SIG (SHI) H2 2024 earnings summary

Executive summary

• Delivered robust performance in 2024 despite challenging construction markets, with group revenue down 4% to £2.6 billion year-over-year.

• Operating profit was £25 million, supported by £42 million in operating cost reductions, offsetting £18 million of cost inflation.

• Strategic restructuring included targeted investments, management changes, a 6% headcount reduction (c430 roles), and closure of 17 branches.

• Successful €300 million refinancing in October 2024 extended debt maturities to 2029, providing financial stability.

• UK Roofing, Germany, and Ireland outperformed relative to markets, while France and Germany remained the weakest.

Financial highlights

• Group sales declined 4% like-for-like to £2,612 million; gross margin fell by 80 basis points to 24.5% due to pricing pressures.

• Underlying operating profit was £25 million, in line with prior guidance; operating margin 1.0% (down from 1.9%).

• Underlying EBITDA was £105 million (down from £132 million); underlying loss before tax of £14 million after finance costs.

• Free cash outflow of £39 million, driven by lower profit and one-off costs, increasing net debt to £497 million (including leases); leverage rose to 4.7x post-IFRS 16.

• Gross profit was £640 million (down from £700 million); working capital intensity remained stable at around 10% of sales.

Outlook and guidance

• Like-for-like sales flat in the first two months of 2025; gradual market recovery expected through H2.

• Pricing expected to be broadly flat in 2025, with OpEx inflation at 2-3%; CapEx guidance for 2025 is £15-20 million; interest costs to rise by £10 million year-over-year.

• U.K. interiors expected to return to profit in 2025, even without market uplift.

• Medium-term target of 5% Group operating margin; business model positioned for margin rebound as markets recover.