REG - SigmaRoc PLC - Final Results and Notice of AGM
27/03/2023 07:00
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RNS Number : 2315U SigmaRoc PLC 27 March 2023
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
27 March 2023
SigmaRoc plc
('SigmaRoc', the 'Company' or the 'Group')
Audited full year results for year ended 31 December 2022
Notice of AGM
SigmaRoc (AIM: SRC), the quarried materials group, is pleased to announce its
audited results for the year ended 31 December 2022.
Underlying(1) results 31 December 2022 31 December 2021 YoY
change
Revenue £538.0m £272.0m +98%
EBITDA £101.7m £49.3m +106%
EBITDA margin 18.9% 18.1% +80bps
Net Margin(2) 21.8% 20.4% +140bps
Profit before tax £62.7m £26.8m +134%
EPS 8.0p 5.4p +49%
Net debt(3) £193.8m £164.0m +18%
Leverage Ratio(4) 1.77x 1.70x +5%
CCR 86.6% 60.0% +27ppt
Free Cash Flow(5) £54.3m £29.7m +83%
ROIC 10.7% 7.6% +310bps
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 Net Margin is EBITDA margin adjusted for impact of inflationary cost
pass-throughs, such as energy, materials, and distribution.
3Net debt including IFRS 16 lease liabilities.
4 Leverage Ratio takes Adjusted Leverage Ratio and excludes IFRS 16 related
lease liabilities.
5 Free Cash Flow takes net cash flows from operating activities and adjusts
for Maintenance CapEx, net interest paid, and net non-underlying expenses
paid.
6 Company compiled analyst consensus estimates as of 12 December 2022: revenue
of £512m, Underlying EBTIDA of £97m and Underlying EPS of 7p.
Financial highlights:
Record results, earnings enhancing acquisitions underpinned by organic growth
- Another year of strong delivery, with full year results ahead of
original expectations 6
- Organic LFL revenue grew by 19% and Underlying EBITDA by 9%
- Underlying EPS increased by 49% YoY
- Ongoing focus on efficiency, with £5m of annualised EBITDA
improvement initiatives delivered across the Group
Increased returns and strong financial position
- Strong cash generation with £54m Free Cash Flow and 87% Cash
Conversion Ratio supporting investment in bolt-on acquisitions and investment
for organic growth
- Adjusted Leverage Ratio comfortably below 2x target, despite
continued growth investment
- ROIC increased 310bps to 10.7%, with clear path to medium term
target of 15%
Operational and Strategic highlights:
Divisional structure
- New divisional structure implemented with regional head coordinating
activities of platforms captured within the region
- The Group's existing platforms are divided between the North West,
West and North East and the Group intends to report key financial and
performance metrics by region going forward
Growth
- LFL volume growth of 1%, despite softer demand conditions through
the year in certain markets
- Benefited from broad diversification in both end markets and
regions:
o West region volumes grew 11% LFL and Baltics Platform volumes grew 24% LFL
o Poundfield Products grew volumes by 8% LFL, helping offset softening
elsewhere in the PPG Platform
- Local focus, responsibility and commercial strategy supported market
share gains in all regions
- Sustainable products saw continued strong demand, with Greenbloc on
track to represent c.50% of PPG production by the end of 2023
Investment
- Successful integration of Nordkalk with synergies representing
annualised EBITDA contribution of €5m identified in the year
- Three acquisitions completed for a net initial cash consideration of
£44.6m with average multiple of 7x EBITDA funded from operational cash flow
- Investment to secure additional 216 million tonnes of high grade and
strategic Reserves and Resources, equating to >40 years of production
- Launch of JV with ArcelorMittal provides framework for expansion of
the Group's lime business in Europe and create a new net-zero producer
Execution
- Continued progress with safety initiatives - Total Incident
Frequency Rate (TIFR) and Serious Harm Injury Frequency Rate (SHIFR) improved
by 13% and 19%, respectively
- Aqualung partnership to launch carbon capture facility in the
Nordics with objective of de-carbonising all kiln operations
- Published maiden ESG report with net-zero target set for 2040
Annual General Meeting
SigmaRoc is also pleased to provide notice that its Annual General Meeting
('AGM') will be held on 25 April 2023 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 will be posted to shareholders today
and are available to view on the Company's website.
Change of Registered Office
SigmaRoc is also pleased to announce that it has changed its registered office
to 6 Heddon Street, London, W1B 4BT with immediate effect.
Max Vermorken, CEO, commented:
"2022 was an extremely challenging year from an operational and a commercial
standpoint. However, the Group delivered performance well ahead of
expectations and made enormous strategic progress, demonstrating the strength
of our operational model and management structure.
This exceptional year has given us the opportunity to get on the front foot
strategically at the start of 2023 with a robust pipeline of organic and
acquisition investments to support our organic growth and accelerate our
strategic goals.
We remain vigilant towards continued variable conditions across our end
markets, but we are confident that the Group can once again demonstrate its
resilience and achieve further strategic progress in 2023."
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 9.00 a.m.
A live webcast of the presentation including Q&A will be held today at
9.00am and will be available via our website at (https://harworthgroup.com/)
https://www.sigmaroc.com/ (https://www.sigmaroc.com/) or on
https://brrmedia.news/SigmaRoc_FY22 (https://brrmedia.news/SigmaRoc_FY22) .
This will be available for playback after the event.
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 by contacting info@sigmaroc.com.
---------------------------------------------------------------------------------------------------------------------------
For further information, please contact:
SigmaRoc plc Tel: +44 (0) 207 002 1080
Max Vermorken / Garth Palmer
Liberum Capital (Co-Broker & Nominated Adviser) Tel: +44 (0) 203 100 2000
Nick How / Jamie Richards / Ben Cryer
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418 8900
Mike Bell / Ed Allsopp
Investor Relations Tel: +44 (0) 207 002 1080
Dean Masefield / Elisa Frenay ir@sigmaroc.com
CHAIRMAN'S STATEMENT
2022 produced many new challenges for SigmaRoc to contend with and I am
pleased to report that the Group was able to meet those challenges and in
doing so surpassed our expectations for the year. We had to deal with
significant disruption to customers as a result of industrial action and plant
issues, volatile energy prices, uncertain energy supply dynamics and the
effects of the Russian invasion of Ukraine. In response to this, we were able
to identify and execute multiple initiatives, across the business, to enhance
growth and support returns. Our central team was able to find savings and
efficiency gains to compensate for unexpected breakdowns and union strikes.
Our commercial teams locally were able to deal with inflationary cost
pressures, leveraging the strategic location of our footprint and our customer
relationships. Our operators were able to react swiftly to an increasingly
challenging energy market, production requirements and customer demand. We are
pleased the quality of our operators, the inherent diversification in our
model and our strong local market positions have demonstrated their true value
in a time of rapid changes and numerous challenges.
Overview
Despite the aforementioned global and local challenges, the Group delivered a
strong operating performance in 2022, with volumes on average ahead across the
Group YoY by 1% on a LFL basis.
The Group is reporting 2022 revenue of £538.0 million, representing a 98% YoY
increase, and Underlying EBITDA of £101.7 million, being an uplift of 106%
YoY. Underlying profit before tax was £62.7 million and Underlying EPS was
8.0p representing a 49% improvement YoY. Revenue and Underlying EBITDA have
increased primarily due to the inclusion of Nordkalk which was acquired in
August 2021, together with the additions of Johnston and RightCast. On a LFL
basis, revenue and Underlying EBITDA grew by 19% and 9%, respectively, during
the year.
The strong trading performance and continuation of careful and effective cash
management strategies have led to a strong year end cash position of £68.6
million. While the Group has continued its investment led growth strategy with
the acquisitions of Johnston, RightCast and La Belonga, for a total initial
consideration of £44.6 million, the Group's Leverage Ratio at 31 December
2022 reduced to 1.77x, which is comfortably within our long term target range.
Continued focus on safety translated into further progress on safety reporting
and management. The Total Injury Frequency Rate (TIFR) recorded dropped by
13%, while the Serious Harm Incidents Frequency Rate (SHIFR) dropped by over
19% versus prior years; including both employees and contractors. Positive
reporting, including near hits and hazard and risk identification increased by
more than 70%. One positive engagement initiative, set up in Belgium in 2021,
has YoY resulted in an increased engagement of nearly 400% for near hits,
hazard, and risk identification and a subsequent reduction in SHIFR by 23%.
Governance
In April 2022 the Group published its first ESG report which contains
extensive detail on its Environmental, Social and Governance policies and
initiatives, as well as a detailed roadmap to net-zero. Further updates to
that report and the various initiatives that are underway across the Group are
provided in the ESG section of these Accounts.
Outlook
Trading in the early part of FY23 has been encouraging, with overall Group
performance for January and February in line with expectations. The Group has
made good progress in executing its capital investment pipeline, deploying
£12 million of the £30 million equity fundraise completed in February on two
businesses across Europe, with work ongoing to deploy the remainder and
execute on the pipeline.
I am very optimistic about the Group's prospects for 2023 and expect the Group
to deliver further improvement over what was a very successful 2022.
David Barrett
Executive Chairman
25 March 2023
CEO's STRATEGIC REPORT
2022 represented a real validation of our model as SigmaRoc delivered
significant financial and strategic progress, despite a volatile and at times
extremely challenging backdrop. Financially, the Group delivered significant
earnings growth, to over £100m of underlying EBITDA and 8p of Underlying EPS,
whilst retaining a strong balance sheet with leverage below 2.0x.
Operationally, we have enhanced safety metrics and customer service levels,
together with making sector leading progress on sustainability initiatives
across the product range and asset base. Strategically, we have managed the
successful integration of the transformational Nordkalk business and completed
four further, earnings enhancing, transactions and reserve extensions in key
locations. These achievements reinforce our belief that the businesses that
form this Group and the more than 2,000 people that work for them, are of
exceptional quality. This is particularly true of the operational and sales
staff who, across the Group, had to contend with a series of acute challenges
ranging from rapid cost inflation, energy availability and supply chain
disruption. It is also true of the various support teams, who in a complicated
year managed to keep the ship on course to deliver on all priorities we set
well before 2022 started.
The content of this Annual Report therefore aims to highlight three key
aspects of our model. First, that there continues to be significant
opportunity to develop the Group, both organically and inorganically, across
each of the platforms and that we have evidenced this potential again in a
year of significant head winds. Second, that the diversified nature of our
geographic footprint, end markets and product base, combined with the ability
to implement high impact improvement programmes, has created real resilience
in our trading performance. Thirdly, that these characteristics have enabled
us to set challenging but attainable mid-term strategic goals, both financial
and ESG focussed, which represent significant value creation potential for all
our stakeholders. These goals are set out below and the potential of the Group
and our confidence in achieving these goals are considered in more detail in
the sections that follow.
Strategic development
Following a year of transformational investment in 2021, which included the
acquisition of Nordkalk together with B-Mix and the establishment of the
Benelux Platform, the Group made further significant strategic development in
2022. In total, the Group deployed c.£44.6m across three acquisitions which
brought annualised revenues of c.£24.5m and EBITDA of c.£7.3m. The
acquisitions were completed on attractive terms, in line with SigmaRoc's
strict financial criteria, which represented an average EBITDA multiple of
c.6x. The team expect to realise synergies and productivity gains at each of
the acquired businesses which will support increasing returns on the invested
capital over time.
Together with financial benefits, the Group's investment activities have
further enabled the delivery of its long term growth ambitions through the
enhancement of the asset base and commercial infrastructure. In aggregate,
investment activities in 2022 added c.216 million tonnes of high quality
reserves across the Group. In addition, the establishment of a strategic JV
with ArcelorMittal provides a framework to accelerate the growth of the
Group's lime business across continental Europe.
At the end of January 2022, the Group acquired Johnston for an initial cash
consideration of £35.5 million and deferred consideration of £8.5 million.
Johnston is a specialist quarried materials supplier producing construction
aggregates and premium quality building stone, as well as agricultural lime
for soil improvement. Its aggregate products are typically used in
infrastructure projects, with its unique Cotswolds Ironstone and Bath Stone
used in specified high end housing and architectural applications. The
business operates five active quarries and three mines and two separate
processing sites located across the south-west of England, Oxfordshire and
Lincolnshire. Johnston has access to 86 million tonnes of freehold and
leasehold reserves and resources giving JQG an average life of mine of over 40
years.
For the 12 months to 30 September 2021, Johnston reported revenue of £14.7
million, generating EBITDA of £5.9 million and profit before tax of £3.6
million. The acquisition was funded from the Group's existing resources,
including the assumption of approximately £11.0 million in borrowings
comprising long term debt and plant hire contracts.
In April 2022, the Group acquired RightCast for an initial cash consideration
of £2.5 million with a further £0.5 million deferred consideration payable
in 12 months subject to certain conditions. RightCast is a precast concrete
producer specialising in the production of concrete stair flights and
landings.
For the 12 months ended 31 October 2021, RightCast reported revenue of £3.1
million, generating EBITDA of £0.6 million and profit after tax of £0.5
million. The acquisition was funded from the Group's existing resources and
RightCast has been integrated into the PPG platform. RightCast brought with it
a strong pipeline of work, well established team and complimentary product
offering to PPG.
In September 2022 the Group entered into a strategic JV agreement with
ArcelorMittal to create a new net-zero European lime producer. The JV will be
located close to Dunkirk's harbour and ArcelorMittal's steelworks, with
ArcelorMittal being the main consumer of the lime produced. To reduce CO(2)
emissions, the lime production process will use heat recovered from the
ArcelorMittal steelworks plant and biofuels rather than natural gas. The
location of the operations will allow the JV to be part of the Dunkirk CO(2)
hub. The combination of these CO(2) reduction initiatives will enable the JV
to offer net-zero lime.
Under the terms of the JV agreement, each of SigmaRoc and ArcelorMittal will
take a 47.5% ownership stake. In the first phase of roll out, the new JV
company will be responsible for the construction of three new lime kilns in
Dunkirk. Initial planning has commenced on permitting and kiln specification
for these operations, with final permitting approval expected toward the end
of 2023 and commissioning in 2025. Long term supply and offtake agreements
will be entered into between the JV partners.
In order to supply the new lime kilns in Dunkirk, in July 2022 La Belonga was
acquired. La Belonga is a limestone quarry located in the north of Spain with
60 million tonnes of reserves and resources and potential for a further 120
million tonnes, subject to permitting. La Belonga is strategic to the Group as
it is a large reserve of high quality limestone, possessing high calcium oxide
and low sulphur content, which is suitable for use in the steel industry, and
is located close to the Gijon port providing export opportunities into the
Group's European operations.
La Belonga was acquired for an initial consideration of €2.2 million with a
further €1.3 million of deferred consideration. For the 12 months ended 31
December 2021, La Belonga reported revenue of €3.5 million, EBITDA of €0.5
million and profit after tax of €0.2 million.
Development of the 2 million tonne quarry extension in Jersey, which was
consented in 2021, has progressed well, with sales of product from the
extended area already underway. In Guernsey, the planning application to
develop a greenfield quarry at Chouet Headland was unanimously approved by the
Guernsey Development & Planning Authority in October 2022. With current
reserves providing a further 7-8 years of production, this approval secures
the supply of Ronez value added product streams and the external construction
market in Guernsey for the next 20 years.
In Poland, a new limestone deposit was opened, with planned reserve extensions
expected to add a total of 35 million tonnes to the Group's reserves and
resources.
In Belgium, quarry extension works are on track at Soignies with construction
of the new road around the extension area progressing well, which has enabled
excavations of overburden to start.
