SIG signals dividend comeback this year
Shares in roof and insulation business SIG bounced 8% as it announced plans to restart dividend payments this year.
Outlook: SIG expects modest growth in residential building to continue in 2011
The firm said it intended to declare a dividend with its 2011 interim results as markets have begun to stabilise.
It reported a 3% rise in underlying profits to £62.5m for 2010. However, taking into account items including impairment charges and restructuring costs, its pre-tax loss deepened to £80.8m from £55.3m.
Full-year turnover was down 2% at £2.7bn.
The shares rose 9.5p to 130.6p in trading today.
SIG has cut hundreds of jobs and trading locations in recent years as it feels the impact of the slowdown in housebuilding and construction.
But it said market conditions improved in the second half of 2010, while trading in the first two months of 2011 was in line with expectations and well ahead of weather-affected comparisons with a year earlier.
Chairman Leslie Van de Walle, said: 'Demand trends overall in the group's sectors and countries of operation are expected to gradually stabilise during the coming year and against this backdrop we are committed to improving our performance in 2011.
'The board expects to see 2010's modest growth trend in residential building continuing in 2011 and the decline in private non-residential construction levelling out in H1 2011.
'However, government expenditure cuts are expected to cause public sector new construction activity to decline as the year progresses, counteracting mild growth in the private sector, particularly in the UK.'
Van de Walle added that SIG plans to invest in selected areas such as renewables and carbon reduction and hopes to add to its branch network in both the UK and mainland Europe.
Broker Panmure Gordon commented: 'These are solid full-year results from SIG, coming in slightly ahead of expectations. Trading conditions remain challenging, but the outlook is unchanged from previous comments.
'New banking facilities are in place and the group has committed to returning to paying dividends at the 2011 interim stage. With healthy fundamental drivers, we maintain our positive stance.'
SIG, which stands for Sheffield Insulations Group, was founded in 1956 and listed on the London Stock Exchange in 1989.
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