Insulation industry news from Global Insulation

UK: SIG has agreed to sell its Building Solutions division to Kingspan Group for Euro42m. Building Solutions is a UK manufacturer and distributor of building envelope solutions operating through brands including Steadmans, United Roofing Products, Trimform Products, and Advanced Cladding & Insulation. SIG decided to sell the division following a strategic review in 2017. Proceeds from the sale will be used to reduce SIG’s debts.

UK: SIG’s sales for the first half of 2019 have fallen by 3.8% year-on-year due to a ‘marked deterioration’ in the level of UK construction. Its UK and Ireland like-for-like sales dropped by 12.7% while sales elsewhere in Europe grew by 3.3%.

UK: SIG’s revenue fell by 1.2% year-on-year to Euro3.11bn in 2018 from Euro3.15bn in 2017. Its profit before tax increased by 8.5% to Euro87.2m from Euro80.4m. The building materials producer blamed ‘challenging’ market conditions but it highlighted its focus on prices and profitability.

UK: SIG’s revenue fell by 1.2% year-on-year to Euro3.13bn in 2018 from Euro3.17bn in 2017. Its profit before tax rose by 8.5% to Euro87.8m from Euro80.9m. The group blamed its falling sales on ‘challenging’ market conditions and a focus on profit over sales volumes. It reported a weakening construction market in 2018 and its UK and Ireland sales fell by 10.6%. Despite slowing markets in France and Germany, its mainland Europe sales remained stable in 2018.

“As expected, our transformation strategy began to deliver during the year and we saw significant operational and financial progress in the second half. Despite challenging market conditions and lower revenue in our largest markets, our focus on pricing and profitability over volume, coupled with tighter control over operating costs, has enabled us to grow our gross margins and profit,” said chief executive officer (CEO) Meinie Oldersma.

UK: SIG has forecast in a trading update that its sales revenue will fall by 2.3% year-on-year in 2018. It described the UK trading environment as increasingly ‘challenging’ in the second half of 2018 with commercial demand reduced by economic uncertainty, slower house price inflation and falling secondary housing market transactions. Conditions in France and Germany were also reported as slowing down in the second half.

UK: SIG’s revenue has fallen in the three months to October 2018 due to a weakening construction market in the UK. Its revenue in the UK and Ireland fell by 8.7% year-on-year. It said that commercial construction demand had remained dampened by macro-economic uncertainty, house price inflation was slowing and secondary housing market transactions had continued to fall. Its sales in Europe were mixed with quarterly declines in France and Germany but strong gains in Poland, the Benelux region and in its Air Handling business.

UK: SIG’s sales revenue for the first half of 2018 has remained stagnant due to poor weather earlier in 2018. Revenue in the UK and Ireland fell by 3.1% year-on-year in the period whilst in Mainland Europe grew by 2.9%.

The Sheffield headquartered building materials producer also said in a trading update that it had appointed Ernst & Young as its external auditor. Shareholders previously voted against a bid to reappoint of Deloitte following an overstatement of the company’s profits in 2016. The company has also appointed Alan Lovell and Cyrille Ragoucy as non-executive directors with effect from 1 August 2018.

UK: The shareholders of SIG have voted against the reappointment of Deloitte as auditor for the insulation materials producer. The board said that it took its shareholders’ views ‘extremely seriously’ and that it will find a new auditor as soon as practically possible. The shareholder discontent follows the discovery that the company’s profits were overstated in 2016.

In a trading statement covering the first four months of 2018, the company revealed that its sales fell slightly by 0.3%. Sales revenue fell by 4.4% year-on-year in the UK and Ireland due to poor weather in February and March. European sales rose by 3.8% due to good performance in Germany, the Benelux region and Poland.

UK: SIG has suspended a ‘number of individuals’ from its staff following the discovery of an intentional effort to overstate the company’s profit in 2016. The discovery followed allegations by a whistle-blower concerning financial irregularities whereby the group’s profit was overstated by up to Euro4.2m in 2016. The affected financial statements will be restated following an audit by Deloitte and KPMG.

According to the Daily Telegraph newspaper, the discrepancies relate to work carried out in 2016 under previous chief executive officer (CEO) Stuart Mitchell. He resigned in November 2016 by ‘mutual agreement’. The group’s former finance director, Doug Robertson, retired in early 2017.

UK: SIG’s revenue from continued operations rose by 7.5% on a like-for-like basis to Euro3.2bn in 2017. This was supported by a rise in the group’s Insulation & Interiors revenue in the UK, bolstered by rising prices. Reviving construction markets in Europe also aided performance. The group will announce its full financial results in March 2018.