TIDMSRC
RNS Number : 6775F
SigmaRoc PLC
23 March 2022
SigmaRoc plc / EPIC: SRC / Market: AIM / Sector: Construction
& Materials
23 March 2022
SigmaRoc plc
('SigmaRoc', the 'Company' or the 'Group')
Audited full year results for year ended 31 December 2021
Notice of AGM
SigmaRoc plc, the AIM listed buy-and-build construction
materials group, is pleased to announce its audited results for the
year ended 31 December 2021.
Financial highlights(1) 31 December 2021 31 December 2020 Change
Revenue GBP272.0m GBP124.2m +118.9%
Underlying EBITDA GBP49.3m GBP23.9m +106.1%
Underlying profit
before tax GBP26.8m GBP12.2m +120.4%
Underlying EPS 5.4p 4.5p +19.4%
Adjusted Leverage
Ratio(2) 1.88x 1.69x +11.2%
(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.
(2) Adjusted leverage ratio compares net debt to underlying
EBITDA for the last twelve months adjusted for pre-acquisition
earnings of subsidiaries acquired during the year.
Operational highlights:
Invest
- Significant new North European materials platform established
through the acquisition of Nordkalk for EUR470 million
- Acquisitions of B-Mix and Casters together with establishment
of new Benelux aggregates platform
- Johnston Quarry Group acquisition completed post year-end,
further strengthening the Group's UK offering
Improve
- Systems: New ERP systems implemented in South Wales and PPG overhauling legacy setup
- Operational efficiency: successful efficiency initiatives
implemented at Casters, GduH and Harries
- Corporate governance: Proposed appointment of new independent non-executive director
Integrate
- Integration of Nordkalk with >800 people across 10 countries progressing well
- Establishment of new Benelux aggregate platform integrating GduH, B-Mix & Casters
- Group banking facilities refinanced to consolidate debt
footprint across the Group in conjunction with acquisition of
Nordkalk
Innovate
- Launch of Greenbloc cement free ultra-low carbon concrete
block technology, to be made available across the entire PPG
product portfolio
- Partnership established with Marshalls to develop ultra-low carbon solutions
Annual General Meeting
SigmaRoc is also pleased to provide notice that its Annual
General Meeting ('AGM') will be held on 26 April 2022 at 3.00 p.m.
at the Washington Mayfair Hotel, 5 Curzon St, London, W1J 5HE.
Copies of the Notice of AGM, together with the Form of Proxy and
Annual Report have been posted to shareholders and are available to
view on the Company's website.
Max Vermorken, CEO, commented:
"Two things make a quality business, a great team and supportive
stakeholders. We are lucky to have both. Our nearly 1,900
colleagues have shown incredible resilience in the testing
conditions of COVID-19 and incredible drive when the Group expanded
yet again to welcome Nordkalk. We have positioned the business well
for the next leg of its journey as a leading North European
quarrying group. 2022 started with more unforeseen events than most
could have predicted, in particular the deeply saddening conflict
in Ukraine and the challenges it brings for the wider economy.
Yet whatever the challenge, the business will rise to it, as it
has done over the past five years. The next five should see the
Group evolve again, further developing its footprint, product
offering, profitability and safety. The ESG targets set are
industry leading and achievable in the timeframes set out. As 2022
has started with many head and tailwinds, we remain optimistic the
underlying demand for all products in all regions is strong and
opportunities to further expand the Group are plentiful.
Much remains to be done and much potential remains untapped.
With the continued support of a great team and our shareholders,
that potential can be turned into very exciting further
developments."
The full text of the statement is set out below, together with
detailed financial results.
SigmaRoc will host a meeting for invited analysts at 8.00 a.m.
To participate in the call, please register by contacting
ir@sigmaroc.com.
The Group has also organised a dedicated results call and
Q&A session for private investors at 12.00 p.m. today. To
participate in the call, please register interest via the following
link:
https://us06web.zoom.us/webinar/register/WN_oFps-iCYRkqMViYs1NWbmw
A recording will also be available on request from the
Company.
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For further information, please contact:
SigmaRoc plc Tel: +44 (0) 207 002 1080
Max Vermorken
Strand Hanson Limited (Nominated Tel: +44(0) 207 409 3494
and Financial Adviser)
James Spinney / James Dance
/ Rob Patrick
Liberum Capital (Co-Broker) Tel: +44 (0) 203 100 2000
Neil Patel / Jamie Richards
/ William Hall
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418 8900
Mike Bell/Ed Allsopp
Investor Relations Tel: +44 (0) 207 002 1080
Dean Masefield / Florian Werner ir@sigmaroc.com
CHAIRMAN'S STATEMENT
On the fifth of January this year, we marked the fifth
anniversary of the Ronez acquisition and the start of our SigmaRoc
journey. In that short time, we have built a dynamic business and
one with even greater potential. The success of this has
undoubtedly been due to the drive and determination of our staff
and the continued support of our shareholders.
Our staff's determination is evident in the commitment I see
towards growth, safety, profitability and sustainability, in an
environment which has clear and existing opportunities. In the
following report we present, therefore, not only an account of
SigmaRoc's 2021 performance but also of our ambitions for future
growth and sustainability targets, as well as our proposals for
managing the challenges ahead.
One of these challenges has undoubtedly been the tragedy
unfolding in Ukraine. We have three employees based there and staff
have rallied to assist them. At the time of writing, we have
ensured accommodation in Poland for their family members. Whilst
the men have had to remain, we have transferred them to safe
accommodation near the Polish border. It is a tragedy that military
action was chosen over a diplomatic resolution. As a business we
will continue to support the Ukrainian people where we can.
Growth
2021 was a year of both growth and development for SigmaRoc.
Whilst acquisition activity was significant during the year, the
Group also made substantial progress in enhancing operational
performance. This further cemented the Group's leading position in
local niche markets, while driving innovation in its product range.
Financially, we exceeded all our targets and market expectations;
we more than doubled our turnover to GBP 272.0 million and
Underlying EBITDA to GBP 49.3 million, growing our Underlying
earnings per share by 19.4%.
We have done considerable work to develop a strategy that will
enable us to take a leadership position on ESG matters and
ambitious targets were set, as will be discussed further below. Our
governance, safety reporting and management capabilities were all
improved further and each of these aspects will be detailed below
and in the various sections of this Annual Report.
Regarding strategic growth opportunities, 2021 was certainly one
of the most active years since SigmaRoc's inception. We started the
year with the creation of a new platform in Benelux, focusing
exclusively on heavy construction materials. This is an embryonic
platform, but one with significant potential given its strategic
positioning in key markets. We also joined forces with Carrières du
Boulonnais in the creation of a dedicated partnership addressing
Belgium and Northern France for aggregates and concrete.
Most significantly, however, we expanded the Group in a new
region: Scandinavia, Poland and the Baltics. Furthermore, we
obtained additional products for our quarried materials through the
acquisition of Nordkalk, a market leader in limestone products.
This was a unique opportunity, allowing the Group to establish
immediate scale and market leadership in a strategically important
new region, diversifying our end customer base, whilst using the
same upstream products and production processes.
As a result of these developments, the Group is now well
positioned for its next chapter - to make use of its strong
position across a range of attractive markets to grow, innovate,
consolidate and improve its product portfolio, market access and
operational efficiency. This is in line with the ambitions set at
the acquisition of Nordkalk.
Operations, Safety and COVID-19
Throughout 2021, the Group delivered a solid operating
performance, despite challenging conditions, with volumes of all
materials sold across the Group in line, or ahead of, 2020.
Deliveries to residential construction and certain industrial
applications at Nordkalk saw good year on year volume growth.
Infrastructure demand remained strong in Benelux and Poland and we
saw a good increase in the UK, with more projects coming online as
the year progressed. Additionally, plant availability and
efficiency were maintained consistently, limiting the impact of
unplanned production stops.
Much progress was again made on safety reporting and management.
The total safety events frequency rate recorded dropped by 25%,
while the harm incidents frequency rate dropped by over 30% versus
the previous years. Positive reporting, including Near Hits and
Hazard and Risk Identification increased by more than 200%. While
this progress is encouraging, work still needs to be done at
several sites, in particular in Belgium, where the level of the
safety culture remains behind that of other parts of the Group.
The overall operational and safety performance is pleasing in
light of the challenging environment created by COVID-19 and the
restrictions imposed. Across the Group, which is now operating in
several countries across Europe, we have ensured compliance with
local regulation. We continue to manage this at a local level,
ensuring that we are rapid in implementing any policy changes. As a
result, we have been effective in managing the health challenges
posed by COVID-19, with no transmission within the workplace
observed.
We thank all our colleagues for their support as these
restrictions often make working conditions more challenging both
physically and mentally.
Governance
In 2021 we made significant progress in further strengthening
the Group's governance. With the appointment of a General Counsel
in 2020, we reviewed all governance and compliance policies to
ensure we are in line with QCA guidelines. We revised our Board
composition, focussing on the independence of directors. We have
now made a further step with the proposed appointment of Axelle
Henry as a third Independent Non-Executive Director and fourth NED
overall, as part of a board of seven, following publication of
these Accounts. Ms Henry is CFO of Verlinvest, a private investment
firm specialised in investments with a focus on consumer goods,
where strong branding and innovation is key and where revenue and
profitability models are very different to our Group. She also has
significant understanding of our sector through her previous role
as deputy-CFO at Groupe Bruxelles Lambert, a major shareholder in
large operators in our sector.
With the acquisition of Nordkalk, we also took significant time
to define our long term ESG strategy and net-zero targets. As a
Group, we are well positioned in terms of our product portfolio.
Most products we make are low in carbon intensity and form a
positive alternative to competing products from an ESG perspective.
We are working hard to mitigate the impact of the product streams
that are higher in CO(2) intensity. In addition, it is not often
known that lime, our most CO(2) intensive product, naturally
reabsorbs nearly all the CO(2) emitted from its production within
five years. As a result, our overall product portfolio is well
balanced and presents us with the opportunity to set and reach
ambitious net-zero targets.
Outlook
Looking forward, the Group is well positioned for its next phase
of growth and evolution. The first five years allowed us to build
an efficient operation dedicated to investment and improvement of
acquired businesses into locally focussed platforms. Nordkalk now
gives the Group significant additional reach and scale, thereby
multiplying the opportunities for continued development. The
significantly enhanced cashflow generation capability of the Group
provides the capacity for continued growth investment, supporting
of our strategic objectives, whilst retaining a flexible and
efficient capital structure.
Considering these various points independently, there are a few
aspects worth noting. While the Group has continually grown its
earnings, the cashflow generated from its own operations
historically has only provided limited capacity for investment. The
substantial change in the Group's cash generation potential is a
significant development for the business, allowing for more dynamic
opportunities. Firm discipline will be maintained regarding capital
expenditure and setting returns targets on investments.
The Group also benefits from an expanded set of credit
facilities, leaving it with headroom of GBP200m in total at the end
of the year. As above, there is a strong disciplined focus within
the Group to manage leverage and not exceed self-imposed leverage
limits, save for short periods to take advantage of unique
opportunities and where they are worked down quickly.
As a result of the above, I believe we are in a good position to
continue on the path of growth we have followed to date and build a
safer, stronger and more attractive business for shareholders,
staff and the communities where we operate. It is evident that the
Group will face challenges along the way - such is the nature of
business. However, if the past five years can be a guide, it is
clear that the Group and its structure is built to deal with the
challenges it encounters, whilst continuing to create value for all
its stakeholders.
David Barrett
Executive Chairman
22 March 2022
CEO's STRATEGIC REPORT
Whilst 2021 saw the Group take a transformational strategic step
with the acquisition of Nordkalk, it also saw the wider business
deliver continued operational and financial progress in what were
very challenging conditions. This is testament both to our people
and the clear strategy that we put in place at the outset of our
journey and against which we are constantly measuring
ourselves.
We are proud of our progress, however, we recognise that it all
fades into deep irrelevance when a war is fought in Europe, when
families are separated, children lose parents and parents lose
children. We will do our utmost to support our colleagues in
Ukraine who, at the time of writing, are safe in western Ukraine or
in Poland. We will continue to support those who flee the Ukrainian
warzone and remain astonished war can ever be considered a
justifiable outcome.
Our journey started five years ago as a cash shell with an
ambitious business model, "the power of the platform". Integrating
vertically, when the end markets are very localised, product
specific and fragmented, is counterintuitive. Decentralising and
making managers and staff accountable, is not. This became the
backbone of our decentralised business model which, in 2020, showed
its agility and in 2021 its relentlessness. It also resonated with
the Rettig Group who understood how one of their companies,
Nordkalk, could fit within our organisation and prosper. Delivering
transactions of this scale and ambition is only possible with the
support of our shareholders and this support has never been taken
for granted. We hope that the progress we have made in the past
five years and the vision we are articulating within this report
for our future, will convince you in continuing your support for
our journey.
2021 was a year of both significant strategic and financial
progress. With four acquisitions in the year, including our largest
to date, the creation of a strategically important JV with
Carrières du Boulonnais and the launch of our Greenbloc technology,
we have laid the foundations for the next phase of the Group's
evolution. These actions helped to deliver significant increases
in: revenue to GBP272.0 million, up 119% year on year; Underlying
EBITDA to GBP49.3 million, up 106% year on year; and Underlying EPS
to 5.37 pence, up 19% year on year.
2021 also saw the business commit to ESG targets which are
industry leading and we believe more aggressive than any of our
peers. The ESG section of this report presents them in detail and a
dedicated ESG Report, to be published in April 2022, will provide
further context. By 2040, we aim to reach net-zero and well before
that, we intend to be free of fossil fuel usage. No other lime
producer has set targets of this level of ambition and no other
building materials producer has made progress in its ultra-low
carbon offering that we have. It is a part of our development we
are very proud of and will continue to pursue.
As 2021 was very busy, and to give sufficient context, I will
provide a summarised account of the key strategic developments
across the year before entering the detail of operational
performance on a platform-by-platform basis.
Strategic development
In 2020 we had laid the foundations for a busy 2021, with our UK
and Benelux platforms performing well and ready to be developed
further.
Re-organising our Benelux based operations involved several
separate actions. The first of these was to separate the dimension
stone and aggregates businesses at Carrières du Hainaut given the
distinct end market profiles and drivers of each. With the split
and appointment of a dedicated Managing Director for Dimension
Stone we set out to develop both platforms further. This included
the creation of Granulats du Hainaut and its combination with our
other quarrying assets in Belgium, as well as the acquisition of
B-Mix with four concrete plants in highly strategic locations in
the region. As a result of these efforts, our Benelux construction
materials platform was established, the start of a highly
concentrated and strategically located supplier of construction
materials in Belgium and the Netherlands.
Having established a broader, marketable platform in Belgium we
saw significant opportunity in extending our presence into the
attractive and adjacent French Market. A joint venture with Group
Boulonnais, France's most respected independent quarried materials
supplier, presented an optimal entry point into this market with
the Group able to benefit from our partner's deep knowledge of the
sector, scale and customer standing.
Alongside operational development, our innovation and product
development activities yielded significant success in 2021 with the
launch of the UK's first ultra-low carbon concrete products
technology, Greenbloc. This technology has been the product of over
18 months' development focus and we are delighted that, following
successful testing, we are able to offer this across our concrete
product range making SigmaRoc a clear leader in ultra-low carbon
concrete across both the UK and Europe.
2021 also presented us with the opportunity to meaningfully
extend our geographic footprint in Europe. The Northern Europe
region has, since inception, been a very key target market for the
Group, benefiting from strong demographic, regulatory and market
drivers for the use of our materials. Nordkalk presented a unique
route to the Group achieving credible scale in this territory, with
over 100 years of history and a leading market position in quarried
products for most of Scandinavia, Poland and the Baltics. Nordkalk
also shared a similar operational structure to SigmaRoc, focussed
on local quarried products for local markets in a decentralised
way, which made it culturally an ideal fit for our business.
Operations and trading
Trading performance:
The Group's trading and operational performance for 2021 was
solid. Overall, on a like-for-like basis, the value of upstream
quarried materials sold increased by 2%. Value added product sales
increased by 14%, with value added services increasing by 16%.
These figures include the Nordkalk business and considering
SigmaRoc pre-Nordkalk acquisition, the evolution is similar with
total revenue increasing by 15% on a like-for-like basis.
For the Ronez platform, trading in both islands was solid and in
line with expectations, with the impact of a lockdown in the first
quarter recovered through strong demand as the year progressed.
Several significant projects in both Jersey and Guernsey, including
Admiral's Park in Guernsey and large residential developments in
Jersey (both the public and private), as well as further demand for
road maintenance helped deliver GBP28.9 million in turnover, which
was slightly ahead of budget. The shipping business had an
excellent year, with very high ship utilisation and a total of 51
cargoes carried. Operational plant and machinery investments of the
past years has shown its worth with the renewed ready-mix fleet,
ready-mix plant and further plant upgrades.
The three businesses which constitute our PPG platform, with
seven sites across the UK, have developed well. Block production
increased year over year, as did volumes for landscaping and
flooring products. Bespoke project work was slow in the early part
of the year, but accelerated in the second half with larger scale
infrastructure and commercial projects such as car parks and
traffic barriers coming online. The most exciting developments
were, however, Greenbloc and our launch into ultra-low concrete
products, leading to a strategic partnership with Marshall's. Cost
pressures, particularly in cement and logistics, were managed via
pass-through mechanisms and further searches for efficiency
initiatives.
With our third platform in the southwest of the UK, we took the
opportunity to expand our integrated aggregates and construction
materials business in the region, starting in South Wales, with the
Harries business. The business was fully integrated into the Group
in September 2020 and much has developed since. Closing the year
with GBP29.9 million in turnover the South Wales business performed
in line with expectations. Work on further development of the
entity is being undertaken currently with a view to extend our
product offering. A complete review of the structure of the
business will lead to a more efficiently organised business.
With the creation of a dedicated dimension stone business, with
Carrières du Hainaut as its base, we ensured full focus on the
production and delivery of a high value-add product, Belgian
Bluestone. Demand for Bluestone was strong throughout the year
across RMI, new build and infrastructure markets. We developed new
sales regions by expanding the sales teams in Germany and focussing
on commercial strategies for Austria and Switzerland. Focus on
Scandinavia and the UK was achieved through dedicated partnerships
with off takers and representatives. As a result, the combination
of existing markets in the Benelux, France and Italy as well as new
markets helped grow sales and volumes to reach 1 million square
meters in the year. Further efforts are now being made on the
commercial positioning of the product, helped by a new digital
strategy and website, as well as operational changes to allow for
further production efficiencies at higher volumes. The significant
extension of the Bluestone quarry, currently underway, is central
to that strategy and represents a substantial enhancement to the
production set up.
As a consequence of the focus on Bluestone, all construction
aggregate production at Carrieres du Hainaut was split off into a
new business, Granulats du Hainaut, which now forms the base of a
Benelux platform also including Cuvelier and B-Mix. The creation of
GduH coincided with the take-over of the Holcim production plant in
April and the creation of a joint venture with Carrières du
Boulonnais to best serve the Benelux and French markets, in
anticipation of the installation of new production infrastructure
in 2024. The Cuvelier business had a good full year, despite sales
being impacted in the first half by road closures limiting access.
B-Mix, the concrete business in northeast Belgium had an excellent
year with volumes of 177 thousand cubic meters and the integration
of the Casters concrete business, acquired simultaneously. Combined
the three businesses form a solid base for further development and
growth in the Benelux market.
In September, a sixth platform joined the Group through the
acquisition of Nordkalk, consisting of three operating divisions.
In the north, its Finnish and Swedish operations had a good year
overall, driven by strong demand from the pulp and paper industry
as well as strong demand from steel producers in the region.
Rationalisation of capacity by customers benefited the group
through sustained volumes. As a result, volumes of lime and
limestone were higher than anticipated. While this improved overall
turnover and net profits, it also posed the challenge of dealing
with very sharp rises in energy costs, exceeding 200% in many cases
toward the end of the year. Efficient pass-through mechanism and
hedging have allowed for protection of the net profitability of the
business, but inevitably increased turnover more than anticipated.
Further efficiency initiatives will target margin protection and
improvement in 2022.
The second region consisting of the Polish and German operations
had an equally good year driven by a highly effective local
management team maximising efficiency of the operations. Demand was
driven by infrastructure works in particular as well as deliveries
to steelworks and the agricultural sectors. Energy cost pressures
were managed through hedging and contractual mechanisms protecting
profitability of the division. Further development of the division,
in particular the extension of reserves at the key sites is
underway to ensure future delivery to key sectors of the Polish
economy.
The third operation within the Nordkalk platform consists of
several joint ventures, including operations in Norway and Sweden
in partnership with fellow minerals companies and steelworks.
Trends seen in other parts of the business were also present here,
where the main challenges were posed by supplying sustained volumes
throughout periods of high energy costs. The business performed
well and managed to improve its competitive position in the
period.
The overall trend for the year 2021 was therefore similar across
the Group with good demand for products in all main sectors of
supply, be it private construction, infrastructure, steel, pulp and
chemical or environmental applications of our quarried products.
Managing rising energy costs and other supply chain disruptions was
done effectively and led to good protection of the Group's bottom
line.
