Belfast Telegraph

SIG appoints EY as Deloitte faces probe over audit of company’s results

The company is extending its usual interim reporting timetable to accommodate the changeover.

SIG has appointed EY after its former auditor Deloitte was put under investigation for its work on the building supplies firm’s accounts.

The Financial Reporting Council last week confirmed it would probe Deloitte’s audit of SIG’s financial statements for 2015 and 2016 after a forensic review at the company revealed a string of accounting irregularities and misstated profits.

It came after a whistleblower identified potential issues at its UK insulation and interiors business, SIG Distribution, and resulted in the suspension and investigation of a number of employees.

SIG confirmed on Wednesday that it was appointing EY as its external auditor with immediate effect.

The company is extending its usual interim reporting timetable to accommodate the changeover.

It will now release its interim results for the half year ending June 30 on September 21.

But a trading update on Wednesday indicated that the group has seen like-for-like sales flatline over the first half of the year.

That was dragged down in part by a 3.1% drop in its UK & Ireland division, which was hit by the extreme weather brought in by the Beast from the East in the spring.

The company said there was a marked improvement in trading in May and June.

The poor performance in the UK offset the 2.9% rise in like-for-like sales across its mainland Europe business.

SIG said trading conditions “remain mixed” across its markets, noting “ongoing challenges” in parts of the UK construction sector, including in new-build commercial properties.

It warned that a “deterioration” in its UK market could knock full-year earnings.

“Our transformational plans are expected to deliver meaningful cost benefits in the second half of the year, mitigating the adverse impact of weather on sales and profit in the UK businesses in the early part of the year,” its trading update said.

“Coupled with the group’s normal seasonality, this should enable us to deliver a significantly stronger second half to the year.

“Providing there is no further deterioration in UK market conditions, our expectations for underlying profitability for the full year remain unchanged.”

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