SIG Plc (LON: SHI), a leading European supplier of Insulation, Exteriors, Interiors, and Specialist Construction Products, issued Tuesday a trading update for the year ended December 31, 2021.
Highlights
Fiscal 2021 was a pivotal and productive year for the SIG Pl. With a strong momentum at the end of the year, the return to growth strategy showed results.
Full-year and H2 sales grew by 8% and 15%, respectively, compared to 2019 comparators, which were not affected by the COVID-19. Growth trends accelerated throughout the year, driven in particular by UK Interiors.
Business performance led to several upgrades during the year, and profitability is increasingly positive.
Refinancing was finalized in late 2021, providing a long-term platform to support strategic growth ambitions.
Trading Performance
Like-for-like revenues for Fiscal Year 2021 increased by 24% compared to the previous year, which was distorted by the pandemic, particularly in the first half of the year.
The group’s reported revenue from underlying transactions increased by 22% compared to 2020, including an unfavorable currency movement of 3%.
In the UK Interiors business, the strategic and operational changes made since July 2020 continue to stimulate the business’s return to its previous position and performance in the market.
The UK Exteriors business continued to perform well, helped by strong demand in RMI. Overall, the U.K. business returned to profitability for the year, with Interiors returning to profit in the second half of the year.
Outlook
The board considers that the group is well placed to capitalize on the significant progress made in 2021. While the context of COVID-19 may continue to create some uncertainty in the markets, the group’s market fundamentals remain solid, particularly with increasingly robust commitments at the European level on energy efficiency and the reduction of carbon emissions.
The board is confident that the momentum started in 2021 will continue into 2022 and, provided there is no significant disruption to our business or end markets, expects the group to show solid organic growth in revenues over the coming year.
Wall Street’s Take
Last month, Citigroup analyst Ami Galla kept a Hold rating on SHI and a 48p price target. This implies 4.6% upside potential.
Overall, SHI scores a Moderate Buy consensus rating among analysts based on one Buy and two Holds. The average SIG plc price target of 55.33p implies 20.4% upside potential to current levels.
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