The second half of 2020 is expected to be also loss-making, the board said, but not as bad as the first half.
Earlier this year SIG brought in new management to turn the company around, renegotiated debt and raised 拢165m from investors to refinance the business.
The directors said that trading in the first half was significantly impacted by Covid-19, particularly in March and April during the most severe lockdown period.聽 With the easing of lockdown restrictions in May and June, there was a gradual improvement in trading performance and profitability.
Revenue for the six months to 30th June 2020 on continuing operations was down 24% to 拢818m. Underlying operating loss was 拢43.2m.
Chief executive Steve Francis said he had 鈥渃reated a sound financial base on which we can rebuild the business鈥�.
He said: "The new management team has started to execute its strategy and implement its organisational model, which focuses on our local branch teams, enabling growth and returning to active industry leadership. As previously stated, the essence of our new strategy is re-connection with our people - employees, customers, suppliers and the communities in which we do business.聽 We are a local, sales and service-driven business. We firmly believe that our new strategy for growth will provide the basis, not only for the restoration of profit and strong cash conversion, but also serve as a foundation to play a leading role in our industry in the years to come.
"Long term fundamentals remain sound in the group's markets across Europe.聽 In the short term, significant economic uncertainty remains in all of our markets, although government stimulus for the construction sector, notably in the UK, is welcome.
"Trading was better than anticipated during the peak lockdown months of March to May, compared to our initial estimates of the possible Covid-19 impact, and the Board now expects full year sales to be moderately higher than guided in May. Group sales in July and August were encouraging although down year on year, and market share losses during 2019, particularly in the UK distribution business, will take time to recover. The second half of 2020 is expected to remain loss making, but at a lower rate than the first despite some increased pressure on gross margin in the UK.
"I am extremely encouraged by the energy and excitement with which our people have embraced the new strategy and by the initial progress made in a short space of time.
"The group demonstrated agility and resilience in the first half of the year, dealing with an unprecedented external challenge, and significant internal change and activity. Coupled with a strengthened balance sheet, the foundations are now in place for the business to grow."
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