Insulation and roofing supplier SIG (LON: SHI) has warned that weaker trading in May and June mean that profit will be lower than expected this year. Trading is expected to continue to be tough in the second half. This warning has made SIG the worst performing premium listed share today with a 10.9% decline to 30.75p.
The market was not expecting a trading update from SIG. It says that like-for-like revenues were flat in the first half with an increase in prices of around 9% offsetting lower volumes. Acquisitions and foreign exchange changes mean that there was a 5% increase in first half revenues with interim operating profit of around £33m expected. Net debt will be around £176m.
Trading in Germany and France was particularly weak in May and June. Uncertain trading will continue in the second half. That means that full year operating profit will be at the lower end of the range of £65m-£84m. Peel Hunt has cut its 2023 operating profit forecast by 17% to £70m, while pre-tax profit expectations have been slashed by one-third to £34m. That would equate to a prospective multiple of 18. Peel Hunt has cut its target price to 49p.