Inflationary pressures and supply chain backdrop:
As was highlighted within the review above, the third and fourth
quarter of 2021 saw several challenges to the business from a
supply chain and cost inflation perspective. In both cases the
businesses reacted well to ensure profitability was protected.
Supply chain issues have been well publicised in the sector,
particularly in the UK. While these challenges were certainly real,
the Group dealt with them effectively. Driver and logistical
shortages were tackled through active fleet management and
benefited from good long term relationships with haulage suppliers.
Additional capacity was successfully secured where necessary in
areas where demand was particularly strong.
Cost inflation, in some cases significant, was evident across a
number of areas but the Group did well to substantially mitigate
this through strong contractual pass-through arrangements and
further internal efficiency gains. Cementitious products remained
both in short supply and at higher-than-average prices. Existing
supply arrangements and management of productivity allowed
continued production at good volumes even when placed on
allocation. In-house delivery capabilities for these products
helped further.
Energy, gas and electricity supplies were the other area of
significant and sudden price increases. Hedging strategies were
already in place converging normalised base load consumption across
the network of plants and operations. As energy price movements
were very significant, further price movement was captured in
contractual pass-through arrangements as part of long term supply
structures allowing the Group to manage the inflationary
environment.
As a result, while the environment was challenging, the
strategies adopted allowed for the protection of the business and
the continued supply and delivery of product to our customers
without interruption.
Financial performance
The Group delivered an excellent financial performance for the
year, which was ahead of analysts' expectations. Reported revenues
were GBP272.0 million, delivering Underlying EBITDA of GBP49.3
million, with demand and pricing pass through driving significant
top line growth which, combined with continued efficiency gains
realised across the business, enabled a strong margin performance
in what was a challenging backdrop. This performance is a testament
to effective local management taking the right decisions to protect
their businesses without hesitation, whilst retaining focus on
supporting their local markets.
From a balance sheet perspective, the Group dramatically changed
across the year with completion of the various acquisitions. As at
31 December 2021, gross assets were GBP 769.3 million, underpinned
by over 1 billion tonnes of reserves and resources, land, plant and
machinery in strategic locations. Net assets were GBP411.2 million
following a refinancing of our debt facilities led by Santander. At
year-end the Group had access to a further GBP200 million in RCF
and credit facilities which will support the Group's further
evolution. We maintain leverage targets at two times Underlying
EBITDA with a significant down trend, giving the Group the ability
to reinvest generated cashflows as the Group reduces its gearing.
At the year-end our leverage ratio stood at 1.88 times Underlying
EBITDA with cash at GBP70 million.
ESG, Safety and Innovation
ESG:
All topics captured under a broad heading of ESG equally saw
incredible progress throughout the year. In April 2022 the Group
will publish its first dedicated ESG report, giving ample detail on
all the initiatives we are undertaking. In anticipation of that
report, we can already announce several exciting points in relation
to our net-zero targets, our Environmental and Social initiatives
and our Governance improvements.
As part of our ESG reporting, we publish detailed statistics and
reductions targets under TCFD and SASB norms. These targets are
aggressive and industry leading. We aim to:
-- provide option for 100% of manufactured products to utilise
waste/recycled materials by 2025;
-- utilise 100% of production materials by 2027;
-- be free of fossil fuel use by 2032; and
-- achieve net-zero by 2040.
No other operator in the lime sector has committed to these
targets and no other building materials producer is presently able
to offer certified products with ultra-low carbon credentials
totally free of cement, across the entire range of its
products.
We are also very focussed on supporting the communities where we
work and several initiatives have been realised in 2021 to ensure
we are a good neighbour with our operations. In Belgium, we have
donated a large section of land to the city of Soignies and will
assist in its development into a zone for recreation and sports. In
Finland, we have built a large wooden exercise staircase alongside
our operations to promote physical activity. In Poland, the
business continues to support the mayor of Slawno who developed a
museum next to our operations to preserve fossilised marine
creatures found in our quarries. These are a few of the initiatives
implemented this year, more of which will be detailed in our
Sustainability report.
From a governance perspective, we continue to develop the
leadership of the Group and are proud of the proposed appointment
of Axelle Henry as an independent NED. Ms Henry brings significant
financial skill to the Group given her role as CFO of a major
investment fund. She also brings knowledge of sectors which are
much more brand and innovation dependent, therefore providing fresh
perspective and diversity of opinion to the Board, augmenting its
specialist sector experience. The Board will therefore consist of a
majority of independent Directors, with very complimentary skills
and backgrounds.
On a more operational level, the Group has continued to maintain
and increase its accreditation levels, both ISO and product
specific, as well as conducting surveys to assess staff and
management perception and engagement. In all cases, the results
were extremely positive with areas identified where cross-learning
could be obtained. As a result, regional advisory boards were set
up to ensure the various platforms in similar legal jurisdictions
would share best practices.
Safety and COVID-19:
Considering safety, the Group has also continued to progress
with a year on year reduction of 25% in incident frequency rate; a
year on year reduction of over 30% in harm frequency rate and a
year on year increase of 200% for near hit, hazard and risk
reporting. The safety culture of the Group is steadily improving
which is a challenge as every year many new businesses with
differing approaches to safety join SigmaRoc. Still, through the
use of adequate tools, including our safety management tool
Highvizz we are able to increase reporting, decrease harm and
improve the awareness and culture that promotes a safe
business.
2021 started with a lockdown and ended with a lockdown in many
of the regions we operate in. As in 2020, the year was dominated by
the COVID-19 pandemic and the restrictions it brought with it. As
in 2020, we aimed to be proactive in implementing the required
local restrictions to keep the business compliant and operating. As
a result, our COVID-19 response continued to be managed at a local
level, to remain quick and agile as local realities changed. We
were effective in managing the pandemic and its impact on our
business, having to date no evidence of any transmission of
COVID-19 at work.
Innovation:
A key part of our focus on becoming an improved and sustainable
business is innovation. Having begun development 18 or so months
ago with the idea to create a carbon neutral concrete product we
are now the leading supplier of ultra-low carbon concrete products
in the UK through our Greenbloc technology.
In addition to Greenbloc, we continue to innovate across the
Group. In Belgium, with support from the Nordic region, we
commenced work on utilising saw sediment waste material from CDH
production as additives and fillers for the chemical, construction
and agriculture industries. In the UK, we supplied concrete
products coated with pollution absorbing paint for a school
playground. At Nordkalk, we launched several new products all
developed in house, one of them being an ultra-white paint without
the use a the TiO(2) pigments making it significantly less
harmful.
Our efforts in innovation were also noticed by others.
Marshalls, the leading UK supplier of landscaping products, joined
the Group in a JV to develop ultra-low carbon solutions. In
Belgium, we continue to develop our Bluestone business in order to
propose new finishes and applications while promoting 100% material
use from all our operations.
Our journey on the path of innovation is not very long, but we
have already made an impact and good progress. It has become a key
area of focus as we aim to provide solutions that are innovative
and low carbon.
Post period announcements
The Group completed the acquisition of Johnston Quarry Group on
31 January 2022. This acquisition significantly enhances the
Group's presence in the UK from a quarrying perspective, with
Johnston Quarry Group and Harries forming part of the expanded
Southern platform covering Southern England and Wales. A new ExCo
member will be appointed to lead these two divisions.
The expanded platform offers a range of products and services
covering a footprint from Pembroke to Lincoln, in aggregates,
concrete, asphalt, surfacing, agricultural lime and dimensions
stone. It is the base for a highly focussed and specialised
platform along the main road axis of the UK and focussed on niche
product and product delivery. It has the potential to deliver more
and grow both in offering and region.
Forward look
The 2022 financial year has started well across the Group. Early
January saw some disruption from COVID-19 restrictions and
absenteeism, but the Group has responded well with performance
strengthening through the first quarter. The overall trading
situation has been challenging, but the agility of the Group has
facilitated the right responses. Unprecedented energy price and
input cost inflation continues from the second half of 2021, but
the Group remains focused on mitigating these through a combination
of hedging, contractual structures and dynamic pricing. A strike at
UPM, one of our key customers in Finland, has slowed demand for
several higher end products in Q1'22, but once resolved we expect
increased volumes as the customer seeks to recover lost production.
Operations in the Belgium, Channel Islands and the UK also traded
in line with expectations with only some minor delays in project
starts in Jersey.
Following the ongoing situation in Ukraine, the Group's
historical sales to Russia were de minimis on Group revenue level
and have now ceased completely, with no historical sales in the
Ukraine. We are fully complying with all UK and EU trading
sanctions and are monitoring the situation closely.
Looking further ahead in the year, we are focussed on a number
of important strategic projects. Firstly, we have set very
ambitious targets in respect of our ESG commitments. We aim to be
sector leaders and we believe have both teams and plans in place to
achieve these targets. In particular, when it comes to lime and
limestone related products as well as ultralow carbon concrete, we
are uniquely positioned to achieve our ambitions. The partnerships
we have developed with several key organisations in the last 12
months, such as Carrières du Boulonnais and Marshalls, are
important enablers of this and the potential strategic
environmental value of the projects being considered and developed
are significant. In addition to these partnerships, several
internal innovation projects will contribute both to our bottom
line and our ESG credentials.
In parallel, we are extremely active on the investment front,
having considered over 140 acquisition targets to date. We will
continue to be highly disciplined and selective in our
consideration of these, only progressing with potential
acquisitions where there is clear path to meeting our financial and
commercial criteria.
There also remains significant potential for the Group to
achieve further organic growth and margin improvement. Expansion of
our markets and growth of our sales networks will help deliver
further top line improvement in each of our platforms and we will
continue to build the local capability that enables our businesses
to capitalise on growth and efficiency opportunities.
Taking all these developments and initiatives, I remain
convinced the Group is very well placed to develop further, deliver
growth and take on a leadership position when it comes to ESG. None
of these targets will be easily met, however, nothing easy is worth
the effort. I am certain the entire organisation shares the same
commitment.
This report was approved by the Board on 22 March 2022 .
Max Vermorken
Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REPORT
I am very pleased to report a strong year financially for the
Group, during which we exceeded our own expectations while
significantly expanding our business during a persisting global
health crisis. We formed a new platform in Benelux, acquired
Nordkalk via a reverse takeover, raised GBP260 million in equity
and obtained access to GBP305 million in debt via a newly
syndicated banking facility.
In our 2021 financial year, the Group generated revenue of
GBP272.0 million (2020: GBP124.2 million) and Underlying EBITDA of
GBP49.3 million (2020: GBP23.9 million). The Underlying profit
before taxation for the Group for the year ended 31 December 2021
was GBP26.8 million (2020: GBP12.2 million).
The statutory loss for the Company for the year ended 31
December 2021 before taxation amounts to GBP26.3 million (2020:
loss GBP5.8 million), which includes GBP22.2 million of
non-underlying expenses primarily pertaining to extensive M&A
activity undertaken by the Company during the year.
The Board monitors the activities and performance of the Group
on a regular basis. The Board uses financial indicators based on
budget versus actual to assess the performance of the Group. The
indicators set out below will continue to be used by the Board to
assess performance over the period to 31 December 2022.
2021 2020
GBP'000 GBP'000
-------------------------- -------- --------
Cash and cash equivalents 69,916 27,452
-------------------------- -------- --------
Revenue 271,986 124,231
-------------------------- -------- --------
Underlying EBITDA 49,262 23,896
-------------------------- -------- --------
Capital expenditure 22,555 6,452
-------------------------- -------- --------
Cash generated from operations was GBP29.5 million (2020:
GBP28.5 million) with a net increase in cash of GBP42.9 million
(2020 net increase of GBP17.5 million).
Revenue and Underlying EBITDA exceeded expectations and
management forecasts.
Capital expenditure relates to purchase of new plant and
machinery and improvements to existing infrastructure across the
Group.
PPA
BDO UK undertook the PPA exercise required under IFRS 3 to
allocate a fair value to the acquired assets of Harries.
The PPA process resulted in a reduction of goodwill recorded on
the Statement of Financial Position of the Group for Harries from
GBP6.1 million to GBP2 million. The reduction was to transfer the
value of goodwill to tangible assets for land and buildings, land
and mineral reserves, intangible assets for trade name and deferred
tax assets.
Non-underlying items
The Company's loss after taxation for 2021 amounts to GBP26.3
million, of which GBP22.2 million relates to non-underlying items,
while the Group's non-underlying items totalled GBP29.1 million for
the year. These items relate to six categories:
1. GBP1.9 million amortisation of acquired assets and adjustments to acquired assets
2. GBP20.1 million in exclusivity, introducer, advisor,
consulting, legal fees, accounting fees, stamp duty, insurance and
other direct costs relating to acquisitions. During the year the
Group acquired B-Mix, Casters, Nordkalk and undertook extensive due
diligence on JQG which completed post year-end.
3. GBP3.1 million legal and restructuring expenses relating to
the rebranding and alignment of all subsidiaries across the
Group.
4. GBP2.3 million in share based payments relating to grants of options.
5. GBP0.7 million on unwinding of discounts on deferred consideration payments for CDH and CCP.
6. GBP1.0 million in other exceptional costs which primarily
relate to non-cash balance sheet adjustments and COVID-19
costs.
Interest and tax
Net finance costs in the year totalled GBP7.0 million (2020:
GBP2.7 million) including associated interest, bank finance
facilities, as well as interest on finance leases (including IFRS
16 adjustments), hire purchase agreements.
A tax charge of GBP 4.7 million (2020: GBP0.7 million) was
recognised in the year, resulting in a tax charge on profitability
generated from mineral extraction in the Channel Islands and
profits generated through the Group's UK, Belgium and Nordic based
operations.
Earnings per share
Basic EPS for the year was a loss of 1.89 pence (2020: profit of
2.55 pence) and Underlying basic EPS (adjusted for the
non-underlying items mentioned above) for the year totalled 5.37
pence (2020: 4.50 pence).
Statement of financial position
Net assets at 31 December 2021 were GBP 411.2 million (2020:
GBP124 million). Net assets are underpinned by mineral resources,
land & buildings and plant & machinery assets of the
Group.
Cash flow
Cash generated by operations was GBP29.5 million (2020: GBP28.5
million). The Group spent GBP350.9 million on acquisitions net of
cash acquired and GBP22.6 million on capital projects. The Group
raised GBP255 million net of fees through the issue of equity and
drew net borrowings of GBP138 million. The net result was a cash
inflow for the year of GBP42.9 million.
Net debt
Net debt at 31 December 2021 was GBP 164.0 million (2020:
GBP43.8 million), and was refinanced on 15 July 2021.
Bank facilities
In July 2021 the Company entered a new Syndicated Senior Credit
Facility of up to GBP305 million (the Debt Facilities) led by
Santander UK and including several major UK and European banks. The
Credit Facility, which comprises a GBP205 million committed term
facility, GBP100 million revolving credit facility and a further
GBP100 million accordion option, provides the Group with further
capacity and flexibility to support its ongoing buy-and-build
strategy, as well as reducing like-for-like borrowing costs.
The Group's new Debt Facilities have a maturity date of 15 July
2026 and are subject to a variable interest rate based on
SONIA/LIBOR plus a margin depending on EBITDA. As at 31 December
2021, total undrawn facilities available to the Group via the new
Debt Facilities amounted to approximately GBP 200 million.
The Group's new Debt Facilities are subject to covenants which
are tested monthly and certified quarterly. These covenants
are:
-- Group interest cover ratio set at a minimum of 4.5 times EBITDA; and
-- A maximum adjusted leverage ratio, which is the ratio of
total net debt, including further borrowings such as deferred
consideration, to adjusted EBITDA, of 3.5x in 2021. As at 31
December 2021, the Group comfortably complied with its bank
facility covenants.
Capital Allocations
We prioritise the maintenance of a strong balance sheet and
deploy our capital responsibly, allowing us to commit significant
organic investment to our business whilst continuing to pursue
acquisitions to accelerate our strategic development. This
conservative approach to financial management will enable us to
continue
pursuing capital growth for our shareholders.
Dividends
Subject to availability of distributable reserves, dividends
will be paid to shareholders when the Directors believe it is
appropriate and prudent to do so. The focus of the Group at this
stage of its development will be on delivering capital growth for
shareholders. The Directors therefore do not recommend the payment
of a dividend for the year (31 December 2020: nil).
Post Balance Sheet event
Post 2021 close we have conducted a series of activities worthy
of mention in this annual report .
Employee Benefits
All of our UK employees, almost 400, have been offered both
Private Medical Insurance and Group Life Assurance. Our benefits
provider commented that the uptake of this offering from our
employees was unprecedented with many adding family members.
SigmaRoc has also engaged Link Group to set up a Share Incentive
Plan for all UK employees, an offering we already have in the
Channel Islands. We are continuing to investigate Share Plans for
our European operations.
This report was approved by the Board on 22 March 2022 and
signed on its behalf.
Garth Palmer
22 March 2022
ESG REPORT
SigmaRoc has and will always be committed to the principles of
ESG. As per our 2020 Annual report, following further work, we have
formally aligned to both TCFD and SASB. Whilst TCFD recommendations
serve as a global foundation for effective climate-related
disclosures, the SASB standards will be used to collect, structure,
and effectively disclose related performance data for the material,
climate-related risks and opportunities identified. SASB standards
represent a clear solution to TCFD implementation, and areas of
future focus are well-established in the market. SASB rigorously
developed TCFD-aligned reporting tools, and support the
implementation of the recommendations and the 11 associated
disclosures in a way that is both cost-effective and useful for all
stakeholders.
The TCFD standards set out recommended disclosures structured
under four core elements of how companies operate:
-- Governance - The organisation's governance around climate-related risks and opportunities
-- Strategy - The actual and potential impacts of
climate-related risks and opportunities for an organisation's
businesses, strategy, and financial planning
-- Risk Management - The processes used by the organisation to
identify, assess, and manage climate-related risks; and
-- Metrics and Targets - The metrics and targets used to assess
and manage relevant climate-related risks and opportunities.
These are supported by recommended disclosures that build on the
framework with information intended to help investors and others
understand how reporting companies assess climate-related risks and
opportunities.
SASB provides industry-specific standards for disclosing
performance on sustainability topics including, but not limited to
climate in a comparable manner that are reasonably likely to have a
material effect on financial performance of companies in each
industry. They will be used when assessing the relevant disclosures
under the Metrics and Targets Pillar of the TCFD and are among the
most frequently cited tools in the TCFD's Implementation Annex.
TCFD Pillar Recommended Disclosure SigmaRoc Summary
Governance The Board has the highest level
* board's oversight of climate-related risks and of responsibility for
opportunities climate-related
issues and is supported by
various committees including
* management's role in assessing and managing climate the Audit Committee, which
related risks and opportunities is responsible for monitoring
ESG performance.
In 2021, the board agreed a
road map to developing ESG
through TCFD, SASB and development
of ESG targets.
--------------------------------------------------------------- -----------------------------------
Strategy ESG is core in all of our key
* Climate-related risks and opportunities decision-making.
identification Both the Board and management
teams review where climate-related
risks and opportunities might
* climate-related risks and opportunities impacts occur, as well as their
significance
and connection to other risks.
* resilience of the organisation's strategy This information allows us
to challenge our strategy to
ensure it is as resilient as
possible.
--------------------------------------------------------------- -----------------------------------
Risk Management Climate-related risks and
* identifying and assessing climate-related risks opportunities
are identified and managed
both locally and at Group level
* managing climate-related risks with our CTO coordinating all
aspects.
The identification, assessment
* integration into overall risk management and effective management of
climate-related risks and
opportunities
are actively discussed during
Board and management meetings.
--------------------------------------------------------------- -----------------------------------
Metrics and To ensure meaningful and
Targets * climate-related metrics appropriate
metrics and targets for our
stakeholders, we are adopting
* Scope 1, Scope 2, and Scope 3 emissions. SASB recommended disclosures.
We also comply with SECR, which
is independently produced,
* climate-related targets and voluntarily expand the
remit to include all our
operations,
not just the UK.
--------------------------------------------------------------- -----------------------------------
1.1. ESG Road Map & Focus Areas
As a business our overall aim is to ensure sustainable returns
to our shareholders. As a Group we are committed to ensuring this
can be done in a manner where we minimise risks, seize
opportunities and so that our business continues to be strong in
the years to come.
Our focus on returns to shareholders is through our 4i
principles, all of which are underpinned by ESG.
Shareholder returns are an output of our inputs, which are our
business model and ESG principles.
