SIG (SHI) stock up after raising roof on profit expectations
By Jenni Reid
13:44, 17 December 2021
British roofing, insulation and construction supply firm SIG PLC saw a slight share price rise on Friday as it upped its profit guidance for the year despite supply chain and inflation challenges.
The stock was up 2.88% to 46.36p in early afternoon trading on the London Stock Exchange and is up 52.42% year to date, though it remains below the highs reached over the summer.
Today, the company said fourth-quarter trading had outperformed its forecast and full-year underlying profit would be no less than £40m, ahead of market expectations.
In October, it said that while the company faced supply chain issues in many of its product groups and inflation was adding to its top line, its order books were continuing to build and the outlook for materials shortages had become clearer.
Building up
In September, the company reported sales were up 33% above 2020 and up 1% from 2019 for the first half of the year, with its French and Polish divisions seeing record results.
Underlying operating profit also swung to a £13.6m profit from a £42.9m loss in 2020 in the first half of the year.
Last year, private equity firm Clayton, Dubilier & Rice invested £85m in the company to give it liquidity during the pandemic.
The company recently launched a return-to-growth strategy, which included giving more autonomy to local teams and a UK business restructuring.
Analysts at Liberum upgraded SIG stock to a “buy” in September, writing: “The share price could double if the new management team delivers on its growth strategy”.
They set a target price of 65p on the stock.