REG - SigmaRoc PLC - Final Results, Notice of AGM & Investor Pres
18/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240318:nRSR1420Ha&default-theme=true
RNS Number : 1420H SigmaRoc PLC 18 March 2024
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
18 March 2024
SigmaRoc plc
('SigmaRoc', the 'Company' or the 'Group')
Audited full year results for year ended 31 December 2023
Notice of AGM
SigmaRoc (AIM: SRC), the AIM quoted lime and limestone group, is pleased to
announce its audited results for the year ended 31 December 2023.
Statutory results Underlying 1 results
31 December 2023 31 December 2022 YoY 31 December 2023 31 December 2022 YoY
change change
Revenue £580.3m £538.0m +8% £580.3m £538.0m +8%
EBITDA £87.3m £95.0m -8% £116.7m £101.7m +15%
EBITDA margin 15.0% 17.7% -270bps 20.1% 18.9% +120bps
Profit before tax £28.3m £42.7m -42% £71.2m £62.7m +14%
EPS 1.95p 4.89p -60% 8.12p 8.0p +1%
Net debt2 £182.4m £193.8m -6%
Covenant Leverage 1.57x 1.93x -19%
ROIC 10.8% 10.3% +50bps
FCF3 £47.0m £54.3m -12.7%
FCF Conversion4 40.3% 53.4% -12.7ppt
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. Non-underlying items are described further in the Chief Financial
Officer's report. These measures are not defined by UK IAS and therefore may
not be directly comparable to similar measures adopted by other companies.
2 Net debt including IFRS 16 lease liabilities.
3 Free Cash Flow takes net cash flows from operating activities and adjusts
for CapEx, net interest paid, and for the underlying result further adjusts
for net non-underlying expenses paid and working capital payments relating to
pre-acquisition accruals or purchase price adjustments.
4 Free Cash Flow Conversion is FCF relative to underlying EBITDA.
5 Company compiled analyst consensus estimates as of 18 December 2023: revenue
of £596.9m, underlying EBITDA of £110.2m and underlying EPS of 7.5p.
6 ROIC calculation revised to include total equity in invested capital rather
than just share capital.
Financial highlights:
Strategic execution driving strong performance, against a challenging market
backdrop
- Trading resilience, efficiency gains and value-accretive
acquisitions combined to deliver record earnings performance, ahead of
original expectations5
- LFL revenue grew by 2% and underlying EBITDA by 10%, despite a 4%
volume decline, reflecting the Group's strong market position, pricing power
and differentiated operational model with diversified end markets
- Continued emphasis on operational efficiency, with £4m of
annualised profitability gains delivered across the Group, enabled further
underlying EBITDA margins improvement to over 20%, demonstrating the Group's
pricing power
- Underlying EPS increased by 1% despite significant increase in
finance costs and impact of dilution from the £30m equity fundraise in
February 2023 with the proceeds fully invested in the months following the
fundraise
Strong financial position and improved returns
- Covenant Leverage reduced to 1.57x further demonstrates ability of
Group to de-gear while continuing to invest in growth
- ROIC increased by 50bps to 10.8%6, with clear path to medium term
target of 15%
- Underlying EBIT ROI of 14% for acquired businesses (including FY23
acquisitions)
- Solid FCF at £47m reduced 13% YoY due to higher net interest
payments and working capital absorption to support growth
Operational and Strategic highlights:
Growth
- Benefited from broad diversification across end markets and regions
- Subdued demand in residential construction markets was partially
offset by a stronger backdrop for infrastructure projects and industrial
markets
- Leadership in local markets and continued focus on service
excellence supported a dynamic pricing approach, which largely offset the
impact of inflation through the year
Investment
- Entered into agreements, in November 2023, to acquire CRH's European
lime and industrial limestone assets, transforming the Group into a leading
European producer
- Deployed £32m to acquire six businesses generating £8m EBITDA
across the UK, Belgium, France and the Nordics, which have all been
successfully integrated and generating proforma 2023 EBITDA of £10m
- CapEx of £33m includes £5m of quarry development contributing
toward c.175 years of mine life at CDH and Ronez
- Successfully developed new asphalt plant in Llandarcy with first
commercial sales commencing in March 2024
- Successful commissioning of Aqualung carbon capture technology in
Sweden, ongoing deployment of biofuels across network, and partnership formed
with Materials Evolution to further decarbonise concrete product offerings in
line with the Group's ESG strategy
Execution
- Continued safety improvement across the Group, with Total Incident
Frequency Rate (TIFR) and Serious Harm Injury Frequency Rate (SHIFR) improved
by 6% and 31% respectively including both employees and contractors.
- Successful launch of Aqualung carbon capture facility in Sweden with
development now focused on purification, compression and liquefaction for
utilisation
- Launch of Puccini Blue, a revolutionary, highly sustainable
re-interpretation of Belgium Blue Stone, revealing unique features not seen in
other natural stone
- Progress on Materials Evolution partnership to produce low-carbon
concrete products with the first plant on CCP's site near Wrexham expected to
be operational mid-2024
- Delivering continued YoY sustainability improvements:
o 29% reduction in CO(2) e intensity since 2021 baseline
o 12% YoY reduction in electrical energy intensity
o 71% fossil free electricity across the Group supported by 100% fossil free
electricity in Nordics and Belgium.
o POC to show kilns can run on between 50%-100% biofuel depending on kiln
type
o 35% of total energy consumption from alternative and renewable means
Outlook
- Trends from 2023 expected to persist into 2024, with strong
infrastructure and industrial markets and subdued residential construction
- Trading for the first two months of the year in-line with
expectations, hence the Board's outlook for FY24 remains unchanged
- Integration of CRH European lime and industrial limestone assets is
progressing well and the Board is confident that once integrated, the Group
will begin delivering previously outlined synergies, enhancing cash flows, and
reducing leverage
Notice of Annual General Meeting
SigmaRoc is also pleased to provide notice that its Annual General Meeting
('AGM') will be held at 12:30pm on Friday 12th April 2024 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 and be available to view on the Company's
website shortly.
Max Vermorken, CEO, commented:
"2023 is another year where SigmaRoc delivered performance ahead of
expectations in challenging market conditions. We have demonstrated resilient
trading, growing revenue, EBITDA and EPS whilst managing the balance sheet to
deliver reduced year end gearing, despite the growth and continuing investment
into the business.
The strategic initiatives we launched in the year are all now contributing,
with the transformational acquisition of European lime assets that creates
Europe's leading lime business completed immediately post year end with the
integration of these assets progressing in line with our expectations.
We continue to innovate in our business and are well set up with our enlarged
footprint and focus on lime to benefit from long term drivers across the
industrial, construction and environmental markets. The transition to a green
economy will drive investment in critical infrastructure, with lime an
essential component of every aspect of this investment.
2024 has started well and I look forward to updating the market on what I
expect to be another year of progress as Northern Europe's leading lime
operator."
END
The full text of the statement is set out below, together with detailed
financial results, and will be available on the Company's website at
www.sigmaroc.com.
Analyst Briefing
SigmaRoc will host a hybrid briefing for invited analysts at 8:30am today. For
more details and to register to attend please email
SigmaRoc@walbrookpr.com.
Private Investor Presentation
SigmaRoc is pleased to announce that its Chairman, David Barrett, its Chief
Executive Officer, Max Vermorken, and its Chief Financial Officer, Garth
Palmer, will provide a live presentation to private investors reviewing the
2023 results and prospects via Investor Meet Company today at 2.00pm GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted at any time during the live presentation. Investors can sign
up to Investor Meet Company for free and add to meet SigmaRoc via:
https://www.investormeetcompany.com/sigmaroc-plc/register-investor
Investors who already follow SigmaRoc on the Investor Meet Company platform
have automatically been invited.
---------------------------------------------------------------------------------------------------------------------------
For further information, please contact:
SigmaRoc plc Tel: +44 (0) 207 002 1080
Max Vermorken (Chief Executive Officer)
Garth Palmer (Chief Financial Officer) ir@sigmaroc.com (mailto:ir@sigmaroc.com)
Tom Jenkins (Head of Investor Relations)
Liberum Capital (Nomad and Co-Broker) Tel: +44 (0) 203 100 2000
Dru Danford / Ben Cryer / John More
Deutsche Numis (Co-Broker) Tel: +44 (0) 207 260 1000
Richard Thomas / Hannah Boros
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418 8900
Mike Bell / Ed Allsopp
Walbrook PR Ltd (Public Relations) Tel: +44 20 7933 8780 sigmaroc@walbrookpr.com
(mailto:sigmaroc@walbrookpr.com)
Tom Cooper / Nick Rome
Mob: +44 7971 221972
CHAIRMAN'S STATEMENT
At the end of 2023, we achieved a key milestone in the development of our
Group, with the proposed acquisition of CRH's European lime assets. The first
and largest of three phases of this transaction completed post period end, in
January 2024, and we are now positioned to become a leading operator in these
markets across Europe. This strategic move, a long-held ambition cultivated
through careful assembly of the right assets in Northern Europe, brings
transformational scale, market position and product offering as we evolve into
a leading lime entity.
This strategic advancement was realised amidst challenging market conditions
both in equity markets and across various sectors and regions, yet we
maintained our core business's record of continuous improvement, with another
year of strong performance. This report offers deeper insights and context as
we gear up for yet another year of substantial progress.
Overview
I am very pleased to report another solid financial performance for the year.
Despite a challenging market, we achieved a 2% LFL increase in revenues to
£580m, while managing a 4% LFL decrease in volumes. This performance
underscores the robust and diverse nature of our Group, adept at sustaining
earnings growth even in subdued markets.
We also enhanced our underlying profitability, with a 10% LFL increase in
underlying EBITDA, and a modest yet positive improvement in underlying EPS to
8.12p. This was achieved amidst a significant YoY increase in financing costs
and the effective absorption of the dilutive impact from the February 2023
fundraising.
Our teams have demonstrated exceptional focus and efficiency, leading to
operational improvements across the board and a return to historical margin
trends. These efficiency improvements have been primarily operational and have
led to significant net cost reductions across the Group. Commercial
initiatives, selling product in new markets, or new products in old markets
have also helped deliver these results.
Our year was not just about financial gains. We made significant strides in
our environmental, social, and governance (ESG) initiatives. Our safety
standards have improved further due to a new group-wide safety management
approach. Environmentally, we have made a significant leap by operating one of
Europe's largest carbon capture systems in Sweden. In respect of Governance,
we are actively pursuing the addition of two independent board members and the
refinement of our policies and procedures strengthens our corporate structure.
Lime and limestone
The CRH Lime Acquisitions, announced in November 2023, stand as a
transformative milestone for the Group. These acquisitions not only elevate
our operations in the sector, but also align with our ambition for compounding
growth and market leadership. Lime and limestone, being essential to modern
life and industry, place us at the forefront of a market critical to the
ongoing economic transition towards sustainability.
Lime and limestone are less well understood as critical minerals for modern
life. They are however, both key, and will continue to be. Lime is sometimes
described as by far the cheapest alkali available, and alkali are a group of
chemical compounds without which a whole host of industrial processes simply
cannot run. This is what makes these minerals so exciting to us as a Group.
Outlook
As we enter FY24, we have several important areas of focus including the
completion of the remaining transactions from CRH and seamlessly integrating
these assets. Once integrated we will turn our attention to delivering the
previously outlined synergies, enhancing cash flows, and reducing leverage,
thereby setting a strong foundation for further growth, with a strategic focus
on lime and limestone.
The trading backdrop in the early months of 2024 remains similar to 2023,
characterised by variability and challenges, conditions which our diversified
market exposure is well set up to effectively address. The European
construction sector continues to face challenges, in the residential segments,
whilst ongoing infrastructure investment is expected to support ongoing
project activity. Industrial demand will vary by sector, influenced by both
local and global trends. In particular paper and pulp is having a better year,
while steel production benefits from disruptions in other regions.
Overall, however, we remain optimistic on the outlook for the year with
respect to potentially improving demand for newbuild housing as expected
interest rate cuts improve the wider construction climate. The likely
reversal should have further spill-over effects in other areas of the economy
benefitting our end markets in general.
In closing, the past year has been a testament to our resilience and strategic
foresight. As we move forward, we remain committed to facing challenges
head-on and capitalising on opportunities for growth and development.
Thank you for your continued trust and support.
David Barrett
Executive Chairman
17 March 2024
CEO's STRATEGIC REPORT
In 2016, we launched SigmaRoc with the ambition to operate a portfolio of
high-quality assets across Northern Europe which would give us an advantageous
competitive position thanks to their market position, barriers to entry,
margin and improvement potential and potential links to larger economic
players. All of these features are clearly evident in what we now very simply
describe as a leading European lime and limestone business.
