Company Announcements

 

6 August 2024

 

SIG plc

Results for the six months to 30 June 2024

 

SIG plc ("SIG", "the Group" or "the Company") today announces its half year results for the six months ended 30 June 2024 ("H1 2024" or "the period").

	H1 2024	H1 2023
Revenue	£1,316.8m	£1,423.4m
LFL1 sales growth	(6.8)%	(0.2)%
Gross margin	24.7%	25.6%
Underlying2 operating profit	£11.7m	£32.7m
Underlying2 operating margin	0.9%	2.3%
Underlying2 (loss)/profit before tax	£(6.6)m	£15.0m
Underlying2 (loss)/earnings per share	(0.8)p	0.6p
Net debt	£476.6m	£468.8m
Net debt (pre-IFRS 16)	£178.6m	£176.2m
Statutory results	H1 2024	H1 2023
Revenue	£1,316.8m	£1,423.4m
Operating profit	£7.1m	£30.0m
(Loss)/profit before tax	£(11.3)m	£12.2m
Total (loss)/profit after tax	£(14.2)m	£4.7m
Basic (loss)/earnings per share	(1.2)p	0.4p

 

 

Financial highlights

·    Group revenue of £1,317m, representing a like-for-like¹ ("LFL") revenue decline of 6.8% versus prior year, reflecting:

o  Prolonged challenging trading conditions in our larger businesses, leading to lower volumes

o  Pricing also down, partly due to modest net input cost deflation  

·    Group underlying operating profit of £11.7m at an operating margin of 0.9%, with effective cost actions mitigating in part the impact of lower sales

·    Disciplined cash management; net debt of £477m post‐IFRS 16 and £179m pre‐IFRS 16, both only marginally up vs prior half year

 

Operational highlights

·    LFL revenue performance reflects challenging conditions in UK Interiors, France and Germany, while Poland and Ireland delivered growth against a stronger local backdrop

·    All businesses continue to perform well relative to their markets, most notably in Germany and UK Roofing

·    Operating margins impacted by the operational gearing effect of reduced volumes and pricing year-on-year

·    Further permanent cost restructuring actions taken in H1 2024 driving reductions in central and operating company overheads, now totalling £15m in annualised savings since H2 2023 (£6m year-over-year saving in H1 2024); total underlying savings in operating costs in the period of £24m vs the prior year, before inflation

·    Continuing progress in all geographies in H1 in improving underlying operational effectiveness and efficiency, and in execution of strategic initiatives expected to drive improved performance over the medium-term

 

Outlook

·    The Group's outlook for FY 2024 remains in line with the recent update published on 24 June:  

o  FY 2024 underlying operating profit expected to be in the range of £20m-£30m

o  Increasing benefits from productivity and cost initiatives underpin continued expectation of a slightly stronger second half   

o  The extent of this H2 improvement is subject to the evolution of demand conditions, particularly given market uncertainties in France and Germany, and recognising the sensitivity of operating profit to relatively small movements in sales

·     The Board remains confident in achieving the Group's operating margin target of 5% in the medium-term

 

Commenting, Gavin Slark, Chief Executive Officer, said:

"Our results in the first half reflect the prolonged challenging market conditions we are currently facing across most of our European businesses. In light of these conditions, we took further actions to reduce our permanent cost base in the half, which will benefit us in the future.

During the period, we also made further progress on our strategic initiatives to improve our underlying operations and to position us to capture additional growth when markets improve. This has included the launch of a new omnichannel and e-commerce platform for our business in Germany, with France to follow, both of which will enhance future profitability as well as customer experience and convenience. Across all of our operations we are implementing a range of initiatives under our 'GEMS' strategy, which will lead to a higher-value sales mix and will support delivery of our 5% operating margin target. The operational gearing in our business model applies equally strongly in conditions of rising demand, and, accordingly, the Board believes the Group remains well positioned to benefit from the market recovery when it occurs."

Notes

1. Like-for-like ("LFL") is defined as the growth/(decline) in sales per working day in constant currency excluding any current and prior year acquisitions and disposals. Sales are not adjusted for branch openings or closures.

