Trading Update

Wednesday 07 July 2004

SIG plc, the leading supplier of insulation, roofing and interior products, issues the following trading update for the 6 months to 30 th June 2004 in advance of the interim results which will be announced on Wednesday 8 th September 2004.

The Group has performed very strongly and ahead of expectations in the first half of 2004. Pre-tax profits are expected to be in excess of 25% higher than the £21.8million reported for the first half of 2003.

Total sales for the period are in excess of £647m, representing an increase of approximately £35m (6%) on the first half of 2003, almost entirely like for like. The operating margin has improved, with goodwill amortisation and interest payments at similar levels to the first 6 months of 2003.

UK and Republic of Ireland (c. 65% of Group sales)

Sales in our largest geographic region increased by approximately 6% in total, and over 5% on a like for like basis.

Sales and operating profits increased in all business streams on a like for like basis. Market conditions have been positive in the construction and building related sectors, which account for over 80% of sales in the UK and Republic of Ireland. Market demand, combined with price inflation in a wide range of mainstream products created helpful conditions in the period.

Insulation, roofing, interiors, safety products and construction specialities all produced improved performance.

In the premium office sector, sales and profits increased as a result of new products and improved efficiencies, despite continued weak market demand.

Insulation demand from within the building sector continued to benefit from strengthened regulations. In contrast, sales declined for industrial insulation products against the background of reduced market demand.

Mainland Europe (c. 30% of Group sales)

Sales in Mainland Europe were up over 10% in local currency, 7% in Sterling. We increased our sales in all countries in which we operate (i.e. Germany, France, Benelux and Poland). Market conditions were mixed, with France and Germany stable, Benelux depressed and Poland strong. Generally, pricing was slightly stronger.

Operating profits in Mainland Europe are very substantially ahead of prior year.

USA (c. 5% of Group sales)

Sales increased by c. 5% in Dollars, but adverse currency movement caused a 7% reduction in Sterling terms. Whilst demand from the core Petrochem industries is still running below normal levels, a general improvement in market conditions in the US, together with some price inflation provided the basis for a substantial increase in operating profits.

Acquisitions

As outlined in January this year, the Group has resumed its acquisition program which was temporarily held back in 2003. So far this year we have completed 6 bolt-on acquisitions, with annualised sales of approximately £22m.

Outlook

The improvement in profits in the first half of 2004 has been exceptional, and this rate of improvement is not expected to be replicated in the second half.

Overall demand across the markets and countries in which the Group operates is expected to range between stable and positive and the Board is confident that further progress will be made.

In the light of the performance in the first half, it is expected that results for the full year will be above the top end of the current market range of consensus expectations for 2004.

Enquiries

David Williams , Chief Executive SIG plc 0114 285 6365

Gareth Davies , Finance Director

Faeth Birch Finsbury 020 7251 3801

• A conference call to discuss the trading update will be held at 9.00 am today. The dial in number is +44 20 7162 0184 and the call chairman is David Williams, SIG.