Trading Update

SIG plc, the international specialist supplier to the construction, building and industrial markets, issues the following trading update in advance of its preliminary results for the 12 months ending 31st December 2002, which will be announced on Tuesday 11th March 2003.

Key points

• Results in line with market expectations for the year, despite incurring rationalisation and restructuring costs of approximately £2 million.
• Record sales achieved in excess of £1,150m, up over 10% on prior year.
• Sales ahead of prior year on a like for like basis in all three geographic regions (UK and Eire, mainland Europe, USA) in local currency, an increase of approximately 3% for the Group as a whole.
• As anticipated, trading in the second half was more encouraging than in the first 6 months of the year.
• Cash flow strengthened progressively throughout the year, with year end gearing and interest cover at healthy levels and in line with expectations..
  

UK and Eire
Sales in this region represent approximately 65% of Group turnover. All three main product sectors of insulation, roofing and interiors saw increases in sales, which in total were up over 14% on the prior year, largely as a result of the beneficial effect from acquisitions. Overall, like for like sales growth was achieved, with increases in both the insulation and roofing sectors more than offsetting the decline in interiors. Whilst like for like sales in interiors were slightly down on prior year in the second half, the decline was lower than occurred in the first half.

Mainland Europe
Sales in mainland Europe, which account for approximately 30% of Group turnover, increased on a like for like basis in Germany, France and Poland in local currencies. Turnover also increased in Benelux as a result of the acquisition made in March 2002.

USA
Sales in this region, which account for approximately 5% of the Group total, increased in local currency chiefly as a result of the new branch openings mid year.

Outlook
During 2002 the Group continued to invest to create opportunities for long term growth. The strength and resilience of the business has again been demonstrated by the increase in sales turnover achieved, despite very difficult conditions in a number of markets in which the Group operates. Cash flow is strong and the group is financially robust.

Looking forward, market conditions are not expected to change materially in the current year. Actions have been taken to improve efficiencies and reduce costs, and the Group is strategically well placed with leading positions in all its main markets. The Board is confident that progress can be achieved and shareholder value increased.