SIG delivers profit warning as macro conditions hit demand

24th Jun 2024 07:13

(Sharecast News) - Insulation and building products group SIG has delivered a profit warning after a challenging first half, as ongoing softness in the building and construction sector across Europe resulted in subdued demand.

The company said it now has a "more cautious view of the timing of any potential market improvements during H2", and expects full-year underlying operating profit be in the range of £20-30m, below the current consensus range of £36.7-43m and the £53.1m reported last year.

Group like-for-like sales across May and June were 7% lower than the comparative period in 2023, following a 6% decline across the first four months of the year.

"Subdued demand has continued to be a factor in the majority of the group's markets, reflecting the ongoing softness in the building and construction sector. This impact has been most notable in the French and German markets, and in the end markets of our UK Interiors business," SIG said in a statement.

"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."

Looking ahead, the group said it expects a stronger second half due to the increasing benefits from productivity and cost initiatives, though the extent of this improvement relies on how demand evolves, in France and Germany where macro conditions are more uncertain.