Lime and limestone are a unique group of products, critical to modern life and
essential to a more sustainable world. Building a leading position in this
sector is not easy and has been the long-term ambition of our group, initially
through our acquisitions of CDH in 2019 and Nordkalk in 2021. Whilst market
and operating conditions in both 2022 and 2023 became increasingly
challenging, leading many competitors to pause their strategic growth
ambition, we continued to integrate, grow and optimise our businesses with the
same agility and focus that has been the hallmark of the Group. By retaining
focus on our goals, we were able to execute the transformational strategic
step in our evolution this year, through the acquisition of CRH's asset base
and successfully position ourselves as a leader in limestone and lime across
Northern Europe. This pivotal evolution has not only brought strategic
alignment across our operations but also paved the way for sustainable growth
and enhanced shareholder value.
The journey to this point has been intricate and required a series of
calculated assumptions and strategic steps, executed with precision and
timeliness. The support from our shareholders and the relentless commitment of
our team were instrumental in this journey. Their contributions have been the
cornerstone in establishing SigmaRoc as a key player in the European lime
industry, a sector vital to both construction and industrial applications.
This statement aims to provide additional context on the year that just
closed, the steps taken, and how these steps now set the Group up for chapter
two of its journey. We are now poised to focus on integrating our diverse
operations into a synergistic whole, a compounding value creator, a driver of
innovation, a leader in the sector, and hopefully the envy of the industrial
minerals space.
Financial performance
The Group again delivered a strong performance against very challenging market
conditions in 2023, a testament to the diversification and quality of the
business, as well as the skill in execution of our team. Group revenue
increased to £580m, a 2% LFL increase. Underlying EBITDA increased to £117m,
an increase of 10% LFL.
Underlying profit after tax increased to £58.8m, translating into underlying
EPS of 8.12p, representing a 1% increase YoY. This evolution is very pleasing
as the senior debt finance costs more than doubled between 2022 and 2023,
reflecting rising interest rates. Tax expense increased also, from 15% to 17%
of profit before tax, as some carry forward losses were used up in prior
periods. The ability of the Group to deliver another year of underlying EPS
growth is an enormous testament to the hard work of so many, in particular
those seldomly mentioned in our annual report, our machine and plant
operators, quarry staff and sales representatives who all look for ideas to
improve the performance of the Group.
Considering this performance on a more granular level, the Group performed
particularly well given some of the local trading conditions. Overall volumes
were down, as was to be expected, but by only 4% LFL, a modest drop when
considering an average European construction output slowdown of 1.7% with 1.6%
in the UK. The largest impact on volumes was therefore within the construction
segment, particularly newbuild housing, where much action was taken early in
the year.
Industrial performance was overall in line with our expectations, for a year
without volume growth on the back of overstocking in the paper segment, and a
reduction in demand for some chemical applications. These lower volumes were
compensated for by robust continued demand in steel, environmental and
infrastructure projects.
Considering these trends on a regional basis, our North West region,
comprising mostly construction materials businesses including more
commodity-like products, had several challenging months to endure as they
actively shifted focus from residential to infrastructure projects. Much
progress was made to upscale the precast products. The integrated businesses
in Wales and the Channel Islands delivered a strong year, despite several
contractor bankruptcies in Jersey created disruption in this market. As a
result, the North West region recorded a LFL decrease in revenues of 1%,
against a LFL decline in volumes of 8% and LFL underlying EBITDA improvement
of 1%.
The West region also delivered a solid performance across its two platforms,
Dimension Stone and Benelux. Initiatives taken in 2022, commercially and
within production, helped Dimension Stone trade successfully through a
challenging market, assisted by additional infrastructure work and overseas
sales. The aggregates and concrete businesses both had good years, despite
increased monthly volume volatility. West region volumes decreased by 8% LFL,
delivering overall revenues of €114m, a LFL decrease of 7%. In spite of the
difficult trading conditions, the West region was able effectively to manage
its cost base and increase underlying EBITDA by 15% LFL, achieving a 473bps
improvement in underlying EBITDA margin in the process. The new businesses in
the Limburg region and on the southern border of Belgium performed well,
delivering more than expected in their first partial year of ownership.
Our North East region had a great year delivering on all strategic and
financial priorities. The restructure announced at the end of 2022 helped
deliver a more agile organisation, able to capture more value via commercial
and operational initiatives. Revenues increased to €390m, a 3% LFL increase,
on volumes down 3% LFL, driven mainly by weaker residential construction
demand in the Nordics which has relatively low impact on profitability. The
Lime, Poland and the Baltic businesses performed strongly, translating into a
12% LFL increase in underlying EBITDA and a 179bps improvement in underlying
EBITDA margin.
Strategic development
2023 marked an exceptionally dynamic year in our Group's history. At the end
of 2022 we had identified several acquisition and investment opportunities
that were available at depressed valuations, due to macro-economic
uncertainty. This pipeline of bolt-on acquisitions consolidated our positions
in Sweden, Finland, the Baltic states, Benelux and the UK, expanding our Group
in terms of geography and product range in a year where volume growth was
likely to be extremely challenging.
As we embarked on integrating these bolt-on acquisitions, our focus shifted to
an opportunity that has been a long-held ambition of the Group - the
acquisition of CRH's lime and industrial limestone assets. These very
significant assets, known for their operational efficiency and value,
presented a complex acquisition proposition, especially in a transaction
climate that appeared less favourable.
Notwithstanding the backdrop, our evaluation of the transaction was very clear
and came from two perspectives: firstly, its financial viability, considering
immediate and long-term earnings growth and our ability to achieve and
maintain target ROIC levels; and secondly, the strategic value in elevating
our status, not merely as a participant in the lime and limestone sector, but
as a principal producer of these essential materials in Northern Europe.
What followed were months of work by a small but dedicated team to deliver a
transaction which if completed in full, would see our Group double in size and
establish itself as Europe's second largest producer by volume of a critical
industrial and construction mineral. The project was ambitious and extremely
challenging given its scale and structure.
It required a significant scale up in debt facilities which our two main
banks, Santander and BNPP, fully underwrote. We further relied on equity
investment from existing and new shareholders to fund the acquisitions.
Despite the complexities, with the critical support from our shareholders we
were able to finalise the transformative transaction by the end of November
2023.
The acquisitions do more than just amplify our size in the lime sector. First,
they clarify and accelerate our strategic direction, affirming our central
commitment to the lime and limestone sector. Secondly, they bring us to a
scale where concurrent objectives of compounding growth, share buybacks,
dividend distributions, and debt reduction become achievable. Lastly, through
geographic footprint and product offering, it transforms SigmaRoc into a
unique asset backed industrial minerals group with much further potential.
Safety
The Group has made significant progress in safety throughout 2023, with our
drive for continuous improvement prompting a fresh perspective on safety
practices. Although reporting via our HighVizz application was already
commendable, the implementation of learnings across the Group needed
improvement.
In response, our board safety committee introduced two fundamental changes.
First, we launched a Group-wide supervisor training programme to ensure that
supervisors are effectively fulfilling their roles. This training highlighted
that, in many cases, individuals designated as supervisors were not fully
performing their duties, leaving critical supervisory roles effectively
unmanned. As a result, unsafe behaviours or key learnings at Group level were
not consistently reaching operators.
The second major change was the initiation of a safety audit programme.
Similar in concept to a financial audit, the safety team of the Group, with a
Group-wide mandate, now conducts audits at all sites to assess both the
accuracy of safety documentation and the actual safety practices on the
ground.
These audits are designed to drive continuous improvement in our operations.
172 audits were conducted this year by Clint White, our HSE&P Director. An
incredible feat reflecting our unwavering commitment to ensuring the highest
standards of safety across all operations. A comprehensive review of the
progress we have made can be found in the ESG section.
Environmental and social
Alongside safety we made good progress in a number of other facets of our ESG
strategy in 2023. To document progress clearly, we have now included a
dedicated ESG section in this report. Of the many initiatives detailed in the
ESG report, there are four projects of which we are especially proud.
First, we believe we are the first kiln operation in Europe with a fully
functioning carbon capture facility, capable of capturing CO(2) at scale. The
installation has been fully commissioned and is now capturing CO(2) to
calibrate the second stage of the CCUS process - either utilisation (U), or
sequestration (S). Progress is being made in both areas, with the help of
additional testing facilities to ensure the quality and consistency of the
captured CO(2) for effective use in either U or S scenarios.
The second project is the launch of a full-scale aggregates recycling
installation in North Wales, which now treats and recycles 350kt tonnes of
waste aggregates per year. This initiative will eventually liberate c.5m
tonnes of virgin aggregate previously trapped beneath waste piles deemed of
insufficient quality for recycling. This complements our recycling activities
in Finland, Sweden, Belgium and the Channel Islands, where we are processing
returned concrete, demolition waste and waste aggregates.
The third project focuses on utilising 100% of the material extracted from our
dimension stone quarries. Previously, stone not suitable for high-quality
slabs or tiles was used for security bunds or construction aggregate - neither
high in value nor value-add. Throughout the year, our teams in Belgium have
explored various high-value applications for this stone, significantly
enhancing its potential.
Lastly, we have continued our efforts to clean our energy sources, both in
terms of combustibles and electricity. Significant progress detailed in the
ESG section, includes applications for wind turbines to supplement our solar
arrays and increase clean energy usage at various production sites.
Additionally, we are transitioning to biofuels for running our kilns, having
already achieved a full week of operation solely on biofuels - a first in the
industry.
With respect to social targets we have made a leap forward as well, delivering
over 22,000 hours of learning and development, as well as promoting diversity
across the group with 42% of non-operational positions being held by women. At
a local level our business continues to work closely with our communities,
donating time and materials to community projects as well as land and water
for community use.
Overall, the progress in 2023 has been significant, paralleled by our active
engagement in financial and growth objectives. More developments are expected
in the future.
Non-Financial and Sustainability Information Statement
The Company recognises the need to report on the on the principal risks
associated with climate change and sustainability under the Companies Act. The
Group has fulfilled their requirements to report under the act throughout
the ESG section.
Governance
We have continued to make significant strides in governance, with the rollout
of additional policies across the Group, further strengthening our commitment
to robust and effective management practices, and establishing new board
committees focusing on ESG and Innovation. These committees are instrumental
in guiding our strategic direction in these critical areas, ensuring that we
stay at the forefront of industry developments and maintain our commitment to
sustainable and innovative practices.
Innovation
The fourth pillar of our 4i operational model, innovation, has seen notable
advancement, extending beyond our ESG-related programmes. This year we have
made significant progress in our product range and innovation investment, with
three projects particularly standing out.
First, we have made considerable further progress with our Greenbloc range.
This product line is now incorporated in almost all of our concrete products,
available in three distinct performance levels. These levels provide a range
of embodied CO(2) reductions from 50% to 90%. Looking ahead, we aim to surpass
the 100% mark, positioning ourselves as pioneers in producing large-scale
negative carbon concrete products.
In our quest for innovation, we have initiated a scheme to fund external
technologies that can make our products more competitive, advanced and/or
sustainable. Highvizz was an early success within this initiative and building
on this, we have now formed a partnership with Mevo.
Mevo is a revolutionary new technology for the grinding and blending of
non-cementitious minerals, imparting certain binding properties to the
materials. We have supported Mevo in raising £15m in venture funding and have
assisted in the construction of its first large-scale plant. Once operational,
we anticipate that Mevo's technology will be at the forefront of decarbonising
all our concrete products.
Post period announcements
On 4 January 2024 the Group successfully completed the first of three proposed
CRH Lime acquisitions, and in conjunction with CRH Deal 1 completed admission
of the Group's enlarged share capital with a £200m gross equity fundraise and
new €875m senior finance facility.
On 1 March 2024 the Group issued notice of exercise of the call option to
acquire CRH's UK lime operations for a total consideration of €155m, with
the transaction expected to complete by the end of March 2024.
Outlook
SigmaRoc's impressive performance in 2023, reflected in our robust financial
results, underscores the inherent strength and quality of our assets and
operations. Since January 2024, we have welcomed several new businesses into
our Group, and this expansion is set to continue as we acquire the remainder
of CRH's European lime businesses in a planned phased approach. Each of these
acquisitions represents high-quality assets with strong market positions,
reinforcing our confidence in the sustained performance of not only our
existing operations but also those of the recently integrated businesses.
This report was approved by the Board on 17 March 2024.
Max Vermorken
Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REPORT
I am pleased to report yet another strong year financially for the Group,
surpassing expectations in a challenging operational and market environment.
