SIG enjoys solid recovery in revenues during second half

The Sheffield-based group said the growth reflects the initial impact of its 'Return to Growth' strategy, which is starting to deliver progress in terms of improved organic sales performance.

The firm said this has been supported by robust demand for repair, maintenance and improvement (RMI) in certain markets, notably in the UK and France.

As a result, the board expects to report 2020 revenues from underlying operations of around £1.87bn. This includes revenues of £52m in the building solutions business. This business' trading results were previously included in "non-core", but will now be reported as part of underlying operations following the board's decision to retain and develop this business.

Subject to audit, the group will report an underlying operating loss in the range of £57m to £61m for the full year, which is at the better end of the range of previous expectations. SIG said profitability continued to improve throughout the second half after the underlying operating loss of £43m in the first half. Finance costs for the full year are expected to be around £22m.

Like-for-like revenues fell 13 per cent in the year to December 31.

Second half like-for-like sales fell 2 per cent after a first half that was severely affected by Covid-19 from mid-March, notably in the UK, France and Ireland. The group said it was able to trade safely throughout the year, working closely and flexibly with employees, customers and suppliers to adapt to new Covid-19 norms, and with minimal negative impact on revenues in the second half. All operations remain open, despite the latest Government restrictions.

SIG said that whilst the evolving Covid-19 backdrop will continue to create uncertainty in the short term, the fundamentals of the group's markets remain sound and the strong recovery in demand across territories and sectors through the second half was encouraging.

Providing there is no material disruption to either its business or end markets as a result of the pandemic, the board expects the near term benefits of the actions taken in 2020 to deliver organic revenue growth in 2021, including market share gains.

It said the benefits of this will become increasingly evident as the year progresses and should enable it to return to underlying operating profitability during the second half.