Distribution giant SIG plc revealed a £112.7 million pre tax loss in 2019 and that to strengthen its capital structure it is making a £150 million cash call. SIG has also agreed that Clayton, Dubilier & Rice, a leading USA private equity investor, will invest £85 million for a 25% stake in the firm.
The Group reported a statutory loss before tax from continuing operations of £112.7m (2018: profit before tax of £10.3m). This reflected £128.3m of Other items, including £90.9m of impairment of goodwill and other intangibles. However, underlying profit before tax (including businesses held for sale), of £41.9m (2018: £74.5m).
SIG said that underlying revenue declined 9.0%, with a loss of market share in UK and Germany was due to poor execution of transformation initiatives which the Board believes disconnected the business from its customers, suppliers and its front-line colleagues
The Board has taken decisive actions to address 2019 performance, appointed a new leadership team and developed a new customer-centric strategy that reprioritises sales.
Steve Francis, the new Chief Executive appointment in February, said: “We have been developing a new strategy and organisational model which focuses on people, growth and active industry leadership. The essence of our new strategy is re-connection with our people – employees, customers, suppliers and the communities in which we do business – we are a local, sales and service-driven business.
“We have also been navigating the effects of COVID-19. I am encouraged by how robustly we have operated in the most testing of circumstances and would like to thank all our people for their resilience and fortitude in the face of this pandemic.
“After nearly a decade of contraction, which has included disposals, rationalisation, debt and cost reduction, it is now time to focus on how to grow SIG and rebuild our core USPs of customer proximity, service and expertise.
“The new management team will empower our customer-facing people and promote an entrepreneurial spirit throughout the Group, thereby re-connecting with our customers and suppliers, re-energising our highly talented employees, and re-setting the growth ambition of SIG.
“I am pleased to welcome Clayton, Dubilier & Rice, an experienced business builder in our industry, as an investor, and we look forward to working with the CD&R team.”