SIG profits on the rise but the firm feels the pain from foreign exchange rates

But the Sheffield-based firm said sales from continuing operations fell 2.7 per cent to £1.2bn after it was hit by foreign exchange translation.

On a constant currency basis, group sales rose 3.1 per cent and life-for-like sales increased 0.6 per cent following an improvement in trading in mainland Europe.

The UK and Ireland put in a strong performance with like-for-like sales rising 2.8 per cent in the six months to June 30.

Pre-tax profit rose from £11.8m to £26.8m on the back of lower exceptional costs. Underlying pre-tax profit fell nine per cent to £39.1m and was down three per cent on a constant currency basis.

SIG’s chief executive Stuart Mitchell said: “The group delivered a robust first half performance against a strong comparative period, supported by continued good progress on strategic Initiatives.

“This was despite variable trading conditions in mainland Europe, increasing competitive pressures and a significant weakening of the euro.”

​He said that the first stage of SIG’s transformation programme, which aims to improve procurement, is delivering significant savings. The next stage, a review of the supply chain, is said to be progressing well and will be announced by the end of the year.

“Our outlook for the year is broadly unchanged although underlying market conditions are resulting in margin pressure, which will offset some of the benefit from our ​s​trategic ​i​nitiatives​,” he added​.

​“​Assuming the improving sales trend in ​m​ainland Europe continues​,​ we expect to make year-on-year progress, with results​ weighted ​to the second half ​as anticipated.​”

SIG i​s raising its interim dividend by 19 per cent to 1.69p per share​.