Brexit-Hit Building Merchants Rise on Year-End Sales Reprieveby
U.K. construction material sales saw strong end to 2016
SIG, Grafton lost market value following Brexit referendum
SIG Plc led British building-material suppliers higher in London trading, rising the most in 6 1/2 years, as a pick up in sales boosted investor optimism in an industry wounded by the U.K.’s decision to leave the European Union.
The Sheffield-based supplier of wall insulation reported a 1.1 percent increase in sales in the U.K. and Ireland despite “challenging” market conditions, with currency movements offsetting a decline in mainland Europe. In a statement Friday, it also reiterated its outlook for 2016 profit to be 75 million pounds ($91 million) to 80 million pounds.
SIG on Nov. 11 warned investors about a slowdown in construction activity stemming from the outcome of the Brexit vote, sending its shares down as much as 24 percent. Dublin-based Grafton Plc added to the relief, saying today U.K. merchanting sales picked up in the final quarter of 2016, with group revenue for the year up 13 percent at 2.51 billion pounds ($3.06 billion).
Grafton rose 5.7 percent to 571.5 pence as of 9:10 a.m., with industry peer Travis Perkins Plc. gaining as much as 4.3 percent.