SIG revamps in UK and stays in Europe
Published:  24 August, 2009


SHEFFIELD: SIG is to further restructure its UK operations in a bid to reduce costs.

The insulation and plasterboard merchant has so far closed 124 branches and cut 2000 jobs over the past 18 months as demand for building materials has dropped.


Chris Davies, chief executive, said that the company would now halve its manufacturing sites and bring its different sectors closer together.

"In the UK it's been almost a silo approach. We've had different divisions with their own branch networks and sales teams, run almost as autonomous businesses," he said.

"That's fine but in some areas we've had two to four sales teams calling on our customers, whereas we need a focused team concentrating on what our customers want to buy."

Revenues from SIG's Irish, Polish and central European businesses, which represent 12.7% the business, fell 30% per cent compared with the previous year, but Davies said that SIG would not follow rival Wolseley in withdrawing from underperforming continental markets and will keep its eastern European businesses

Like-for-like sales in the six months to the end of June fell 17.5% on the previous year, after stripping out currency effects.

"We've only just bought businesses there so we're not going to write them off today. We absolutely see [central Europe] as a long-term region for us," he said.

Turnover fell from £1.49bn to £1.35bn while pre-tax profits reversed from £55.7m to a loss of £9.2m.

Earnings per share dropped from 23.9p to losses of 2.1p. The shares closed up 8.8p at 133.7p on news of the announcement.

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