SIG management blunders rack-up £112.7m loss

Grant Prior 2 years ago
Share

Materials distribution giant SIG made a pre-tax loss of £112.7m last year following a series of management failures leading to a fall in market share.

Accountants PwC were called in earlier this year to investigate divisional financial forecasting issues which left the Board “unsighted as to the overall picture.”

The company is now vowing to grow the business again with the long-term aim of hitting 5% margins.

Chief Executive Officer Steve Francis,who took up the role in February, said: “After nearly a decade of contraction, which has included disposals, rationalisation, debt and cost reduction, it is now time to focus on how to grow SIG and rebuild our core USPs of customer proximity, service and expertise.

“We play an important role in the construction industry, providing a channel through which suppliers can bring their products to a fragmented customer base conveniently and efficiently.

“I firmly believe that our new strategy for growth will provide the basis, not only for the restoration of profit and cash conversion, but also serve as a foundation to play a leading role in our industry in the years to come.

“Since my appointment as CEO on 25 February, we have been developing a new strategy and organisational model which focuses on people, growth and active industry leadership.

“The essence of our new strategy is re-connection with our people – employees, customers, suppliers and the communities in which we do business – we are a local, sales and service-driven business.

“The new management team will empower our customer-facing people and promote an entrepreneurial spirit throughout the Group, thereby re-connecting with our customers and suppliers, re-energising our highly talented employees, and re-setting the growth ambition of SIG.”

The impact of Covid-19 saw 2,000 staff furloughed and group revenues fall £138.9m during March and April from the prior year – a drop of 37%.

SIG said trading is “now returning to pre Covid-19 levels in most of its operating companies as the group adapted swiftly to new social distancing protocols.”

Turnover this year is expected to be £500m down on 2019 and not return to those levels until 2022.

An underlying pre-tax profit last year of £20.6m was sunk by impairment charges of £90.9m, restructuring costs of £27.1m, and other costs of £9.5m.

The impairment charges of £90.9m (2018: £4.0m) principally relate to impairment of goodwill in relation to UK Distribution (£57.4m) and France Exteriors (Lariviere) (£32.2m).

SIG also confirmed that US private equity firm Clayton Dubilier & Rice is investing £85m in the business in return for a 25% stake.

Latest news

Massive Stewart Milne development goes into administration

Countesswells new town now in hands of administrators
1 day ago

Ex-Laing O’Rourke boss to head rejigged BAM UK business

BAM names new chief for combined UK and Ireland businesses in growth push
2 days ago

Robertson submits £150m Cardiff Arena plan

Arena work to start next Autumn with wider Atlantic Wharf regen scheme to follow
2 days ago

HS2 pioneers first ‘box-slide’ bridge over motorway

BBV will start initial site preparation over the Christmas holiday period
2 days ago

Rocks smash site huts as quarry blast goes wrong

Breedon Trading Ltd fined £300,000 after court hears worker was forced to run for cover
2 days ago

Sellafield names £250m HVAC key delivery partners

Balfour Beatty Kilpatrick and EJ Parker Technical Services take first integrated team deal
3 days ago

Cut-price home builds quadruple maintenance cost

Mount Anvil study attempts to quantify link between Capex and Opex costs
2 days ago

Ray O’Rourke to step down from Group Chief Executive role

New CEO Seamus French to join from mining giant Anglo American
3 days ago

TClarke on track for £500m revenue target

Orders surge to £525m setting fresh record for M&E specialist
3 days ago

Northern contractors still reeling from rail cancellations

Firms fear "economic black hole which will have a huge impact on regional SME contractors"
3 days ago

Go-ahead for McAlpine’s £43m Edinburgh concert hall job

Work to start next year on first concert venue in Edinburgh for over 100 years
3 days ago

Miller Homes fined £200,000 for polluting dyke

Court hears details of second incident at same Huddersfield site
3 days ago

Plans in for £60m Stoke goods yard quarter

Bowmer & Kirkland are working on the scheme under a pre-construction agreement
3 days ago

Quinn Infrastructure goes into administration

Rail M&E specialist contractor stops work on sites
4 days ago

Farrans to build £30m rotating Glasgow footbridge

Steel price rises blamed for 40% jump in rotating bridge cost
4 days ago

Brickability buys renewable energy specialist

Materials distributor buys new housing green energy specialist
4 days ago

RSK swoops for Yorkshire surveying specialist

Infrastructure surveying specialist Centara employs 60 staff
4 days ago

Former Amey director takes reins at renamed SSE Contracting

Zak Houlahan to lead Enerveo from December
4 days ago

Bouygues wins £30m Swansea zero carbon office

Firm to break ground in coming weeks on The Kingsway project
4 days ago

Sisk names new UK framework director

Rebecca Hartshorn to take on Scape framework development
4 days ago

Expanded starts work on giant HS2 station box

Construction will see 690,000 cubic metres of clay removed
5 days ago

Builders slam plans for electric car chargers in all new homes

Construction firms will foot the bill while electricity companies make the profits
5 days ago

Kier set for £32m Bournemouth council flats job

Work to start next year on four blocks of flats rising to 10 storeys
5 days ago

Severfield rises with record orders after strong first half

Orders soar to nearly £400m after Everton stadium award, shed and HS2 wins
5 days ago

Plans in for Manchester Red Bank enabling works

Council plans to spend £51m preparing way for up to 5,500 homes on old railway sidings
5 days ago

Triton bags biggest shed job yet

Firm eyes big shed delivery market after Stakehill 185 wins
5 days ago

Driver crushed between vehicles at builder’s merchant

Company fined £180,000 after court hears banksman had left yard area
5 days ago

£610m finance deal for Moda build-to-rent housing

£1.7bn Moda project pipeline targets Birmingham, Brighton & Hove and London
6 days ago

GMI names head for new North East business

GMI completes build-up of new north east team for regional expansion drive
5 days ago

National Highways halts first Smart motorway job

Balfour Beatty's £140m M3 smart motorway job put on hold
6 days ago

Contractor services