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UPDATE 1-UK housing, acquisitions drive revenue growth at SIG
May 16, 2014 / 8:22 AM / in 4 years

UPDATE 1-UK housing, acquisitions drive revenue growth at SIG

* Revenue from cont. ops rises 9.4 pct in first four months

* UK and Ireland market stronger than mainland Europe

* Shares rise as much as 3 pct (Adds details, analyst comment, share price)

By Aashika Jain

May 16 (Reuters) - British building materials supplier SIG Plc reported a 9.4 percent jump in revenue from continuing operations for the first four months of the year, as a string of small acquisitions mitigated the impact of a strong pound.

The company’s stock rose as much as 3 percent in early trading on Friday to rank among the top percentage gainers on the London Stock Exchange.

SIG, which supplies roofing materials, insulation and interior fittings, said trading in the UK and Ireland, which accounts for slightly less than half of its revenue, continued to be stronger than in mainland Europe.

In March, the UK government said it would extend a popular mortgage scheme aimed at boosting construction of new homes. The government launched the “Help to Buy” scheme in April last year in a bid to free up the mortgage market.

Sheffield-based SIG made eight acquisitions last year, mostly in the roofing materials business and most of them in Britain, according to the company’s 2013 annual report.

“We anticipate further bolt-on acquisitions as we progress through the year,” Panmure Gordon & Co analyst Mike Allen wrote in a note. He has a “buy” rating on the stock.

SIG, helped by growing demand for energy-efficient buildings, said like-for-like sales also increased 9.4 percent for the first four months of the year, compared with a decline of 2.6 percent in the same period last year.

At 13.1 percent, the increase in like-for-like sales was stronger in the UK and Ireland than in mainland Europe, which clocked growth of 6.0 percent.

Like other British companies which earn a large portion of their revenue abroad, SIG has been impacted by the strong pound. The company earns slightly more than half of its revenue from mainland Europe.

The euro fell about 1 percent against the pound in the first four months of the year.

SIG’s shares were up 1.1 percent at 181 pence at 0820 GMT. (Editing by Robin Paxton)

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