Distribution giant SIG plc has crashed into a first half loss of £125.4 million (H1 2019: £2.2m profit) with revenue falling to £840.1 million (H1 2019: £1,113.3m). The pandemic hit performance at the UK Distribution arm and it has reported an operating loss of £61.0m (H1 2019: £2.6m profit).
On a like-for-like (LFL) basis SIG plc saw Group revenues decline 23.9% during the first half of 2020 and an underlying operating loss of £43.2m (H1 2019: £29.1m profit).
The lockdown during March and April severely impacted UK trading with underlying revenue in UK Distribution down 47.5% to £154.9 million (H1 2019: £295.2m). The UK’s Distribution and Exteriors businesses have now been merged to create a single UK division, with a combined leadership team replicating the model already deployed in SIG France.
Steve Francis, SIG’s chief executive, said: “I would like to thank all our people for their resilience and commitment in the face of the very challenging circumstances of recent months, the effects of which clearly impacted our first half results. Providing a safe environment and instilling an even greater focus on good health and safety behaviours have been a major focus of the new management team.
“The new management team has started to execute its strategy and implement its organisational model, which focuses on our local branch teams, enabling growth and returning to active industry leadership. As previously stated, the essence of our new strategy is re-connection with our people – employees, customers, suppliers and the communities in which we do business.
“Long term fundamentals remain sound in the Group’s markets across Europe. In the short term, significant economic uncertainty remains in all of our markets, although government stimulus for the construction sector, notably in the UK, is welcome.
“Trading was better than anticipated during the peak lockdown months of March to May, compared to our initial estimates of the possible Covid-19 impact, and the Board now expects full year sales to be moderately higher than guided in May. Group sales in July and August were encouraging although down year on year, and market share losses during 2019, particularly in the UK distribution business, will take time to recover. The second half of 2020 is expected to remain loss making, but at a lower rate than the first despite some increased pressure on gross margin in the UK.”