SIG aims to raise £165m in funding

Sheffield-based SIG said that CD&R, the global investment manager, has agreed to invest up to £94m, with a guaranteed minimum investment of £80m.

The firm said some of the cash will be used to fund the unwinding of Government relief to mitigate the effects of the Covid-19 pandemic.

In an update on current trading, SIG said it has seen a gradual improvement throughout May and June, particularly in the UK and Ireland where branches continued to reopen during May as lockdown eased.

The firm said underlying revenue for May showed a steady recovery from its low point in April. Although this remained below the underlying revenue achieved in March, daily sales at the end of May were largely in line with March levels.

The improvement in revenues continued at the start of June, with the group trading in line with pre-Covid-19 levels.

While revenues continued to be hit by the coronavirus pandemic in some of its primary markets, SIG said the strength of trading is testament to the capability and resilience of its operating companies which returned to work quickly and effectively.

The firm said that although the improvement in trading performance is encouraging, this has been influenced by a range of factors, including re-stocking by customers as a result of previously subdued demand, and it is unclear, given the relatively short period of trading post-lockdown, whether this performance will be maintained going forwards.

Profitability improved materially during May, with operating losses in the UK materially lower than management estimates at the start of the lockdown and the rest of the group is trading profitably before central costs.

SIG said this has been driven by a combination of improved trading performance, particularly in the UK and Ireland, decisive cost actions by management and Government support.

Jefferies International and Peel Hunt are acting as joint bookrunner, joint sponsor and joint financial adviser to SIG over the fundraising. Lazard & Co is acting as the lead financial adviser to the company.

IKO Enterprises, SIG’s largest shareholder, said it is fully supportive of the company’s new strategy and the capital raise and has undertaken to take up its full allocation at the issue price.