REG - SigmaRoc PLC - Final Results and Notice of AGM
23/03/2022 07:00
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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 £272.0m £124.2m +118.9%
Underlying EBITDA £49.3m £23.9m +106.1%
Underlying profit before tax £26.8m £12.2m +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 €470 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."
END
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 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 / 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 £272.0 million and
Underlying EBITDA to £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 £200m 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 £272.0 million, up 119% year on year; Underlying EBITDA to
£49.3 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 £28.9 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 £29.9 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 £272.0 million,
delivering Underlying EBITDA of £49.3 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 £769.3 million, underpinned by over 1 billion tonnes of
reserves and resources, land, plant and machinery in strategic locations. Net
assets were £411.2 million following a refinancing of our debt facilities led
by Santander. At year-end the Group had access to a further £200 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 £70 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 £260 million in
equity and obtained access to £305 million in debt via a newly syndicated
banking facility.
In our 2021 financial year, the Group generated revenue of £272.0 million
(2020: £124.2 million) and Underlying EBITDA of £49.3 million (2020: £23.9
million). The Underlying profit before taxation for the Group for the year
ended 31 December 2021 was £26.8 million (2020: £12.2 million).
The statutory loss for the Company for the year ended 31 December 2021 before
taxation amounts to £26.3 million (2020: loss £5.8 million), which includes
£22.2 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
£'000 £'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 £29.5 million (2020: £28.5 million) with
a net increase in cash of £42.9 million (2020 net increase of £17.5
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 £6.1 million to £2
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 £26.3 million, of which
£22.2 million relates to non-underlying items, while the Group's
non-underlying items totalled £29.1 million for the year. These items relate
to six categories:
1. £1.9 million amortisation of acquired assets and adjustments to
acquired assets
2. £20.1 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. £3.1 million legal and restructuring expenses relating to the
rebranding and alignment of all subsidiaries across the Group.
4. £2.3 million in share based payments relating to grants of options.
5. £0.7 million on unwinding of discounts on deferred consideration
payments for CDH and CCP.
6. £1.0 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 £7.0 million (2020: £2.7 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 £4.7 million (2020: £0.7 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 £411.2 million (2020: £124 million). Net
assets are underpinned by mineral resources, land & buildings and plant
& machinery assets of the Group.
Cash flow
Cash generated by operations was £29.5 million (2020: £28.5 million). The
Group spent £350.9 million on acquisitions net of cash acquired and £22.6
million on capital projects. The Group raised £255 million net of fees
through the issue of equity and drew net borrowings of £138 million. The net
result was a cash inflow for the year of £42.9 million.
Net debt
Net debt at 31 December 2021 was £164.0 million (2020: £43.8 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 £305 million (the Debt Facilities) led by Santander UK and including
several major UK and European banks. The Credit Facility, which comprises a
£205 million committed term facility, £100 million revolving credit facility
and a further £100 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
£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 · board's oversight of climate-related risks and opportunities The Board has the highest level of responsibility for climate-related issues
and is supported by various committees including the Audit Committee, which is
· management's role in assessing and managing climate related risks responsible for monitoring ESG performance.
and opportunities
In 2021, the board agreed a road map to developing ESG through TCFD, SASB and
development of ESG targets.
Strategy · Climate-related risks and opportunities identification ESG is core in all of our key decision-making.
· climate-related risks and opportunities impacts Both the Board and management teams review where climate-related risks and
opportunities might occur, as well as their significance and connection to
· resilience of the organisation's strategy other risks.
This information allows us to challenge our strategy to ensure it is as
resilient as possible.
Risk Management · identifying and assessing climate-related risks Climate-related risks and opportunities are identified and managed both
locally and at Group level with our CTO coordinating all aspects.
· managing climate-related risks
The identification, assessment and effective management of climate-related
· integration into overall risk management risks and opportunities are actively discussed during Board and management
meetings.