While residential construction markets showed significantly subdued volume,
our profitability improved. This achievement is due to strong performance in
industrial minerals and infrastructure markets, coupled with proactive
management actions in the UK and Nordics to optimise operations.
For the year ending 31 December 2023, the Group generated revenue of £580.3
million (2022: £538.0 million) and underlying EBITDA of £116.7 million
(2022: £101.7 million). Underlying profit before taxation for the Group was
£71.2 million (2022: £62.7 million).
The statutory loss for the Company for the year ended 31 December 2023 before
taxation amounts to £42.9 million (2022: loss £24.4 million), which includes
£30.0 million of non-underlying expenses primarily pertaining to M&A
related cash fees, non-cash share option expense and amortisation of finance
costs.
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 2023.
2023 2022
£'000 £'000
Cash and cash equivalents 55,872 68,623
Revenue 580,285 537,993
Underlying EBITDA 116,688 101,723
Capital expenditure 43,046 52,721
Cash generated from operations was £65.4 million (2022: £87.7 million) with
a net decrease in cash of £11.5 million (2022: £4.0 million) after spending
£30.2 million on acquisitions net of cash acquired, £37.1 million in net
capital expenditure and £20.0 million in senior loan amortisation repayments.
Underlying EBITDA exceeded expectations and management forecasts, while
revenue and volumes were somewhat softer due to difficult residential
construction markets and dynamic pricing effects of lower input costs.
Capital expenditure relates to purchases of land and minerals, new plant and
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 JQG and Goijens.
The PPA process resulted in a reduction of goodwill recorded on the Statement
of Financial Position of the Group for JQG from £49.8 million to £16.7
million and a reduction in Goijens from £5.1 million to £1.6 million. The
reduction was to transfer the value of goodwill to tangible assets for land
and buildings, land and mineral reserves, intangible assets and deferred tax
assets.
Non-underlying items
The Company's loss after taxation for 2023 amounts to £42.9 million, of which
£30.0 million relates to non-underlying items, while the Group's
non-underlying items totalled £42.1 million for the year, of which £12.3
million, representing approximately 30%, are non-cash and non-tax deductible.
These items relate to seven categories:
1. £25.9 million in exclusivity, introducer, advisor, consulting, legal
fees, accounting fees, insurance and other direct costs relating to
acquisitions. During the year the Group acquired Juuan Dolomitik, Goijens,
Retaining, Björka Mineral, ST Investicija, Beton and entered into agreements
for the CRH Lime Acquisitions which comprise the vast majority of the costs
incurred during the year.
2. £6.6 million amortisation of acquired assets and adjustments to
acquired assets.
3. £4.0 million in share-based payments relating to grants of options.
4. £3.7 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. £0.4 million on unwinding of discounts on deferred consideration
payments for Harries.
7. £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 £15.9 million (2022: £10.4 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 £12.4 million (2022: £9.1 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 1.98 pence (2022: 4.89 pence) and underlying basic
EPS (adjusted for the non-underlying items mentioned above) for the year
totaled 8.12 pence (2022: 8.03 pence).
Statement of financial position
Net assets at 31 December 2023 were £514.9 million (2022: £469.9 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 £65.4 million (2022: £87.7 million). The
Group spent £30.2 million on acquisitions net of cash acquired, £37.1
million on capital projects including acquisition of intangibles, raised
£29.2 million net of fees from the issue of equity, generated £5.2 million
through the disposal of non-core property, plant & equipment, and repaid
net borrowings of £27.0 million. The net result was a cash outflow for the
year of £11.5 million.
Net debt
Net debt at 31 December 2023 was £182.4 million (2022: £193.8 million).
Bank facilities
On 22 November 2023 the Company entered a new syndicated senior credit
facility of up to €750 million (the 'New Debt Facilities') led by Santander
UK and BNPP, with the syndicate including several major UK and European banks
and a further €125 million bridge loan ('Bridge Loan'). The New Debt
Facilities were partially drawn on 4 January 2024 in connection with the CRH
Lime Acquisitions, specifically CRH Deal 1, and the legacy debt facility was
repaid as part of this process.
The New Debt Facilities comprise a €600 million committed term facility,
€150 million revolving credit facility and a further €100 million
uncommitted accordion.
The Group's New Debt Facilities have a maturity date of 21 November 2028 and
are subject to a variable interest rate based on EURIBOR plus a margin
depending on underlying EBITDA.
The Group's New Debt Facilities are subject to covenants which are tested
monthly and certified quarterly. These covenants are:
· Group interest cover ratio set at a minimum of 3.5 times EBITDA
while the Bridge Loan remains outstanding and then 4.0 times thereafter; 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 3.95x in 2024.
The Bridge Loan has a maturity date of 21 November 2024, with options for two
6-month extensions which if exercised would push maturity to 21 November 2025.
The Bridge Loan is subject to a variable interest rate based on EURIBOR plus a
margin as follows:
- 2% for months 0 - 6
- 3% for months 7 - 12
- 4% for months 13 - 18 (assuming exercise of the first extension
option)
- 5% for months 19 - 24 (assuming exercise of the second extension
option)
As at 31 December 2023, the Group comfortably complied with its bank facility
covenants under the terms of the legacy debt facility and total undrawn
facilities available to the Group under the legacy debt facility amounted to
approximately £173 million.
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 Group has achieved significant capital growth since its inception and
the Directors expect to commence dividend payments once the Group's Covenant
Leverage is below 1.5 times, which following CRH Deal 1 of the CRH Lime
Acquisitions, is currently above 2 times. The Directors therefore do not
recommend the payment of a dividend for the year (31 December 2022: nil).
Post balance sheet events
Post 2023 close we have conducted a series of activities worthy of mention in
this Annual Report. Further information is set out in Note 38.
This report was approved by the Board on 17 March 2024 and signed on its
behalf.
Garth Palmer
Chief Financial Officer
ESG REPORT
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.
This year has seen some substantial achievements in terms of ESG:
· 71% fossil free electricity across the Group with 100% fossil
free electricity in Nordics and Belgium
· 35% alternative energy that including alternative / renewable
electricity and biofuels / alternative fuels
· 29% GHG emissions intensity reduction from 2021 baseline
· 12% YoY energy consumption reduction
· 36% and 87% YoY reduction in NOx and SOx respectively
· 79% of all our businesses are IOS certified in either ISO9001,
ISO14001, ISO45001
· 172 site audits conducted for health and safety
· 0 fatalities and cases of silicosis
· 6% reduction in total injury frequency rates for employees and
contractors on our sites
· >25% reduction in lost time and serious harm frequency rates
for employees and contractors on our sites
· >2.5 billion litres of water supplied to local communities
· AA MSCI rating
· Launch of multiple sustainable products
Following on from our 2023 annual report and standalone annual 2023 ESG
Report, we continue to engage with stakeholders and commit to reporting and
disclosure of both mandatory and voluntary ESG and sustainability matters.
SECR - we continue to report our energy consumption and Scope 1-3 greenhouse
gas emissions according to the SECR regulations, including non-mandatory
aspects to ensure full transparency of our emissions and intensity ratio.
TCFD - This is the first year we have fully reported against the
recommendations and recommended disclosures of the Taskforce on
Climate-Related financial disclosures (TCFD), under the Companies (Strategic
Report) (Climate-related Financial Disclosure) Regulations 2022. The report
was developed in conjunction with external consultants. The report has been
reviewed by both the Audit Committee as well as the Company Auditors.
SASB - we continue to use SASB as a guiding principle for disclosure of
metrics that are material to our industry as per the SASB materiality matrix.
SBTi - In line with our stated ambition, this year we have submitted our Scope
1-3 carbon footprint alongside our emissions reduction targets data to SBTi.
We have committed to reducing our Scope 1&2 emissions, and to reducing our
Scope 3 emissions, aligned with the ambition and emissions reduction
trajectory required to curb global temperature rise to 1.5ºC.
European Energy Directive - UK ESOS report has been compiled and will be
submitted in line with UK submission requirements.
Sustainability recognition and Commitment - Currently holding a AA rating, we
are recognised as a "Leader" in our sector by MSCI. This year we registered
with CDP and submitted our first Climate Change questionnaire, and await
validation of our emissions reduction targets from the SBTi.
1.1. Stakeholder engagement and Materiality Assessment
We continually engage with a wide array of internal and external stakeholders
to identify the key sustainability issues that matter most to the Group and to
our core stakeholders. Our findings have guided our ESG journey, through
setting strategic sustainability performance targets against each material
issue. We report on our progress against the strategic targets set and further
information on our Materiality Assessment, including our Materiality Matrix:
Stakeholders Description How we engage
(in alphabetical
order)
Colleagues We have a dedicated workforce of c. 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 as Mineral
our license to operate. We are committed to adherence of legal and regulatory Products Association, Federation Industries Extractives and European Lime
requirements. We are committed to have independent review / oversight be it Association. Effective and clear policies to ensure governance. Education and
internally or externally. We are committed to a sustainability framework training of staff to reinforce compliance with regulations.
following review of international standards.
1.2. CO2 and the Lime Industry and how it varies from cement and
other industries.
To deal with CO(2), it is crucial to understand how CO(2) is governed and how
it is produced.
1.2.1. 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 directive concerning Phase IV (2021-2030) of the ETS entered into force on
8 April 2018. Secondary legislation and guidance documents defining the
revised ETS scheme were published in 2023 to align it with the target of a 55
% reduction of EU Green House Gas emissions. The new benchmark values (the
value at which the free allowance is set) are 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 drove traded prices in 2023 up to values of €80-€100/tonne,
though at the time of publishing they have dropped.
Recently the Cross Border Adjustment Mechanism (CBAM) was brought in for many
industries, including cement. Lime however is not part of CBAM. CBAM is a
mechanism whereby importers of materials such as steel and cement into Europe
will have to pay a duty / tax to ensure that European business and importers
are equally priced with regards to carbon costs. In order for those industries
to protect their boundaries, the consequence was to relinquish all free
allocation by 2034 compared to allowing allowance to run until the 2050
timeline associated with the current legislation. As previously mentioned,
lime is excluded from this and will continue its gradual reduction of free
allocation under the existing rules.
1.2.2. Lime Industry and CO2
For lime there are sources of CO(2) emissions throughout 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 have
achieved success with fossil free lime calcination, achieving 100%
substitution by biomass at one site. Our first Carbon Capture unit has also
been successfully installed and commissioned.
Process CO(2) can only be addressed by CCUS, with our first Carbon Capture
unit having been successfully installed and commissioned.
1.2.3. 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 currently in use by SigmaRoc, there are
a few other options, some of which are more traditional and geared towards
large emitters with each solution having 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 single
kilns / small cluster of kilns due to the proven technology, small footprint,
low capital and operating costs and high efficiencies. For our sites that have
multiple kilns with larger emission volumes, carbon capture can be done via
membrane, but also by other technologies, allowing a flexible approach to
carbon capture based on the site, infrastructure and country policies and
legislation.
Other technologies, that may be more suited to the SigmaRoc kiln network, are
being trialled and investigated including Ocean GeoLoop which employs an
all-electric pressure swing process for CO2 capture where a trial plant
designed to capture 10,000 tonnes of CO2 is to be established with Nordkalk's
joint venture partner in Norway.
This allows the Company to constantly select the best option for both its
operations and its operating jurisdictions.
1.3. Overall Performance
1.3.1. Road Map to Net Zero
ESG Subject Target Date Progress to date Status
Environment Carbon All concrete products available in low carbon and ultra-low carbon. 2025 100% of concrete products available in low carbon and ultra-low carbon. Achieved 2023
Carbon capture storage and utilisation trial plant operational. 2025 First module commissioned and operational. Achieved 2023
Alternative fuels used in mobile equipment. 2030 One site is running 100% fossil free. On Track
Alternative fuels used in fixed equipment (e.g. lime and asphalt). 2032 100% fossil fuel substitution achieved on vertical lime kiln using biofuel On Track
>50% fossil fuel substitution achieved on rotary lime kiln using biofuel
with potential to go to 100% upon completion of remaining biofuel project
All kilns are carbon neutral. 2038 CCUS system commissioned and capture taking place at initial kiln. On Track
Corporation with JV partner on all-electric pressure swing process CCUS at the
Norwegian site.
