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Building supplier SIG reports lower sales on weak construction activity

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By Reuters
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(Reuters) – Building materials supplier SIG Plc <SHI.L> on Friday reported 3.8% lower like-for-like sales for the first half of the year as construction activity fell in the second quarter in face of challenging market conditions in the UK and Ireland.

British construction firms reported having almost a third less work in the pipeline than a year ago, with Brexit and the collapse of larger contractors a major worry, an annual survey of subcontractors showed in June.

“Trading conditions remain challenging in many of the Group’s end markets and there has been a marked deterioration in the level of construction activity in the UK as the year has progressed,” the company said in a trading update for the half year ended June 30.

However, the Sheffield-based company, which supplies insulation, energy management and roofing products, stuck to its full-year profit outlook.

The Brexit-crisis pushed the British construction industry into its sharpest fall in a decade in June, as the IHS Markit/CIPS construction Purchasing Managers’ Index (PMI) plunged to 43.1, its lowest reading since April 2009, when the country was gripped by the global financial crisis.

Like-for-like sales from the UK & Ireland fell over 12.7% in the half year, nearly four times the drop that SIG recorded from the regions in the year-ago period. Overall group revenue from continuing operations fell 5.7% during the half year.

The company also announced the sale of its unit WeGo FloorTec GmbH, a German manufacturer of raised access flooring, to Kingspan Group, resulting in proceeds of about 12 million pounds($15.09 million).

(Reporting by Shariq Khan in Bengaluru; Editing by Arun Koyyur)

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