Metrics and Targets · climate-related metrics To ensure meaningful and appropriate metrics and targets for our stakeholders,
we are adopting SASB recommended disclosures.
· Scope 1, Scope 2, and Scope 3 emissions.
We also comply with SECR, which is independently produced, and voluntarily
· climate-related targets 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 and ultra-low carbon 2025
Carbon Capture Storage and utilisation trial plant operational 2025
Alternative fuels used in mobile equipment 2030
Alternative fuels used in fixed equipment (e.g lime and asphalt) 2032
All kilns are carbon neutral 2038
Net Zero 2040
Energy intensity and efficiency 2.5% reduction in energy intensity 2030
100% third party energy sourced from renewable means 2030
Resource utilisation & circular economy 100% of all manufactured products can utilise waste / recycled materials* 2025
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 do Focus for 2022
Environment Sustainable use of reserves and resources; Achieve Net Zero road map targets First publication of net zero road map Development and implementation 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 do Focus for 2022
Social Ensure people leave work in the same or better condition than when they Total injury frequency rate and harm injury frequency rate reduction year on Achieved both total incident and harm incident reduction through continual focus on 3 key areas
arrived; year engagement and support, especially during unprecedent global times
Structure & Compliance by ensuring corrective actions properly closed out
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, retain, and engage our workforce; Increase workforce engagement and retention Climate survey conducted that has allowed each business to focus on key areas Continue to increase diversity to achieve >25% diversity on the board
UK Employee benefits reviewed and updated Increase relationships with education to promote our industry at ages where
career choices are being considered
Increase board diversity Increased female board diversity with the appointment of Axelle Henry
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 do Focus for 2022
Governance Promote QCA and Corporate Governance Codes; Formalise and implement ESG framework and structure The Board agreed to adopt the TCFD and SASB framework and guidelines which Collection of data for ongoing disclosure
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 (tCO₂e)
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 (CH₄ & N₂O) - - - 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 (CH₄ & N₂O) - - - 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 (£m) 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 of close to 2,000 across the Group. We recognise Site presence and visual felt leadership. Employee groups and committees and
our dedicated workforce as a key driver of the value derived from the unions. Focus on development training and succession planning. Decentralised
business. Our colleagues are experienced and continuously developed to fulfil approach with flat management allowing easy access to all staff. Employee
their potential. All employees are offered a fair benefits and compensation benefit offerings that can also extend to family members.
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 and Suppliers All our businesses are decentralised and locally focused so that we know the Prioritise a local focus on both customers and suppliers. Engage directly from
customers and suppliers areas like they do. We work alongside our customers to our sites so that the customer and supplier deal directly with the site they
provide "right first time" service and to seek proactive and innovative are supplying or buying from. Ensure timely payments are made to suppliers.
solutions to support requirements. "Right first time" is key to success and Functional and intuitive websites and digital solutions focused on the
ensuring customer loyalty as part of our long-term success. We recognise the customer. Ensure adequate checks and due diligence are done on customers and
huge role our suppliers play in its long-term success. We strive to ensure suppliers.
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 and local we are at the heart of the communities in Proactive approach and active participation in community and industry working
which we operate allowing us to be knowledgeable, good, supportive and groups, forums and committees.
engaging neighbours.
Investors All our Shareholders play an important role in the continued success of our Dedicated forums such as AGM, Annual and Interim Webinar Q&As. Annual and
business. We maintain purposeful and close relationships with them either interim reports, trading statements and RNS. Regular phone calls and
directly or via wider mediums such as Q&A webinars and when allowed, dialogues. Broker and NED contacts. Site visits, investor roadshows, investor
conferences. We seek to be transparent and give clear and consistent messages conferences.
across all communication channels.
