Britain's SIG names new CEO amid stagnant construction market

(Reuters) -British building materials supplier SIG named Pim Vervaat as its new chief executive officer on Tuesday, taking over at a time when the company faces persistent weakness in its major European construction markets.

The leadership change comes as SIG continues to face stagnant demand in its main markets including the UK, Germany, and France. "Demand remains "well below historical levels", the company said in a trading statement adding that it remains cautious about the potential for a recovery in the second half of the year.

Vervaat, who has previously led other European industrial companies, will take over on October 1 from Gavin Slark, who will transition to non-executive chair within 18 months.

Over Slark's nearly two-and-a-half-year tenure as CEO, SIG's shares have lost more than half their value.

They fell 3.4% in early trading on Tuesday.

The drop in share price has coincided with weakness across Europe as high inflation and broader economic uncertainty dampened construction activity.

"Demand in all markets remains well below historical levels, and trends in the second quarter were similar to those experienced in Q1, with European construction at a low point in the cycle", the company said.

However, cost savings helped mitigate some of the impact of market weakness, and SIG said it expects first-half underlying operating profit to rise to 15 million pounds ($20.4 million) from 12 million pounds a year ago.

It still expects annual underlying operating profit in line with average market expectations of 31.6 million pounds, as per a company poll.

($1 = 0.7338 pounds)

(Reporting by Raechel Thankam Job and Nithyashree R B in Bengaluru; Editing by Harikrishnan Nair and Louise Heavens)