SIG plc (SHI) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Andrew Allner. And as Chairman of the company, I'm delighted to welcome you to SIG's 32nd Annual General Meeting. SIG lists on the London Stock Exchange in 1989. I confirm as a quorum is present, and I declare the meeting open. The arrangements for today's meeting are, as you are aware, considerably different from previous years due to the ongoing COVID-19 restrictions. As explained in the notice of meeting, in line with public health guidelines, shareholders have been asked not to attend the meeting physically, but to join us by Computershare's virtual meeting platform for this hybrid meeting. Should you wish to vote electronically or ask a question, please do so through the online platform. I will shortly explain how you may do this. I would now like to introduce my Board colleagues. Here with me in the SIG West London office, socially distanced, of course, are Steve Francis. Chief Executive Officer; and Ian Ashton, Chief Financial Officer. My nonexecutive director colleagues who have joined by the virtual meeting platform are as follows: Alan Lovell, Senior Independent Director; Kath Durrant, Chair of the Remuneration Committee; Shatish Dasani, Chair of the Audit Committee; together with our other nonexecutive directors, Gillain Kent, Bruno Deschamps, Christian Rochat and Simon King. Also present with me in the room at SIG West London is Andrew Watkins, SIG's Company Secretary. I will shortly invite shareholders to raise any questions relating to the resolutions or any other questions relevant to today's business. If you've not already registered with Computershare to ask a question during the meeting, please do so electronically by selecting the messaging icon on the navigation bar. You may choose to ask your question verbally yourself or you can type your question at the bottom of the screen and when finished, press the send icon to the right-hand side of the message box to submit your question, in which case your question will be read out by the company secretary. We'll endeavor to answer all questions. However, please be aware that we will not be able to answer any questions that may unduly interfere with the conduct of the meeting or which would involve the disclosure of confidential information or where it is undesirable to provide answers in either the interest of the company or for the good order of the meeting. I will now proceed to the formal business of the meeting. The Notice of Annual General Meeting, together with explanatory notes dated 7 April 2021, disposed to the shareholders on 8 April. Accordingly, the requisite notice of the meeting has been given. With your permission, I would like to take the notice of the meeting as read. Is that agreed? On 5th May, SIG released its trading statement commenting on trading across the first 4 months of the year. I would now like to hand over to Steve Francis, SIG's Chief Executive Officer, to summarize the key points from that trading statement.

Thank you, Andrew. The group has made an encouraging start to 2021 with the return to growth strategy continuing to deliver good progress with trading underpinned by continued strength in RMI demand. After solid start in January and February, sales volumes then picked up strongly and March and April traded ahead of management's expectations. Prior year comparative growth rates from late March onwards are difficult because of the impact of COVID last year. However, performance for the year to the end of April was ahead of our expectations. Group sales of 29% up on 2020 for the 4-month period. They were 4% lower than the same period in 2019 and flat against 2019 in the last 2 months of March and April. The evolving COVID backdrop will continue to create uncertainty in the short term and also in our EU markets than in the U.K., although strong demand across territories and sectors in the first 4 months of the year was encouraging and gives us increased confidence for the full year performance. The momentum we've seen through March and April, together with improving visibility in the near-term order book means that we now expect the group to deliver an underlying operating profit in the first half, returning the group's profitability earlier than expected. Given the prevailing macroeconomic uncertainties, we retain a cautious view of the second half at this stage. We do, however, continue to expect the second half to be both profitable and cash generative. And in light of the stronger-than-anticipated recent performance, we now expect full year revenues to be slightly ahead of prior expectations and profits to also be higher than previously expected.

Thank you. Thank you, Steve. And the trading performance of the group across the first 4 months of the year has been encouraging. Moving on with the meeting. I propose to proceed by dealing with all questions from shareholders on any matters relevant to the business of the meeting before we move on to voting on the resolutions themselves. This is because we have a large number of resolutions. And in my view, we will be able to deal with the voting more efficiently in this manner while still giving shareholders time to ask all the questions they may wish to ask. Shareholders should know that the functionality on the online platform to ask questions will be disabled when we move to the voting section of the meeting. Shareholders have the ability to ask questions on our virtual meeting platform. I will now ask the company secretary whether any questions have been raised using the online messaging facility. And if so, I'll ask the company secretary to read out each question in turn.

No following questions. There are no questions.

As there appears to be no questions, it is time to put the resolutions to a vote. The functionality to ask questions through the online platform is now being disabled. I will start by explaining the voting procedures. Voting today will be done by way of a poll on each of the resolutions put to the meeting. This is seen as best practice as it gives all shareholders the opportunity to participate in the decision-making of the company and have their votes recorded in proportion to the number of shares they hold. Those can be cast in the poll electronically using the virtual meeting platform. Computershare, the company's registrars, are appointed to conduct the poll and will act as scrutineers. If you have already lodged a proxy form in advance of the meeting, you do not need to vote electronically unless you wish to change your vote. Otherwise, I will complete vote card in accordance with the instructions on the proxy forms that have been received in favor of the Chairman. I will now explain how shareholders who wish to vote electronically can do so. When the voting is open shortly, the voting icon will appear on the navigation part on the online platform. Once you click on the icon, each resolution will appear on screen in turn, along with a for, against, withheld voting options. So that one of these options to cast your vote, your vote will have been submitted and the voting option icon changes color and the Vote Received message appears. If you change your mind, simply select another option. You can change your vote as many times as you wish up until the close of the poll. Voting will be enabled on all resolutions together. We will not consider each resolution individually or in turn. You can vote on all resolutions at any time after I open voting until I declare the poll closed. I will terminate the votes to be cast. You will not be able to change your vote after voting has closed. We will now proceed to vote on the resolutions, which are formally proposed to the meeting. The full text to each resolutions is set out in the Notice of Meeting, a copy of which you would have received. Resolutions 1 to 15 are proposed as ordinary resolutions and require a simple majority to be passed. Resolutions 16 to 21 proposed as special resolutions, which require a majority of 75% the vote in favor of the resolution to be passed. Appearing shortly on your screen will be a series of 3 slides. These slides show the 21 resolutions being proposed at the meeting, together with the approximate percentage of proxy forms, which have been launched in advance of the meeting in favor of each resolutions. Each slide will show for approximately 30 seconds to allow you time to view it. I ask the company secretary to advise me when that time has passed.

First slide, please. Thank you. Second side, please. And the third slide, please. Back to you, Mr. Chairman.

I declare the voting is now open. Voting will remain open for 2 minutes. That is until 10:15. This video stream will be muted whilst the voting process is completed. [Voting]

Voting has now closed. The results will be announced through a regulatory information service posted on the company's website as soon as practical. That concludes the formal business of the Annual General Meeting, and I declare the meeting closed. Thank you all for attending.

Thank you.