TIDMSRC
RNS Number : 3418L
SigmaRoc PLC
05 September 2023
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
5 September 2023
SigmaRoc plc
('SigmaRoc', the 'Company' or the 'Group')
Interim Results 2023
Strong H1 with resilient trading, further strategic progress,
and full year expectations unchanged
SigmaRoc plc, the specialist quarried materials group , is
pleased to announce its unaudited interim results for the six
months ended 30 June 2023.
Highlights
Financial highlights
Underlying [1] results 30 June 2023 30 June 2022 YoY change
Revenue GBP290.0m GBP247.1m +17%
EBITDA GBP54.9m GBP47.6m +15%
EBITDA margin 18.9% 19.2% -30bps
Net Margin 2 21.9% 21.2% +70bps
Profit before tax GBP33.0m GBP29.1m +13%
EPS 4.01p 3.61p +11%
Cash and cash equivalents GBP62.5m GBP46.4m +35%
Net debt 3 GBP183.3m GBP216.9m -15%
Adjusted Leverage Ratio 1.69x 2.24x -25%
[1] Underlying results are stated before acquisition related
expenses, certain finance costs, redundancy and reorganisation
costs, impairments, amortisation of acquisition intangibles and
share option expense. References to an underlying profit measure
throughout this Annual Report are defined on this basis. Pro-forma
financial information is presented on a like-for-like basis
adjusting for impact of any acquisitions or non-recurring
events.
2 Net Margin is EBITDA margin adjusted for impact of
inflationary cost pass-throughs, such as energy, materials, and
distribution
3 Net debt including IFRS 16 lease liabilities.
Financial highlights
-- Strong H1, further demonstrating the resilience of the
Group's model , together with its continued strategic
development;
-- LFL revenue growth of 13%, reflecting effective pricing
actions and benefits of diversified market exposure;
-- Underlying LFL EBITDA growth of 12%, with further
productivity gains contributing to robust margins;
-- Group volumes fell by 3% but demand remained resilient across
key markets with dynamic pricing supporting Net Margin
improvement;
-- Underlying EPS increased by 11% YoY, despite finance costs
doubling and impact of February fundraise ;
-- Adjusted Leverage Ratio reduced by 0.24x in the Period to
1.69x, comfortably below 2.0x target;
Strategic highlights
-- Acquisition and investment programme launched in February
2023, following GBP30m equity placing, now fully committed:
o Six acquisitions expected to contribute c.GBP8m annualised
EBITDA at an effective multiple of 3.9 times ;
o Organic growth investments expected to contribute a further
c.GBP2m EBITDA, once fully operational, at an effective multiple of
3.3 times ;
o Divestment of four non-core assets generating GBP11m at an
effective multiple of 12.9 times (includes land holdings with no
earnings impact );
-- Continued success in market leading sustainability
initiatives including the Aqualung carbon capture project, and
partnership with Materials Evolution for low carbon cement ;
Current trading and outlook - Positive start to second half and
full year expectations maintained
-- H2 trading has started well, with continuing robust demand
for infrastructure and quicklime products, alongside stabilised
conditions in the paper, pulp & board market ;
-- Second half to see further benefit from the integration of
recent acquisitions as well as the organic development initiatives
as they come on stream;
-- Normal seasonal cash flow profile expected to support further
de-levering over the remainder of the year, in the absence of
further acquisitions and/or development;
-- The long-term potential remains exciting, with significant
opportunities to extend our geographical reach and product offering
across a range of markets for high quality construction materials
and industrial minerals;
-- While the Board is mindful that trading conditions are likely
to remain challenging in several of the Group's markets, the Board
expects that the Group's diversified end market exposure,
geographic spread, and decentralised operating model will continue
to deliver a resilient performance and accordingly the Board's
expectations for the full year remain unchanged.
Max Vermorken, CEO, commented:
"I am delighted to be sharing these results for the first half
of 2023 which show the resilience of SigmaRoc's diversified
business and operations, which have traded ahead of expectations.
It has been an active period for the Group. We have made continued
strategic progress on the M&A front where we have strengthened
the Group's footprint with transactions at attractive multiples,
alongside a number of organic projects, all of which will
contribute to the Group's performance in the second half of the
year and beyond.
The second half has started well, with resilient demand for
infrastructure and quicklime, alongside better conditions in the
paper, pulp & board market. Despite a tougher trading
environment in some areas of the business, our diversified business
model, agile team, and a demonstrated ability to manage prices and
costs, has enabled SigmaRoc to deliver another set of robust
results. Longer term structural drivers of the business remain
positive, and we look forward to the future with optimism."
The full text of the interim statement is set out below,
together with detailed financial results, and will be available on
the Company's website at www.sigmaroc.com.
Analyst Briefing
SigmaRoc will host a hybrid briefing for analysts at the offices
of Peel Hunt, 7th Floor, 100 Liverpool St, London EC2M 2AT at
8:30am today. Please register to attend by emailing
SigmaRoc@walbrookpr.com , specifying whether you will be attending
in person or dialling in.
Private Investor Presentation
SigmaRoc's Chairman, David Barrett, its Chief Executive Officer,
Max Vermorken, and its Chief Financial Officer, Garth Palmer, will
provide a live presentation to private investors reviewing the 2023
interim results and prospects via Investor Meet Company today at
11.30am BST.
The presentation is open to all existing and potential
shareholders. Questions can be submitted at any time during the
live presentation via your Investor Meet Company dashboard.
Investors can sign up to Investor Meet Company for free and add to
meet SigmaRoc via:
https://www.investormeetcompany.com/sigmaroc-plc/register-investor
Investors who already follow SigmaRoc on the Investor Meet
Company platform have automatically been invited.
Information on the Company is available on its website,
www.sigmaroc.com .
Enquiries:
SigmaRoc plc Tel: +44 (0) 207
Max Vermorken (Chief Executive Officer) 002 1080
Garth Palmer (Chief Financial Officer)
Tom Jenkins (Head of Investor Relations) ir@sigmaroc.com
Liberum Capital (Co-Broker and Nominated Tel: +44 (0) 203
Adviser) 100 2000
Dru Danford / Jamie Richards / Ben Cryer
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418
Mike Bell / Ed Allsopp 8900
Walbrook PR Ltd (Public Relations) Tel: +44 (0) 20 7933
Tom Cooper / Nick Rome 8780
Sigmaroc@walbrookpr.com
Mob: 07971 221972
/ 07748 325 236
About SigmaRoc plc
SigmaRoc is an innovative quarrying and construction materials
group with sites in the UK and Northern Europe.
SigmaRoc's vision is t o become the leading European quarried
materials group, seeking to create value by purchasing assets in
fragmented materials markets and extracting efficiencies through
active management and forming the assets into larger groups. In
addition, through the development of new products and services, the
Group aims to meet the challenges of providing customers with
innovative and sustainable solutions for the future.
SigmaRoc has a strong balance sheet and a growth strategy driven
by both acquisitive and organic growth initiatives.
The Group listed on AIM in 2017, has made over 15 acquisitions,
and now employs over 2,000 staff in more than 80 sites across the
UK and Europe.
EXECUTIVE STATEMENT
The Group delivered a strong first half trading performance,
with continued underlying earnings growth despite broad
macroeconomic uncertainty and challenging conditions in some
markets. Against this backdrop, Group LFL volumes were 3% lower in
the Period with the weakest demand conditions in residential
construction segments, primarily in the UK and Nordics, where the
Group has relatively low exposure. This was partially offset by
continued strong demand in several of the Group's markets and in
particularly for infrastructure and quicklime products. The Group
continued to be effective in passing through ongoing cost
inflation, leveraging SigmaRoc's differentiated product quality and
service levels, with dynamic pricing leading to 17% year-on-year
growth in Group revenues to GBP290m.
