Building materials group SIG reports pre-tax loss of €61.8m

By Geoff Percival

Friday, March 19, 2010

BRITISH building materials group SIG has reported a pre-tax loss of £55.3 million (€61.8m) for 2009, with its Irish operations again playing a negative role in overall performance.

The Sheffield-headquartered insulation product specialist, which employs around 300 people in Ireland, had made a pre-tax profit of £33.1m in 2008; but attributed a slowdown in construction activity and harsh winter weather as reasons for the negative turnaround in financial performance.

On mainland Europe, SIG operates in Germany, France and the Benelux countries; and it has an Eastern European presence.

The company reported an operating loss of £61.6m (down from a profit of £60.4m for 2008) for its British and Ireland division; and the European division now represents over half of group turnover which stood at £2.74m last year, down by 10.2%.

Regarding the Irish market, where SIG cut over 50 jobs last year, the company said: "The trading environment in Ireland remained extremely challenging during the year, as the full effects of the country’s economic difficulties impacted on all sectors of the construction market."

SIG’s chairman, Les Tench, added that the global economic downturn – which significantly reduced construction activity and, in turn, demand for products – resulted in 2009 being "an exceptionally challenging year" for the company.

"The scale of the decline varied by geography and market sector, with a number of our mainland Europe countries of operation less heavily affected than the UK and Ireland," he added.

He added that the bad weather at the start of this year has slowed trading in 2010 and warned that first half profits are likely to take a severe hit, as a result.

"It is management’s expectation that the shape of the year is now more likely to be significantly more weighted towards the second half and that the pre-tax profit for the first six months will be well below the result for the equivalent period last year," said Mr Tench, before adding that "management action" over the past year-and-a-half "has improved the group’s long-term operational efficiency" and has significantly strengthened its balance sheet.

This appeared in the printed version of the Irish Examiner Friday, March 19, 2010