Builders Merchants Journal – BMJ Publishing to Builders Merchants and the UK merchanting industry for more than 95 years
Distributor SIG posted a first-half pre-tax loss of £125.4m for the first half of 2020, compared with a £2.3m profit for the same period in 2019.
Turnover, at £840m during the period, was down from £1,113m.
A new management team is now in place with a new growth strategy and while the group still expects to continue with losses in the second half of the year, this is likely to be “at a lower rate.”
The slump due to the Covid-19 pandemic also caused underlying operating losses of £43.2m and impairment charges of £42.8m.
Chief Executive Officer Steve Francis, said: “In mid-summer, we concluded the successful restructure of our financing facilities and a £165m capital raise. These, along with our careful management of working capital and cash in recent months, have created a sound financial base on which we can rebuild the business.
“The new management team has started to execute its strategy and implement its organisational model, which focuses on our local branch teams, enabling growth and returning to active industry leadership.
“Long term fundamentals remain sound in the Group’s markets across Europe. In the short term, significant economic uncertainty remains in all of our markets, although government stimulus for the construction sector, notably in the UK, is welcome.
“Trading was better than anticipated during the peak lockdown months of March to May, compared to our initial estimates of the possible Covid-19 impact, and the Board now expects full year sales to be moderately higher than guided in May.
“Group sales in July and August were encouraging although down year on year, and market share losses during 2019, particularly in the UK distribution business, will take time to recover.
“The second half of 2020 is expected to remain loss making, but at a lower rate than the first despite some increased pressure on gross margin in the UK.
“I am extremely encouraged by the energy and excitement with which our people have embraced the new strategy and by the initial progress made in a short space of time.”