Net-zero. 2040 On Track
Energy intensity and efficiency 2.5% reduction in energy intensity. 2030 12% YoY energy intensity reduction in 2023 Achieved
29% reduction in energy intensity from 2021 baseline
100% third party energy sourced from renewable means. 2030 100% of electrical energy sourced from fossil free means in Nordics and On Track
Belgium
71% of Group electrical energy sourced from fossil free means
Resource utilisation and circular economy 100% of all manufactured products can utilise waste / recycled materials. 2025 100% of our manufactured products (where specification allows) can use Achieved 2023
recycled products
This includes products such as asphalt, concrete, and concrete products which
are already using, where specification allows, waste / recycled materials such
as nappies, RAP, PFA, GGBS and recycled aggregates.
100% utilisation of all production materials. 2027 Nordkalk Next, Nordkalk Complete, Puccini Blue, Mevo, Greenbloc, Aggregates On Track
reprocessing, and Concrete Product mix designs are key examples of where we
are driving towards 100% utilisation of all our production materials.
1.3.2. Environment
Pillar Key Focus Area Link to UN SDG Targets How Did we do Focus for 2024
Environment Sustainable use of reserves and resources. Goal 12: Responsible consumption & production Achieve Carbon net-zero road map targets. First Carbon Capture plant installed and commissioned Incorporation of new business into our ESG Road map
Goal 13: Climate Action
Reduction in energy intensity and increase in energy efficiency. Installation and commissioning of a new wash plant offering premium washed Continue to focus and accelerate where possible our net-zero road map targets.
aggregates previously designated as waste, in turn releasing approximately 5
million tonnes of limestone.
Maximisation of resource utilisation and circular economy. Continue energy and fuel optimisation to reduce the reliance on fossil fuels.
Creation of Puccini Blue to allow utilisation of up to 100% of the material
extracted from our dimension stone quarries.
100% fossil fuel substitution in lime kiln at an operating site.
First fossil free site
created.
UK ESOS completed, ready for submission to authorities.
Energy surveys completed across platforms that have found multiple
opportunities and savings.
Further solar installations and tendering for installation of wind energy.
Partnership with Mevo
Achieve low and ultra low carbon offering across all our Concrete Products
Nordkalk Next, Nordkalk Complete and Puccini Blue offering s in drive to
sustainable products across our other businesses
Submission of SBTi
Use of OneClick for creation of LCAs and EPADs
Environment Responsible use key resources including raw material, mineral and water. Goal 12: Responsible consumption & production
Goal 13: Climate Action
Environment Optimise energy use and minimise impact of our operations on the environment. Goal 12: Responsible consumption & production
Goal 13: Climate Action
Environment Contribute to sustainable construction and address environmental aspects Goal 9: Industry, innovation & infrastructure
either through product production or use.
Goal 12: Responsible consumption & production
1.3.3. Social
Pillar Key Focus Area Link to UN SDG Targets How Did we do Focus for 2024
Social Ensure people leave work in the same or better condition than when they Goal 3: Good health & wellbeing Total injury frequency rate and harm injury frequency rate reduction year on Improved safety performance with a notable 31% and 25% reduction in SHIFR and Increase Group audit team across the platform.
arrived.
year. LTIFR respectively. This data is not just limited to employees, but included
Goal 8: Decent work & economic growth
all those that work on our sites including contractors.
Continual roll out of supervisor alignment programme for Health & Safety.
Increase workforce engagement and retention.
172 site safety audits conducted by Group Health & Safety Director
Continued focus on 3 core Health & Safety areas: Structure &
Increase board diversity.
Compliance; Proactive Prevention; and Learn & Improve.
Initiation and roll out of PEPtalk across UK business
Continue to work with government agencies, education establishments and
Completion of initial Front Line Supervision initiative to ensure Supervisors communities to offer long term employment opportunities.
spend optimal time managing safety, quality and productivity.
Supervisor training to at least IOSH Managing Safely level.
Social Support the physical and mental health of our employees and their families. Goal 3: Good health & wellbeing
Social Attract, train, retain and engage our workforce. Goal 4: Quality Education
Goal 8: Decent work & economic growth
Social Be a good neighbour; Source local, buy local, sell local, invest local. Goal 11: Sustainable cities & communities
1.3.4. Governance
Governance Promote QCA and Corporate Governance Codes Goal 16: Peace, justice & strong institutions Continue to implement, and transparently disclose, compliance and matters Appointment of Tom Jenkins as Head of Investor Relations 100% compliance target on Formity training and acknowledgement for Group
relating to ESG.
polices across the Group
Formalisation of Formity across the Group to ensure governance training and
Maintain ongoing compliance in a dynamic environment across multiple compliance. Creation of dedicated ESG Board Committee
jurisdictions.
Engagement of CEN-ESG to conduct gap analysis and peer review report that Quarterly ESG reporting to Board and ESG Committee
identified opportunities to improve our policies and governance
Continued interaction with institutional investors' ESG & Stewardship
Completion of first TCFD report analysts to ensure compliance with reporting requirements.
Governance Ensure proactive Board oversight and independence of committees Goal 16: Peace, justice & strong institutions
Governance Focus on Risk Management and mitigation, including cyber Goal 16: Peace, justice & strong institutions
Governance Ensure transparency on reporting and Tax Goal 16: Peace, justice & strong institutions
1.3.5. SASB
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.
SASB Topic Accounting Metric Category Unit of Measure Code 2023 Result
Greenhouse Gas Emissions Gross global Scope 1 emissions, percentage covered under emissions-limiting Quantitative Metric tonnes (t) CO₂-e, Percentage (%) EM-CM-110a.1 662,135 tCo2e
regulations
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 tonnes (t) EM-CM-120a.1
(1) Nox, 447
(2) Sox, 196.3
Energy Management (1) Total energy consumed, Quantitative Gigajoules (GJ) Percentage (%) EM-CM-130a.1 4.3m GJ of energy
(2) percentage grid electricity, 15% from grid electricity
(3) percentage alternative, 35% alternative energy that includes alternative / renewable electricity and
biofuels / alternative fuels
(4) percentage renewable 5% renewable energy that includes renewable electricity and biofuel
Water Management Total fresh water withdrawn, Quantitative Thousand cubic meters (m.) Percentage (%) EM-CM-140a.1 34,000k m3 of water is managed that includes dewatering processes from
seasonal snow melt water, rain water collection etc
Of the water managed 2%, 748k m3, is used for operational purposes which is a
mix of fresh water, recycled and collected.
Of the water managed 8%, >2,5m m3, is allocated to local communities for
drinking water purposes.
Waste Management Amount of waste generated Quantitative Metric tonnes (t) EM-CM-150a.1 2,787,498t generated of which 88% is recycled
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 5,287 acres of land is disturbed which accounts for about 48% of our land
holdings.
17% of disturbed land was restored or is under restoration program
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 sections 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 £0
with cartel activities, price fixing, and anti-trust activities
Zero
1.4. Case Studies
1.4.1. Aqualung update and NorFraKalk
In 2023, SigmaRoc successfully installed and commissioned its first carbon
capture unit at Nordkalk's site in Köping, Sweden. The fully scalable carbon
capture system, utilising Aqualung's innovative membrane technology, is the
first-ever implementation of its kind in the industry.
The carbon capture system has been developed by Aqualung, a leading provider
of membrane-based carbon capture and separation technology, based in Norway.
Over the course of the preceding year, SigmaRoc reviewed an array of
technologies including amine absorption, solid absorption, membrane and
cryogenic. The Aqualung membrane technology was considered best suited for the
Group's operations based on the following factors: small footprint, low CapEx
and operating costs, and a relatively low complexity and efficient solution.
The system is modular and fully scalable, allowing SigmaRoc significant
flexibility in the roll out of the solution.
The Aqualung module installed in Köping can capture up to 25% of the process
emissions emitted from a standard kiln and was initially designed as a 'catch
and release' system to demonstrate the durability and efficiency of the
membranes. The unit is able to capture CO2 with a purity of 96% through just 2
stages.
The unit has been connected to a pilot purification module to simulate
settings required to produce higher purities of CO2 for different end use
applications that go beyond sequestration requirements. We believe review of
alternative application is required whilst European Governments and third
parties develops legislation, policies and sequestration infrastructure
including pipeline, storage facilities and portside facilities to allow for
commercially available sequestration.
SigmaRoc is working with various businesses and solution providers with
regards to the end use of CO2, including being involved with the NICE (Norvik
Infrastructure CCS East Sweden) project to explore all CO2 utilisation and
sequestration options.
Nordkalk also secured part-funding from the Swedish Energy Agency for the
implementation and scaling of the Köping carbon system with the intention to
capitalise on the learning from the engineering, commissioning and operation
phase of the initial module.
As part of the Groups JV, Norfrakalk in conjunction with Ocean GeoLoop are
initiating an industrial trial plant designed to capture 10,000 tonnes of CO2
in Norway using an all-electric pressure swing process.
1.4.2. Biodiversity
The concept of dynamic biodiversity management combines integrated management
of the operation of an active quarry with dynamic preservation, management and
restoration measures for species and habitats. This principle makes it
possible to integrate the populations of species present in the quarry into a
network of habitats ensuring constant availability of environments conducive
to their development.
We have integrated the dynamic management of biodiversity into its extraction
activity as part of the Life in Quarries project and have conducted annual
monitoring to assess the structure and functionality of the habitats created.
Since 2020, in Belgium we have ensured compliance with a management plan in
response to local biological issues using the tools and skills acquired as
part of the Life in Quarries project. A summary of activities in 2023 is set
out below:
ACTION UNIT commitment Current Active
Pioneer ponds (nb) 15 18 18
Mineral pioneer lawns (ha) 1.5 1.72 1.72
Swallow cliffs (nb) 1 2 2
Solitary bee slope (nb) 1 1 1
Various shelters (nb) 10 14 14
Permanent ponds (nb) 10 15 15
Gentle sloping banks (m) 50 52.53 52.53
Gull platforms (nb) 2 5 5
Artificial bat galleries (nb) 1 1 1
Historic bat galleries (nb) 1 1 1
During 2023, specific training was given by the University of Gembloux on two
areas:
Pollinators
Career pollinators and the awareness about the disappearance of wild bees
which are essential for biodiversity and a large part of the crops intended
for our food. Pollinators need quality food resources at each stage of their
life, winter nesting sites, construction materials for nesting and shelter to
protect themselves from the wind and predators all whilst considering light
pollution.
Planting hedges in Quarries
With their gradual disappearance throughout the country, hedges have taken
away the multiple roles they fulfilled. They have local and regional
ecological importance by diversifying the landscape and providing habitat and
food resources for many species. They fulfil other roles of ecological
connectivity and provide a range of ecosystem services, shading, fight against
runoff, improvement of soil quality. They also support the quarry in other
services: fight against erosion, protective barrier, sound insulation. They
can constitute an additional opportunity to contribute to the conservation of
Biodiversity in the quarry.
1.4.3. Waste reuse & Circular Products
Circular solutions have been a large focus in 2023 with the extension and
launch of several sustainable product lines, such as Greenbloc, Mevo, MTech,
Puccini Blue, Nordkalk Next and Nordkalk Complete on industrial scales.
Mevo
Mevo is a revolutionary new technology for the grinding and blending of
non-cementitious minerals, imparting certain binding properties to the
materials. The Company has supported Mevo in raising £15m in venture funding
and has assisted in the construction of its first large-scale plant. Once
operational, we anticipate that Mevo's technology will be at the forefront of
decarbonising all our concrete products.
Greenbloc
Through 2023 Greenbloc technology has made significant strides in sustainable
development across the business, offering up to 50% carbon reduction on all
standard blocks produced at CCP Building Products. This has saved over 6,000
tonnes of CO(2) since its introduction and has been offered at no additional
cost to the customer. CCP completed its expanded new ranges by introducing an
additional premium range product, which sits between its standard 50%
reduction product and ultra cement-free and provides up to a 70% carbon
reduction at a competitive price.
Greenbloc can now be incorporated in almost all of our concrete products,
available in three distinct performance levels. These levels provide a range
of embodied CO(2) reductions from 50% to 90%. Greenbloc is a flexible
solution, enabling daily production and the ability to turn cement-free
concrete on-and-off for environmentally significant bespoke projects. These
include the UK Environmental Agency's Canvey Island Sea Defence and Jimmy's
Farm Polar Bear Relocation projects, both of which achieved over 80% reduction
in the carbon embodiment of the concrete products. As a result of these
initiatives, we have become one of the leading UK producers of cement-free
pre-cast concrete, producing more wet-cast cement-free concrete per day than
any other precast company, and underscoring the industry's shift towards more
sustainable practices. The resulting media focus has brought more cement-free
projects to the business for 2024. Looking ahead, we aim to surpass the 100%
mark, positioning ourselves as pioneers in producing large-scale negative
carbon concrete products.
