UK's SIG expects 2023 operating profit in upper half of forecast

(Reuters) -British building materials supplier SIG Plc said on Tuesday it expects underlying operating profit to come in the upper-half of its forecast for 2023, while it continues to expect softness in market conditions for 2024 as well.

The company, which sells roofing and insulation materials in Britain and some other European countries, said it expects 10 million pounds ($12.75 million) in cost savings in 2024 from the restructuring and productivity initiatives it undertook in the second half of last year.

In October, the Sheffield, northern England-based company had cut its operating profit forecast for 2023 to 50 million pounds - 55 million pounds.

Britons have been struggling with steep household bills amid a tough economic environment, resulting in customers opting to cut down on non-essential spending like home improvements.

SIG expects 2023 revenue to be about 2.76 billion pounds, due to the softened demand it saw in most of its markets in the second half of the year.

Its full-year like-for-like sales dropped 2% from a year ago.

Still, the company "looks well placed to manage through a difficult 2024 and to deliver structurally improved financial metrics as markets recover", analysts at Investec said in a note.

($1 = 0.7845 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Savio D'Souza and Mrigank Dhaniwala)