Pleasingly, H1 EBITDA margins were maintained at 19%, with
inflationary cost pressures well managed and further productivity
gains realised across the network, resulting in a 15% YoY increase
in EBITDA to GBP55m. The Group generated GBP20m of Underlying
operating cash, which was in-line with expectations and consistent
with seasonal working capital fluctuations. The adjusted leverage
ratio reduced by 0.24x in the Period to 1.69x, comfortably below
2.0x target. Despite a step up in financing costs and the effect of
the equity fundraise in February 2023, underlying EPS increased
11%, to 4p, in the Period.
Operations and trading
The Group's diversified business model and end market exposure
continues to provide resilience with several markets outperforming
expectations.
-- Industrial minerals - 43% of Group revenue for the Period
derived from industrial mineral markets which have seen demand in
line with budget, supported by structural drivers:
- Environmental, Agriculture and Chemical (19% of Group
revenue): The Group saw overall demand in this segment remain
positive in H1 supported by the environmental and chemical
segments.
- Pulp, Paper & Board (13% of Group revenue): Paper had a
slow start to the year as a result of inventory corrections in the
value chain leading to lower demand for high grade and pigment
grade limestone. Board and pulp demand remained robust, supported
by the continued transition away from plastic packaging.
- Metals (11% of Group revenue): Order books and demand remained
strong, with the recovery experienced in 4Q22 continuing into
H1.
-- Construction - 57% of Group revenue for the Period derived
from construction markets, which have seen good demand from
infrastructure segments and a recovery in RMI, offsetting some
localised slowing in new build residential demand:
- Infrastructure (37% of Group revenue): Infrastructure markets
have continued to be strong in H1. Further projects have been
launched in the Group's key territories and increasingly in the
energy transition sector, which has provided sustained demand for
our aggregates, dimension stone and downstream products.
- Residential (20% of Group revenue): European residential
construction markets have seen a clear softening in new build
demand, leading to reduced housing starts, particularly in the UK,
Finland, and Sweden. Partially offsetting this has been more
resilient demand in Poland and the Baltic markets, as well as a
more fragmented construction backdrop in Belgium. In Jersey there
has been a slight slowing, primarily related to the bankruptcy of a
major developer, but the pipeline of projects remains full.
Renovation and RMI spend has seen a recovery in most markets
sequentially through the Period.
The Group introduced a regional structure in 2022 to support
further growth and scale. Performance by region is summarised as
follows:
Underlying Revenue EBITDA
GBP'M
1H23 1H22 1H23 1H22
------ ------ ------ ------
North West 73.8 66.4 14.7 14.2
------ ------ ------ ------
West 51.4 43.2 12.8 10.0
------ ------ ------ ------
North East 164.8 137.5 32.9 27.1
------ ------ ------ ------
Corporate - - (5.5) (3.7)
------ ------ ------ ------
Group 290.0 247.1 54.9 47.6
------ ------ ------ ------
North East
The North East region had a strong H1, driven by quicklime
industrial products and Polish infrastructure demand. On a LFL
basis, revenue was up 15% and EBITDA up 16%, despite softer than
expected volumes in Nordic residential construction and
PP&B.
Quicklime benefited from good volumes, dynamic pricing, and
margin expansion, with metals & mining, agriculture, and
environment markets particularly strong. Poland volumes were also
up for the Period and were further supported by strong pricing and
cost control.
The Nordics suffered from weak volumes into the construction
industry, with volumes into cement majors down considerably,
however this has relatively low impact on the Group's
profitability. PP&B was also softer than expected due to
destocking in the Period following build-up of inventories in the
second half of 2022.
West
Dimension Stone benefited from favourable pricing dynamics and
good cost control which translated into an 11% YoY improvement in
EBITDA on subdued volumes. Commercial highlights for the Period
include paving for city centre renewal at Charleroi and
refurbishment of the Boulevard Adolphe Max in Brussels.
Benelux traded exceptionally well in the first half, with EBITDA
up 19% on a LFL basis, against volumes that were down 3% and
revenue up 4%. The ready-mix businesses were the standout
performers, with B-Mix profitability up over 15% and Goijens
integration into the Group performing well ahead of expectations.
GduH had a difficult H1 due to low volumes from its primary
customer, however given the contractual take-or-pay arrangements,
this will correct in H2.
North West
PPG trading followed similar trends to those seen in the second
half of 2022, with softening demand at CCP and Allen being largely
offset by strong infrastructure demand at Poundfield and RightCast.
The integration of Retaining UK has been positive with trading for
the Period exceeding expectations. Performance was further
supported by restructuring initiatives at CCP to scale its cost
base with reduced volumes.
At Johnston, construction aggregate demand from the Lincolnshire
and Cotswolds quarries remained subdued, with volumes down 3% YoY,
however revenues were up 5% and most pleasingly EBITDA improved by
over 20% due to product mix and cost efficiencies.
Trading at Harries was robust, with YoY revenue up 15% and
EBITDA up 12%, while volumes were broadly in-line with 2022. Plant
availability negatively impacted profitability, with cost and
margin improvement a key focus for H2.
In the Channel Islands, volumes were down 5% due to market
disruption in Jersey resulting from two construction contractor
bankruptcies. However, strong asphalt and surfacing demand across
both islands, combined with improving margins, meant that EBITDA
was down only 1% YoY.
Safety
The Group has continued to progress and improve its safety
culture in 2023 by ensuring the business focuses on 3 key
areas:
1. Structure & Compliance by ensuring corrective actions are properly closed out and on time;
2. Proactive Prevention by focusing on each business' 3-5 core risks; and
3. Learn & Improve through thorough investigations and timely communication.
At a site level, each business has three core expectations
demanded from it with regards to health & safety:
1. Paperwork
a. Safe Systems of Work and Risk Assessments
b. Traffic Management Plan, Site Improvement Plan, Contractor Management Plan
c. Management of Core Risk Management and SIFs relevant to the site
2. On Site Prevention
a. Pre-Start huddles & inspections
b. Supervisors' boots on the ground and off the tools
c. Hazards and risks (HIRE) identified and mitigated
3. Learn & Improve
a. Information cascade
b. Follow up (plan do check act principle)
c. Proportionally detailed root cause investigations
A structured internal audit process measures businesses against
these three key focus areas and expectations above and as such we
are pleased to report a 14% YoY reduction in harm frequency rate;
over 42% reduction in serious harm frequency rate and Lost time
Frequency Rate and over 28% YoY increase in near hit, hazard and
risk reporting, taking into account all those that work on our
sites, employee and contractors alike.
With the integration of three new businesses during the Period
the Group has leveraged its established health & safety tools
and procedures, including the internally developed safety
management system HighVizz, which has helped increase reporting,
decrease incidents, and improve safety awareness and culture.
Growth and development
The Company's acquisition strategy is focused on enhancing
market position, driving scale, productivity and margins, as
operations are integrated, invested in and de-risked.
In February 2023, the Group raised GBP30m of equity to
accelerate execution on a pipeline of acquisitions, disposals, and
investment projects, across the Group, which had been assembled
over the previous 12 months. The Directors are pleased to update
the market that this programme, consisting of 14 projects
(including acquisitions, disposals, and organic investments), has
been fully committed with all acquisitions and disposals
successfully executed and the organic investments proceeding to
plan.
