SIG fears government cash cuts

City A.M. Reporter
SIG, the insulation and roofing group, said UK government austerity measures were a drag on its outlook despite an encouraging start to the second half after a fall in first-half pretax profit.

Sales across the group recovered in May and June -- with sales per day in July up four per cent year-on-year -- after cold weather badly affected sales at the start of the year.

“We think that certainly over the last three to five months, things have been gradually improving,” said chief executive Chris Davies.

SIG reported a core pre-tax profit of £18.5m for the six months to the end of June, compared with £21.9m in the same period last year.

However, the company offered a note of warning due to a faltering economic recovery and the British government’s programme to slash public spending.

“SIG’s management remains cautious on how its markets will develop over the next few months ... based on the continuing macroeconomic uncertainty and concerns about the potential impact of government austerity measures and credit availability,” chairman Les Tench said yesterday.

Shares in SIG closed up 2.5 per cent at 93p yesterday.