1.1.1. Road Map to Net Zero
ESG Subject Target Date
Environment Carbon All concrete products available in low carbon 2025
and ultra-low carbon
--------------------- --------------------------------------------------- ---------
Carbon Capture Storage and utilisation trial plant 2025
operational
--------------------- --------------------------------------------------- ---------
Alternative fuels used in mobile equipment 2030
--------------------------------------------------- ---------
Alternative fuels used in fixed equipment (e.g 2032
lime and asphalt)
--------------------------------------------------- ---------
All kilns are carbon neutral 2038
--------------------------------------------------- ---------
Net Zero 2040
--------------------- --------------------------------------------------- ---------
Energy intensity 2.5% reduction in energy intensity 2030
and efficiency
--------------------- --------------------------------------------------- ---------
100% third party energy sourced from renewable 2030
means
--------------------- --------------------------------------------------- ---------
Resource utilisation 100% of all manufactured products can utilise 2025
& circular economy waste / recycled materials*
--------------------- --------------------------------------------------- ---------
100% utilisation of all production materials 2027
--------------------- --------------------------------------------------- ---------
*where industry specifications allow for it
1.1.2. Environment
Pillar Key Focus Area Targets How Did we Focus for
do 2022
Environment Sustainable Achieve Net First publication Development
use of reserves Zero road map of net zero and implementation
and resources; targets road map of solution
to achieve
our Net Zero
targets
-------------------- -------------- ----------------- --------------------
Environment Responsible
use key resources
including raw
material, mineral
and water;
-------------------- -------------- ----------------- --------------------
Environment Optimise energy
use and minimise
impact of our
operations
on the environment;
--------------------
Environment Contribute
to sustainable
construction
and address
environmental
aspects either
through product
production
or use.
-------------------- -------------- ----------------- --------------------
1.1.3. Social
Pillar Key Focus Area Targets How Did we Focus for
do 2022
Social Ensure people Total injury Achieved both focus on 3
leave work frequency rate total incident key areas
in the same and harm injury and harm incident Structure
or better condition frequency rate reduction through & Compliance
than when they reduction year continual engagement by ensuring
arrived; on year and support, corrective
especially actions properly
during unprecedent closed out
global times and on time.
Proactive
Prevention
by focusing
on each businesses'
3-5 core risks
Learn & Improve
through thorough
investigations
and timely
communication
-------------------- ------------------ --------------------- ------------------------
Social Support the
physical and
mental health
of our employees
and their families;
-------------------- ------------------ --------------------- ------------------------
Social Attract, train, Increase workforce Climate survey Continue to
retain, and engagement conducted that increase diversity
engage our and retention has allowed to achieve
workforce; each business >25% diversity
Increase board to focus on on the board
diversity key areas Increase relationships
UK Employee with education
benefits reviewed to promote
and updated our industry
Increased female at ages where
board diversity career choices
with the appointment are being
of Axelle Henry considered
-------------------- ------------------ --------------------- ------------------------
Social Be a good neighbour;
Source local,
buy local,
sell local,
invest local.
-------------------- ------------------ --------------------- ------------------------
1.1.4. Governance
Pillar Key Focus Area Targets How Did we Focus for
do 2022
Governance Promote QCA Formalise and The Board agreed Collection
and Corporate implement ESG to adopt the of data for
Governance framework and TCFD and SASB ongoing disclosure
Codes; structure framework and
guidelines
which have
been used in
the creation
and disclosure
of this section
------------------- -------------- ---------------- --------------------
Governance Ensure proactive
Board oversight
and independence
of committees;
------------------- -------------- ---------------- --------------------
Governance Focus on Risk
Management
and mitigation,
including cyber;
-------------------
Governance Ensure transparency
on reporting
and Tax.
------------------- -------------- ---------------- --------------------
1.2. Group Health and Safety Report
2021 saw continued focus and commitments to Health and Safety in
challenging environments created by COVID-19 and the restrictions
imposed. Key statistics show year on year improvement; The total
event and the Harm event frequency rates both improved 25% and 31%
respectively. This was part aided by the significant increase in
positive reporting, including Near Hits and Hazard and Risk
Elimination by more than200%.
As the Group continues to grow, and which is now operating in
numerous countries across Europe, we continue to ensure compliance
with local regulation, which is managed at a local level, whilst at
the same time integrating these businesses to align with Group
H&S standards.
As a group we have set three overarching principals as well core
aspects such as increased reporting and event management through
the use of our in-house H&S app, Health and Safety Committees
and training through NEBOSH and IOSH:
Structured & Compliant
1. All sites audited with identified improvement
actions.
2. All corrective actions properly closed
out and on time.
Proactive Prevention
1. 3-5 core risks with live action plan.
2. Uncontrolled Risks and hazards (HIRE)
logged and actioned.
--------------------------------------------------------
Learn & Improve
1. Detailed investigations on all MTI, LTI
and HiPo events suing aspects such as ICAM.
2. Performance and events communicated throughout
the business in a timely manner
--------------------------------------------------------
The safety culture of the Group continues to have strong focus
as every new business comes with differing approaches to safety
prior to joining SigmaRoc. Through the use of adequate tools,
including our safety app Highvizz, site improvement and Annual
Focus Plans, safety committee structures and climate surveys we are
increasing worker engagement and delivering a positive safety
culture as these businesses become integrated. An initiative based
on football league tables has recently been successfully trialled
and saw a five-fold increase in hazard reporting.
During 2021 we have been effective in managing the both physical
and mental health challenges posed by COVID-19, with no apparent
transmission within the workplace observed.
1.3. Streamlined Energy and Carbon Report (SECR)
This report is independently produced by Briar. The Group
voluntarily expands the remit to include all operations, not just
UK.
1.3.1. UK energy use and associated greenhouse gas emissions
Current UK based annual energy usage and associated annual
greenhouse gas ("GHG") emissions are reported pursuant to the
Companies (Directors' Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018 ("the 2018
Regulations") that came into force 1 April 2019.
1.3.2. Organisational boundary
Energy use and associated GHG emissions are reported across the
Group as defined by the operational control approach. This includes
operations in the UK, Channel Islands, Belgium and across northern
Europe (Estonia, Finland, Poland & Sweden). This exceeds the
minimum mandatory requirements set out in the 2018 Regulations for
'large quoted companies', which only requires reporting of UK based
energy use and emissions.
1.3.3. Reporting period
The annual reporting period is 1 January to 31 December each
year and the energy and carbon emissions are aligned to this
period. The subsidiary company, Nordkalk, was acquired in September
2021 and energy and emissions are only included for this subsidiary
from this date.
1.3.4. Quantification and reporting methodology
The 2019 UK Government Environmental Reporting Guidelines and
the GHG Protocol Corporate Accounting and Reporting Standard
(revised edition) were followed. Emissions calculations were based
on emission factors published in the 2021 UK Government GHG
Conversion Factors for Company Reporting, Statistics Finland Fuel
Classification 2021, Swedish Environmental Protection Agency
Emission Factors 2022 and the latest available factors from the
Association of Issuing Bodies (2020), Jersey Electricity (2020) and
Guernsey Electricity (2020). The report has been reviewed
independently by Briar Consulting Engineers Limited.
Electricity and gas consumption were based on invoice records
with some pro-rata and benchmark estimations carried out to
complete missing data. Transport usage was calculated from a
combination of mileage and fuel records where possible. Transport
is not reported separately outside the UK and Channel Islands as it
is included within fuel usage and is considered immaterial for grey
fleet. Gross calorific values were used except for mileage energy
calculations as per Government GHG Conversion Factors.
The associated emissions are divided into mandatory and
voluntary emissions according to the 2018 Regulations. For large
unquoted organisations, the 2018 Regulations define mandatory
emissions as those originating in the UK coming from purchased
electricity, gas combustion and purchased fuel for transport
(including mileage expense claims). Reporting energy and emission
sources outside of these sources is considered voluntary and
reported separately.
The emissions are further divided into their relevant scopes as
per the GHG Protocol. The scopes are defined as:
-- Scope 1: Direct GHG emissions that occur from sources owned
or controlled by the organisation.
-- Scope 2: Indirect GHG emissions from the generation of
acquired and consumed electricity, steam, heating or cooling.
-- Scope 3: Other indirect GHG emissions that occur as a
consequence of the organisations activities but occur from sources
not owned or controlled by the organisation.
-- Outside of scopes: Biogenic CO(2) emissions that scope 1
impact are determined to be 'net zero', since the fuel source
itself absorbs an equivalent amount of CO(2) during the growth
phase as the amount of CO(2) released through combustion.
Therefore, the direct CO(2) emissions are reported separately.
Breakdown of energy consumption used to calculate emissions
(kWh):
Energy type 2020 2021
-------------------------------------- ---------------------------- ----------------------------
Mandatory energy: UK Group Total(1) UK Group Total(1)
Gas 274,854 716,644 453,856 104,338,875
Purchased electricity 2,611,414 17,271,765 5,113,311 80,401,077
Transport fuel 6,274,566 9,179,726 16,253,123 25,774,101
-------------------------------------- ----------- --------------- ----------- ---------------
Total energy (mandatory) 9,160,835 27,168,136 21,820,291 210,514,054
-------------------------------------- ----------- --------------- ----------- ---------------
Voluntary energy:
Bioenergy - - - 7,392,511
Coal - - - 155,968,343
Oil 17,781,282 54,968,961 36,524,685 158,166,363
Generated electricity(2) - 940,490 - 1,906,467
-------------------------------------- ----------- --------------- ----------- ---------------
Total energy (voluntary) 17,781,282 55,909,451 36,524,685 323,433,684
-------------------------------------- ----------- --------------- ----------- ---------------
Total energy (mandatory & voluntary) 26,942,117 83,077,587 58,344,976 533,947,737
-------------------------------------- ----------- --------------- ----------- ---------------
(1) The Group total includes emissions from the UK, Channel
Islands, Belgium, and Nordkalk (Estonia, Finland, Poland and Sweden
from Sep 21 only).
(2) Electricity generated by solar photovoltaic panels. Reported
energy includes any exported energy to the grid.
Breakdown of emissions associated with the reported energy use
(tCO e)
Emission source 2020 2021
----------------------------------------------- ----------------------- ------------------------
Mandatory emissions: UK Group Total(1) UK Group Total(1)
Scope 1
Gas 51 145 83 16,929
Transport (company owned vehicles) 1,472 2,171 3,775 6,247
----------------------------------------------- ------ --------------- ------- ---------------
Scope 2
Purchased electricity (location-based) 609 2,855 1,086 17,070
----------------------------------------------- ------ --------------- ------- ---------------
Scope 3
Transport (grey fleet) 41 41 78 104
----------------------------------------------- ------ --------------- ------- ---------------
Total gross emissions (mandatory) 2,173 5,212 5,022 40,349
----------------------------------------------- ------ --------------- ------- ---------------
Voluntary emissions:
Scope 1
Bioenergy (CH & N O) - - - 0.5
Coal - - - 52,657
Oil 4,514 14,054 9,259 41,179
Process related emissions - - - 135,461
----------------------------------------------- ------ --------------- ------- ---------------
Total gross emissions (voluntary) 4,514 14,054 9,259 229,297
----------------------------------------------- ------ --------------- ------- ---------------
Total gross emissions (mandatory & voluntary) 6,687 19,266 14,281 269,647
----------------------------------------------- ------ --------------- ------- ---------------
Outside of scopes (CO(2) only)
Bioenergy - - - 2,529
Petrol/diesel biofuel content 30 30 227 251
----------------------------------------------- ------ --------------- ------- ---------------
Intensity ratio: tCO(2) e per million-pound turnover:
Mandatory emissions only 46.8 42.0 67.9 148.3
Mandatory & voluntary emissions 142.9 155.1 193.0 991.4
----------------------------------------------- ------ --------------- ------- ---------------
(1) The Group total includes emissions from the UK, Channel
Islands, Belgium, and Nordkalk (Estonia, Finland, Poland and Sweden
from Sep 21 only).
Breakdown of emissions across the Group for 2021 only (tCO(2)
e)
Emission source 2021
-------------------------------------------------------- -----------------------------------------------
UK C.I BE Nordkalk(3) Total
Scope 1
Bioenergy (CH & N O) - - - 0.5 0.5
Coal - - - 52,657 52,657
Gas 83 - 110 16,737 16,929
Oil 9,259 2,012 6,820 23,087 41,179
Transport - Company owned vehicles 3,775 2,471 - - 6,247
Process related emissions - - - 135,461 135,461
-------------------------------------------------------- ------- ------ ------ ------------ --------
Scope 2
Purchased electricity (location-based) 1,086 123 2,663 13,199 17,070
-------------------------------------------------------- ------- ------ ------ ------------ --------
Scope 3
Transport - Business travel in employee-owned vehicles 77 26 - - 103
-------------------------------------------------------- ------- ------ ------ ------------ --------
Total gross emissions 14,281 4,631 9,593 240,959 269,647
-------------------------------------------------------- ------- ------ ------ ------------ --------
Outside of scopes
Bioenergy (CO(2) ) - - - 2,529 2,529
Petrol/diesel biofuel content 227 24 - - 251
-------------------------------------------------------- ------- ------ ------ ------------ --------
Intensity ratio
tCO(2) e per million-pound turnover 193.0 159.7 131.4 2,511.9 991.4
-------------------------------------------------------- ------- ------ ------ ------------ --------
(3) Nordkalk emissions are reported from Sep 2021 only and
include sites within the operational control boundary in Estonia,
Finland, Poland and Sweden.
1.3.5. Intensity Ratio
The intensity ratio is total gross emissions in metric tonnes CO
(2) ei per total million-pound (GBPm) turnover. This is calculated
separately for 'mandatory' emissions and 'mandatory &
voluntary' emissions for the UK, Channel Islands, Belgium and
Nordkalk. This financial metric is considered the most relevant to
the Company's wide-ranging activities and allows a comparison of
performance across other organisations and sectors.
The increase in the UK intensity ratio this year reflects a
shift in production. In 2020, a large amount of production focused
on a one-off project to deliver Road Zipper System highway
barriers, which required relatively low energy intensive processes.
From 2021, production has returned to typical projects that require
higher energy intensity. Absolute UK emissions have also increased,
primarily due to the inclusion of the subsidiary GD Harries &
Sons Limited for a full 12 months this year, whereas in 2020 it was
reported from September 2020 only (when the business joined the
Group).
Group wide relative and absolute emissions have increased this
year due to the acquisition of Nordkalk, a manufacturer of
limestone-based products which have high process related CO (2)
emissions associated with limestone calcination reactions. Absolute
emissions will increase further next year when a full 12 months of
emissions is reported for Nordkalk. This is because this year's
figures are only quantified from September 21, when the company
joined the Group.
1.3.6. Energy efficiency action during current financial year
In the period 1 January to 31 December 2021 for UK operations,
energy efficiency action has focused on transport efficiency, with
considerable work undertaken to optimise transport and logistics in
CCP to reduce road miles covered by the haulage fleet.
On site renewable energy generation has increased following the
completion of the third phase of the solar photovoltaic extension
in Belgium. This has resulted in an increase in annual renewable
electricity generation of 965,000 kWh this year compared to last
year's generation; more than double the energy generation in
2020.
This year we have committed to going cement free in our precast
portfolio from January 2022. This follows the launch of the CCP
Greenbloc in February 2021; the UKs first cement-free ultra-low
carbon dense concrete block. Compared to a dense concrete block
manufactured with 100% Ordinary Portland Cement, Greenbloc has a
77% lower embodied CO2, resulting in an average reduction of 1.1kg
CO2e per concrete block.
Operations at Ronez on the Channel Islands have increased the
usage of GGBS in the low carbon product range, specifically for
Ready Mix Concrete (RMX) and concrete blocks. 683 tonnes were
switched from cement to GGBS this year compared to 2020, estimated
to result in a CO2e reduction of 478 tonnes. The launch of
Greenbloc and increased use of GGBS at Ronez will primarily impact
scope 3 (upstream and downstream) emissions; however, scope 3
emissions are not fully quantified in these tables.
1.4. Stakeholders
Stakeholders Description How we engage
(in alphabetical
order)
Colleagues We have dedicated workforce Site presence and visual felt
of close to 2,000 across leadership. Employee groups
the Group. We recognise and committees and unions.
our dedicated workforce Focus on development training
as a key driver of the and succession planning. Decentralised
value derived from the approach with flat management
business. Our colleagues allowing easy access to all
are experienced and continuously staff. Employee benefit offerings
developed to fulfil their that can also extend to family
potential. All employees members.
are offered a fair benefits
and compensation package
relative to their role
and level in the organisation.
We encourage share ownership
where they are available
and are working to set
up where they are not
currently in place.
------------------------------------ ----------------------------------------
Customers All our businesses are Prioritise a local focus on
and Suppliers decentralised and locally both customers and suppliers.
focused so that we know Engage directly from our sites
the customers and suppliers so that the customer and supplier
areas like they do. We deal directly with the site
work alongside our customers they are supplying or buying
to provide "right first from. Ensure timely payments
time" service and to seek are made to suppliers. Functional
proactive and innovative and intuitive websites and
solutions to support requirements. digital solutions focused
"Right first time" is on the customer. Ensure adequate
key to success and ensuring checks and due diligence are
customer loyalty as part done on customers and suppliers.
of our long-term success.
We recognise the huge
role our suppliers play
in its long-term success.
We strive to ensure timely
payments, maximise value
to support the delivery
of our customers' needs.
We balance economic requirements
with sustainability considerations
over the whole supply
chain.
------------------------------------ ----------------------------------------
Communities By being decentralised Proactive approach and active
and local we are at the participation in community
heart of the communities and industry working groups,
in which we operate allowing forums and committees.
us to be knowledgeable,
good, supportive and engaging
neighbours.
------------------------------------ ----------------------------------------
Investors All our Shareholders play Dedicated forums such as AGM,
an important role in the Annual and Interim Webinar
continued success of our Q&As. Annual and interim reports,
business. We maintain trading statements and RNS.
purposeful and close relationships Regular phone calls and dialogues.
with them either directly Broker and NED contacts. Site
or via wider mediums such visits, investor roadshows,
as Q&A webinars and when investor conferences.
allowed, conferences.
We seek to be transparent
and give clear and consistent
messages across all communication
channels.
------------------------------------ ----------------------------------------
Regulators We look to develop and Regular dialogue with Governments,
/ local Government sustain good relationships Government agencies, regulators,
with many regulators who and industry groups. Active
govern our businesses membership of the industry
to ensure the success bodies such Mineral Products
of our business and maintaining Association, Federation Industries
our license to operate. Extractives and European Lime
We are committed to adherence Association. Effective and
of legal and regulatory clear policies to ensure governance.
requirements. We are committed Education and training of
to have independent review staff to reinforce compliance
/ oversight be it internally with regulations.
or externally. We are
committed to a sustainability
framework following review
of international standards.
------------------------------------ ----------------------------------------
Stakeholder engagement
The Director's believe they have acted in the way most likely to
promote the success of the Group for the benefit of its members as
a whole, as required by s172 of the Companies Act 2006. The
requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term;
-- Act fairly between the members of the Company;
-- Maintain a reputation for high standards of business conduct;
-- Consider the interests of the Group's employees;
-- Foster the Group's relationships with suppliers, customers and others; and
-- Consider the impact of the Group's operations on the community and environment.
The application of the s172 requirements are demonstrated
throughout this report and the Accounts as a whole, with the
following examples representing some of the key decisions made in
2021 and up to the date of these Accounts:
-- Continued pursuit of buy and build growth strategy: the Group
has aggressively continued its buy and build growth strategy,
completing two acquisitions during 2021, establishing two new
platforms and entering into a strategic JV partnership. The
acquisition of Nordkalk was transformational for the Group, giving
scale to self fund further growth opportunities.
-- Ongoing management of the COVID-19 pandemic: the Group
continued to actively monitor and manage the various measures
implemented in 2020 to ensure continued protection and wellbeing of
its employees, maintenance of good working relationships with
customers and suppliers, and the commercial viability of its
business.
-- Safety initiatives: safety and wellbeing of our colleagues is
one of our top priorities and the Group continued to improve its
health and safety standards.
1.5. Membership
Membership to trade organisations, industry bodies and other
agencies is critical to ensure continual improvement in all that we
do and to help facilitate the ongoing changes our industry and our
customers face. Across our platforms we both support and are
supported by National and International bodies such as:
-- Mineral Product Association (MPA): UK industry trade
association for the aggregates, asphalt, cement, concrete,
dimension stone, lime, mortar and silica sand industries.
-- Federation Industries Extractives (Fediex) of which we have representation on the Board
-- Benelux Natural Stone Association (BNSA) of which we have representation on the Board
-- European Lime Association (EuLA) of which we have representation on the Board
-- Industrial Minerals Association Europe (IMA Europe)
-- European Calcium Carbonate Association (CCA)
-- International Lime Association (ILA)
Further to these bodies, businesses in the Group also has ISO
accreditation or equivalent in ISO 9001 Quality; ISO 14001
Environment and ISO 45001 Health & Safety. Currently 50% of our
businesses have ISO with 75% in H1 2022. Currently Benelux is being
reviewed as to what is the best form of accreditations to maintain
in addition to their product and local accreditations
Further information on ESG will be available via our dedicated
ESG Report and at www.sigmaroc.com .
DIRECTORS' REPORT
The Directors present their report, together with the audited
Financial Statements, for the year ended 31 December 2021.
Principal Activities
The principal activity of the Company is to make investments
and/or acquire businesses and assets in the construction materials
sector. The principal activity of the Group is the production of
high quality aggregates and supply of value-added construction
materials.
Board composition and head office
The Board comprises three Executive Directors and three
Non-Executive Directors at year end. The Corporate Head Office of
the Company is located in London, UK . Following the publication of
these accounts, a fourth Non-Executive Director will be
appointed.
Risk Management
The Board is responsible for the Group's risk management and
continues to develop policies and procedures that reflect the
nature and scale of the Group's business.
