I am pleased with the progress the Group has made over the past year in delivering its Stronger Together vision.
Stuart Mitchell Chief Executive
Following a strong start to 2014, which benefited from mild weather, trading moderated in the second half as Mainland European markets deteriorated. However, SIG delivered good like-for-like ("LFL") sales growth of 3.8% for the year, 2.5% on a reported basis, driven by a strong performance in the UK & Ireland. This resulted in a 9.0% increase in the Group's underlying profit before tax to £98.1m (2013: £90.0m).
We have made good progress on our self-help measures, both in terms of market outperformance and Strategic Initiatives, where we overdelivered against our targets and achieved a net benefit of £10.1m in 2014, mainly sourced from procurement. This gives us a high degree of confidence in delivering the remainder of the programme, which targets a cumulative net benefit of c.£20m in 2015 and c.£30m in 2016.
In 2014 SIG's ROCE increased by 90bps to 10.3% (2013: 9.4%) and was 310bps higher than the Group's Weighted Average Cost of Capital ("WACC") of 7.2% (2013: 8.3%). While this means that the Group has met its medium-term objective of ROCE exceeding WACC by 300bps, it recognises that it has benefited from a lower WACC.
For 2015 the Group is now targeting a ROCE in excess of 11.0%, which it will seek to achieve through disciplined capital management and further improvements in profitability.
I am pleased with the progress the Group has made over the past year in delivering its Stronger Together vision. This culture change programme underpins the delivery of our Strategic Initiatives and making SIG's whole greater than the sum of the parts. We have agreed a vision, mission and values for the Group, and for the first time in our history, undertaken an employee engagement survey. Cross-border working groups have been established to better leverage our scale, benchmark across SIG and utilise best practice. And we are strengthening the SIG brand, both internally and externally.
Although this is transforming the way we are working, there is still significant work to do that will enable us to deliver against our strategic objectives and to enjoy continued growth and success.
Going forward, we expect to see an ever increasing exchange of ideas and people across our international borders. We are leveraging our buying power and synergies, and our new procurement methods are showing sustainable long-term benefits.
SIG anticipates that trading conditions will remain variable across the Group's countries of operation in 2015, with continued good growth in the UK and Ireland and uncertainty persisting in Mainland Europe.
While the Group also notes the continuing weakening of the Euro and potential adverse translational effect on profit, it expects this headwind to be partially offset by lower fuel costs.
With continued scope for self-help through market outperformance and the Strategic Initiatives, SIG is confident of achieving further progress this year, although strong H1 comparators mean that this will be weighted towards the second half.