SIG lifts full-year outlook
By Michele Maatouk
Date: Friday 22 Oct 2021
(Sharecast News) - SIG said on Friday that full-year underlying operating profit was set to be ahead of current market expectations despite supply issues, following continued strong sales momentum.
The group, which supplies specialist building products, said in an update that the solid trading performance seen in July and August continued through September. As a result, like for like sales growth in the third quarter was 17% on the prior year. This follows 33% growth reported in the first half, which it said was "distorted by the material Covid impact in 2020".
Against pre-Covid 2019 comparatives, Q3 growth was 9%, up from 1% in H1.
"UK Distribution performance provided the principal driver for the acceleration in growth during Q3, with the business moving, as expected, back to growth against 2019 monthly comparators, as the strategic and operational changes made since July 2020 continue to drive the return towards its previous market position and performance," it said.
Meanwhile, the company's France and UK Exteriors businesses, and its Poland business, continue to perform "very strongly". As expected, Ireland was a further driver of growth, rebounding after the first-half impact of local Covid-related restrictions.
"As previously reported, inflation is also adding to the top line in all geographies, with the group continuing to pass through cost increases. Profitability continued to improve in the quarter compared to the first half, despite the typical modest seasonal dip in sales volumes in August," it said.
SIG said that while supply issues persist across many product groups, order books continue to build and the outlook for materials shortages has become clearer.
"We are mindful of the potential impact of these shortages should the situation persist for an extended period, but remain highly confident in the effectiveness of our supply chain management and commercial agility.
"As a result of the continued strong sales momentum and operating performance, we are now more confident in our near-term outlook and expect full year underlying2 operating profit to be ahead of current market forecasts."
At 1230 BST, the shares were up 5% at 48.72p.
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