2. Underlying represents the results before Other items. Other items relate to the amortisation of acquired intangibles, net restructuring costs, costs related to acquisitions, cloud based ERP implementation costs and other specific items. Other items have been disclosed separately in order to give an indication of the underlying earnings of the Group.

 

A live presentation and Q&A session, hosted by Gavin Slark, CEO, and Ian Ashton, CFO, will take place at 10.15am UK time today at the offices of FTI Consulting. The presentation and Q&A session will be webcast live, and a recording of both will be available after the event.

Please click the link below to join the webinar:

https://storm-virtual-uk.zoom.us/s/85286554999

 

Webinar ID: 852 8655 4999

 

Or One tap mobile:

    +442080806592,,85286554999# United Kingdom

    +443300885830,,85286554999# United Kingdom

Or join by phone:

United Kingdom: +44 208 080 6592 or +44 330 088 5830 or +44 131 460 1196 or +44 203 481 5237 or +44 203 481 5240 or +44 203 901 7895 or +44 208 080 6591

International numbers available: https://storm-virtual-uk.zoom.us/u/kcnQYmdLHQ

 

Enquiries SIG plc		+44 (0) 114 285 6300
Gavin Slark	Chief Executive Officer
Ian Ashton	Chief Financial Officer
Sarah Ogilvie	Head of Investor Relations
FTI Consulting	Richard Mountain	+44 (0) 20 3727 1340

About

SIG plc is a leading pan-European supplier of specialist building products to trade customers across the UK, France, Germany, Ireland, Benelux and Poland. With leading market positions in specialist insulation, interiors and exteriors products, as well as a growing position in construction accessories and other specialisms, SIG facilitates one-stop access to an extensive product range, provides expert technical advice and coordinates often complex delivery requirements. For suppliers, SIG offers a channel through which products can be brought to a highly fragmented market of smaller customers and sites that are of insufficient scale to supply direct. SIG employs more than 7,000 employees across Europe and is listed on the London Stock Exchange (SHI). For more information, please visit the Company's website, www.sigplc.com.

 

 

Trading overview

Group LFL revenue was 7% down year‐on‐year in the period, with volumes and pricing having a broadly equal effect.

Reported Group revenue was also 7% lower in the period, with a negligible impact in aggregate from movements in exchange rates and working days.

1 January to 30 June 2024 Revenue	LFL growth	£m
UK Interiors	(14)%	250
UK Roofing	(2)%	182
UK Specialist Markets	(7)%	121
UK	(9)%	553
France Interiors	(7)%	105
France Roofing	(11)%	215
Germany	(3)%	220
Poland	3%	119
Benelux	(12)%	54
Ireland	9%	50
EU	(5)%	763
Group	(7)%	1,317

Market conditions were challenging through H1 across our larger EU based businesses (58% of revenue) and in the UK (42% of revenue). This included prolonged weak demand in France, where product volumes to new build construction projects were weaker in both residential and commercial. Demand was also weak in Germany, including in commercial new build, the larger element of our business in Germany.

In the UK, our Interiors business experienced lower volumes and weaker market demand. Its LFL decline included a 3% reduction in sales from strategic branch closures, a part of our restructuring initiatives that will help drive profitability in the near and longer term. Increased price competition in drylining has also been a factor. UK Roofing also experienced weaker revenue but has continued to trade with good momentum relative to the market and is benefiting from increasingly strong execution, allied with selective investment in sales and marketing. Specialist Markets experienced weaker demand for Performance Technology and Building Solutions while demand for Construction Accessories has been somewhat more resilient.

Volumes and market conditions are stabilising in Poland and Ireland, both of which are further through the cycle than our other markets. This, combined with strong execution by our teams, means they have both reported positive sales growth and more robust profitability. Our Benelux business continues its gradual recovery in underlying performance after some years of underperformance, although as elsewhere a very weak market backdrop held back sales in the period.

All the businesses have made progress on driving operational improvements and efficiencies, as well as stronger customer service, as detailed below under Strategic Progress. We will continue to focus on cost discipline and on ensuring that we have the appropriate level of cost and infrastructure across the Group.