Operations and trading
Group structure:
Following the substantial expansion and development of SigmaRoc in 2021, with
the acquisition of Nordkalk, the Board determined that the Group's
platform-based model could be enhanced through the overlay of an overarching
regional structure. The platform model has proven effective, ensuring the
Group remains locally focussed and agile, with the regional overlay supporting
the Group's new expanded footprint and providing a strong foundation for
further growth and expansion. This new regional structure will provide the
basis for divisional reporting going forward.
Each region has a Managing Director and Financial Director who are responsible
and accountable for overseeing performance, steering development, and driving
growth. While these roles and responsibilities are new, the people occupying
them are not. They are either MDs and FDs of existing platforms within the
region, taking on a larger remit but retaining their prior responsibilities,
or they are incumbents in the role (but with a new title) and the organisation
beneath them has been reorganised, such is the case with Nordkalk.
The new regional structure aligns the Group as follows:
Region MD FD Countries Platforms
North West Michael Roddy Michael Crump UK PPG
Channel Islands England
Wales
Channel Islands
West Emmanuel Maes Dean Masefield Belgium Dimension Stone
Netherlands Benelux
Luxembourg
Northern France
North East Paul Gustavsson Marcel Gestranius Finland Quicklime
Sweden Nordics
Poland Poland
Norway Baltics
Estonia
Latvia
Lithuania
Spain(1)
( )
(1) La Belonga was acquired by Nordkalk and currently reports into the North
East region, this will be reviewed as the Group develops.
Market dynamics:
The Group benefits from broad diversification across products, end markets and
geography.
Approximately 44% of Group Revenue is derived from industrial mineral markets,
which have seen resilient demand, supported by the following structural
drivers:
- Environmental, Agriculture and Chemical (20% of Group Revenue):
Continued good structural demand pull through, with additional, ongoing
substitution by customers of materials previously sourced from Russia.
- Pulp, Paper & Board (14% of Group Revenue): Order books continue
to replenish at historically high rates, with underlying demand from pulp
customers increasing as part of the transition in packaging materials away
from plastic and with the Group also benefitting from an increasing switch by
customers to our products.
- Metals & Mining (10% of Group Revenue): Order intake remains
stable, despite lower European steel production in the second half of the
year, with the Group able to sell product into a range of alternative local
industrial markets.
The remaining 56% of Group revenues are derived from construction markets,
with over half of this from infrastructure applications which have continued
to see robust demand:
- Infrastructure (32% of Group Revenue): Robust demand across the UK
and European platforms, underpinned by customer guided volumes into 2023 as
well as significant project wins.
- Residential (25% of Group Revenue): Robust orderbooks in commercial
markets and high specification products, including the Greenbloc range,
offsetting low exposure to softening UK RMI market (total UK residential
exposure is approximately 8% of Group Revenues).
The Group's sustainable product offering has been a contributing factor to the
substantial growth in the PPG Platform over the past two years, with Greenbloc
helping secure tier 1 building contractors as part of the customer base. From
2020 to 2022, the PPG Platform grew revenue by 48% and Underlying EBITDA by
65%.
Trading performance:
The business overall performed ahead of Board expectations in 2022, which
enabled the Group to more than offset c.£5m of profit headwind in Q1 arising
from a combination of industrial action and other customer disruption.
North West
In the Channel Islands phasing of significant construction projects created a
modest decline in volumes for the year, however this was offset by operational
cost improvements derived from productivity gains resulting from investment in
plant & machinery and strategic procurement of raw materials, combined
with efficient hedging. This enabled the Channel Islands to meet its targets
for the year, growing EBITDA by 5%.
PPG continued its strong performance through the year. Demand in the first
half was consistent across the platform and cost inflation was effectively
passed-on through regular price increases. In the second half, a slight
slowing in demand at CCP and Allen was offset by a very busy bespoke projects
division at Poundfield and strong trading at RightCast. Poundfield had a
record year, increasing revenue by 39% YoY.
At Johnston, construction aggregate demand from the Lincolnshire quarries was
subdued as large infrastructure projects were delayed but this was offset by
strong demand for agricultural lime. Performance post-acquisition was further
improved through the integration process, including a review of operating
costs and savings from utilisation of Group supply chains.
Revenue for Harries was strong throughout the period, but margin performance
was impacted in January and February as a result of equipment issues which
increased maintenance and plant hire costs. This was recovered by improved
margins through a combination of premium aggregate product sales and operating
cost efficiencies, which translated into an increase in EBITDA of 25% YoY.
West
Dimension Stone had another strong year of trading through 2022, with an
exceptionally strong order book translating into high volumes. Inflationary
input cost pressure was mitigated by regular price increases, and we further
benefitted from very good electricity generation from a new solar panel
installation. Commercial highlights for the year included the specification of
Bluestone for new offices at Euralille in Lille, development around Penn
Station New York, modernisation of Leuven railway and city centres of
Charleroi and Gembloux.
Our Benelux platform performed ahead of expectations. B-Mix had a very strong
year with volumes ahead of budget translating into strong EBITDA growth.
Cuvelier was in line with expectations and while GduH was behind on volumes
for much of the year, strong volumes in November and December combined with a
contractual take-or-pay adjustment translated into results ahead of
expectation.
North East
Nordkalk faced particularly challenging conditions in the early part of the
year, including:
· The Russian invasion of Ukraine displacing three employees and
their families;
· Significant energy cost increases and concern over supply
arrangements;
· Union strike at UPM in Finland which persisted for almost 4
months; and
· Unexpected plant shutdown at customer, SSAB, in January.
Through active collaboration between SigmaRoc technical teams and the regional
teams within Nordkalk, many of the challenges were met head-on. Further
savings were found across the Group and Nordkalk's commercial teams were able
to manage the inflationary pressure well through a combination of hedging and
dynamic pricing. The impact from customer interruptions was successfully
mitigated through the implementation of cost saving programmes across the
Group combined with catchup demand through the remainder of the year. In
response to the Ukraine conflict, Nordkalk staff in Poland were very active in
assisting our Ukrainian staff and their families to relocate to safety when
possible, with those who had to remain in Ukraine being located near the
Polish border. As a result, Nordkalk had a strong 2022 in ways beyond the
purely financial.
Financial performance
The Group delivered an excellent financial performance for the year, which was
ahead of both the Board's and market expectations. Reported revenues were
£538.0 million, delivering Underlying EBITDA of £101.7 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, as at 31 December 2022, gross assets were
£906.1 million, underpinned by over 1.6 billion tonnes of reserves and
resources, land, plant and machinery in strategic locations. Net assets were
£469.9 million. At year-end the Group had access to a further £173.0 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 Adjusted Leverage Ratio
stood at 1.93 with cash at £68.6 million.
ESG, Safety and Innovation
ESG:
In April 2022 the Group published its first ESG report which contains
extensive detail on its Environmental, Social and Governance policies and
initiatives, as well as a detailed roadmap to net-zero. The report provides
further detail on a large number of initiatives already in place across the
Group to manage its energy use and sourcing, as well as accelerate its
successful track record in innovation to both meet demanding ESG targets and
further enhance competitiveness. In summary of the ESG report, we aim to:
· provide the 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.
We are not aware of any other operator in the lime sector having 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.
More specifically, feasibility studies have been initiated across the Group to
further increase green energy sourcing. These include new wind and solar
installations and further increases of existing solar capacity on site at
Soignies.
In West Wales, Harries contributed to a successful "nappy-enhanced" asphalt
trial, whereby 2.4km of roadway was surfaced using asphalt that contained
recycled nappies. The fibres from the nappies improve binding of bitumen with
aggregate, resulting in a more durable road surface which is expected to
remain in situ for up to 20 years while also providing reduced road noise.
As part of our commitment to employees as well as their families and the
communities they love and work in, West Wales held a Family Fun Day with over
200 people attending. This was an opportunity for everyone to come together,
have fun and relax as well as raise money for local charities with additional
support from other local businesses.
Furthering our governance initiatives, Julie Kuenzel was appointed as Company
Secretary in September 2022. Julie holds a Bachelor of Commerce Degree, is a
Chartered Accountant and working toward membership with the Chartered
Governance Institute UK & Ireland. Julie has over 20 years' experience
working in a wide range of industries in senior management positions. More
recently, Julie has been focussed on providing financial and corporate
governance advice to listed companies. Julie replaced Westend Corporate, who
remain as the Group's financial accountants. Julie's appointment bolstered the
Group's already strong corporate governance function, and she reports to the
Board on all compliance related matters.
In April 2022, Axelle Henry joined the Board as an independent NED. Ms Henry
brings significant financial skill to the Group given her role as CFO of a
major investment fund and also adds fresh perspective to the Board with her
knowledge of sectors which are more brand and innovation oriented.
To support both our businesses and our communities, we are continuing to
develop our working relationships with the military and military employment
charities and are registered with the Career Transition Partnership. We will
help facilitate resettlement and transition from military to civilian life as
well as support civilian spouses and partners of serving and ex-Forces
personnel on their journey into employment.
Across all our platforms, our business model of local business for local
communities ensures that we continue to integrate into the areas we work,
supporting both other local businesses, projects, and communities.
Safety:
The Group has continued to progress and improve its safety culture in 2022 by
focusing on 3 key areas:
1. Structure & Compliance by ensuring corrective actions are properly
closed out and on time;
2. Proactive Prevention by focusing on each businesses' 3-5 core risks;
and
3. Learn & Improve through thorough investigations and timely
communication.
We are pleased to report a 13% YoY reduction in incident frequency rate; 19%
reduction in serious harm frequency rate and over 70% YoY increase in near
hit, hazard and risk reporting, taking into account all those that work on our
sites, employee and contractors alike. With the addition of three new
businesses during the year the Group has leveraged its established health
& safety tools and procedures, including the internally developed safety
management system HighVizz which has helped increase reporting, decrease
incidents, and improve safety awareness and culture.
Innovation:
In November 2022 we announced our partnership with Aqualung to construct
Europe's first industrial scale carbon capture facility in Scandinavia, with
the objective of rolling out across the Group's entire kiln network and
capture all kiln process emissions by 2030.
The market reaction to Greenbloc has surpassed our expectations. We have
invested significantly in our own manufacturing facilities to keep pace with
demand, while the PPG platform has also acquired and developed additional UK
sites to facilitate the development and manufacture of ultra-low carbon
construction products that go beyond concrete blocks.
From the start of this year every product currently manufactured by SigmaRoc's
PPG platform is now available in a cement-free ultra-low carbon option. 2023
will see up to 50% of all products produced across the PPG platform falling
under Greenbloc low carbon alternative ranges.
Our strategic collaboration agreement with Marshalls, which was established on
the back of our leadership in the market with Greenbloc, accelerated during
2022. We have multiple workstreams focusing on pushing existing technologies
to their limits while also developing new manufacturing techniques. Together
with Marshalls, we remain committed to improving how concrete is specified
within the build environment and reducing its carbon footprint significantly.
In the Channel Islands all ready-mix concrete and concrete products are now
offered with a low carbon cement blend option, and the ultra-low carbon
offering for ready-mix concrete is gathering traction in the market.
Post period announcements
In February 2023 the Company successfully completed a £30 million fundraise
to part fund ten potential near term strategic acquisition opportunities and
four organic growth and carbon footprint reduction projects. Collectively, the
strategic acquisitions and the organic growth investments are anticipated,
should they all complete, to generate, net of proposed divestments,
approximately £42 million of revenue, £10 million of EBITDA and profit after
tax of £6 million on an annualised basis.
In March 2023 the Company announced completion of the following acquisitions,
which form part of the near term strategic acquisition opportunities announced
in February 2023, for an aggregate consideration of £12 million:
(a) Goijens, a leading supplier of ready-mixed concrete and pumping
solutions, located in the north east of Belgium. Goijens operates two concrete
plants and concrete recycling facilities, as well as pumping and other
services. Its footprint, located in the north east of Belgium on c.10 acres of
freehold land, is highly complementary to the Benelux Platform, which is
expected to enable commercial and operational synergies, as well as a swift
integration into the Group; and
(b) Juuan Dolomitik, a specialist supplier of high quality dolomitic
limestone, used in agricultural and environmental sectors to improve
regulation of soil pH and water retention. JD's operations are located close
to the Group's existing Finnish business and represent a valuable extension
into dolomitic limestone, adding approximately 1.5 million tonnes of reserves,
equating to roughly 30 years of operating life.
Additionally in March 2023, the Company announced that it had been successful
in its claim to seek compensation from the Swedish state in respect of land
use restrictions. The verdict, pronounced on 14 March 2023, made an award to
Nordkalk in compensation for economic loss, of which a sum of c. SEK 188
million (c. £17 million) that is to be adjusted for inflation and interest
until payment is made, is receivable by the Group as its share. The verdict is
subject to appeal until 4 April 2023 and receipt of funds remains subject to
the outcome of any appeal, if lodged.
Forward look
The Group has started 2023 positively, trading broadly in line with
expectations, supporting a cautious level of optimism for the remainder of the
year. Whilst the significant reduction in energy prices in the UK and Europe
has improved the demand outlook for many of the sectors we supply, we continue
to see variable conditions across our end markets, with recovering demand and
structural drivers in a number of segments offsetting continued subdued
activity in others.
Notably, we have seen stronger than expected demand from European steel
customers as a result of more benign energy conditions and our infrastructure
construction pipeline remains healthy in all jurisdictions. Set against this,
residential construction demand in the UK, and to a lesser extent Sweden and
Finland, remains softer, although this represents c.10% of Group revenue.
We have continued to price dynamically, pass through inflationary cost
increases and utilise hedging, and operational execution has remained strong,
enabling the Group to deliver further efficiency, improvement and cost saving
programmes.
The Group's pipeline of organic and acquisition investment opportunities is
very robust, with the proceeds of the equity fundraising in February enabling
the Group to execute on multiple value accretive projects in 2023 and toward
the end of the year the Group will have generated c.£50 million in FCF with
headroom to support further capital deployment.
The Group has a clear set of strategic priorities which support sustainable
organic growth, robust margins, strong cash generation and expanding ROIC. Our
broad footprint, product set and end market representation provides numerous
avenues through which to accelerate delivery through further investment and a
market leadership position in sustainability.
I am therefore confident in the Group's ability to deliver another exceptional
year of growth and development.
This report was approved by the Board on 25 March 2023.
Max Vermorken
Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REPORT
I am pleased to report another strong year financially for the Group, where we
exceeded expectations despite considerable challenges in the operational and
market backdrop. We were able to more than offset these headwinds through a
combination of volume outperformance in the less impacted parts of the Group,
dynamic pricing, effective hedging, and numerous operational improvement
programmes and cost saving initiatives.
For the year ending 31 December 2022, the Group generated revenue of £538.0
million (2021: £272.0 million) and Underlying EBITDA of £101.7 million
(2021: £49.3 million). Underlying profit before taxation for the Group was
£62.7 million (2021: £26.8 million).
The statutory loss for the Company for the year ended 31 December 2022 before
taxation amounts to £24.4 million (2021: loss £26.3 million), which includes
£10.2 million of non-underlying expenses primarily pertaining to non-cash
share option expense, amortisation of finance costs, and M&A related cash
fees.
The Board monitors the activities and performance of the Group on a regular
basis and 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.