Details of the Group's financial risk management policies are
set out in Note 3 to the Financial Statements.
Results and Dividends
For the year to 31 December 2021, the Group's Underlying profit
before tax was GBP 26.8 million (2020: GBP12.2 million) and
Underlying profit after tax was GBP22.1 million (2020: GBP11.5
million). Recognising the Group's strategy, current position on its
journey, the Directors are not proposing to adopt a dividend policy
yet.
Stated Capital
Details of the Company's shares in issue are set out in note 28
to the Financial Statements.
Directors
The following Directors served during the year:
Director Position Note
--------------- -------------------------- ------------------------
David Barrett Chairman
--------------- -------------------------- ------------------------
Max Vermorken Chief Executive Officer
--------------- -------------------------- ------------------------
Garth Palmer Chief Financial Officer
--------------- -------------------------- ------------------------
Dean Masefield Chief Financial Officer Resigned 31 August 2021
--------------- -------------------------- ------------------------
Tim Hall Non-Executive Director
--------------- -------------------------- ------------------------
Simon Chisholm Independent Non-Executive
Director
--------------- -------------------------- ------------------------
Jacques Emsens Independent Non-Executive
Director
--------------- -------------------------- ------------------------
Directors & Directors' interests
The Directors who served during the year ended 31 December 2021
are shown below and had, at that time, the following beneficial
interests in the shares of the Company:
31 December 2021 31 December 2020
--------------------- ---------------------
Ordinary Options Ordinary Options
Shares Shares
------------------ --------- ---------- --------- ----------
Max Vermorken 674,150 11,807,349 549,529 11,807,349
------------------ --------- ---------- --------- ----------
David Barrett 3,009,189 5,638,674 2,609,189 5,638,674
------------------ --------- ---------- --------- ----------
Garth Palmer 556,146 3,326,014 438,499 3,326,014
------------------ --------- ---------- --------- ----------
Dean Masefield(1) 45,748 500,000 28,101 30,000
------------------ --------- ---------- --------- ----------
Tim Hall 400,176 750,000 329,176 750,000
------------------ --------- ---------- --------- ----------
Simon Chisholm - - - -
------------------ --------- ---------- --------- ----------
Jacques Emsens - - - -
------------------ --------- ---------- --------- ----------
(1) Resigned on 31 August 2021
Further details on options can be found in Note 29 to the
Financial Statements.
Details on the remuneration of the Directors can be found in
Note 10 to the Financial Statements.
Substantial Shareholdings
The Company is aware that, as at 22 March 2022, other than the
Directors, the interests of Shareholders holding three per cent or
more of the issued share capital of the Company were as shown in
the table below :
Shareholder Shares held Percentage
of holdings
------------------------------------- ------------ -------------
Blackrock Investment Mgt (UK) 82,943,051 13.00%
------------------------------------- ------------ -------------
Rettig Group 50,276,521 7.88%
------------------------------------- ------------ -------------
Ninety One 45,421,428 7.12%
------------------------------------- ------------ -------------
M&G Investment Management 40,753,864 6.39%
------------------------------------- ------------ -------------
Chelverton Asset Management 40,000,000 6.27%
------------------------------------- ------------ -------------
BGF Investment LP 33,557,577 5.26%
------------------------------------- ------------ -------------
Canaccord Genuity Wealth Management 32,972,287 5.17%
------------------------------------- ------------ -------------
Janus Henderson Investors 32,338,004 5.07%
------------------------------------- ------------ -------------
Polar Capital 25,983,914 4.07%
------------------------------------- ------------ -------------
Premier Fund Managers 24,850,846 3.89%
------------------------------------- ------------ -------------
Employees
By being responsible for their own businesses, that are aligned
with the overall Group's strategy, employees are fully aware of
their impact and contribution as they are inherently responsible
for their own success. The Group and each business is committed to
employing the best they can, not only in skills and competence but
also in their softer skills, regardless of who they are or where
they have come from. Once engaged, each employee is nurtured and
developed locally with opportunities within each business and
platform offered openly.
Political Contribution
The Group did not make any contributions to political parties
during either the current or the previous year.
Annual General Meeting
The AGM will be held at the Washington Mayfair Hotel, 5 Curzon
St, London W1J 5HE on 26 April 2022 at 3pm. The formal notice
convening the AGM, together with explanatory notes on the
resolutions contained therein, is included in the separate circular
accompanying this document and is available on the Company's
website at www.sigmaroc.com.
Viability Statement
The directors have assessed the viability of the Group over a
period to December 2026. This is the same period over which
financial projections were prepared for the Group's strategic
financial plan. In making their assessment the directors have taken
into account the Group's current position and the potential impact
of the principal risks and uncertainties in its business model,
future performance, solvency or liquidity. They also stress tested
their analysis by running a number of credible scenarios and
considered the availability of mitigating actions. Based on this
assessment, the directors confirm that they have a reasonable
expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period to 31
December 2022. In making this statement, the directors have assumed
that financing remains available and that mitigating actions are
effective.
Corporate responsibility
Environmental
SigmaRoc undertakes its activities in a manner that minimises or
eliminates negative environmental impacts and maximises positive
impacts of an environmental nature.
Health and safety
SigmaRoc operates a comprehensive health and safety programme to
ensure the wellness and security of its employees. The control and
eventual elimination of all work related hazards requires a
dedicated team effort involving the active participation of all
employees. A comprehensive health and safety programme is the
primary means for delivering best practices in health and safety
management. This programme is regularly updated to incorporate
employee suggestions, lessons learned from past incidents and new
guidelines related to new projects, with the aim of identifying
areas for further improvement of health and safety management. This
results in continuous improvement of the health and safety
programme. Employee involvement is regarded as fundamental in
recognising and reporting unsafe conditions and avoiding events
that may result in injuries and accidents.
Internal controls
The Board recognises the importance of both financial and
non-financial controls and has reviewed the Group's control
environment and any related shortfalls during the year. Since the
Group was established, the Directors are satisfied that, given the
current size and activities of the Group, adequate internal
controls have been implemented. Whilst they are aware that no
system can provide absolute assurance against material misstatement
or loss, in light of the current activity and proposed future
development of the Group, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and
effective.
Going concern
The Group meets its day-to-day working capital and other funding
requirements through cash and banking facilities; which were
renewed in July 2021.
The impact of the COVID-19 pandemic on the Group's business,
revenues and cash flow creates uncertainty. However, given the
Group's robust balance sheet, solid performance through the
COVID-19 pandemic to date and in conjunction with forecast
projections, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future and, therefore, continue to adopt the
going concern basis in preparing the Annual Report and Financial
Statements. Further details on their assumptions and their
conclusion thereon are included in the statement on going concern
included in Note 2.3 to the Financial Statements.
Directors' and officers' indemnity insurance
The Company has made qualifying third-party indemnity provisions
for the benefit of its Directors and officers. These were made
during the year and remain in force at the date of this Annual
Report.
Events after the reporting period
Events after the reporting period are set out in Note 38 to the
Financial Statements.
Policy and practice on payment of creditors
The Group agrees terms and conditions for its business
transactions with suppliers. Payment is then made in accordance
with these terms, subject to the terms and conditions being met by
the supplier. As at 31 December 2021, the Company had an average of
58 days (2020: 9 days) purchases outstanding in trade payables and
the Group had an average of 91 days (2020: 74 days).
Provision of information to Auditor
So far as each of the Directors is aware at the time this report
is approved:
-- there is no relevant audit information of which the Group's auditor is unaware; and
-- the Directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in
office as auditor.
This report was approved by the Board on 22 March 2022.
Garth Palmer
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2021
Year ended 31 December
Year ended 31 December 2021 2020
Non-underlying*
Non-underlying (Note 11
Underlying (Note 11) Total Underlying ) Total
Continued operations Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---- ----------- -------------- --------- ------------- ----------------- -----------
Revenue 7 271,987 - 271,987 124,231 - 124,231
----------- -------------- --------- ------------- ----------------- -----------
Cost of sales 8 (210,068) - (210,068) (90,028) - (90,028)
Profit from
operations 61,919 - 61,919 34,203 - 34,203
----------- -------------- --------- ------------- ----------------- -----------
Administrative
expenses 8 (31,792) (25,734) (57,526) (20,046) (4,554) (24,600)
Net finance
(expense)/income 12 (5,317) (1,682) (6,999) (2,379) (360) (2,739)
Other net gains
/ (losses) 13 1,978 (1,644) 334 374 (65) 309
Profit/(loss) before
tax 26,788 (29,060) (2,272) 12,152 (4,979) 7,173
----------- -------------- --------- ------------- ----------------- -----------
Tax expense 15 (4,699) - (4,699) (662) - (662)
Profit/(loss) 22,089 (29,060) (6,971) 11,490 (4,979) 6,511
----------- -------------- --------- ------------- ----------------- -----------
Profit/(loss)
attributable
to:
Owners of the parent 21,499 (29,060) (7,561) 11,490 (4,979) 6,511
Non-controlling
interest 590 - 590 - - -
----------- -------------- ---------
22,089 (29,060) (6,971) 11,490 (4,979) 6,511
----------- -------------- --------- ------------- ----------------- -----------
Basic earnings
per share
attributable
to owners of the
parent (expressed
in pence per share) 32 5.37 (7.26) (1.89) 4.50 (1.95) 2.55
----------- -------------- --------- ------------- ----------------- -----------
Diluted earnings
per share
attributable
to owners of the
parent (expressed
in pence per share) 32 5.02 (6.79) (1.77) 4.15 (1.80) 2.35
----------- -------------- --------- ------------- ----------------- -----------
* Non-underlying items represent acquisition related expenses,
restructuring costs, certain finance costs, share option expense
and amortisation of acquired intangibles. See Note 11 for more
information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
Year ended Year ended
31 December 31 December
2021 2020
Note GBP'000 GBP'000
---------------------------------------------------------------------------------- ---- ------------ ------------
Profit/(loss) for the year (6,971) 6,511
------------ ------------
Other comprehensive income:
Items that will or may be reclassified to
profit or loss:
FX translation reserve (15,806) 2,379
Cash flow hedges - effective portion of changes
in fair value 882 -
Remeasurement of the net defined benefits
liability 155 -
------------ ------------
Other comprehensive income, net of tax (14,769) 2,379
------------ ------------
Total comprehensive income (21,740) 8,890
------------ ------------
Total comprehensive income attributable to:
Owners of the parent (22,343) 8,890
Non-controlling interests 603 -
------------ ------------
Total comprehensive income for the period (21,740) 8,890
------------ ------------
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Consolidated Company
------------------------ ------------------------
31 December 31 December 31 December 31 December
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ---- ----------- ----------- ----------- -----------
Non-current assets
Property, plant and equipment 16 256,436 144,793 429 52
Intangible assets 17 306,436 48,804 - -
Investments in subsidiary
undertakings 18 - - 554,195 101,249
Investment in equity-accounted
associate 19 524 - - -
Investment in joint ventures 5,134 - - -
Derivative financial asset 33 870 - - -
Other receivables 20 4,759 21 - -
Deferred tax asset 15 3,129 1,412 - -
577,288 195,030 554,624 101,301
----------- ----------- ----------- -----------
Current assets
Trade and other receivables 20 73,254 20,343 2,890 998
Inventories 21 44,530 14,247 - -
Cash and cash equivalents 22 69,916 27,452 19,038 11,521
Derivative financial asset 33 4,327 152 302 152
192,027 62,194 22,230 12,671
----------- ----------- ----------- -----------
Total assets 769,315 257,224 576,854 113,972
----------- ----------- ----------- -----------
Current liabilities
Trade and other payables 23 98,213 46,523 5,567 14,216
Derivative financial liabilities 33 737 - - -
Provisions 25 4,024 - - -
Borrowings 24 21,723 3,611 8,102 21
Current tax payable 3,934 708 - -
128,631 50,842 13,669 14,237
----------- ----------- ----------- -----------
Non-current liabilities
Borrowings 24 212,199 67,688 192,068 22
Employee benefit liabilities 1,589 - - -
Deferred tax liabilities 15 5,190 3,871 - -
Provisions 25 6,151 6,160 - -
Other payables 23 4,401 5,100 4,401 5,100
----------- ----------- ----------- -----------
229,530 82,819 196,469 5,122
----------- ----------- ----------- -----------
Total liabilities 358,161 133,661 210,138 19,359
----------- ----------- ----------- -----------
Net assets 411,154 123,563 366,716 94,613
----------- ----------- ----------- -----------
Equity attributable to
owners of the parent
Share capital 28 6,379 2,787 6,379 2,787
Share premium 28 399,897 107,418 399,897 107,418
Share option reserve 29 3,104 847 3,104 847
Other reserves 30 (11,236) 3,293 1,362 1,362
Retained earnings 2,116 9,218 (44,026) (17,801)
----------- ----------- ----------- -----------
Equity attributable to
owners of the parent 400,260 123,563 366,716 94,613
Non-controlling interest 31 10,894 - - -
----------- ----------- ----------- -----------
Total equity 411,154 123,563 366,716 94,613
----------- ----------- ----------- -----------
The Company has elected to take the exemption under Section 408
of the Companies Act 2006 from presenting the Company's Income
Statement and Statement of Comprehensive Income.
The loss for the Company for the year ended 31 December 2021 was
GBP26.3 million (year ended 31 December 2020: GBP5.8 million).
The Financial Statements were approved and authorised for issue
by the Board of Directors on 22 March 2022 and were signed on its
behalf by:
Garth Palmer
Chief Financial Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
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 2020 2,537 95,359 531 914 2,707 102,048 - 102,048
-------- -------- -------- --------- --------- -------- --------------- --------
Profit for the
year - - - - 6,511 6,511 - 6,511
Currency translation
differences - - - 2,379 - 2,379 - 2,379
-------- -------- -------- --------- --------- -------- --------------- --------
Total comprehensive
income for the
period - - - 2,379 6,511 8,890 - 8,890
-------- -------- -------- --------- --------- -------- --------------- --------
Contributions by
and distributions
to owners -
Issue of share
capital 243 12,156 - - - 12,399 - 12,399
Issue costs 28 - (441) - - - (441) - (441)
Share based payments 7 344 316 - - 667 - 667
Total contributions
by and distributions
to owners 250 12,059 316 - - 12,625 - 12,625
-------- -------- -------- --------- --------- -------- --------------- --------
Balance as at 31
December 2020 2,787 107,418 847 3,293 9,218 123,563 - 123,563
-------- -------- -------- --------- --------- -------- --------------- --------
Balance as at 1
January 2021 2,787 107,418 847 3,293 9,218 123,563 - 123,563
-------- -------- -------- --------- --------- -------- --------------- --------
Profit for the
year - - - - (7,561) (7,561) 590 (6,971)
Currency translation
differences - - - (15,819) - (15,819) 13 (15,806)
Other comprehensive
income - - - 1,037 - 1,037 - 1,037
-------- -------- -------- --------- --------- -------- --------------- --------
Total comprehensive
income for the
period - - - (14,782) (7,561) (22,343) 603 (21,740)
-------- -------- -------- --------- --------- -------- --------------- --------
Contributions by
and distributions
to owners
Acquired via
acquisition - - - - - - 9,031 9,031
Issue of share
capital 3,089 258,996 - - - 262,085 1,260 263,345
Issue costs 28 - (8,748) - - - (8,748) - (8,748)
Share based payments 503 42,231 2,322 - - 45,056 - 45,056
Exercise of share
options - - (65) 65 - - -
Other equity
adjustments - - - 253 394 647 - 647
Total contributions
by and distributions
to owners 3,592 292,479 2,257 253 460 299,040 10,291 309,331
-------- -------- -------- --------- --------- -------- --------------- --------
Balance as at 31
December 2021 6,379 399,897 3,104 (11,236) 2,116 400,260 10,894 411,154
-------- -------- -------- --------- --------- -------- --------------- --------
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
Share
Share Share option Other Retained
capital premium reserve reserves earnings Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---- -------- -------- -------- --------- --------- --------
Balance as at 1 January
2020 2,537 95,359 531 1,362 (11,995) 87,794
-------- -------- -------- --------- --------- --------
Profit/(Loss) - - - - (5,806) (5,806)
Total comprehensive
income for the period - - - - (5,806) (5,806)
-------- -------- -------- --------- --------- --------
Contributions by and
distributions to owners
Issue of share capital 243 12,156 - - - 12,399
Issue costs 28 - (441) - - - (441)
Share based payments 7 344 316 - - 667
Total contributions
by and distributions
to owners 250 12,059 316 - - 12,625
-------- -------- -------- --------- --------- --------
Balance as at 31 December
2020 2,787 107,418 847 1,362 (17,801) 94,613
-------- -------- -------- --------- --------- --------
Balance as at 1 January
2021 2,787 107,418 847 1,362 (17,801) 94,613
-------- -------- -------- --------- --------- --------
Profit/(Loss) - - - - (26,290) (26,290)
Total comprehensive
income for the period - - - - (26,290) (26,290)
-------- -------- -------- --------- --------- --------
Contributions by and
distributions to owners
Issue of share capital 3,089 258,996 - - - 262,085
Issue costs 28 - (8,748) - - - (8,748)
Share based payments 503 42,231 2,322 - - 45,056
Exercise of share options - - (65) - 65 -
Total contributions
by and distributions
to owners 3,592 292,479 2,257 - 65 298,393
-------- -------- -------- --------- --------- --------
Balance as at 31 December
2021 6,379 399,897 3,104 1,362 (44,026) 366,716
-------- -------- -------- --------- --------- --------
CASH FLOW STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
Consolidated Company
-------------------------- --------------------------
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ---- ------------ ------------ ------------ ------------
Cash flows from operating
activities
Profit/(loss) (6,971) 6,511 (26,290) (5,484)
Adjustments for:
16
Depreciation and amortisation 17 19,115 10,889 49 29
Impairments 2,006 - - -
Share option expense 2,321 316 2,321 316
Loss/(gain) on sale of PP&E 101 (373) - -
Net finance costs 7,360 2,739 2,705 203
Income tax expense 4,699 662 - -
Share of earnings from joint
ventures (291) (294) - -
Non-cash items (1,103) 650 (275) 351
(Increase)/decrease in trade
and other receivables (1,178) 7,559 (1,142) (211)
(Increase)/decrease in inventories 130 (1,008) - -
(Decrease)/increase in trade
and other payables 9,142 2,714 2,348 (136)
Increase in provisions (1,339) - - -
Income tax paid (4,451) (1,894) - -
Net cash inflows/(outflows)
from operating activities 29,541 28,471 (20,284) (4,932)
------------ ------------ ------------ ------------
Investing activities
Purchase of property, plant
and equipment 16 (22,555) (6,452) (426) (9)
Sale of property, plant and
equipment 3,475 896 - -
Purchase of intangible assets 17 (62) (153) - -
Acquisition of businesses
(net of cash acquired) (350,940) (8,383) (379,854) (10,117)
Financial derivative (4,327) (152) (302) (152)
Loans granted (750) - (750) -
Interest received - 186 5 38
Net cash used in investing
activities (375,159) (14,058) (381,327) (10,240)
------------ ------------ ------------ ------------
Financing activities
Proceeds from share issue 263,344 12,399 262,085 12,399
Cost of share issue (8,748) (441) (8,748) (441)
Proceeds from borrowings 155,734 67,646 167,020 -
Cost of borrowings (5,425) (859) (5,425) -
Repayment of borrowings (12,253) (73,148) - -
Net loans with subsidiaries - - (3,927) 10,810
Interest paid (3,511) (2,487) (1,858) (0.7)
Repayment of finance lease
obligations (601) - (21) (23)
------------ ------------ ------------ ------------
Net cash used in financing
activities 388,540 3,110 409,126 22,744
------------ ------------ ------------ ------------
Net increase/(decrease) in
cash and cash equivalents 42,922 17,523 7,515 7,572
Cash and cash equivalents
at beginning of period 27,452 9,868 11,521 3,936
Exchange losses on cash (458) 61 2 13
Cash and cash equivalents
and end of period 22 69,916 27,452 19,038 11,521
------------ ------------ ------------ ------------
Major non-cash transactions
During the year ended 31 December 2021 there were share based
payments of GBP42.7 million as part of the Nordkalk acquisition.
The remainder of non-cash movements are not considered
material.
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
The principal activity of SigmaRoc plc (the 'Company') is to
make investments and/or acquire projects in the construction
materials sector and through its subsidiaries (together the
'Group') is the production of high-quality aggregates and supply of
value-added 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 Suite 1, 15 Ingestre
Place, London W1F 0DU.
2. Accounting Policies
The principal accounting policies applied in the preparation of
these Financial Statements are set out below ('Accounting Policies'
or 'Policies'). These Policies have been consistently applied to
all the periods presented, unless otherwise stated.
2.1. Basis of Preparing the Financial Statements
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') and IFRIC
Interpretations Committee ('IFRIC IC') i n conformity with the
requirements of the Companies Act 2006 . The Financial Statements
have also been prepared under the historical cost convention.
The Financial Statements are presented in UK Pounds Sterling
rounded to the nearest thousand.