A leap in innovation was gained through the production of a
carbon-negative-cement-free concrete block, which boasted a 115% carbon
reduction and was created using Greenbloc cement-free technology, combined
with carbon-negative aggregate produced from waste materials and captured
carbon. The block showed all the same characteristics and performance as
standard equivalent cement-based blocks and is expected to become part of an
extended future range with the introduction of Mevo at CCP in 2024
MTech
SigmaRoc has produced an in-house cement-free-carbon-negative concrete with
patentable opportunities, in collaboration with Marshalls. The concrete
combines carbon-negative materials with an in-house developed cement-free
binder which incorporates upcycled waste lime kiln dust from Nordkalk. The
patent application will be submitted in 2024 with expected opportunities for
use in 2025.
Puccini Blue
Developed by John Vis (Commercial Director of Carrieres du Hainaut) and Chris
Vermorken (Legal and Operational Advisor) with the help of Elisa Frenay (Group
Marketing Lead), Puccini Blue is a revolutionary new way to maximise quarry
yield by making the fault lines of products a distinctive and highly desirable
feature through resin technology. Material that once had to be separated due
to natural fault lines and therefore producing less yield, can now be
processed to ensure structural integrity of the fault lines to maximise not
only the yield, but the aesthetic product offering so desirable to our
customers.
Nordkalk Next
A product offering where at least 33% of the material used is reusable
material, own or external, that is not used or is considered waste. Further,
33% of energy used in production is fossil free. This is considered as per
energy content.
Nordkalk Complete
A product offering where 100% of the material used is material, own or
external, that is not used or is considered waste. CO(2) neutral scope 1 and
scope 2.
1.4.4. Sustainable Products
We are proud to be working in collaboration with a series of partners on the
development of products that promote sustainability, such as the EcoTile, that
creates spaces within the fabric of our cities and towns in which multiple
species can survive and thrive, and where humans can interact and engage
safely with nature. Initial trials showed that a multitude of species settled
where they were expected to, and in the design features - the multispecies
design works.
In 2023, Nordkalk introduced seven innovative, sustainable products and
solutions across a diverse range of applications. A brand-new range of
fossil-free products was launched in Ignaberga, Sweden, marking a significant
step forward in the company's commitment to sustainability. Additionally, more
efficient soil improvement products specifically designed for agricultural
purposes were developed for the Swedish market. In the construction sector,
Nordkalk developed two novel fillers: an ultrafine product aimed at reducing
the use of cement and additives in plasters, and another product designed to
minimise the bitumen content in roofing materials.
1.4.5. Our People and PepTalk
The way in which companies measure the "S" in ESG or their social impact has a
significant effect on the wellbeing of their employees, the wider community
and the organisation's stakeholders. The significance of measuring and
reporting social risks and impacts is underscored by the presence of social
inequalities and the necessity for a transition to a sustainable economy.
Prioritising employee wellbeing and the internal culture of organisations is
becoming increasingly important in today's society and are essential metrics
for the "S" in the ESG strategy as employee wellbeing is central to an
organisation's social performance.
In 2023 SigmaRoc incorporated PepTalk into its UK ESG strategy to enhance
employee engagement and well-being. PepTalk provides a data-led engagement
platform to improve psychological safety, enhance employee morale and reduce
attrition. The integration of PepTalk aligns with their commitment to
enhancing employee wellbeing and contributes to a positive corporate culture.
PepTalk supports our Social Responsibility strategy as follows:
● Employee Wellbeing: providing a safe, inclusive workplace and
offering a tool such as PepTalk's platform and program that can help in
delivering regular training and development opportunities to foster
professional growth.
● Employee Satisfaction & Feedback: measurement of employee
satisfaction and the success of wellbeing initiatives.
● 100% reach: modern technology enables a dispersed team to stay
connected through a wide range of content-led program and actions plans that
are designed to support team connection and engagement.
● Expert-led Wellbeing and Culture Calendar: rolling wellbeing and
culture content calendar, designed in partnership with industry experts and
thought leaders that enables employees to perform at their best.
● Team Building Initiatives: customised competitions across wellness
and activity designed to drive employee connection and collaboration.
● Behavioural Change Programs: behavioural change programs and
interventions for managers and team members to address potential inhibitors to
engagement and promote learning and skill building.
● Leadership Tools: supporting managers to work on building
psychological safety, trust and authenticity with their teams.
1.5. Environment
1.5.1. Carbon Emissions
1.5.1.1. Targets & Performance
Baseline Year Target Year Target description Target reduction Status
2021 2040 Net zero by 2040 100% On Target
7% YoY emissions reduction in 2023
12% emissions reduction since the 2021 baseline
2021 2038 All kilns are carbon neutral by 2038 100% On Target
100% fossil fuel substitution achieved at site
Carbon capture module installed and commissioned
2021 2030 2.5% reduction in energy intensity by 2030 2.5% Achieved
12% YoY achieved in 2023
29% overall reduction since the 2021 baseline
2021 2030 100% third party energy sourced from renewable means by 2030 On Target
100% of Belgium, Finland and Sweden use alternative / renewable electrical
energy
71% of Group uses alternative / renewable electrical energy
As we go through the SBTi verification process, the Group will develop defined
targets.
The SECR report is conducted in line with 2019 UK Government Environmental
Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting
Standard (revised edition) and covers all operations where we have operational
control. The SECR report also includes both mandatory and voluntary reporting
to ensure transparent disclosure.
GHG Emission metric tonnes CO2e
Year 2021(1) 2022 2023
Total tCO2e 750,586 709,020 662,134
Year on Year reduction 6% 7%
2021 baseline reduction 12%
GHG emissions intensity
Year 2021(1) 2022 2023
Total tCO2e per £m Revenue 1,617.6 1,317.9 1,141.1
Year on Year reduction 19% 13%
2021 baseline reduction 29%
Energy Consumption
Year 2021(1) 2022 2023
Total mWh 1,340,619 1,258,477 1,193,958
Year on Year reduction 6% 5%
2021 baseline reduction 11%
Energy Intensity
Year 2021(1) 2022 2023
Total mWh per £m Revenue 2,889.2 2,339.2 2,057.6
Year on Year reduction 19% 12%
2021 baseline reduction 29%
(1) Emissions based on SECR reports including both Mandatory and Voluntary
data. To allow like for like comparisons, 2021 data was adjusted for Nordkalk
(the North East region) which was reported for a full 12 months in 2021
(despite joining SigmaRoc in September 2021) and 2022 to provide comparable
annual emissions for the Group
1.5.1.2. Mitigation
The 3 focuses areas for 2023 were:
- Scope 1 - commissioning of the Company's first modular Carbon Capture system
- Scope 2 - improvement of energy use and energy intensity and sourcing of
alternative energy
- Scope 3 - continual development of sustainable products
The commissioning of the Company's first modular Carbon Capture system and
continual development of sustainable products helping recue scope 1 and scope
3 emission. The modular plant is now commissioned and able to capture with a
purity of 96% through just 2 stages. Subject to finding a commercial outlet
for the CO2, the Company is in a position to expand the roll out of the
system. Whilst Governments and third parties continue to try to develop
necessary policies and infrastructure for transport and sequestration of CO2,
the Company is proactively identifying independent transportation systems that
can utilise road and rail as well as internal and external CO2 uses such as
the sequestration of CO2 into our own concrete products to support Greenbloc
and Mevo technology.
The Company has engaged with a series of mandatory and voluntary programmes to
focus on the reduction of emissions intensities. These include reporting to
CDP as well as submission to SBTi of which we are awaiting the verification
process.
Additional initiatives include completion of our ESOS report which is part of
the European Energy Directive and the submission of our annual SECR report
that looks at both mandatory and voluntary reporting aspects and is a guide to
focus areas.
1.5.2. Toxic Emissions and Waste
1.5.2.1. Governance and Strategy
Environmental Management Systems (EMS) are key to ensuring management of toxic
emissions and waste. Across our businesses, 76% of our businesses (by revenue)
have an ISO14001 certified Environmental Management System (EMS) that also
include provisions for waste management with no fines being incurred in 2023.
Our EMSs, including our 14001 audited EMS are regularly audited by external
auditors as well as additional specialised audits conducted by the likes of
MCA and Lloyds Register for aspects such as MARPOL (the International
Convention for the Prevention of Pollution from Ships.)
1.5.2.2. Targets & Performance
In terms of air quality, our NOx and SOx performance has seen a significant
step change reduction. This has been achieved through a combination of kiln
network balancing and the use of Selective Non Catalytic Reduction (SNCR)
systems.
2022 2023 YoY Reduction
NOx 699 447 36%
SOx 1544.19 196.3 87%
1.5.3. Biodiversity and Land Use
1.5.3.1. Policy
SigmaRoc operates a series of policies that include:
- Sustainability Policy
- Environment and Water Policy
- Biodiversity Policy
- Energy and Climate Policy
These include provisions and commitments on sustainably managing natural
resources and raw materials, minimising disturbance from operations and
reclaiming habitat and disturbed land.
The Board has overall responsibility for the Policies and approves the
policies which are then cascaded throughout the business with a formal
acknowledgement and training program to be rolled out in 2024 to all employees
and contractors as required. These will be monitored and audited quarterly by
the Board with a target of 100% compliance for employees in terms of
acknowledgement and training.
1.5.3.2. Program and Structures
Restoration and Rehabilitation
As part of site planning and permits, most government agencies and authorities
require restoration plans to be in place. These restoration plans cannot be
completed until the operations have come to end of life, however where there
is an opportunity, our sites work concurrently to restore areas that are no
longer operational.
Despite the Group operating over a large area of approximately 5,287 acres,
with 17% having been restored or under restoration restored in line with local
authorities and community requirements.
Protection of natural ecosystems
Even before a point of final restoration, our sites work closely with local
authorities, working groups and communities to ensure we maximise not only the
preservation of existing ecosystems, but often the generation of further
eco-systems to provide a thriving environment for existing species but also
previously extinct species. This includes both fauna and flora with success
derived through programs such as flora relocation programmes, wildflower
programs, Red Bill chough breeding programs, Peregrine falcon nesting programs
and great crested newt habitat establishment.
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.
1.5.3.3. Biodiversity and Community Impact
The Company works closely with communities and local authorities to ensure
that our ongoing operations and future operations minimise environmental and
community impact. Our future works are supported by impact assessments prior
to the commencement of work.
Operational considerations not only seek to minimise impact, but also actively
enhance biodiversity in surrounding areas.
Before commencing operation of a site, the potential environmental, including
bio diversity, 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.
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).
1.5.4. Water management
Our operations manage over 34,000k m(3) of water per year including fresh
water, seasonal snow melt water, rainwater collection and run off.
Of the water managed, 2%, 748k m3, is used for operational purposes which is a
mix of fresh water, recycled and collected.
Furthermore, 8%, 2.5m m3, is allocated to local communities for drinking water
purposes.
1.6. Social
1.6.1. Community Relations
1.6.1.1. Community Impact and Disturbance
SigmaRoc operates a series of policies that include:
- Sustainability Policy
- Environment and Water Policy
- Biodiversity Policy
- Human Rights and Community policy
These include provisions and commitments to support protected areas, local
community engagement approach and impact assessments.
The policies are approved by the Board and cascaded throughout the business
with a formal acknowledgement and training program to be rolled out in 2024 to
all employees and contractors as required. These will be monitored and audited
quarterly by the Board with a target of 100% compliance for employees in terms
of acknowledgement and training.
The Company adopts a precautionary approach with formal channels for local
community engagement.
The businesses' environmental aspects are guided by their individual operating
policies, ensuring that local requirements, as well as wider requirements, are
met.
1.6.1.2. Distribution of Benefits
The Company promotes a local approach to both procurement and hiring to
support local businesses and communities.
A significant majority of our workforce live local to their place of work and
the Company engages in community development projects and philanthropic
programs to support local communities, be it donations of labour and
materials, allocation of land for public access or creation of community
activity areas
1.6.1.3. Conflict and Human rights
SigmaRoc operates a series of policies that include a Human Rights and
Community policy.
The policies are approved by the Board and cascaded throughout the business
with a formal acknowledgement and training program to be rolled out in 2024 to
all employees and contractors as required. These will be monitored and audited
quarterly by the Board with a target of 100% compliance for employees in terms
of acknowledgement and training.
1.6.2. Health & Safety
1.6.2.1. Overview
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. We are committed ensuring awareness about
H&S issues; reducing the number of severity of accidents; preventing
occupational disease; promoting wellbeing and preventing exposure to hazardous
substances
Principles
The Group continues to drive its overarching H&S standards which we
believe supported the continual improvement in health and safety in 2024.
