REG - SigmaRoc PLC - Acquisition of Johnston Quarry Group

SigmarocAnnouncement

04/01/2022 07:00

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RNS Number : 2535X  SigmaRoc PLC  04 January 2022

4 January 2022

 

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

 

SIGMAROC PLC

 ('SigmaRoc', the 'Group' or the 'Company')

 

Acquisition of Johnston Quarry Group

 

SigmaRoc plc (AIM: SRC), the AIM quoted quarried materials group, is pleased
to announce the acquisition of Johnston Quarry Group Limited ('JQG') and
Guiting Quarry Limited for an initial cash consideration of £35.5m (the
'Acquisition') from Nicholas Johnston, Giantflow Limited and Flowgiant Limited
(the 'Sellers').

 

JQG is a specialist quarried materials supplier producing construction
aggregates and premium quality building stone, as well as agricultural lime
for soil improvement. Its aggregate products are typically used in
infrastructure projects, with its unique Cotswolds Ironstone and Bath Stone
used in specified high end housing applications. The business operates eight
quarries and two separate processing sites located across the South West,
Oxfordshire and Lincolnshire. JQG has access to 86 million tonnes of freehold
and leasehold reserves and resources giving JQG an average life of mine of
over 40 years.

 

For the 12 months to 30 September 2021, JQG reported revenue of £14.7m,
generating EBITDA of £5.9m and £3.6m profit before tax. As at 30 September
2021, JQG had gross assets of £22.1m and net assets of £6.9m primarily in
land, mineral reserves and plant and machines. The Acquisition, which will be
immediately enhancing to SigmaRoc's underlying earnings, is expected to
complete in the next few weeks, following the satisfaction of certain
completion conditions. On completion of the Acquisition, Nicholas Johnston,
JQG's founder, will remain available in an advisory capacity as required for
smooth integration. The Acquisition consideration will be funded from the
Group's existing resources, including the assumption of up to £6m of JQG's
long term debt and up to £3.6m in plant hire contracts.

 

As part of the Acquisition, SigmaRoc has also conditionally agreed to purchase
from the Sellers two further quarries, together with additional mineral
reserves, for a total potential consideration of £14.5m. These additional
sites have a strategically attractive location relative to JQG and will
increase the business' footprint and market access. The consideration for the
acquisition of these additional sites is payable in three phases, upon the
delivery of each of the two quarries and the delivery of the mineral reserves
with planning permission. The Group expects these additional transactions to
complete between H2 - 2022 and H2 - 2024.

 

 

David Barrett, Chairman of SigmaRoc, commented:

 

"Johnston Quarry Group fits the SigmaRoc model well and I believe the benefits
gained will be mutual. As a Group, we have focussed on building a portfolio of
high quality stand-alone businesses, to which we can add value through our
improvement and integration efforts, while maintaining those aspects of each
which are unique and successful. We look forward to welcoming the JQG team to
SigmaRoc and see significant potential to create value in this business over
time."

 

Max Vermorken, CEO of SigmaRoc, commented:

 

"Firstly, we welcome the JQG staff to SigmaRoc and look forward to supporting
them in growing and developing their very successful business. JQG is high
quality quarrying group, with an attractive geographic footprint and a product
range which offers both architectural and environmental benefits over
alternatives. The Acquisition extends our footprint significantly in several
key markets within the UK, while offering the opportunity for further
improvement and platform based synergies."

 

Market Abuse Regulation (MAR) Disclosure

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European (Withdrawal) Act 2018.

 

Information on the Company is available on its website, www.sigmaroc.com
(http://www.sigmaroc.com) .

 

 SigmaRoc plc                                             Tel: +44 (0) 207 002 1080

 Max Vermorken

 Strand Hanson Limited (Nominated and Financial Adviser)  Tel: +44(0) 207 409 3494

 James Spinney / James Dance / Rob Patrick

 Liberum Capital (Co-Broker)                              Tel: +44 (0) 203 100 2000

 Neil Patel / Jamie Richards / Ben Cryer

 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

 

 

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