2022 2021
£'000 £'000
Cash and cash equivalents 68,623 69,916
Revenue 537,993 271,986
Underlying EBITDA 101,723 49,262
Capital expenditure 51,008 22,555
Cash generated from operations was £87.7 million (2021: £29.5 million) with
a net decrease in cash of £4 million (2021 net increase of £42.9 million)
after spending £43.3 million on acquisitions net of cash acquired and £40.8
million in net capital expenditure.
Revenue and Underlying EBITDA exceeded expectations and management forecasts.
Capital expenditure relates to purchases of land & minerals, new plant
& machinery, and improvements to existing infrastructure across the Group.
PPA
BDO UK LLP undertook the PPA exercise required under IFRS 3 to allocate a fair
value to the acquired assets of B-Mix and Nordkalk.
The PPA process resulted in a reduction of goodwill recorded on the Statement
of Financial Position of the Group for Nordkalk from £268.8 million to £35
million. The reduction was to transfer the value of goodwill to tangible
assets for plant and equipment, land and buildings, land and mineral reserves,
intangible assets and deferred tax assets.
Non-underlying items
The Company's loss after taxation for 2022 amounts to £24.4 million, of which
£10.2 million relates to non-underlying items, while the Group's
non-underlying items totalled £20.0 million for the year, of which £13.1
million, representing over 65%, are non-cash and non-tax deductible. These
items relate to nine categories:
1. £6.7 million amortisation of acquired assets and adjustments to
acquired assets, which has increased by £5.0 million resulting from the
Nordkalk PPA adjustment.
2. £4.7 million in share-based payments relating to grants of options,
including £0.5 million pertaining to option revaluations resulting from
changes to exercise dates.
3. £3.5 million in exclusivity, introducer, advisor, consulting, legal
fees, accounting fees, insurance and other direct costs relating to
acquisitions. During the year the Group acquired Johnston, RightCast, La
Belonga and entered into the ArcelorMittal joint venture. The Group also
undertook extensive due diligence on over 20 other potential transactions,
some of which were completed, and others which are expected to complete, post
year-end.
4. £1.8 million legal and restructuring expenses relating to the
reorganisation and integration of recently acquired subsidiaries, including
costs associated with discontinuing sites and operations, transitional salary
costs, redundancies, severance and recruitment fees, and costs associated with
financial reporting and system migrations.
5. £1.1 million on amortisation of finance costs arising from the
syndicated 5-year debt facilities established in July 2021.
6. £0.9 million in stamp duty and other taxes, primarily relating to
taxes paid in relation to the acquisition of 11 hectares of land in Belgium.
7. £0.5 million on expenses relating to innovation and sustainable
practices, including continued development of Greenbloc, alternative
carbon-free cement solutions, Aqualung carbon capture technology and
utilisation of alternative fuels.
8. £0.4 million on unwinding of discounts on deferred consideration
payments for Harries.
9. £0.4 million in other exceptional costs which primarily relate to
non-cash balance sheet adjustments.
Interest and tax
Net finance costs in the year totalled £10.4 million (2021: £7.0 million)
including associated interest on bank finance facilities, as well as interest
on finance leases (including IFRS 16 adjustments) and hire purchase
agreements.
A tax charge of £9.1 million (2021: £4.7 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 4.89 pence (2021: loss of 1.89 pence) and
Underlying basic EPS (adjusted for the non-underlying items mentioned above)
for the year totalled 8.03 pence (2021: 5.37 pence).
Statement of financial position
Net assets at 31 December 2022 were £469.9 million (2021: £411.2 million).
Net assets are underpinned by mineral resources, land and buildings and plant
and machinery assets of the Group.
Cash flow
Cash generated by operations was £87.7 million (2021: £29.5 million). The
Group spent £43.3 million on acquisitions net of cash acquired, £51.0
million on capital projects, raised £9.2 million through the disposal of
surplus land holdings, and drew net borrowings of £5.8 million. The net
result was a cash outflow for the year of £4 million.
Net debt
Net debt at 31 December 2022 was £193.8 million (2021: £164.0 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 £405 million (the 'Debt Facilities') led by Santander UK and including
several major UK and European banks. The Debt Facilities, 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 Debt Facilities have a maturity date of 15 July 2026 and are
subject to a variable interest rate based on SONIA/EURIBOR plus a margin
depending on Underlying EBITDA. As at 31 December 2022, total undrawn
facilities available to the Group via the new Debt Facilities amounted to
approximately £173 million.
The Group's 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 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 3.25x in 2022. As at 31 December 2022, the Group
comfortably complied with its bank facility covenants.
Capital Allocation
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 2021: nil).
Post Balance Sheet event
Post 2022 close we have conducted a series of activities worthy of mention in
this Annual Report.
This report was approved by the Board on 25 March 2023 and signed on its
behalf.
Garth Palmer
Chief Financial Officer
ESG REPORT
SigmaRoc has and will always be committed to the principles of ESG. ESG
encompasses a company's Environmental, Social and Governance aspects, however
there is no global definition with each company and sector potentially having
different focus priorities.
Following on from our 2021 annual report and standalone annual 2021 ESG
Report, we continue to commit to reporting and disclosure of ESG and
sustainability matters through frameworks such as TCFD and SASB. During 2022,
we have extended our pledge by committing to Science Base Target Initiatives
(SBTi).
1.1. Frameworks
TCFD & SASB
The Group's ESG report has been guided using the principles of TCFD and SASB.
Whilst TCFD recommendations serve as a global foundation for effective
climate-related disclosures, in terms of disclosure, the Group has adopted,
where possible, the SASB Construction Materials disclosure topics and
accounting metrics.
SASB standards represent a clear solution to TCFD implementation having
rigorously developed TCFD-aligned reporting tools to promote disclosures in a
way that is both cost-effective and useful for all stakeholders.
As of August 2022, the International Sustainability Standards Board (ISSB) of
the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB
has committed to build on the industry-based SASB Standards and leverage
SASB's industry-based approach to standards development and encourages
preparers and investors to continue to provide full support for and to use the
SASB Standards until IFRS Sustainability Disclosure Standards replace SASB
Standards.
ISSB in 2022 published exposure drafts consolidating content from the TCFD,
CDSB, SASB, Integrated Reporting, and WEF IBC's stakeholder capitalism metrics
into a coherent whole with the intention to become the global standard-setter
for sustainability disclosures for the financial markets.
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.
SBTi
Science-based targets provide a clearly defined pathway for companies to
reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of
climate change and future-proof business growth. They show organisations how
much and how quickly they need to reduce their greenhouse gas (GHG) emissions.
Through the 2015 Paris Agreement, world governments committed to curbing
global temperature rise to well-below 2°C above pre-industrial levels and
pursuing efforts to limit warming to 1.5°C. In 2018, the Intergovernmental
Panel on Climate Change warned that global warming must not exceed 1.5°C to
avoid the impacts of climate change. To achieve this, global GHG emissions
must halve by 2030 - and drop to net-zero by 2050.
Targets are considered 'science-based' if they are in line with what the
latest climate science deems necessary to meet the goals of the Paris
Agreement.
As we continue our commitment to net zero, SBTi is a global body enabling
businesses to set ambitious emissions reductions targets in line with the
latest climate science.
There are 5 stages of SBTi:
1. Commit: Register online and submit a letter to commit to setting a
science-based target, or to have existing targets independently verified.
2. Develop a target: Develop target(s) in line with SBTi science-based
criteria.
3. Submit target for validation: Review of targets by SBTi team of
technical experts to validate it against our science-based criteria.
4. Announce target and inform stakeholders: SBTi will publish targets on
their Companies Taking Action Page.
5. Disclose progress: Disclose company's emissions annually and monitor
progress on reaching target.
1.2. ESG Road Map and 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 and seize opportunities 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.
1.2.1. Road Map to Net Zero
ESG Subject Target Date Progress to date
Environment Carbon All concrete products available in low carbon and ultra-low carbon. 2025 50% of concrete products available in low carbon and ultra-low carbon.
Carbon capture storage and utilisation trial plant operational. 2025 First module ordered and due for commissioning in April 2023.
Alternative fuels used in mobile equipment. 2030 Trials with alternative fuels for fleet and electronic fleet and mobile
equipment.
Alternative fuels used in fixed equipment (e.g. lime and asphalt). 2032 Upgrade of fuel handling systems and burners underway in Nordkalk for the use
of alternative fuels.
All kilns are carbon neutral. 2038 Aqualung agreement signed that will look to have all kilns carbon neutral by
2030.
Net-zero. 2040
Energy intensity and efficiency 2.5% reduction in energy intensity. 2030
100% third party energy sourced from renewable means. 2030 Site and Virtual PPA under review across each business with some businesses
already expanding their renewable energy sources.
Resource utilisation and circular economy 100% of all manufactured products can utilise waste / recycled materials 1 2025 Products such as asphalt, concrete, and concrete products are already using,
(#_ftn1) . where specification allows, waste / recycled materials such as nappies, RAP,
PFA, GGBS and recycled aggregates.
The production of quicklime uses waste materials as fuel in the process of
making quicklime.
100% utilisation of all production materials. 2027 Set up of Baltic Aggregates enables the aggregates not suitable for industrial
mineral application to be processed and supplied to construction markets.
1.2.2. Environment
Pillar Key Focus Area Targets How Did we do Focus for 2023
Environment Sustainable use of reserves and resources. Achieve Carbon net-zero road map targets. Published first ESG report which contains extensive detail on its Continue to focus and accelerate where possible our net-zero road map targets.
Environmental, Social and Governance policies and initiatives, as well as a
detailed roadmap to net-zero.
Reduction in energy intensity and increase in energy efficiency. Commissioning of first carbon capture aqualung module.
Energy surveys commissioned across platforms that have found multiple
opportunities and savings.
Maximisation of resource utilisation and circular economy.
Continue energy and fuel optimisation to reduce the reliance on fossil fuels.
Appointment of Kinect Energy to give dedicated focus on energy procurement and
hedging. Submission and validation of SBTi data.
Increase green energy sourcing initiatives including new wind and solar
installations and further increases of existing solar capacity on site at
Soignies.
Successful "nappy-enhanced" asphalt trial using asphalt that contained
recycled nappies.
Partnership with Aqualung, to construct Europe's first industrial scale carbon
capture facility in Scandinavia.
PPG platform acquired and developed additional UK sites to facilitate the
development and manufacture of ultra-low carbon products.
Our strategic collaboration with Marshalls focusing on pushing existing
technologies while also developing new manufacturing techniques.
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.
1.2.3. Social
Pillar Key Focus Area Targets How Did we do Focus for 2023
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 13% year-on-year reduction in incident frequency rate; 19% reduction in Continual roll out of supervisor alignment programme for Health & Safety.
arrived. year. serious harm frequency rate and over 70% year-on-year increase in near hit,
hazard, and risk reporting. This data is not just limited to employees, but
included all those that work on our sites including contractors.
Continued focus on 3 core Health & Safety areas: Structure &
Increase workforce engagement and retention. Compliance; Proactive Prevention; and Learn & Improve.
Commitment to employees as well as their families and the communities through
Family Fun Day with over 200 people attending.
Increase board diversity.
Alignment of all business to group core risks to continue to drive SIF
reduction.
Climate and supervisor surveys that has allowed each business to focus on key
areas identified by our employees.
Continue to promote Board diversity in addition to current diversity of 25% of
female NEDs.
Increased female board diversity to 25% with regards to NEDs through the
appointment of Axelle Henry.
Continue to work with government agencies, education establishments and
communities to offer long term employment opportunities.
Continued development of our working relationships with the military and
military employment charities.
Engagement of apprenticeship schemes as well as school and university
placements to offer careers to those both at the start of their careers or
those looking for change or coming back to work later in life.
Social Support the physical and mental health of our employees and their families.
Social Attract, train, retain, and engage our workforce.
Social Be a good neighbour; Source local, buy local, sell local, invest local.
1.2.4. Governance
Governance Promote QCA and Corporate Governance Codes Continue to implement, and transparently disclose, compliance and matters Appointment of Axelle Henry as an independent NED. Review opportunity for improvement of Investor relations function within the
relating to ESG.
Group.
Appointment of Company Secretary to bolster the Group's already strong
Maintain ongoing compliance in a dynamic environment across multiple corporate governance function, reporting to the Board on all compliance Interaction with institutional investors' ESG & Stewardship analysts to
jurisdictions. related matters. ensure compliance with reporting requirements.
Alignment of cyber security policy as well as other overarching policies Be a leading business of compliance that meets the expectations of our
across the Group. shareholders and potential investors in a timely fashion.
Enhancement of governance education within the Group through the use of
Formity training and compliance system.
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
1.3. Disclosure
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 with 2022 being the first year of reporting to SASB
and where data limited, putting process in place to capture for the following
year.
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 adopted 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.
As a further commitment in 2022 we committed to SBTi and will use the 2022
data to submit and independently validate targets.
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.
SASB Topic Accounting Metric Category Unit of Measure Code 2022 Result
Greenhouse Gas Emissions Gross global Scope 1 emissions, percentage covered under emissions-limiting Quantitative Metric tons (t) CO₂-e, Percentage (%) EM-CM-110a.1 665,937 tCo2e
regulations
90% covered by EUETS
Greenhouse Gas Emissions Discussion of long-term and short-term strategy or plan to manage Scope 1 Discussion and Analysis n/a EM-CM-110a.2
emissions, emissions reduction targets, and an analysis of performance against
those targets
Air Quality Air emissions such as: Quantitative Metric tons (t) EM-CM-120a.1
(1) Nox, 699.10
(2) Sox, 1544.19
Energy Management (1) Total energy consumed, Quantitative Gigajoules (GJ) Percentage (%) EM-CM-130a.1 4,413,519 GJ of energy
(2) percentage grid electricity, 16% from grid
(3) percentage alternative, 21% alternative energy including Guarantee of origin for alternative energy.
(4) percentage renewable 2% renewable energy including guarantee of origin of renewable energy and
solar PV
Water Management Total fresh water withdrawn, Quantitative Thousand cubic meters (m.) Percentage (%) EM-CM-140a.1 312,878m3 of water withdrawn
14% of process water is drawn from fresh water supplies
Waste Management Amount of waste generated Quantitative Metric tons (t) EM-CM-150a.1 4,496,901t
This is predominantly related to overburden removal at quarries. These
materials are often stored or used for restoration purposes including the
recultivation of indigenous soils for remediation. The creation of new
business is also looking to use surplus material into other business streams
and therefore reprocess historical and future material once deemed waste.
Biodiversity Impacts Description of environmental management policies and practices for active Discussion and Analysis n/a EM-CM-160a.1
sites
Biodiversity Impacts Terrestrial acreage disturbed; percentage of impacted area restored Quantitative Acres (ac) Percentage (%) EM-CM-160a.2 3,737 acres of land is disturbed.
16% of land was restored
Workforce Health & Safety Total recordable incident rate (TRIR) Quantitative Rate EM-CM-320a.1 Data has historically been collected as an amalgamation for Direct Employee,
Contract employee and external contractors as it is believed that we are
responsible for all those on our site regardless of employment status.
Workforce Health & Safety Number of reported cases of silicosis Quantitative Number EM-CM-320a.2 None
Product Innovation Total addressable market and share of market for products that reduce energy, Quantitative Reporting currency Percentage (%) EM-CM-410a.2 Market share is not a straightforward number to capture given all the
water, and/or material impacts during usage and/or production industries and end markets we operate in, however in the Greenbloc and
Sustainability section on we clearly show how construction material product
innovation is being driven.