 

 

Strategic progress

During H1 2024 the Group has progressed actions to improve its operational performance towards our medium-term target of a 5% operating profit margin. While market conditions create a near-term headwind to margin progression, we are taking actions in four strategic areas to improve the way we operate now, to better position our business to win as markets recover and to take advantage of long-term growth trends in the industry. 

Grow

We are focused on delivering above-market growth in all of our businesses.

In H1 2024, our LFL growth rates in our largest operating companies continued to show good performance relative to the market.

In the UK, our Roofing business continues to trade with good momentum against the wider market, and is benefiting from investments made in the customer service experience in our branches, sales, marketing and branch merchandising. Growth rates in the Interiors business reflect the decline in market volumes, with drylining most challenging. However, adjusting for the 3% revenue impact from branch closures, data from our suppliers regarding overall market volumes indicates that we have performed robustly relative to the market in Interiors in the period.

In France, both businesses delivered a LFL performance that we believe was ahead of the local market. In Germany, the LFL growth achieved was notably stronger than the wider market and reflects the business's continued momentum following turnaround actions, including reinvestment in sales and branch employee engagement, over the last three years.

Execute

We are focused on strengthening our operational execution and margin across our geographies.

During H1 2024 we took further restructuring actions, in addition to those started in H2 2023, to reduce our permanent cost base to mitigate the impact of lower volumes on profitability. These actions have included reducing the number of roles in the business by approximately 250 year-over-year, with the focus on reducing Group and operating company central overheads. Outside formal restructuring initiatives, we have also reduced headcount, including in branches, through the non-replacement of leavers. Some of the latter may be temporary reductions, depending on when and to what extent volumes return, and others will be permanent.

In H1 2024 we also decided to close a number of branches that were either consistently underperforming or were in locations we can either service more effectively from another branch or which have seen shifts in local market growth dynamics. In total we closed seven branches in H1, with another three in progress. These closures have been in the UK, France, and Germany.

These restructuring actions, together with those commenced in H2 2023, are expected to generate £15m in annualised cost savings, with the majority of these benefiting 2024. £10m of these annualised savings are as previously announced, with a further £5m identified in H1 2024. Of the expected year-over-year impact in FY 2024 of c£12m, around £6m benefited H1. The one-off cost to deliver these £15m restructuring savings will be £12m-£13m, with £6m cash spent to date, including c£3m in H1 2024, which followed a similar amount in H2 2023.

Along with other initiatives, notably the rigorous management of normal headcount churn as referenced above, operating costs dropped by £19m over the prior year in the period. After adjusting for inflation of £7m and a small amount of FX, underlying savings in operating costs were £24m in the period.

Modernise

We are acting to modernise our operations to increase efficiency and productivity.

We have made good progress in H1 in expanding our customer-facing e-commerce platforms. Germany completed the development of their new omnichannel sales model and new e-commerce platform. A pilot site went live in April with good initial usage and with customer feedback incorporated into the final development. The full launch is on track for Q3 2024. In France a new e-commerce site for France Interiors is also in development and being progressed towards a targeted launch in Q1 2025. As in Germany, this platform will also leverage our successful e-commerce experience in Poland.  

Both platforms will allow us to provide a more seamless and convenient customer experience, by allowing them to purchase from SIG through the channel most convenient for them - anywhere, anytime. We expect both platforms, once fully established, to increase revenue through greater share of wallet from existing customers, and within that to also increase private label sales per customer, with these sales typically being higher margin. There is also greater cost efficiency to the SIG sales teams in serving customers through an omnichannel model.

Specialise

We will accelerate growth in the more specialist and higher return businesses within our portfolio.

In H1 2024 our UK Specialist Markets business has developed a number of innovative new products in our performance materials manufacturing and fabricating businesses. These new products target future market demand for greater fire protection in high rise and other buildings, following changes under the UK Building Safety Act. Our performance materials business launched 10 new products in the period and has a further pipeline of over 60 products planned for launch in due course.

