Returns at building products distributor SIG (SHI) were hit by £184m-worth of non-underlying items, pushing the group into a £106m loss before tax (see table). The most significant of these were the £100m impairment charge related to the French specialist roofing business Larivière, acquired in 2007, and £40m of losses on sales and agreed sales.
Interim CEO Mel Ewell said he was disappointed with the group's performance during the year, characterising it as "initiative overload", as ambitious attempts to execute a new strategy sapped focus and time from customers and sales growth. Underlying operating profit was £91.3m, down 15 per cent on 2015 at constant currencies. The top line pushed 4 per cent higher, on the same measure, but this was mostly driven by acquisitions.
The group is taking its recovery seriously. It announced the reduction its dividend in line with its policy to build earnings cover to between two and three times, and its intention to reduce leverage and net debt to 1-1.5 times from its current level of 2.1 times.
Analysts at Panmure Gordon are forecasting profit before tax of £77.5m, giving underlying basic EPS of 9.6p in 2017 (from £77.5m and 9.7p in 2016).
| SIG (SHI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 118.6p | MARKET VALUE: | £702m | |
| TOUCH: | 118.6-118.9p | 12-MONTH HIGH: | 150p | LOW: 87p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 91p* | NET DEBT: | 48% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 2.64 | 43.7 | 4.5 | 3.00 |
| 2013 | 2.71 | 2.1 | -2.5 | 3.55 |
| 2014 | 2.63 | 39.0 | 5.6 | 4.40 |
| 2015 | 2.57 | 51.3 | 6.1 | 4.60 |
| 2016 | 2.85 | -106 | -20.1 | 3.66 |
| % change | +11 | -307 | -430 | -20 |
Ex-div: 8 Jun Payment: 7 Jul *Includes intangible assets of £430m, or 73p a share | ||||