Pricing Integrity and Transparency Total amount of monetary losses as a result of legal proceedings associated Quantitative Reporting currency EM-CM-520a.1 Zero
with cartel activities, price fixing, and anti-trust activities
1.1 Group Environmental Report
1.1.1. Dealing with Carbon Dioxide
To deal with CO(2), it is crucial to understand how CO(2) is governed and how
it is produced.
European Union Emissions Trading System (EUETS)
The EUETS regulates greenhouse gas emissions of energy and energy-intensive
industries as well as inner-European aviation. The EUETS puts a cap on the
carbon dioxide (CO(2)) emitted by business and creates a market and price for
carbon allowances. It covers 45% of EU emissions, including energy intensive
sectors and approximately 12,000 installations.
The EUETS works on the 'cap and trade' principle. A 'cap', or limit, is set on
the total amount of certain greenhouse gases that can be emitted by factories,
power plants and other installations in the system within the cap, and
companies receive or buy emission allowances which they can consume, or trade
as needed.
An allowance gives the right to emit a tonne of CO(2), and any allowance
surplus to requirement can be accumulated and used to offset future emissions
or traded. The current surpluses were inherited from previous phases of the
scheme where emissions were consistently below the system's cap. As such the
value of these allowances was low and were traded at less than €10/tonne.
The directive concerning Phase IV (2021-2030) of the ETS entered into force on
8 April 2018. However, secondary legislation and guidance documents defining
the legislative background of the Phase IV Trading Period are still ongoing.
The new benchmark values (the value at which the free allowance is set) is
below the actual emissions of the covered industries, and this deficit, along
with market measures such as a stability reserve held by the EU and the faster
reduction in year-on-year allowances has driven traded prices up to current
values of €80-€100/tonne.
Lime Industry and CO2
For lime there are sources of CO(2) along the production process, however
there are two primary sources that make up the majority of CO(2) emissions:
fuel and process emissions from the calcination part of the process.
The calcination process is simply the formula of deriving CaO from CaCO(3)
using heat.
The two main sources of CO(2) from the calcination part of the process are as
follows: Combustion CO(2) (~25% to 35%) is produced from the burning of fossil
fuels, while process CO(2) (~65% to 75%) results from the actual calcination
of limestone.
All the CO(2) sources have different mitigation solutions.
Power and energy CO(2) can be reduced through energy efficiency, renewable
electricity, fuel efficiency and renewable / alternative fuels. We are
actively working on renewable energy solutions and Power Purchase Agreements.
Combustion CO(2) can be reduced by energy efficiency and fuel selection, as
well as by carbon capture utilisation or sequestration (CCUS). We are in the
process of moving away from fossil fuels and are due to commission our first
module of the CCUS in April 2023.
Process CO(2) can only be addressed by CCUS, with our first module due to be
commissioned in April 2023.
Carbon capture utilisation or sequestration
The emissions from lime kilns are well suited to technologies such as CCUS as
they have a higher CO(2) content than most post-combustion gases and contain
fewer contaminants due to using only limestone as feedstock and, due to
product requirements, more stringent fuel quality requirements and typically
lower gas filtration temperatures.
Post-combustion capture (PCC) systems constitute a technically and
economically viable solution to reduce emissions in a variety of sectors.
Retrofitting existing plants with post-combustion capture units may be the
only effective and economically viable way to reduce emissions at the stack,
without affecting the process upstream. The availability of a range of
commercially ready technologies suitable for different types of CO(2) point
sources is crucial for the wide deployment of CCUS systems. Given the wide
ranges of plant sizes and flue gas specifications relevant to different
emitting sources, it is unlikely that a single technology could fit best in
all cases. Therefore, for effective process design, it is convenient to
consider multiple technologies and select the most efficient and economically
viable option to serve the purpose.
In addition to the membrane technology chosen by SigmaRoc, there are a few
other options, each with their own opportunities and risks:
· Amine scrubbing is acknowledged as the most mature CCUS solution.
Absorption-based processes for the separation of CO(2) from flue gases have
been widely researched, and their effectiveness has been proven through
testing on a variety of scales, from laboratory to commercial. For lime, this
solution is both costly and requires a substantial footprint with significant
energy consumption and issues with disposal of waste residues.
· Cryogenic capture and separation is a more recent development
offered by industrial gas companies as an extension of their in-house process.
For Lime, this solution is both costly and requires a substantial footprint
with significant energy consumption.
SigmaRoc believes that membrane technology is optimally suited to our
operations, in summary, due to the proven technology, small footprint, low
capital and operating costs, and high efficiencies.
Membrane-based processes, on the one hand, are characterised by relatively
simple process schemes (e.g., no flowing liquid phase, fewer auxiliary streams
and fewer pieces of equipment), which make them cost-competitive at small
scales. On the other hand, components like membrane modules are generally
limited in their maximum size and benefit less from economies of scale, but do
offer a modularity that allows for smaller investments over time to follow
market effects.
The choice to pursue membrane technology in our lime production process was
based upon several criteria - capital requirement, footprint, cost of
operation, complexity of operation and overall environmental impact.
Membrane technology is, as mentioned previously, limited in scale and suitable
for modularity, allowing smaller capital investment to track, as an example,
allowances in EUETS. The modules are small (within a sea container) and would
require, in our largest plant, four modules to cover process emissions. There
are relatively few moving parts, no hazardous liquids or residues and, due to
efficient kiln processes where we have little remaining waste heat which can
be used in amine technologies, lower energy penalty to operate (typically less
than 50% of competitive technologies). In addition, when the produced CO(2) is
utilised in other processes, specific purity requirements could be met by the
addition of another stage of separation within the existing modules.
1.1.2. Streamlined Energy and Carbon Report (SECR)
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 2018 Regulations.
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 and Channel Islands (North West), Belgium (West) and Estonia, Finland,
Poland, Sweden, Turkey & Spain (North East). This exceeds the minimum
mandatory requirements set out in the 2018 Regulations for 'large unquoted
companies', which only requires reporting of UK based energy use and
emissions.
Acquisitions during 2022 include Johnston Quarry Group in January 2022 which
forms the England Platform and RightCast which joined the UK based PPG
Platform in April 2022. Spanish based La Belonga joined the North East region
in July 2022.
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 energy and
emissions for the newly acquired entities have been included from their
respective acquisition dates. Reported emissions for Nordkalk in 2021 have
been revised to present a full 12 months, thereby providing a more accurate
like for like comparison with 2022 emissions.
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 2022 UK
Government GHG Conversion Factors for Company Reporting, Statistics Finland
Fuel Classification 2022, Swedish Environmental Protection Agency Emission
Factors 2022 and the latest available factors from the Association of Issuing
Bodies (2021), 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 necessarily reported separately outside the
UK and Channel Islands as it is included within onsite fuel usage. 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 organisation's 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 2021 2022
Mandatory energy: UK Group Total(1) UK Group Total(1)
Gas 453,856 302,329,485 362,199 208,190,947
Purchased electricity 5,113,311 189,655,953 7,024,295 192,100,497
Transport fuel & site fuel 52,777,809 396,547,065 55,806,376 434,579,215
Total energy (mandatory) 58,344,976 888,532,503 63,192,870 834,870,659
Voluntary energy:
Bioenergy - 22,177,534 - 32,094,230
Coal - 428,002,960 - 387,013,242
Generated electricity(2) - 1,906,467 - 4,499,105
Total energy (voluntary) - 452,086,961 - 423,606,577
Total energy (mandatory & voluntary) 58,344,976 1,340,619,464 63,192,870 1,258,477,236
(1) The Group total includes emissions from the UK, Channel Islands, Belgium,
and Nordkalk (Estonia, Finland, Poland, Sweden and Turkey, with Spain from
August 2022 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 2021 2022
Mandatory emissions: UK Group Total(3) UK Group Total(3)
Scope 1
Gas 83 49,091 66 32,501
Company owned vehicles & site fuel 13,035 103,962 13,859 113,712
Scope 2
Purchased electricity (location-based) 1,086 43,200 1,358 42,771
Scope 3
Category 6: Business travel (grey fleet only) 77 103 88 311
Total gross emissions (mandatory) 14,281 196,356 15,371 189,295
Voluntary emissions:
Scope 1
Bioenergy (CH₄ & N₂O) - 1.4 - 2.0
Coal - 140,333 - 131,205
Process related emissions - 413,896 - 388,517
Total gross emissions (voluntary) - 554,230 - 519,724
Total gross emissions (mandatory & voluntary) 14,281 750,586 15,371 709,020
Outside of scopes (CO(2) only)
Bioenergy - 7,586 11,013
Petrol/diesel biofuel content 227 251 223 239
Intensity ratio: tCO(2)e per million-pound turnover:
Mandatory emissions only 193.0 423.2 142.3 351.9
Mandatory & voluntary emissions 193.0 1,617.6 142.3 1,317.9
(3) The Group total includes emissions from the UK, Channel Islands, Belgium,
and Nordkalk (Estonia, Finland, Poland, Sweden, and Turkey, with Spain from
August 2022 only).
Breakdown of emissions across the Group by region for 2022 only (tCO(2)e)(4)
Emission source 2022
North West West North East Total
Scope 1
Bioenergy (CH₄ & N₂O) - - 2 2.0
Coal - - 131,205 131,205
Gas 66 108 32,328 32,501
Company owned vehicles & site fuel 18,431 6,180 89,101 113,712
Process related emissions - - 388,517 388,517
Scope 2
Purchased electricity (location-based) 1,473 1,715 39,583 42,771
Scope 3
Category 6: Business travel (grey fleet only) 95 - 216 311
Total gross emissions 20,065 8,003 680,952 709,020
Outside of scopes
Bioenergy (CO(2)) - - 11,013 11,013
Petrol/diesel biofuel content 239 - - 239
Intensity ratio
tCO(2)e per million-pound turnover 144.2 91.6 2,186.2 1,317.9
(4) The North West includes the UK and Channel Islands; the West region
includes Belgium; the North East region includes Nordkalk.
Intensity Ratio
The intensity ratio is total gross emissions in metric tonnes CO(2)e per total
million-pound (£m) turnover. This is calculated separately for 'mandatory'
emissions and 'mandatory & voluntary' emissions for the UK and regionally
for the North West, West and North East SigmaRoc regions. 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.
Energy efficiency action during current financial year
Emissions for Nordkalk (the North East region) have been reported for a full
12 months in 2021 (despite joining SigmaRoc in September 2021) and 2022 to
provide comparable annual emissions for the Group. Consequently, the reported
emissions reveal that Group wide relative and absolute emissions have reduced
in 2022 despite the acquisitions of Johnston Quarry Group, RightCast and La
Belonga.
Fuel consumption emissions in the North East region have reduced with a
transition away from coal (reduced by 9,128 tCO(2)e) and coke gas (reduced by
4,648 tCO(2)e) to alternative and biofuel sources, such as recycled fuel oil
(increased by 6,459 tCO(2)e) and biofuel in Finland and Sweden rotary kilns.
Gross UK emissions have increased by 1,090 tCO(2)e in 2022, largely due to the
acquisitions of Johnston Quarry Group (1,816 tCO(2)e) in 2022, which has
countered emission reductions elsewhere in UK operations. Nevertheless,
operational efficiencies at the Wales Platform quarries of Harries have
resulted in energy efficiency improvements. In Blaencilgoed Quarry, usage of
DERV has reduced by 0.14 litres per tonne of aggregate production when
compared to 2021 data. At the same quarry, power to a small submersible water
pump has been converted from a diesel generator onto mains electricity, which
has a lower carbon intensity.
At the Harries Bolton Hill Quarry, operational efficiencies have resulted in
DERV usage reducing by 0.3 litres per tonne in mobile plant aggregate
production, while at the main fixed crushing plant, electricity consumption
has reduced by 1.5 kWh per tonne in aggregate production compared to 2021
data. Furthermore, a fabricated steel structure has been constructed at
Alltgoch Quarry over the cold feed bins at the asphalt plant as part of a
development to keep the aggregate and dust drier and save energy costs.
The Ronez operations are trialling low temperature asphalt to reduce use of
gas oil and have been improving metering and monitoring of energy usage to
identify further opportunities in 2023. At Poundfield Products, work has begun
to replace the diesel-powered forklift truck fleet with electric powered
models, while also investigating the feasibility of installing solar panels at
the main manufacturing sites.
1.1.3. Water management and Biodiversity
SigmaRoc understands the pressing need for businesses to preserve the
environment they operate in, safeguarding our shared home for current and
future generations.
SigmaRoc is dedicated to limiting and mitigating the impact of its activities
on the environment and focusing on growing sustainably. To do so, we have
implemented several polices including Biodiversity and Environment &
Water.
Water management
Our operations minimise the amount of fresh water extracted, with 86% of our
water being recycled and reused. In several sites, excess water is routed to
local water supply companies for treatment and then use in local communities.
Several of our quarries have extensive amounts of naturally collected water
which, subject to agreement with local authorities, can be used as alternative
water sources.
Biodiversity
Despite the Group operating over a large area of approximately 4,000 acres,
this year saw around 16% restored according to agreed programs. Even in our
working environments, we take a proactive approach to biodiversity and our
sites have created working ecosystems. This includes breeding programs and the
re-introduction of wildlife such as the Red Bill Chough, not seen for over 100
years, nesting of peregrine falcons, as well as other flora and fauna.
Operational considerations not only seek to minimise impact, but also actively
enhance biodiversity in surrounding areas.
Some sites are close to Sites of Specific Scientific Interest where our
working relationships with local groups and national agencies have helped
ensure they thrive. Where there is risk of impact, the valuable species are
moved to other suitable or created areas.
The businesses' environmental aspects are guided by their individual operating
policies, ensuring that local requirements, as well as wider requirements, are
met.
The operating policies list the guiding principles of the management system
and provide a framework for setting quality, environmental and H&S goals
supporting strategy and aiming for continuous improvements being implemented
within all businesses.
Before commencing operation of a site, the potential environmental and social
impacts are assessed through an Environmental Impact Assessment process, after
which an application for an environmental permit is typically made.
During the operating phase of the sites, environmental management is guided by
environmental permits, which set regulatory requirements for the operation and
closure, and by the environmental management system of the Company including
ISO14001.
Active sites have restoration and water management plans which are often set
as part of the permitting process and are updated as required. The
environmental management of the sites covers matters such as ecological and
biodiversity impacts, waste generation, noise impacts, emissions to air,
discharges to water, natural resource consumption, and hazardous chemical
usage.
The Group is committed to minimising its impact on the natural environment
where it operates. We integrate biodiversity management into all steps of
planning, production and closure of sites whilst maintaining a hierarchy of
mitigation (avoid, minimize, restore, and finally offset).
1.2. Group Health and Safety Report
2022 once again saw continued focus and commitment to health & safety
across a larger and more diverse Group. Importantly, the Group has seen a
further 13% reduction in the Total Recordable Incident Rate (TRIFR) and 8%
reduction in Lost Time Injury Frequency Rate (LTIFR). Strong focus on near
hits and hazard & risk elimination resulted in an increase in positive and
lead indicating reporting by more than 70%. It should be clearly noted that
when reporting we cover all those that work on our site regardless of
employment status and as such this includes employees, agency staff,
consultants, and contractors.
Operating in numerous countries across the UK and 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 best
practice Group H&S standards.
Principles
The Group continues to drive its overarching H&S standards which we
believe supported the continual improvement in health and safety in 2022.
