Trading Update

Monday 14 January 2002

SIG are pleased to issue the following update in advance of its preliminary results for the 12 months ending 31st December 2001, which will be announced on 11th March 2002.

Summary Headlines
Sales and profits significantly ahead of prior year. Results will be within market expectations for the year. Sales grew strongly - up over 11% overall compared with 2000, taking Group sales to over £1bn for the first time. Trading cash flow remains strong and gearing and interest cover are healthy. Acquisitions made in 2001 are performing according to plan and are integrating well into the Group. Market coverage improved. The number of trading sites increased by 33 compared with December 2000.

UK and Eire
Sales in this region, which represent approximately 60% of Group turnover, grew by over 14%, representing an increase of £80m compared to 2000. Acquisitions made in 2001 contributed sales of £34m. The £46m organic sales growth in the UK and Eire represents an increase of 8%. Excellent progress was made in each of the three key product sectors, with both sales and operating profits up in Insulation, Roofing and Interiors (formerly described as Ceilings and Partitions).

Europe
Sales in Europe account for some 30% of Group turnover. Increases were achieved in Germany, France and Benelux, whilst in Poland, which represents less than 2% of the Group, sales declined. Operating profits were lower in 2001 compared with 2000. Continued progress in France and Benelux was countered by reduced profits in Germany and a loss in Poland. Throughout 2001 we have stated that profits in Germany would be at a reduced level compared to 2000 due to adverse market conditions. The results bear this out and are in line with our expectations. Across Europe, continued progress has been made in both the Insulation and Interiors markets.

USA
Sales in the USA represent less than 10% of Group turnover and are made in the industrial insulation sectors, especially the petro-chem and heating and ventilation markets. Good progress has been made, with an improvement in sales and profits over 2000.

Outlook
The Group holds a leading position in markets which are believed to offer long term growth prospects. The geographic spread and the diversity of markets and customers served create resilience. These factors, together with the proven ability of the operational management and the strength of the balance sheet, give confidence that the Company will continue to make further progress.