Specialist building products distributor SIG plc saw has seen sales at its UK operations collapsed by 40% to £666 million during 2020, while its European businesses experienced a 12% decline. This morning’s trading update also revealed that across the group, full year sales fell 24% to £1,870 million, subject to audit.
The Group’s trading update for the year ended 31 December 2020 said there has been a solid recovery, ahead of the Board’s previous expectations, with progress throughout the half resulting in like‐for‐like revenues for the fourth quarter up 4% compared to prior year.
Subject to audit, the group expects to report an underlying operating loss in the range of £57‐61m for the full year, which is at the better end of the range of previous expectations. Profitability continued to improve throughout the second half after the underlying operating loss of £43m in the first half of 2020.
SIG’s activities were severely affected by Covid‐19 from mid‐March, notably in the UK, France and Ireland, and that prior to that point was declining at c11% over 2019. The Group was able to trade safely throughout the year, working closely and flexibly with employees, customers and suppliers to adapt to new Covid‐19 norms, and with minimal negative impact on revenues in the second half.
The branch and customer‐centric restructuring in the UK is progressing to plan. The UK Exteriors business had a strong second half, partly due to strong RMI demand growth. In UK Distribution the new organisation structure was fully in place by the end of November, and the business started to reverse its decline over the prior year in the last weeks of 2020. As previously advised, regaining market share in the UK Distribution business will take time, but the early signs are reassuring, and the plan is on track.
Performance in the EU was solid in the half, with a good increase in Q4 growth. France performed particularly well, partly as a result of RMI demand in the exteriors business, with Germany showing clear early signs of improvement.
Whilst the evolving Covid‐19 backdrop will continue to create uncertainty in the short term, the fundamentals of the Group’s markets remain sound and the strong recovery in demand across territories and sectors through the second half was encouraging.
Providing there is no material disruption to either our business or end markets as a result of the pandemic, the Board expects the near term benefits of the actions taken in 2020 to deliver organic revenue growth in 2021.