Core Risks
SigmaRoc has worked closely with consultants and post-graduate researchers to
continual improve our health & safety. This year has seen the focus on
core risks which include:
· Contact with moving vehicles / objects
· Entrapment by machinery / moving parts
· Hit by suspended load / falling objects
· Falls from height
· Trapped by significant mass / energy
· Powders and COSHH material handling
Two primary areas of focus to improve our control of core risks has been on:
1. Serious Injury or Fatality (SIF) framework; and
2. Investigations.
SIF is the focus on events that could lead to Serious Injury or Fatality; in
simple terms those events that cause or have the potential to cause life
threatening / changing injuries. This work has been heavily developed in
recent times and is seen to be the next evolution of well-grounded traditional
H&S principles; driving the focus to those areas that are of the most
serious nature. This has supported and aligns with our core risks and enables
us to develop improved reporting to ensure action on those key areas.
The Group also maintains a strong focus on conducting detailed investigations,
not only after an event has happened, but also before events happen. For
example, through Bow Tie analysis, core risk events can be reviewed before
they happen. This allows causes to be proactively identified so safety
barriers can be implemented to mitigate routes to an adverse H&S event. On
the flip side, the effects and consequences of the event are also proactively
identified so safety barriers can be implemented to mitigate the impacts of
such an event.
Post event investigation, including investigation on near hits, and externally
publicised events both in our industry and beyond, is conducted. The level of
investigation is proportional to the severity and seeks to review not just the
event, but also organisation factors, task and environmental conditions,
individual and team actions, and absent or failed defences.
It is by these principles and through core risk management and investigation
that the Group can act to continually deliver its year-on-year H&S
improvement.
Front line leadership
Following on from 2021, in 2022 the Group concluded its initial Group front
line leadership initiative. The Group continues to support and drive NEBOSH
and IOSH (or equivalent) training of supervisor and front-line management as
an on-going process.
2022 laid the foundation for the 2023 initiative to ensure all front-line
leaders spend optimal time on site, leading and managing safety, quality, and
productivity. This includes engagement of our front-line leaders, which
includes both supervisors and managers, and working closely with them to
ensure they continue to be supported and equipped, whilst identifying and
eliminating unnecessary process and reporting, to maintain a safe, lean, and
agile business.
By focusing on the inputs of having boots on the ground and lean processes
driven by our front-line leaders, the Group is confident that it will see
continued improvement in the output of not only safety, but also quality and
productivity.
HighVizz
Our ability to manage and report safety continues to thrive and develop
through our HighVizz app. This includes supporting SIF identification, as well
as new modules such as pre-start inspections, and enables our teams to have
lean processes and systems that ensure risks are managed more effectively and
efficiently.
Culture
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.
In 2022, the H&S part of the monthly senior management meeting was given
its own specific meeting held two weeks earlier. The meeting has been expanded
to a wider audience to promote focus, communication and prompt closure of
actions, with the ability to follow up key actions in the main senior
management team meeting two weeks later; thereby driving the "plan, do, check,
act" cycle used by the UK HSE.
The initiative based on football league tables in Belgium has shown huge
success and has resulted in year-on-year increased engagement of nearly 400%
for near hits, hazard, and risk identification and a subsequent reduction in
SHIFR by 23%.
Occupational Health
Both SASB and the UK Minerals Product Association have a focus on occupational
health, especially Silicosis. As a Group we have a hierarchy of controls,
based upon best health and safety guidance and an assessment of the risks
within our sites and workplaces ensuring compliance with HASWA 1974, MHSWR
1999, COSHH Regulations, L140 - HSE ACOP for HAVS, PUWER 1998, HSG258 - HSE
Controlling airborne contaminants at work (use of LEVs) and EH75-4 and INDG
463 Silica and control methods.
These include:
· Use of Risk assessments, safe systems of works and COSHH
assessments;
· Minimising dust generated by our operations through engineering
controls such as enclosing processing equipment and transfer points, water
suppression, use of spray systems for dust encapsulation and local exhaust
ventilation;
· Periodic personal and local monitoring by external consultants
and subsequent personal assessments against recognised exposure limits;
· Health questionnaires and health surveillance of staff by
Occupational Health specialists;
· Where surveys identify potential exposure above recognised
exposure limits warning signage is posted and workers are required to wear
appropriate respiratory protective equipment including full and half masks,
and air fed breathing systems;
· Time limits set for and policy of job rotation to minimise
exposure times in addition to the use of specialised PPE in areas of risk;
· Training for new employees and regular refresher training for
existing employees to raise awareness of the risks to health that can arise
from exposure; and
· Training in the correct use and maintenance of PPE provided to
protect their health and other checks such as face fit testing for dust masks.
1.3. Stakeholders
Stakeholders Description How we engage
(in alphabetical
order)
Colleagues We have a dedicated workforce of over 2,000 across the Group. We recognise our Site presence and visual felt leadership. Employee groups and committees and
dedicated workforce as a key driver of the value derived from the business. unions. Focus on development training and succession planning. Decentralised
Our colleagues are experienced and continuously developed to fulfil their approach with flat management allowing easy access to all staff. Employee
potential. All employees are offered a fair benefits and compensation package benefit offerings that can also extend to family members.
relative to their role and level in the organisation. We encourage share
ownership where it is available and, where possible, are working to setup
where it is 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 our sites so that the customer and supplier deal directly with the site they
to 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 our long-term success. We strive to ensure suppliers.
timely payments and 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 good, knowledgeable, 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 and/or
business. We maintain purposeful and close relationships with them either interactive investor presentations. Annual and interim reports, trading
directly or via wider mediums such as Q&A webinars and conferences. We statements and RNS. Regular phone calls and dialogues. Broker and NED
seek to be transparent and give clear and consistent messages across all contacts. Site visits, investor roadshows, investor conferences.
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 areommited 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 Directors 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 2022 and up to the date of these Accounts:
· Continued pursuit of buy and build growth strategy: the Group has
continued its buy and build growth strategy, completing three acquisitions
during 2022 and entering into a strategic JV partnership with ArcelorMittal.
· Management of Russian invasion into Ukraine: the Group
successfully evacuated family members of Ukrainian colleagues into Poland and
provided support near the Ukrainian border to those that were unable to
evacuate.
· Dealing with impact from UPM union strike: the Group endured a
4-month union strike at one of its largest customers and managed to mitigate
the impact through a combination of operational efficiency programmes and cost
savings initiatives.
· 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.
1.4. 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.
· 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).
· FedBeton: Federation for ready-mixed concrete in Belgium.
Further to these bodies, businesses in the Group also have ISO accreditation
or equivalent in ISO 9001 Quality (78%); ISO 14001 Environment (76%) and ISO
45001 Health & Safety (69%). Some businesses are currently going through
ISO accreditation programs. Benelux was reviewed, however the local business
and product accreditations held were deemed to have greater relevance than the
ISO, for both our customers and end-users.
Further information on ESG will be available via our dedicated ESG Report and
at www.sigmaroc.com (http://www.sigmaroc.com) .
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
Year ended 31 December 2022 Year ended 31 December 2021
Underlying Non-underlying* (Note 11) Total Underlying Non-underlying* (Note 11) Total
Continued operations Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 7 537,993 - 537,993 271,987 - 271,987
Cost of sales 8 (422,056) - (422,056) (210,068) - (210,068)
Profit from operations 115,937 - 115,937 61,919 - 61,919
Administrative expenses 8 (46,144) (19,126) (65,270) (31,792) (25,734) (57,526)
Net finance (expense)/income 12 (8,910) (1,528) (10,438) (5,317) (1,682) (6,999)
Other net gains / (losses) 13 1,853 641 2,494 1,978 (1,644) 334
Profit/(loss) before tax 62,736 (20,013) 42,723 26,788 (29,060) (2,272)
Tax expense 15 (9,142) - (9,142) (4,699) - (4,699)
Profit/(loss) 53,594 (20,013) 33,581 22,089 (29,060) (6,971)
Profit/(loss) attributable to:
Owners of the parent 51,251 (20,013) 31,238 21,499 (29,060) (7,561)
Non-controlling interest 31 2,343 - 2,343 590 - 590
53,594 (20,013) 33,581 22,089 (29,060) (6,971)
Basic earnings per share attributable to owners of the parent (expressed in 32 8.03 (3.14) 4.89 5.37 (7.26) (1.89)
pence per share)
Diluted earnings per share attributable to owners of the parent (expressed in 32 7.68 (3.00) 4.68 5.02 (6.79) (1.77)
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 2022
Year ended 31 December 2022 Year ended 31 December 2021
Note £'000 £'000
Profit/(loss) for the year 33,581 (6,971)
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
FX translation reserve 17,735 (15,806)
Cash flow hedges - effective portion of changes in fair value 3,432 882
Remeasurement of the net defined benefits liability 202 155
Other comprehensive income, net of tax 21,369 (14,769)
Total comprehensive income 54,950 (21,740)
Total comprehensive income attributable to:
Owners of the parent 52,048 (22,343)
Non-controlling interests 2,902 603
Total comprehensive income for the period 54,950 (21,740)
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
Note £'000 £'000 £'000 £'000
Non-current assets
Property, plant and equipment 16 523,188 256,436 257 429
Intangible assets 17 189,875 318,963 - -
Investments in subsidiary undertakings 18 - - 583,421 554,195
Investment in equity-accounted associate 19 576 524 - -
Investment in joint ventures 19 5,942 5,134 - -
Derivative financial asset 33 4,771 870 - -
Other receivables 20 4,259 4,759 - -
Deferred tax asset 15 4,426 3,129 - -
733,037 589,815 583,678 554,624
Current assets
Trade and other receivables 20 86,805 73,254 3,168 2,890
Inventories 21 67,780 44,530 - -
Cash and cash equivalents 22 68,623 69,916 5,055 19,038
Derivative financial asset 33 10,683 4,327 - 302
233,891 192,027 8,223 22,230
Total assets 966,928 781,842 591,901 576,854
Current liabilities
Trade and other payables 23 140,443 98,213 13,526 5,567
Derivative financial liabilities 33 6,693 737 - -
Provisions 25 6,596 4,024 - -
Borrowings 24 33,846 21,723 20,072 8,102
Current tax payable 1,251 3,934 - -
188,829 128,631 33,598 13,669
Non-current liabilities
Borrowings 24 228,630 212,199 206,369 192,068
Employee benefit liabilities 1,312 1,589 - -
Deferred tax liabilities 15 68,604 17,717 - -
Derivative financial liabilities 552 - - -
Provisions 25 4,100 6,151 - -
Other payables 23 5,051 4,401 5,051 4,401
308,249 242,057 211,420 196,469
Total liabilities 497,078 370,688 245,018 210,138
Net assets 469,850 411,154 346,882 366,716
Equity attributable to owners of the parent
Share capital 28 6,383 6,379 6,383 6,379
Share premium 28 400,022 399,897 400,022 399,897
Share option reserve 29 7,483 3,104 7,483 3,104
Other reserves 30 10,261 (11,236) 1,362 1,362
Retained earnings 33,969 2,116 (68,368) (44,026)
Equity attributable to owners of the parent 458,118 400,260 346,882 366,716
Non-controlling interest 31 11,732 10,894 - -
Total equity 469,850 411,154 346,882 366,716
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 2022 was £24.4
million (year ended 31 December 2021: loss of £26.3 million).
The Financial Statements were approved and authorised for issue by the Board
of Directors on 25 March 2023 were signed on its behalf by:
Garth Palmer
Chief Financial Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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 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 2,257 253 459 299,040 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
Balance as at 1 January 2022 6,379 399,897 3,104 (11,236) 2,116 400,260 10,894 411,154
Profit for the year - - - - 31,238 31,238 2,343 33,581
Currency translation differences - - - 17,176 - 17,176 559 17,735
Other comprehensive income - - - 3,634 - 3,634 - 3,634
Total comprehensive income for the period - - - 20,810 31,238 52,048 2,902 54,950
Contributions by and distributions to owners
Acquired via acquisition - - - - - - 974 974
Issue of share capital 28 4 125 - - - 129 - 129
Share based payments - - 4,453 - - 4,453 - 4,453
Exercise of share options - - (74) - 74 - - -
Dividends - - - - - - (3,038) (3,038)
Other equity adjustments - - - 687 541 1,228 - 1,228
Total contributions by and distributions to owners 4 125 4,276 687 615 5,810 (2,064) 3,746
Balance as at 31 December 2022 6,383 400,022 7,483 10,261 33,969 458,118 11,732 469,850
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share Share premium Share option reserve Other reserves Retained earnings Total
capital
Note £'000 £'000 £'000 £'000 £'000 £'000
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
Balance as at 1 January 2022 6,379 399,897 3,104 1,362 (44,026) 366,716
Profit/(Loss) - - - - (24,416) (24,416)
Total comprehensive income for the period - - - - (24,416) (24,416)
Contributions by and distributions to owners
Issue of share capital 4 125 - - - 129
Issue costs 28 - - - - - -
Share based payments - - 4,453 - - 4,453
Exercise of share options - - (74) - 74 -
Total contributions by and distributions to owners 4 125 4,276 - 74 4,582
Balance as at 31 December 2022 6,383 400,022 7,483 1,362 (68,368) 346,882
CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Company
Year ended 31 December 2022 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2021
Note £'000 £'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) 33,581 (6,971) (24,416) (26,290)
Adjustments for:
Depreciation and amortisation 16 17 37,116 19,115 118 49
Impairments 30 2,006 - -
Share option expense 4,453 2,321 4,453 2,321
Loss/(gain) on sale of PP&E (1,471) 101 -
Net finance costs 10,438 7,360 7,032 2,705
Income tax expense 15 9,142 4,699 - -
Share of earnings from joint ventures (786) (291) - -
Non-cash items (475) (1,103) 3,927 (275)
Increase in trade and other receivables (6,807) (1,178) (450) (1,142)
(Increase)/decrease in inventories (17,322) 130 - -
Increase in trade and other payables 31,182 9,142 4,151 2,348
Decrease in provisions (19) (1,339) - -
Income tax paid (11,332) (4,451) - -
Net cash inflows/(outflows) from operating activities 87,730 29,541 (5,185) (20,284)
Investing activities
Purchase of property, plant and equipment 16 (51,008) (22,555) (14) (426)
Sale of property, plant and equipment 10,235 3,475 - -
Purchase of intangible assets 17 (1,713) (62) - -
Acquisition of businesses (net of cash acquired) (43,318) (350,940) (43,427) (379,854)
Financial derivative 278 (4,327) 302 (302)
Loans granted - (750) - (750)
Interest received 603 - 7 5
Net cash used in investing activities (84,923) (375,159) (43,132) (381,327)
Financing activities
Proceeds from share issue 129 263,344 129 262,085
Cost of share issue - (8,748) - (8,748)
Proceeds from borrowings 36,154 155,734 26,840 167,020
Cost of borrowings - (5,425) - (5,425)
Repayment of borrowings (30,361) (12,253) (8,067) -
Net loans with subsidiaries - - 22,801 (3,927)
Interest paid (9,732) (3,511) (7,537) (1,858)
Dividends paid (3,038) (601) - -
Net cash used in financing activities (6,848) 388,540 34,166 409,126
Net increase/(decrease) in cash and cash equivalents (4,041) 42,922 (14,151) 7,515
Cash and cash equivalents at beginning of period 69,916 27,452 19,038 11,521
Exchange losses on cash 2,748 (458) 168 2
Cash and cash equivalents and end of period 22 68,623 69,916 5,055 19,038
Major non-cash transactions
During the year ended 31 December 2022 there were share based payments of
£0.5 million. During the year ended 31 December 2021 there were share based
payments of £42.7 million as part of the Nordkalk acquisition. £0.8m is a
non-cash gain on a liquidation of Coordination du Hainaut SCS and the
remainder of non-cash movements are not considered material.
