SIG plc swings to a pre-tax loss of £202.3 million in 2020

SIG plc (LON: SHI) said on Thursday that its pre-tax loss widened in 2020 due to COVID-19 disruptions that weighed on its revenue. The company, however, expressed confidence that it will return to profitability later in 2021.

The ongoing health emergency has so far infected more than 4.3 million people in the United Kingdom and caused over 126 thousand deaths.

SIG plc shares jumped roughly 4% in premarket trading on Thursday but lost more than 10% on market open. The stock is now exchanging hands at 37 pence per share. In comparison, it had started the year at 30.36 pence per share after recovering from a low of 16.86 pence per share in the first week of April 2020. Here’s what you need to know about investing in the stock market.

SIG plc reports £76.3 million of underlying pre-tax loss

SIG plc reported £202.3 million of pre-tax loss in 2020. In the previous year, its loss stood at a much narrower £112.7 million. The Sheffield-based company attributed its loss to onerous contract costs of £13.2 million and impairment charges worth £76.1 million.

Underlying pre-tax loss, as per the British firm, came in at £76.3 million in 2020 versus the year-ago figure of £17.7 million of underlying pre-tax profit. SIG valued its revenue in the recently concluded year at £1.87 billion, compared to a higher £2.16 billion in 2019.

The international supplier of specialist construction products acknowledged that its annual sales posted a 13% year over year decline due to the ongoing Coronavirus pandemic. Signs of recovery, it added, were evident in the second half of 2020, with sales climbing by 4% in the fourth quarter.

In separate news from the United Kingdom, AstraZeneca said a new analysis showed its COVID-19 vaccine to be 76% effective.

SIG says its performance matched guidance in 2021 to date

According to SIG, its financial performance matched its own guidance in 2021 to date. The London-listed firm expects cash generation in H2 of the ongoing year. The board refrained from announcing a dividend for 2020 on Thursday.

SIG’s financial update comes only days after the British chemicals and personal care business, Elementis plc, said its profit slid 34% in 2020.

SIG plc performed largely downbeat in the stock market last year with an annual decline of close to 75%. At the time of writing, it is valued at £448.44 million.