Regulators / local Government We look to develop and sustain good relationships with many regulators who Regular dialogue with Governments, Government agencies, regulators, and
govern our businesses to ensure the success of our business and maintaining industry groups. Active membership of the industry bodies such Mineral
our license to operate. We are committed to adherence of legal and regulatory Products Association, Federation Industries Extractives and European Lime
requirements. We are committed to have independent review / oversight be it Association. Effective and clear policies to ensure governance. Education and
internally or externally. We are committed to a sustainability framework training of staff to reinforce compliance with regulations.
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 (http://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
£26.8 million (2020: £12.2 million) and Underlying profit after tax was
£22.1 million (2020: £11.5 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 Shares Options Ordinary Shares Options
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 YEAR ENDED 31 DECEMBER 2021
Year ended 31 December 2021 Year ended 31 December 2020
Underlying Non-underlying (Note 11) Total Underlying Non-underlying* (Note 11) Total
Continued operations Note £'000 £'000 £'000 £'000 £'000 £'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 32 5.37 (7.26) (1.89) 4.50 (1.95) 2.55
pence per share)
Diluted earnings per share attributable to owners of the parent (expressed in 32 5.02 (6.79) (1.77) 4.15 (1.80) 2.35
pence per share)
* 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 YEAR ENDED 31 DECEMBER 2021
Year ended 31 December 2021 Year ended 31 December 2020
Note £'000 £'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 2021 31 December 2020 31 December 2021 31 December 2020
Note £'000 £'000 £'000 £'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 £26.3
million (year ended 31 December 2020: £5.8 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 YEAR ENDED 31 DECEMBER 2021
Share Share premium Share option reserve Other reserves Retained earnings Total Non-controlling interest Total
capital
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'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 YEAR ENDED 31 DECEMBER 2021
Share Share premium Share option reserve Other reserves Retained earnings Total
capital
Note £'000 £'000 £'000 £'000 £'000 £'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 YEAR ENDED 31 DECEMBER 2021
Consolidated Company
Year ended 31 December 2021 Year ended 31 December 2020 Year ended 31 December 2021 Year ended 31 December 2020
Note £'000 £'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) (6,971) 6,511 (26,290) (5,484)
Adjustments for:
Depreciation and amortisation 16 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
£42.7 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') in 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 as Current or Non-Current. 1 January 2023
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 £000'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 £6.1 million to
£2 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 vehicles 7.5% - 33.3%
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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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.
2021 1-12 months 1-2 years 2-5 years More than 5 years
Contractual cash flows £'000 £'000 £'000 £'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 2021 31 December 2020
£'000 £'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 £293 million as at 31 December 2021 (31
December 2020: £39.9 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: £nil). 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 £4.3 million (31 December 2020: £0.9 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 £10m. The
estimated present value of these payments is £4.8m. 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 Kingdom Channel Islands Belgium Northern Europe Total
£'000 £'000 £'000 £'000 £'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 Kingdom Channel Islands Belgium Total
£'000 £'000 £'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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 £25.7 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 2021 31 December 2020
£'000 £'000
Fees payable to the Company's auditor and its associates for the audit of the 360 194
Company and Consolidated Financial Statements
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 300 24
diligence and transactional services associated with the readmission of the
Company trading on AIM
Fees paid to the Company's auditor for other services - -
660 227
9. Employee Benefits Expense
Consolidated Company
31 December 2021 31 December 2020 31 December 2021 31 December 2020
Staff costs (excluding directors) £'000 £'000 £'000 £'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 2021 31 December 2020 31 December 2021 31 December 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
Directors' fees Bonus Taxable benefits Pension benefits Options issued ((3)) Total
£'000 £'000 £'000 £'000 £'000 £'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
Directors' fees Bonus Taxable benefits Pension benefits Options issued ((3)) Total
£'000 £'000 £'000 £'000 £'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
£'000 £'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.
