SIG's financial report for 2024 makes for sobering reading but the group is optimistic it is ready to benefit from the expected market recovery.
Despite deepening pre-tax losses, SIG estimates that its results for 2024 reflect a "robust trading performance in challenging markets." Results that have been partially achieved through extensive cost and restructuring actions.
The Sheffield-based distributor reported statutory loss before tax of £44.8 million for 2024, compared to £31.9 million in 2023. Like-for-like sales were down 4% across the group, with revenues of £2.61 billion (2023: £2.76 billion) and underlying operating profit of £25.1 million, in line with expectations, though this was down from £53.1 million.
The group reports good progress on the strategic actions it has undertaken and hope will benefit medium and longer-term profitability, with efficiencies and productivity gains mitigating much of the near-term impact of lower volumes and operating cost inflation. There was a £32 million reduction in reported year over year operating expenses, and £42 million reduction before inflation.
Of the pre-tax losses, £30.5 million amounted to £13.4 million restructuring costs, £5.3 million in refinancing costs, and a £7.3 million non-cash impairment in the UK Interiors business.
On a more positive note, UK roofing sales growth rate increased to 5% in the second half of the year, up from -2% in the first half, despite UK market weakness. In Ireland sales grew to 17% in the second half from 9% at the beginning of the year.
The restructuring undergone by the business meant a reduction of staff numbers by 430 across the Group, as well as the closure of 17 underperforming branches, with an acceleration of restructuring actions in UK Interiors Q4.
The company congratulates itself on good progress being achieved on its group-wide ‘GEMS’ strategy (Grow, Execute, Modernise, Specialise), with modernisation initiatives including new e-commerce customer sales platform launched in Germany, and specialisation including expansion of specialist markets product ranges and contracts in UK
Commenting, Gavin Slark, Chief Executive Officer, said: “The Group’s 2024 results reflect a robust trading performance in challenging markets. We continued to experience lower volumes from weak end-markets across the UK and EU, but we have used this period to reshape our operations, through cost reduction and restructing actions, and to create better performing businesses across the Group. This will help to significantly improve our future profitability when markets recover.
“We also maintained a keen focus on our customers and delivering great service. I am proud of the energy and resilience our people have continued to demonstrate in this tough environment. Across all our operations we are implementing a range of initiatives under our ‘GEMS’ strategy, which will lead to a higher-value sales mix, continually stronger commercial execution, and more efficient operations, all of which will support delivery of our 5% medium-term operating margin target.
“The operational gearing in our business model applies equally strongly in conditions of rising demand, and, accordingly, the Board believes the Group remains very well positioned to benefit from the market recovery when it occurs.”
