Yorkshire building materials distribution firm SIG has hiked its profit outlook on the back of strong trading.
Ahead of unveiling its half year results in September, the Sheffield company issued a trading update for the six months to June 30, pointing to strong revenue growth and underlying operating profit of around £13.5m, which is better than previous expectations.
SIG expects to report interim revenues from underlying operations of around £1.11bn and says its Ƶ business as a whole will be just over break-even at the underlying operating profit level.
The group said its strategy of re-connecting with customers, suppliers and employees is helping it to take advantage of both strong near-term demand and long-term fundamentals.
It said first half revenues were strong, with like-for-like growth of 33% compared to the Covid-affected prior year. Turnover was also 1% up against 2019, which it said was a more meaningful comparator.
The firm said: “This reflects the ongoing positive impact of the group’s Return to Growth strategy, which is delivering improved organic sales performance, and has been supported by continuing robust demand in the repair, maintenance and improvement segments in most markets.
“Profitability improved throughout the period, a result of the normal seasonality in the business and the improving trading across the group.
“The group has remained able to trade safely throughout the period, working closely and flexibly with employees, customers and suppliers under the now well established Covid-19 norms."
SIG ended the period with net debt of £58m and with gross cash balances of £174m.
It added that, “where possible and appropriate”, it has built up modest increases in its inventory holding levels in light of likely supply challenges in the coming months.
Shares had risen 4.49% to 50.07p at the time of publication.
