Building materials distributor SIG has warned that in the absence of any clear signs of macroeconomic improvement in its main countries of operation, the board expects construction markets in 2013 to 'remain challenging and likely to decline at a rate similar to 2012'.
Revenues in 2012 totalled around £2,635m, flat on a constant currency basis, though down by 4.0% in sterling due to exchange rate movements. Underlying profit is expected to be no less than £82m.
The group said trading in the latter half of the year was boosted by resilience in Mainland Europe, particularly France, as well as a strong performance in SIG Energy Management.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In Mainland Europe sales rose by around 1.5% in constant currency, but fell by about 5.0% in sterling.
In the UK & Ireland sales from continuing operations were down around 2.0% in constant currency, with the UK down 1.5%.
The company is continuing to make a number of cost cuts, and has identified around £3.0m of additional efficiencies from its branch network, meaning it is now targeting a total cost saving target of around £10.0m.
Net debt for 2012 is expected to have fallen to £110m, after £8.0m of expenditure on five infill acquisitions.
In a statement the company said: "The group also anticipates a reduction in volumes for its SIG Energy Management business, due to the end of CERT and a likely slow start-up of the successor Green Deal scheme.
"Against this background, and building on recent performance, SIG expects to make further progress in 2013 by continuing to focus on sales outperformance, gross margin enhancement and improved operational efficiency."
The group also said it plans to sell its Czech and Slovak businesses, which together account for only 1.0% of revenues, to the Woodcote Group, a recent management buyout from Wolseley.
It added: "SIG has decided to concentrate its management and resources in the region on further strengthening its position in Poland, a market to which the board remains fully committed."
NR
-
Cash in on the growth prospects of Europe's companiesOpinion Marcel Stötzel, co-portfolio manager of the Fidelity European Trust, selects three stocks
-
Is the AI boom another dotcom bubble?25 years on from the dotcom bubble bursting, is it time for investors to consider the sustainability of the AI boom in the stock market?