The acquisitions were made on an average EV/EBITDA multiple of
3.9 times and are expected to contribute an additional c. GBP8m of
annualised EBITDA. The organic investment projects were made on an
average EV/EBITDA multiple of 3.3 times and will contribute an
expected additional GBP2m of EBITDA, once fully operational.
As part of the development pipeline, the Group also committed to
divest of certain non-core assets, all of which have either been
completed or are signed subject to regulatory approval, and
collectively have, or will, return to the Group approximately
GBP11m in proceeds .
Further details on each of the acquisition, organic investment
and divestment projects is provided in the Growth Initiatives and
Development Pipeline section of these Accounts.
Environmental, Social and Governance (ESG)
In April 2023, the Group published its second annual ESG report
which contains extensive detail on its ESG policies and
initiatives, as well as a detailed roadmap to net-zero . The report
provides further detail on a large number of initiatives, already
in place across the Group, to continue to manage as well as
accelerate its successful track record in both meeting demanding
ESG targets and further enhancing competitiveness.
Environment : On going work includes aspects such as reducing
our climate and biodiversity impact. Key projects include:
(a) increasing the share of biomass in our fuel mix including
successful substitution at 100%;
(b) installing renewable energy such as the 50kW solar system at
Slavno, Poland; and
(c) officially capturing CO(2) with our first carbon capture
module at the Köping lime kiln in Sweden.
In terms of Biodiversity, in addition to our ongoing
biodiversity projects, we have assessed our biodiversity impacts
and opportunities in certain businesses. This assessment helps us
to prioritise biodiversity projects in areas with the highest
potential to increase biodiversity values over time.
Social : The Group continues to improve with regards to health
& safety with a 14% YoY reduction in harm frequency rate; over
42% reduction in serious harm frequency rate and lost time
frequency Rate. This has been supported by proactive internal
audits and focus on core risks and management plans. The Group also
continues to ensure proactive engagement with staff, contractors,
and communities through the likes of our Supervisor Workshop
program and community engagement programs, including partnering
with Hope House Ty Gobaith.
Governance : the Group continues to drive routine training and
development through Formity, while also ensuring its policies and
procedures are regularly reviewed.
The Group is currently covered by MSCI (ESG rating agency) and
is AA rated, but as part of a continued focus on ESG, engaged
CEN-ESG, an ESG consultancy, to conduct a gap analysis to optimise
our ESG reporting and disclosure.
With new regulation for AIM companies, the Group will disclose a
TCFD report in the FY23 Annual Report.
Corporate
Our 2022 annual results were released on 27 March 2023 and on 25
April 2023 we held our AGM with all resolutions being passed.
Outlook
Whilst conditions are likely to remain challenging in several of
the Group's markets in the coming months, early trading into the
second half of FY23 has been encouraging.
Demand conditions in the Group's infrastructure markets remains
positive, with several significant projects underpinning visibility
into H2. In quicklime products, demand continues to be resilient in
the Metals, Agriculture and Environment sectors with conditions
stabilising in the Paper, Pulp & Board sector following the
de-stocking in H1. Residential construction demand is expected to
remain weak, particularly in the UK and Scandinavian markets.
Against this diversified backdrop, we also expect that our focus on
productivity enhancement and a decentralised operating model will
continue to support a resilient performance. As such, the Board's
expectations for the full year remain unchanged.
The full impact of the acquisition and investment programme
launched in February 2023, will manifest over the course of H2,
strengthening the Group's competitive position in several local
markets, while adding to our geographic diversification in others.
Many of these end markets are underpinned by longer term structural
growth dynamics, including infrastructure investment,
sustainability, energy transition and the increasing use of
limestone in various industrial production processes, which should
enable the Group to accelerate its growth momentum as macroeconomic
conditions improve.
The Group continues to be cash generative and, with cash flow
also typically seasonally weighted to the second half, leverage is
expected to continue to decline absent of further acquisitions
and/or development investment .
David Barrett Max Vermorken Garth Palmer
Executive Chairman Chief Executive Officer Chief Financial Officer
4 September 2023
CONSOLIDATED INCOME STATEMENT
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
Non-underlying* Non-underlying*
Underlying (Note 8) Total Underlying (Note 8) Total
Continued GBP'000
operations Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------- ---------- ----------------- ------- ----------- --------------- -----------
Revenue 6 290,018 - 290,018 247,067 - 247,067
-------------- ----------- ------------- ----------- --------------- -----------
Cost of sales 7 (223,320) - (223,320) (193,918) - (193,918)
Gross profit 66,698 - 66,698 53,150 - 53,150
-------------- ----------- ------------- ----------- --------------- -----------
Administrative
expenses 7 (28,013) (7,960) (35,973) (21,410) (9,766) (31,176)
Profit from
operations 38,685 (7,960) 30,725 31,739 (9,766) 21,973
-------------- ----------- ------------- ----------- --------------- -----------
Net finance
(expense)/income (6,649) (764) (7,413) (3,349) (764) (4,113)
Other net
(losses)/gains 738 634 1,372 576 (9) 567
Foreign exchange 268 - 268 157 - 157
Profit/(loss)
before tax 33,042 (8,090) 24,952 29,123 (10,539) 18,584
-------------- ----------- ------------- ----------- --------------- -----------
Tax expense (4,660) - (4,660) (5,206) - (5,206)
Profit/(loss) 28,382 (8,090) 20,292 23,917 (10,539) 13,378
-------------- ----------- ------------- ----------- --------------- -----------
Profit/(loss)
attributable to:
Owners of the
parent 27,101 (8,090) 19,011 23,067 (10,539) 12,528
Non-controlling
interests 1,281 - 1,281 850 - 850
-------------- ----------- -------------
28,382 (8,090) 20,292 23,917 (10,539) 13,378
-------------- ----------- ------------- ----------- --------------- -----------
Basic earnings
per share
attributable
to owners of the
parent
(expressed
in pence per
share) 15 4.01 (1.20) 2.81 3.61 (1.65) 1.96
-------------- ----------- ------------- ----------- --------------- -----------
Diluted earnings
per share
attributable
to owners of the
parent
(expressed
in pence per
share) 15 3.84 (1.15) 2.70 3.46 (1.58) 1.88
-------------- ----------- ------------- ----------- --------------- -----------
* Non-underlying items represent acquisition related expenses,
restructuring costs, certain finance costs, share option expense
and amortisation of acquired intangibles. See Note 8 for more
information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
Note GBP'000 GBP'000
--------------------------------------------- ---- ----------- -----------
Profit for the period 20,292 13,378
----------- -----------
Other comprehensive income:
Items that will or may be reclassified to
profit or loss:
Currency translation (losses) / gains (20,095) 11,306
Cash settled hedges - effective portion of
changes in fair value (8,858) 11,678
Cash settled hedges - reclassified to profit
or loss 105 -
Remeasurement of the net defined benefits
liability - 13
Related tax 1,743 -
----------- -----------
(27,105) 22,997
----------- -----------
Total comprehensive income (6,813) 36,375
----------- -----------
Total comprehensive income attributable
to:
Owners of the parent (7,661) 35,518
Non-controlling interests 12 847 857
----------- -----------
Total comprehensive income for the period (6,813) 36,375
----------- -----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number: 05204176
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
--------------------------------- ---- ---------- ---------- -----------
Non-current assets
Property, plant and equipment 9 525,007 277,364 523,188
Intangible assets 10 182,191 355,222 189,875
Available for sale assets 250 - -
Investment in equity-accounted
