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14/03/2017
SIG Reports £106.3m Pre-Tax Profit Loss
Specialist building products firm SIG has reported a pre-tax loss of £106.3 million in its results for the year ended 31 December 2016.
While turnover was up 11% to £2,739m from £2,463m, the £106.3m loss was mostly down to £183.8m of non-underlying items.
The company's French roofing business, Larivière, revealed a £100.4m non-cash goodwill and intangible impairment charge due to "more cautious market forecasts and broader market uncertainty".
In addition, SIG's Offsite Construction division increased revenue by 20.7% to £27.4m (2015: £22.7m), however the business made an operating loss of £4.2m (2015: profit of £0.3m), blamed on production challenges in the modular housing part of its Building Systems division.
Since November, the firm said it has reassessed its internal initiatives "so that branches can refocus on customers and drive sales growth". The company has reviewed its UK eCommerce programme, suspended its Regional Distribution Centre ("RDC") programme, and is targeting to complete substantially the roll-out of its new UK ERP system in April.
However, interim Chief Executive Mel Ewell said that while the Board believes the Group's strategic direction is correct, "implementation has proved challenging".
"Accordingly, since November we have slowed or stopped a number of internal initiatives, which will allow our team to refocus on customers and sales growth in order to generate cash and improve ROCE. This will ensure that we build on SIG's significant potential in 2017," he said.
"One consequence of our 2016 profit is that leverage is now higher than our targeted 1.0 - 1.5x range. Leverage reduction is a key short-term priority and we have already identified a number of actions to strengthen the balance sheet, including the rebasing of our dividend.
"Going forward, we will take all necessary steps to ensure the Group's balance sheet is able to withstand any near-term fluctuations in market demand."
In addition, the company has revealed Meinie Oldersma will join as Group Chief Executive from April, with Mr Ewell reverting back to being a Non-Executive Director.
(LM/MH)
While turnover was up 11% to £2,739m from £2,463m, the £106.3m loss was mostly down to £183.8m of non-underlying items.
The company's French roofing business, Larivière, revealed a £100.4m non-cash goodwill and intangible impairment charge due to "more cautious market forecasts and broader market uncertainty".
In addition, SIG's Offsite Construction division increased revenue by 20.7% to £27.4m (2015: £22.7m), however the business made an operating loss of £4.2m (2015: profit of £0.3m), blamed on production challenges in the modular housing part of its Building Systems division.
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Since November, the firm said it has reassessed its internal initiatives "so that branches can refocus on customers and drive sales growth". The company has reviewed its UK eCommerce programme, suspended its Regional Distribution Centre ("RDC") programme, and is targeting to complete substantially the roll-out of its new UK ERP system in April.
However, interim Chief Executive Mel Ewell said that while the Board believes the Group's strategic direction is correct, "implementation has proved challenging".
"Accordingly, since November we have slowed or stopped a number of internal initiatives, which will allow our team to refocus on customers and sales growth in order to generate cash and improve ROCE. This will ensure that we build on SIG's significant potential in 2017," he said.
"One consequence of our 2016 profit is that leverage is now higher than our targeted 1.0 - 1.5x range. Leverage reduction is a key short-term priority and we have already identified a number of actions to strengthen the balance sheet, including the rebasing of our dividend.
"Going forward, we will take all necessary steps to ensure the Group's balance sheet is able to withstand any near-term fluctuations in market demand."
In addition, the company has revealed Meinie Oldersma will join as Group Chief Executive from April, with Mr Ewell reverting back to being a Non-Executive Director.
(LM/MH)
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