Building materials supplier SIG warned of a sharp fall in 2019 profit this morning, amid weak European construction markets and delays in its turnaround efforts taking effect.
The company’s shares fell 20 per cent in early trading after it also said sales rates deteriorated towards the end of the year.
The warning dragged down SIG’s sector peers, with Travis Perkin shares falling four per cent, Grafton and Kingfisher dropping three per cent and Howden’s down one per cent.
SIG already issued a warning in October because of a weakening economic outlook in Britain and Germany.
This was further exacerbated by political uncertainty in the UK, it said then.
However, the relative end to political uncertainty in the UK brought about by Boris Johnson’s election win in December has not yet heralded a turnaround in fortunes for the firm, which said it expects underlying pretax profit of about £42m for the 12 months ended 31 December.
UK sales fell 18 per cent, made even worse by the company’s decision to focus less on low-margin work.
SIG said measures taken earlier in the year would deliver benefits in 2020, not 2019 as previously expected.
The Sheffield-based company said sales per working day in December were about a quarter lower than November.
SIG reported underlying pretax profit of £75.3m in 2018.
It also said the disposal of its air handling division would be completed later this month and expects the sale of its building solutions business to close in the first quarter.