News Column

SIG Lifts Interim Dividend 23% Despite Fall In Pretax Profit

August 12, 2014

Samuel Agini

LONDON (Alliance News) - SIG PLC Tuesday reported a fall in first half pretax profit as it was hit by a number of one-off items such as restructuring costs, goodwill impairment charges, and losses on the sales of its German roofing operations and of its Miller Pattison home energy-efficiency business.

In a statement, the building products distributor said it made a GBP11.8 million pretax profit in the six months ended June 30, compared with GBP13.1 million in the corresponding period a year earlier. Revenue increased by GBP31.1 million to GBP1.31 billion, while operating expenses increased by GBP14.2 million to GBP328.2 million. On an underlying basis, which excludes other items, SIG reported a GBP41.5 million pretax profit, up from GBP33.6 million.

Sig increased its interim dividend by 23% to 1.42 pence from 1.15p.

"The group delivered a good first half performance having benefited from procurement savings, improving UK market conditions and the mild winter. This has been achieved while reinvesting in the business and commencing a culture change programme," Chief Executive Stuart Mitchell said in a statement.

Mitchell said that SIG's progress on its strategic initiatives was ahead of its initial 2014 target.

"In particular we have exceeded our expectations for procurement and this has driven a 40 [basis points] improvement in gross margin in the first half. For the full year we now expect to deliver a net benefit of around GBP7.0 million, above the upper end of our previously stated GBP1.0 million-GBP5.0 million range," Mitchell said.

The CEO also pointed to differences in trading conditions in the UK and Europe.

"Trading conditions in the UK have continued to gather momentum, led by the revival in the housing market. As anticipated, conditions in Mainland Europe remain variable, with the French construction market expected to weaken further in the second half," Mitchell said.

"Although SIG is exposed to ongoing currency headwinds and a challenging market backdrop in France, the group's first half performance and progress on its strategic initiatives provide a strong base on which to achieve its full year expectations," the CEO said.

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Source: Alliance News

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