SIG says trading in line; over-stated cash position

Building products supplier SIG said trading in recent months had met its expectations, with group revenue from continuing operations for 2017 rising strongly.

Revenue growth of 7.5% to £2.8bn included currency movements contributing 3.8% and acquisitions 0.2%, the company said.

Like-for-like revenue for the year grew by 4.0%, in line with management's expectations.

SIG, however, also announced that it had overstated cash and trade payables associated with the issue of cheques around previous period ends. Although there was no impact on the current year's trading statement, it resulted in an overstatement of cash of around £20m at 31 December 2016 and around £27m at 30 June 2017.

If adjusted, this would have resulted in headline financial leverage of 2.3 times at 31 December 2016, compared to a reported 2.1 times, and 1.9 times at 30 June 2017, compared to a reported 1.6 times.

"The group has initiated a rigorous review of controls around cheque issuance and will provide a further update at the time of its full year results," SIG said.

After adjusting for the overstatements, SIG said it was anticipating headline financial leverage of around 1.9 times at 31 December 2017. It said it continued to target a 1.0-1.5 times leverage range during 2018 and was aiming to maintain leverage below 1.0 times over the medium term.

"The improvement in confidence in mainland European markets continues to mitigate a weaker second half margin performance in the UK," the company said.

"As a result, returns on sales have remained stable and our overall expectations for underlying profitability for the full year remain unchanged."