SIG Posts Flat Like-For-Like Sales

SIG plc today announces its half year results for the six months ended 30 June 2023. 

1. Like-for-like ("LFL") is defined as the growth/(decline) in sales per working day in constant currency excluding any current and prior year acquisitions and disposals.  Sales are not adjusted for branch openings or closures.

2. Underlying represents the results before Other items.  Other items relate to the amortisation of acquired intangibles, impairment charges, costs related to acquisitions, cloud computing configuration and customisation costs and other specific items. 

Financial highlights

• Group revenue of £1,423m, representing flat like-for-like¹ ("LFL") revenue versus prior year, reflecting volume declines offset by input price inflation:

o  Weaker trading conditions across all geographies

o  Inflation tailwinds moderated as expected

• Group underlying operating profit of £33m with operating margin of 2.3%
• Disciplined cash management; net debt of £468.8m post‐IFRS 16 and £176.2m pre‐IFRS 16 

Operational highlights

• Resilient LFL revenue performance by our largest Operating Companies in challenging markets, with UK Interiors up 4% and France Exteriors up 2%

• Margins temporarily impacted by challenging market conditions and higher than normal operating cost inflation, but resilient in France at c5%, and Germany and UK Interiors improving margins year-over-year

• Continuing progress in all geographies in improving underlying operational performance in H1, with initiatives focusing on delivering an improved operating margin in near and medium term

• Strategic actions taken over last three years mean that the Group is in a strong position, operationally and financially, to navigate current markets 

Outlook

• Market conditions expected to remain challenging across the Group's geographic end markets in the second half, alongside further moderation in price inflation

• Second half expected to see greater benefit from productivity initiatives, and the Group's full year underlying operating profit is expected to be in line with the Board's recently revised guidance

• Strong positive free cash flow expected in H2 as seasonal working capital unwinds and working capital discipline continues to deliver benefits

• Board remains confident in improving the Group's operating margin to 5% in the medium term 

The Group will hold a Capital Markets presentation in London on 23 November 2023, including an update on strategy from CEO Gavin Slark, who joined the company in February 2023.  Further details for investors and analysts will follow in due course. 

Commenting, Gavin Slark, Chief Executive Officer, said: 

"Our performance in the first half reflects the challenging market conditions we are currently facing, with the Group's LFL revenue growth flat year-on-year.  Despite these conditions, I'm very pleased with the progress we are making on many fronts to improve the business, notably with the initiatives across our Operating Companies to improve our ability to drive higher levels of profitable growth when market conditions recover.  In the first half these initiatives reflected a continuing focus on our people, our branches, and our productivity, creating a platform that will allow us to capture and maximise the significant opportunities I see for the medium term.

"Looking ahead, while we expect market conditions in the second half to remain difficult, we remain confident the business will grasp the opportunities it has to continue to improve its underlying operational performance.  This will, in turn, deliver higher levels of profitability as we drive towards our medium-term margin target of 5%.  The Group is financially and commercially well placed to drive meaningful shareholder value in the medium and long term."

Source : SIG PLC

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