SIG faces tough construction market

The Sheffield-based group said that better sales in Poland and France led to a 3 per cent rise in like-for-like sales in mainland Europe. Overall SIG reported a 3 per cent decline in group like-for-like sales in the four months to April 30.

Despite the fall, SIG maintained its annual profit expectations.

The company, which supplies insulation, energy management and roofing products, had to grapple with weakness in some mainland European construction markets, particularly in Germany, leading it to focus on restructuring.

The company said trading conditions remain challenging and the outlook for many of its markets remained uncertain, especially in the UK.

SIG suffered a ransomware attack in France resulting in the business having no access to ordering and accounting systems for a short period in April. Core systems have now been restored, the company said.

The firm had already said that the UK’s construction market became increasingly challenging towards the end of 2018, with commercial construction demand dampened by macro-economic uncertainty, smaller house price rises and a slowdown in sales.

SIG said there would be job cuts, as planned, in the first half of 2019 to bring down operating costs and also pricing tweaks to shore up margins.

Looking to the future, SIG's chief executive Meinie Oldersma said: "Trading conditions remain challenging and the outlook in many of our end markets remains uncertain, notably in the UK.

"The board believes it can sustain the pace of transformation during 2019 and, providing there is no further deterioration in market conditions, the board remains confident, despite any impact of the French ransomware attack, that the underlying profitability for the full year will be delivered in line with management expectations."

SIG will issue a trading update for the half year ending June 30 on July 5.