SIG plc, the distribution giant, has returned to profitability with results for the year to December 31 2018 revealing a pre-tax profit of £28.5m compared to a £54.7m loss last year as turnover eased to £2,741.9m from £2,878.4m.
Despite challenging market conditions and lower revenue in the Group’s largest markets, the Group’s focus on pricing and profitability over volume enabled it to grow gross margins and gross profit, particularly in the UK insulation and interiors business, SIG Distribution. In addition, actions taken to reduce headcount and improve operational efficiency brought operating costs under tighter control, resulting in a reduction during the year. As a result, the Group made progress during 2018 towards its medium term financial targets, particularly in the second half.
SIG Distribution, the UK distributor of insulation and interiors products, delivered £20.9m of operating profit in 2018, up from £3.5m in 2017.
Meinie Oldersma, SIG’s chief executive, said: “We have continued to strengthen our balance sheet during the year, enhanced by the disposal of peripheral businesses and structural reductions in levels of working capital, particularly stock. We have now reduced debt by over a third since the start of 2017.
“Trading conditions remain challenging, with the outlook in many of our end markets uncertain, and the Group expects continuing like-for-like sales declines in the first part of the year. Notwithstanding these headwinds, the margin and cost actions taken in 2018 give us good visibility of further significant progress in the current year.”