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
The principal activity of SigmaRoc is to make investments and/or acquire
projects in the quarried materials sector, and the principal activity of the
Group is the production of high-quality aggregates and supply of value-added
industrial and construction materials. The Company's shares are admitted to
trading on AIM and it is incorporated and domiciled in the United Kingdom.
The address of its registered office is 6 Heddon Street, London, W1B 4BT.
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 Group and Company Financial Statements have been prepared in accordance
with UK-adopted International Accounting Standards in accordance 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 UK IASs 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 IASB issued various amendments and revisions to UK IAS and IFRSIC
interpretations which include IFRS 3 - Reference to Conceptual Framework, IAS
37 - Onerous Contracts, IAS 16 - Proceeds before intended use, IAS 8 -
Accounting estimates and Annual Improvements - 2018 - 2020 Cycle. The
amendments and revisions were applicable for the period ended 31 December 2022
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 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
IAS 12 Income taxes 1 January 2023
IFRS 17 Insurance contracts 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 1 Presentation of Financial Statements 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
a) Subsidiaries
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. On consolidation
all inter-company transactions, balances and unrealised gains and losses on
transactions between group companies are eliminated. 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.
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 UK IAS 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 UK IAS. 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 UK IAS 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 UK IAS. Nordkalk will continue to prepare their company
financial statements in line with the local GAAP rules.
b) Associates
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.
c) Joint Arrangement
A joint arrangement is an arrangement in which two or more parties have joint
control. A joint venture is a joint arrangement in which the parties that
share joint control have rights to the net assets of the arrangement. Joint
arrangements 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.
d) Employee Benefit Trust
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.
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
The Financial Statements have been prepared on a going concern basis which the
directors consider to be appropriate for the following reasons.
The Group meets its day-to-day working capital and other funding requirements
through operating cash generation and its Debt Facilities. The Debt Facilities
comprises of a £205 million committed term facility, £100 million revolving
credit facility and a further £100 million accordion option which matures on
15 July 2026. The Group has met all covenants on its Debt Facilities.
The Group has prepared cash flow forecasts for a period of more than 12 months
which anticipate a continuous upward trend of profitability and cash
generation. As the Group has a strong focus on operational gearing, it can
remain flexible during economically disruptive events which can have a
negative effect on cash flow.
At 31 December 2022, the Group had cash of £68.6 million and undrawn banking
facilities of £173 million, and at the date of this report has similar levels
of liquidity which is expected to provide sufficient funds for the Group to
discharge its liabilities as and when they fall due and ensure covenants are
met.
Based on the above, the directors believe that it remains appropriate to
prepare the financial statements on a Going Concern basis.
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
e) 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.
f) 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'. An
exception to this is when the borrowings exchange differences arise on
monetary items that form part of the reporting entity's net investment in a
foreign operation, in the consolidated financial statements the exchange gain
or loss will be shown in other comprehensive income. 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.
g) 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.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate. Exchange differences arising 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 B-Mix and Nordkalk as at the
completion date. As a result of this exercise, goodwill in B-Mix decreased
from £6.4 million to £2 million with the corresponding movement being land
and buildings. Goodwill in Nordkalk decreased from £268.8 million to £35
million with the corresponding movement being customer relations, vehicles,
land and buildings 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 PPA
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.
Derivative Financial Instruments and Hedging Activities recognition and
measurement
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair value.
The method of recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and, if so, the nature of
the item being hedged. The Group designates certain derivatives as either:
· hedges of the fair value of recognised assets or liabilities or a firm
commitment (fair value hedge);
· hedges of a particular risk associated with a recognised asset or
liability or a highly probable forecast transaction (cash flow hedge); or
· hedges of a net investment in a foreign operation (net investment hedge).
At inception of the hedge relationship, the Group documents the economic
relationship between hedging instruments and hedged items, including whether
changes in the cash flows of the hedging instruments are expected to offset
changes in the cash flows of hedged items. The Group documents its risk
management objective and strategy for undertaking its hedge transactions.
The fair values of various derivative instruments used for hedging purposes
are disclosed in Note 33. Movements on the revaluation reserve in
shareholders' equity are shown in Note 30. The full fair value of a hedging
derivative is classified as a non-current asset or liability if the remaining
maturity of the hedged item is more than 12 months, and as a current asset or
liability if the remaining maturity of the hedged item is less than 12
months. Trading derivatives are classified as a current asset or liability.
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, which is the estimated selling price in the
ordinary course of business, less applicable variable selling expenses. 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 recognised initially at fair value, and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. 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 2022 31 December 2021
£'000 £'000
Total factoring 5,004 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
Income Statement.
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.
Deferred tax is recognised using the liability method in respect of temporary
differences arising from differences between the carrying amount of assets and
liabilities in the consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of
goodwill; deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor
taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets (including those arising from
investments in subsidiaries), are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary
differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries only to the extent that it is
probable the temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary difference can
be used.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net
basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted
or substantively enacted by the statement of financial position date and are
expected to apply to the period when the deferred tax asset is realised, or
the deferred tax liability is settled.
Deferred tax assets and liabilities are not discounted.
2.19. Non-Underlying Items
Non-underlying items are a non UK IAS 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.
Performance obligations for contracting services are satisfied over time.
Revenue is therefore recognised over time on an output basis, being volume of
product laid for contract surfacing. As the performance obligations relating
to contracting revenues have an expected duration less than 12 months, the
Group has taken the practical expedient on the performance obligations
disclosures.
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 Consolidated Income
Statement 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.
2.27. Prior year restatement
During the year, the prior year accounting treatment of the PPA on
acquisitions has been revisited. The fair value uplift on assets acquired as
part of the PPA exercise should have resulted in a deferred tax liability
being recognised in accordance with IFRS 3 and IAS 12. As a result, a prior
year restatement to include deferred tax with acquired goodwill increasing by
the same amount has been reflected within the financial statements. There
are no changes to the prior period income statement, statement of
comprehensive income, statement of changes in equity or the statement of cash
flows. See Note 39 for details of the impact on the financial statement.
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
Group has a strong focus on operational gearing, allowing it to be flexible
during economically disruptive events however 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 2022 31 December 2021
£'000 £'000
Trade and other receivables 91,064 78,013
Cash and cash equivalents 68,623 69,916
159,687 147,929
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 2022 31 December 2021
£'000 £'000
North West 21,505 18,731
West 13,387 9,103
North East 56,172 50,179
91,064 78,013
Impairment
At the reporting date the ageing of the trade receivables that were not
impaired, were as follows.
31 December 2022 31 December 2021
£'000 £'000
Total trade receivables 79,261 66,166
Not overdue 68,051 47,345
Overdue 1 - 30 days 8,913 14,211
Overdue 31 - 60 days 1,491 1,996
Overdue 61 - 90 days 437 815
More than 90 days 554 1,799
Impairment loss recognised (185) (182)
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 2022 31 December 2021
£'000 £'000
At January 1 1,060 763
Amounts arising from business combinations 36 571
Charged to the Consolidated income statement during the year 132 182
Movement in provision (846) (456)
382 1,060
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.
2022
GBP thousand USD SEK NOK PLN
Gross exposure (17,126) 17,028 (3,571) (1,185)
Hedged 17,532 (14,068) 3,012 720
Net exposure 406 2,960 (559) (465)
Sensitivity analysis (+/- 10%) 41 296 (56) (47)
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.
2022 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 26,500 29,879 177,503 1,577
Trade payables 69,907 - - -
96,407 29,879 177,503 1,577
Derivative financial liabilities
Forward exchange contracts used for hedging 556 - - -
Electricity hedges 825 526 26 -
1,381 526 26 -
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 2022 is as follows:
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Total borrowings (Note 24) 262,476 233,923
Less: Cash and cash equivalents (Note 22) (68,623) (69,916)
Net debt 193,853 164,007
Total equity 469,850 411,154
Total capital 663,703 575,161
Gearing ratio 0.29 0.29
4. Critical Accounting Estimates
The preparation of the Financial Statements, in conformity with UK IASs,
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, Harries and Nordkalk 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 £115.2 million as at 31 December 2022 (31
December 2021: £293 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 2022 (31 December
2021: £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 2022 of £6.1 million (31 December 2021: £4.3 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.
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 £5.1m. 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 2022 (2021: 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 has three geographical regions, North West which
comprises of PPG, England, Wales and Channel Islands; West which comprises of
Dimension Stone and Benelux; and North East which comprises of Quicklime,
Nordics, Poland and Baltics. Activities in the North West, West and North East
regions relate to the production and sale of construction material products
and services.
31 December 2022
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 139,709 87,365 310,919 537,993
Profit from operations per reportable segment 36,444 22,478 57,015 115,937
Additions to non-current assets 62,400 6,137 28,612 97,149
Reportable segment assets 221,317 138,823 606,788 966,928
Reportable segment liabilities 342,255 27,806 127,017 497,078
31 December 2021
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 103,363 72,668 95,956 271,987
Profit from operations per reportable segment 24,094 20,050 17,775 61,919
Additions to non-current assets (6,527) 10,611 378,174 382,258
Reportable segment assets (restated) 166,641 119,631 495,570 781,842
Reportable segment liabilities (restated) 253,441 27,714 89,533 370,688
7. Revenue
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Upstream products 75,244 44,190
Value added products 401,012 198,107
Value added services 52,292 24,064
Other 9,445 5,626
537,993 271,987
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.
The Group contract revenue for the year ended 31 December 2022 was £24.9m.
8. Expenses by Nature
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Cost of sales
Changes in inventories of finished goods and work in progress 9,003 10,854
Raw materials & production 198,984 75,452
Distribution & selling expenses 43,671 18,622
Employees & contractors 71,936 48,698
Maintenance expense 21,543 12,556
Plant hire expense 6,449 5,374
Depreciation & amortisation expense 30,085 17,156
Other costs of sale 40,385 21,356
Total cost of sales 422,056 210,068
Administrative expenses
Operational admin expenses 42,455 30,175
Corporate admin expenses 22,815 27,351
Total administrative expenses 65,270 57,526
Corporate administrative expenses include £14.1 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 2022 31 December 2021
£'000 £'000
Fees payable to the Company's auditor and its associates for the audit of the 414 360
Company and Consolidated Financial Statements
Fees payable to the Company's auditor and its associates for tax services - -
Fees paid or payable to the Company's auditor and its associates for due 117 300
diligence and transactional services associated with the readmission of the
Company trading on AIM
Fees paid to the Company's auditor for other services - -
531 660
9. Employee Benefits Expense
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
Staff costs (excluding directors) £'000 £'000 £'000 £'000
Salaries and wages 87,682 54,071 2,990 2,104
Post-employment benefits 250 278 28 80
Social security contributions and similar taxes 1,891 1,679 329 386
Other employment costs 8,594 8,436 2 17
98,417 64,464 3,349 2,587
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
Average number of FTE employees by function # # # #
Management 69 85 6 5
Operations 1,550 1,371 - -
Administration 426 409 4 4
2,045 1,865 10 9
10. Directors' Remuneration
31 December 2022
Directors' fees Bonus Taxable benefits Pension benefits Options issued Total
£'000 £'000 £'000 £'000 £'000 £'000
Executive Directors
David Barrett 375 469 15 - - 859
Garth Palmer 375 469 15 40 - 899
Max Vermorken 475 594 15 60 - 1,144
Non-executive Directors
Timothy Hall 50 - - - - 50
Simon Chisholm 50 - - 5 - 55
Jacques Emsens 50 - - - - 50
Axelle Henry ((1)) 34 - - - - 34
1,409 1,532 45 105 - 3,091
31 December 2021
Directors' fees Bonus Taxable benefits Pension benefits Options issued ((4)) Total
£'000 £'000 £'000 £'000 £'000 £'000
Executive Directors
David Barrett 358 469 14 - 61 902
Garth Palmer ((2)) 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 ((3)) 120 - 6 8 - 134
Simon Chisholm 43 - - 4 - 47
Jacques Emsens 43 - - - - 43
1,214 1,243 39 55 264 2,815
(1) Appointed on 26 April 2022
(2) 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.
(3) Resigned on 31 August 2021.
(4) Options issued relate to options granted in the 2019 financial year
and vesting in the 2021 financial year.
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.
11. Non-underlying Items
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Acquisition related expenses 4,345 20,125
Amortisation and remeasurement of acquired assets 6,761 1,888
Amortisation of finance costs 1,085 784
Restructuring expenses 1,780 2,334
Innovation 497 -
Discontinued operations 97 169
Share option expense 4,670 2,321
Unwinding of discount on deferred consideration 443 825
Net other non-underlying expenses & gains 335 614
20,013 29,060
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 Johnston
Quarry Group, RightCast and La Belonga and undertook due diligence on numerous
other prospective acquisitions.
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 relate to the reorganisation and integration of
recently acquired subsidiaries, including costs associated with site
optimisation, transitional salary costs, redundancies, severance &
recruitment fees, and costs associated with financial reporting and system
migrations.
Share option expense is the fair value of the share options issued during the
year and also includes fair value adjustment in 2022 resulting from changes to
certain option exercise dates, refer to Note 29 more information.
Unwinding of discount on deferred consideration is a non-cash adjustment
relating to deferred consideration arising on acquisitions.
Amortisation of finance costs is the amortisation of borrowing costs on the
Syndicated Senior Credit Facility. These costs are amortised over a 5-year
period.
Discontinued operations include the trading expenses, stock adjustments and
redundancies incurred at the Bury site for the period from January 2022 to
December 2022. Refer to Note 14 for more information.
Net other non-underlying expenses and gains include other advisory fees and
other associated costs.
12. Net Finance (Expense)/Income
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Net interest expense (9,557) (5,066)
Dividends 647 37
Other finance expense (1,085) (1,145)
Unwinding of discount on deferred consideration (443) (825)
(10,438) (6,999)
13. Other Net Gains/(Losses)
Consolidated
31 December 2022 31 December 2021
£'000 £'000
Gain/(losses) on disposal of property, plant and equipment 1,471 (101)
Other gain/(loss) 20 730
Gain/(loss) on call options 248 632
Impairment (30) (2,006)
Share of earnings from joint ventures 786 291
Forex movement - 788
2,495 334
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 2022 31 December 2021
£'000 £'000
Revenue - -
Cost of sales - -
Gross profit - -
Administration (97) (169)
Other expenses - -
Loss from discontinued operation (97) (169)
Basic earnings per share attributable to owners of the parent (expressed in (0.04) (0.04)
pence per share)
Cash movement 31 December 2022 31 December 2021
£'000 £'000
Net cash outflow from operating activities - (62)
Net cash inflow from investing activities - -
Net cash inflow from financing activities - -
Net increase / (decrease) in cash generated by the subsidiary - (62)
15. Taxation
Consolidated
31 December 2022 31 December 2021
Tax recognised in profit or loss £'000 £'000
Current tax (6,960) (4,529)
Deferred tax (2,182) (170)
Total tax charge in the Income Statement (9,142) (4,699)
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 2022 31 December 2021
£'000 £'000
Profit/(loss) on ordinary activities before tax 42,723 (2,272)
Tax on profit on ordinary activities at standard CT rate 9,806 494
Effects of:
Expenditure not deductible for tax purposes 1,119 4,874
Deferred tax not recognised 274 1,268
Remeasurement of deferred tax for changes in tax rates 214 (120)
Income not taxable for tax purposes (2,016) (903)
Prior year adjustments (785) (864)
Depreciation in excess of/(less than) capital allowances 347 (61)
Tax losses 183 11
Tax charge 9,142 4,699
The weighted average applicable tax rate of 18.26% (2021: 21.74%) used is a
combination of the standard rate of corporation tax rate for entities in the
United Kingdom of 19% (2021: 19%), 20% on quarrying of minerals and rental
property (2021: 20%) in Jersey and Guernsey, 25% (2021: 25%) in Belgium, 20%
(2021: 20%) in Finland, 20.6% (2021: 20.6%) in Sweden, 19% (2021: 19%) in
Poland and 20% (2021: 20%) in Estonia.