The preparation of Financial Statements in conformity with
IFRS's requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the Group's Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial
Information are disclosed in Note 4 .
a) Changes in Accounting Policy
i) New standards and amendments adopted by the Group
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 31 December 2021 but
did not result in any material changes to the financial statements
of the Group or Company.
ii) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
-------------------- ---------------------------------- ---------------
IFRS 3 Reference to Conceptual Framework 1 January 2022
---------------------------------- ---------------
IAS 37 Onerous contracts 1 January 2022
---------------------------------- ---------------
IAS 16 Proceeds before intended use 1 January 2022
---------------------------------- ---------------
Annual improvements 2018-2020 Cycle 1 January 2022
---------------------------------- ---------------
IAS 8 Accounting estimates 1 January 2023
---------------------------------- ---------------
IAS 1 Classification of Liabilities 1 January 2023
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
2.2. Basis of Consolidation
The Consolidated Financial Statements consolidate the Financial
Statements of the Company and the accounts of all of its subsidiary
undertakings for all periods presented.
Subsidiaries are entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
The Group applies the acquisition method of accounting to
account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred to the former owners
of the acquiree and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred unless they
result from the issuance of shares, in which case they are offset
against the premium on those shares within equity.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is
accounted for within equity.
Investments in subsidiaries are accounted for at cost less
impairment.
Associates are entities over which the Group has significant
influence but not control over the financial and operating
policies. Investments in associates are accounted for using the
equity method of accounting and are initially recognised at cost.
The Group's share of its associates' post-acquisition profits or
losses is recognised in profit or loss, and its share of
post-acquisition movements in reserves is recognised in other
comprehensive income. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment.
Accounting policies of equity-accounted investees have been
changed where necessary to ensure consistency with the policies
adopted by the Group.
Where considered appropriate, adjustments are made to the
financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group. All intercompany transactions and balances between Group
enterprises are eliminated on consolidation.
CDH, B-Mix, Stone and GduH use Belgian GAAP rules to prepare and
report their financial statements. The Group reports using IFRS
standards and in order to comply with the Group's reporting
standards, management of CDH and B-Mix processed several
adjustments to ensure the financial information included at a Group
level complies with IFRS. CDH and B-Mix will continue to prepare
their company financial statements in line with the Belgian GAAP
rules.
Nordkalk entities use local GAAP rules to prepare and report
their financial statements. The Group reports using IFRS standards
and in order to comply with the Group's reporting standards,
management of Nordkalk processed several adjustments to ensure the
financial information included at a Group level complies with IFRS.
Nordkalk will continue to prepare their company financial
statements in line with the local GAAP rules.
The Employee Benefit Trust is considered to be a special purpose
entity in which the substance of the relationship is that of
control by the group in order that the group may benefit from its
control. The assets held by the trust are consolidated into the
group
2.3. Going Concern
Whilst COVID-19 is now endemic and is expected to have less of
an impact in the future years, it still bears uncertainty. The
executive management team believe that the Group has a sufficiently
robust balance sheet to endure any further uncertainty around
COVID-19.
The Financial Statements have been prepared on a going concern
basis. The Directors have a reasonable expectation that the Group
and Company have adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the Financial
Statements.
2.4. Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes
strategic decisions.
2.5. 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
GBP000's, 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.
2.6. Intangible Assets
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred and the
acquisition date fair value of any previous equity interest in the
acquire over the fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquire. If the total
of consideration transferred, non-controlling interest recognised
and previously held interest measured at fair value is less than
the fair value of the net assets of the subsidiary acquired, in the
case of a bargain purchase, the difference is recognised directly
in the Income Statement.
As reported within the CEO's strategic report, a PPA was carried
out to assess the fair value of the assets acquired in Harries as
at the completion date. As a result of this exercise, goodwill in
Harries decreased from GBP6.1 million to GBP2 million with the
corresponding movement being property and land and minerals. The
current accounting policies regarding the subsequent treatment
intangible assets will apply to fair value uplift attributable to
the PPA.
Amortisation is provided on intangible assets to write off the
cost less estimated residual value of each asset over its expected
useful economic life on a straight-line basis at the following
annual rates:
Goodwill 0%
Customer relations 7% - 12.5%
Intellectual property 10 - 12%
Research and Development 10% - 20%
Branding 5% - 10%
Other intangibles 10% - 20%
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each of the cash-generating
units, or groups of cash-generating units, that are expected to
benefit from the synergies of the combination. Each unit or group
of units to which the goodwill is allocated represents the lowest
level within the entity at which the goodwill is monitored for
internal management purposes. Goodwill is monitored at the
operating segment level.
Goodwill is not amortised however impairment reviews are
undertaken annually, or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value
of goodwill is compared to the recoverable amount, which is the
higher of value in use, discounted to present value using a pre-tax
discount rate reflective of the time value of money and risks
specific to the business unit. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
Other intangibles consist of capitalised development costs for
assets produced that assist in the operations of the Group and
incur revenue. Impairment reviews are performed annually. Where the
benefit of the intangible ceases or has been superseded, these are
written off the Income Statement.
2.7. Property, Plant and Equipment
Property, plant and equipment is stated at cost, plus any
purchase price allocation uplift, less accumulated depreciation and
any accumulated impairment losses. Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged
to the Income Statement during the financial period in which they
are incurred.
Depreciation is provided on all property, plant and equipment to
write off the cost less estimated residual value of each asset over
its expected useful economic life on a straight-line basis at the
following annual rates:
Office equipment 12.5% - 50%
Land and minerals 0 - 10%
Land and Buildings 0 - 10%
Plant and machinery 4% - 33%
Furniture and 7.5% - 33.3%
vehicles
Construction in
progress 0%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposal are determined by comparing the
proceeds with the carrying amount and are recognised within 'Other
net gains/(losses)' in the Income Statement.
2.8. Land, Mineral Rights and Restoration Costs
Land, quarry development costs, which include directly
attributable construction overheads and mineral rights are recorded
at cost plus any purchase price allocation uplift. Land and quarry
development are depreciated and amortised, respectively, using the
units of production method, based on estimated recoverable
tonnage.
Where the Group has a legal or constructive obligation for
restoration of a site the costs of restoring this site is provided
for. The initial cost of creating this provision is capitalised
within property, plant and equipment and depreciated over the life
of the site. The provisions are discounted to their present value
at a rate which reflects the time value of money and risks specific
to the liability. Changes in the measurement of a previously
capitalized provision are accordingly added or deducted from the
value of the asset.
The depletion of mineral rights and depreciation of restoration
costs are expensed by reference to the quarry activity during the
period and remaining estimated amounts of mineral to be recovered
over the expected life of the operation.
The process of removing overburden and other mine waste
materials to access mineral deposits is referred to as
stripping.
There are two types of stripping activity:
-- Development stripping is the initial overburden removal
during the development phase to obtain access to a mineral deposit
that will be commercially produced.
-- Production stripping relates to overburden removal during the
normal course of production activities and commences after the
first saleable minerals have been extracted from the component.
Development stripping costs are capitalised as a development
stripping asset when:
-- It is probable that future economic benefits associated with
the asset will flow to the entity; and
-- The costs can be measured reliably.
Production stripping can give rise to two benefits, the
extraction of ore in the current period and improved access to the
ore body component in future periods. To the extent that the
benefit is the extraction of ore stripping costs are recognised as
an inventory cost. To the extent that the benefit is improved
access to future ore, stripping costs are recognised as a
production stripping asset if the following criteria are met:
-- It is probable that the future economic benefit (improved
access to ore) will flow to the entity;
-- The component of the ore body for which access has been improved can be identified; and
-- The costs relating to the stripping activity can be measured reliably.
The development and production stripping assets are depreciated
in accordance with units of production based on the proven and
probable reserves of the relevant components. Stripping assets are
classified as other minerals assets in property, plant and
equipment.
2.9. Financial Assets
Classification
The Group's financial assets consist of loans and receivables.
The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of
its financial assets at initial recognition.
(i) Financial Assets at Fair Value through Profit or Loss
Financial assets at fair value through profit or loss are
financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling
in the short term. Derivatives are also categorised as held for
trading unless they are designated as hedges.
Assets in this category are classified as current assets if
expected to be settled within 12 months; otherwise, they are
classified as non-current.
(ii) Financial Assets at Fair Value through other comprehensive income
A financial asset is classified and subsequently measured at
fair value through other comprehensive income if it meets the SPPI
criterion and is managed in a business model in which assets are
held both for sale and to collect contractual cash flows, or if an
investment in an equity instrument is elected to be measured at
fair value through other comprehensive income. Derivatives eligible
for hedge accounting are classified as financial assets at fair
value through other comprehensive income.
(iii) Loans and Receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are
classified as non-current assets. The Group's loans and receivables
comprise trade and other receivables and cash and cash equivalents
at the year-end.
Recognition and Measurement
Regular purchases and sales of financial assets are recognised
on the trade date - the date on which the Group commits to
purchasing or selling the asset. Financial assets carried at fair
value through profit or loss is initially recognised at fair value,
and transaction costs are expensed in the Income Statement.
Financial assets are derecognised when the rights to receive cash
flows from the assets have expired or have been transferred, and
the Group has transferred substantially all of the risks and
rewards of ownership.
Loans and receivables are subsequently carried at amortised cost
using the effective interest method.
Gains or losses arising from changes in the fair value of
financial assets at fair value through profit or loss are presented
in the Income Statement within "Other (Losses)/Gains" in the period
in which they arise.
Impairment of Financial Assets
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset, or a group of
financial assets, is impaired. A financial asset, or a group of
financial assets, is impaired and impairment losses are incurred,
only if there is objective evidence of impairment as a result of
one or more events that occurred after the initial recognition of
the assets (a "loss event"), and that loss event (or events) has an
impact on the estimated future cash flows of the financial asset,
or group of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is
objective evidence of an impairment loss include:
-- significant financial difficulty of the issuer or obligor;
-- a breach of contract, such as a default or delinquency in interest or principal repayments;
-- the Group, for economic or legal reasons relating to the
borrower's financial difficulty, granting to the borrower a
concession that the lender would not otherwise consider; and
-- it becomes probable that the borrower will enter bankruptcy
or another financial reorganisation.
The Group first assesses whether objective evidence of
impairment exists.
The amount of the loss is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not been
incurred), discounted at the financial asset's original effective
interest rate. The asset's carrying amount is reduced and the loss
is recognised in the Income Statement.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an
improvement in the debtor's credit rating), the reversal of the
previously recognised impairment loss is recognised in the Income
Statement.
2.10. Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost and net realisable value. Cost comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
In the case of manufactured inventories and work in progress, cost
includes an appropriate share of overheads based on normal
operating capacity.
Weighted average cost is used to determine the cost of
ordinarily interchangeable items.
2.11. Trade Receivables
Trade receivables are amounts due from third parties in the
ordinary course of business. If collection is expected in one year
or less, they are classified as current assets. If not, they are
presented as non-current assets.
Trade receivables - factoring
The carrying amounts of the trade receivables excludes
receivables which are subject to a factoring arrangement. Under
this arrangement, the Group has transferred the relevant
receivables to the factor in exchange for cash without recourse.
Therefore, it doesn't recognise the transferred assets in their
entirety in its balance sheet.
The value of factored receivables at each year end are as
follows:
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------- ----------- -----------
Total factoring 2,960 -
2.12. Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and
are subject to an insignificant risk of changes in value.
2.13. Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
2.14. Reserves
Share Premium - the reserve for shares issued above the nominal
value. This also includes the cost of share issues that occurred
during the year.
Retained Earnings - the retained earnings reserve includes all
current and prior periods retained profit and losses.
Share Option Reserve - represents share options awarded by the
Company.
Other Reserves comprise the following:
Capital Redemption Reserve - the capital redemption reserve is
the amount equivalent to the nominal value of shares redeemed by
the Group.
Foreign Currency Translation Reserve - represents the
translation differences arising from translating the financial
statement items from functional currency to presentational
currency.
Deferred Shares - are shares that effectively do not have any
rights or entitlements.
Hedging Reserve - includes derivative instruments used for
cash-flow hedging.
Fair-value Reserve - represents the changes of values in certain
assets.
2.15. Trade Payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method.
2.16. Provisions
The Group provides for the costs of restoring a site where a
legal or constructive obligation exists. The estimated future costs
for known restoration requirements are determined on a site-by-site
basis and are calculated based on the present value of estimated
future costs.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash
flows (where the effect of the time value of money is material).
The increase in provisions due to the passage of time is included
in the Consolidated Statement of Profit or Loss and Comprehensive
Loss.
2.17. Borrowings
Bank and Other Borrowings
Interest-bearing bank loans and overdrafts and other loans are
recognised initially at fair value less attributable transaction
costs. All borrowings are subsequently stated at amortised cost
with the difference between initial net proceeds and redemption
value recognised in the Income Statement over the period to
redemption on an effective interest basis.
2.18. Taxation
Tax is recognised in the Income Statement, except to the extent
that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
2.19. Non-Underlying Items
Non-underlying items are a non IFRS measure, but the Group have
disclosed these separately in the financial statements, where it is
necessary to do so to provide further understanding of the
financial performance of the Group. They are items that are not
expected to be recurring or do not relate to the ongoing operations
of the Group's business and non-cash items which distort the
underlying performance of the business.
2.20. Revenue Recognition
Group revenue arises from the sale of goods and contracting
services. Revenue is measured at the fair value of the
consideration received or receivable and represents amounts
receivable for goods or services supplied in course of ordinary
business, stated net of discounts, returns and value added taxes.
The Group recognises revenue in accordance with IFRS 15,
identifying performance obligations within its contracts with
customers, determining the transaction price applicable to each of
these performance obligations and selecting an appropriate method
for the timing of revenue recognition, reflecting the substance of
the performance obligation at either a point in time or over
time.
Sale of goods
The majority of the Group's revenue is derived from the sale of
physical goods to customers. Depending on whether the goods are
delivered to or collected by the customer, the contract contains
either one performance obligation which is satisfied at the point
of collection, or two performance obligations which are satisfied
simultaneously at the point of delivery. The performance obligation
of products sold are transferred according to the specific terms
that have been formally agreed with the customer, generally upon
delivery when the bill of lading is signed as evidence that they
have accepted the product delivered to them.
The transaction price for this revenue is the amount which can
be invoiced to the customer once the performance obligations are
fulfilled, reduced to reflect provisions recognised for returns,
trade discounts and rebates. The Group does not routinely offer
discounts or volume rebates, but where it does the variable element
of revenue is based on the most likely amount of consideration that
the Group believes it will receive. This value excludes items
collected on behalf of third parties, such as sales and value added
taxes.
For all sales of goods, revenue is recognised at a point in
time, being the point that the goods are transferred to the
customer.
Contracting services
The majority of contracting services revenue arises from
contract surfacing work, which typically comprises short-term
contracts with a performance obligation to supply and lay product.
Other contracting services revenue can contain more than one
performance obligation dependent on the nature of the contract.
The transaction price is calculated as consideration specified
by the contract, adjusted to reflect provisions recognised for
returns, remedial work arising in the normal course of business,
trade discounts and rebates.
Where the contract provides for elements of variable
consideration, these values are included in the calculation of the
transaction price only to the extent that it is 'highly probable'
that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the
variable consideration is resolved. Where the transaction price is
allocated between multiple performance obligations on other
contracts, this typically reflects the allocation of value to each
performance obligation agreed with the end customer, unless this
does not reflect the economic substance of the transaction.
As contracting services performance obligations are satisfied
over time, revenue is recognised over time. Revenue is recognised
on an output basis, being volume of product laid for contract
surfacing.
2.21. Finance Income
Interest income is recognised using the effective interest
method.
2.22. Employee Benefits - Defined contribution plans
The Group maintains defined contribution plans for which the
Group pays fixed contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or
voluntary basis and will have no legal or constructive obligation
to pay further amounts. The Group's contributions to defined
contribution plans are charged to the Income Statement in the
period to which the contributions relate.
2.23. Employee Benefits - Defined benefit plans
The Group's net obligation in respect of defined benefit plans
is calculated separately for each plan by estimating the amount of
the future benefit that employees have earned in the current and
prior periods, discounting the amount and deducting the fair value
of any plan assets.
Defined benefit obligations are calculated annually by a
qualified actuary using the projected unit credit method. When the
calculation results in a potential asset for the Group, the
recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan
or reductions in future contributions to the plan. To calculate the
present value of economic benefits, consideration is given to any
applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any,
excluding interest), are recognised immediately in other
comprehensive income. The Group determines the net interest expense
(income) for the net defined benefit liability (asset) for the
period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the
then-net defined benefit liability (asset), taking into account any
changes in the net defined benefit liability (asset) during the
period as a result of contributions and benefit payments. Net
interest expense relating to defined benefit plans are recognised
in profit or loss in net financial items.
When the benefits of a plan are changed or when a plan is
curtailed, the resulting change in benefit that relates to past
service or the gain or loss on the curtailment is recognised
immediately in the profit or loss. The Group recognises gains and
losses on the settlement of a defined benefit plan when the
settlement occurs.
2.24. Share Based Payments
The Group operates a number of equity-settled, share-based
schemes, under which the entity receives services from employees or
third-party suppliers as consideration for equity instruments
(options and warrants) of the Group. The fair value of the
third-party suppliers' services received in exchange for the grant
of the options is recognised as an expense in the Statement of
Comprehensive Income or charged to equity depending on the nature
of the service provided. The value of the employee services
received is expensed in the Income Statement and its value is
determined by reference to the fair value of the options
granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
Non-market vesting conditions are included in assumptions about
the number of options that are expected to vest. The total expense
or charge is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
satisfied. At the end of each reporting period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Income
Statement or equity as appropriate, with a corresponding adjustment
to a separate reserve in equity.
When the options are exercised, the Company issues new shares.
The proceeds received, net of any directly attributable transaction
costs, are credited to share capital (nominal value) and share
premium when the options are exercised.
2.25. Discontinued Operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographic area of operations;
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations;
or
-- is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs at the earlier
of disposal or when the operation meets the criteria to be
classified as held-for-sale. The Group operates several business
units which are constantly reviewed to ensure profitability. During
2019 it was determined that the flagging & paving division at
CCP's Bury site was loss making and therefore it was decided that
the operations at this site be discontinued. For further
information, refer to note 14 .
2.26. Leases
The Group leases certain plant and equipment. Leases of plant
and equipment where the Group has substantially all the risks and
rewards of ownership are classified as finance leases under IFRS
16. Finance leases are capitalised on the lease's commencement at
the lower of the fair value of the leased assets and the present
value of the minimum lease payments. Other leases are either small
in value or cover a period of less than 12 months.
Each lease payment is allocated between the liability and
finance charges. The corresponding rental obligations, net of
finance charges, are included in long-term borrowings. The interest
element of the finance cost is charged to the Income Statement over
the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
Assets obtained under finance leases are depreciated over their
useful lives. The lease liabilities are shown in note 24 .
Rent payable under operating leases on which the short term
exemption has been taken, less any lease incentives received, is
charged to the income statement on a straight-line basis over the
term of the relevant lease except where another more systematic
basis is more representative of the time pattern in which economic
benefits from the lease asset are consumed.
3. Financial Risk Management
3.1. Financial Risk Factors
The Group's activities expose it to a variety of financial
risks: market risk, credit risk and liquidity risk. The Group's
overall risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Risk management is carried out by the UK based management team
under policies approved by the Board of Directors.
a) Market Risk
The Group is exposed to market risk, primarily relating to
interest rate, foreign exchange and commodity prices. The Group has
not sensitised the figures for fluctuations in interest rates,
foreign exchange or commodity prices as the Directors are of the
opinion that these fluctuations would not have a significant impact
on the Financial Statements at the present time. The Directors will
continue to assess the effect of movements in market risks on the
Group's financial operations and initiate suitable risk management
measures where necessary.
b) Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises from cash and cash
equivalents, derivative financial instruments and, principally,
from the Group's receivables from customers.
Management monitors the exposure to credit risk on an ongoing
basis and have credit insurance at a number of its subsidiaries.
The Nordkalk entities don't hold credit insurance as they have a
stable customer base with minimal credit losses. No credit limits
were exceeded during the period, and management does not expect any
losses from non-performance by these counterparties.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------------------- ----------- -----------
Trade and other receivables 78,013 20,364
Cash and cash equivalents 69,916 27,452
----------- -----------
147,929 47,816
----------- -----------
Credit risk associated with cash balances is managed and limited
by transacting with financial institutions with high-quality credit
ratings.
Trade and other receivables
The Group's exposure to credit risk stems mainly from the
individual characteristics of each customer. However, management
also considers the factors that could influence the credit risk of
its customer base, including the default risk of the industry and
country in which customers operate.
The Group has established a credit policy under which each new
customer is analysed individually for creditworthiness, before the
Group's standard payment and delivery terms and conditions are
offered to the customer. The Group's review includes external
ratings, when available, and in some cases bank references.
Most of the Group's customers have been trading with the Group
for years, and no major credit losses have occurred with these
customers. Credit risk is monitored by grouping customers according
to their credit characteristics, including whether they are
individuals or legal entities and whether they are wholesale,
retail or end-user customers, as well as by geographic location,
industry and the existence of previous financial difficulties.
