UK construction firms have almost a third less work in the pipeline than a year ago, according to an annual survey of subcontractors in June.

"Trading conditions remain challenging in many of the Group's end markets and there has been a marked deterioration in the level of construction activity in the UK as the year has progressed," the company said in a trading update.

Shares in the Sheffield-based company were down 6.3% at 124 pence at 0845 GMT, having recouped some earlier losses.

In the half year to end June, SIG's group like-for-like sales fell 3.8%, with UK and Ireland down 12.7%. Overall group revenue from continuing operations fell 5.7% in the half-year period.

The company stuck to its full-year profit forecast, expecting a stronger second half as it pushes ahead with its restructuring and sale of non-profitable businesses.

SIG said it would sell its German flooring unit, WeGo FloorTec GmbH, to Kingspan Group. After the sale, the company has just one non-core business under review.

"Given SIG has now completed its strategy of walking away from unprofitable customers in distribution, the sequential (like-for-like) deterioration appears to solely reflect underlying market conditions," Jefferies analysts said in a note.

The company is also looking to sell its air purification business, which had revenue of more than 300 million pounds in 2018 on a proforma basis. It reported a 7.7% rise in like-for-like sales in the first half of the year.

(Reporting by Shariq Khan in Bengaluru. Editing by Jane Merriman)

By Shariq Khan