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SIG profits half as sales fall

Insulation specialist SIG today revealed a 10 per cent drop in sales in 2009 as profits halved.

In a statement released to the stock market today, the firm said that sales fell to £2.74 billion in 2009, down from £3.05 billion in 2008.

Sales in its European division actually increased over 2009, being helped by favourable currency movements, while the UK business saw a sales fall of 22 per cent at stores open for at least one year.

Before taking into account exceptional charges, it made a profit of £60.6 million, a fall of 56 per cent from the £137 million made in 2008.

Exceptional charges of £116 million for writing down the value of businesses acquired, restructuring costs and a write down in the value of its Irish business resulted in losses of £55 million.

SIG chairman Chris Davies said: “2009 was an exceptionally challenging year for SIG, with the global economic downturn significantly reducing construction activity and hence demand for the products and services supplied by the Group.”

He added: “The extreme cold weather conditions and snow experienced across the UK and Mainland Europe in January and February have resulted in a particularly slow start to trading in 2010.

“It is management’s expectation that the shape of the year is now more likely to be significantly more weighted towards the second half and that the pre tax profit for the first six months will be well below the result for the equivalent period last year.”

The group’s net debt was reduced to £255 million at the end of 2009, from £697 million a year earlier. This is after a placing of new shares in the firm raised £325 million during 2009.

SIG’s Miller Pattison subsidiary, whose main activity is the retrofitting of thermal insulation in the walls and lofts of houses, saw volumes under the CERT scheme grow strongly in the first half of the year, but then fall away from summer onwards.

This reflected a reduction in funding from the utility companies, pending the outcome of government consultations to increase the value of work to be carried out during the lifetime of the current arrangements and to extend the for a further year to 2012.