Income statement 31 December 2021 31 December 2020
£'000 £'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 (0.04) (0.04)
pence per share)
Cash movement 31 December 2021 31 December 2020
£'000 £'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 2021 31 December 2020
Tax recognised in profit or loss £'000 £'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 2021 31 December 2020
£'000 £'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 Tax losses Temporary timing differences Total
At 1 January 2021 402 1,010 1,412
Acquisition of subsidiary - 2,530 2,530
Charged/(credited) directly to (402) (411) (813)
equity
At 31 December 2021 - 3,129 3,129
Deferred Tax Liability Tax losses Temporary timing differences Total
At 1 January 2021 (128) 3,999 3,871
Acquisition of subsidiary - 2,070 2,070
Charged/(credited) directly to - (751) (751)
income statement
At 31 December 2021 (128) 5,318 5,190
Deferred income tax assets of £3.1 million (2020: £1.4 million) are
recognised to the extent that the realisation of related tax benefits through
future taxable profits is probable. Deferred tax liabilities of £5.2
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 Equipment Land and minerals Land and buildings Plant and machinery Furniture and vehicles Construction in progress Total
£'000 £'000 £'000 £'000 £'000 £'000 £'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 £6 million (2020: £1.4 million) and the net book value is £16.5
million (2020: £5.5 million).
Company
Office Equipment Land & Buildings Motor Vehicle Total
£'000 £'000 £'000 £'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 £13,314 (2020: £13,313) and the net book value is £225,459 (2020:
£27,737).
17. Intangible Assets
Consolidated
Goodwill Customer Relations Intellectual property Research & Development Branding Other Intangibles Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost & net book value
As at 1 January 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 £4.1m 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 £254.6m for the Nordkalk platform, £21.2m
for the PPG Platform, £7.6m for the Benelux platform, £5m for Dimension
Stone, £2.1m for the South Wales platform and £3m 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 2021 31 December 2020
£'000 £'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:
Name of subsidiary Country of incorporation Share capital held by Company Share capital held by Group Principal activities
SigmaFin Limited England £45,181,877 Holding company
Foelfach Stone Limited England £1 Construction materials
SigmaGsy Limited Guernsey £1 Shipping logistics
Ronez Limited Jersey £2,500,000 Construction materials
Pallot Tarmac (2002) Limited Jersey £2 Road contracting services
Island Aggregates Limited Guernsey £6,500 Waste recycling
Topcrete Limited England £926,828 Pre-cast concrete producer
A. Larkin (Concrete) Limited England £37,660 Dormant
Allen (Concrete) Limited England £100 Holding company
Poundfield Products (Group) Limited England £22,167 Holding company
Poundfield Products (Holdings) Limited England £651 Holding company
Poundfield Innovations Limited England £6,357 Patents & licencing
Poundfield Precast Limited England £63,568 Pre-cast concrete producer
Alfabloc Limited England £1 Dormant
CCP Building Products Limited England £50 Construction materials
Cheshire Concrete Products Limited England £1 Dormant
Clwyd Concrete Products Limited England £100 Dormant
Country Concrete Products Limited England £100 Dormant
CCP Trading Limited England £100 Dormant
CCP Aggregates Limited England £100,000 Construction materials
CDH Développement SA Belgium €23,660,763 Holding company
Carrières du Hainaut SCA Belgium €16,316,089 Construction materials
Granulats du Hainaut SA Belgium €62,000 International marketing
CDH Management 2 SPRL Belgium €760,000 Holding company
GDH (Holdings) Limited England £54,054 Construction materials
Gerald D. Harries & Sons Limited England £112 Construction materials