In UK Roofing, the business has continued sales development activities to support our new solar product offering launched last year. This has been rolled out nationwide, and our sales team are now able to sell solar products alongside our core roofing ranges. We continue to develop customer support materials and tools to help our roofing customers capture the growing demand for solar as an adjacent but complementary market to our traditional flat and pitched roofing business.

In France, our Roofing business has also continued with business development activities across the branch network to support the launch of solar products, for which we anticipate long-term growth in demand. In H1 this included a new dedicated warehouse for solar product storage and a dedicated key account sales team for solar products.

The French RE2020 regulation supports long-term demand for building products that help building decarbonisation. In H1 2024, we added three new suppliers of bio-based products as we continue to evolve our offering to be ready to capture demand driven by this long-term trend when market conditions improve.

 

FINANCIAL REVIEW

Revenue

Group revenue of £1,316.8m (H1 2023: £1,423.4m) was 7% lower on a reported basis, including negligible impact in aggregate from movements in exchange rates and working days. LFL revenue was hence also 7% down year-on-year in the period, with declines in pricing and volumes having a broadly equal effect. Pricing was down in all markets, and volumes in the majority.

Profit

Underlying and statutory gross profit decreased 11.0% to £324.6m (H1 2023: £364.8m) with a reduced gross profit margin of 24.7% (H1 2023: 25.6%). The reduction in gross margin was due primarily to increased pricing pressure in the current difficult demand environment.

The Group's underlying operating costs were down 5.8% to £312.9m (H1 2023: £332.1m). The decrease was primarily due to operating cost initiatives, including those from restructuring actions taken from H2 2023 onwards, and partly due to lower volumes, with these two factors partially offset by the impact of inflation on operating costs, with the biggest impact of the latter being on wages and salaries.

As a result, Group underlying operating profit was £11.7m (H1 2023: £32.7m), at an operating margin of 0.9% (H1 2023: 2.3%). Reported operating profit was £7.1m (H1 2023: £30.0m) after Other items of £4.6m (H1 2023: £2.7m), which are set out further below.

Segmental analysis

UK

	Revenue H1 2024 £m	Revenue restated1 H1 2023 £m	LFL sales H1 2024	Underlying operating (loss)/profit H1 2024 £m	Underlying operating profit restated1 H1 2023 £m
UK Interiors	250.4	290.1	(14)%	(1.2)	2.4
UK Roofing	182.1	184.1	(2)%	4.9	4.5
UK Specialist Markets	120.9	128.5	(7)%	2.3	5.7
UK	553.4	602.7	(9)%	6.0	12.6

1. The H1 2023 segmental information has been restated in order to present on a consistent basis with the current period, see Note 1 for further details.

Following a change in the UK management structure announced in November 2023, we now report three segments in the UK, with the Specialist Markets businesses separated out from the Interiors and Roofing businesses under which they were reported previously.

Reported revenue in UK Interiors, a specialist insulation and interiors distribution business, decreased by 14% to £250.4m (H1 2023: £290.1m). LFL revenue was down 14% year-on-year with the impact of a declining market and a headwind from input price deflation. This included a 3% reduction in LFL sales due to strategic branch closures, part of our restructuring initiatives to improve profitability. The decline in revenue, together with pricing pressure, partially offset by operating cost reductions, resulted in an operating loss of £1.2m (H1 2023: £2.4m profit).

Reported revenue in UK Roofing, a specialist roofing merchant, decreased slightly to £182.1m (H1 2023: £184.1m), with LFL revenue down 2%. This was largely due to deflation in certain materials while volumes were broadly flat. A small reduction in gross margin, offset by operating cost reductions, resulted in operating profit of £4.9m (H1 2023: £4.5m).

Reported revenue in our UK Specialist Markets decreased by 6% to £120.9m (H1 2023: £128.5m). LFL revenue declined 7%, driven by a softer market, and by input price deflation in steel, which is a bigger element of these businesses than elsewhere in the Group. These factors, coupled with operating cost inflation, resulted in a reduction in operating profit to £2.3m (H1 2023: £5.7m).