The maximum exposure to credit risk for trade and other
receivables by reportable segment, was:
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------- ----------- -----------
United Kingdom 15,433 11,397
Channel Islands 3,298 3,059
Belgium 9,103 5,887
Northern Europe 50,179 -
----------- -----------
78,013 20,343
----------- -----------
Impairment
At the reporting date the ageing of the trade receivables that
were not impaired, were as follows.
31 December 31 December
2021 2020
GBP'000 GBP'000
--------------------------- ----------- -----------
Total trade receivables 66,166 18,074
Not overdue 47,345 9,314
Overdue 1 - 30 days 14,211 6,272
Overdue 31 - 60 days 1,996 786
Overdue 61 - 90 days 815 480
More than 90 days 1,799 1,222
Impairment loss recognised (182) (63)
Provisions for impairment of trade and other receivables are
calculated on a lifetime expected loss model in line with the
simplified approach available under IFRS 9 for Trade Receivables.
The key inputs in determining the level of provision are the
historical level of bad debts experienced by the Group and ageing
of outstanding amounts. Movements during the year were as
follows:
31 December 31 December
2021 2020
GBP'000 GBP'000
--------------------------------------------- ----------- -----------
At January 1 763 50
Amounts arising from business combinations 571 510
Charged to the Consolidated income statement
during the year 182 63
Movement in provision (456) 140
1,060 763
----------- -----------
Derivatives
Subsidiary currency risks are hedged by the parent or ultimate
parent acting as counterparty in currency forward deals. External
currency hedging is performed by finance and treasury functions as
appropriate. In such deals, the counterparty is a bank or financial
institution with a rating at least Baa3 from Moody's rating agency.
A comparable credit rating from a reputable credit rating agency is
acceptable. Exceptions may be granted on an individual basis in
rare cases where a bank is chosen for geographical reasons, but
does not fulfil the stipulated rating criteria.
Items hedged against are CO(2) emission rights, forecast energy
consumption, loans in foreign currency and forecast earnings.
c) Currency Risk
Following the Nordkalk acquisition, the Group is exposed to
currency risk to the extent that there is a mismatch between the
currencies in which sales and purchases are denominated and the
respective functional currencies of Group companies. The functional
currencies of Group companies are primarily the Pound, the Euro,
the Polish Zlothy (PLN) and the Swedish Krona (SEK). The currencies
in which these transactions are primarily denominated are GBP, EUR,
PLN and SEK. Additional exposures may arise from purchase of fuel
in USD.
At any point in time, the Group hedges on average 60 to 100 per
cent of its estimated foreign currency exposure in respect of
forecast sales and purchases over the following 12-18 months. The
Group uses forward exchange contracts to hedge its currency risk,
with a maturity of up to 12 months from the reporting date.
Borrowings are, with a few exceptions, denominated in the
subsidiaries domestic currencies.
In respect of other monetary assets and liabilities denominated
in foreign currencies, the Group's policy is to ensure that its net
exposure remains at an acceptable level by buying or selling
foreign currencies at spot rates when necessary to address
short-term imbalances.
Exposure to currency risk
Currency risk sensitivity to a +/- 10 per cent change in the
exchange rate is shown for the net currency position per currency.
The summary of quantitative data relating to the Group's exposure
to currency risk as reported to the Group management is as
follows.
2021
GBP thousand EUR SEK USD PLN
Gross exposure 35,344 43,607 (4,660) 3,787
Hedged (25,000) (39,961) 5,260 (9,317)
--------- --------- -------- --------
Net exposure 10,344 3,646 600 (5,530)
--------- --------- -------- --------
Sensitivity
analysis (+/-
10%) 1,034 365 60 (553)
--------- --------- -------- --------
d) Liquidity Risk
The Group's continued future operations depend on the ability to
raise sufficient working capital through the issue of equity share
capital or debt. The Directors are reasonably confident that
adequate funding will be forthcoming with which to finance
operations owing to the continued support of the lenders and a
history of successful capital raises. Controls over expenditure are
carefully managed.
More than
2021 1-12 months 1-2 years 2-5 years 5 years
Contractual cash flows GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ----------- --------- --------- ---------
Non-derivative financial liabilities
Loans 13,302 20,073 171,936 -
Trade payables 98,182 761 480 3,190
111,484 20,834 172,416 3,190
----------- --------- --------- ---------
Derivative financial liabilities
Forward exchange contracts
used for hedging 608 - - -
Electricity hedges 129 - - -
----------- --------- --------- ---------
737 - - -
----------- --------- --------- ---------
The outflows disclosed in the above tables represent the
contractual undiscounted cash flows relating to derivative
financial liabilities held for risk management purposed and which
are not usually closed out before contractual maturity.
The interest payments on the variable interest rate loans in the
table above reflect market forward interest rates at the reporting
date and these amounts may change in line with changes in market
interest rates. The future cash flows from derivative instruments
may differ from the amount in the above table as interest rates and
exchange rates change. With the exception of these financial
liabilities, it is not expected that the cash flows included in the
maturity analysis could occur significantly earlier or at
significantly different amounts.
3.2. Capital Risk Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, in order to
enable the Group to continue its construction material investment
activities, and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the Group
may adjust the issue of shares or sell assets to reduce debts.
The Group defines capital based on the total equity of the
Company. The Group monitors its level of cash resources available
against future planned operational activities and the Company may
issue new shares in order to raise further funds from time to
time.
The gearing ratio at 31 December 2021 is as follows:
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
------------------------------------------- ----------- -----------
Total borrowings (Note 24 ) 233,923 71,300
Less: Cash and cash equivalents (Note 22 ) (69,916) (27,452)
----------- -----------
Net debt 164,007 43,848
Total equity 411,154 123,563
Total capital 575,161 167,411
----------- -----------
Gearing ratio 0.29 0.26
----------- -----------
4. Critical Accounting Estimates
The preparation of the Financial Statements, in conformity with
IFRSs, requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
Financial Statements and the reported amount of expenses during the
year. Actual results may vary from the estimates used to produce
these Financial Statements.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Significant items subject to such estimates and assumptions
include, but are not limited to:
a) Land and Mineral Reserves
The determination of fair values of land and mineral reserves
are carried out by appropriately qualified persons in accordance
with the Appraisal and Valuation standards published by the Royal
Institution of Chartered Surveyors. The estimation of recoverable
reserves is based upon factors such as estimates of commodity
prices, future capital requirements and production costs along with
geological assumptions and judgements.
The PPAs included the revaluation of land and minerals based on
the estimated remaining reserves within St John's, Les Vardes,
Aberdo, Carrières du Hainaut and Harries quarries. These are then
valued based on the estimated remaining life of the mines and the
net present value for the price per tonnage.
b) Estimated Impairment of Goodwill
The determination of fair values of assets acquired and
liabilities assumed in a business combination involves the use of
estimates and assumptions; such as discount rates used and
valuation models applied as well as goodwill allocation.
Goodwill has a carrying value of GBP293 million as at 31
December 2021 (31 December 2020: GBP39.9 million). The Group tests
annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in Note 2.6 to the
Financial Statements.
Management has concluded that an impairment charge was not
necessary to the carrying value of goodwill for the period ended 31
December 2021 (31 December 2020: GBPnil). See Note 2.6 to the
Financial Statements.
c) Restoration Provision
The Group's provision for restoration costs has a carrying value
at 31 December 2021 of GBP4.3 million (31 December 2020: GBP0.9
million) and relate to the removal of the plant and equipment held
at quarries in the Channel Islands, United Kingdom and Northern
Europe. The cost of removal was determined by management for the
removal and disposal of the machinery at the point of which the
reserves are no longer available for business use.
The restoration provision is a commitment to restore the site to
a safe and secure environment. The provisions are reviewed
annually.
d) Fair Value of Share Options
The Group has made awards of options and warrants over its
unissued share capital to certain Directors and employees as part
of their remuneration packages. Certain warrants have also been
issued to suppliers for various services received.
The valuation of these options and warrants involves making a
number of critical estimates relating to price volatility, future
dividend yields, expected life of the options and forfeiture rates.
These assumptions have been described in more detail in Note 29 to
the Financial Statements.
e) Valuation and timing of deferred consideration
As part of the acquisition of Harries, the Group has agreed to
pay royalty payments over the next 10 years with a minimum total
value of GBP10m. The estimated present value of these payments is
GBP4.8m. In determining this value, management must make critical
estimates as to the timing, value and cost of money of these
payments.
f) Recognition of deferred tax assets
Uncertainty exists related to the availability of future taxable
profit against which tax losses carried forward can be used,
however deferred tax assets are recognised for unused tax losses to
the extent that it is probable that taxable profits will be
available against which the losses can be utilised. Significant
management judgement is required to determine the amount of
deferred tax assets that can be recognised, based on the likely
timing and level of future taxable profits, together with future
tax planning strategies. Further information on income taxes is
disclosed in note 15.
g) Defined benefit obligations - actuarial assumptions
The present value of the pension obligations is subject to
actuarial assumptions used by actuaries to calculate these
obligations. Actuarial assumptions include the discount rate, the
annual rate of increase in future compensation levels and inflation
rate. Further details on assumptions used are disclosed in note 26
.
h) Fair value of financial instruments
The fair values of financial instruments that cannot be
determined based on quoted market prices and rates are established
using different valuation techniques. The Group uses judgement to
select methods and make assumptions that are mainly based on market
conditions existing at the end of the reporting period. Factors
regarding valuation techniques and their assumptions could affect
the reported fair values.
5. Dividends
No dividend has been declared or paid by the Company during the
year ended 31 December 2021 (2020: nil).
6. 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 had
interests in four key geographical segments, being the United
Kingdom, Channel Islands, Belgium and Northern Europe. The Northern
Europe segment has been established with the acquisition of
Nordkalk. Activities in the United Kingdom, Channel Islands,
Belgium and Northern Europe relate to the production and sale of
construction material products and services.
31 December 2021
------------------------------------------------------
United Channel Belgium Northern Total
Kingdom Islands Europe
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ---------- ---------- --------- -------- -----------
Revenue 74,417 28,946 72,668 95,956 271,987
---------- ---------- --------- -------- -----------
Profit from operations
per reportable segment 14,275 9,819 20,050 17,775 61,919
---------- ---------- --------- -------- -----------
Additions to non-current
assets (5,007) (1,520) 10,611 378,174 382,258
Reportable segment assets 117,086 47,273 109,386 495,570 769,315
Reportable segment liabilities 235,443 5,471 27,714 89,533 358,161
---------- ---------- --------- -------- -----------
31 December 2020
United Channel Belgium Total
Kingdom Islands
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------- -------- ------- -------
Revenue 46,790 27,325 50,116 124,231
-------- -------- ------- -------
Profit from operations per reportable
segment 10,017 9,230 14,956 34,203
-------- -------- ------- -------
Additions to non-current assets 32,030 (1,891) 371 30,510
Reportable segment assets 107,559 49,214 100,451 257,224
Reportable segment liabilities 76,031 5,369 52,261 133,661
-------- -------- ------- -------
7. Revenue
Consolidated
---------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
--------------------------------------------- ------------- -----------
Upstream products 44,190 13,334
Value added products 198,107 105,428
Value added services 24,064 3,921
Other 5,626 1,548
271,987 124,231
------------- -----------
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
8. Expenses by Nature
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
--------------------------------------------- ----------- -----------
Cost of sales
Changes in inventories of finished goods and
work in progress 10,854 (1,758)
Raw materials & production 75,452 27,741
Distribution & selling expenses 18,622 6,541
Employees & contractors 48,698 29,508
Maintenance expense 12,556 4,865
Plant hire expense 5,374 3,079
Depreciation & amortisation expense 17,156 9,365
Other costs of sale 21,356 10,687
Total cost of sales 210,068 90,028
----------- -----------
Administrative expenses
Operational admin expenses 30,175 17,270
Corporate admin expenses 27,351 7,330
Total administrative expenses 57,526 24,600
----------- -----------
Corporate administrative expenses include GBP25.7 million of
non-underlying expenses (refer to note 11 ).
During the year the Group (including its overseas subsidiaries)
obtained the following services from the Company's auditors and its
associates:
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------------------------------------------------- ----------- -----------
Fees payable to the Company's auditor and its
associates for the audit of the Company and Consolidated
Financial Statements 360 194
Fees payable to the Company's auditor and its
associates for tax services - 9
Fees paid or payable to the Company's auditor
and its associates for due diligence and transactional
services associated with the readmission of the
Company trading on AIM 300 24
Fees paid to the Company's auditor for other
services - -
-----------
660 227
----------- -----------
9. Employee Benefits Expense
Consolidated Company
------------------------ ------------------------
31 December 31 December 31 December 31 December
2021 2020 2021 2020
Staff costs (excluding directors) GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- ----------- -----------
Salaries and wages 54,071 31,639 2,104 1,424
Post-employment benefits 278 114 80 52
Social security contributions
and similar taxes 1,679 432 386 212
Other employment costs 8,436 7,939 17 65
-----------
64,464 40,124 2,587 1,753
----------- ----------- ----------- -----------
Consolidated Company
------------------------ ------------------------
31 December 31 December 31 December 31 December
2021 2020 2021 2020
Average number of FTE employees
by function # # # #
-------------------------------- ----------- ----------- ----------- -----------
Management 85 58 5 5
Operations 1,371 744 - -
Administration 409 140 4 2
1,865 942 9 7
----------- ----------- ----------- -----------
10. Directors' Remuneration
31 December 2021
Options
Directors' Taxable Pension issued
fees Bonus benefits benefits (3) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ------- --------- --------- ------- -------
Executive Directors
David Barrett 358 469 14 - 61 902
Garth Palmer (1) 151 180 5 13 52 401
Max Vermorken 456 594 14 30 129 1,223
Non-executive Directors
Timothy Hall 43 - - - 22 65
Dean Masefield (2) 120 - 6 8 - 134
Simon Chisholm 43 - - 4 - 47
Jacques Emsens 43 - - - - 43
1,214 1,243 39 55 264 2,815
---------- ------- --------- --------- ------- -------
31 December 2020
Options
Directors' Taxable Pension issued
fees Bonus benefits benefits (3) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ------- --------- --------- ------- -------
Executive Directors
David Barrett 305 280 14 - 46 645
Dean Masefield 125 90 6 13 - 234
Max Vermorken 395 380 13 40 110 938
Non-executive Directors
Dominic Traynor 40 - - 5 5 50
Patrick Dolberg 40 - - - 4 44
Timothy Hall 40 - - - 27 67
Garth Palmer 55 25 - 5 30 115
Simon Chisholm 28 - - 3 - 31
Jacques Emsens 28 - - - - 28
1,056 775 33 66 222 2,152
---------- ------- --------- --------- ------- -------
(1) Garth Palmer was reappointed as CFO on 31 August 2021. His
bonus was performance based for the period 31 August 2021 to 31
December 2021.
(2) Resigned on 31 August 2021.
(3) Options issued relate to options granted in the 2019
financial year and vesting in the 2021/2020 financial years.
The bonuses earned in the year by the Directors reflect the
performance of the business, were based on industry standard
criteria taking into account external market data, were recommended
by the Remuneration Committee and approved by the Board.
Details of fees paid to companies and partnerships of which the
Directors are related have been disclosed in Note 36 .
11. Non-underlying Items
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
-------------------------------------------------- ----------- -----------
Acquisition related expenses 20,125 1,372
Amortisation and remeasurement of acquired assets 1,888 1,409
Restructuring expenses 3,118 803
Equity & debt funding expenses - 145
Discontinued operations 169 100
Share option expense 2,321 316
Unwinding of discount on deferred consideration 825 322
Net other non-underlying expenses & gains 614 512
----------- -----------
29,060 4,979
----------- -----------
Under 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.
Acquisition related expenses include costs relating to the due
diligence of prospective pipeline acquisitions, stamp duty on
completed acquisitions, warranty & indemnity insurance and
other direct costs associated with merger & acquisition
activity. During the year the Group acquired B-Mix, Nordkalk and
undertook due diligence on various other prospective acquisitions
including Johnston Quarry Group which was completed post
year-end.
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 PPA. Remeasurement of acquired
assets arises from ensuring assets from acquisitions are
depreciated in line with Group policy.
Restructuring expenses include advisory fees, redundancy costs
and moving expenses. During the year these primarily related to the
SigmaPPG and South Wales platform.
Equity & debt funding expenses relates to consulting fees
for debt refinance.
Share option expense is the fair value of the share options
issued during the year, refer to note 29 more information.
Unwinding of discount on deferred consideration is a non-cash
adjustment relating to deferred consideration arising on
acquisitions.
Discontinued operations include the trading expenses, stock
adjustments and redundancies incurred at the Bury site for the
period from January 2021 to December 2021. Refer to note 14 for
more information.
Net other non-underlying expenses and gains include COVID-19
related costs, legal fees and other associated costs.
12. Net Finance (Expense)/Income
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
------------------------------------------------ ----------- -----------
Other interest expense (5,029) (2,291)
Other finance expense (1,145) (126)
Unwinding of discount on deferred consideration (825) (322)
(6,999) (2,739)
----------- -----------
13. Other Net Gains/(Losses)
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
--------------------------------------------- ----------- -----------
Gain/(losses) on disposal of property, plant
and equipment (101) 373
Other gain/(loss) 730 (252)
Gain/(loss) on call options 632 (38)
Impairment (2,006) -
Share of earnings from associates - 294
Share of earnings from joint ventures 291 -
Loss on discontinued operations - (101)
Forex movement 788 33
334 309
----------- -----------
For more information on the loss on discontinued operations,
please refer to note 14.
14. Discontinued Operations
From due diligence undertaken as part of the acquisition of CCP
in January 2019, doubts existed over the viability of the flagging
& paving division at its site in Bury. After a detailed review
it was determined that the business unit was loss making and it was
decided that the operations at this site be discontinued effective
from 1 February 2019.
Financial information relating to the discontinued operation for
the period is set out below.
31 December 31 December
2021 2020
Income statement GBP'000 GBP'000
------------------------------------------------ ----------- -----------
Revenue - -
Cost of sales - (150)
----------- -----------
Gross profit - (150)
Administration (169) (56)
Other expenses - 106
----------- -----------
Loss from discontinued operation (169) (100)
----------- -----------
Basic earnings per share attributable to owners
of the parent (expressed in pence per share) (0.04) (0.04)
----------- -----------
31 December 31 December
2021 2020
Cash movement GBP'000 GBP'000
-------------------------------------------- ----------- -----------
Net cash outflow from operating activities (62) (94)
Net cash inflow from investing activities - 288
Net cash inflow from financing activities - -
----------- -----------
Net increase / (decrease) in cash generated
by the subsidiary (62) 194
----------- -----------
15. Taxation
Consolidated
------------------------
31 December 31 December
2021 2020
Tax recognised in profit or loss GBP'000 GBP'000
----------------------------------------- ----------- -----------
Current tax (4,529) (790)
Deferred tax (170) 128
----------- -----------
Total tax charge in the Income Statement (4,699) (662)
----------- -----------
The tax on the Group's profit/(loss) before taxation differs
from the theoretical amount that would arise using the weighted
average tax rate applicable to the profits/(losses) of the
consolidated entities as follows:
Consolidated
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
------------------------------------------------- ----------- -----------
Profit/(loss) on ordinary activities before tax (2,272) 7,096
Tax on profit on ordinary activities at standard
CT rate 494 1,784
----------- -----------
Effects of:
Expenditure not deductible for tax purposes 4,874 1,241
Deferred tax not recognised 1,268 (1,859)
Remeasurement of deferred tax for changes in
tax rates (120) (436)
Income not taxable for tax purposes (903) (659)
Prior year adjustments (864) -
Depreciation in excess of/(less than) capital
allowances (61) 613
Tax losses 11 (22)
----------- -----------
Tax charge 4,699 662
----------- -----------
The weighted average applicable tax rate of 21.74% (2020:
25.14%) used is a combination of the standard rate of corporation
tax rate for entities in the United Kingdom of 19% (2020: 19%), 20%
on quarrying of minerals and rental property (2020: 20%) in Jersey
and Guernsey, 25% (2020: 25%) in Belgium, 20% in Finland, 20.6% in
Sweden, 19% in Poland and 20% in Estonia.
Deferred Tax Asset Temporary timing
Tax losses differences Total
----------------------------- ----------- ----------------- ------
At 1 January 2021 402 1,010 1,412
Acquisition of subsidiary - 2,530 2,530
Charged/(credited) directly
to
equity (402) (411) (813)
----------- ----------------- ------
At 31 December 2021 - 3,129 3,129
----------- ----------------- ------
Deferred Tax Liability Temporary timing
Tax losses differences Total
----------------------------- ----------- ----------------- ------
At 1 January 2021 (128) 3,999 3,871
Acquisition of subsidiary - 2,070 2,070
Charged/(credited) directly
to
income statement - (751) (751)
----------- ----------------- ------
At 31 December 2021 (128) 5,318 5,190
----------- ----------------- ------
Deferred income tax assets of GBP3.1 million (2020: GBP1.4
million) are recognised to the extent that the realisation of
related tax benefits through future taxable profits is probable.
Deferred tax liabilities of GBP5.2 million (2020: 3.9 million) are
recognised in full.
