Guy Bruce, SIG Roofing’s Managing Director appointed in July 2018, is a man in a hurry. A straight-talking, no nonsense Geordie, Guy exudes energy and determination – much-needed characteristics to address the falling sales, profits and share values the company has suffered in the last few years. “We’ve just had the best January in our history in the branches,” says Guy. “We’re on budget for March and the target profit is 50 per cent higher than last year’s. We’ve arrested a four-year sales decline in the past three months and we are now in positive growth. But it’s not about revenue, it’s about profit. “
This is a fundamentally simple business that we’ve over-complicated in the last few years. We love complexity here. Part of what I’m trying to do is simplify, take noise out of the system, automate, digitise and let people have the time to speak to customers and sell products.”
Guy comes from Interserve’s infrastructure and industrial division where he faced many similar restructuring challenges to develop revenue streams and profitability. Guy’s first task has been to get to know the business of SIG Roofing and assess its current state.
“The questions are always the same, the answers are always different,” says Guy, “whether it’s the sector, the cycle, or the PLC agenda: what’s the true current state of the business? What are its fundamentals? What are its strengths and weaknesses? And, what are our options to move ahead? “There are a number of areas in the business where we could do better. We had sizeable market share, now we’ve got less. Competitors have grown up regionally (most of whom used to work for us) and have been relatively agile.
“Stripping out acquisitions, all the profit and revenue were going down, stock was up, all the graphs were going in the wrong direction. So, there’s the context of why we’re doing what we’re about to do.”
So, how will Guy go about addressing the various problems at SIG Roofing?
“In this business, the options are scarily straightforward. It’s a very straightforward business: we buy product, we store product, we sell it through one channel – branches. We distribute it. We are profitable, we’re cash generative. That’s not a bad place to start, I’ve had worse!” The company has formulated a five-year plan and its starting place is reinvesting in the basics of the business. Guy explains: “What we know is three things are important to our customers: proximity – we’ve still got the largest footprint in the UK with 110 branches; stock availability both to collect and deliver; and expert knowledge which is about having the right people in branches with the time to give advice.”
This year is a pivotal one for SIG Roofing. A double-digit million, 18-month investment started in April to relocate up to 10 main branches to major city thoroughfares, because those particular sites are “a function of our history and acquisition, they’re not a function of where it’s optimum to have branches or hubs,” Guy comments.
“We’ll also open some new format branches,” he continues, “think Screwfix for roofing. They’ll be smaller branches fed from a hub (at least one this year) and then we’ll be moving and optimising hubs.”
And that’s not all. In May, the company’s new IT logistics system, Descartes, goes live, allowing customers to track orders and to sign for deliveries electronically on site, meaning a smoother, digitalised supply chain process.
But the really big news for SIG Roofing is its plan to start e-commerce, giving customers the option to order online with delivery to site.
Guy says: “My ambition is to be the number one e-commerce platform within the next two years.” These plans beg the question: why not buy out and develop one of the many roofing e-commerce merchants that have sprung up in recent years? “They’re great little businesses,” responds Guy. “I’ve analysed all of them: their operating model, their logistics feed, the software they use, who owns them, I know everything about all of them. I could have bought any of them because I could afford to.
“But based on return on investment, speed to market, how much cash I’ve got to spend and the scalability of their IT architecture that needs to go to a £100 million business in five years, we need to start from scratch.
“We’ll have European-level architecture; it’s a several million-pound investment over the next two years. You’ve got to have the machinery in place to drive the online footfall and then fulfil it at the back end. All of that we’ve got. If you build the right platform and it’s scaleable, it’s valuable in its own right.
“Phase one will be 24-hour delivery. Phase two will be a click and collect app on your phone, within 18 months. We see the demographic changing and sectors that we don’t properly serve currently. If you look at DIY, it’s reducing, which is driving demand, but how do tradesman want to do business? They want to do it online, but we’ve under-invested in that historically,” Guy concludes.