Building materials supplier SIG PLC (LON:SHI) announced the sale of its German business WeGo FloorTec as tough trading conditions in the UK construction market hit first-half revenue.
WeGo FloorTec, a maker of raised access flooring, will be sold to Irish building materials firm Kingspan Group for £12mln.
SIG said it would use the process to improve its balance sheet. It is also still mulling the sale of its Air Handling division, which sells air purifiers, as announced in March.
READ: SIG 2018 profit jumps 25% as cost control, price hikes counter weak demand in construction market
Revenue fell 3.8% on a like-for-like basis in the six months to the end of June as a 12.7% decline in the UK and Ireland offset a 3.3% increase in mainland Europe.
SIG said the weak performance in the UK and Ireland reflected a slowdown in construction activity in the second quarter.
The distribution division, which supplies insulation and interiors in the UK and Ireland, was also affected by actions taken to improve pricing and offload unprofitable businesses. While the restructuring improved margins and lowered costs, like-for-like sales dropped 17%.
Sales in mainland Europe were bolstered by a recovery in France following a ransomware attack.
Despite the weaker overall sales in the first half, SIG reaffirmed its expectations for the underlying profits for the full year, although added that it would “continue to monitor how trading conditions develop”.
"Trading conditions remain challenging in many of the Group's end markets and there has been a marked deterioration in the level of construction activity in the UK as the year has progressed," SIG said.
"However, the continuing transformation of the group's businesses, coupled with the group's normal seasonality, should enable delivery of a stronger second half to the year."