In a trading update today, Sig said that its 2024 underlying operating profit is likely to be in the range of £20m to £30m; analysts had previously been predicting £37m to £43m.
First half sales were down 7%
The company said: “Subdued demand has continued to be a factor in the majority of the group's markets, reflecting the ongoing softness in the building and construction sector. This impact has been most notable in the French and German markets, and in the end markets of our UK Interiors business. Whilst we continue to see more robust demand in our Poland, Ireland and UK Exteriors businesses, group sales overall were weaker than expected in May and June to date.
“Despite the difficult market backdrop, the group continues to make good progress on its strategic and operational initiatives. These have included permanent cost restructuring to lower central and operating company overheads, modernisation implementations which will lower our cost-to-serve and support higher margin sales mix, and more robust commercial execution, which has seen a continuation of the market share growth achieved over the last three years.”
It added: “The increasing benefit from productivity and cost initiatives underpins our continued expectation of a stronger second half. The extent of this improvement is subject to the evolution of demand conditions, particularly given market uncertainties in France and Germany, and recognising the sensitivity of operating profit to relatively small movements in sales.”
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