Construction materials distributor SIG plc saw a drop in like-for-like sales for the first half of 2019.
Revenue fell to £1.26 bn, down from £1.32 bn compared with the year before. Operating profit for the same period was down from £27.9 million to £17.8 million.
Meinie Oldersma, chief executive officer, said: “We continue to deliver increases in gross and operating margins in our UK businesses and have largely completed the transition to a smaller, more focused base of business in SIG Distribution. We continue to roll out transformational initiatives across our businesses in Mainland Europe, which we expect to result in further upside over the next twelve months. We remain on track to deliver our medium term targets.”
“In addition, we continue to strengthen our balance sheet. We have almost halved net debt since the start of 2017, with further improvement anticipated in the second half from continuing reductions in levels of working capital and the receipt of proceeds from the previously announced disposal of WeGo FloorTec. There remains one further business, previously identified as peripheral, under review. Accordingly, we believe our medium term target of headline financial leverage below 1.0x is within reach.
“The significant improvements in the business during the first half of 2019 have been made against a backdrop of challenging trading conditions in many of the Group’s end markets. There has been a marked deterioration in the level of construction activity in the UK as the year has progressed and a number of key indicators are pointing to further weakening of the macro-economic backdrop, notably in the UK and in Germany.”
“We continue to see benefits from transformational initiatives across the Group’s businesses. Coupled with the Group’s normal seasonality, these are expected to deliver further upside in the second half of the year. However, political and macro-economic uncertainty continues to increase as we enter the traditionally strongest trading months of the year. We continue to monitor trading conditions closely and we are taking actions in anticipation of further market weakness.”