(Reuters) -British building materials supplier SIG posted a 53% fall in annual underlying profit on Wednesday, warning that a slowdown in housing and construction activity will continue to hurt
SIG Anticipates Market Recovery in Late 2025 After 2024 Profit Decline
By Raechel Thankam Job and Chandini Monnappa
(Reuters) -The CEO of British building materials supplier SIG said on Wednesday that he expects to see continued market recovery in its key UK, German and France markets in the second half of 2025, sending shares up, after the firm posted a 53% fall in annual underlying profit.
While slower-than-expected interest rate cuts and stubborn inflation are some factors keeping customers from buying new homes or undertaking home-improvement projects, SIG CEO Gavin Slark said in a post-earnings call that underlying demand for construction, housing and infrastructure remains very strong.
SIG shares, which fell 2.7% early on Wednesday, reversed course and rose as much as 4% to 12.28 pence. SIG shares are down 60% in the last 12 months.
Considering the current share price and that it is performing relatively well in a challenging market environment, there appears to be considerable operational leverage for potential growth as markets recover, Investec analyst Aynsley Lammin said.
Lammin added that from this perspective, investing in the shares seems like a promising opportunity.
SIG reaffirmed its 5% operating margin guidance for the medium term. For 2024, SIG's like-for-like sales were down 4% and it has taken several measures to limit impact from slowing demand including cutting 430 jobs and shuttering 17 underperforming branches.
Underlying operating profit for 2024 came in at 25.1 million pounds ($32 million), in line with analysts' estimate of 25.2 million pounds, according to a company-compiled consensus.
(Reporting by Raechel Thankam Job and Chandini Monnappa in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala, Philippa Fletcher and Mark Porter)
