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SIG has issued a profit warning to the City, as weaker trading in May and June pushed back the timing of an anticipated market recovery.
The group stated that “subdued demand has continued to be a factor in the majority of the Group’s markets” and expects its underlying operating profit to be in the range of £20-30 million, which is blow the current analyst range.
SIG stated: “This impact has been most notable in the French and German markets, and in the end markets of our UK Interiors business. Whilst we continue to see more robust demand in our Poland, Ireland and UK Exteriors businesses, Group sales overall were weaker than expected in May and June to date.
“Despite the difficult market backdrop, the Group continues to make good progress on its strategic and operational initiatives. These have included permanent cost restructuring to lower central and operating company overheads, modernisation implementations which will lower our cost-to-serve and support higher margin sales mix, and more robust commercial execution, which has seen a continuation of the market share growth achieved over the last three years.
“The Group also continues to prioritise and demonstrate effective working capital and cash flow management, with year to date cash performance also reflecting normal seasonal trends and the lower profit, and our RCF remaining undrawn.”
It also said that it continued to perform well relative to its markets and is also continuing to drive cost reductions and efficiency initiatives
However, its cash performance to date remains in line with expectations.
It will publish the Group’s H1 2024 results on August 6 2024, with a presentation and conference call for analysts at 10.15am at the offices of FTI Consulting.
