- Strong underlying growth boosted by acquisitions
- Shares more than halved this year
- Significant new venture with global leader
Construction and industrial materials firm SigmaRoc (SRC:AIM) released an upbeat first half trading statement and announced a major joint venture with one of the world’s leading steel makers.
Investors warmed to the shares, which have more than halved in value this year, sending them 3% higher to 49p.
ROCK SOLID
The company, which owns and operates quarries in the UK and Europe extracting materials for construction, agricultural and industrial uses, reported revenue of £247 million for the six months to June, almost three times last year’s result on a headline basis and 17% ahead on a like-for-like basis.
EBITDA (earnings before interest, taxes, depreciation and amortisation) rose more than 200% to £47.6 million on a headline basis and 6% on a like-for-like basis.
The difference between the two figures is largely due to the acquisition of Germany’s Nordkalk in August last year, together with the additions of Johnston and RightCast which were purchased this year.
The firm faced a number of challenges in the first half, from strikes to increased plant hire costs due to equipment issues alongside lower demand from the infrastructure sector due to a lack of large projects, yet it was able to sell more premium aggregate products and keep its costs in check.
Chairman David Barrett said he was ‘extremely pleased with the performance of the Group considering the challenges faced in the last six months’.
‘Furthermore, Johnston Quarry Group and RightCast are excellent additions and fit the SigmaRoc model well. The group remains well positioned for growth and evolution in the coming months and years’, added Barrett.
BIG DEAL
Separately, SigmaRoc announced it had entered into a strategic joint venture with the French subsidiary of Amsterdam-listed ArcelorMittal (MT:AMS), one of the world’s leading steel producers.
The companies will jointly produce up to 900,000 tons of lime per year at a site close to Dunkirk harbour where ArcelorMittal has a steel plant.
Lime is added to steel during the manufacturing process to purify the end product, and the new venture will use recovered heat as well as biofuel to replace natural gas which will both reduce emissions and future-proof the operation against higher energy costs.
SigmaRoc chief executive Max Vermorken predicted the new venture would ‘generate the target return on invested capital for shareholders’ based on the firm’s equity contribution of around €20 million to the project.
