SIG Navigates Choppy Waters, Full-Year Profit Outlook Intact

SIG plc (LON: SHI), a leading European supplier of specialist insulation and building products, issued a Q3 trading update today, revealing flat like-for-like (LFL) revenue growth compared to the same period last year.

Despite challenging market conditions, the company reaffirmed its full-year underlying operating profit expectations, aligning with market consensus.

Group LFL sales remained stagnant in Q3; however, underlying volumes experienced a modest 1% increase. This indicates that subdued demand continues to plague the construction sector across SIG's key markets, with no significant recovery signs emerging during the quarter.

Pricing pressures further compounded the issue, offsetting slight input cost inflation and resulting in a net 1% price reduction.

A regional breakdown reveals a mixed performance. The UK Interiors business demonstrated strong outperformance, recording a 5% LFL growth in Q3 and 7% year-to-date.

Conversely, Germany experienced an unexpected weakening, with LFL sales declining by 5% during the quarter. France showed some improvement compared to H1, with LFL declines easing to 2%. Poland stood out with a positive 8% LFL growth in Q3.

SIG's management is actively pursuing operational initiatives aimed at enhancing cost and working capital efficiency. The UK Interiors and Benelux businesses are already reaping the rewards of self-help programs implemented last year, particularly those related to material cost reductions and improved top-line performance.

Key Financial Metrics:

• Group LFL Sales (Q3): 0% growth
• Group LFL Sales (Year-to-Date): 1% growth
• UK Interiors LFL Growth (Q3): 5%
• Germany LFL Decline (Q3): -5%

The company's outlook acknowledges the ongoing market headwinds, but the Board remains confident in achieving its full-year underlying operating profit target. Productivity and cost control measures are expected to play a vital role in underpinning profitability.

SIG believes its operational gearing will position it favorably to capitalize on market recoveries when they eventually materialize. The company collated analyst expectations are for Full Year 2025 underlying operating profit (EBIT) of £31.6m, within a range of £30m to £35m, as at 16 October 2025.

The flat revenue growth and reaffirmed profit outlook suggest that SIG is successfully navigating a difficult market. The company's cost control measures and market share gains are positive signs. However, investors should remain cautious due to the ongoing uncertainty in the European construction sector.

CEO Pim Vervaat, who joined the company on October 1, 2025, commented, “I have been impressed with the energy, commitment and knowledge of the many people I have met across the Group so far… I look forward to working with the Board and the management teams in driving substantial value over time.”