The UK Government announced the corporate tax rate from 1 April
2023 will be 25%. The UK deferred tax closing balances have been
calculated using the new rate as it is assumed these are likely to
become realised after the change in tax rates.
16. Property, Plant and Equipment
Consolidated
Office Land and Land and Plant Furniture Construction
Equipment minerals buildings and machinery and vehicles in progress Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------- --------- ---------- -------------- ------------- ------------ --------
Cost
As at 1 January
2020 3,692 49,764 38,373 77,111 17,677 846 187,463
Acquired through
acquisition 303 15,085 1,139 17,420 6,503 - 40,450
Transfer between
classes - - - 133 - (133) -
Fair value adjustment - 35,954 5,322 (48) - - 41,228
Additions 67 2,937 570 1,473 871 534 6,452
Disposals - (192) - (581) (780) - (1,553)
Forex 163 831 545 2,990 266 - 4,795
---------- --------- ---------- -------------- ------------- ------------ --------
As at 31 December
2020 4,225 104,379 45,949 98,498 24,537 1,247 278,835
---------- --------- ---------- -------------- ------------- ------------ --------
As at 1 January
2021 4,225 104,379 45,949 98,498 24,537 1,247 278,835
Acquired through
acquisition 210 81,482 70,622 193,425 3,813 10,504 360,056
Transfer between
classes - - 1,149 (122) 342 (1,369) -
Fair value adjustment - 3,433 1,539 - - - 4,972
Additions 364 3,324 3,768 9,944 2,294 2,861 22,555
Disposals - (190) (592) (7,764) (6,008) - (14,554)
Forex (206) (2,461) (1,202) (4,063) (383) - (8,315)
---------- --------- ---------- -------------- ------------- ------------ --------
As at 31 December
2021 4,593 189,967 121,233 289,918 24,595 13,243 643,549
---------- --------- ---------- -------------- ------------- ------------ --------
Depreciation
As at 1 January
2020 3,221 8,590 22,689 62,619 11,626 - 108,745
Acquired through
acquisition 198 1,164 39 8,062 3,246 - 12,709
Charge for the
year 250 1579 1,905 3,899 2,404 - 10,037
Disposals - - - (497) (531) - (1,028)
Forex 148 40 451 2,654 286 - 3,579
As at 31 December
2020 3,817 11,373 25,084 76,737 17,031 - 134,042
---------- --------- ---------- -------------- ------------- ------------ --------
As at 1 January
2021 3,817 11,373 25,084 76,737 17,031 - 134,042
Transfer between
classes - - - (309) 309 - -
Acquired through
acquisition 150 57,487 40,927 149,510 3,114 - 251,188
Charge for the
year 267 2,396 3,423 10,038 1,635 - 17,759
Disposals - - (592) (7,298) (3,087) - (10,977)
Impairment - - 380 684 - - 1,064
Forex (194) (1,082) (829) (3,088) (770) - (5,963)
---------- --------- ---------- -------------- ------------- ------------ --------
As at 31 December
2021 4,040 70,174 68,393 226,274 18,232 - 387,113
---------- --------- ---------- -------------- ------------- ------------ --------
Net book value
---------- --------- ---------- -------------- ------------- ------------ --------
As at 31 December
2020 408 93,006 20,865 21,761 7,506 1,247 144,793
---------- --------- ---------- -------------- ------------- ------------ --------
As at 31 December
2021 553 119,793 52,840 63,644 6,363 13,243 256,436
---------- --------- ---------- -------------- ------------- ------------ --------
The depreciation on the right of use assets for the year ended
31 December 2021 was GBP6 million (2020: GBP1.4 million) and the
net book value is GBP16.5 million (2020: GBP5.5 million).
Company
Office
Equipment Land & Buildings Motor Vehicle Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---------- ---------------- ------------- --------
Cost
As at 1 January 2020 21 54 25 100
Additions 9 - - 9
Disposals - - - -
Forex - - - -
---------- ---------------- ------------- --------
As at 31 December 2020 30 54 25 109
---------- ---------------- ------------- --------
As at 1 January 2021 30 54 25 109
Additions 215 211 - 426
Disposals - - - -
Forex - - - -
---------- ---------------- ------------- --------
As at 31 December 2021 245 265 25 535
---------- ---------------- ------------- --------
Depreciation
As at 1 January 2020 14 14 - 28
Charge for the year 8 13 8 29
Disposals - - - -
As at 31 December 2020 22 27 8 57
---------- ---------------- ------------- --------
As at 1 January 2021 22 27 8 57
Charge for the year 28 13 8 49
Disposals - - - -
---------- ---------------- ------------- --------
As at 31 December 2021 50 40 16 106
---------- ---------------- ------------- --------
Net book value
---------- ---------------- ------------- --------
As at 31 December 2020 8 27 17 52
---------- ---------------- ------------- --------
As at 31 December 2021 195 225 9 429
---------- ---------------- ------------- --------
The depreciation on the right of use assets for the year ended
31 December 2021 was GBP13,314 (2020: GBP13,313) and the net book
value is GBP225,459 (2020: GBP27,737).
17. Intangible Assets
Consolidated
Customer Intellectual Research Other
Goodwill Relations property & Development Branding Intangibles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- ---------- ------------ -------------- -------- ------------ ----------
Cost & net book value
As at 1 January 2020 73,005 3,850 556 1,167 1,266 400 80,244
Additions - - - 153 - - 153
Additions through
business combination 7,887 - - - - - 7,887
Price Purchase
Allocation
- CDH (43,780) - - - 2,292 - (41,488)
Amortisation - (517) (85) (88) (160) - (850)
Forex 2,854 - - 5 - - 2,859
As at 31 December
2020 39,966 3,333 471 1,237 3,398 400 48,805
--------- ---------- ------------ -------------- -------- ------------ ----------
As at 1 January 2021 39,966 3,333 471 1,237 3,398 400 48,805
--------- ---------- ------------ -------------- -------- ------------ ----------
Additions - - - - - 62 62
Additions through
business combination 260,944 - - 331 - 6,387 267,663
Price Purchase
Allocation
-Harries (4,098) - - - - - (4,098)
Amortisation - (517) (85) (594) (160) - (1,356)
Impairment - - - (400) - (400) (800)
Forex (3,374) - - (3) - (463) (3,840)
--------- ---------- ------------ -------------- -------- ------------ ----------
As at 31 December
2021 293,438 2,816 386 571 3,238 5,986 306,436
--------- ---------- ------------ -------------- -------- ------------ ----------
An adjustment has been made to reflect the initial accounting
for the acquisition of Harries by the Company, being the
elimination of the investment in Harries against the non-monetary
assets acquired and recognition of goodwill. In 2020, the Company
determined the fair value of the net assets acquired pursuant to
the acquisition of CDH, via a Purchase Price Allocation ('PPA')
exercise. The PPA's determined a decrease of GBP4.1m of goodwill in
Harries with the corresponding movement to uplift the value of the
Land and Buildings and Land and Minerals.
It has been determined that the acquisition of Nordkalk is
considered a reverse takeover under the AIM Rules definition but
does not meet the requirements of the IFRS definition and therefore
will be treated as a business combination under IFRS 3.
The goodwill total is made up of GBP254.6m for the Nordkalk
platform, GBP21.2m for the PPG Platform, GBP7.6m for the Benelux
platform, GBP5m for Dimension Stone, GBP2.1m for the South Wales
platform and GBP3m for the Ronez platform.
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 acquire 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.
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 ten operating segments are considered to be Ronez in the
Channel Islands, Topcrete in the UK, Poundfield in the UK, CCP in
the UK, Harries in the UK, CDH in Belgium, Stone in Belgium, GduH
in Belgium, B-Mix in Belgium and Nordkalk in Northern Europe.
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 2022 and the five
year plan to 2026. 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.
18. Investment in Subsidiary Undertakings
Company
------------------------
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------------------------- ----------- -----------
Shares in subsidiary undertakings
At beginning of the year 120,039 94,371
Additions 315,046 25,668
Disposals - -
----------- -----------
At period end 435,085 120,039
----------- -----------
Loan to/(from) Group undertakings 119,110 (18,789)
----------- -----------
Total 554,195 101,250
----------- -----------
Investments in Group undertakings are stated at cost less
impairment.
Details of subsidiaries at 31 December 2021 are as follows:
Share capital Share capital
Country held by held by
Name of subsidiary of incorporation Company Group Principal activities
---------------------------- ----------------- ------------- ------------- -----------------------
SigmaFin Limited England GBP45,181,877 Holding company
Foelfach Stone Limited England GBP1 Construction materials
SigmaGsy Limited Guernsey GBP1 Shipping logistics
Ronez Limited Jersey GBP2,500,000 Construction materials
Pallot Tarmac (2002) Road contracting
Limited Jersey GBP2 services
Island Aggregates Limited Guernsey GBP6,500 Waste recycling
Pre-cast concrete
Topcrete Limited England GBP926,828 producer
A. Larkin (Concrete)
Limited England GBP37,660 Dormant
Allen (Concrete) Limited England GBP100 Holding company
Poundfield Products
(Group) Limited England GBP22,167 Holding company
Poundfield Products
(Holdings) Limited England GBP651 Holding company
Poundfield Innovations
Limited England GBP6,357 Patents & licencing
Pre-cast concrete
Poundfield Precast Limited England GBP63,568 producer
Alfabloc Limited England GBP1 Dormant
CCP Building Products GBP50
Limited England Construction materials
Cheshire Concrete Products GBP1 Dormant
Limited England
Clwyd Concrete Products England GBP100 Dormant
Limited
Country Concrete Products England GBP100 Dormant
Limited
CCP Trading Limited England GBP100 Dormant
CCP Aggregates Limited England GBP100,000 Construction materials
CDH Développement Belgium EUR23,660,763 Holding company
SA
Carrières du Hainaut Belgium EUR16,316,089 Construction materials
SCA
Granulats du Hainaut Belgium EUR62,000 International marketing
SA
CDH Management 2 SPRL Belgium EUR760,000 Holding company
GDH (Holdings) Limited England GBP54,054 Construction materials
Gerald D. Harries & England GBP112 Construction materials
Sons Limited
Stone Holding Company Belgium EUR100 Construction materials
SA
Cuvelier Philippe SA Belgium EUR750 Construction materials
B-Mix Beton NV Belgium EUR680,600 Concrete producer
J&G Overslag en Kraanbedrijf Belgium EUR18,600 Concrete producer
BV
Top Pomping NV Belgium EUR62,000 Concrete producer
Finland Limestone quarrying
Nordkalk Oy Ab EUR1,000,000 and processing
Nordkalk AB Sweden EUR2,439,000 Limestone quarrying
and processing
Kalkproduktion Storugns Sweden EUR293,000 Limestone quarrying
AB and processing
Nordkalk AS Estonia EUR959,000 Limestone quarrying
and processing
Nordkalk GmbH Germany EUR50,000 Limestone quarrying
and processing
Nordkalk Sp.z o.o Poland EUR19,637,000 Limestone quarrying
and processing
Suomen Karbonaatti Oy Finland EUR2,102,000 Limestone quarrying
and processing
NKD Holding Oy Ab Finland EUR3,000 Holding company
Nordeka Maden A.S Turkey EUR1,020,000 Limestone quarrying
and processing
Name of subsidiary Registered office address
------------------------------ -----------------------------------------------
Suite 1, 15 Ingestre place, London, W1F
SigmaFin Limited 0DU
Suite 1, 15 Ingestre place, London, W1F
Foelfach Stone Limited 0DU
Les Vardes Quarry, Route de Port Grat,
SigmaGsy Limited St Sampson, Guernsey, GY2 4TF
Ronez Quarry, La Route Du Nord, St John,
Ronez Limited Jersey, JE3 4AR
Pallot Tarmac (2002) Ronez Quarry, La Route Du Nord, St John,
Limited Jersey, JE3 4AR
Les Vardes Quarry, Route de Port Grat,
Island Aggregates Limited St Sampson, Guernsey, GY2 4TF
Topcrete Limited 38 Willow Lane, Mitcham, Surrey, CR4 4NA
A. Larkin (Concrete)
Limited 38 Willow Lane, Mitcham, Surrey, CR4 4NA
Allen (Concrete) Limited 38 Willow Lane, Mitcham, Surrey, CR4 4NA
Poundfield Products (Group) The Grove, Creeting St. Peter, Ipswich,
Limited England, IP6 8QG
Poundfield Products (Holdings) The Grove, Creeting St. Peter, Ipswich,
Limited England, IP6 8QG
Poundfield Innovations The Grove, Creeting St. Peter, Ipswich,
Limited England, IP6 8QG
The Grove, Creeting St. Peter, Ipswich,
Poundfield Precast Limited England, IP6 8QG
The Grove, Creeting St. Peter, Ipswich,
Greenbloc Limited England, IP6 8QG
CCP Building Products
Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Cheshire Concrete Products
Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Clwyd Concrete Products
Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Country Concrete Products
Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Trading Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Aggregates Limited Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CDH Développement Rue de Cognebeau 245, B-7060 Soignies,
SA Belgium
Carrières du Hainaut Rue de Cognebeau 245, B-7060 Soignies,
SCA Belgium
Granulats du Hainaut Rue de Cognebeau 245, B-7060 Soignies,
SA Belgium
Rue de Cognebeau 245, B-7060 Soignies,
CDH Management 2 SPRL Belgium
Rowlands View, Templeton, Narbeth, SA67
GDH (Holdings) Limited 8RG
Gerald D. Harries & Sons Rowlands View, Templeton, Narbeth, SA67
Limited 8RG
Stone Holding Company Avenue Louise 292, BE-1050 Ixelles, Belgium
SA
Cuvelier Philippe SA Avenue Louise 292, BE-1050 Ixelles, Belgium
B-Mix Beton NV Kanaalweg 110, B-3980 Tessenderlo, Belgium
J&G Overslag en Kraanbedrijf Kanaalweg 110, B-3980 Tessenderlo, Belgium
BV
Top Pomping NV Kanaalweg 110, B-3980 Tessenderlo, Belgium
Skräbbölentie 18, FI-21600, Parainen,
Nordkalk Oy Ab Finland
Nordkalk AB Box 901, 731 29 Köping
Kalkproduktion Storugns Strugns, 620 34 Lärbro
AB
Nordkalk AS Lääne-Viru maakond, Väike-
Maarja vald, Rakke alevik, F.R Faehlmanni
tee 11a, 46301
Innungsstrabe 7, 21244 Buchholz in der
Nordkalk GmbH Nordheide
Nordkalk Sp.z o.o ul. Plac Na Groblach, nr 21, lok. Miejsc,
Krakow, kod 31-101, poczta, Krakow, kraj
Polska
Suomen Karbonaatti Oy Ihalaisen teollisuusalue, 53500 Lappeenranta
NKD Holding Oy Ab Skräbbölentie 18, 21600 Parainen
Levent MH.Cömert Sk. Yapi Kredi Blokl.c
Nordeka Maden A.S Blok no.1 c/17 Besiktas
For the year ended 31 December 2021 the following subsidiaries
were entitled to exemption from audit under section 479A of the
Companies Act 2006 related to the following subsidiary
companies:
-- SigmaFin Limited
-- Foelfach Stone Limited
-- Topcrete Limited
-- A. Larkin (Concrete) Limited
-- Allen (Concrete) Limited
-- Poundfield Products (Group) Limited
-- Poundfield Products (Holdings) Limited
-- Poundfield Innovations Limited
-- Poundfield Precast Limited
-- Greenbloc Limited
-- CCP Building Products Limited
-- Cheshire Concrete Products Limited
-- Clwyd Concrete Products Limited
-- Country Concrete Products Limited
-- CCP Trading Limited
-- CCP Aggregates Limited
-- GDH (Holdings) Limited
-- Gerald D. Harries & Sons Limited
Impairment review
The performance of all companies for the year ended 31 December
2021 are in line with forecasted expectations and as such there
have been no indications of impairment.
19. 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.
31 December
2021
GBP'000
-------------------------- -----------
Interests in associates 524
Interest in joint venture 5,134
-----------
5,658
-----------
Proportion of
ownership interest
held
---------------------------------------------------- -------- ----------------------
31 December 31 December
Name Country of incorporation 2021 2020
------------------------- --------------------------- ---------------- ------------
NorFraKalk AS Norway 50% -
------------------------- ------------------------------- ------------ ------------
Summarised financial information
31 December 31 December
NorFraKalk AS - Cost and net book value 2021 2020
GBP'000 GBP'000
---------------------------------------- ----------- -----------
Current assets 10,184 -
Non-current assets 6,507 -
Current liabilities 3,989 -
Non-current liabilities 2,621 -
----------- -----------
23,301 -
----------- -----------
For the For the
period period
1 September 1 January
2021 to 2020 to
31 December 31 December
2021 2020
GBP'000 GBP'000
-------------------------------------------- ------------ ------------
Revenues 5,694 -
Profit after tax from continuing operations 442 -
------------ ------------
20. Trade and Other Receivables
Consolidated Company
------------------------ ------------------------
31 December 31 December 31 December 31 December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ----------- ----------- ----------- -------------
Trade receivables 66,166 18,074 1,787 877
Prepayments 3,598 1,143 346 114
Other receivables 3,490 1,126 757 7
73,254 20,343 2,890 998
Non-current
Other receivables 4,759 21 - -
----------- ----------- -------------
4,759 21 - -
----------- ----------- -------------
The carrying value of trade and other receivables classified as
loans and receivables approximates fair value.
The carrying amounts of the Group and Company's trade and other
receivables are denominated in the following currencies:
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
UK Pounds 18,731 14,367 2,890 998
Euros 38,435 5,997 - -
Swedish krona 14,976 - - -
Zlotys 5,088 - - -
Ukrainian Hryvnia 7 - - -
Turkish Lira 666 - - -
Russian Ruble 110 - - -
78,013 20,364 2,890 998
Other classes of financial assets included within trade and
other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. The
Group does not hold any collateral as security.
21. Inventories
Consolidated
31 December 31 December
2021 2020
Cost and net book value GBP'000 GBP'000
Raw materials and consumables 18,642 5,706
Finished and semi-finished goods 22,543 7,871
Work in progress 3,345 670
44,530 14,247
The value of inventories recognised as a debit and included in
cost of sales was GBP10.8 million (31 December 2020: (GBP1.7
million)).
22. Cash and Cash Equivalents
Consolidated Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and on hand 69,916 27,452 19,038 11,521
69,916 27,452 19,038 11,521
All of the Group's cash at bank is held with institutions with a
credit rating of at least A-. Exceptions may be granted on an
individual basis in rare cases where a bank is chosen for
geographical reasons, but does not fulfil the stipulated rating
criteria.
The carrying amounts of the Group and Company's cash and cash
equivalents are denominated in the following currencies:
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
'000 '000 '000 '000
UK Pounds 25,555 19,929 14,704 11,521
Euros 43,163 7,523 4,334 -
Swedish krona 991 - - -
Zlotys 17 - - -
Ukrainian Hryvnia 64 - - -
Turkish Lira 112 - - -
Russian Ruble 14 - - -
69,916 27,452 19,038 11,521
23. Trade and Other Payables
Consolidated Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Current liabilities
Trade payables 55,865 16,288 984 147
Wages Payable 11,910 4,308 - -
Accruals 19,681 6,291 3,402 1,676
VAT payable/(receivable) 3,975 2,282 (223) (39)
Deferred consideration 1,331 13,390 730 12,389
Other payables 5,451 3,964 674 43
98,213 46,523 5,567 14,216
Non - Current liabilities
Deferred consideration 4,401 5,100 4,401 5,100
4,401 5,100 4,401 5,100
The carrying amounts of the Group and Company's trade and other
payables are denominated in the following currencies:
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
'000 '000 '000 '000
UK Pounds 30,073 38,548 9,539 19,316
Euros 46,161 13,075 429 -
Swedish krona 15,924 - - -
Zlotys 10,336 - - -
Ukrainian Hryvnia 9 - - -
Turkish Lira 96 - - -
Russian Ruble 15 - - -
102,614 51,623 9,968 19,316
24. Borrowings
Consolidated Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Non-current liabilities
Syndicated Senior Credit Facility 191,937 61,235 191,937 -
Bank Loans 73 - - -
Finance lease liabilities 20,189 6,453 131 22
212,199 67,688 192,068 22
Current liabilities
Syndicated Senior Credit Facility 8,000 - 8,000 -
Finance lease liabilities 8,422 3,611 102 21
Bank Loans 5,301 - - -
21,723 3,611 8,102 21
In July 2021, 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 31 December 2021 the Interest Margin was 2.35%.
The carrying amounts and fair value of the non-current
borrowings are:
Carrying amount
and fair value
31 December 31 December
2021 2020
GBP'000 GBP'000
Santander term facility 191,937 61,235
Bank loans 73 -
Finance lease liabilities 20,189 10,064
212,199 71,299
Finance Lease Liabilities
Lease liabilities are effectively secured, as the rights to the
leased asset revert to the lessor in the event of default.
Consolidated
31 December 31 December
2021 2020
Finance lease liabilities - minimum lease payments GBP'000 GBP'000
Not later than one year 8,037 3,612
Later than one year and no later than five years 14,643 5,823
Later than five years 3,666 629
26,346 10,064
Future finance charges on finance lease liabilities 2,265 681
Present value of finance lease liabilities 28,611 10,745
For the year ended 31 December 2021, the total finance charges
were GBP1 million.
