Shares in SIG PLC (LSE:SHI) jumped after the company said first-quarter sales were well ahead of its expectations and that it now believes it will perform significantly better than previously forecast in the full year.
The UK-based supplier of specialist construction products said group sales were £641mln in the quarter to 31 March 2022, a like-for-like rise of 25% on the same period last year, with momentum continuing into April. Inflation added around 19% to group growth in the period.
The underlying operating margin for 2022 is now anticipated to reach 3%, and though input cost inflation is higher than previously anticipated, the resulting increase in revenue is set to offset any market softening, the company noted in its trading update.
Including acquisitions, sales in the UK Interiors business grew by 45%.
Some supply constraints persist across the business, but these are continuing to ease, SIG said.
"The first four months have seen markedly stronger growth than anticipated, driving positive margin momentum across all our countries of operation," said Steve Francis, chief executive.
"Although it is relatively early in the year, and notwithstanding the current macro-economic and geo-political environment, the strength of our recent trading gives us the confidence that we will now reach our initial margin target of 3% and return to cash generation this year, ahead of schedule."
Shares were 14.04% higher at 41.91p in early trades.