August 23, 2012 / 6:56 AM / in 5 years

UPDATE 1-SIG profit dips, sees uneven second half demand

LONDON, Aug 23 (Reuters) - British building materials group SIG Plc posted a slight fall in first-half profit and said it would target further cost savings in 2013 amid declining market volumes.

The company, which supplies insulation, roofing and specialist construction materials to Europe, said on Thursday its underlying profit before tax for the six months to end-June fell 1.9 percent to 34.7 million pounds, versus 35.4 million pounds in the same period last year.

SIG said its sales were flat after having been hit by the weakening economy and adverse weather conditions in Europe. It also raised its interim dividend by 33.3 percent to 1 pence per share.

“We continue to expect market volumes to decline slightly this year and against this background are focused on improving the group’s performance, outperforming our markets and implementing further self-help measures,” Chief Executive Chris Davies said in a statement.

SIG, which operates in 11 European countries, said it was targeting further annual operating cost savings of 7 million pounds in 2013, adding that some 2.3 million pounds of these savings had been made in the first half of the year.

It said its like-for-like sales so far in the second half of 2012 had been in line with the prior year, following a slight decline in May and June, and it had seen little effect from the London Olympics on its operations.

The company also said that its outlook was unchanged from July when it said it expected uneven demand to continue during the second half.

Shares in SIG closed at 94.15 pence on Wednesday, valuing the company at 552.9 million pounds.

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