Building supplier SIG’s profit more than doubles

Specialist building products supplier SIG, which employs about 250 people over 11 locations in Ireland, has reported a pretax profit of £26.8 million for the first half of the year compared to £11.8 million a year earlier.

Revenues for the six months to the end of June fell by 2.7 per cent to £1.2 billion from £1.3 billion and the group recorded an operating profit of £33.6 million as against £19.1 million for the same period a year earlier.

In UK and Ireland, revenues from continuing operations increased 5.8 per cent to £679.2million as against £632.1 million last year with life-for-like sales up 2.1 per cent in the UK and 14.8 per cent in Ireland.

SIG said overall group sales increased by 3.1 per cent on a constant currency basis and by 0.6 per cent on a like-for-like basis.

Sales in mainland Europe from continuing operations decreased 11.3 per cent to £564.4million due to movements in foreign exchange rates.

Underlying operating profit declined 9.5 per cent to £44.6 million from £49.3 million, also due to fluctuating currency rates, while underlying operating margin declined 30 basis points to 3.6 per cent from 3.9 per cent.

Net debt at June 30th increased to £195.4 million compared to £131.5 million a year earlier.

An interim dividend of 1.69 pence is to be paid, up 19 per cent versus the same period last year.

SIG said it is targeting expenditure of around £200 million on infill acquisitions over the next two years. It acquired eight infill businesses for an initial consideration of £34 million during the first half of 2015.

"The group delivered a robust first half performance against a strong comparative period, supported by continued good progress on its strategic initiatives. This was despite variable trading conditions in mainland Europe, increasing competitive pressures and a significant weakening of the euro," said chief executive Stuart Mitchell.

“Assuming the improving sales trend in mainland Europe continues we expect to make year-on-year progress, with results in the second half weighted as anticipated,” he added.