Distributer of building materials SIG has reported a 23.5% increase in underlying pre-tax profit thanks to improved market conditions led by the boost in house building.
The Group’s half year results for the six months ended 30 June 2014 reported the company made £41.5m pre-tax profit, up on the £33.6m made in the same period in 2013.
The supplier reported sales increased 6.5% and 7.1% on a like-for-like basis during the first half of the year.
Stuart Mitchell, chief executive of SIG, said: “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.
“We are pleased with progress on our strategic initiatives, which are ahead of our initial 2014 target. In particular we have exceeded our expectations for procurement and this has driven a 40bps improvement in gross margin in the first half. For the full year we now expect to deliver a net benefit of around £7m, above the upper end of our previously stated £1-5m range.
“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.
“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.”