SIG slides as CEO and CFO exit

Meinie Oldersma and Nick Maddock have both resigned from the insulation firm with immediate effect and will be replaced by Steve Francis and Kath Kearney-Croft, respectively

SIG PLC - SIG slides as CEO and CFO exit

SIG PLC (LON:SHI) shares sank on Monday as its chief executive, Meinie Oldersma, and its finance chief, Nick Maddock, both resigned with immediate effect.

The FTSE 250 insulation maker said it has appointed Steve Francis as CEO on an initial contract until 31 December, while the CFO role will be filled on an interim basis by Kath Kearney-Croft, the former finance director of camera systems firm Vitec Group.

READ: SIG's third profit warning drags down building materials peers

As a result of the changes at the top, SIG also said that it would be postponing its full year results for 2019 until the second half of April from the original date of 6 March.

"Now that this essential restructuring of the Group has largely been completed, the Board believes that it is time for a new leadership team, with skills in driving rapid operational performance improvements through strong customer relationships, excellence in customer service and creating highly engaged teams”, said SIG chairman Andrew Allner.

The announcement was accompanied by a trading update for the year ended 31 December, which SIG said are expected to be “in line with guidance” provided on 9 January, its third profit warning in five months.

Underlying pre-tax profits for the year are expected to be around £42mln, with the company adding that trading in the early period of 2020 had seen “a continuation of the trends in the last quarter of 2019”.

The company warned last month that there had been a “deterioration” in the level of construction activity in key markets last year, saying that indicators continued to point to “further weakening, principally in the UK”.

In a note, analysts at Liberum, which rate SIG at ‘hold’ with a price target of 97p, said the top-level changes were “surprising but the group faced the challenge of restoring top line performance after the old management team had done a very good job on the cost line, and perhaps the Board simply felt that a new team would be better placed to restore sales momentum and also to decide what to do with its balance sheet strength”.

“There remains significant upside if the group's margins can ever be restored to the right level”, they added.

The shares slumped 11.7% to 73.7p in early deals.

Quick facts: SIG PLC

Price: 23.26 GBX

Market: LSE
Market Cap: £137.6 m

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