The Irish division of UK specialist building products supplier SIG saw like-for-like revenues increase 8% in 2017, writes Geoff Percival.
In a trading update, the group also reported total sales growth of 4% for last year. It is a rival of Kingspan in the building insulation and energy management market.
It said an increasingly difficult UK market is being offset by a recovery in its operations in continental Europe.
Mainland Europe revenues rose 5.8% last year; underpinned by strong performances in France, Germany, and Poland. Its traditionally core UK and Ireland division saw combined sales increase 2.1%.
However, SIG’s shares fell by over 4% on the back of it also noting a historical overstatement of cash associated with the issuance of cheques around previous reporting period ends.
This has affected the group’s debt reduction aims, with net debt now expected to be 1.9 times earnings at year-end rather than the 1.6 times initially targeted.
“Leverage reduction remains a key medium-term priority and the group continues to focus on structural reductions in levels of working capital and sustained profit improvement to drive leverage lower,” the company said.
SIG’s new management said it would undertake a rigorous review of controls around cheque issuance and will update investors at the time of its full-year 2017 results presentation in early March.
“This update acts as a timely reminder of the challenges facing SIG’s current management team,” Davy said.