SIG plc has published a trading update for the period 1 January to 30 April 2019 and has revealed that Like for Like sales at its UK SIG Distribution business fell by 15%.
The Group said it made further operational and financial progress in the first months of the year, reflecting the momentum brought into 2019 as a result of the margin and cost actions taken in 2018. SIG continues to move to a more integrated functional operating model within its divisions resulting in further reductions in headcount and operating costs in the first part of this financial year. Pricing initiatives continue to deliver margin improvement, and in SIG Distribution and, to a lesser extent, the German operations, the business remains focused on the transition to a smaller, more profitable base of activity.
As anticipated at the time of the Group’s 2018 results, the Group saw continuing like-for-like (LFL) sales declines in the first part of the year, with Group like-for-like revenues 2.6% lower. Group revenues from continuing operations were 3.4% lower in the period, including an adverse 1.3% currency movement offset by a 0.5% improvement from more working days
At SIG Distribution the business intentionally brought a much lower, though more focused, base of business into 2019 which, coupled with the weak market conditions, resulted in LFL sales down 15.0% in the period. However, SIG’s statement reported that this has been more than offset by the margin and cost actions taken over the last twelve months and as a result, the Board continues to expect significantly improved profitability in SIG Distribution in the current year.
SIG Exteriors and the Group’s business in Ireland returned to LFL growth in the period helped by improved sales performance and the better weather conditions in February and March compared with 2018. In the UK & Ireland, including SIG Distribution, LFL revenues were down 9.2%.
Trading conditions remain challenging and the outlook in many of SIG’s markets remains uncertain, notably in the UK. The Board believes it can sustain the pace of transformation during 2019 and, providing there is no further deterioration in market conditions, the Board remains confident that the underlying profitability for the full year will be delivered in line with management expectations.
The Group will issue a trading update for the half year ending 30 June 2019 on 5 July 2019.