SIG warned investors on Monday that profit for the 2024 financial year will come in below expectations as market conditions have not improved in line with expectations.
In a trading update, the supplier of insulation and building products noted that “market conditions have remained challenging” over recent weeks.
During May and June, like-for-like sales were seven per cent lower than last year, similar to during the first four months of the year but below expectations. The firm was expecting demand to pick up as the year progressed.
Market weakness remains most accurate in the French and German markets as well as its UK interior business.
“Given the weaker than expected trading in recent weeks and a consequently more cautious view of the timing of any potential market improvements during H2, the Board now expects our 2024 full year underlying operating profit to be in the range £20m-£30m, which is below the current analyst range,” SIG said.
Despite the difficult conditions, SIG said it “continues to perform well relative to its markets”. It has seen “robust demand” in Poland, Ireland and the UK Exteriors.
The firm is also looking to continue creating efficiencies through “modernisation implementations”, which should help support a higher margin sales mix, and “more robust commercial execution” to help it continue growing its market share.
This should help support a stronger performance in the second half as markets recover, although it warned that the extent of this improvement depends on how market conditions evolve in France and Germany.
“The Group also continues to prioritise and demonstrate effective working capital and cash flow management, with year-to-date cash performance also reflecting normal seasonal trends and the lower profit, and our RCF remaining undrawn,” it added.
SIG will publish its results for the first half of the year on 6 August.