France

	Revenue H1 2024 £m	Revenue H1 2023 £m	LFL sales H1 2024	Underlying operating profit H1 2024 £m	Underlying operating profit H1 2023 £m
France Interiors	105.1	116.4	(7)%	3.6	6.4
France Roofing	214.9	249.7	(11)%	4.9	12.1
France	320.0	366.1	(9)%	8.5	18.5

France Interiors, a structural insulation and interiors business trading as LiTT, saw revenue decrease by 10% to £105.1m (H1 2023: £116.4m), and by 7% on a LFL basis. This was driven by lower demand and volumes together with input price deflation, as opposed to the price inflation seen in H1 2023. The revenue decline, coupled with increased margin pressure, resulted in a £2.8m decrease in operating profit to £3.6m (H1 2023: £6.4m).

Revenue in France Roofing, a specialist roofing business trading as Larivière, decreased 14% to £214.9m (H1 2023: £249.7m), and by 11% on a LFL basis. Demand and volumes were lower due to continued softening of the new build market and input price deflation. The decrease in revenue and reduced gross margin was partially offset by reduced operating costs, resulting in an operating profit decrease of £7.2m to £4.9m (H1 2023: £12.1m).

Germany

	Revenue H1 2024 £m	Revenue H1 2023 £m	LFL sales H1 2024	Underlying operating profit H1 2024 £m	Underlying operating profit H1 2023 £m
Germany	219.9	234.8	(3)%	3.0	9.6

Revenue in wego/vti, our specialist interiors, flooring and insulation distribution business in Germany, decreased by 6% to £219.9m (H1 2023: £234.8m). LFL revenue was down 3% year-on-year, largely driven by deflation, with broadly stable volumes. Gross margin also declined due to increased price competition, resulting in lower operating profit of £3.0m (H1 2023: £9.6m).

Poland

	Revenue H1 2024 £m	Revenue H1 2023 £m	LFL sales H1 2024	Underlying operating profit H1 2024 £m	Underlying operating profit H1 2023 £m
Poland	118.7	110.2	3%	2.6	2.7

In our Polish business, a market leading distributor of insulation and interiors products, revenue increased to £118.7m (H1 2023: £110.2m), representing a 3% increase on a LFL basis. Residential building activity improved year-on-year along with further improvements in our market position. This was offset by operating cost inflation, resulted in a slightly lower operating profit of £2.6m (H1 2023: £2.7m).

Benelux

	Revenue H1 2024 £m	Revenue H1 2023 £m	LFL sales H1 2024	Underlying operating  (loss) H1 2024 £m	Underlying operating  (loss) H1 2023 £m
Benelux	54.4	62.1	(12)%	(2.4)	(1.6)

Revenue from the Group's business in Benelux decreased by 12% to £54.4m (H1 2023: £62.1m) with LFL revenue also down 12%. This reflected continued market decline, and alongside this gross margin has declined due to strong price competition, only being partially offset by operating cost savings. The first half performance resulted in an operating loss of £2.4m (H1 2023: £1.6m loss).

Ireland

	Revenue H1 2024 £m	Revenue H1 2023 £m	LFL sales H1 2024	Underlying operating profit H1 2024 £m	Underlying operating profit H1 2023 £m
Ireland	50.4	47.5	9%	1.3	0.5

Our business in Ireland comprises a specialist distributor of interiors and exteriors, and three separate specialist contracting businesses offering office furnishing, industrial coatings and kitchen/bathroom fit out. Revenue in total increased by 6% to £50.4m (H1 2023: £47.5m), and by 9% on a LFL basis, as a result of commercial initiatives to improve market share combined with a slightly healthier market backdrop than the prior year. Operating profit improved as a result by £0.8m to £1.3m (H1 2023: £0.5m).

Reconciliation of underlying to statutory result

Other items, being items excluded from underlying results, during the period amounted to £4.7m (H1 2023: £2.8m) on a pre-tax basis and are summarised in the table below:

	H1 2024 £m	H1 2023 £m
Underlying (loss)/profit before tax	(6.6)	15.0
Other items - impacting (loss)/profit before tax:
Amortisation of acquired intangibles	(1.1)	(1.6)
Net restructuring costs	(2.8)	-
Costs related to acquisitions	(0.2)	(1.4)
Cloud based ERP implementation costs	(0.4)	(1.3)
Onerous contract costs	-	(0.2)
Other specific items	(0.1)	1.8
Non-underlying finance costs	(0.1)	(0.1)
Total Other items	(4.7)	(2.8)
Statutory (loss)/profit before tax	(11.3)	12.2

Other items are disclosed separately in order to provide a better indication of the underlying earnings of the Group.

