FTSE 250 company to check cheque controls

FTSE 250 building products supplier SIG, which is a leading distributor of specialist building products in Europe, has said it is to review the controls around cheque issuance after a historical overstatement of cash and trade payables resulted in higher closing net debt for 2017

In the company’s trading update for the year ended 31 December 2017, SIG said that during initial year end close processes, the group identified a historical overstatement of cash and trade payables related to cash cut-off procedures associated with the issue of cheques around previous period ends. 

The statement said: ‘There was no impact from this on the group's income statement, but it resulted in an overstatement of cash of £20m at 31 December 2016 and £27m at 30 June 2017.’

If adjusted, this would have resulted in headline financial leverage of 2.3 times at 31 December 2016 (reported as 2.1 times) and 1.9 times at 30 June 2017 (reported as 1.6 times). 

‘The group has initiated a rigorous review of controls around cheque issuance and will provide a further update at the time of its full year results,’ the statement said.

Group revenues from continuing operations rose 7.5% to £2.8bn in 2017, with like-for-like sales growing 4%. According to SIG’s 2016 annual report, its external auditor is Deloitte, while KPMG operates the group’s outsourced internal audit function. Deloitte was paid £1.5m in audit fees, plus £100,000 for non-audit services during the year.

Report by Pat Sweet

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