By Yadarisa Shabong

Building materials supplier SIG Plc on Friday announced plans to raise 150 million pounds in new capital as it reported an annual loss and warned of a revenue hit this year.

CEO Steve Francis, appointed earlier this year, also laid out a new strategy focusing on sales and reviving margins as the British firm looks to put past troubles with financial forecasts behind it.

The company reported a statutory annual pretax loss of 112.7 million pounds versus a profit of 10.3 million pounds a year earlier.

It also scrapped its dividend and warned of a 500 million pound hit to 2020 revenue as the coronavirus knocks demand.

Its shares, however, moved higher on the news, rising as much as 11% before paring gains to trade just 2% higher.

SIG's planned equity raising through a deal that will see U.S. buyout firm Clayton, Dubilier & Rice (CD&R) hold a 25% stake was welcome news, Davy Research analyst Flor O'Donoghue said.

CD&R's investment will amount to 85 million pounds and is conditional on SIG raising 150 million pounds in new equity, SIG said. It will result in CD&R becoming its biggest investor with two board seats.

"SIG has proved to be an immense challenge for a number of management teams over the last decade and longer," Davy's O'Donoghue said.

"This challenge is now all the more daunting due to COVID-19 but ... the intention to raise ...equity will provide SIG with a much-needed financial firewall."

Sheffield-based SIG also appointed Ian Ashton from polymer products maker Low & Bonar as its new finance chief on Friday.

His predecessor Nick Maddock resigned in February following two profit warnings in three months.

The company said a review into SIG's past financial reporting which it commissioned auditors PwC to conduct found a number of issues with its 2019 forecasting process, with communication from operating companies being the biggest setback.

"The PwC Report makes clear that the issues identified were not adequately communicated to the Board in the reports presented to it by the CFO," SIG said.

(Reporting by Yadarisa Shabong in Bengaluru; editing by Shounak Dasgupta and Jason Neely)