Revenues from continuing operations at distribution giant SIG decreased by 2.3% in the period from June to October 2018. As a result, Group like-for-like (LFL) revenues were 3.6% lower.
SIG said that the UK construction environment has weakened during the autumn. Commercial construction demand remains dampened by macro-economic uncertainty, house price inflation is slowing and secondary housing market transactions have continued to fall.
The weaker trading environment impacts demand for SIG’s products and is a key factor behind the lower LFL revenues in the UK and Ireland, down 8.7% in the period.
Revenues at SIG Distribution have also fallen due to the focus on improving profitability across the customer portfolio, which continues to deliver increasing gross margins at the expense of lower revenue.
Trading conditions in construction markets across Mainland Europe have also softened since June, notably in France as anticipated, where LFL revenues were down by 1.6% during the period.
SIG’s management remains confident that the Group will see significant profit improvement in the second half of the year and deliver a result in line with its expectations, driven by higher gross margins and lower operating costs.
