SIG looks forward to better than expected profits

The Sheffield-based company said residential construction levels in its major markets, the UK, France and Germany, turned modestly positive from a low base in 2010, and it expects the growth to continue into 2011 as well.

"Private sector non-residential construction activity experienced a slowing in the rate of decline in the second half of 2010, while public sector construction work continued to benefit from significant government investment programmes throughout the year," SIG said in a statement.

The company, however, warned that Government expenditure cuts would likely cause a dip in new construction in the public sector as the year progressed, offsetting the mild growth in the private sector.

SIG, which began life as Sheffield Insulations group, said pre-tax profits for 2010 before amortisation and exceptional items would not be less than analysts' November estimates of 61.3m.

The average consensus estimate had come down significantly since then to about 53m.

SIG, which supplies specialist products to the construction sector, expects a two per cent fall in full-year sales to 2.69bn, slightly above estimates of 2.68bn.