associate 11 591 528 576
Investment in joint ventures 11 5,574 5,283 5,942
Derivative financial assets 3,904 11,989 4,771
Other receivables 4,134 4,879 4,259
Deferred tax asset 5,132 3,915 4,426
726,783 659,180 733,037
---------- ---------- -----------
Current assets
Trade and other receivables 100,264 94,097 86,805
Inventories 72,765 56,028 67,780
Cash and cash equivalents 62,526 46,427 68,623
Derivative financial assets 1,423 10,180 10,683
236,978 206,732 233,891
---------- ---------- -----------
Total assets 963,761 865,912 966,928
---------- ---------- -----------
Current liabilities
Trade and other payables 130,053 119,933 140,443
Derivative financial liabilities 3,545 1,372 6,693
Provisions 6,373 4,982 6,596
Current tax payable 2,640 3,811 1,251
Borrowings 13 35,540 30,021 33,846
178,151 160,119 188,829
---------- ---------- -----------
Non-current liabilities
Borrowings 13 210,254 233,363 228,630
Employee benefit liabilities 1,242 1,575 1,312
Derivative financial liabilities 2,510 1,057 552
Deferred tax liabilities 65,468 9,710 68,604
Provisions 3,810 5,094 4,100
Other payables 5,374 4,484 5,051
---------- ---------- -----------
288,658 255,283 308,249
---------- ---------- -----------
Total Liabilities 466,809 415,402 497,078
---------- ---------- -----------
Net assets 496,952 450,510 469,850
---------- ---------- -----------
Equity attributable to owners
of the parent
Share capital 14 6,939 6,383 6,383
Share premium 14 - 400,022 400,022
Share option reserve 9,481 9,307 7,483
Other reserves (17,077) 12,796 10,261
Retained earnings 485,872 12,781 33,969
Equity attributable to owners
of the parent 485,215 441,289 458,118
Non-controlling interest 12 11,737 9,221 11,732
---------- ---------- -----------
Total Equity 496,952 450,510 469,850
---------- ---------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Non-controlling
Share Share option Other Retained interest
capital premium reserve reserves earnings Total Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ------ ------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 1
January
2022 6,379 399,897 3,104 (11,236) 2,116 400,260 10,894 411,154
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Profit for the
period - - - - 12,528 12,528 850 13,378
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Currency translation
differences - - - 11,299 - 11,299 7 11,306
Other comprehensive
income - - - 11,691 - 11,691 - 11,691
Total comprehensive
income for the
period - - - 22,990 12,528 35,518 857 36,375
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Contributions by
and distributions
to owners
Issue of ordinary
shares 4 125 - - - 129 - 129
Share option charge - - 6,380 - - 6,380 - 6,380
Exercise of share
options - - (177) - 177 - - -
Dividends - - - - (1,686) (1,686) (2,530) (4,216)
Movement in equity - - - 1,042 (354) 688 - 688
Total contributions
by and
distributions
to owners 4 125 6,203 1,042 (1,863) 5,511 (2,530) 2,981
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 30
June 2022 6,383 400,022 9,307 12,796 12,781 441,289 9,221 450,510
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 1 July
2022 6,383 400,022 9,307 12,796 12,781 441,289 9,221 450,510
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Profit for the
period - - - - 18,710 18,710 1,493 20,203
Currency translation
differences - - - 5,877 - 5,877 552 6,429
Other comprehensive
income - - - (8,057) - (8,057) - (8,057)
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Total comprehensive
income for the
period - - - (2,180) 18,710 16,530 2,045 18,575
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Contributions by
and distributions
to owners
Acquired via
acquisition - - - - - - 974 974
Issue of ordinary
shares - - - - - - - -
Share option charge - - (1,824) (1,824) - (1,824)
Movement in equity - - (355) 2,478 2,123 (508) 1,615
Total contributions
by and
distributions
to owners - - (1,824) (355) 2,478 299 466 765
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 31
December 2022 6,383 400,022 7,483 10,261 33,969 458,118 11,732 469,850
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 1
January
2023 6,383 400,022 7,483 10,261 33,969 458,118 11,732 469,850
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Profit for the
period - - - - 19,011 19,011 1,281 20,292
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Currency translation
differences - - - (19,662) - (19,662) (433) (20,095)
Other comprehensive
income - - - (7,010) - (7,010) - (7,010)
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Total comprehensive
income for the
period - - - (26,672) 19,011 (7,661) 847 (6,813)
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Contributions by
and distributions
to owners
Issue of ordinary
shares 14 556 29,444 - - - 30,000 - 30,000
Issue of share
capital - (782) - - - (782) - (782)
Share option charge - - 2,001 - - 2,001 - 2,001
Exercise of share
options - - (3) - 3 - - -
Dividends - - - - 3,438 3,438 (843) 2,595
Movement in equity - (428,684) - (666) 429,451 101 - 101
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Total contributions
by and
distributions
to owners 556 (400,022) 1,998 (666) 432,892 34,758 (843) 33,915
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
Balance as at 30
June 2023 6,939 - 9,481 (17,077) 485,872 485,215 11,737 496,952
------- ------------ ------- ----------- -------- ----------- ----------------- ----------
CASH FLOW STATEMENTS
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
Note GBP'000 GBP'000
------------------------------------------------ ---- ----------- -----------
Cash flows from operating activities
Profit 20,292 13,378
Adjustments for:
Depreciation and amortisation 18,533 15,830
Share option expense 2,001 6,597
Loss/(gain) on sale of property, plant and
equipment (229) (358)
Net finance costs 7,413 4,113
Other non-cash adjustments (548) 407
Net tax paid (197) (1,441)
Share of earnings from associates (414) (201)
Increase in trade and other receivables (11,280) (13,325)
Increase in inventories (5,950) (8,501)
(Decrease)/increase in trade and other payables (12,342) 3,383
Decrease in provisions (178) (539)
Net cash flows from operating activities 17,101 19,343
----------- -----------
Investing activities
Purchase of property, plant and equipment 9 (14,617) (15,063)
Cash paid for acquisition of subsidiaries
(net of cash acquired) (17,012) (36,648)
Proceeds from sale of subsidiary 1,720 -
Sale of property plant and equipment 1,014 779
Purchase of intangible assets 10 (7) (535)
Purchase of available for sale assets (250) -
Financial derivatives (4) 302
Interest received 1,487 2,959
Net cash used in investing activities (27,669) (48,206)
----------- -----------
Financing activities
Proceeds from share issue 30,000 128
Cost of share issues (782) -
Finance costs (10,342) (6,714)
Proceeds from borrowings 2,135 28,901
Repayment of borrowings (13,997) (16,257)
Dividends paid (843) (1,686)
----------- -----------
Net cash generated from financing activities 6,171 4,372
----------- -----------
Net increase in cash and cash equivalents (4,397) (24,491)
Cash and cash equivalents at beginning of
period 68,623 69,916
Exchange (losses)/gains on cash ( 1,700) 1,002
Cash and cash equivalents and end of period 62,526 46,427
----------- -----------
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
The principal activity of SigmaRoc is to make investments and/or
acquire projects in the quarried materials sector, and the
principal activity of the Group is the production of high-quality
aggregates and supply of value-added industrial and construction
materials. The Company's shares are admitted to trading on the AIM
market of the London Stock Exchange ('AIM'). The Company is
incorporated and domiciled in the United Kingdom.
The address of its registered office is 6 Heddon Street, London,
W1B 4BT.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting, as adopted by
the UK. The interim financial statements have been prepared
applying the accounting policies and presentation that were applied
in the annual financial statements for the year ended 31 December
2022. The condensed interim financial stat ements should be read in
conjunction with the annual financial statements for the year ended
31 December 2022.
The interim financial information set out above does not
constitute statutory accounts within the meaning of the Companies
Act 2006. It has been prepared on a going concern basis in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) as adopted by
the UK.
