Small is beautiful as acquisitions help SIG mitigate effects of a strong pound

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BUILDING materials supplier SIG reported a 9.4 per cent jump in revenue from continuing operations for the first four months of the year, as a string of small acquisitions mitigated the impact of a strong pound.

The Sheffield company’s stock rose as much as 3 per cent in early trading yesterday to rank among the top percentage gainers on the London Stock Exchange.

SIG, which supplies roofing materials, insulation and interior fittings, said trading in the UK and Ireland, which accounts for slightly less than half of its revenue, continued to be stronger than in mainland Europe.

It employs 1,000 people in Sheffield.

The company made eight acquisitions last year, mostly in the roofing materials business and most of them in Britain, according to the company’s 2013 annual report.

“We anticipate further bolt-on acquisitions as we progress through the year,” Panmure Gordon & Co analyst Mike Allen wrote in a note. He has a ‘buy’ rating on the stock.

SIG, helped by growing demand for energy-efficient buildings, said like-for-like sales also increased 9.4 per cent for the first four months of the year, compared with a decline of 2.6 per cent in the same period last year.

At 13.1 per cent, the increase in like-for-like sales was stronger in the UK and Ireland than in mainland Europe, which clocked growth of 6 per cent.

SIG, which earns slightly more than half of its revenue from mainland Europe, has been impacted by the strong pound.