(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	£290.0m	£247.1m	+17%
EBITDA	£54.9m	£47.6m	+15%
EBITDA margin	18.9%	19.2%	-30bps
Net Margin2	21.9%	21.2%	+70bps
Profit before tax	£33.0m	£29.1m	+13%
EPS	4.01p	3.61p	+11%
Cash and cash equivalents	£62.5m	£46.4m	+35%
Net debt3	£183.3m	£216.9m	-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 £30m equity placing, now fully committed:

o  Six acquisitions expected to contribute c.£8m annualised EBITDA at an effective multiple of 3.9 times;

o  Organic growth investments expected to contribute a further c.£2m EBITDA, once fully operational, at an effective multiple of 3.3 times;

o  Divestment of four non-core assets generating £11m 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 Max Vermorken (Chief Executive Officer) Garth Palmer (Chief Financial Officer) Tom Jenkins (Head of Investor Relations)	Tel: +44 (0) 207 002 1080   ir@sigmaroc.com
Liberum Capital (Co-Broker and Nominated Adviser) Dru Danford / Jamie Richards / Ben Cryer	Tel: +44 (0) 203 100 2000
Peel Hunt (Co-Broker) Mike Bell / Ed Allsopp	Tel: +44 (0) 20 7418 8900
Walbrook PR Ltd (Public Relations) Tom Cooper / Nick Rome	Tel:+44 (0) 20 7933 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 to 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 £290m.

 

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 £55m. The Group generated £20m 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 £'M	Revenue		EBITDA
	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 £30m 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. £8m 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 £2m 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 £11m 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 CO₂ 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 Unaudited							6 months to 30 June 2022 Unaudited
				Underlying		Non-underlying* (Note 8)			Total		Underlying	Non-underlying* (Note 8)			Total
Continued operations	Note		£'000		£'000				£'000		£'000	£'000			£'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 to 30 June 2023 Unaudited	6 months to 30 June 2022 Unaudited
	Note	£'000	£'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 2023 Unaudited	30 June 2022 Unaudited	31 December 2022 Audited
	Note	£'000	£'000	£'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 capital		Share premium		Share option reserve		Other reserves		Retained earnings		Total		Non-controlling interest		Total
	Note		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'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 to 30 June 2023 Unaudited	6 months to 30 June 2022 Unaudited
	Note	£'000	£'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 statements 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 as Current or Non-Current.	1 January 2024

 

 

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 East		Total
		£'000			£'000	£'000		£'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 East	Total
		£'000	£'000		£'000	£'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 to 30 June 2023 Unaudited		6 months to 30 June 2022 Unaudited
	£'000		£'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 to 30 June 2023 Unaudited	6 months to 30 June 2022 Unaudited
	£'000	£'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 to 30 June 2023 Unaudited	6 months to 30 June 2022 Unaudited
	£'000	£'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

 

	Office equipment	Land and minerals	Land and buildings	Plant and machinery	Furniture and vehicles	Right of use assets	Construction in progress	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'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 Relations	Intellectual property	Research & Development	Branding	Other Intangibles	Total
	£'000		£'000	£'000	£'000	£'000	£'000	£'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 Unaudited	30 June 2022 Unaudited
	£'000	£'000
Interests in associates	591	528
Interest in joint venture	5,574	5,283
	6,165	5,811

 

 

					Proportion of ownership interest held
Name	Country of incorporation		30 June 2023 Unaudited			30 June 2022 Unaudited
NorFraKalk AS	Norway			50%		50%

 

 

Summarised financial information

 

NorFraKalk AS - Cost and net book value	30 June 2023 Unaudited £'000	30 June 2022 Unaudited £'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 to 30 June 2023 Unaudited £'000	6 months to 30 June 2022 Unaudited £'000
Revenues	5,947	10,559
Profit after tax from continuing operations	812	478

 

12.   Non-controlling interests

 

	6 months to 30 June 2023 Unaudited £'000	6 months to 30 June 2022 Unaudited £'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
	Suomen Karbonaatti		Other individually immaterial subsidiaries		Suomen Karbonaatti	Other individually immaterial subsidiaries
	£'000		£'000		£'000	£'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 2023 Unaudited		30 June 2022 Unaudited
	£'000		£'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 £305 million (the 'Credit Facility') led by Santander UK and including several major UK and European banks. The Credit Facility, which comprises a £205 million committed term facility, a £100 million revolving facility commitment and a further £100 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 2023 Unaudited	30 June 2022 Unaudited
	£'000	£'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 of shares	Ordinary shares	Share premium	Total
		£	£	£
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 £781,679

 

On 23 February 2023, the Company raised £29.2 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 £20,292 million (2022: £13,378 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 £20,292 million (2022: £13,378 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
		Fair value - Hedging instruments		Fair value through P&L	Fair value through OCI	Financial asset at amortised cost	Other financial liabilities	Total		Level 1	Level 2	Total
		£'000		£'000	£'000	£'000	£'000	£'000		£'000	£'000	£'000
Financial assets measured at fair value
Forward exchange contracts			-	(2,615)	1,550	-	-	(1,064)		-	(1,064)	(1,064)
CO2 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 £3.5 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	£'000
Net cash consideration	3,500
	3,500

 

 

Recognised amounts of assets and liabilities acquired	£'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 €14 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	£'000
Cash	12,037
	12,037

 

Recognised amounts of assets and liabilities acquired	£'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 £1.2 million and revenue of £8.2 million. Had Goijens been consolidated from 1 January 2023, the consolidated statement of income would show additional loss of £0.1 million and revenue of £0.5 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 €1.83 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	£'000
Cash	527
Deferred consideration	1,054
	1,581

 

Recognised amounts of assets and liabilities acquired	£'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 £0.2 million and revenue of £0.8 million. Had JD been consolidated from 1 January 2023, the consolidated statement of income would show no additional and revenue of £0.2 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 £2.45 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	£'000
Cash	2,450
	2,450

 

Recognised amounts of assets and liabilities acquired	£'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 £0.2 million and revenue of £1.4 million. Had Retaining been consolidated from 1 January 2023, the consolidated statement of income would show additional profit of £0.1 million and revenue of £1.4 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 to 30 June 2023 Unaudited	6 months to 30 June 2022 Unaudited
	£'000	£'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.