 

Taxation

Tax for the six month period ended 30 June 2024 is determined based on applying full year estimates of the annual effective tax rate for individual jurisdictions to the underlying profit/loss before tax for the six month period. This results in an effective "negative tax rate" of 47.0% on the underlying loss before tax (30 June 2023: 53.3%; 31 December 2023: 74.7%; both positive rates on underlying profits before tax). Tax losses cannot be surrendered or utilised cross border, and the Group is therefore subject to tax in some countries and not in others. Tax losses in the UK and Benelux businesses are not currently recognised as deferred tax assets, which impacts the overall and underlying effective tax rate. The relative proportions of these losses compared to the total Group underlying (loss)/profit before tax is higher for the six months to 30 June 2024 compared to prior periods, and the Group has incurred an overall underlying loss before tax for the current period, resulting in the abnormal effective tax rate.

Pensions

The Group operates a number of pension schemes, four of which provide defined benefits based upon pensionable salary. The UK scheme has assets held in a separate trustee administered fund, and three are overseas book reserve schemes. The UK defined benefit pension scheme obligation is calculated on a year to date basis, using the latest triennial valuation as at 31 December 2022 which was concluded at the end of March 2024.

The IAS 19 valuation conducted as at 31 December 2023 has been updated to reflect current market conditions, and as a result an actuarial gain of £1.5m has been recognised within the Condensed consolidated statement of comprehensive income. The total net pension liability in relation to defined benefit schemes at 30 June 2024 is £16.4m (30 June 2023: £21.0m; 31 December 2023: £20.3m), including an £8.9m deficit (30 June 2023: £13.5m; 31 December 2023: £12.7m) in the UK scheme. The movement in the period relates principally to an actuarial gain of £1.5m together with the recognition of the scheduled annual contribution into the UK scheme of £2.5m.

Financial position

Overall, the net assets of the Group decreased by £13.4m to £215.1m from £228.5m at 31 December 2023, with a cash position at the period end of £100.7m (30 June 2023: £106.3m; 31 December 2023: £132.2m) and net debt (post-IFRS 16) of £476.6m (30 June 2023: £468.8m; 31 December 2023: £458.0m). Net debt on a pre-IFRS 16 basis was £178.6m (30 June 2023: £176.2m, 31 December 2023: £154.0m).

The movement in post‐IFRS 16 net debt is due mainly to the movement in cash noted below. A reduction in net lease liabilities of £6.8m and a favourable currency movement of £6.2m on bond debt improved the net debt position. The movement in pre-IFRS net debt is not affected by the movement on leases.

 

Cash flow

	H1 2024 £m	H1 2023 £m
Underlying operating profit	11.7	32.7
Add back: Depreciation	39.1	37.8
Add back: Amortisation	0.8	1.2
Underlying EBITDA	51.6	71.7
Increase in working capital	(8.0)	(27.5)
Repayment of lease liabilities	(33.6)	(31.8)
Capital expenditure	(7.9)	(5.7)
Cash exceptional items	(3.6)	(2.8)
Other	(2.0)	1.6
Operating cash flow	(3.5)	5.5
Interest and financing	(17.8)	(17.1)
Tax	(0.6)	(8.7)
Free cash flow1	(21.9)	(20.3)
Payments related to previous acquisitions	(6.6)	(0.5)
Investment in financial assets	-	(1.0)
Repayment of debt	(0.4)	(0.4)
Total cash flow	(28.9)	(22.2)
Cash and cash equivalents at beginning of the period	132.2	130.1
Effect of foreign exchange rate changes	(2.6)	(1.6)
Cash and cash equivalents at end of the period	100.7	106.3

1. Free cash flow represents the cash available after supporting operations, including capex and the repayment of lease liabilities, and before acquisitions and any movements in funding.

