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UK-based building materials supplier SIG has indicated a likely drop in its first-half profit after reporting a 5% decline in like-for-like sales during the first quarter. Weak demand across European construction markets, impacted by poor weather and a prolonged cyclical slowdown, has weighed on performance. The company also pointed to rising energy costs and geopolitical uncertainty linked to the Iran conflict as near-term risks. However, SIG noted some improvement in trading in recent months and maintained that its cash flow remains strong and ahead of internal expectations.
UK-based building materials supplier SIG has warned that its first-half profit is expected to decline after the company reported a 5% fall in like-for-like sales during the first quarter. The performance was impacted by unusually poor weather conditions across Europe along with an ongoing cyclical slowdown in the construction sector. Advertisement
The company highlighted that broader market demand across most regions continues to remain significantly below historical levels. It noted that the European construction sector is currently going through a prolonged weak phase, which has affected overall activity and order volumes.
SIG also pointed to rising uncertainty due to the ongoing Iran conflict, stating that it has made it difficult to assess the timing and shape of a recovery across its key European markets. The company indicated that it is still too early to determine the full impact this situation may have on its operations.
At the same time, increasing oil and gas prices have led to higher input costs for the business. SIG said it plans to pass on these additional costs to customers in the near term, in order to protect margins.
Despite the weak start to the year, the company noted that trading conditions began to show signs of improvement over the past two months. The decline in like-for-like sales is expected to narrow to around 2–3% during this period, compared to the sharper drop seen in the first quarter.
On the financial front, SIG reported that its cash flow for the three months ending March 31 was ahead of internal expectations. The company also stated that it expects to maintain healthy liquidity levels through the rest of the year, supported by its cost control measures.
Market response remained positive, with the company’s shares rising by around 5% in early trading following the update. Analysts noted that while the first quarter was challenging, SIG has continued to make progress through internal measures, including gaining market share and maintaining disciplined cash flow management.
In terms of leadership changes, SIG has appointed Simon Kesterton as its new Chief Financial Officer. He previously served as CFO at construction and infrastructure group Kier and will replace Ian Ashton, whose exit was announced earlier in the month.
The company has been working on internal efficiency measures over the past few years to improve profitability and strengthen its balance sheet, especially during periods of market volatility.
Source Reuters
5th Jun, 2025
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