Core Risks
The Company continues to focus on its core risks:
· 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 that have improved our control of core risks have
been:
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
We continue focus on front line leadership, with learning and development
supported by programs such as NEBOSH and IOSH training for supervisor and
front-line management.
Our boots on the ground program has been a significant contributor to our
ongoing health and safety success. Front-line leaders are more visible in the
business ensuring a continued improvement in the output of not only safety,
but also quality and productivity.
HighVizz
HighVizz continues to be continually developed and integrated into our newly
acquired businesses allowing us dynamically to report and manage safety.
HighVizz includes 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.
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.
1.6.2.2. Governance and strategy
69% of the Company's operations are certified to ISO18001/450001. Those that
are not, leverage the safety management systems.
In addition to safety management systems, the Group operates its own internal
audit function with over 172 internal audits conducted in 2023 across our
operations. The audits focus on both systems and sites, with interactive and
constructive feedback and actions generated. The audit also monitors the close
out of these actions.
1.6.2.3. Responsibility
The Board has overall responsibility for Health and Safety with the
implementation of the strategy and performance managed by the Group Health
& Safety committee that has both Executive Directors, Non-Executive
Directors and Executive Committee members as part of the committee. The
delivery of the strategy and driving of performance is then the directive of
the Group Health & Safety Director
Once the Health & Safety strategy is set by the Board and Group HS
Committee, the Executive Committee and Health & Safety Director implement
the strategy and drive the performance. Each month the performance is reviewed
by the executive management committee in a dedicated meeting and is cascaded
wider to ensure that all employees are engaged. Health and safety form a key
part of every Board and Executive meeting.
1.6.2.4. HS Policy
The Company operates a Group wide Health & Safety Policy that is cascaded
and implemented in every business. The Policy applies to any person operating
on our sites, including employees, contractors and visitors.
The policy is approved by the Board and cascaded throughout the business with
a formal acknowledgement and training program to be rolled out in 2024 to all
employees and contractors as required. These will be monitored and audited
quarterly by the Board with a target of 100% compliance for employees in terms
of acknowledgement and training.
1.6.2.5. H&S Targets and Performance
The group is committed to the continuous improvement of health and safety and
wellbeing for any person who is on our site, be it an employee, contractor or
visitor.
Health and Safety Frequency rate improvements
2020 2021 2022 2023
TIFR 2% 26% 17% 6%
(contractor ad Employees)
HIFR -9% 28% 6% 17%
contractor ad Employees)
SHIFR 27% -29% 19% 31%
contractor ad Employees)
LTIFR 47% -31% 8% 25%
contractor ad Employees)
Fatalities 0 0 0 0
Since the start of all reporting, both employees and contractors have been
included in all the statistics. In 2023 contractor and employee statistics
were separated to allow greater understanding of where focus should be between
contractor and employee.
2020 2021 2022 2023
Silicosis 0 0 0 0
1.6.3. Labour Management
Within the Group, as per the business owner at 31 December 2023 the Group
employed c.2000 people.
Within the heavy materials industry, diversity continues be a challenge
especially at an operational level with 80% of our workforce being at an
operational level. Across the Group 12% of our work force is female, however
42% of our shared services and management is female.
We continue to engage with school leavers and apprentices to ensure there is
succession planning and that the knowledge of our long serving employees is
retained within the business with our overall age profile as follows:
Age
0-20 1%
21-30 11%
31-40 20%
41-50 26%
51-60 31%
>61 11%
This development of our teams has been supported by >22,000 hours of
learning and development that has been delivered during the course of 2023.
In addition to the recruitment of staff to support our growing businesses, we
also review employee retention through aspects such as local satisfaction
surveys, training, career management plans and performance reviews.
The Group has not experienced any strikes / lockouts within its businesses in
the last three years.
1.6.3.1. Strategy
Each OPCO is responsible for the recruitment, management, and retention of its
employees with renumeration policies being guided by local legislation.
Generally, Supervisors and managers have a variable component to their
renumeration which is based on a combination of business performance as well
as personal performance and operators have a variable component to their
renumeration which is usually based on operation and site performance.
Each business complies with its jurisdictional requirements around aspects
such as pensions and where applicable / available offers additional
non-compensation employee benefits such as life assurance and medical
insurance that can often be extended to employees' families, allowing them
access to preferential rates.
1.7. Governance
1.7.1. Corporate Governance
1.7.1.1. Board
In 2023 the Board consisted of Independent Non-Executive Directors (57%) and
Executive Directors (43%).
In 2024 the Board is expected consist of Independent Non-Executive Directors
(67%) and Executive Directors (33%) subject to formal appointments.
In 2024 the Board is expected to have representation of experts in Finance,
Industry and ESG.
In 2024 the Independent Non-Executive Directors are expected to be 33% female
subject to formal appointment.
Committee Fully Independent Experts on Committee
Audit Yes Finance
Renumeration Yes Finance
Nominations Yes Finance
Safety Part Industry
ESG Part Industry
ESG2
Finance3
2 (subject to formal appointments)
3 (subject to formal appointments)
Expertise is based on both knowledge and competence through aspects such as
qualifications and career experience.
1.7.1.2. Ownership and Control
The Group is quoted on the AIM market of the London Stock Exchange with the
founding members and other senior management holding shares in the company
purchased by themselves in compliance with regulations and governed through
approval routes overseen by the CFO.
1.7.2. Corporate Behaviour
1.7.2.1. Business Ethics
SigmaRoc operates a series of policies that include:
- Anti Bribery & Corruption
- Criminal Finances Act Policy
- Code of conduct
- Competition Compliance
- Whistleblowing
- Disclosure (Share dealing) policy
- Sustainability (ESG) policy
- Environment and Water
- Biodiversity
- Energy and Climate Change
- Health and Safety
- Human Rights and Community
- Anti-Slavery and Human Trafficking
- IT systems and Data
- Data Protection and Security
- Diversity and Inclusion
- Tax
- Board Diversity
- Freedom of Association Policy
These policies are designed to facilitate good governance with the intention
of running the business in accordance with good business ethics. Furthermore
the policies are approved by the Board and cascaded throughout the business. A
formal acknowledgement and training program will be rolled out in 2024 to all
employees and contractors as required. These will be monitored and audited
quarterly by the Board with a target of 100% compliance for employees in terms
of acknowledgement and training.
Day to day management of the Policies is overseen by the Group's Executive
Committee.
When engaging suppliers and contractors, the operating businesses can conduct
review of their policies to ensure they observe the principles set out in our
policies.
1.8. 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: 79% of our business by revenue has ISO 9001
- ISO 14001 Environment: 76% of our business by revenue has ISO
14001
- ISO 18001/45001 Health & Safety: 69% of our business by
revenue has ISO 18001/45001
Benelux has local business and product accreditations that are deemed to have
greater relevance than the ISO, for both our customers and end-users.
2. Streamlined Energy and Carbon Report (SECR)
UK energy use and associated greenhouse gas emissions
Current UK based annual energy usage and associated annual greenhouse gas
("GHG") emissions are reported pursuant to the Companies (Directors' Report)
and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
("the 2018 Regulations") that came into force 1 April 2019.
Organisational boundary
Energy use and associated GHG emissions are reported across the Group as
defined by the operational control approach. This includes operations in the
UK, Channel Islands ('North West'), Belgium ('West') and across 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 require reporting of UK based energy use and
emissions.
Reporting period
The annual reporting period is 1(st) January to 31(st) December each year and
the energy and carbon emissions are aligned to this period.
Quantification and reporting methodology
The data was prepared with reference to the 2019 UK Government Environmental
Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting
Standard (revised edition). Emissions calculations were based on emission
factors published in the 2023 UK Government GHG Conversion Factors for Company
Reporting, Statistics Finland Fuel Classification 2023, Swedish Environmental
Protection Agency Emission Factors 2022, and the latest available factors from
the Association of Issuing Bodies (2022), Jersey Electricity and Guernsey
Electricity. The report has been reviewed independently by Briar Consulting
Engineers Limited. Electricity and gas consumption were based on invoice
records, consumption data and estimation techniques such as the direct
comparison and pro-rata extrapolation to complete missing data. Transport
usage was calculated from a combination of mileage and fuel records; however,
outside the UK and Channel Islands, transport fuel is included with other site
fuel usage associated with stationary assets. Gross calorific values were used
except for mileage energy calculations as per Government GHG Conversion
Factors.
The emissions are divided into mandatory and voluntary emissions according to
the 2018 Regulations, then further divided into the direct combustion of fuels
and the operation of facilities (scope 1), indirect emissions from purchased
electricity (scope 2) and further indirect emissions that occur as a
consequence of company activities but occur from sources not owned or
controlled by the organisation (scope 3).
Breakdown of energy consumption used to calculate emissions (kWh):
Energy type 2022 2023
Mandatory energy: UK Group Total(1) UK Group Total(1)
Gas 362,199 208,190,947 313,720 223,279,896
Purchased electricity 7,024,295 192,100,497 6,774,753 178,284,164
Transport fuel & site fuel 55,806,376 434,579,215 51,728,962 468,734,219
Total energy (mandatory) 63,192,870 834,870,659 58,817,435 870,298,279
Voluntary energy:
Bioenergy - 32,094,230 - 55,245,659
Coal - 387,013,242 - 264,308,210
Generated electricity(2) - 4,499,105 - 4,105,784
Total energy (voluntary) - 423,606,577 - 323,659,653
Total energy (mandatory & voluntary) 63,192,870 1,258,477,236 58,817,435 1,193,957,932
(1)The Group total includes consumption from the UK, Channel Islands, Belgium,
and Nordkalk (Estonia, Finland, Poland, Sweden, and Turkey).
(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 2022 2023
Mandatory requirements: UK Group Total(3) UK Group Total(3)
Scope 1
Gas 66 32,501 57 35,102
Company owned vehicles & site fuel 13,859 113,712 12,747 122,421
Scope 2
Purchased electricity (location-based) 1,358 42,771 1,403 40,492
Scope 3
Category 6: Business travel (grey fleet) 88 311 89 324
Total gross emissions (mandatory) 15,371 189,295 14,296 198,339
Voluntary requirements:
Scope 1
Bioenergy (CH(4) & N(2)O) - 2 - 3
Coal - 131,205 - 85,502
Process related emissions - 388,517 - 378,290
Scope 2
Purchased electricity (market-based) - - - 0
Total gross emissions (voluntary) - 519,724 - 463,795
Total gross emissions (mandatory & voluntary - location-based) 15,371 709,019 14,296 662,134
Outside of Scopes (biofuel tCO(2))
Bioenergy - 11,013 - 19,038
Petrol/Diesel biofuel content 223 239 304 323
(3) The Group total includes emissions from the UK, Channel Islands, Belgium,
and Nordkalk (Estonia, Finland, Poland, Sweden, and Turkey).
Intensity ratios 2022 2023
Tonnes CO(2)e per million-pound turnover
Mandatory emissions only 142.3 351.9 132.4 341.8
Mandatory & voluntary emissions 142.3 1,317.9 132.4 1,141.1
Breakdown of emissions across the Group by region for 2023 only (tCO(2)e)(4)
Emission source 2023
North West West North East Total
Scope 1
Bioenergy (CH₄ & N₂O) - - 3 3
Coal - 95 85,407 85,502
Gas 57 60 34,985 35,102
Company owned vehicles & site fuel 16,824 11,699 93,897 122,421
Process related emissions - - 378,290 378,290
Scope 2
Purchased electricity (location-based) 1,532 1,808 37,152 40,492
Scope 3
Category 6: Business travel (grey fleet only) 112 - 212 324
Total gross emissions (location-based) 18,525 13,662 629,946 662,134
Outside of scopes
Bioenergy (CO(2)) - - 19,038 19,038
Petrol/diesel biofuel content 323 - - 323
Intensity ratios
tCO(2)e per million-pound turnover 130.7 138.1 1,855.1 1,141.1
(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 CO2e 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 in the North East have seen a 7.5% (51,005 tCO(2)e) decrease in 2023
compared to 2022. A large share of this decrease is due to the further
transition away from coal to alternative fuel sources such as recycled fuel
oil and biomass.
In St John, Jersey, a new solar PV array was commissioned in April 2023. This
investment by Jersey Electric will benefit Ronez by saving approximately 57
MWh each year. Ronez has continued to experiment with low temperature asphalt
by switching to Nytherm during the reporting period to reduce gas oil usage by
approximately 55,500 litres. Furthermore, the addition of 3 EV's to the
company fleet (including 2 plug-in hybrids) will reduce diesel and petrol
consumption and therefore reduce emissions associated with transport. At
Carrières du Hainaut, there was an extension of the existing photovoltaic
park by increasing the existing surface area by approximately 57%. This
installation aims to send 62% of the electricity generated to the Carrières
site for self-consumption, with the surplus sent into the ORES public network.
