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SIG stays cautious despite profits

Roofing and insulation firm SIG today warned recovery prospects remained uncertain despite better-than-expected half-year profits.

Sheffield-based SIG said combined sales rates for May and June were level on 2009 in the UK and Ireland and marginally ahead in mainland Europe.

However, volumes in June were slightly softer than in May and SIG warned that non-residential construction was still moving downwards and looked unlikely to return to growth before the end of the year.

Sales for the six months to June 30 were 4% lower at £1.29bn, prompting SIG to forecast that underlying profits will be above market hopes in August.

However, it added: “Notwithstanding the encouraging sales development in its main businesses in the second quarter, SIG’s management remains appropriately cautious about prospects for the remainder of the year.”

The company, which has shed around 2,800 jobs since 2008, said that it would make further cost savings “where appropriate”.

Floods in November and this winter’s extreme weather conditions disrupted trading at SIG and led to the closure of many sites.

The stabilisation of SIG’s key markets has continued in line with expectations since then, with its UK distribution and merchanting businesses seeing sales growth of 2% in the second quarter of 2010.

The biggest improvement came in the group’s roofing operation, which has the greatest exposure to the recovering residential construction sector.

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