UK: Roofing and insulation materials supplier SIG has returned to profit but it warned that its UK business is beginning to feel the bite of government austerity cuts.
The Sheffield-based group reported pre-tax profits of Euro9m in the year to 31 December 2011, compared to losses of Euro97m in 2010, as it outperformed its markets and benefited from restructuring. In the UK and Ireland, sales increased by 3.6% despite it reducing branch numbers by 34 to 330, as trade was boosted by a slight increase in its residential markets and by strong commercial demand in the south east of England.
Despite a return to profit, SIG warned that a reduction in public sector demand towards the end of the year will be more pronounced in 2012. The group sold three of its UK businesses in June 2011 as part of its plan to focus on its core markets of insulation and energy management, interiors and exteriors.
Underlying profits across the group were up by 27% to Euro98m. Revenues rose by 7.1% to Euro3.2bn, driven by a strong performance in mainland Europe, which accounts for more than half of SIG's business. Sales growth across the group has slowed to 1% in the first weeks of 2012 and it says it expects its overall markets to contract 2012 although it will continue to gain market share.
The group recently announced it is to close more of its stores, including 15 in the UK and Ireland, as part of plans to save Euro6m. It will also continue to open new sites, mainly under the Builders Express format in London and the south east having opened four over the past year.
