Home News SIG plc reveals 4% profit rise for 2017

Distribution giant SIG PLC revealed a 4.% rise in full-year pretax profit, helped by strength in mainland Europe. SIG said underlying pretax profit rose to £79.2 million in the year ended December 31, from £75.9 million a year earlier. Revenue rose 7.4% to £2.78 billion 

Meinie Oldersma, Chief Executive, said: ” We have achieved much this year, beginning to stabilise the business, returning SIG Distribution to underlying profitability and rationalising the loss-making UK Offsite Construction division.

“As the Group moves into 2018, we are seeing increasingly confident markets across Mainland Europe and Ireland, but also the first signs of capacity and labour constraint in buoyant construction markets.  In contrast, we are seeing an increasingly challenging environment in the UK created by macro uncertainty and recent events in the construction industry.  Notwithstanding this outlook, we see considerable potential for a significant improvement in operational and underlying financial performance, with execution largely within management’s control, and we are working hard to ensure effective delivery.”

In 2017, the Group delivered its first improvement in underlying operating profit in three years as well as an improvement in its underlying profit before tax (“PBT”), up 4.3% to £79.2m (2016: £75.9m).  Progress has been made in the year against the Group’s medium term financial targets of like-for-like sales and headline financial leverage, with return on sales and return on capital employed stabilised at similar levels to the prior year.

The UK & Ireland business generated 1.6% like-for-like sales growth, primarily reflecting industry price inflation, with volumes falling 2.9%.  Operating margins fell 50bps as the business only partially recovered the deterioration in performance seen in the second half of 2016.

UK trading conditions have become increasingly challenging in recent months, reflecting increased macro uncertainty and recent events in the construction industry.  Whilst new housing starts continued to grow, RMI markets remained subdued and there have been some delays to new starts in commercial new build.

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