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SIG Says U.K. Building Industry Is Showing Signs of Recovery

SIG Plc, a U.K. distributor of insulation to builders, said Britain’s construction industry is showing signs of improvement after a long winter hampered sales.

First-half sales per day in the U.K. and Ireland rose by 2 percent at constant currency, excluding energy management operations, the Sheffield, England-based company said in a statement today. SIG reiterated it will make further progress in 2013. Revenue was 2.6 billion pounds ($3.9 billion) last year.

A recovery in the U.K. is a boost for SIG as it grapples with weakened construction markets in mainland Europe. Shares of Bovis Homes Group Plc jumped 7 percent yesterday to their highest in almost six years after the homebuilder reported a “significant improvement” in first-half profit. The Bloomberg EMEA Home Builders Index has advanced 37 percent this year.

“While SIG’s trading update is slightly behind our expectations for the first half, driven by mainland Europe, we take comfort from the reiteration of guidance for a year of progress,” Robert Eason, an analyst at Goodbody, wrote in a note today.

The company said underlying pretax profit in the first half will probably range from 29 million pounds to 31 million pounds, compared with 35.5 million pounds a year earlier.

More Optimism

SIG shares traded 1 percent lower at 169.6 pence as of 11:45 a.m. local time, giving the company a market value of 1 billion pounds. The stock has risen 40 percent this year.

“There is generally a little bit more optimism around, and I see that talking to customers and suppliers alike,” Chief Executive Officer Stuart Mitchell said on a conference call. Chancellor of the Exchequer George Osborne’s Help to Buy initiative, introduced in April, has helped lift confidence in the industry, he said.

A U.K. house-price guage rose to 21 in June, the highest since January 2010, from 5 in May, the London-based Royal Institution of Chartered Surveyors said today. The number relates to a monthly poll of property surveyors. A positive number means more respondents saw values increase rather than decline.

A measure of new buyer enquiries rose to 38, the highest since August 2009, from 30, RICS said.

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