Construction products supplier SIG has almost doubled underlying operating profit thanks to improved trading across its UK and overseas business.
The Sheffield-based plc said that, despite a squeeze on margins and inflation-driven increases in operating costs, the business underlying operating profit jumped from £41.4m to £80.2m in 2022, as underlying revenues increased from £2.29bn to £2.74m. Investors were told the performance was down to improved profitability in the countries where SIG operates, which includes a network of 440 sites and more than 7,000 people.
SIG has been embarked on a successful turnaround plan, which has led to a return to profit and recovery of market share for its UK Interiors business, improvement in like-for-like sales and underlying margins in its German business and margins exceeding 5% across its French business. Bosses at the insulation, roofing and commercial interiors distributor said they expect weaker demand during 2023, offset by continued price inflation.
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Gavin Slark, newly joined chief executive officer, said: "Trading in the first two months of 2023 saw mid-single digit like-for-like revenue growth, with the continued effects of input price inflation more than offsetting year-over-year volume declines. Market conditions continue to vary across our geographic footprint, but overall we expect weaker demand conditions to prevail during 2023, offset by a continued tailwind from input price inflation, albeit the latter will continue to moderate further this year.
"As a European market leader in the supply of specialist insulation, SIG is well-positioned to benefit from long-term structural growth drivers, notably sustainable construction. There is an increasing focus on the need to reduce building emissions, to increase energy efficiency and to use more sustainable materials.
"With a strengthened financial position, good strategic momentum, pan-European footprint, and a diverse portfolio with opportunity for growth, I am confident in our ability to manage short-term market weakness during 2023 while maintaining a focus on sustainable long term value creation for all our stakeholders."
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