SIG Regulatory News (SHI)

11 Jan 2007 07:00

SIG PLC11 January 2007 Trading Statement 11 January 2007 SIG plc, the leading supplier of insulation, roofing and commercial interiorsproducts, issues the following trading update for the year ended 31 December2006, in advance of the preliminary results which will be announced on 14 March2007. The Group performed strongly throughout 2006, and again produced record salesand profits. Total sales for the year exceeded £1,915m, an increase ofapproximately £276m (17%) over 2005. These figures include sales of £65m fromthe USA business, the disposal of which was announced in November 2006. Excluding the USA from both 2006 and 2005, sales in 2006 were c.£1,850m, anincrease of approximately £279m (18%). Like for like sales growth was c.7%. Underlying* profit before tax is expected to be not less than £111.5m (includingc.£4.0m contribution from the USA), and marginally ahead of analysts' consensusexpectations. Excluding the USA from both 2006 and 2005, the 2006 underlying* profit beforetax is expected to be not less than £107.5m, an increase of £16.2m (c.18%) overthe equivalent figure for the year ended 31 December 2005. In addition, a one-off profit of c.£2m is expected to be recorded in 2006,arising from the successful disposal of the USA business in November 2006. UK & Ireland (c.65% of Group sales) Sales in our largest geographic region increased by approximately 14% over 2005,with like for like growth of c.4%. Operating profits were significantly ahead ofprior year. Sales and operating profits increased in all businesses, i.e.Insulation, Roofing, Commercial Interiors and Safety and Specialist ConstructionProducts. Mainland Europe (c.32% of Group sales) Total sales in Mainland Europe increased by approximately 27% in both Sterlingand local currencies, with like for like growth in excess of 13%. The second half year saw a very significant increase in market demand inGermany, which is believed to have been driven partly by some pull-forward oforders to beat the increase in VAT on building materials which took effect on 1January 2007. Operating profits were increased substantially and sales and operating profitswere increased in all countries in which the Group has trading operations, i.e.Germany and Austria, France, Benelux and Poland. USA (c.3% of Group sales) On 21 November 2006, the Group announced the sale of its business, for $51m incash. Up to the date of disposal, the USA business contributed sales of £65m andoperating profits of c.£4m. The 2006 Group results will benefit from a one-off profit of c.£2m arising fromthis disposal. Acquisitions During 2006 the Group completed 23 acquisitions, a record number for the Group,with combined annualised sales on an historical basis of c.£240m. The geographicsplit of the acquired sales is c.£135m in Mainland Europe and c.£105m in UK andIreland. Of the total 23, 19 were in the UK and Ireland, comprising 4 in insulation, 8 inroofing and roofline, 2 in commercial interiors, and 5 in specialistconstruction products. In Mainland Europe, 4 businesses were acquired comprising 2 in France (bothinsulation), 1 business operating in both Germany and Poland as a roofingsupplies specialist and 1 business in Poland with sales spread acrossinsulation, commercial interiors and specialist construction products. Total consideration including assumed debt for acquisitions in 2006 amounted toc.£108m. Trading Sites During the course of the year, the Group increased the number of trading sitesfrom 496 at 1 January 2006 to 613 at 31 December 2006, after having disposed ofthe 21 sites in the USA. Outlook In the UK and Ireland, overall construction activity is expected to show modestgrowth in 2007 over 2006. The market for thermal insulation for use in newbuildings is expected to begin to benefit from the recent change to the BuildingRegulations (Part L) and this is expected to be moderately helpful in 2007. Inaddition, as indicated in the Interim results in September 2006, the level ofdemand for insulation upgrading in existing properties driven by grant aid hasfallen sharply in the latter part of 2006, and this decline is expected tocontinue throughout 2007, until the new grant scheme (EEC3) becomes effective in2008. This new scheme is expected to significantly increase grant-aided demandfrom 2008. In Mainland Europe, conditions are expected to remain positive, though it is tooearly to say whether the surge in demand in Germany in recent months is a timingfactor rather than the beginning of an upturn in construction activity. The Group enters 2007 in good shape and the Board is confident that furtherprogress will be made. * Where reference is made to "underlying" this is defined as being before the amortisation of acquired intangibles, goodwill impairment, hedge ineffectiveness and profit on disposal of the US business. Analyst Conference Call There will be an Analyst conference call at 9.00 am today. The dial in number is020 7162 0125. Enquiries: David Williams, Chief Executive SIG plc 0114 285 6300Gareth Davies, Finance DirectorGordon Simpson/Kirsty Flockhart Finsbury 020 7251 3801 This information is provided by RNS The company news service from the London Stock Exchange