SIG reports modest rise in profit, announces new CEO

(Sharecast News) - SIG reported a modest rise in first-half operating profit on Tuesday, and confirmed its full-year outlook despite subdued demand across its European markets. The London-listed building materials supplier also named Pim Vervaat as its next chief executive, with a planned transition to chair in 2027.

Group revenue for the six months ended 30 June came in at £1.31bn, broadly flat on a like-for-like basis, while underlying operating profit rose to approximately £15m from £12m a year earlier.

The company said ongoing productivity initiatives were helping to offset weak demand and pricing pressures, particularly in Europe where construction activity remains at a low point in the cycle.

Like-for-like sales in the UK rose 5%, led by an 8% increase in the Interiors segment and a 5% gain in Roofing.

However, European operations saw a 1% decline, with sales down 7% in France Interiors and 4% in France Roofing.

Volumes were up 2% across the group, but a 1% net reduction in pricing offset modest inflation, leading to flat overall growth.

Net debt at the end of June stood at £525m, up from £497m in December, including leases.

Liquidity remained robust at £171m, supported by £81m in cash and an undrawn £90m revolving credit facility.

The group recorded a free cash outflow of about £10m during the period, with working capital initiatives mitigating much of the usual seasonal drag.

Its board maintained full-year guidance, stating it expected to deliver underlying operating profit in line with market expectations.

However, it noted that demand remained weak in the second quarter and expressed caution over the likelihood of any meaningful recovery in the near term.

"The board believes the group remains very well positioned to benefit from the market recovery when it occurs," SIG said.

Separately, SIG announced the appointment of Pim Vervaat as chief executive officer and chair designate.

Vervaat would assume the chief executive role on 1 October, succeeding Gavin Slark, who had stepped down and would remain on garden leave until the end of the year.

Vervaat previously served as CEO of Constantia Flexibles and led RPC Group as both CFO and CEO.

He is currently the senior independent director of Luceco plc.

Commenting on the appointment, chair Andrew Allner said: "The board is delighted to announce that Pim has agreed to join SIG as its CEO and non-executive chair designate.

"He has significant experience of operating in decentralised European businesses and a strong track record of delivering shareholder value."

Vervaat was expected to transition into the role of non-executive chair after approximately 18 months, when Allner steps down following a full term.

In the interim, CFO Ian Ashton would oversee daily operations.

Reporting by Josh White for Sharecast.com.