SIG , a leading distributor of building products has reported FY 2013 results this morning that show an improvement in H2 trading levels versus the challenging period experienced in H1. Revenue for 2013 increased to £2.582 billion (+4.4% reported, -.4% LfL) with LfL sales increasing by 2.2% in H2 (H1: -3.1%). Underlying operating profit came in at £99.5 million (+3.5%) while underlying earnings per share were higher by 7.2%, amounting to 10.4p. SIG is also increasing the dividend per share to 3.55p (+18.3% YoY). <p>

Management note that while the H1 period of 2013 was challenging, there was an increase in activity in the second half of the year and believe that they outperformed the market by 2.8% for the year as a whole. The company benefitted from a positive translation effect during the year, somewhat flattering the results on a reported basis while the underlying performance was mixed with the UK increasing, offsetting to a degree the more challenging markets for SIG in Germany and Austria. <p>

In terms of outlook, SIG is reiterating the view expressed by management earlier in the year that is looking for an increase in the recovery momentum in 2014. SIG has benefitted from the mild weather across its markets during the start 2014 and is confident of seeing the benefits of self help measures flow through in the coming years. In the UK, residential construction demand is expected to be strong, offsetting a flat non-residential end market while the expected performance across Europe will vary by country.
<p><h5>David Holohan</h5>



Disclaimer: www.merrion-capital.com/disclaimer

Merrion Stockbrokers Limited (registration no. 307878)
is a limited liability company whose registered office is at
Block C, The Sweepstakes Centre, Ballsbridge, Dublin 4, Ireland.