SIG Reports 13% Decline In 2020 Sales

SIG plc has published its full-year results for the year ended 31 December 2020, advising that its 'return to growth' strategy is on track.

Strategic highlights

• Return to Growth strategy delivering to plan:
- UK business rebuilt and relaunched
- Reconnection with customers, suppliers and employees well advanced

• Strong finish to 2020, ahead of expectations; like-for-like sales up 4% in Q4, reflecting broad-based growth across all major markets, including the UK

• Significantly strengthened balance sheet provides confidence to invest in new growth strategy and security against short term market uncertainty

• Group continues to adapt successfully to trade safely to new Covid-19 norms, working closely and flexibly with our employees, customers and suppliers

Financial results

• Full year like-for-like sales down 13%, with a solid recovery in the second half

• Underlying gross margin down 80bps due to lower sales volumes over the year

• Underlying operating loss of £53.3m (2019: £42.5m profit); better than previous guidance

• Underlying loss before tax of £76.3m (2019: £17.7m profit before tax), with statutory loss before tax from continuing operations of £202.3m (2019: £112.7m loss before tax), reflecting £126.0m of Other items, including £76.1m of impairment charges in the UK business and £13.2m onerous contract costs

• Net debt, pre IFRS 16, down to £4.1m (2019: £162.8m), helped by the sale of Air Handling division in January and £152m capital raise in July; post IFRS 16 net debt down to £238.2m (2019: £455.4m) 

Current trading and outlook

• Trading in 2021 to date is in line with management expectations, continuing on a similar trajectory to Q4 2020

• Market fundamentals remain strong; good RMI growth in UK and France 

• UK Distribution structure in place; revenue growth starting to emerge as planned

• Continued uncertainty remains regarding Covid-19

• Return to profitability and cash generation expected in H2

• Company reaffirms medium term financial goals

Commenting, Steve Francis, Chief Executive Officer, said:
“Our teams have shown great resilience and commitment in the face of the challenging circumstances for much of the year, the effects of which clearly impacted our first half, and hence full year, results. Providing a safe environment and instilling an even greater focus on good health and safety behaviours has been and will remain a major focus of the new management team.

“I am delighted that due to our Return to Growth strategy we delivered a solid second half and have begun to return the business to growth after a long period of decline. On behalf of the whole Board I would like to thank all our employees for their significant efforts, and successes, during the year.

“The new UK management team has rebuilt its business and, everywhere we operate, we have reconnected with our employees, customers and suppliers. Their response has reaffirmed that we are at our best when we are a local, sales and technical service-driven business, partnering closely with our key suppliers and operating with empowered and entrepreneurial branch teams. That is our strategy for growth and the basis for playing a leading role in our industry in the years to come. 

“This, coupled with a strong balance sheet, gives us the right foundations for the business to grow.”

Source : SIG PLC

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