SIG flags £1.8bn revenue; shares up 9% amid recovery

Shares of Sheffield-based building materials supplier SIG plc rose about 9% on Monday after it published a trading update for the year ended December 31, 2020, saying that revenues in the second half of the year “showed a solid recovery, ahead of the board’s previous expectations.”

SIG shares have fallen about 60% over the past year.

SIG said like-for-like revenues for the fourth quarter rose 4% compared to the prior year.

“This reflects the initial impact of the group’s Return to Growth strategy, which is starting to deliver progress in terms of improved organic sales performance, and has been supported by robust demand in repair, maintenance and improvement (RMI) segments in certain markets, notably UK and France,” said SIG.

“As a result, the board expects to report FY20 revenues from underlying operations of c£1,870m, subject to audit.

“This includes revenues of £52m in the Building Solutions business, whose trading results were previously included in ‘non-core’ but will now be reported as part of underlying operations following the board’s decision to retain and develop this business.

“Subject to audit, the group will report an underlying operating loss in the range of £57-61m for the full year, which is at the better end of the range of previous expectations.

“Profitability continued to improve throughout the second half after the underlying operating loss of £43m in H1.”

In its outlook, SIG said: “Providing there is no material disruption to either our business or end markets as a result of the pandemic, the board expects the near term benefits of the actions taken in 2020 to deliver organic revenue growth in 2021, including market share gains.

“The benefits of this will become increasingly evident as the year progresses and should enable us to return to underlying operating profitability during the second half.”