials supplier SIG has flagged a slowdown over the remainder of the year that took the gloss off a strong first half performance.

SIG added that it still expects to make progress this year, but growth will moderate in the second half due to a combination of tough comparative numbers and macro-economic factors.

The said the UK and Ireland is seeing lower consumer spending in areas such as home improvements while reduced government spending is also putting pressure on public sector work.

Up until June sales were strong, with overall revenues up by nine per cent to £1.4 billion and underlying profits 84% ahead to £34 million, but the UK and Ireland saw a ‘noticeable softening in demand’ towards the end of the quarter.

UK and Ireland sales grew by three per cent in the six months to June, but private repair and maintenance and public sector housing tailed off towards the end of the half.

Mainland Europe, which accounts for 54 per cent of sales, was much stronger with revenues ahead by 15 per cent over the six months with France, Germany, Poland and Central Europe all growing strongly, although the comparative period was weather-affected.

“In mainland Europe, the group is not directly exposed to those southern European countries facing the most difficult economic challenges, and uncertainty in the Eurozone is not expected to have any immediate impact on the recovery in SIG’s main countries of operation,” it added.

SIG, which has around 750 trading sites in the UK and Europe, has cut hundreds of jobs and trading locations in recent years as it felt the impact of the slowdown in housebuilding and construction.

Prior to this update Morgan Stanley expected the group to report full year profits of £77 million on sales of £2.74 billion.