TIDMSRC
RNS Number : 2984X
SigmaRoc PLC
25 April 2023
25 April 2023
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
SIGMAROC PLC
( ' SigmaRoc ', the 'Group' or the 'Company')
Solid Q1 trading
Publication of the Group's ESG report
SigmaRoc, the specialist quarried materials group is pleased to
announce the publication of its ESG report, together with the
following update on Group trading for the first quarter of its 2023
financial year ('Q1' or the 'period'), in advance of its Annual
General Meeting ('AGM') to be held at 3:00 pm today.
Highlights:
- Solid Q1 performance, with Group underlying EBITDA ahead of
prior year and slightly ahead of management expectations;
- Development pipeline progressing to plan, with three acquisitions closed in Q1;
- Further progress made in sustainability initiatives with the
installation of the first Aqualung module in Q2 and the publication
of the Group's ESG report today, highlighting progress areas across
a broad range of metrics;
- Revenue diversity and further margin enhancement programmes
support the Board's expectations for 2023.
Q1 trading update
The Group is pleased to report that it has started 2023 well,
with Q1 performance ahead of the prior year on a like-for-like
basis. Volumes were 1% ahead of budget, contributing to revenues of
GBP137.1m for the quarter. The ongoing benefit from cost management
and asset enhancement programmes underpinned margin growth in the
period, resulting in an Underlying EBITDA slightly ahead of
management's expectations.
The Group's diversified geographic and end market footprint
continues to provide resilience with growth across a range of
segments, more than offsetting areas of subdued demand:
- Industrial minerals: continued growth in demand across
chemical, environmental, and agricultural markets, as well as
metals & mining which is seeing demand supported by
re-activation of customer capacity. Paper, pulp & board saw
lower demand in the quarter as safety stocks acquired to mitigate
energy risk at the end of 2022 are unwound.
- Infrastructure: demand in this sector remained strong across
all three regions, with particularly good performances in Poland
and the Baltics. Several major projects in other regions are
mobilising, supporting expected demand for construction materials
across the Group.
- Residential construction and RMI: the more subdued demand
conditions in Finland, Sweden and the UK seen in the latter part of
2022 have continued, as expected, into 2023. Conditions in Poland,
the Baltics and Belgium have been stronger as a result of greater
resilience in residential construction activity in these
markets.
-
Acquisition and development pipeline update
The Group made significant progress on its acquisition and
development pipeline in Q1, closing three acquisitions and
launching three development projects. Goijens Beton is presently
being integrated into the Benelux concrete business and Juuan
Dolomiittiikalkki has been integrated within the Nordics platform
and is now delivering the expected synergies.
In the UK, the Group closed the acquisition of Retaining Holding
Limited ('RHL'), a leading manufacturer of specialty retaining wall
systems for an effective multiple of 2.9 times recurring average
EBITDA for the years 2020 to 2022, before expected synergies and
operational improvements. This business fits very well with the PPG
precast platform, both expanding its range of walling solutions,
which already includes the patented Alfabloc, as well as extending
PPG's reach into the north of the UK. Integration has already
started successfully and will aim to drive further synergies within
this calendar year.
The Group also signed the lease and placed the order for a new
asphalt plant to be installed later this year in the UK, which is
currently expected to be operational in Q4.
Additionally, the Group is making good progress on its
divestment programme and expects to close two non-core business
units at attractive multiples within the month of May.
The pipeline of both organic and inorganic opportunities remains
very full, offering the Group the ability to be selective with its
investments and focus on those with the most compelling financial
and strategic relevance.
Aqualung update
The Group's first Aqualung module will be installed over the
next two to three weeks with commissioning targeted to start on
7(th) May 2023. Once installed and connected to a Nordkalk
quicklime kiln, it will start a testing programme.
The Group aims to start capturing and bottling CO(2) from its
quicklime operations by the last week of May 2023. An official
launch will be organised to celebrate this significant step in the
Group's evolution, the details of which will be published in due
course.
ESG Report publication
The Group is pleased to publish its second ESG report today,
which contains comprehensive detail on its Environmental, Social
and Governance policies and initiatives, as well as a detailed
roadmap to Net Zero.
The report provides further detail on a large number of
initiatives already in place across the Group to manage its energy
use and sourcing, as well as accelerate its successful track record
in innovation to both meet demanding ESG targets and further
enhance competitiveness.
The report can be found on the Company's website at
www.sigmaroc.com. In summary of the ESG report, 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.
Trading outlook
Economic conditions continue to show a degree of volatility and
so we remain alert to changes in our local markets, both positive
and negative. In the near term, we expect the trends we have seen
in Q1 to continue into the second quarter, with demand in the
residential construction and pulp, paper & board markets
remaining subdued. Conversely, we see continued demand resilience
across the infrastructure, chemical, environmental, agriculture and
metals & mining segments.
As has been the case in the first quarter, we expect local
market agility and our internal improvement initiatives to support
margins through the year, with the pricing and inflationary
backdrop more stable than was the case in 2022. Execution on our
investment pipeline continues in line with plan and it is
encouraging to see synergy benefits being delivered already from
acquisitions made in the last few months.
The Group's product, end market and geographic diversity,
together with the local teams' ability to drive continuous
improvement leave it well placed to navigate through any further
economic volatility in 2023. The opportunities to enhance progress
through the development pipeline are substantial and the Board
remains very confident in the Group's ability to make further
significant progress in the current year and beyond.
Max Vermorken, CEO, commented
"The Group delivered performance ahead of expectations in Q1,
despite variable market conditions , leveraging its ability to
focus activity on growth segments and achieve further margin gains
through operational efficiency and active cost management.
The Group also made significant progress on its acquisition
pipeline, with three important development projects initiated
within the quarter.
We approach the remainder of 2023 with vigilance but are
confident that the Group can demonstrate its resilience and achieve
further strategic progress."
Information on the Company is available on its website,
www.sigmaroc.com .
SigmaRoc plc Tel: +44 (0) 207
Max Vermorken / Garth Palmer 002 1080
Liberum Capital (Co-Broker & Nominated Tel: +44 (0) 203
Adviser) 100 2000
Nick How / Jamie Richards / Ben Cryer
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418
Mike Bell / Ed Allsopp 8900
Investor Relations Tel: +44 (0) 207
Dean Masefield / Elisa Frenay 002 1080
ir@sigmaroc.com
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