The Sheffield-based group said the growth reflects the ongoing positive impact of the group’s Return to Growth strategy, which is delivering improved organic sales performance.
SIG said the return to profitability was faster and more significant than previously expected and it exited the first half with strong demand and the benefits of the Return to Growth strategy coming through clearly.
It said the effectiveness of its supply chain management and commercial agility give it confidence entering the second half, albeit it is mindful that the potential impact of material shortages could be more significant should the situation persist for an extended period. As such, it retains a cautious view of the second half at this stage.
However, providing there is no significant disruption in coming months, it expects the second half to be both profitable and cash generative, with full year underlying operating profit now expected to be ahead of previous forecasts.
The group reported an underlying operating profit of £13.5m in the first half, which was better than previous expectations.
It said its strategy of re-connecting with customers, suppliers and employees is positioning the group well, enabling it to take advantage of both strong near term demand and healthy long term fundamentals.
The group reported robust demand in the repair, maintenance and improvement (RMI) industry. Profitability improved throughout the period, a result of the normal seasonality in the business and improving trading across the group.
As a result, the board expects to report first half revenues from underlying operations of £1.11bn. It has seen good progress in the UK, and it expects the UK business to be just over break even.