Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • SHI reports 1% LFL revenue growth in H1FY25, with GBP 1.3 billion in total revenue
  • SHI expects H1 operating profit of approximately GBP 15 million, up from GBP 12 million YoY
  • SHI net debt stands at GBP 525 million; FY25 guidance remains unchanged

SIG plc (LSE:SHI), a supplier of specialist insulation and construction products across Europe, has released a trading update for the six months ended 30 June 2025. Despite muted demand conditions and subdued construction activity in key markets, the Group reported modest like-for-like (LFL) revenue growth and reaffirmed its full-year financial guidance.

Group revenue for the period stood at GBP 1,306 million, reflecting 1% LFL growth compared to the same period in 2024. The underlying operating profit is expected to reach approximately GBP 15 million, compared to GBP 12 million in H1 2024. This growth was supported by the Group’s ongoing cost management and productivity initiatives, partially mitigating the impact of weak market demand.

LFL volumes were up 2% year-on-year, but overall pricing declined by 1% due to sustained pressure across the construction sector. The Group also noted a 1% negative impact from branch restructuring and currency exchange effects, contributing to the flat revenue performance.

Management acknowledged that construction activity in Europe continues to operate below historical averages. Market conditions in Q2 were broadly consistent with Q1, underscoring ongoing challenges across the sector.

SIG highlighted progress in its UK operations, particularly within the Interiors and Roofing segments. The Interiors business delivered improved revenue and profitability, following a series of internal changes over the past nine months. Meanwhile, Roofing operations in the UK continued to demonstrate resilient performance relative to broader market trends.

In mainland Europe, Germany and France reported steady results despite prevailing industry challenges. The Benelux division, which is currently undergoing a restructuring effort, has shown operational improvement as local leadership executes its recovery strategy.

Across all regions, the Group continues to focus on initiatives to drive efficiency, enhance its operating platform, and manage margin pressure. Strategic investments aimed at supporting long-term growth remain in place, even as SIG maintains cost discipline in the current trading environment.

As of 30 June 2025, SIG reported net debt of GBP 525 million (including lease liabilities), compared to GBP 497 million at 31 December 2024. Liquidity remains stable, with GBP 171 million in total, including GBP 81 million in cash and an undrawn GBP 90 million revolving credit facility.

Free cash outflow for the period was around GBP 10 million. However, the Group noted that improvements in working capital offset much of the seasonal cash usage. Enhancing cash generation continues to be a key financial objective, with management focused on sustaining improvements through the second half of the year.

The Board reaffirmed its full-year guidance, anticipating underlying operating profit in line with current market expectations. However, it noted the continued lack of demand recovery across core markets and maintained a cautious view for H2FY25.

Operational gearing remains a key feature of SIG’s business model, allowing the Group to benefit disproportionately from any future rebound in market activity. The company expressed confidence in its ability to capitalise on recovery trends when they materialise.

In a related development, SIG announced the appointment of Pim Vervaat as CEO and Chair designate. He is scheduled to take over the role on 1 October 2025.

As of 8 July 2025, SIG shares were trading 3.45% higher at GBX 15.00 per share.