In a trading update today, SIG PLC has reported like-for-like (LFL) revenues in the UK & Ireland rose by 2.5% since July and that the Group’s Insulation & Interiors business in the UK is continuing to benefit from price increases.
SIG confirmed that trading conditions in construction markets across Mainland Europe continued to show signs of improvement, with LFL revenues up by 6.6% during the period, underpinned by strong performances in France, Germany and Poland.
SIG shares were up more than 7% in early trading in response to the news.
Ongoing macroeconomic uncertainty in the UK remains the key risk to performance, although the continuing improvement in confidence in Mainland European markets is helping to mitigate weaker second half performance in the UK. Group margins remain stable and overall expectations for underlying profitability for the full year remain unchanged.
Following the appointment of new management earlier this year, SIG has completed a comprehensive review of its strategy, cost base and use of capital. The aim of the review has been to assess the potential profits and returns achievable by the Group over the medium term and to identify the key strategic levers that will drive a step change in performance.
SIG’s management set out its intention to deliver a step change in the operational and financial performance of the Group, targeting a return on sales of c.5% and a return on capital employed of c.15% over the medium term.
The key strategic levers that will drive this step change in performance are a refocus by the Group on customer service and customer value, whilst delivering operational efficiency through reductions in both the operational cost base and the working capital of the Group.
