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Annual Results

SIG books loss, reduces dividend

14 March 2017 07:28

SIG Plc swung to a FY pretax loss of £106.3m, from a year-ago profit of £51.3m, in what it styled as a disappointing performance.

SIG had lowered its dividend to 3.66p a share, from 4.6p. Underlying pretax profit for the just-finished year was £77.5m, in line with previously stated £75-£80m range.

The company added that trading in the first two months of 2017 were in line with directors' expectations. It noted that remained competitive and that the company was experiencing some supplier price inflation.

CEO Mel Ewell said SIG had delivered underlying pretax profit in line with the company's previously stated range, but was "disappointed" with the overall financial performance of the group in 2016.

"Although the Board believes that the Group's strategic direction is correct, implementation has proved challenging," said Ewell.

"Accordingly, since November we have slowed or stopped a number of internal initiatives, which will allow our team to refocus on customers and sales growth in order to generate cash and improve ROCE. This will ensure that we build on SIG's significant potential in 2017."

He noted that one consequence of SIG's 2016 profit was that leverage was now higher than the targeted 1.0-times to 1.5-times range.

"Leverage reduction is a key short-term priority and we have already identified a number of actions to strengthen the balance sheet, including the rebasing of our dividend," the CEO added.

"Going forward, we will take all necessary steps to ensure the Group's balance sheet is able to withstand any near-term fluctuations in market demand."

SIG also said it had appointed Meinie Oldersma as its new CEO. Story provided by StockMarketWire.com

Related Company: SHI

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