Building supplies group SIG hit by economic uncertainty

Building supplies firm SIG blamed economic uncertainty for contributing to tough conditions in the construction industry as the group posted a disappointing set of figures.

Like-for-like sales at the company dropped 4.7% in the six months to December 31, with comparable revenue 2.3% lower over the full year.

It means adjusted annual pre-tax profit is set to come in at £75 million, down from the £79.2 million booked in 2017.

“As previously reported, the UK construction environment became increasingly challenging in the second half of 2018,” SIG said.

“Commercial construction demand remained dampened by macro-economic uncertainty, house price inflation slowed and secondary housing market transactions continued to fall.”

Several surveys have shown that Brexit is leading to investments being delayed and construction projects being put on hold.

Shares were down 6% in morning trade at 109.6p.

SIG also saw difficult trading in mainland Europe, particularly in France and Germany, where like-for-like revenues were down by 3.2% and 4.6% respectively. In Ireland, comparable sales fell 8.8%.

However, the firm insisted that its transformation continues to progress at pace, with a better focus on pricing management and the withdrawal from unprofitable business increasing profit margins.

In December, SIG sold its shareholding in its UK offsite manufacturing business, RoofSpace, and the assets of Proteus, a facade panel systems manufacturing business.

Total revenue from continuing operations in the year to the end of December fell by 1.4%, with a further 0.7% decrease from currency and 0.2% from more working days.

In 2017, the company generated revenue of £2.78 billion.