SIG plc, a leading distributor of specialist building products in Europe, has issued an updated Trading Statement for the nine months to end September 2015. Group like-for-like (“LFL”) sales were up 0.2%, with the UK & Ireland ahead by 2.0% and Mainland Europe down 1.7%, compared to the same period last year.
In Q3 the Group’s LFL sales declined by 0.9% with the UK & Ireland up 0.4% and Mainland Europe down 2.3%, compared to the same period last year.
At its Half Year Results released in August, SIG said that it expected to make year-on-year progress assuming the improving sales trend in Mainland Europe continued. This trend has not continued with market conditions deteriorating in the second half, particularly in France. This was most notable in September, although October has remained difficult. SIG has also been impacted by a lower than anticipated level of demand in the UK RMI market.
The challenging market conditions have also impacted SIG’s gross margin, which is now anticipated to be broadly flat year-on-year, with procurement savings being offset by competitive pressures and adverse volume effects.
SIG continues to improve efficiency over the medium-term, particularly in supply chain and procurement. SIG has concluded its supply chain review and in response to the market downturn is accelerating this programme, with savings of at least £20m expected to be delivered. This is in addition to efficiencies being delivered from the Group’s procurement initiative.