Deferred Tax Asset Tax losses Temporary timing differences Total
At 1 January 2022 - 3,129 3,129
Acquisition of subsidiary - - -
Charged/(credited) directly to - 1,295 1,295
equity
At 31 December 2022 - 4,424 4,424
Deferred Tax Liability Tax losses Temporary timing differences Total
As at 1 January 2022 (As previously stated) (128) 5,318 5,190
Prior year adjustment - refer to Note 39 - 12,527 12,527
As at 1 January 2022 (As restated) (128) 17,845 17,717
Acquisition of subsidiary - 827 827
Arising on fair value adjustments on PPA - 47,127 47,127
Charged/(credited) directly to - 2,933 2,933
income statement
At 31 December 2022 (128) 68,732 68,604
Deferred income tax assets of £4.4 million (2021: £3.1 million) are
recognised to the extent that the realisation of related tax benefits through
future taxable profits is probable. Deferred tax liabilities of £68.6
million (2021: 5.2 million) are recognised in full.
16. Property, Plant and Equipment
Consolidated
Office Equipment Land and minerals Land and buildings Plant and machinery Vehicles Right of use Construction in progress Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
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
As at 1 January 2022 4,593 189,967 121,233 289,918 24,595 13,243 643,549
Acquired through acquisition 157 - 20,601 15,294 227 2,052 38 38,369
Transfer between classes - 74 (5,722) (24,217) (2,350) 35,014 (2,799) -
Fair value adjustment - 211,629 10,508 12,450 3 - - 234,590
Additions 222 2,051 15,160 24,274 1,491 5,926 1,884 51,008
Disposals (56) (468) (4,525) (2,888) (2,356) (2,862) - (13,156)
Forex 177 2,881 653 10,382 915 (696) (671) 13,642
As at 31 December 2022 5,093 406,134 157,908 325,213 22,525 39,434 11,695 968,002
Depreciation
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
As at 1 January 2022 4,040 70,174 68,393 226,274 18,232 - 387,113
Transfer between classes - - (1,850) (14,533) (1,101) 17,484 - -
Acquired through acquisition 77 - 8,693 7,588 32 392 - 16,782
Charge for the year 208 6,548 5,139 14,996 1,303 6,257 - 34,451
Disposals (55) - (91) (1,597) (1,742) (907) - (4,392)
Forex 170 3,179 1,098 6,580 613 (780) - 10,860
As at 31 December 2022 4,440 79,901 81,382 239,308 17,337 22,446 - 444,814
Net book value
As at 31 December 2021 553 119,793 52,840 63,644 6,363 - 13,243 256,436
As at 31 December 2022 653 326,233 76,526 85,905 5,188 16,988 11,695 523,188
The transfer between classes relates to reclassing the assets which are right
of use assets.
Company
Office Equipment Land & Buildings Motor Vehicle Right of Use Total
£'000 £'000 £'000 £'000 £'000
Cost
As at 1 January 2021 30 54 25 - 109
Additions 215 211 - - 426
Disposals - - - - -
As at 31 December 2021 245 265 25 - 535
As at 1 January 2022 245 265 25 - 535
Transfer between classes - (265) (25) 290 -
Fair value adjustment - - - (68) (68)
Additions 14 - - - 14
Disposals - - - - -
As at 31 December 2022 259 - - 222 481
Depreciation
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
As at 1 January 2022 50 40 16 - 106
Transfer between classes - (40) (16) 56 -
Charge for the year 50 - - 68 118
Disposals - - - - -
As at 31 December 2022 100 - - 124 224
Net book value
As at 31 December 2021 195 225 9 - 429
As at 31 December 2022 159 - - 98 257
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 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 (3,373) - - (3) - (463) (3,839)
As at 31 December 2021 293,439 2,816 386 571 3,238 5,986 306,436
As at 1 January 2022 (As previously stated) 293,439 2,816 386 571 3,238 5,986 306,436
Prior year adjustment - refer to Note 39 12,527 - - - - 12,527
As at 1 January 2022 (As restated) 305,966 2,816 386 571 3,238 5,986 318,963
Additions - - - - - 1,713 1,713
Additions through business combination 89,096 - - - - - 89,096
Price Purchase Allocation - B-Mix (4,429) - - - - - (4,429)
Price Purchase Allocation - Nordkalk (233,955) 3,795 - - - - (230,160)
Amortisation - (826) (85) (87) (160) (1,507) (2,665)
Forex 17,147 - - - - 210 17,357
As at 31 December 2022 173,825 5,785 301 484 3,078 6,402 189,875
An adjustment has been made to reflect the initial accounting for the
acquisition of B-Mix and Nordkalk by the Company, being the elimination of the
investment in B-Mix and Nordkalk against the non-monetary assets acquired and
recognition of goodwill. In 2022, the Company determined the fair value of the
net assets acquired pursuant to the acquisition of B-Mix and Nordkalk, via a
Purchase Price Allocation ('PPA') exercise. For B-Mix, the PPA determined a
decrease of £4.4 million of goodwill with the corresponding movement to
uplift the value of the Land and Buildings. For Nordkalk, the PPA determined a
decrease of £234 million of goodwill with the corresponding movement to
uplift the value of the Customer relations, Vehicles, Land and Buildings and
Land and Minerals
The goodwill total is made up of £40.2 million for Johnston, £81.3 million
for Nordkalk, £24.7 million for the PPG Platform, £3.7 million for the
Benelux platform, £16.7 million for Dimension Stone, £3.2 million for
Harries, £3.7 million for the Ronez and £327,000 for La Belonga.
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 sixteen operating segments are considered to be Ronez in the Channel
Islands; Topcrete, Poundfield, CCP, RightCast, Harries and Johnston in the UK;
CDH, Stone, GduH and B-Mix in Belgium; and Quicklime, Nordics, Baltics and
Poland 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 2023 and the five year plan to 2027. The key
assumptions on which budgets and forecasts are based include sales volumes,
product mix and operating costs. These cash flows are then valued using a
discounted cashflow model, with a terminal value based on a perpetuity growth
model. 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 10 per cent; which was calculated 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 2022 31 December 2021
£'000 £'000
Shares in subsidiary undertakings
At beginning of the year 435,085 120,039
Additions 47,537 315,046
Disposals - -
At period end 482,622 435,085
Loan to/(from) Group undertakings 100,799 119,110
Total 583,421 554,195
Investments in Group undertakings are stated at cost less impairment.
Details of subsidiaries at 31 December 2022 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
Greenbloc 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
GD Harries & Sons Limited England £1 Dormant
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
Baltic Aggregates Oy Finland €1 Crushing stone
NK - East Oy Finland €8,869 Holding company
Nordkalk Ukraine TOV Ukraine €539 Mining rights
Nordkalk Prykarpattya TOV Ukraine €308 Dormant
Johnston Quarry Group Limited England £190 Holding company
Building Stone Limited England £1 Stone producing
CSSL No.2 Limited England £1 Dormant
Guiting Quarry Limited England £100 Construction materials
Bath Stone Group Limited England £110 Holding company
Monks Park Minerals Limited England £1 Dormant
Stoke Hill Minerals Limited England £13,620 Minerals rights
The Bath Stone Company Limited England £1 Construction materials
Hartham Park Minerals Limited England £1 Dormant
Costwold Stone Sales Limited England £1 Dormant
Flick Quarry Limited England £1 Dormant
Creeton Quarry Limited England £100 Dormant
Oathill Quarry Limited England £1 Dormant
Ropsley Quarry Limited England £100 Dormant
Righcast Limited England £103 Concrete manufacturer
Canteras La Belonga SA Spain €273,575 Construction materials
Name of subsidiary Registered office address
SigmaFin Limited 6 Heddon Street, London W1B 4BT
Foelfach Stone Limited 6 Heddon Street, London W1B 4BT
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
GD Harries & Sons Limited 6 Heddon Street, London W1B 4BT
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, Finland
Nordeka Maden A.S Levent MH.Cömert Sk. Yapi Kredi Blokl.c Blok no.1 c/17 Besiktas
Baltic Aggregates Oy Skräbbölentie 18, FI-21600, Parainen, Finland
NK - East Oy Skräbbölentie 18, FI-21600, Parainen, Finland
Nordkalk Ukraine TOV Ivana Makukha st. 14, 78000, Ivano-Frankivsk Oblast, Tlumach, Ukraine
Nordkalk Prykarpattya TOV Galytska st 10, 7600 Ivano-Frankivsk, Ukraine
Johnston Quarry Group Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Building Stone Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
CSSL No.2 Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Guiting Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Bath Stone Group Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Monks Park Minerals Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Stoke Hill Minerals Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
The Bath Stone Company Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Hartham Park Minerals Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Costwold Stone Sales Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Flick Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Creeton Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Oathill Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Ropsley Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
RightCast Limited Unit W4 Junction 38 Business Park, Darton, Barnsley, South Yorkshire, S75 5QQ
Canteras La Belonga SA Oviedo, Cellagu-Latores, 33193, Spain
For the year ended 31 December 2022 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
· GD Harries & Sons Limited
· Johnston Quarry Group Limited
· Building Stone Limited
· CSSL No.2 Limited
· Guiting Quarry Limited
· Bath Stone Group Limited
· Monks Park Minerals Limited
· Stoke Hill Minerals Limited
· The Bath Stone Company Limited
· Hartham Park Minerals Limited
· Costwold Stone Sales Limited
· Flick Quarry Limited
· Creeton Quarry Limited
· Oathill Quarry Limited
· Ropsley Quarry Limited
· RightCast Limited
Impairment review
The performance of all companies for the year ended 31 December 2022 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, managing 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 2022 31 December 2021
£'000 £'000
Interests in associates 576 524
Interest in joint venture 5,942 5,134
6,518 5,658
Proportion of ownership interest held
Name Country of incorporation 31 December 2022 31 December 2021
NorFraKalk AS Norway 50% 50%
Summarised financial information
NorFraKalk AS - Cost and net book value 31 December 2022 31 December 2021
£'000 £'000
Current assets 8,815 10,184
Non-current assets 7,338 6,507
Current liabilities 3,388 3,989
Non-current liabilities 1,872 2,621
21,413 23,301
For the period 1 January 2022 to 31 December 2022 For the period 1 September 2021 to 31 December 2021
£'000 £'000
Revenues 20,055 5,694
Profit after tax from continuing operations 1,602 442
20. Trade and Other Receivables
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
£'000 £'000 £'000 £'000
Trade receivables 78,879 66,166 2,555 1,787
Prepayments 4,917 3,598 358 346
Other receivables 3,009 3,490 255 757
86,805 73,254 3,168 2,890
Non-current
Other receivables 4,259 4,759 - -
4,259 4,759 - -
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:
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
£'000 £'000 £'000 £'000
UK Pounds 21,479 18,731 3,168 2,890
Euros 49,112 38,435 - -
Swedish Krona 13,945 14,976 - -
Zlotys 5,803 5,088 - -
Ukrainian Hryvnia - 7 - -
Turkish Lira 725 666 - -
Russian Ruble - 110 - -
91,064 78,013 3,168 2,890
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 2022 31 December 2021
Cost and net book value £'000 £'000
Raw materials and consumables 26,104 18,642
Finished and semi-finished goods 36,187 22,543
Work in progress 5,489 3,345
67,780 44,530
The value of inventories recognised as a debit and included in cost of sales
was £9 million (31 December 2021: (£10.8 million)).
22. Cash and Cash Equivalents
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
£'000 £'000 £'000 £'000
Cash at bank and on hand 68,623 69,916 5,055 19,038
68,623 69,916 5,055 19,038
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:
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
'000 '000 '000 '000
UK Pounds 8,536 25,555 1,576 14,704
Euros 56,322 43,163 3,479 4,334
Swedish krona 1,100 991 - -
Zlotys 2,479 17 - -
Ukrainian Hryvnia 20 64 - -
Turkish Lira 166 112 - -
Russian Ruble - 14 - -
68,623 69,916 5,055 19,038
23. Trade and Other Payables
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
£'000 £'000 £'000 £'000
Current liabilities
Trade payables 69,907 55,865 2,964 984
Wages Payable 13,662 11,910 1,032 -
Accruals 39,627 19,681 4,475 3,402
VAT payable/(receivable) 3,785 3,975 (12) (223)
Deferred consideration 5,873 1,331 4,243 730
Other payables 7,589 5,451 824 674
140,443 98,213 13,526 5,567
Non - Current liabilities
Deferred consideration 5,051 4,401 5,051 4,401
5,051 4,401 5,051 4,401
The carrying amounts of the Group and Company's trade and other payables are
denominated in the following currencies:
Group Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
'000 '000 '000 '000
UK Pounds 44,493 30,073 16,418 9,539
Euros 69,579 46,161 2,159 429
Swedish krona 21,523 15,924 - -
Zlotys 9,663 10,336 - -
Ukrainian Hryvnia 9 9 - -
Turkish Lira 227 96 - -
Russian Ruble - 15 - -
145,494 102,614 18,577 9,968
24. Borrowings
Consolidated Company
31 December 2022 31 December 2021 31 December 2022 31 December 2021
£'000 £'000 £'000 £'000
Non-current liabilities
Syndicated Senior Credit Facility 206,342 191,937 206,342 191,937
Bank Loans 2,617 73 - -
Finance lease liabilities 7,375 8,177 - -
IFRS 16 leases 12,296 12,012 27 131
228,630 212,199 206,369 192,068
Current liabilities
Syndicated Senior Credit Facility 20,000 8,000 20,000 8,000
Bank Loans 6,500 5,301 - -
Finance lease liabilities 2,927 3,442 - -
IFRS 16 leases 4,419 4,980 72 102
33,846 21,723 20,072 8,102
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 2022 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 2022 31 December 2021
£'000 £'000
Syndicated Senior Credit Facility 206,342 191,937
Bank Loans 2,617 73
Finance lease liabilities 7,375 20,189
IFRS 16 leases 12,296 -
228,630 212,199
Finance Lease Liabilities (including IFRS 16 leases)
Lease liabilities are effectively secured, as the rights to the leased asset
revert to the lessor in the event of default.
Consolidated
31 December 2022 31 December 2021
Finance lease liabilities - minimum lease payments £'000 £'000
Not later than one year 7,346 8,037
Later than one year and no later than five years 14,547 14,643
Later than five years 5,124 3,666
27,017 26,346
Future finance charges on finance lease liabilities 3,200 2,265
Present value of finance lease liabilities 30,217 28,611
For the year ended 31 December 2022, the total finance charges were £0.6m.