Statutory financial statements for the period ended 31 December
2022 were approved by the Board of Directors on 25 March 2023 and
delivered to the Registrar of Companies. The report of the auditors
on those financial statements was unqualified. The comparative
financial information for the interim period ended 30 June 2022 and
year ended 31 December 2022 is for the Group only.
Going concern
The Directors, having made appropriate enquiries, consider that
adequate resources exist for the Company and Group to continue in
operational existence for the foreseeable future and that,
therefore, it is appropriate to adopt the going concern basis in
preparing the condensed interim financial statements for the period
ended 30 June 2023.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Company's
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Company's
2022 Annual Report and Financial Statements, a copy of which is
available on the Company's website: www.sigmaroc.com . The key
financial risks are liquidity risk, credit risk, interest rate risk
and fair value estimation.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in Note 4 of the Company's 2022 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
Foreign Currencies
a) Functional and Presentation Currency
Items included in the Financial Statements are measured using
the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The Financial
Statements are presented in Pounds Sterling, rounded to the nearest
pound, which is the Group's functional currency.
b) Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the Income Statement. Foreign exchange gains and
losses that relate to borrowings and cash and cash equivalents are
presented in the Income Statement within 'finance income or costs.
All other foreign exchange gains and losses are presented in the
Income Statement within 'Other net gains/(losses)'.
Translation differences on non-monetary financial assets and
liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value
gain or loss. Translation differences on non-monetary financial
assets measured at fair value, such as equities classified as
available for sale, are included in other comprehensive income.
c) Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
-- assets and liabilities for each period end date presented are
translated at the period-end closing rate;
-- income and expenses for each Income Statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
-- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities, and of
monetary items receivable from foreign subsidiaries for which
settlement is neither planned nor likely to occur in the
foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised
in the Income Statement as part of the gain or loss on sale.
3. Accounting policies
Except as described below, the same accounting policies,
presentation and methods of computation have been followed in these
condensed interim financial statements as were applied in the
preparation of the company's annual financial statements for the
year ended 31 December 2022, except for the impact of the adoption
of the Standards and interpretations described in para 3.1
below:
3.1. Changes in accounting policy and disclosures
(a) Accounting developments during 2023
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 30 June 2023 but did
not result in any material changes to the financial statements of
the Group or Company.
(b) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standard Impact on initial application Effective date
--------- ------------------------------ ---------------
IFRS 16 Leases 1 January 2024
------------------------------ ---------------
IAS 1 Classification of Liabilities 1 January 2024
as Current or Non-Current.
------------------------------ ---------------
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
the Group's results or shareholders' funds.
4. Dividends
No dividend has been declared or paid by the Company during the
six months ended 30 June 2023 (2022: nil).
5. Segment Information
Management has determined the operating segments based on
reports reviewed by the Board of Directors that are used to make
strategic decisions. During the periods presented the Group has
three geographical regions, North West which comprises of PPG,
England, Wales and Channel Islands; West which comprises of
Dimension Stone and Benelux; and North East which comprises of
Quicklime, Nordics, Poland and Baltics. Activities in the North
West, West and North East regions relate to the production and sale
of construction material products and services.
6 months to 30 June 2023
-----------------------------------------------
North West West North Total
East
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------- ------- ---------
Revenue 73,789 51,416 164,813 290,018
------------- ------- ------- ---------
Profit from operations per
reportable segment (1,384) 9,307 22,802 30,725
------------- ------- ------- ---------
Additions to non-current assets 1,300 (195) (7,358) (6,253)
Reportable segment assets 240,470 139,634 583,657 963,761
Reportable segment liabilities 325,536 27,421 113,852 466,809
------------- ------- ------- ---------
6 months to 30 June 2022
-----------------------------------------
North West West North Total
East
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ---------- ------- -------- ------------
Revenue 66,364 43,224 137,479 247,067
---------- ------- -------- ------------
Profit from operations per
reportable segment (2,766) 6,978 17,761 21,973
---------- ------- -------- ------------
Additions to non-current assets 57,100 (2,191) 26,984 81,893
Reportable segment assets 230,693 116,653 518,566 865,912
Reportable segment liabilities 286,173 30,015 99,214 415,102
---------- ------- -------- ------------
6. Revenue
Consolidated
---------------------
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
-------------------------------------------- ------------- -----------
Upstream products 42,667 28,009
Value added products 217,164 191,046
Value added services 25,695 23,171
Other 4,492 4,842
290,018 247,067
------------- -----------
Upstream products revenue relates to the sale of aggregates and
cement. Value added products is the sale of finished goods that
have undertaken a manufacturing process within each of the
subsidiaries. Value added services consists of the transportation,
installation and contracting services provided.
All revenues from upstream and value added products relate to
products for which revenue is recognised at a point in time as the
product is transferred to the customer. Value added services
revenues are accounted for as products and services for which
revenue is recognised over time.
Whilst the Group has contract revenue, this amount is not deemed
to be material under IFRS 15.
7. Expenses by nature
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
-------------------------------------- ----------- -----------
Cost of sales
Raw materials and production 102,035 92,942
Distribution and selling expenses 20,837 19,654
Employee benefit expenses 61,473 46,614
Maintenance expense 12,572 10,196
Plant hire expense 3,267 3,008
Depreciation and amortisation expense 15,176 15,091
Other costs of sale 7,960 6,413
Total cost of sales 223,320 193,918
----------- -----------
Administrative expenses
Operational admin expenses 27,253 19,666
Corporate admin expenses 8,720 11,510
Total administrative expenses 35,973 31,176
----------- -----------
Depreciation and amortisation expense is a combination of
property, plant and equipment depreciation and amortisation of
intangible assets.
8. Non-underlying items
As required by IFRS 3 - Business Combinations, acquisition costs
have been expensed as incurred. Additionally, the Group incurred
costs associated with obtaining debt financing, including advisory
fees to restructure the Group to satisfy lender requirements.
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------------------------- ----------- -----------
Acquisition related expenses 2,112 1,849
Restructuring expenses 285 801
Share options expense 2,001 6,696
Amortisation and remeasurement of acquired intangibles 2,725 739
Amortisation of finance costs 543 -
Unwinding of discount on deferred consideration 222 -
Other non-underlying 202 454
8,090 10,539
----------- -----------
Acquisition related expenses include costs relating to the due
diligence of prospective pipeline acquisitions, stamp duty and
other direct costs associated with merger & acquisition
activity including accounting fees, legal fees and other consulting
fees.
Restructuring expenses relate to the reorganisation and
integration of recently acquired subsidiaries, including costs
associated with site optimisation, transitional salary costs,
redundancies, severance & recruitment fees, and costs
associated with financial reporting and system migrations.
Share option expense is the fair value of the share options
issued and or vested during the period.
Amortisation and remeasurement of acquired assets are non-cash
items which distort the underlying performance of the businesses
acquired. Amortisation of acquired assets arise from certain fair
value uplifts resulting from the Purchase Price Allocation ("PPA").
Remeasurement of acquired assets arises from ensuring assets from
acquisitions are depreciated in line with Group policy.
Amortisation of finance costs is the amortisation of borrowing
costs on the Syndicated Senior Credit Facility. These costs are
amortised over a 5-year period.
Unwinding of discount on deferred consideration is a non-cash
adjustment relating to deferred consideration arising on
acquisitions.
Other non-underlying costs include professional adviser fees and
other miscellaneous non-recurring costs.
