SIG (LSE:SHI), the pan-European specialist distributor of building materials, reported a total loss after tax of £14.7m for the six months to 30 June, narrower than the £27.3m loss in the same period last year but still reflecting a construction market weakened by poor weather in the first quarter.
Group revenue fell 1% to £1,293.3m, with like-for-like sales down 1.5% as volumes dropped 2.3% and pricing pressure offset modest cost inflation. Underlying operating profit slipped to £10.5m from £15.4m, at a margin of 0.8%, as cost and productivity actions only partly absorbed weaker demand and pricing pressure.
Free cash outflow widened to £16m from £9m, reflecting normal seasonality and a deliberate inventory build ahead of price increases.
Liquidity stood at £154m at period end, down from £172m a year earlier, comprising £64m of cash and an undrawn £90m revolving credit facility. Net debt rose to £532.4m, including £323.4m of net lease liabilities.
The board has suspended dividend payments, prioritising organic deleveraging following November's strategic review.
Chief executive Pim Vervaat said markets are not expected to recover through the remainder of 2026 and "possibly throughout 2027," prompting the group to accelerate its Vision 2030 self-help plan.
That plan targets a £50m run-rate operating profit improvement by mid-2028, at least £100m of cash generation by the end of 2027, and leverage below 3.0x net debt to EBITDA, alongside a 3% to 5% through-cycle operating margin.
France remained the weak spot, with an underlying operating loss of £6.7m versus £3.9m a year earlier, on a 5.9% like-for-like sales decline tied to political and economic uncertainty.
SIG reiterated that full-year underlying operating profit is expected to be around £25m, toward the lower end of analyst consensus range of £25m to £32m.
News Intelligence what this means for the company
SIG swung to a narrower but still material £14.7m first-half loss as construction demand collapsed, with revenue flat and volumes down 2.3%. The distributor has suspended its dividend and committed to a £50m self-help profit target by mid-2028, signalling management expects no market recovery until 2028—a stark admission that near-term headwinds are structural, not cyclical.
Net debt of £532m (including £323.4m lease liabilities) against liquidity of £154m leaves limited room for error if the market remains depressed through 2027. The dividend suspension and aggressive cost-cutting roadmap reflect a pivot from shareholder returns to survival; the £50m profit improvement target is ambitious given H1 underlying operating profit was only £10.5m, and France—a material market—posted a £6.7m operating loss.
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