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 2022 31 December 2021
£'000 £'000
Not later than one year 7,566 8,278
Later than one year and no later than five years 14,983 15,082
Later than five years 5,278 3,776
Present value of finance lease liabilities 27,827 27,136
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 2022 192,010 13,302 28,611 233,923
Increase/(decrease) through financing cash flows (10) (17,371) (12,980) (30,361)
Increase from refinancing 26,189 3,023 6,942 36,154
Amortisation of finance arrangement fees (1,085) - - (1,085)
Increase through obtaining control of subsidiaries 3,205 7,017 4,098 14,320
Transfer between classes (20,000) 20,000 - -
Foreign exchange movement 8,650 529 346 9,525
As at 31 December 2022 208,959 26,500 27,017 262,476
25. Provisions
Consolidated
31 December 2022 31 December 2021
£'000 £'000
As at 1 January 10,175 6,160
Acquired on business combination 631 5,721
Deduction (109) (1,706)
10,697 10,175
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; £4.84m for the Nordkalk sites; and £338,943 for the
Johnston 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, £83,000 is to cover the loss on the Holcim contract
in CDH, £106,000 for legal fees, £1.76m for other restructuring costs in the
Nordkalk entities and £2.66m 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 8% (2021: 7.07%) 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 £317,000.
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 2022 2021
£'000 £'000
Assets - -
Liabilities 3,543 4,292
Net defined benefit liability at end of year 3,543 4,292
Amounts recognised in the Statement of Financial Position 2022 2021
£'000 £'000
Present value of funded defined benefit obligations 2,468 2,222
Fair value of plan assets (2,071) (2,068)
397 154
Present value of unfunded defined benefit obligation 3,128 4,138
Unrecognised past service cost - -
Total 3,543 4,292
Amounts recognised in the Income Statement 2022 2021
£'000 £'000
Current service cost 160 32
Interest cost 47 26
Expected return on plan assets (127) 227
Total pension expense 80 285
Changes in the present value of the defined benefit obligation 2022 2021
£'000 £'000
Defined benefit obligation at beginning of year 4,292 3,593
Current service cost 160 32
Interest cost 47 26
Benefits paid (317) (220)
Remeasurements (127) 227
Acquired in business combination - 1,524
Remeasurements in OCI (844) -
Other significant events 249 -
Foreign exchange movement 83 (890)
Defined benefit obligation at end of year 3,543 4,292
Amounts recognised in the Statement of Changes in Equity 2022 2021
£'000 £'000
Prior year cumulative actuarial remeasurements 152 (75)
Remeasurements (844) 227
Foreign exchange movement 54 -
Cumulative amount of actuarial gains and losses recognised in the Statement of (638) 152
recognised income / (expense)
Movements in the net liability/(asset) recognised in the Statement of 2022 2021
Financial Position
£'000 £'000
Net liability in the balance sheet at beginning of year 4,292 3,593
Total expense recognised in the income statement 207 58
Contributions paid by the company (317) (220)
Amount recognised in the statement of recognised (income)/expense (127) 227
Acquired in business combination - 1,524
Remeasurements in OCI (844) -
Other significant events 249 -
Foreign exchange movement 83 (890)
Defined benefit obligation at end of year 3,543 4,292
Principal actuarial assumptions as at 31 December 2022
Discount rate 2.77%
Future salary increases 2.56%
Future inflation 2.20%
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 2022
Loans & receivables Total
Assets per Statement of Financial Performance £'000 £'000
Trade and other receivables (excluding prepayments) 86,148 86,148
Cash and cash equivalents 68,623 68,623
154,771 154,771
At amortised cost Total
Liabilities per Statement of Financial Performance £'000 £'000
Borrowings (excluding finance leases) 235,459 235,459
Finance lease liabilities 27,017 27,017
Trade and other payables (excluding non-financial liabilities) 145,495 145,495
407,971 407,971
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
Company 31 December 2022
Loans & receivables Total
Assets per Statement of Financial Performance £'000 £'000
Trade and other receivables (excluding prepayments) 2,810 2,810
Cash and cash equivalents 5,055 5,055
7,865 7,865
At amortised cost Total
Liabilities per Statement of Financial Performance £'000 £'000
Borrowings (excluding finance leases) 226,342 226,342
Finance lease liabilities 99 99
Trade and other payables (excluding non-financial liabilities) 18,577 18,577
245,018 245,018
31 December 2021
Company
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
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 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 ((1)) 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
As at 1 January 2022 637,915,750 6,379 399,897 406,276
Exercise of options & warrants - 4 January 2022 330,594 3 125 128 4 125 129
As at 31 December 2022 638,246,344 6,383 400,022 406,405
4
125
129
As at 31 December 2022
638,246,344
6,383
400,022
406,405
(1) Includes issue costs of £8,748,365
The authorised share capital consists of 702,070,978 ordinary shares at a par
value of 1 penny.
On 4 January 2022, the Company issued and allotted 304,580 new Ordinary Shares
at a price of 40 pence per share as an exercise of options. On this same day
the Company issued and allotted 26,014. new Ordinary Shares at a price of 25
pence per share as an exercise of options.
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 2022 31 December 2021
Grant date Expiry date Exercise price in £ per share # #
5 January 2017 30 December 2026 0.25 260,146 286,160
5 January 2017 30 December 2026 0.40 11,878,645 12,183,225
15 April 2019 15 April 2026 0.46 9,030,934 9,340,934
30 December 2019 30 December 2026 0.46 7,976,392 8,389,726
29,146,117 30,200,045
The Company and Group have no legal or constructive obligation to settle or
repurchase the options or warrants in cash.
The Options issued on 5 January 2017 expiry date was extended from 5 January
2022 until 30 December 2026 on 15 December 2021.
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
Revalued on 15/12/2021 15/12/2021 - -
Life (years) 5 5 7 7
Share price 0.8295 0.8295 0.465 0.525
Risk free rate 0.40% 0.40% 0.31% 0.55%
Expected volatility 31.32% 31.32% 4.69% 8.19%
Expected dividend yield - - - -
Marketability discount - - - -
Total fair value £58,345 £661,604 £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.
2017 Options A and B were extended for another 5 years by the Board on 15
December 2021 and were revalued on this day.
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 2022 31 December 2021
Weighted average exercise price Weighted average exercise price
# £ # £
Outstanding at beginning of the year 30,200,045 0.45 25,416,105 0.42
Granted - - - -
Vested - - 5,921,330 0.46
Exercised (1,053,927) 0.44 (1,137,390) 0.40
Outstanding as at year end 29,146,117 0.44 30,200,045 0.45
Exercisable at year end 29,146,117 0.44 30,200,045 0.45
LTIP awards
31 December 2022 31 December 2021
Weighted average valuation price Weighted average valuation price
# £ # £
Outstanding at beginning of the year - - - -
Granted 25,620,000 0.69 25,620,000 0.69
Vested - - - -
Exercised - - - -
Outstanding as at year end 25,620,000 0.69 25,620,000 0.69
Exercisable at year end - - - -
30. Other Reserves
Group
Deferred shares Capital redemption reserve Revaluation reserve Capital reserve Foreign currency translation reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
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) (11,236)
As at 1 January 2022 762 600 1,037 - (13,635) (11,236)
Other comprehensive income - - 3,634 - - 3,634
Currency translation differences - - - - 17,176 17,176
Other equity adjustments - - - 687 - 687
As at 31 December 2022 762 600 4,671 687 3,541 10,261
31. Non-controlling interests
Group
£'000
As at 1 January 2022 10,894
Shares issued to non-controlling interest -
Acquired in business combination 974
Non-controlling interests share of profit in the period 2,343
Dividends paid (3,038)
Foreign exchange movement 559
As at 31 December 2022 11,732
31 December 2022 31 December 2021
Suomen Karbonaatti Other individually immaterial subsidiaries Suomen Karbonaatti Other individually immaterial subsidiaries
£'000 £'000 £'000 £'000
Current assets 17,592 12,427 22,164 3,970
Non-current assets 3,348 19,605 4,430 13,166
Current liabilities 7,975 7,627 6,100 2,232
Non-current liabilities 5,767 4,361 9,011 885
Net Assets 7,197 20,045 11,483 14,019
Net Assets Attributable to NCI 3,527 7,366 3,981 5,905
Revenue 37,760 23,662 52,245 9,734
Profit after taxation 3,294 1,993 6,748 148
Other comprehensive income - - - -
Total comprehensive income 3,294 1,993 6748 148
Net operating cash flow 4,196 1,556 7,326 1,596
Net investing cash flow (679) (2,782) (603) (2,170)
Net financing cash flow (6,208) 1,701 (6,012) (4,040)
Dividends paid to NCI 3,038 - 601 -
32. Earnings Per Share
The calculation of the total basic earnings per share of 4.89 pence (2021:
(1.89) pence) is calculated by dividing the profit attributable to
shareholders of £31,238 million (2021: loss of £6,971 million) by the
weighted average number of ordinary shares of 638,243,627 (2021: 400,170,256)
in issue during the period.
Diluted earnings per share of 4.68 pence (2021: (1.77) pence) is calculated by
dividing the profit attributable to shareholders of £31,238 million (2021:
loss of £6,971 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
667,430,527 (2021: 427,854,251). The weighted average number of shares is the
opening balance of ordinary shares plus the weighted average of 327,877
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 measured 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 - 436 1,526 - - 1,962 - 1,962 1,962
CO(2) emission hedge - - - - - - - - -
Electricity hedges - - 13,493 - - 13,493 13,493 - 13,493
Financials assets not measured at fair value
Trade and other receivables (excl. Derivatives) - - - 91,065 - 91,065 - - -
Cash and cash equivalents - - - 68,623 - 68,623 - - -
Financial liabilities measured at fair value
Forward exchange contracts - - 1,441 - - 1,441 - 1,441 1,441
Electricity hedges - - 5,804 - - 5,804 5,804 - 5,804
Financial liabilities not measured at fair value
Loans - - - - 235,459 235,459 - - -
Finance lease liability - - - - 27,017 27,017 - - -
Trade and other payables (excl. derivative) - - - - 145,495 145,495 - - -
34. Business Combinations
Johnston Quarry Group
On 31 January 2022, the Group acquired 100 per cent of the share capital of
Johnston Quarry Group Limited ('JQG') for a cash consideration of £35.5
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 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 42,046
Repayment of loan (6,996)
Deferred consideration 8,500
43,550
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 1,587
Trade and other receivables 2,160
Inventories 881
Property, plant & equipment 16,896
Trade and other payables (5,840)
Borrowings (10,795)
Provisions (325)
Income tax payable (350)
Deferred tax liability (826)
Total identifiable net assets 3,388
Goodwill 40,162
Total consideration 43,550
Since 31 January 2022 JQG has contributed a profit of £4.5 million and
revenue of £16.5 million. Had JQG been consolidated from 1 January 2022, the
consolidated statement of income would show additional profit of £11,000 and
revenue of £1.2 million.
RightCast Limited
On 27 April 2022, the Group acquired 100 per cent of the share capital of
RightCast Limited ('RightCast') and its subsidiaries for a cash consideration
of £2.55 million. RightCast is registered and incorporated in England.
RightCast is a precast company specialising in the design, manufacture, supply
and installation of bespoke precast concrete products.
The following table summarises the consideration paid for RightCast and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Initial Cash 2,550
Working capital adjustment 297
Cash acquired and repatriated to vendors 690
Deferred consideration 450
3,987
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 315
Trade and other receivables 1,153
Inventories 462
Property, plant & equipment 75
Trade and other payables (474)
Income tax payable (57)
Deferred tax liability (19)
Total identifiable net assets 1,455
Goodwill (refer to Note 17) 2,532
Total consideration 3,987
Since 27 April 2022 RightCast has contributed a profit of £0.5 million and
revenue of £2.8 million. Had RightCast been consolidated from 1 January 2022,
the consolidated statement of income would show additional profit of £0.1
million and revenue of £0.9 million.
La Belonga
On 31 July 2022, the Group acquired 65 per cent of the share capital of La
Belonga with the remaining 35 per cent acquired by CdB. for a cash
consideration of €2.2 million. La Belonga is registered and incorporated in
Spain. La Belonga is a high-quality producer of limestone.
The following table summarises the consideration paid for La Belonga and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Net cash consideration 1,919
Deferred consideration 1,129
3,048
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 127
Trade and other receivables 2,253
Investments 46
Inventories 619
Deferred tax asset 7
Property, plant & equipment 4,740
Intangible assets 23
Trade and other payables (1,500)
Borrowings (3,374)
Provisions (220)
Total identifiable net assets 2,721
Goodwill 327
Total consideration 3,048
Since 31 July 2022 La Belonga has contributed a profit of £0.1 million and
revenue of £1.3 million. Had La Belonga been consolidated from 1 January
2022, the consolidated statement of income would show additional profit of
£19,000 and revenue of £3.2 million.
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 2022 31 December 2021
£'000 £'000
Ronez Limited (22,764) (18,328)
SigmaGsy Limited (7,663) (5,705)
SigmaFin Limited 20,549 20,146
Topcrete Limited (10,346) (9,494)
Poundfield Products (Group) Limited 5,356 5,501
Foelfach Stone Limited 557 466
CCP Building Products Limited 4,586 5,647
Carrières du Hainaut SCA 14,948 18,251
GDH (Holdings) Limited 10,035 9,588
B-Mix Beton NV 8,013 1,295
Stone Holdings SA 384 376
Nordkalk Oy Ab 70,196 91,367
Johnston Quarry Group 7,747 -
RightCast Limited (799) -
100,799 119,110
Loans granted to or from subsidiaries are unsecured, have interest charged at
2% and are repayable in Pounds Sterling on demand from the Company.
All intra Group transactions are eliminated on consolidation.
37. Ultimate Controlling Party
The Directors believe there is no ultimate controlling party.
38. Events After the Reporting Date
On 28 February 2023, the Company raised gross proceeds of approximately £30
million through the issue of 55,555,555 new Ordinary Shares at a price of 54
pence per share.
On 10 March, the Company announced the completion of the Goijens and the Juuan
Dolomitik acquisitions for an aggregate consideration of £12 million. Goijens
operates two concrete plants and concrete recycling facilities, as well as
pumping and other services and Juuan Dolomitik, a specialist supplier of
high-quality dolomitic limestone. They will be immediately enhancing to the
Group's underlying earnings, and the acquisitions were funded from the net
cash proceeds generated by the Group's equity fundraising in February 2023.
No further financial information on these transactions is available at this
time, due to the proximity of the acquisitions to the reporting date of these
financial statements.
On 15 March 2023, the Company announced that it had been successful in its
claim to seek compensation from the Swedish state in respect of land use
restrictions. The verdict, pronounced on 14 March 2023, made an award to
Nordkalk in compensation for economic loss, of which a sum of c. SEK 188
million (c. £17 million) that is to be adjusted for inflation and interest
until payment is made, is receivable by the Group as its share. The verdict is
subject to appeal until 4 April 2023 and receipt of funds remains subject to
the outcome of any appeal, if lodged.
39. Prior year restatement
As part of previously made acquisitions, a PPA exercise was performed to split
out separately identifiable assets from acquired goodwill. On completion of
this exercise, the deferred tax impact on the fair value uplift of the assets
identified during the PPA was not correctly reflected in line with IAS 12. As
a result, a prior year adjustment is required which results in an increase to
the Group's deferred tax liability of £12,527,074 with acquired goodwill
increasing by the same amount. There are no changes to the prior period
income statement, statement of comprehensive income, statement of changes in
equity or the statement of cash flows.
The impact of the prior year restatement in respect of the classification of
the investments held are as follows:
2021 2021
As presented Restatement As restated
£'000 £'000 £'000
Non-current assets
Intangible assets 306,436 12,527 318,963
Non-current liabilities
Deferred tax liability 5,190 12,527 17,717
Net assets 411,154 - 411,154
1 (#_ftnref1) Where industry specifications allow for it
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