TIDMSHI
RNS Number : 9958X
SIG PLC
11 January 2022
11 January 2022
SIG plc: 2021 Full Year Trading Update
SIG plc ("SIG", or "the Group") today issues a trading update
for the year ended 31 December 2021 ("FY21").
Highlights
-- 2021 a pivotal and productive year for the Group. Strong
momentum exiting the year, with Return to Growth strategy
delivering results ahead of plan
-- Full year and H2 sales growth of 8% and 15% respectively
against the non Covid-affected 2019 comparators. Accelerating
growth trend through the year, driven most notably by UK
Interiors
-- Profitability increasingly positive, with the trading
performance driving several upgrades during the year
-- Refinancing completed in late 2021 - providing a long-term
platform to support strategic growth ambitions
Summary
The Group's Return to Growth strategy is delivering significant
progress, including improved organic sales performance. The
performance, driven by our strategic initiatives, has also been
supported by robust demand across all key end markets, partially
offset by well documented industry wide supply constraints.
Inflationary increases in input costs have been well managed, with
the direct pass through of these reflected in the reported sales
figures.
As a result of the above, and subject to audit, the Board
expects to report FY21 revenues from underlying operations(1) of
GBP2,292m and an underlying(2) operating profit no less than
GBP40m, the latter as announced in mid-December.
The Group expects to report net debt, as at 31 December 2021, of
approximately GBP364m on a post IFRS 16 basis, with gross cash
balances of GBP145m. Net debt on a pre IFRS 16 basis is expected to
be GBP129m. As previously guided, the Group held higher than normal
inventory levels at the year-end as part of the proactive strategy
to optimise customer service, and especially so at a time of supply
shortages. As previously announced, the Group completed a EUR300m
(GBP253m) bond issue on 18 November 2021, and at the same time
established a new revolving credit facility of GBP50m, which
remains undrawn.
Trading performance
FY21 like for like(3) ("LFL") revenues grew 24% vs prior year,
which was distorted by Covid, notably in H1, and 8% vs 2019.
Reported Group revenues from underlying operations were 22% higher
in the year vs 2020, including a 3% adverse currency movement
LFL sales growth FY 2021
2021 vs 2020 H1 Q3 Q4 H2 FY sales
GBPm
UK Interiors 54% 30% 21% 26% 38% 508
UK Exteriors 58% 24% 17% 20% 36% 422
UK 56% 27% 19% 23% 37% 930
------------------ ---- ---- ---- ---- ---- --------
France Interiors 38% 2% 10% 6% 20% 196
France Exteriors 34% 6% 17% 12% 22% 406
Germany 11% 7% 9% 8% 10% 393
Poland 22% 44% 46% 45% 34% 187
Benelux 2% 0% 17% 9% 5% 92
Ireland 14% 18% 9% 14% 14% 88
------------------ ---- ---- ---- ---- ---- --------
EU 22% 11% 16% 14% 17% 1,362
------------------ ---- ---- ---- ---- ---- --------
Group 33% 17% 17% 17% 24% 2,292
------------------ ---- ---- ---- ---- ---- --------
LFL sales growth
2021 vs 2019 H1 Q3 Q4 H2 FY
UK Interiors (19)% 0% 15% 7% (8)%
UK Exteriors 14% 26% 29% 28% 21%
UK (7)% 10% 22% 15% 4%
------------------ ------ ------ ----- ----- -----
France Interiors 8% 1% 13% 7% 7%
France Exteriors 19% 11% 40% 25% 22%
Germany 1% 3% 12% 7% 4%
Poland 20% 33% 41% 36% 29%
Benelux (10)% (12)% (1)% (6)% (8)%
Ireland (21)% 6% 15% 10% (5)%
------------------ ------ ------ ----- ----- -----
EU 7% 8% 22% 15% 11%
------------------ ------ ------ ----- ----- -----
Group 1% 9% 22% 15% 8%
------------------ ------ ------ ----- ----- -----
In the UK Interiors business, the strategic and operational
changes made since July 2020 continue to drive the business's
return towards its previous market position and performance. The UK
Exteriors business continued to perform strongly, helped by robust
demand in RMI. The UK business overall returned to profitability
for the year, with Interiors returning to profit in H2.
Performance in the EU was also encouraging in H2, with a good
improvement in Q4 growth. The performance remains strong in our
French businesses, with the Exteriors business in particular
maintaining good growth in Q4 despite some strong comparators. Our
Polish business continued to perform strongly against both 2020 and
2019 comparators, and was helped further by an especially high
inflationary impact. Our Germany and Benelux businesses both have
new, experienced leadership in place, and we are confident that
they will continue to build on the early signs of improvement
already seen in Q4. Ireland was, as anticipated, a further driver
for the H2 acceleration vs 2019, rebounding after the H1 impact of
local Covid-related restrictions.
Pass through of product price inflation added to the top line in
all geographies, to an increasing degree in H2. We estimate the
impact on revenue for the full year to be around 6-7%.
Profitability continued to improve in H2 compared to the first
half, with underlying operating profit approximately doubling in H2
vs H1.
Outlook
The Board believes the Group is well placed to build on the
significant progress made in 2021. Whilst the Covid-19 backdrop may
continue to create some market uncertainty, the fundamentals of the
Group's markets remain sound, notably with the increasingly robust
Europe-wide commitments on energy efficiency and carbon
reduction.
Our order books continue to be robust, and we remain confident
in the effectiveness of our supply chain management in meeting
customer requirements and continuing to manage any potential
volatility in supply and in input costs. As a result, the Board is
confident that the momentum built in 2021 will continue in 2022
and, providing there is no material disruption to either our
business or end markets, expects the Group to deliver solid organic
revenue growth in the coming year.
The numbers in this update remain subject to final close
procedures and to audit.
1. Underlying operations excludes businesses divested or closed,
or which the Board has resolved to divest or close.
2. Underlying represents the results before Other items. Other
items relate to the amortisation of acquired intangibles,
impairment charges, profits and losses on agreed sale or closure of
non-core businesses and associated impairment charges, net
operating profits and losses attributable to businesses identified
as non-core, net restructuring costs, and other non-underlying
profits or losses.
3. Like-for-like is defined as sales per working day in constant
currency, excluding completed acquisitions and disposals.
Contacts
SIG plc +44 (0) 114 285 6300
Steve Francis Chief Executive Officer
Ian Ashton Chief Financial Officer
FTI Consulting +44 (0) 20 3727 1340
Richard Mountain
Peel Hunt LLP - Joint broker to SIG +44 (0) 20 7418 8900
Mike Bell / Charles
Batten
Jefferies International Limited -
Joint broker to SIG +44 (0) 20 7029 8000
Ed Matthews / Will
Soutar
LEI: 213800VDC1BKJEZ8PV53
Cautionary Statement
This document contains certain forward-looking statements
concerning the Group's business, financial condition, results of
operations and certain Group's plans, objectives, assumptions,
projections, expectations or beliefs with respect to these items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'potential',
'targets', 'goal', 'forecasts' or 'estimates' or similar
expressions or negatives thereof.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the Group's actual
financial condition, performance and results to differ materially
from the plans, goals, objectives and expectations set out in the
forward-looking statements included in this document.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to the Group
or any persons acting on its behalf are expressly qualified in
their entirety by the factors referred to above. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised;
actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Subject to compliance with
applicable law and regulation, the Group does not intend to update
the forward-looking statements in this document to reflect events
or circumstances after the date of this document and does not
undertake any obligation to do so.
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END
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