March 9, 2018 / 7:30 AM / 3 months ago

SIG full-year profit rises as restructuring takes shape

(Reuters) - SIG Plc on Friday posted a 4.3 percent rise in full-year pretax profit, helped by strong demand in Europe amid a restructuring turnaround in several of its businesses.

SIG, which supplies insulation and roofing products, said underlying pretax profit rose to 79.2 million pounds in the year ended Dec. 31, from 75.9 million pounds a year earlier.

The firm has been trying to strengthen its balance sheet by selling assets and reviewing costs, as it battles to recover from weak trading in its UK insulation, interiors and offsite construction businesses.

Chief Executive Officer Meinie Oldersma took over in April to lead the turnaround, which resulted in SIG exiting 11 businesses, including its loss-making modular offsite construction business Building Systems and its UK insulation business GRM.

Oldersma said on Friday he is “increasingly confident” about Mainland Europe and Ireland markets in 2018, but also warned on “the first signs of capacity and labour constraint in buoyant construction markets”.

Full-year revenue rose 7.4 percent to 2.78 billion pounds, the company said.

“In contrast, we are seeing an increasingly challenging environment in the UK created by macro uncertainty and recent events in the construction industry,” Oldersma said.

SIG, which has been undergoing a review of its historic accounts after a whistleblowing allegation of potential accounting irregularities, suspended staff last month for overstating profits over several years.

The company, which cut its dividend to 3.66 pence last year, declared a total dividend of 3.75 pence this year.

The country’s biggest supplier of building materials, Travis Perkins, reported a fall in 2017 profit last week, while forecasting a flat performance this year, citing a continued mixed market backdrop.

Reporting By Justin George Varghese in Bengaluru; Editing by Gopakumar Warrier, Bernard Orr

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