The contracted and planned lease commitments were discounted
using a weighted average incremental borrowing rate of 3%.
The present value of finance lease liabilities is as
follows:
Consolidated
31 December 31 December
2021 2020
GBP'000 GBP'000
Not later than one year 8,278 3,720
Later than one year and no later than five years 15,082 5,998
Later than five years 3,776 648
Present value of finance lease liabilities 27,136 10,366
Reconciliation of liabilities arising from financing activities
is as follows:
Consolidated
Liabilities
arising
Long-term Short-term from financing
borrowings borrowings Lease liabilities activities
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January 2021 61,235 - 10,064 71,299
Increase/(decrease) through
financing cash flows (1,830) (601) 607 (1,824)
Increase from refinancing 137,980 8,000 - 145,980
Cost of borrowings (5,425) - - (5,425)
Amortisation of finance
arrangement fees (784) - - (784)
Increase through obtaining
control of subsidiaries 834 5,903 17,940 24,677
As at 31 December 2021 192,010 13,302 28,611 233,923
25. Provisions
Consolidated
31 December 31 December
2021 2020
GBP'000 GBP'000
---------------------------------
As at 1 January 6,160 6,937
Acquired on business combination 5,721 172
Deduction (1,706) (949)
10,175 6,160
The provision total is made up of GBP632,011 as a restoration
provision for the St John's and Les Vardes sites; GBP86,812 for the
Aberdo site; GBP172,303 for quarries in Wales; and GBP3.5m for the
Nordkalk sites which are all based on the removal costs of the
plant and machinery at the sites and restoration of the land. Cost
estimates in Jersey and Guernsey are not increased on an annual
basis - there is no legal or planning obligation to enhance the
sites through restoration. The commitment is to restore the site to
a safe environment; thus the provision is reviewed on an annual
basis. The estimated expiry on the quarries ranges between 5 - 35
years.
Of the remaining amount, GBP1.05m is to cover the loss on the
Holcim contract in CDH, GBP160,000 for legal fees, GBP1.62m for
other restructuring costs in the Nordkalk entities and GBP3m is the
provision for early retirement in Belgium, where salaried workers
can qualify for early retirement based on age. The provision for
early retirement consists of the estimated amount that will be paid
by the employer to the "early retired workers" till the age of the
full pension. Refer to note 26 for more information.
The future reclamation cost value is discounted by 7.07% (2020:
7.39%) which is the weighted average cost of capital within the
Group.
26. Retirement benefit schemes
The Group sponsors various post-employment benefit plans. These
include both defined contribution and defined benefit plans as
defined by IAS 19 Employee Benefits.
Defined contribution plans
For defined contribution plans outside Belgium, the Group pays
contributions to publicly or privately administered pension funds
or insurance contracts. Once the contributions have been paid, the
Group has no further payment obligation. The contributions are
expensed in the year in which they are due. For the year ended,
contributions paid into defined contribution plans amounted to
GBP220k.
Defined benefit plans
The Group has group insurance plans for some of its Belgian,
Swedish and Polish employees funded through defined payments to
insurance companies. The Belgian pension plans are by law subject
to minimum guaranteed rates of return. In the past the minimum
guaranteed rates were 3.25% on employer contributions and 3.75% on
employee contributions. A law of December 2015 (enforced on 1
January 2016) modifies the minimum guaranteed rates of return
applicable to the Group's Belgian pension plans. For insured plans,
the rates of 3.25% on employer contributions and 3.75% on employee
contributions will continue to apply to the contributions
accumulated before 2016. For contributions paid on or after 1
January 2016, a variable minimum guaranteed rate of return with a
floor of 1.75% applies. The Group obtained actuarial calculations
for the periods reported based on the projected unit credit
method.
The Swedish plan provides an old-age pension cover for plan
members whereas plan members receive a lump sum payment upon
retirement in the Polish plan. Both Swedish and Polish plans are
based on collective labour agreements. Through its defined benefit
plans, the Group is exposed to a number of risks. A decrease in
bond yields will increase the plan liabilities. Some of the Group's
pension obligations are linked to inflation and higher inflation
will lead to higher liabilities. The majority of the plans
obligations are to provide benefits for the life of the plan
member, so increases in life expectancy will result in an increase
in the plans liabilities.
Employee benefits amounts in the Statement of 2021 2020
Financial Position GBP'000 GBP'000
Assets - -
Liabilities 4,292 3,593
Net defined benefit liability at end of year 4,292 3,593
Amounts recognised in the Statement of Financial 2021 2020
Position GBP'000 GBP'000
Present value of funded defined benefit obligations 2,222 2,379
Fair value of plan assets (2,068) (2,214)
154 165
Present value of unfunded defined benefit obligation 4,138 3,428
Unrecognised past service cost - -
Total 4,292 3,593
2021 2020
Amounts recognised in the Income Statement GBP'000 GBP'000
Current service cost 32 128
Interest cost 26 19
Expected return on plan assets 227 (31)
Total pension expense 285 116
Changes in the present value of the defined 2021 2020
benefit obligation GBP'000 GBP'000
Defined benefit obligation at beginning of year 3,593 3,758
Current service cost 32 128
Interest cost 26 19
Benefits paid (220) (493)
Remeasurements 227 (31)
Acquired in business combination 1,524 -
Foreign exchange movement (890) 212
Defined benefit obligation at end of year 4,292 3,593
Amounts recognised in the Statement of Changes 2021 2020
in Equity GBP'000 GBP'000
Prior year cumulative actuarial remeasurements (75) (46)
Remeasurements 227 (31)
Foreign exchange movement - 3
Cumulative amount of actuarial gains and losses
recognised in the Statement of recognised income
/ (expense) 152 (74)
Movements in the net liability/(asset) recognised 2021 2020
in the Statement of Financial Position GBP'000 GBP'000
Net liability in the balance sheet at beginning
of year 3,593 3,758
Total expense recognised in the income statement 58 147
Contributions paid by the company (220) (493)
Amount recognised in the statement of recognised
(income)/expense 227 (31)
Acquired in business combination 1,524 -
Foreign exchange movement (890) 212
Defined benefit obligation at end of year 4,292 3,593
Principal actuarial assumptions as at 31 December 2021
-----
Discount rate 0.53%
Future salary increases 1.62%
Future inflation 1.65%
Post-retirement benefits
The Group operates both defined benefit and defined contribution
pension plans.
Pension plans in Belgium are of the defined benefit type because
of the minimum promised return on contributions required by law.
The liability or asset recognised in the Statement of Financial
Position in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using
the projected unit credit method. The present value of the defined
benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate
bonds that are denominated in the currency in which the benefits
will be paid, and that have terms approximating to the terms of the
related obligation. The net interest cost is calculated by applying
the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included
in employee benefit expense in the Income Statement. Remeasurement
gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They are included in
retained earnings in the Statement of Changes in Equity and in the
Statement of Financial Position.
For defined contribution plans, the Group pays contributions to
publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further
payment obligations once the contributions have been paid. The
contributions are recognised as employee benefit expense when they
are due.
27. Financial Instruments by Category
Consolidated 31 December 2021
Loans &
receivables Total
Assets per Statement of Financial Performance GBP'000 GBP'000
Trade and other receivables (excluding prepayments) 69,656 69,656
Cash and cash equivalents 69,916 69,916
139,572 139,572
At amortised
cost Total
Liabilities per Statement of Financial Performance GBP'000 GBP'000
Borrowings (excluding finance leases) 205,312 205,312
Finance lease liabilities 28,611 28,611
Trade and other payables (excluding non-financial
liabilities) 102,614 102,614
336,537 336,537
Consolidated 31 December 2020
Loans &
receivables Total
Assets per Statement of Financial Performance GBP'000 GBP'000
Trade and other receivables (excluding prepayments) 19,179 19,179
Cash and cash equivalents 27,452 27,452
46,631 46,631
At amortised
cost Total
Liabilities per Statement of Financial Performance GBP'000 GBP'000
Borrowings (excluding finance leases) 61,235 61,235
Finance lease liabilities 10,064 10,064
Trade and other payables (excluding non-financial
liabilities) 51,623 51,623
122,922 122,922
Company 31 December 2021
Loans &
receivables Total
Assets per Statement of Financial Performance GBP'000 GBP'000
Trade and other receivables (excluding prepayments) 2,544 2,544
Cash and cash equivalents 19,038 19,038
21,582 21,582
At amortised
cost Total
Liabilities per Statement of Financial Performance GBP'000 GBP'000
Borrowings (excluding finance leases) 199,937 199,937
Finance lease liabilities 233 233
Trade and other payables (excluding non-financial
liabilities) 9,968 9,968
210,138 210,138
Company 31 December 2020
Loans & receivables Total
Assets per Statement of Financial Performance GBP'000 GBP'000
Trade and other receivables (excluding prepayments) 884 884
Cash and cash equivalents 11,521 11,521
12,405 12,405
At amortised
cost Total
Liabilities per Statement of Financial Performance GBP'000 GBP'000
Borrowings (excluding finance leases) - -
Finance lease liabilities 43 43
Trade and other payables (excluding non-financial
liabilities) 18,994 18,994
19,037 19,037
28. Share Capital and Share Premium
Number of Ordinary Share premium
shares shares Total
GBP'000 GBP'000 GBP'000
Issued and fully paid
As at 1 January 2020 253,739,186 2,537 95,359 97,896
Issue of new shares - 9 December
2020 (1) 25,000,000 250 12,059 12,309
As at 31 December 2020 278,739,186 2,787 107,418 110,205
As at 1 January 2021 278,739,186 2,787 107,418 110,205
Exercise of options & warrants
- 27 April 2021 1,059,346 11 456 467
Exercise of warrants - 7
May 2021 78,044 1 19 20
Issue of new shares - 31
August 2021 (2) 307,762,653 3,059 249,772 252,831
Issue of new shares - 31
August 2021 50,276,521 521 42,232 42,753
As at 31 December 2021 637,915,750 6,379 399,897 406,276
(1) Includes issue costs of GBP440,736
(2) Includes issue costs of GBP8,748,365
The authorised share capital consists of 914,345,908 ordinary
shares at a par value of 1 penny.
On 27 April 2021 the Company issued and allotted 33,332 new
Ordinary Shares at a price of 46 pence per share for options
exercised. On the same day, the Company issued and allotted
1,026,014 new Ordinary Shares at a price of 46 pence per share for
warrants exercised.
On 7 May 2021 the Company issued and allotted 78,044 new
Ordinary Shares at a price of 46 pence per share for warrants
exercised.
On 31 August 2021 the Company raised GBP252,849,890 net of issue
costs via the issue and allotment of 307,762,653 new Ordinary
Shares at a price of 85 pence per share. On the same day the
Company issued and allotted 50,276,521 new Ordinary Shares at a
price of 85 pence per share as shares issued as part of the
Nordkalk acquisition.
29. Share Options
In 2021, the Company introduced a long term incentive plan
('LTIP') for senior management personnel. Shares are awarded in the
Company and vest in 3 parts over the third, fourth and fifth
anniversary to the extent the performance conditions are met.
Share options and warrants outstanding and exercisable at the
end of the year have the following expiry dates and exercise
prices:
Options & Warrants
31 December 31 December
2021 2020
Exercise price
Grant date Expiry date in GBP per share # #
5 January 2017 4 January 2022 0.44 - 1,026,014
5 January 2017 22 August 2021 0.25 - 78,044
5 January 2017 5 January 2022 0.25 286,160 286,160
5 January 2017 5 January 2022 0.40 12,183,225 12,183,225
15 April 2019 15 April 2026 0.46 9,340,934 6,433,956
30 December 2019 30 December 2026 0.46 8,389,726 5,408,706
30,200,045 25,416,105
The Company and Group have no legal or constructive obligation
to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined
using the Black Scholes valuation model. The parameters used are
detailed below:
2017 Options 2017 Options 2019 Options 2019 Options
A B C D
Vested on 5/1/2017 5/1/2017 15/4 30/12
Life (years) 5 5 7 7
Share price 0.425 0.425 0.465 0.525
Risk free rate 0.52% 0.52% 0.31% 0.55%
Expected volatility 24.81% 24.81% 4.69% 8.19%
Expected dividend yield - - - -
Marketability discount - 50% - -
Total fair value GBP56,039 GBP234,854 GBP419,130 GBP729,632
The risk-free rate of return is based on zero yield government
bonds for a term consistent with the option life.
The volatility is calculated by dividing the standard deviation
of the closing share price from the prior six months by the average
of the closing share price from the prior six months.
A 50% discount was applied to Options B due to the uncertainty
surrounding the future performance of the Group. The Options A
& B were issued in the first year of acquisitions which at the
time had not had a significant impact on the Company's share price.
Therefore a 50% discount was applied to reflect the fact the
Company was still in an early stage with regards to acquiring niche
company's and building value for the shareholders.
A reconciliation of options and warrants and LTIP awards granted
over the year to 31 December 2021 is shown below:
Options and warrants
31 December 2021 31 December 2020
Weighted Weighted
average average
exercise exercise
price price
# GBP # GBP
Outstanding at beginning of
the year 25,416,105 0.42 19,494,774 0.40
Granted - - - -
Vested 5,921,330 0.46 5,921,331 0.46
Exercised (1,137,390) 0.40 - -
Outstanding as at year end 30,200,045 0.45 31,337,434 0.44
Exercisable at year end 30,200,045 0.45 25,416,105 0.42
LTIP awards
31 December 2021 31 December 2020
Weighted Weighted
average average
valuation valuation
price price
# GBP # GBP
Outstanding at beginning of - -
the year - -
Granted 25,620,000 0.69 - -
Vested - - - -
Exercised - - - -
Outstanding as at year end 25,620,000 0.69 - -
Exercisable at year end - - - -
30. Other Reserves
Company
Foreign
currency
Deferred Capital redemption Revaluation translation
shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January 2020 762 600 - (448) 914
Currency translation
differences - - - 2,379 2,379
As at 31 December
2020 762 600 - 1,931 3,293
As at 1 January 2021 762 600 - 1,931 3,293
Other comprehensive
income - - 1,037 - 1,037
Currency translation
differences - - - (15,566) (15,566)
As at 31 December
2021 762 600 1,037 (13,635) (11,237)
31. Non-controlling interests
As at 1 January 2021 -
Shares issued to non-controlling interest 1,260
Acquired in business combination 9,031
Non-controlling interests share of profit in the period 590
Foreign exchange movement 13
As at 31 December 2021 10,894
32. Earnings Per Share
The calculation of the total basic earnings per share of (1.89)
pence (2020: 2.55 pence) is calculated by dividing the loss
attributable to shareholders of GBP6,971 million (2020: profit of
GBP6,511 million) by the weighted average number of ordinary shares
of 400,170,256 (2020: 255,310,224) in issue during the period.
Diluted earnings per share of (1.77) pence (2020: 2.35 pence) is
calculated by dividing the loss attributable to shareholders of
GBP6,971 million (2020: GBP6,511 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
427,854,251 (2020: 277,113,850). The weighted average number of
shares is the opening balance of ordinary shares plus the weighted
average of 2,290,811 shares.
Details of share options that could potentially dilute earnings
per share in future periods are disclosed in Note 29 .
33. 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
Forward exchange
contracts - 561 - - - 561 - 561 561
Co2 emission
hedge - 125 - - - 125 125 - 125
Electricity
hedges 4,628 243 - - - 4,511 4,511 - 4,511
Financials
assets not
measure at
fair value
Trade and
other receivables
(excl. Derivatives) - - - 78,013 - 78,013 - - -
Cash and
cash equivalents - - - 69,916 - 69,916 - - -
Financial
liabilities
measured
at fair value
Forward exchange
contracts 608 - - - - 608 - 608 608
Electricity
hedges 129 - - - - 129 129 - 129
Financial
liabilities
not measured
at fair value
Loans - - - - 205,312 205,312 - - -
Finance lease
liability - - - - 28,611 28,611 - - -
Trade and
other payables
(excl. derivative) - - - - 102,613 102,613 - - -
34. Business Combinations
Nordkalk
On 31 August 2021, the Group acquired 100 per cent of the share
capital of Nordkalk and its subsidiaries for a total consideration
of EUR355 million (being EUR470 355 million (being EUR470 million
less adjustments for various obligations assumed by the Group as
part of the acquisition)) less adjustments for various obligations
assumed by the Group as part of the acquisitionwhich translates to
GBP297.8 million. Nordkalk is registered and incorporated in
Finland with subsidiaries across Northern Europe. Nordkalk develops
limestone-based solutions for agricultural, construction and
chemical industries.
The following table summarises the consideration paid for
Nordkalk and the values of the assets and equity assumed at the
acquisition date.
Total consideration GBP'000
Cash consideration 348,225
Consideration paid in shares 41,982
Purchase of shareholder loans (92,360)
297,847
Recognised amounts of assets and liabilities acquired GBP'000
Cash and cash equivalents 23,403
Trade and other receivables 49,281
Inventories 30,733
Derivative financial assets 3,737
Deferred tax 460
Property, plant & equipment 103,907
Intangible assets 6,965
Investment in associates 524
Investments in joint ventures 4,719
Trade and other payables (50,330)
Derivative financial liabilities (1,074)
Borrowings (113,084)
Provisions (5,720)
Income Tax (1,483)
Non-controlling interests (9,031)
Total identifiable net liabilities 43,007
Goodwill (refer to note 17 ) 254,840
Total consideration 297,847
B-Mix
On 7 April 2021, the Group acquired 100 per cent of the share
capital of B-Mix and its subsidiaries for a cash consideration of
EUR12.03 million (being EUR13 million less adjustments for various
obligations assumed by the Group as part of the acquisition) which
translates to GBP10.2 million. B-Mix is registered and incorporated
in Belgium. The principal activity is the operation of concrete
plants.
The following table summarises the consideration paid for B-Mix
and the values of the assets and equity assumed at the acquisition
date.
Total consideration GBP'000
Cash consideration 10,105
10,105
Recognised amounts of assets and liabilities acquired GBP'000
Cash and cash equivalents 1,013
Trade and other receivables 3,002
Inventories 301
Property, plant & equipment 4,122
Trade and other payables (1,965)
Income tax payable (296)
Borrowings (2,161)
Deferred tax liability (15)
Total identifiable net liabilities 4,001
Goodwill (refer to note 17 ) 6,104
Total consideration 10,105
35. Contingencies
The Group is not aware of any material personal injury or damage
claims open against the Group.
36. Related party transactions
Loans with Group Undertakings
Amounts receivable/(payable) as a result of loans granted
to/(from) subsidiary undertakings are as follows:
Company
31 December 31 December
2021 2020
GBP'000 GBP'000
Ronez Limited (18,328) (12,878)
SigmaGsy Limited (5,705) (4,455)
SigmaFin Limited 20,146 (7,139)
Topcrete Limited (9,494) (8,178)
Poundfield Products (Group) Limited 5,501 6,364
Foelfach Stone Limited 466 457
CCP Building Products Limited 5,647 5,786
Carrières du Hainaut SCA 18,251 (6)
GDH (Holdings) Limited 9,588 1,234
B-Mix Beton NV 1,295 -
Stone Holdings SA 376 368
Nordkalk Oy Ab 91,367 -
119,110 (18,447)
Loans granted to or from subsidiaries are unsecured, have
interest payable at 2% and are repayable in Pounds Sterling on
demand from the Company.
All intra Group transactions are eliminated on
consolidation.
Other Transactions
Westend Corporate LLP, a limited liability partnership of which
Garth Palmer was a partner but resigned effective 31 August 2021,
invoiced a total fee of GBP326,821 (2020: GBP249,997) for the
provision of corporate management and consulting services to the
Company until 31 August 2021, which included GBP160,000 for
services relating to the acquisition of Nordkalk Oy Ab.
37. Ultimate Controlling Party
The Directors believe there is no ultimate controlling
party.
38. Events After the Reporting Date
On 4 January 2022, the Company issued and allotted 26,014 new
Ordinary Shares at a price of 25 pence per share and 304,580 new
Ordinary Shares at a price of 40 pence per share for options
exercised.
On 1 February 2022, the Group acquired 100 per cent. of the
share capital of Johnston Quarry Group Limited ('JQG') for a cash
consideration of GBP 35.1 million (being GBP 35.5 million less
adjustments for various obligations assumed by the Group as part of
the acquisition). JQG is registered and incorporated in the
England. JQG is a high-quality producer of construction aggregates,
building stone and agricultural lime.
The following table summarises the consideration paid for JQG
and the values of the assets and equity assumed at the acquisition
date.
Total consideration GBP'000
Cash consideration 35,090
35,090
Recognised amounts of assets and liabilities acquired GBP'000
Cash and cash equivalents 1,587
Trade and other receivables 1,840
Inventories 1,463
Property, plant & equipment 16,908
Intangible assets 264
Trade and other payables (3,477)
Borrowings (9,947)
Provisions (325)
Deferred tax liability (826)
Total identifiable net liabilities 7,487
Goodwill 27,603
Total consideration 35,090
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