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 reducing headcount by 6% (c430 roles), closing 17 branches, and management changes.

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

• UK Roofing, Germany, and Ireland outperformed their respective markets, while France and Germany remained the weakest.

Financial highlights

• Revenue: £2,612 million (down from £2,761 million in FY 2023); like-for-like sales growth -4%.

• Gross margin: 24.5% (down 80bps year-over-year); gross profit £640 million (down from £700 million).

• Underlying operating profit: £25 million (down from £53 million); operating margin 1.0% (down from 1.9%).

• Underlying EBITDA: £105 million (down from £132 million); free cash outflow: £39 million, increasing net debt to £497 million.

• Leverage: 4.7x net debt/EBITDA (up from 3.5x); working capital intensity stable at around 10% of sales.

Outlook and guidance

• Like-for-like sales were flat in the first two months of 2025, with positive trends in UK interiors, UK roofing, Germany, and Ireland.

• Expecting gradual market recovery in 2025, with stabilization in France and Germany and continued improvement in the UK.

• Pricing expected to be broadly flat for 2025; operating cost inflation anticipated at 2-3%.

• Capex guidance: £15-20 million; net interest charge expected at £50-55 million.

• Targeting a reduction in leverage and a medium-term group operating margin of 5% as profitability recovers.