Building on our potential
During 2016 the business suffered from internal initiative overload as it attempted to implement its strategic change programme too quickly, thereby distracting the business from its customers.
We have reassessed our change programme, slowing or stopping a number of projects. This will give time back to our branches, enabling them to refocus on customers.
One consequence of our lower level of profit is that our leverage is now higher than is appropriate for the business.
Leverage reduction is a key short-term priority and we have already identified a number of actions to strengthen the balance sheet.
Going forward, we will take all necessary steps to protect the Group's balance sheet, so it is able to withstand any near-term fluctuations in market demand.
Our core markets continue to offer considerable opportunity, and SIG remains a good business with strong market positions which is capable of delivering much more.
Trading in the first two months of 2017 has been in line with the Board's expectations, although markets remain competitive and we are experiencing some supplier price inflation.
For this year we continue to expect the new build residential market to be the best performing sector in the UK, with the commercial market more uncertain.
In Mainland Europe better economic indicators, together with our improving quarterly LFL sales performance, give us some optimism for an improved 2017.
The key risk in our major markets is political uncertainty, with the triggering of Article 50 in the UK, and forthcoming elections in France and Germany.
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