The project includes the installation of a total power of 1,999,215 kWp from a
total of 2,889 panels.Gross UK emissions have decreased by 7.0 % (1,075 tCO2e)
in 2023. This is largely due to the significant reduction in emissions by
company owned vehicles and site fuel (1,112 tCO2e) across sites within the UK.
In particular, kerosene consumption at Bolton Hill Quarry decreased by 1.78
GWh (442.3 tCO2e) in 2023, contributing to nearly half of the decrease in
company vehicle and site fuel emissions.
3. TCFD Report
The Board has noted the new requirement for mandatory climate-related
disclosures arising from the Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022. Consequently, we provide disclosures
aligned with the recommendations issued by the Task Force on Climate-related
Financial Disclosures (TCFD) in this Annual Report for the year ended 31
December 2023. This report is based on the TCFD recommendations and
recommended disclosures as detailed in Recommendations of the Task Force on
Climate-related Financial Disclosures (2017), considering the additional
guidance set out in the TCFD 2021 Annex, 'Implementing the Recommendations of
the Task Force on Climate-related Financial Disclosures'.
We recognise that climate change presents both material risks and
opportunities to our business and sector. Accordingly, the following report
covers the Group's well-established governance of climate change issues, its
integration into our overall risk management processes, our strategies for
managing climate-related risks and opportunities, and relevant metrics used to
measure progress towards our climate targets. We have prepared this report
with the support of external sustainability consultants, CEN-ESG, who have
enhanced the analysis of our exposure to natural hazards with a detailed
bottom-up site analysis using a geospatial climate hazard mapping tool.
This report is based on the structures and operations in place on 31 December
2023. Given the agreement with CRH plc to acquire its European lime
operations, we have decided that any detailed quantification of our key
climate-related risks and opportunities will be published in next year's
annual report to accommodate the significant transformation to the business
from the acquisition.
Governance
Board Level
At SigmaRoc, climate-related governance has been well-integrated for several
years. The Board has overall responsibility for sustainability issues
including climate-related matters, and effective management of climate-related
risks and opportunities as with all matters of Group strategy. The Board meets
quarterly, and ESG, including climate-change, is a standing agenda item at all
these meetings, with updates on climate-related issues presented by the Chief
Technical Officer (CTO) who sits as a permanent guest at board meetings.
Additionally, the Board considers climate-related issues, especially CO2
emissions, when reviewing and guiding strategy, major plans of action,
policies, annual budgets, and business plans as well as setting the
organisation's performance objectives, monitoring implementation and
performance, and overseeing major capital expenditures, acquisitions, and
divestiture. The Board is supported by committees including the Audit
Committee, which assists in monitoring ESG performance and climate-related
risks.
In 2023, the development of science-based targets and the Road Map to Net Zero
has been a particular focus of Board meetings, and now drives the management
of climate-related risks and opportunities through review of carbon emissions.
The Board is responsible for approving TCFD disclosures and is also
responsible for reviewing and signing off the risk register, including risks
related to the environment and climate change. The Board does not currently
receive formal training from third parties on climate-related issues, but
receives information provided by the CTO and other members of the Group when
required.
To ensure appropriate visibility over climate change is maintained as
operations continue to expand, in 2024 SigmaRoc will seek to appoint a new
non-executive director with a strong background in ESG and climate change.
Furthermore, a dedicated ESG Committee has been formed, including Independent
Board and Executive Board members and the CTO, who will meet throughout the
year when the quarterly ESG & Climate Change Working Group Report will be
presented.
Management level
At the direction of the Board, the Chief Technical Officer is assigned
responsibility to assess, monitor and manage climate-related risks and
opportunities alongside Group-level risk management. The Executive Committee
meets monthly and the CTO is responsible for updating the Committee on
climate-related issues and other ESG initiatives. The CTO is informed via
ongoing dialogue with the managing directors from each of the business units,
who monitor and report on general risks, strategic projects and operations,
including climate-related issues, as necessary.
Each business unit is also responsible for monitoring and feeding back the key
aspects to be reported as defined by permits, legislation and frameworks. Data
collection and monitoring is done through online process control systems,
purchase orders, consumption meters etc. This includes statutory (e.g NOx and
SOx), and non-statutory aspects such as land, power and water use. The data is
collated through group wide tools such as OneClick LCA.
Following the recent agreement to acquire CRH's European lime business,
SigmaRoc is currently recruiting a Group Sustainability Manager who will be
responsible for collating climate and ESG data, monitoring performance,
overseeing climate-related projects, and educating across the Group on
climate-related issues. The Group Sustainability Manager will also create and
lead an ESG & Climate Change Working Group with representatives across all
operational regions, who will meet quarterly to review progress across the
Group, and subsequently prepare and provide quarterly updates and reports to
the Board and ESG Committee.
Risk Management
Climate-related risks are integrated into SigmaRoc's risk management processes
and are considered as part of the overall Group risk management processes. The
risk assessment considered existing and emerging risks and all risk categories
outlined in the TCFD recommendations in relation to all of SigmaRoc's
operations as of 31 December 2023. Climate-related risks and opportunities
were also considered across upstream and downstream supply chains.
Climate-related risk identification is performed both bottom-up, through a
detailed assessment of risks affecting each individual site, and top-down,
through a high-level assessment of strategic, transition and market risks
pertinent to the Group and its sector. Additionally, risks are identified
through discussion and engagement with primary investors, peer review and
through a cross-functional process led by the CTO taking into account internal
stakeholders such as H&S, ESG, Estates and the General Counsel.
Site-level environmental risks, including climate change risks, are identified
as part of operational risk assessments. These are conducted at a plant level
and reviewed, assessed and monitored by regional Environmental and Industrial
Direct teams. This year, the Group enhanced its site-level assessment of both
chronic and acute physical climate-related risks using geospatial modelling
software, which has provided greater detail and specificity for each
individual site in the Group's portfolio. Where material risks are identified,
risk assessments are reviewed at divisional and Group level. Once identified,
climate-related risks and opportunities are assessed and scored according to
their likelihood and impact, in order to assess their relative magnitude
relative to other risks. Impact is assessed based on quantitative and
qualitative or reputational and financial risk according to the standard risk
management thresholds. Likelihood is assessed based on the following
thresholds:
Likelihood
1 Remote Occurrence less frequently than once in 5 years
2 Probable Occurrence within 5 years
3 Frequent Occurrence within one year or more frequently
Climate-related risks and opportunities were assessed against the following
time horizons:
From (years) To (years) Rationale
Short-term 2022 2024 In line with strategic cycles (noting 2023 is year 2)
Medium-term 2025 2030 In line with medium-term time horizons followed by peers
Long-term 2031 2040 and beyond In line with the Road Map to Net Zero and the UK's Net Zero by 2050 ambitions.
The following three climate-related scenarios were examined, looking forward
out to 2100, to identify and assess physical climate-related risks.
· RCP 2.6: a climate-positive pathway, likely to keep global
temperature rise below 2 °C by 2100. CO(2) emissions start declining by 2020
and go to zero by 2100.
· RCP 4.5: an intermediate and probably baseline scenario more
likely than not to result in global temperature rise between 2 °C and 3 °C,
by 2100 with a mean sea level rise 35% higher than that of RCP 2.6. Many plant
and animal species will be unable to adapt to the effects of RCP 4.5 and
higher RCPs. Emissions peak around 2040, then decline.
· RCP 8.5: a bad case scenario where global temperatures rise
between 4.1-4.8°C by 2100. This scenario is included for its extreme impacts
on physical climate risks as the global response to mitigating climate change
is limited.
The following two climate-related scenarios were examined, looking forward out
to 2050, to identify and assess the behaviour of transition risks and
opportunities.
· Net Zero 2050 (NZE): an ambitious scenario which sets out a
narrow but achievable pathway for the global energy sector to achieve net zero
CO(2) emissions by 2050. This meets the TCFD requirement of using a "below
2°C" scenario and is included as it informs the decarbonisation pathways used
by the Science Based Targets initiative (SBTi), which validates corporate net
zero targets and ambition.
· Stated Policies Scenario (STEPS): a scenario which represents the
roll forward of already announced policy measures. This scenario outlines a
combination of physical and transitions risk impacts as temperatures rise by
around 2.5°C by 2100 from pre-industrial levels, with a 50% probability. This
scenario is included as it represents a base case pathway with a trajectory
implied by today's policy settings.
Over 2024 SigmaRoc will be restructuring the business in order to integrate
appropriately the newly acquired sites into the risk management process. Once
appointed, the Group Sustainability Manager will collect data relating to
environmental and climate-related risks as part of the quarterly review,
maintain a central register and prepare a suite of reports to be reviewed by
the Group ESG committee.
Strategy
Having assessed the climate-related hazards affecting the entire estate,
SigmaRoc's overall exposure to physical climate-related risks is considered to
be low. By contrast, as a supplier of both low and high grade materials for
use in construction, agriculture, environmental and industrial applications,
SigmaRoc's exposure to transition risks may be greater due to developing
environmental regulation and stakeholder expectations in Europe. Nevertheless,
given the longstanding work to identify and mitigate climate impacts on the
Group, the strategy is considered to be resilient to climate risks and
opportunities. As detailed against each risk, SigmaRoc is working to
decarbonise its operations through energy efficiency, transition to renewable
electricity, the development of carbon capture mechanisms and via strategic
collaboration to minimise exposure such that any strategic and financial
impacts from climate change are limited. Moreover, SigmaRoc considers itself
at the forefront of the green transition by providing the materials that are
essential to the green economy and will be enhancing its strategy to
capitalise on these opportunities in the coming years.
Key Risks
Five key-climate related risks that could have a financial impact on the Group
have been identified.
Risk 1. Disruption due to fluvial and coastal flooding 2. Carbon pricing within operations 3. Carbon pricing in value chain 4. Operational decarbonisation 5. Failure to meet/maintain expected ESG credentials
Type Physical (Chronic and Acute) Transition (Current and Emerging Regulation) Transition (Current and Emerging Regulation) Transition (Technology) Transition (Reputation)
Area Own Operations Own Operations Downstream Own Operations Own Operations
Primary potential financial impact Loss of revenue due to operational disruption Higher costs associated with energy and other inputs Higher costs associated with carbon tax on Scope 3 emissions Increased capex, increased operating costs Increased cost of capital, loss of investment
Time horizon Long Medium Medium Short/Medium Short/Medium
Likelihood Medium High High Medium High
Location or service most impacted River Flood: Site specific, risk identified at 7 sites across operations. Group Group Group Group
Sea level rise: Site specific, risk identified at 8 sites across operations.
Metrics - Number of flooding incidents - Scope 1&2 emissions - Scope 3 emissions - CO2 intensity - External ESG scores
- Days lost due to flooding incidents - Energy Intensity - Share Price
- Costs of flooding incidents - Total energy consumption
- % alternative energy consumption (including renewables &
Biofuels)
-
1. Disruption due to fluvial or coastal flooding
Following an assessment of climate-related hazards affecting the Group's
portfolio, flood risk exposure from rivers and sea level rise was identified
for several sites.
While 92% of the portfolio is at minimal risk of river flooding, 7 sites are
currently in the highest flood risk zone and will remain in this risk bracket
under all future scenarios and time horizons. Flooding is likely SigmaRoc's
most material physical risk at present due to its potential to destabilise
assets.
Sea level rise is a growing risk, with 7 sites at medium or high risk under
RCP 2.6 and 4.5. Under a severe RCP 8.5 scenario, 7 of these sites would be
exposed to high risk, with the final site exposed to extreme risk.
Mitigation
Mitigation of hydrological risks in some operations is already business as
usual. Whereas some sites naturally drain and consequently remain dry, others
require periodic de-watering. Historically the Group has found that water
logging does not tend to stop operations altogether at an affected quarry, as
work can be diverted to a different area of the quarry whilst groundwater is
pumped away.
Even in the event of downtime at a particular quarry, SigmaRoc has the
capacity to rebalance activities across the network and therefore recoup any
costs lost, admitting some transfer costs. Redundancy in stock is maintained
across quarries, which could also remediate any downtime losses. All sites
exposed to a medium/high risk of sea level rise are able to divert resources
to alternative sites in the event of a storm surge event. None of the sites
identified as being at risk of river flooding are material in terms of
financial risk.
