SIG plunges on profit warning as UK housing sector struggles
Sees full-year underlying operating profit of 50 mln-55 mln stg
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Stock falls up to 24.4%; top pct loser on FTSE Small Cap index
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Sees weaker demand conditions persisting through rest of 2023
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Market backdrop tricky for another 6-12 months - analysts
(Rewrites paragraph 1 to add share milestone, adds share move in 2, analyst comment in 6)
By Aby Jose Koilparambil
Oct 12 (Reuters) - British building materials supplier SIG cut its annual profit forecast on Thursday, sending its shares tumbling to a near three-year low as it became the latest company in the home building and improvements sector to warn of weak demand.
Shares in the company, which sells roofing and insulation materials in Britain and some other European countries, plunged as much as 24.4% to 25.7 pence, the biggest percentage fall on the FTSE Small Cap index.
Britain's housing market has been struggling for much of this year as high mortgage rates dampen demand and weigh on new construction, and the situation is similar elsewhere in Europe.
"Market conditions remain challenging, with a further softening in demand in September, most notably in new build residential segments across all geographies," SIG said in its third-quarter trading statement.
The Sheffield, northern England-based company said it expected weaker demand conditions to persist through the rest of 2023.
Peel Hunt analysts said in a note that although SIG had continued to make productivity improvements, those benefits had been lost to softer market volumes, adding the market backdrop looked to be tricky for at least another six to 12 months.
SIG now expects an annual underlying operating profit in a range of 50 million pounds to 55 million pounds ($62 million-$68 million), below market expectations of 65.3 million pounds-84 million pounds cited by the company in July.
Britain's biggest supplier of building materials, Travis Perkins, on Wednesday cut its full-year profit forecast by up to 27%, citing tough market conditions. ($1 = 0.8120 pounds) (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu and Mark Potter)
