* H1 underlying pretax profit 41.5 mln stg vs 33.6 mln stg
* Revenue 1.3 bln stg vs 1.2 bln stg
* Raises interim dividend to 1.42 pence from 1.15 pence
* Shares jump as much as 5.3 pct
(Adds comments from CEO, analyst; details, updates share
By Aashika Jain
Aug 12 Building materials supplier SIG Plc
reported a 23.5 percent rise in half-year underlying
pretax profit, helped by a robust improvement in the UK
residential construction market and a mild winter.
Shares in the Sheffield-based company rose more than 5
percent to 181.1 pence in early trade on Tuesday.
The company, which generates more than half of its revenue
from mainland Europe, said conditions in mainland Europe
remained variable with the French construction market expected
to weaken further in the second half.
"We would be expecting the French construction market to be
down 5 percent in the second half compared with last year,"
Chief Executive Stuart Mitchell told Reuters.
In mainland Europe, SIG's biggest market is France, followed
by Germany, Benelux, Poland and Ireland.
Mitchell was, however, bullish on the company's performance
in the UK, which accounted for 47 percent of SIG's total sales,
and said he was expecting the benefits of the pick up in
commercial markets in 2015.
The company supplies insulation, exterior roofing and
interior products to the residential and commercial markets.
SIG is usually impacted by a decline in construction
activity at the end of the cycle due to the nature of its
"Although markets remain variable, SIG should continue to
outperform, in our view, and with further self-help benefits to
come, profit momentum is positive," Panmure Gordon analysts said
in a note and reiterated their "buy" rating on the stock.
Underlying gross margin in the first half rose 40 bps to
26.8 percent, helped by a cost-saving programme launched late
"For the full year, we expect a benefit of 7 million pounds,
ahead of our internal target of 1-5 million pounds of savings,"
The company is looking at expansion via acquisitions to the
tune of 30-50 million pounds for the full year, Mitchell said.
SIG completed three acquisitions in the first half, and
another three in July alone, bringing the total spend on
acquisitions to 14.6 million pounds.
Underlying pretax profit from continuing operations rose to
41.5 million pounds for the six months ended June 30, from 33.6
million pounds a year earlier.
Revenue rose 6.5 percent to 1.3 billion pounds.
SIG said it would pay an interim dividend of 1.42 pence per
share, up from 1.15 pence last year.
Shares in the company were up 2.3 percent at 175.805 pence
at 0813 GMT.
(Reporting by Aashika Jain in Bangalore; Editing by Gopakumar