SIG improves on better weather

Insulation giant SIG said revenues rose four per cent to £2.7m in 2013 after benefiting from favourable exchange rates.

As a result, the Sheffield-based group said annual pre-tax profits will be no less than market consensus of £85.8m.

The group said trading improved as the year progressed, with like-for-like sales up 2.5 per cent in the second half compared with a 3.5 per cent decline in the first half, which was hit by bad weather.

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For the full year, like-for-like sales fell by 0.5 per cent, with Mainland Europe down 1.5 per cent and the UK and Ireland up by one per cent.

Excluding SIG Energy Management, like-for-like sales in the UK increased by four per cent.

SIG’s net debt is expected to be £120m at the end of 2013, which includes £17m of expenditure on acquisitions during the year.

At its half year results presentation in August the group announced that it had identified £3.9m of annual savings with an associated exceptional charge of £5.6m, and that further measures were expected in the second half of the year.

SIG said it subsequently identified £5m of additional efficiencies in the second half, thereby increasing its total savings target to £9m, of which 40 per cent was realised in 2013.

The total exceptional charge, which also includes £3m of costs associated with the closure of Builders Express, is now expected to be around £19m in 2013.

SIG said it expects construction activity in the UK residential market to remain buoyant, with the non-residential sector continuing to be subdued.

In Mainland Europe construction markets are expected to remain variable.

Analyst Mike Allen at Panmure said: “SIG has delivered a solid year end trading update, essentially confirming that it is confident of hitting consensus adjusted pre-tax profits for 2013.

“Revenues are higher than forecast reflecting solid trading patterns in December and favourable foreign exchange, with net debt slightly lower due to good cost control.”