SIG has issues a trading update for 1 January to 31 March 2026 in advance of its Annual General Meeting.
The Sheffield-based distributor said in the update that the group's like-for-like sales had declined 5% to £614 million for the first quarter of 2026, reflecting the continued subdued demand backdrop as well as unusually poor weather in the early part of the year. LFL volumes were also down 5%.
Reported revenues were 3% down, reflecting a positive impact of 2% in aggregate from working days, exchange rates and net branch closures.
Trading started to improve from March, albeit recent global events have created additional uncertainty over the timing and shape of recovery across the group’s markets.
Pricing pressure remains elevated, and year over year pricing was flat in the quarter, despite modest inflation on input costs as expected.
Demand in most markets remains well below historical levels, with European construction experiencing a protracted cyclical low. As previously reported, trading in the first weeks of 2026 was also adversely affected by particularly poor weather across Europe.
Against this backdrop the group's businesses generally continue to outperform their markets. UK Roofing demonstrated improving performance through the quarter to finish only marginally down on prior year. The UK Interiors business was significantly impacted by both the poor weather and subdued market conditions.
The statement says that actions to mitigate the ongoing demand weakness and to strengthen the operating platform are ongoing. Alongside targeted investment to support strategic growth opportunities, the benefits from productivity, cost and working capital initiatives, including those arising from the increased focus on procurement, will contribute incrementally as the year progresses.
The recent increases in oil and gas prices are driving additional increases in input costs in the near term and SIG expects to pass these through in a timely manner. The company feels it is too early to predict the extent and nature of potential impacts from recent global events, notably the Iran war, which add to the uncertainty over the timing and shape of recoveries in market demand across Europe.
The Group’s overall trading started to improve from March, with a LFL decline of 2-3% now expected over March and April in aggregate. Prior year comparators start to ease slightly from May, and this is expected to lead to further improvement in LFL numbers over the balance of the year.
However, the group continues to anticipate softness in market conditions in 2026, particularly in H1. Q1 underlying operating profit was lower than the prior year, given the sales decline, and SIG consequently expects H1 profit to be lower than H1 2025.
The business however continues to target a robust performance for the full year 2026, with an increased weighting to the second half, and expects to maintain healthy levels of liquidity throughout the year. The group feels it remain well positioned to benefit from the market recovery when it occurs. This also underpins the board’s confidence that the group will deliver its targeted 3-5% operating margin range in the medium-term.
This, combined with the increasing focus on portfolio optimisation under its Vision 2030 strategy, is expected to support the board’s overarching goal of delivering meaningful value creation over the medium and long-term.
