TIDMSHI
RNS Number : 7851J
SIG PLC
29 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS
(SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
29 April 2022
SIG plc
Strong start to 2022; significantly increased full year
expectations
SIG plc ("SIG", or "the Group") today issues a trading update
for 1 January 2022 to date ("the period"), in advance of its Annual
General Meeting, which is being held on 12 May 2022.
Key Points
-- Group expected to deliver full year performance significantly ahead of previous expectations
-- Underlying operating margin for 2022 now anticipated to reach 3%
-- Positive free cash flow now forecast in 2022
Trading Summary
The Group has made a strong start to the year, with the Return
to Growth strategy continuing to deliver excellent progress across
the business. In addition to robust demand, we have seen further
impetus to sales and profit as a result of continuing input cost
inflation.
Group sales were 25% up on 2021 for the quarter to 31 March on a
like for like ("LFL") (1) basis. This represented a performance
well ahead of previous expectations, with this momentum continuing
into the month of April to date.
1 January to % GBP'm
31 March LFL
Sales Growth
vs 2021
UK Interiors 26% 162
UK Exteriors 19% 109
UK 23% 271
------------------- ---- ------
France Interiors 10% 51
France Exteriors 21% 106
Germany 20% 105
Poland 63% 55
Benelux 17% 26
Ireland 78% 27
EU 27% 370
------------------- ---- ------
Group 25% 641
------------------- ---- ------
Reported Group sales were 27% up on 2021 for the quarter, with
acquisitions adding 4% to the LFL result referenced above, offset
partially by movements on working days and exchange rates.
Including the acquisitions, the reported UK Interiors growth rate
was 45%.
The overall impact of inflation is estimated to have added c19%
to Group growth over the period, albeit the levels have varied
across the different operating companies. This reflects the
annualisation of input cost inflation experienced in the second
half of 2021, as well as further increases in early 2022 as our
suppliers have passed on steeply increasing energy costs in
manufacturing. There remain some constraints in supply across the
business, but these are continuing to abate, as previously
reported.
Outlook
Given the strong momentum seen through the early part of 2022,
together with increasing visibility on the near-term trading
outlook, the Board now expects the Group to deliver a full year
performance significantly ahead of previous expectations.
Input cost inflation is currently higher than previously
anticipated, as noted above, and expected to remain elevated in the
near term. We expect that the resulting increase in revenue will
more than offset any localised market softening.
In addition, we are confident that we will be able to maintain
and build on the strong margin discipline that has been an
important part of the recent progress made by the Group, with
underlying operating margin for 2022 now expected to reach 3%.
Furthermore, we now expect the Group to be cash generative in
2022.
Steve Francis, Chief Executive, said:
"The first four months have seen markedly stronger growth than
anticipated, driving positive margin momentum across all our
countries of operation. Our decentralised model, with 433 branches
in seven countries providing strong local specialist expertise and
superior stock availability, continues to gain ground and to show
resilience in market conditions that remain challenging. Demand for
our sustainable construction offerings remain strong. The three
acquisitions made during the last 18 months are performing well and
this is an area of increasing strategic focus for us.
"Although it is relatively early in the year, and
notwithstanding the current macro-economic and geo-political
environment, the strength of our recent trading gives us the
confidence that we will now reach our initial margin target of 3%
and return to cash generation this year, ahead of schedule."
1. Like-for-like ("LFL") 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
The person responsible for arranging the release of this
announcement on behalf of the Company is Andrew Watkins, Group
General Counsel & Company Secretary.
Cautionary Statement
This announcement does not constitute an offer of securities by
SIG plc. This announcement may include statements that are, or may
be deemed to be, forward-looking statements. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future and may be beyond the Group's ability to
control or predict. Forward-looking statements are not guarantees
of future performance. You are advised to read the section headed
'Principal risks and uncertainties' in the Group's Annual Report
and Accounts for the year ended 31 December 2021 for a further
discussion of the factors that could affect its future performance
and the industry in which it operates. Other than in accordance
with its legal or regulatory obligations, SIG plc does not accept
any obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future events or
otherwise.
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END
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