Insulation specialist SIG to axe 900 jobs » Housing » 24dash.com

Insulation specialist SIG today became the latest firm in the construction sector to announce job losses after confirming it is axing 900 positions.

SIG is cutting 7% of its workforce and shutting 65 trading sites after warning that annual profits will be at the bottom end of market forecasts.

The announcement comes a day after building supplies firm Wolseley said it is cutting 2,000 UK jobs.

Sheffield-based SIG said its UK and Ireland operation, which traded from 500 sites in the summer, would take the bulk of the cost-saving measures. It has a further 370 trading outlets in mainland Europe.

SIG said the measures, which should produce £25 million of annual cost savings in 2009, would realign resources to current and anticipated trading levels.

The company said: "It will be some time before the implications of the tighter liquidity and credit conditions now set to prevail well into
2009 become clear, but it is logical that these will not be without consequence for SIG's markets and customers."

SIG, which stands for Sheffield Insulations Group, opened its first branch in 1956 and listed on the London Stock Exchange in 1989.

The company said like-for-like sales for the UK and Ireland division were down 5.3% in the second half of the year to date, compared with growth of 3.3% in the first half of the year.

SIG said those parts of its operations most heavily exposed to residential construction and repair and maintenance had found trading increasingly challenging, with new housing most affected.

The notable exception has been its Miller Pattison business, which specialises in the fitting of insulation in existing dwellings and has continued to see strong sales.

Numis Securities said it expected SIG to report pre-tax profits of £145.5 million this year, with the figure dropping to £95 million in 2009.

Analyst Howard Seymour added: "Given the negative noises emanating from UK and European peers, SIG's trading statement comes as no surprise."