SIG's (SHI) cost-cutting measures and the sale of three underperforming assets helped the insulation and roofing materials group drive its capital return (ROCE) by 90 basis points to 10.3 per cent in 2014. The group's operating profit came in at £53.2m, against £15.4m a year earlier, although last year's figures were lumbered with a £42.8m loss on the disposal of SIG's German roofing business.
Sales in the UK and Ireland rose 9 per cent on a like-for-like business, with the residential market experiencing good growth. Pricing pressures meant margins for the group's Irish business fell 30 basis points, but overall margins rose 50 basis points to 26.7 per cent. This was due to improved performance in the UK roofing business, coupled with savings from SIG's procurement initiative.
Trading conditions in mainland Europe were more difficult during 2014. The French construction market remained challenging, with like-for-like sales decreasing 2.1 per cent to £586m. Poland was another weak spot. Sales fell just over 10 per cent, partially due to the closure of two loss-making branches, while regional business confidence was shaken by the Ukraine crisis.
Broker Panmure Gordon expects adjusted EPS of 12.8p this year, up from 11.9p in 2014.
SIG (SHI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 193p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 192-193p | 12-MONTH HIGH: | 215p | LOW: 143p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 112p* | NET DEBT: | 19% | |
| Year to 31 Dec 2014 | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 2.67 | -80.8 | -13.0 | nil |
| 2011 | 2.81 | 7.5 | nil | 2.25 |
| 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 |
| % change | -3 | +1,757 | - | +24 |
Ex-div: 30 Apr Payment: 29 May *Includes intangible assets of £469m, or 79p a share | ||||
