SIG chief executive builds his stake

The drop in sales – particularly from higher-margin roof merchanting – translated to an underlying pre-tax loss of £54m, down from a £17m profit a year earlier. On the back of a £43m goodwill impairment to reflect the impact of Covid-19, the statutory pre-tax loss was more severe at £125m.

The balance sheet is looking more positive thanks to the £165m secured via an equity raise in July. This included an £83m investment from US private equity giant Clayton, Dubilier and Rice, which is now SIG’s largest shareholder. Together with the proceeds from selling its Air Handling business, this has pushed SIG into a £29m net cash position, excluding lease liabilities.

With trading during lockdown being better than expected, the group believes that full-year sales will be higher than previously thought – it had guided in May that revenue would fall by around £500m versus 2019. Sales in July and August were still down compared with a year earlier, but have been described as “encouraging”. SIG expects the second half to remain lossmaking, albeit “at a lower rate”.

Shortly after these half-year numbers were unveiled, chief executive Steven Francis purchased almost 320,000 shares in aggregate worth £75,000. While that is not the largest director’s deal we’ve ever seen, it is nonetheless a sign of confidence from the person tasked with turning SIG around. Mr Francis took the helm in February with an initial contract running until the end of the year, although the appointment has since been made permanent. His tenure hasn’t been without controversy – in July, more than two-fifths of shareholders voted against handing him a £375,000 bonus after less than four months in the job.