SIG (SHI) H1 2024 earnings summary

Executive summary

• Group revenue for H1 2024 was £1.3bn, down 7% like-for-like, reflecting challenging conditions in core markets (UK, France, Germany), but relative outperformance in Poland and Ireland.

• Underlying operating profit fell to £11.7m (0.9% margin), down from £32.7m (2.3% margin) in H1 2023, as cost actions only partially offset lower sales.

• Disciplined cost and cash management led to £24m in cost savings versus H1 2023, including £6m from restructuring, supporting profitability despite lower sales and margin pressure.

• Strategic investments in e-commerce and higher-margin product areas, including new platforms in Germany and France, position the group for long-term growth.

• The business is positioned for recovery, with actions taken to ensure readiness when market volumes return.

Financial highlights

• Revenue declined to £1,316.8m from £1,423m year-over-year; like-for-like sales growth was -7%.

• Gross margin fell to 24.7% (down from 25.6%) due to pricing pressures; gross profit decreased to £324.6m.

• Underlying operating profit was £11.7m; underlying loss before tax was £7m after finance costs.

• Free cash outflow was £21.9m, mainly due to seasonal working capital movements; net debt stable year-over-year at £476.6m post-IFRS 16.

• Restructuring charges totaled £3m, with £5m in other items below underlying profit.

Outlook and guidance

• Full-year 2024 guidance for underlying operating profit remains £20–30m.

• No change to medium-term 5% operating margin target; volume recovery is required to achieve this.

• H2 expected to see further moderation in volume decline and low single-digit price declines; improvement subject to demand evolution, especially in France and Germany.

• CapEx guidance for 2024 slightly reduced to £17–20m; interest expected at £40m for the year.

• Cash tax for 2024 now expected at £11–13m, mostly in H2.