9. Property, plant and equipment
Land Plant Right
Office Land and and Furniture of use Construction
equipment and minerals buildings machinery and vehicles assets in progress Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Cost
As at 1
January
2022 4,594 189,967 121,233 289,918 24,595 - 13,199 643,506
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary 160 9,248 994 10,931 251 -- 1,730 23,314
Transfer
between
classes - - - 364 - - (364) -
Fair value
adjustment - - (68) - 2,192 - - 2,124
Additions 106 2,303 1,176 8,085 423 - 2,970 15,063
Disposals (5) - - (1,254) (112) - - (1,371)
Forex 93 2,741 975 2,206 200 - 0 6,215
As at 30 June
2022 4,948 204,259 124,310 310,250 27,549 - 17,535 688,851
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary - - 19,607 4,363 - 2,052 36 26,058
Transfer
between
classes - (9,175) (5,720) (13,907) (1,776) 35,014 (4,436) -
Fair value
adjustments - 211,629 10,576 12,450 - - - 234,655
Additions 116 - 13,984 14,853 1,068 5,926 - 35,947
Disposals (51) (468) (4,525) (1,634) (2,244) (2,862) - (11,784)
Forex 82 (113) (322) (1,161) (2,071) (696) (1,442) (5,723)
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
As at 31
December
2022 5,095 406,132 157,910 325,214 22,526 39,434 11,693 968,004
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary 207 348 3,474 6,190 3,632 - - 13,851
Transfer
between
classes - 4,456 709 188 - - (884) 4,469
Additions 85 1,762 280 5,192 810 992 5,496 14,617
Disposals (25) - - (2,107) (900) - - (3,032)
Forex (292) 7,403 (14,568) (15,787) (1,297) (1,093) 667 (24,968)
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
As at 30 June
2023 5,070 420,101 147,805 318,890 24,771 39,333 16,971 972,941
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Depreciation
As at 1
January
2022 4,041 70,174 68,392 226,274 18,232 - - 387,113
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary 78 1,947 68 4,140 53 - - 6,286
Charge for
the
year 102 1,157 3,207 8,847 1,477 - - 14,790
Disposals (3) - - (888) (58) - - (949)
Forex 89 2,500 (380) 1,885 153 - - 4,247
---------- ------------
As at 30 June
2022 4,307 75,778 71,287 240,258 19,857 - - 411,487
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary - - 8,625 3,448 - 393 - 12,466
Charge for
the
year 106 5,391 1,932 6,149 522 6,257 - 20,357
Disposals (52) - (91) (709) (1,684) (907) - (3,443)
Transfer
between
classes - (1,947) (1,850) (12,585) (1,101) 17,483 - -
Forex 79 679 1,478 2,749 (256) (780) - 3,949
As at 31
December
2022 4,440 79,901 81,381 239,310 17,336 22,446 - 444,816
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Acquired
through
acquisition
of
subsidiary 80 - 1,064 4,070 2,386 - - 7,600
Charge for
the
year 77 3,384 2,424 8,232 612 2,615 - 17,344
Disposals (24) - - (1,614) (608) - - (2,246)
Forex (191) 588 (4,541) (13,796) (531) (1,109) - (19,580)
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
As at 30 June
2023 4,382 83,873 80,328 236,202 19,197 23,952 - 447,934
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
Net book
value
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
As at 30 June
2022 641 128,481 53,023 69,992 7,692 - 17,535 277,364
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
As at 31
December
2022 655 326,231 76,529 85,904 5,188 16,988 11,693 523,188
As at 30 June
2023 688 336,228 67,477 82,688 5,574 15,381 16,971 525,007
---------- ------------ ----------- ----------- ------------ -------- ------------ ---------
10. Intangible assets
Consolidated
Goodwill Customer Intellectual Research Branding Other Total
Relations property & Development Intangibles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------- ------------ -------------- -------- ------------ ----------
Cost & net book
value
As at 1 January
2022 293,438 2,816 386 571 3,238 5,986 306,435
Additions - - - 4 - 531 535
Additions through
business combination 41,496 - - - - 41,496
Amortisation - (258) (42) (54) (80) (607) (1,041)
Forex 7,647 - - 4 - 146 7,797
---------- ---------- ------------ -------------- -------- ------------ ----------
As at 30 June 2022 342,581 2,558 344 525 3,158 6,056 355,222
---------- ---------- ------------ -------------- -------- ------------ ----------
2021 Adjustment 12,527 12,527
Additions - - - - - 1,182 1,182
Additions through
business combination 47,600 - - - - - 47,600
Price Purchase Allocation
- B-Mix (4,429) - - - - - (4,429)
Price Purchase Allocation
- Nordkalk (233,955) 3,795 - - - - (230,160)
Amortisation - (568) (43) (33) (80) (900) (1,624)
Forex 9,501 - - (8) - 64 9,558
---------- ---------- ------------ -------------- -------- ------------ ----------
As at 31 December
2022 173,825 5,785 301 484 3,078 6,402 189,875
---------- ---------- ------------ -------------- -------- ------------ ----------
Reallocation - - - - - (4,496) (4,496)
Additions - - - 3 - 4 7
Additions through
business combination 8,019 - - - - - 8,019
Amortisation - ( 413) ( 42) ( 31) ( 80) ( 623) (1,189)
Forex (9,593) - - ( 425) - ( 7) (10,025)
---------- ---------- ------------ -------------- -------- ------------ ----------
As at 30 June 2023 172,251 5,372 259 31 2,998 1,280 182,191
---------- ---------- ------------ -------------- -------- ------------ ----------
The intangible asset classes are:
- Goodwill is the excess of the consideration transferred and
the acquisition date fair value of any previous equity interest in
the acquired over the fair value of the net identifiable
assets.
- Customer relations is the value attributed to the key customer lists and relationships.
- Intellectual property is the patents owned by the Group.
- Research and development is the acquiring of new technical
knowledge and trying to improve existing processes or products or;
developing new processes or products.
- Branding is the value attributed to the established company brand.
- Other intangibles consist of capitalised development costs for
assets produced that assist in the operations of the Group and
incur revenue.
Amortisation of intangible assets is included in cost of sales
on the Income Statement. Development costs have been capitalised in
accordance with the requirements of IAS 38 and are therefore not
treated, for dividend purposes, as a realised loss.
The Purchase Price Allocation ('PPA') exercise for Johnston
Quarry Group has commenced but is still subject to
finalisation.
Impairment tests for goodwill
Goodwill arising on business combinations is not amortised but
is reviewed for impairment on an annual basis, or more frequently
if there are indications that the goodwill may be impaired.
Goodwill is allocated to groups of cash generating units according
to the level at which management monitor that goodwill, which is at
the level of operating segments.
The primary operating segments are considered to be Ronez in the
Channel Islands, Topcrete, Poundfield, CCP, Rightcast, Retaining,
GD Harries and Johnston Quarry Group in the UK, CDH, Stone, GDH,
B-Mix and Goijens in Belgium and Nordkalk in Finland, Sweden,
Poland and Spain.
Key assumptions
The key assumptions used in performing the impairment review are
set out below:
Cash flow projections
Cash flow projections for each operating segment are derived
from the annual budget approved by the Board for 2023 and the
three-year plan to 2023 and 2025. The key assumptions on which
budgets and forecasts are based include sales volumes, product mix
and operating costs. These cash flows are then extrapolated forward
for a further 17 years, with the total period of 20 years
reflecting the long-term nature of the underlying assets. Budgeted
cash flows are based on past experience and forecast future trading
conditions.
Long-term growth rates
Cash flow projections are prudently based on 2 per cent. and
therefore provides plenty of headroom.
Discount rate
Forecast cash flows for each operating segment have been
discounted at rates of 8 per cent which was calculated by an
external expert based on market participants' cost of capital and
adjusted to reflect factors specific to each operating segment.
