Britain’s SIG shares jump 15% on upbeat outlook

(Reuters) – Building materials supplier SIG Plc on Friday forecast annual financial performance “significantly ahead” of its expectations, driven by robust demand from businesses, sending the company’s shares up as much as 15%.

The company said it expects its underlying operating profit margin for 2022 to reach 3%, compared with 1.8% reported a year earlier.

“The first four months (of the financial year) have seen markedly stronger growth than anticipated, driving positive margin momentum across all our countries of operation,” said Chief Executive Officer Steve Francis in a statement.

SIG, which sells roofing and insulation materials in Britain and a handful of European countries, said current input costs are running higher than expected and would remain elevated in the near term, but the impact would be cushioned by higher revenue.

The Sheffield-based company said its like-to-like group sales rose 25% during the quarter ended March 31, adding that the momentum had continued into April to date.

Analysts at Goodbody said the growth was predominantly driven by pricing, with inflation estimated at about 19%, amid mid-single-digit volume growth during the quarter.

Shares of the FTSE small-cap company were on course for their best single-day gain in a month.

(Reporting by Aby Jose Koilparambil in Bengaluru)