Stone Holding Company SA Belgium €100 Construction materials
Cuvelier Philippe SA Belgium €750 Construction materials
B-Mix Beton NV Belgium €680,600 Concrete producer
J&G Overslag en Kraanbedrijf BV Belgium €18,600 Concrete producer
Top Pomping NV Belgium €62,000 Concrete producer
Nordkalk Oy Ab Finland €1,000,000 Limestone quarrying and processing
Nordkalk AB Sweden €2,439,000 Limestone quarrying and processing
Kalkproduktion Storugns AB Sweden €293,000 Limestone quarrying and processing
Nordkalk AS Estonia €959,000 Limestone quarrying and processing
Nordkalk GmbH Germany €50,000 Limestone quarrying and processing
Nordkalk Sp.z o.o Poland €19,637,000 Limestone quarrying and processing
Suomen Karbonaatti Oy Finland €2,102,000 Limestone quarrying and processing
NKD Holding Oy Ab Finland €3,000 Holding company
Nordeka Maden A.S Turkey €1,020,000 Limestone quarrying and processing
Name of subsidiary Registered office address
SigmaFin Limited Suite 1, 15 Ingestre place, London, W1F 0DU
Foelfach Stone Limited Suite 1, 15 Ingestre place, London, W1F 0DU
SigmaGsy Limited Les Vardes Quarry, Route de Port Grat, St Sampson, Guernsey, GY2 4TF
Ronez Limited Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Pallot Tarmac (2002) Limited Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Island Aggregates Limited Les Vardes Quarry, Route de Port Grat, 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) Limited The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Products (Holdings) Limited The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Innovations Limited The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Precast Limited The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Greenbloc Limited The Grove, Creeting St. Peter, Ipswich, 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 SA Rue de Cognebeau 245, B-7060 Soignies, Belgium
Carrières du Hainaut SCA Rue de Cognebeau 245, B-7060 Soignies, Belgium
Granulats du Hainaut SA Rue de Cognebeau 245, B-7060 Soignies, Belgium
CDH Management 2 SPRL Rue de Cognebeau 245, B-7060 Soignies, Belgium
GDH (Holdings) Limited Rowlands View, Templeton, Narbeth, SA67 8RG
Gerald D. Harries & Sons Limited Rowlands View, Templeton, Narbeth, SA67 8RG
Stone Holding Company SA Avenue Louise 292, BE-1050 Ixelles, Belgium
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 BV Kanaalweg 110, B-3980 Tessenderlo, Belgium
Top Pomping NV Kanaalweg 110, B-3980 Tessenderlo, Belgium
Nordkalk Oy Ab Skräbbölentie 18, FI-21600, Parainen, Finland
Nordkalk AB Box 901, 731 29 Köping
Kalkproduktion Storugns AB Strugns, 620 34 Lärbro
Nordkalk AS Lääne-Viru maakond, Väike- Maarja vald, Rakke alevik, F.R Faehlmanni tee
11a, 46301
Nordkalk GmbH Innungsstrabe 7, 21244 Buchholz in der 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
Nordeka Maden A.S Levent MH.Cömert Sk. Yapi Kredi Blokl.c 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
£'000
Interests in associates 524
Interest in joint venture 5,134
5,658
Proportion of ownership interest held
Name Country of incorporation 31 December 2021 31 December 2020
NorFraKalk AS Norway 50% -
Summarised financial information
NorFraKalk AS - Cost and net book value 31 December 2021 31 December 2020
£'000 £'000
Current assets 10,184 -
Non-current assets 6,507 -
Current liabilities 3,989 -
Non-current liabilities 2,621 -
23,301 -
For the period 1 September 2021 to 31 December 2021 For the period 1 January 2020 to 31 December 2020
£'000 £'000
Revenues 5,694 -
Profit after tax from continuing operations 442 -
20. Trade and Other Receivables
Consolidated Company
31 December 2021 31 December 2020 31 December 2021 31 December 2020
£'000 £'000 £'000 £'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 2021 31 December 2020 31 December 2021 31 December 2020
£'000 £'000 £'000 £'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 2021 31 December 2020
Cost and net book value £'000 £'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 £10.8 million (31 December 2020: (£1.7 million)).
