SIG’s (SHI) results for the six months to June 2017 paint a picture of management engaged in the often thankless task of putting its house in order. Reported profit, earnings and the dividend may be down, but the building products distributor managed to cut £93.4m from net debt, bringing leverage down to 1.6 times cash profit, from 2.1 times at the same point last year. Chief executive Meinie Oldersma said this will continue to be a focus until it reaches the target range of 1-1.5 times, which it hopes to achieve during 2018.
Management has also been looking to rid itself of non-core businesses. As a consequence, the group has booked related impairments, with losses made on sales and restructuring charges totalling £49m in the period, up from £9.5m in 2016. Since the period end, the group has disposed of its UK building plastics business for up to £20.3m. Nevertheless, core markets remain challenging, with revenue for the UK and Ireland division down 3 per cent to £715.5m. However, strip out restructuring charges and the picture is more positive, with revenue from continuing businesses up 1.3 per cent on a like-for-like basis, with sales in mainland Europe up 4.3 per cent to £716m.
Analysts at Peel Hunt are forecasting adjusted profit before tax of £80m, giving EPS of 10.7p in 2017 (from £77.5m and 9.7p in FY2016).
| SIG (SHI) | ||||
| ORD PRICE: | 161p | MARKET VALUE: | £952m | |
| TOUCH: | 160.9-161.3p | 12-MONTH HIGH: | 171p | LOW: 86.6p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 88p* | NET DEBT: | 32% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.38 | 38.4 | 4.80 | 1.83 |
| 2017 | 1.44 | -10.7 | -2.70 | 1.25 |
| % change | +5 | -128 | -156 | -32 |
| Ex-div: | 5 Oct | |||
| Payment: | 3 Oct | |||
| *Includes intangible assets of £388m, or 66p a share | ||||
