SIG plc, the Sheffield-based international building materials supplier, said its group like-for-like (LFL) sales fell 6% year-on-year to £873 million in the period from January 1 to April 30, 2024 “reflecting both volume and price reductions.”
In an AGM trading update, SIG said reported group revenues were also 6% lower in the period “reflecting minimal movement in aggregate in working days and exchange rates.”
The firm said: “Whilst there remain pockets of inflation on input costs, these have been more than offset by deflation in certain geographies and categories, as well as pricing pressure in the market, contributing to a net c3% reduction in pricing …
“Weak demand has been a factor in all of the group’s markets. Encouragingly, the benefit of ongoing commercial and modernisation initiatives is enabling most of our businesses to outperform local markets, with particularly strong relative performance in UK Exteriors, Germany and Poland.
“In UK Interiors, two strategic branch closures early in the year affected the LFL growth by about 3% in the period.
“Despite the difficult market backdrop, the group has continued to make good progress on the strategic programmes set out at our Capital Markets Event in November 2023.
“Modernisation initiatives to drive improved customer service and long-term profitability are progressing well, including the new German e-commerce sales platform, which went live for beta testing in April.
“Restructuring initiatives across the group are progressing as planned, alongside the more proactive management of product portfolio and mix.
“We also remain focused on effective working capital and cash flow management, to support the investment required to deliver our strategic actions.”
In its outlook, SIG said it expects weak demand conditions to continue to prevail during 2024.
“Whilst those conditions were weaker than anticipated for the first four months of the year, notably in France, we have further stepped up our actions on productivity and cost in the period, delivering meaningful savings in operating costs against the prior year,” said the firm.
“These are largely driven by disciplined headcount management, and also include the initial benefits of the restructuring programme previously announced and commenced in FY23.
“As a result, our overall outlook for FY24 underlying profitability remains unchanged, and we expect profit in H2 to be greater than in H1.
“We remain confident in our ability to manage through this current phase of the cycle and to ensure that we are more than ready to take advantage of the significant opportunities for the Group as markets recover.”
SIG CEO Gavin Slark said: “The actions we are taking now to improve the productivity and cost structure of our operations, during this period of weak demand, will enhance our ability to deliver value as markets recover.
“In addition, we are taking the opportunity to implement actions to drive a more profitable sales mix, with greater focus on specialisation.
“Whilst conditions are likely to remain a headwind in the short term, our operational agility and discipline is enabling the business to respond effectively, and we are committed to implementing the strategic steps that will drive long term value creation.”