Renovation boom in pandemic augurs well for profits, says building materials supplier

Bengaluru

BUILDING materials supplier SIG said on Monday it expects losses for 2020 to be at the "better end" of its expectations and that it could return to profitability in the second half of 2021, as the building materials supplier recovers from a Covid-19 pandemic-led slump.

SIG, which supplies roofing and insulation materials in Britain, France, Germany and Ireland, among others, said its UK and French businesses witnessed solid demand for renovation, maintenance and improvement during the pandemic.

Britain's construction sector extended its robust recovery from a Covid-19-related lockdown early in December, a survey showed last week, with housing being the biggest driver of construction growth.

The company, which has sought to move on from troubles with its financial forecast, saw several changes last year that included a new CEO whose strategy is to focus on sales and margin revival, the sale of its air handling unit, and the entry of the largest shareholder PE firm CD&R after a capital raise.

SIG also said it expected underlying operating loss for 2020 to be between £57 million (US$76.9 million) and £61 million. It had reported a profit of £33.5 million in 2019.

All of the company's operations are currently open despite a third national lockdown in England that began last week, SIG said. Construction activity is exempted from the latest restrictions.

The supplier to residential, non-residential as well as renovation maintenance and improvement markets, said it expects 2020 revenue to be about 13 per cent lower than last year even as it rose 4 per cent on a like-for-like basis in the fourth-quarter. REUTERS