Shares of Sheffield-based European building products supplier SIG plc fell about 6% after it published a trading update for the year ended December 31 that showed group like-for-like revenues were 2.3% lower.

SIG said the UK construction market became “increasingly challenging” in the second half of 2018 and mainland Europe also “slowed materially.”

SIG said: “The board believes that the group will report adjusted profit before tax of c.£75m, including the benefit of £2-3m of property profits in the year. 

“The group expects the benefits of the ongoing transformation to drive a further significant increase in profitability in 2019.

“Group revenues from continuing operations decreased by 1.4% in the year, with a further 0.7% decrease from currency and 0.2% from more working days.

“As a result, group like-for-like revenues were 2.3% lower.”

SIG added: “As previously reported, the UK construction environment became increasingly challenging in the second half of 2018.

“Commercial construction demand remained dampened by macro-economic uncertainty, house price inflation slowed and secondary housing market transactions continued to fall. 

“This weaker trading environment impacted on demand for SIG’s products and is a key factor behind the lower LFL revenues in the UK and Ireland, down 8.8% in the second half. 

“Revenues at SIG Distribution also continued to reflect the focus on improving profitability, which has delivered higher gross margins at the expense of lower revenue.

“Trading conditions in construction markets across mainland Europe also slowed materially in the second half, particularly in France and Germany, where LFL revenues were down by 3.2% and 4.6% respectively. 

“Revenues in Germany were also affected by ongoing actions to reduce the group’s exposure to unprofitable business.

“In contrast, the group currently continues to see robust demand and good top-line growth in Poland, Air Handling and Benelux.”