Sensitivity
The Group has applied sensitivities to assess whether any
reasonable possible changes in assumptions could cause an
impairment that would be material to these consolidated Financial
Statements. This demonstrated that a 1% increase in the discount
rate would not cause an impairment and the annual growth rate is
assumed to be 2%.
The Directors have therefore concluded that no impairment to
goodwill is necessary.
11. Investment in Equity Accounted Associates & Joint Ventures
Nordkalk has a joint venture agreement with Franzefoss Minerals
AS, to build a lime kiln located in Norway which was entered into
on 5 August 2004. NorFraKalk AS is the only joint agreement in
which the Group participates.
The Group has one non-material local associate in Pargas, Pargas
Hyreshus Ab.
30 June 2023 30 June 2022
Unaudited Unaudited
GBP'000 GBP'000
-------------------------- ------------ ------------
Interests in associates 591 528
Interest in joint venture 5,574 5,283
------------ ------------
6,165 5,811
------------ ------------
Proportion of
ownership interest
held
------------------------------------------------------ -------- ----------------------
30 June 30 June
2023 2022
Name Country of incorporation Unaudited Unaudited
-------------------------- --------------------------- ----------------- ------------
NorFraKalk AS Norway 50% 50%
-------------------------- -------------------------------- ------------ ------------
Summarised financial information
30 June 30 June
2023 2022
Unaudited Unaudited
NorFraKalk AS - Cost and net book value GBP'000 GBP'000
---------------------------------------- ---------- ----------
Current assets 7,994 10,960
Non-current assets 6,584 9,867
Current liabilities 2,781 4,199
Non-current liabilities 2,144 5,488
---------- ----------
19,503 30,514
---------- ----------
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
-------------------------------------------- ----------- -----------
Revenues 5,947 10,559
Profit after tax from continuing operations 812 478
----------- -----------
12. Non-controlling interests
6 months 6 months
to 30 June to 30
2023 June 2022
Unaudited Unaudited
GBP'000 GBP'000
--------------------------------------------- ----------- ----------
As at 1 January 11,732 10,894
Non-controlling interests share of profit in
the period 1,281 850
Dividends paid (843) (2,530)
Foreign exchange movement (433) 7
----------- ----------
As at 30 June 11,737 9,221
----------- ----------
30 June 2023 30 June 2022
--------------------------- ---------------------------
Other Other
individually individually
Suomen immaterial Suomen immaterial
Karbonaatti subsidiaries Karbonaatti subsidiaries
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------- ------------ -------------
Current assets 15,103 11,537 18,491 9,091
Non-current assets 3,130 19,606 3,611 13,545
Current liabilities 11,074 8,057 9,432 4,709
Non-current liabilities 10 5,131 7,774 2,150
------------ ------------- ------------ -------------
Net Assets 7,149 17,955 4,897 15,777
------------ ------------- ------------ -------------
Net Assets Attributable to NCI 3,503 6,817 2400 5,300
------------ ------------- ------------ -------------
Revenue 18,253 12,719 14,254 9,527
Profit after taxation 1,870 1,050 1,029 1,026
Other comprehensive income - - - -
------------ ------------- ------------ -------------
Total comprehensive income 1,870 1,050 1,029 1,026
------------ ------------- ------------ -------------
Net operating cash flow 1,552 977 977 841
Net investing cash flow (137) (812) (398) (370)
Net financing cash flow (1,717) (1,391) (3,452) (380)
------------ ------------- ------------ -------------
Dividends paid to NCI (843) - (1,691) -
------------ ------------- ------------ -------------
13. Borrowings
30 June 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
---------------------------------------------- ------------- ----------
Non-current liabilities
Santander term facility 189,458 211,320
Bank Loans 2,351 65
Finance lease liabilities 7,192 8,897
IFRS16 Leases 11,253 13,081
-------- ----------
210,254 233,363
-------- ----------
Current liabilities
Santander term facility 24,000 16,000
Bank loans 6,234 6,962
Finance lease liabilities 1,294 588
IFRS16 Leases 4,012 6,471
-------- ----------
35,540 30,021
-------- ----------
In July 2022, the Group entered into a new Syndicated Senior
Credit Facility of up to GBP305 million (the 'Credit Facility') led
by Santander UK and including several major UK and European banks.
The Credit Facility, which comprises a GBP205 million committed
term facility, a GBP100 million revolving facility commitment and a
further GBP100 million accordion option. This new facility replaces
all previously existing bank loans within the Group.
The Credit Facility is secured by a floating charge over the
assets of SigmaFin Limited, Carrieres du Hainaut and Nordkalk and
is secured by a combination of debentures, security interest
agreements, pledges and floating rate charges over the assets of
SigmaRoc plc, SigmaFin Limited, B-Mix, Carrieres du Hainaut and
Nordkalk. Interest is charged at a rate between 1.85% and 3.35%
above SONIA ('Interest Margin'), based on the calculation of the
adjusted leverage ratio for the relevant period. For the period
ending 30 June 2023 the Interest Margin was 2.60%.
The carrying amounts and fair value of the non-current
borrowings are:
Carrying amount
and fair value
-----------------------
30 June 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------------------ ---------- ----------
Santander term facility (net of establishment
fees) 189,458 211,320
Bank loans 2,351 65
Finance lease liabilities 7,192 8,897
IFRS16 leases 11,253 13,081
---------- ----------
210,254 233,363
---------- ----------
14. Share capital and share premium
Number Ordinary
of shares shares Share premium Total
GBP GBP GBP
---------------------------------- ----------- -------- ------------- ---------
Issued and fully paid
As at 1 January 2022 637,915,750 6,379 399,897 406,276
----------- -------- ------------- ---------
Issue of new shares - 4 January
2022 330,594 4 125 129
As at 30 June 2022 638,246,344 6,383 400,022 406,405
As at 31 December 2022 638,246,344 6,383 400,022 406,405
----------- -------- ------------- ---------
As at 1 January 2023 638,246,344 6,383 400,022 406,405
Issue of new shares - 28 February
2023 55,555,555 556 28,682 29,238
Capital reduction - 23 May
2023 - - (428,704) (428,704)
As at 30 June 2023 693,801,899 6,939 - 6,939
----------- -------- ------------- ---------
(1) Includes issue costs of GBP781,679
On 23 February 2023, the Company raised GBP29.2 million net of
issue costs via the issue and allotment of 55,555,555 new Ordinary
Shares at a price of 54 pence per share.
On 23 May 2023, the Company undertook a capital reduction
whereby the share premium account was transferred to retaining
earnings and the deferred shares were cancelled.
15. Earnings per share
The calculation of the total basic earnings per share of 2.81
pence (2022: 1.96 pence) is calculated by dividing the profit
attributable to shareholders of GBP 20, 292 million (2022:
GBP13,378 million) by the weighted average number of ordinary
shares of 675,999,566 (2022: 638,240,865) in issue during the
period.
Diluted earnings per share of 2.70 pence (2022: 1.88 pence) is
calculated by dividing the profit attributable to shareholders of
GBP20,292 million (2022: GBP13,378 million ) by the weighted
average number of ordinary shares in issue during the period plus
the weighted average number of share options and warrants to
subscribe for ordinary shares in the Company, which together total
705,122,110 (2022: 667,404,450).
Details of share options that could potentially dilute earnings
per share in future periods are disclosed in the notes to the
Group's Annual Report and Financial Statements for the year ended
31 December 2022.
16. Fair value of financial assets and liabilities measured at amortised costs
The following table shows the carrying amounts and fair values
of the financial assets and liabilities, including their levels in
the fair value hierarchy. It does not include fair value
information for financial assets and financial liabilities not
measures at fair value if the carrying amount is a reasonable
approximation of fair value.
