Shares of Sheffield-based European building materials supplier SIG plc fell about 5% on Friday after it said trading conditions remain challenging and there has been a “marked deterioration” in UK construction activity.
The group saw a 3.8% decline in like-for-like revenues over the first half of the year and revenues from continuing operations were 5.7% lower.
However, SIG’s businesses in mainland Europe reported a better performance with like-for-like revenues up 3.3%.
SIG also announced the sale to Kingspan Group of WeGo FloorTec GmbH, a German manufacturer of raised access flooring, for proceeds of £12 million.
In a half year trading update SIG said: “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.
“However, the continuing transformation of the group’s businesses, coupled with the group’s normal seasonality, should enable delivery of a stronger second half to the year.
“As such, the board continues to believe that underlying profitability for the full year will be delivered in line with its expectations, but will continue to monitor how trading conditions develop …
“The LFL sales declines in the UK & Ireland reflect a falling level of construction activity as the second quarter progressed.
“Revenues at SIG Distribution have also been affected, as anticipated, by the radical actions taken to focus on better pricing management and a planned withdrawal from unprofitable business, as previously reported …
“The group’s businesses in mainland Europe reported a positive performance in the period, with LFL revenues up +3.3%.
“The French business has recovered strongly to +3.3% following the previously reported ransomware attack.
“Core systems are now fully operational, with no ongoing impact anticipated, enabling the business to recommence key initiatives around pricing and costs.”