22. Cash and Cash Equivalents
Consolidated Company
31 December 2021 31 December 2020 31 December 2021 31 December 2020
£'000 £'000 £'000 £'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 2021 31 December 2020 31 December 2021 31 December 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 2021 31 December 2020 31 December 2021 31 December 2020
£'000 £'000 £'000 £'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 2021 31 December 2020 31 December 2021 31 December 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 2021 31 December 2020 31 December 2021 31 December 2020
£'000 £'000 £'000 £'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 £305 million (the 'Credit Facility') led by Santander UK and
including several major UK and European banks. The Credit Facility, which
comprises a £205 million committed term facility, a £100 million revolving
facility commitment and a further £100 million accordion option. This new
facility replaces all previously existing bank loans within the Group.
The Credit Facility is secured by a floating charge over the assets of
SigmaFin Limited, Carrieres du Hainaut and Nordkalk and is secured by a
combination of debentures, security interest agreements, pledges and floating
rate charges over the assets of SigmaRoc plc, SigmaFin Limited, B-Mix,
Carrieres du Hainaut and Nordkalk. Interest is charged at a rate between 1.85%
and 3.35% above SONIA ('Interest Margin'), based on the calculation of the
adjusted leverage ratio for the relevant period. For the period ending 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 2021 31 December 2020
£'000 £'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 2021 31 December 2020
Finance lease liabilities - minimum lease payments £'000 £'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 £1
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 2021 31 December 2020
£'000 £'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
Long-term borrowings Short-term borrowings Lease liabilities Liabilities arising from financing activities
£'000 £'000 £'000 £'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 2021 31 December 2020
£'000 £'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 £632,011 as a restoration provision for the
St John's and Les Vardes sites; £86,812 for the Aberdo site; £172,303 for
quarries in Wales; and £3.5m 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, £1.05m is to cover the loss on the Holcim contract
in CDH, £160,000 for legal fees, £1.62m for other restructuring costs in the
Nordkalk entities and £3m 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 £220k.
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 Financial Position 2021 2020
£'000 £'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 Position 2021 2020
£'000 £'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
Amounts recognised in the Income Statement 2021 2020
£'000 £'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 benefit obligation 2021 2020
£'000 £'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 in Equity 2021 2020
£'000 £'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 152 (74)
recognised income / (expense)
Movements in the net liability/(asset) recognised in the Statement of 2021 2020
Financial Position
£'000 £'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 £'000 £'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 £'000 £'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 £'000 £'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 £'000 £'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 £'000 £'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 £'000 £'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
31 December 2020
Company
Loans & receivables Total
Assets per Statement of Financial Performance £'000 £'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 £'000 £'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 shares Ordinary shares Share premium Total
£'000 £'000 £'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 £440,736
(2) Includes issue costs of £8,748,365
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 £252,849,890 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 2021 31 December 2020
Grant date Expiry date Exercise price in £ 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 A 2017 Options B 2019 Options C 2019 Options 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 £56,039 £234,854 £419,130 £729,632
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 average exercise price Weighted average exercise price
# £ # £
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 average valuation price Weighted average valuation price
# £ # £
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
Deferred shares Capital redemption reserve Revaluation reserve Foreign currency translation reserve Total
£'000 £'000 £'000 £'000 £'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
£6,971 million (2020: profit of £6,511 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 £6,971 million (2020:
£6,511 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
Fair value - Hedging instruments Fair value through P&L Fair value through OCI Financial asset at amortised cost Other financial liabilities Total Level 1 Level 2 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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 €355 million
(being €470 355 million (being €470 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 £297.8 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 £'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 £'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 €12.03 million (being €13
million less adjustments for various obligations assumed by the Group as part
of the acquisition) which translates to £10.2 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 £'000
Cash consideration 10,105
10,105
Recognised amounts of assets and liabilities acquired £'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 2021 31 December 2020
£'000 £'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
£326,821 (2020: £249,997) for the provision of corporate management and
consulting services to the Company until 31 August 2021, which included
£160,000 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 £35.1
million (being £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 £'000
Cash consideration 35,090
35,090
Recognised amounts of assets and liabilities acquired £'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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