Items where the carrying amount equates to the fair value are
categorised to three levels:
-- Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date
-- Level 2 inputs are inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
either directly or indirectly
-- Level 3 inputs are unobservable inputs for the asset or liability.
Carrying amount Fair value
------------------------------------------------------- ----
Financial
Fair Fair Fair asset
value value value at Other
- Hedging through through amortised financial Level Level
instruments P&L OCI cost liabilities Total 1 2 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------------ -------- ------- --------- ----------- -------- --------- -------- ----------
Financial assets measured at fair value
Forward exchange
contracts - (2,615) 1,550 - - (1,064) - (1,064) (1,064)
CO(2) emission - - - - - - - - -
hedge
Electricity
hedges - - 6,391 - - 6,391 6,391 - 6,391
----------- -------- ------- --------- ----------- -------- --------- -------- ----------
Financials assets not measured at fair value
Trade and
other
receivables
(excl.
Derivatives) - - - 100,264 - 100,264 - - -
Cash and cash
equivalents - - - 62,526 - 62,526 - - -
Financial liabilities measured at fair value
Forward exchange
contracts - (2,954) 1,518 - - (1,436) - (1,436) (1,436)
Electricity
hedges - - 7,492 - - 7,491 7,491 - 7,491
----------- -------- ------- --------- ----------- -------- --------- -------- ----------
Financial liabilities not measured at fair value
Loans - - - - 222,042 222,042 - - -
Finance lease
liability - - - - 23,751 23,751 - - -
Trade and
other payables
(excl.
derivative) - - - - 135,427 135,427 - - -
----------- -------- ------- --------- ----------- -------- --------- -------- ----------
17. Business combination
Nayles Barn Quarry Limited
On 27 January 2023, the Group acquired 100 per cent. of the
share capital of Nayles Barn Quarry Limited ("Nayles Barn") for a
cash consideration of GBP3.5 million. Nayles Barn is registered and
incorporated in England. Nayles Barn is a high-quality producer of
construction aggregates, building stone and agricultural lime.
The following table summarises the consideration paid for Nayles
Barn and the values of the assets and equity assumed at the
acquisition date.
Total consideration GBP'000
----------------------- -------
Net cash consideration 3,500
3,500
-------
Recognised amounts of assets and liabilities acquired GBP'000
------------------------------------------------------- --------
Trade and other receivables 15
Property, plant & equipment 73
Trade and other payables (771)
Investment in Subsidiary 670
--------
Total identifiable net assets (13)
--------
Goodwill 3,513
--------
Total consideration 3,500
--------
Since 27 January 2023 Nayles Barn hasn't contributed profit or
revenue.
Goijens
On 31 January 2023, the Group acquired 100 per cent. of the
share capital of Gripeco BV and its subsidiaries ('Goijens') for a
cash consideration of EUR14 million. Goijens is registered and
incorporated in Belgium. The principal activity is the operation of
concrete plants.
The following table summarises the consideration paid for
Goijens and the values of the assets and equity assumed at the
acquisition date.
Total consideration GBP'000
-------------------- -------
Cash 12,037
12,037
-------
Recognised amounts of assets and liabilities acquired GBP'000
------------------------------------------------------ -------
Cash and cash equivalents 1,888
Trade and other receivables 2,166
Inventories 231
Property, plant & equipment 3,756
Investment in Subsidiary 2,426
Trade and other payables (1,485)
Income tax payable (24)
Borrowings (233)
Total identifiable net assets 8,725
-------
Goodwill (refer to note 8 ) 3,312
-------
Total consideration 12,037
-------
Since 31 January 2023, Goijens has contributed a profit of
GBP1.2 million and revenue of GBP8.2 million. Had Goijens been
consolidated from 1 January 2023, the consolidated statement of
income would show additional loss of GBP0.1 million and revenue of
GBP0.5 million.
Juuan Dolomiittikalkki Oy
On 1 February 2023, the Group acquired 70 per cent. of the share
capital of JD and its subsidiaries for a cash consideration of
EUR1.83 million. JD is registered and incorporated in Finland. JD
is a land improvement lime manufacturing company.
The following table summarises the consideration paid for JD and
the values of the assets and equity assumed at the acquisition
date.
Total consideration GBP'000
----------------------- -------
Cash 527
Deferred consideration 1,054
-------
1,581
-------
Recognised amounts of assets and liabilities acquired GBP'000
------------------------------------------------------ -------
Cash and cash equivalents 790
Trade and other receivables 362
Inventories 93
Property, plant & equipment 875
Investment in Subsidiary 32
Trade and other payables (78)
Borrowings (29)
Total identifiable net assets 2,045
-------
Goodwill (refer to note 8 ) (464)
-------
Total consideration 1,581
-------
Since 1 February 2023, JD has contributed a profit of GBP0.2
million and revenue of GBP0.8 million. Had JD been consolidated
from 1 January 2023, the consolidated statement of income would
show no additional and revenue of GBP0.2 million.
Retaining UK Limited
On 7 April 2023, the Group acquired 100 per cent. of the share
capital of Retaining UK Limited ('Retaining') and its subsidiaries
for a cash consideration of GBP2.45 million. Retaining is
registered and incorporated in England. Retaining provides
retaining wall solutions across the United Kingdom.
The following table summarises the consideration paid for
Retaining and the values of the assets and equity assumed at the
acquisition date.
Total consideration GBP'000
-------------------- -------
Cash 2,450
2,450
-------
Recognised amounts of assets and liabilities acquired GBP'000
------------------------------------------------------ -------
Cash and cash equivalents 150
Trade and other receivables 300
Inventories 1,372
Property, plant & equipment 396
Trade and other payables (889)
Income tax payable (46)
Deferred tax liability (30)
Borrowings (459)
Total identifiable net assets 794
-------
Goodwill (refer to note 8 ) 1,656
-------
Total consideration 2,450
-------
Since 7 April 2023, Retaining has contributed a profit of GBP0.2
million and revenue of GBP1.4 million. Had Retaining been
consolidated from 1 January 2023, the consolidated statement of
income would show additional profit of GBP0.1 million and revenue
of GBP1.4 million.
18. Related party transactions
Loans with Group Undertakings
Amounts receivable/(payable) as a result of loans granted
to/(from) subsidiary undertakings are as follows:
Company
------------------------
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------ ----------- -----------
Ronez Limited (23,044) (19,728)
SigmaGsy Limited (7,663) (6,763)
SigmaFin Limited 20,549 20,146
Topcrete Limited (10,346) (9,494)
Poundfield Products (Group) Limited 5,356 5,251
Foelfach Stone Limited 557 466
CCP Building Products Limited 5,086 5,396
Carrières du Hainaut SCA 13,633 16,388
GDH (Holdings) Limited 10,737 9,838
B-Mix Beton NV 11,279 517
Stone Holdings SA 384 376
Nordkalk Oy Ab 55,924 73,939
Johnston Quarry Group 11,975 10,451
Rightcast Limited (799) -
93,628 106,783
----------- -----------
Loans granted to or from subsidiaries are unsecured, have
interest charged at 2% and are repayable in Pounds Sterling on
demand from the Company.
All intra Group transactions are eliminated on
consolidation.
Other Transactions
During the period, there were no related party transactions.
19. Events after the reporting date
There have been no events after the reporting date of a material
nature.
20. Approval of interim financial statements
The condensed interim financial statements were approved by the
Board of Directors on 4 September 2023.
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END
IR USRRROSUKRUR
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