During the period, the Group reported a free cash outflow of £21.9m (H1 2023: £20.3m outflow). This was a result of the lower underlying operating profit and higher capex being offset by continued discipline in working capital. Capex during the period was £7.9m (H1 2023: £5.7m). "Other" included the add back of non-cash P&L items, provision movements of £4.3m, and proceeds on sale of property, plant and equipment of £1.2m.

The key factors driving the working capital result in the period were the usual sales seasonality and lower volumes year-on-year.

Financing and funding

The Group's debt funding comprises €300m of 5.25% fixed rate secured notes and an RCF of £90m. These mature and expire in November 2026 and May 2026 respectively. The secured notes are subject to incurrence-based covenants only, and the RCF has a leverage maintenance covenant set at 4.75x which only applies if the facility is over 40% drawn at a quarter end reporting date. The RCF was undrawn at 30 June 2024 and remains undrawn. The Board is evaluating, and will continue to evaluate, its options for the optimal refinancing of these facilities ahead of their maturity dates.

The Group's liquidity position remained robust throughout H1 2024, and at the end of the period stood at £191m, consisting of cash of £101m and the £90m undrawn RCF noted above. On the basis of current forecasts the Group is expected to remain in compliance with all banking covenants throughout the going concern forecast period to 30 September 2025.

 

 

	H1 2024 £m	H1 2023 £m
Cash and cash equivalents at end of the period	100.7	106.3
Undrawn RCF at end of the period	90.0	90.0
Liquidity	190.7	196.3
Post-IFRS 16 net debt	476.6	468.8
Pre-IFRS 16 net debt	178.6	176.2
Post-IFRS 16 leverage	4.3x	3.2x
Pre-IFRS 16 leverage	5.8x	2.4x

 

Dividend

No interim dividend will be paid for 2024. However, continued successful execution of the strategy will return the Group to sustainable, profitable growth and cash generation, especially once construction markets start to recover to more normal levels, supporting a range of capital allocation priorities. The Board reiterates its commitment to reinstating a dividend, appropriately covered by underlying earnings, once it is appropriate to do so.

 

Responsibility Statement

We confirm to the best of our knowledge that:

(a) the condensed interim set of financial statements has been prepared in accordance with UK adopted IAS 34 "Interim Financial Reporting";

(b) the Interim Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c) the Interim Report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

 

By order of the Board
Gavin Slark	Ian Ashton
Director	Director
05 August 2024	05 August 2024

 

 

Cautionary statement 

This Interim Report is prepared for and addressed only to the Company's Shareholders as a whole and to no other person. The Company, its Directors, employees, agents or advisors do not accept or assume responsibility to any other person to whom this Interim Report is shown or into whose hands it may come and such responsibility or liability is expressly disclaimed.

This Interim Report contains forward-looking statements that are subject to risk factors including the economic and business circumstances occurring from time to time in countries and markets in which the Group operates and risk factors associated with the building and construction sectors. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results and outcomes to differ materially from those expressed in or implied by the forward-looking statements. No assurance can be given that the forward-looking statements in this Interim Report will be realised. Statements about the Directors' expectations, beliefs, hopes, plans, intentions and strategies are inherently subject to change and they are based on expectations and assumptions as to future events, circumstances and other factors which are in some cases outside the Group's control. Actual results could differ materially from the Group's current expectations.

It is believed that the expectations set out in these forward-looking statements are reasonable but they may be affected by a wide range of variables which could cause actual results or trends to differ materially, including but not limited to, market conditions, competitors and margin management, commercial relationships, fluctuations in product pricing, changes in foreign exchange and interest rates, government legislation, availability of funding, working capital and cash management, IT infrastructure and cyber security and availability and quality of key resources.

The Company's Shareholders are cautioned not to place undue reliance on the forward-looking statements. This Interim Report has not been audited or otherwise independently verified. The information contained in this Interim Report has been prepared on the basis of the knowledge and information available to Directors at the date of its preparation and the Company does not undertake any obligation to update or revise this Interim Report during the financial year ahead.