In addition, the geospatial analysis only models regional flood defences at a
handful of countries, so SigmaRoc's risk exposure may be lower than indicated
due to flood and storm defences that have not been accounted for. Further, sea
level rise is likely only to materialise in the very long term and could
therefore fall outside reasonable business planning horizons.
2. Carbon pricing within operations
The scope of carbon pricing (applied directly or indirectly) is expected to
expand over the medium term, and the price of carbon is expected to rise.
SigmaRoc is already exposed to the EU Emissions Trading Scheme (ETS), although
does not fall under the Carbon Border Adjustment Mechanism (CBAM) so the loss
of free allocation by 2035 is less substantial than in other adjacent sectors,
namely cement.
Given the nature of the sector, SigmaRoc is a large emitter with greater
limitations on its ability to decarbonise, especially in scope 3 emissions
given its supply to customers with high emissions. Some operations will be
particularly challenging to decarbonise, while machinery can be replaced with
more efficient and cleaner models, substantial emissions (approximately
70-80%) arise from the chemical reactions within kilns.
Mitigation
SigmaRoc is focused on the transition from fossil fuels to fossil free energy
and biofuel, and improvements in operational efficiency such as efforts to
reduce machinery idle time. The Group continues to install renewable energy
capacity on site, upgrade its vehicle fleet, conduct heat and power loss
reviews of large assets, expand carbon capture, utilisation and storage (CCUS)
infrastructure, and purchase PPAs. Capital expenditure to decarbonise
operations, including the replacement of higher-emitting machinery, is largely
covered by business-as-usual expenditure.
In addition, SigmaRoc is able to pass on costs related to ETS credits through
to customers in contracts. Addressing the challenge posed by chemical
reactions in kilns is an ongoing challenge requiring further research and
development. In the meantime, costs related to kilns can be passed through to
customers in circumstances where sites are cohabited with customers.
3. Carbon pricing within value chain
European carbon pricing policies may lead to higher operational costs for
shipping, impacting distribution networks. Moreover, there is a concern that
customers might be incentivised to procure materials from quarries located in
less regulated jurisdictions, where carbon pricing is less stringent,
potentially putting European suppliers at a competitive disadvantage.
Mitigation
SigmaRoc leverages the cohabitation of sites with customers to ensure more
sustainable distribution practices. By strategically locating sites near key
customers, the Group reduces the need for extensive shipping, mitigating the
impact of carbon pricing on transportation.
The Group can also avail itself to alternative transportation methods,
particularly road, rail and sea transportation, depending on the overall cost.
4. Operational decarbonisation
SigmaRoc's decarbonisation ambitions face a hurdle in potential localised grid
capacity constraints, which may impede the electrification of operations. This
may increase operating costs if reliance on pricier fuels, subject to carbon
levies, becomes necessary or cannot be phased out sufficiently quickly.
Additionally, the transition of machinery to electricity or biofuel carries
the inherent risk of upfront costs. While these costs are strategically
integrated into business-as-usual activities, they remain a critical aspect of
natural machinery churn. There may however be limits on the availability of
funding for such a transition, and potential constraints on the availability
of such technology. More significantly, the development of carbon capture,
utilisation and storage (CCUS) capabilities on the estate poses a distinct
risk given that CCUS investments do not align with routine equipment churn and
require a focused financial strategy. Development of CCUS capabilities will
also depend on third parties.
Mitigation
Mitigation involves investment in on-site renewable electricity capacity
installation, and planned adaptation of machinery to ensure gradual shift
minimising financial strain.
5. Failure to meet/maintain expected ESG credentials
There is a risk that failure to meet non-financial reporting expectations
could lead to reduced access to capital and potential divestment. Further,
failure to maintain customer expectations on sustainability performance could
lead to loss of business and reputational damage, ultimately leading to lower
revenue and difficulty winning new business.
Mitigation
Mitigation would largely involve continually improving sustainability
reporting, improving sustainability engagement with stakeholders and
increasing focus on sustainability. This may involve costs related to the
application of additional internal sustainability resources, additional
reporting and data management resource and systems. There may also be
additional costs related to use of external sustainability consultants to
assist in the Group's reporting and regulatory obligations.
Key Opportunities
Four key climate-related financial opportunities that could have a financial
impact on the Group have been identified:
Opportunity 1. Improved Operational efficiency 2. Transition to green electricity 3. Increased market share in products aiding the transition to a green economy 4. Resilience through innovation
Type Resource Efficiency Energy Source Markets Resilience
Primary potential financial impact Reduced operating costs Reduced operating costs Increased sales Reduced operating costs
Time horizon Short/Medium Medium Medium Medium
Likelihood High High High Medium
Location or service most impacted Global Global Global Global
Metrics - Energy intensity - Energy intensity - % of products that can be manufactured through "green" processes - New products to market
(e.g. use of cement alternatives in Greenbloc range)
- Resource efficiency - % renewable energy consumption - Innovation spend including R&D and technology such as MEVO
- FTE hours dedicated to innovation
1. Improved operational efficiency
Reducing energy consumption through a programme of efficiency and carbon
reduction initiatives may decrease operating costs, increase operating margins
and mitigate against the cost of future carbon pricing.
Operational efficiency improvements have already been introduced across the
Group and continue to be implemented both through dedicated programmes and
business-as-usual activities. Examples include:
- Metering and monitoring of fuel and electricity consumption;
- Limiting machinery idling - through software analysis and
optimisation of shift patterns;
- Switching to more efficient fuels, such as the transition from coal
and oil to biofuel and recycled fuel in the North East region;
- Electrification - such as the replacement of diesel-powered water
pumps and forklifts with electric alternatives;
- Intensity innovations - such as trials of low temperature asphalt;
- Efficiency upgrades of machinery;
- Consolidation of operations to improve efficiencies.
Strategy to capitalise
SigmaRoc is targeting energy intensity reductions of 2.5% by 2030 from a 2021
base year, for 100% of all manufactured products to utilise waste/recycled
materials by 2025, and for 100% utilisation of all production materials by
2027. These targets are in excess of operational efficiency improvements that
will be made as part of business-as-usual activities, such as the upgrade of
machinery at the end of its lifespan to more efficient models. Efficiency
improvements will increasingly be aided by technological advancements in the
future.
2. Transition to green electricity
Transition to green electricity, both through purchase of renewable grid
electricity and through generation of renewable electricity onsite, presents
another opportunity to reduce operating costs, especially as renewable
electricity becomes increasingly inexpensive. Renewable energy installations
will have the additional benefit of reducing the Group's dependence on the
electricity grid, thereby providing some comfort from any future energy price
fluctuations and reducing any exposure to carbon pricing mechanisms.
Strategy to capitalise
SigmsRoc has published targets for 100% of third-party energy to be sourced
from renewable sources by 2030. As part of the target, the Group is currently
reviewing site and virtual power purchase agreements (PPAs) across each
business, and businesses will continue to expand renewable generation. The
Group has an established programme of wind and solar installations to generate
renewable electricity, including existing solar photovoltaic capacity at
Soignies and installations at Miedzianka and Wolica (Poland) and Dimension
Stone (West) during 2022. Wind turbines have been installed at Soignies, and a
successful feasibility study was undertaken for windmill construction at the
Dimension Stone (West) site.
3. Increased market share in products aiding the transition to a green
economy
SigmaRoc is well-placed to capitalise on the net-zero transition. Lime is a
key resource for the green transition, with various applications such as for
the production and recycling of lithium batteries, decarbonisation of
construction and as natural carbon sinks. Additionally, SigmaRoc has developed
a range of low-carbon products, namely Greenbloc low-carbon concrete. By
replacing 100% of cement with alternative materials, Greenbloc products have
substantially reduced curing times which reduce energy consumption and carbon
emissions. Similarly, SigmaRoc is currently developing concrete blocks that
sequester and permanently store waste CO(2).
Development of such product ranges may increase access to new clients and
markets, as the demand for climate-friendly construction materials grows. This
opportunity may be expected to manifest in the medium-term, although it
depends on the extent to which national regulations keep pace with the green
transition.
Strategy to capitalise
Continue to focus on expanding market-share of low-carbon products. Align
offerings with evolving climate-friendly construction demands, with
medium-term impact contingent on regulatory advancements.
4. Resilience through innovation
Overall there is a significant opportunity for the Group to continue to trial
innovations in order to build and maintain climate resilience. The specific
financial impacts will vary depending on the nature and outcomes of the trial,
for example renewable energy programmes may help to reduce operational costs
and thereby increase operating margins, whereas product-related trials may
identify new product lines that may generate additional revenue.
Strategy to capitalise
Continue to target cost reduction and revenue generation through innovation
trials and renewable energy initiatives. The Group anticipates that the return
on investment in alignment of new and existing operations to new and more
efficient machinery will be short. Additionally, as a Group comprised of many
small business units, SigmaRoc can be more dynamic and reactive than peers.
Metrics & Targets
SigmaRoc currently reports mandatory energy consumption, scope 1, scope 2 and
Business Travel emissions for its UK-based operations as required under UK
SECR regulation, alongside voluntary energy consumption and scope 1 emissions
across its European operations in excess of SECR requirements. As part of the
SBTi submission, SigmaRoc has also undertaken efforts to estimate its scope 3
footprint, establishing a team responsible for collecting and monitoring
emissions data going forward. Reporting of scope 3 emissions is expected to
become more comprehensive as greater confidence in data is achieved.
The specific metrics used to monitor each of the climate-related risk and
opportunities are noted in the relevant tables above. In addition, SigmaRoc
reports against industry-specific SASB metrics including air emissions, water
consumption and biodiversity impacts, as well as additional metrics to satisfy
MSCI and other ESG rating agency requirements.
As SigmaRoc is exposed to the European Union's Emissions Trading Scheme,
additional internal carbon prices are not applied. However, this will remain
under review and the use of internal prices in the coming years will be
considered as necessary.
In 2021, SigmaRoc launched its Road Map to Net Zero, committing the Group to
achieving Net Zero across its operations (Scope 1 & 2) by 2040, through
the following:
• 2025 - All concrete products available in low carbon and ultra-low carbon
• 2025 - Carbon Capture Storage and utilisation trial plant operational
• 2025 - 100% of all manufactured products can utilise waste/recycled
materials (Where industry specifications allow for it)
• 2027 - 100% utilisation of all production materials
• 2030 - Alternative fuels used mobile equipment
• 2030 - 2.5% reduction in energy intensity compared to the 2021 baseline
• 2030 - 100% third party energy sourced from renewable means
• 2032 - Alternative fuels used fixed equipment (e.g. lime and asphalt)
• 2038 - All kilns are carbon neutral
In 2023, SigmaRoc submitted its net zero (Scope 1 and 2) by 2040 target to the
SBTi, which is currently under review by SBTi.
Delivery of the Road Map to Net Zero was a corporate objective linked to
executive remuneration in 2022, and inclusion of climate-related metrics
within the remuneration approach going forward will be established for 2024.
DIRECTORS' REPORT
The Directors present their report, together with the audited Financial
Statements, for the year ended 31 December 2023.
Principal activities
The principal activity of the Company is to make investments and/or acquire
businesses and assets in the construction and industrial quarried materials
sectors. The principal activity of the Group is the production of high-quality
aggregates and supply of value-added quarried materials.
Board composition and head office
The Board comprises three Executive Directors and four Non-Executive Directors
at year end. The Corporate Head Office of the Company is located in London,
UK.
Risk management
The Board is responsible for the Group's risk management and continues to
develop policies and procedures that reflect the nature and scale of the
Group's business.
Details of the Group's financial risk management policies are set out in Note
3 to the Financial Statements.
Results and dividends
For the year to 31 December 2023, the Group's underlying profit before tax was
£71.2 million (2022: £62.7 million) while total profit before tax was £28
million (2022: £42.7 million) and underlying profit after tax was £58.8
million (2022: £53.6 million) while total profit after tax was £16.7 million
(2022: £33.6 million). Recognising the Group's strategy and current position
on its journey, the Directors are not proposing to adopt a dividend policy
yet, however this will be reviewed once the Group's Covenant Leverage is below
1.5x.
Stated capital
Details of the Company's shares in issue are set out in Note 28 to the
Financial Statements.
Directors
The following Directors served during the year:
Director Position
David Barrett Chairman
Max Vermorken Chief Executive Officer
Garth Palmer Chief Financial Officer
Tim Hall Independent Non-Executive Director
Simon Chisholm Independent Non-Executive Director
Jacques Emsens Independent Non-Executive Director
Axelle Henry Independent Non-Executive Director
Directors & Directors' interests
The Directors who served during the year ended 31 December 2023 are shown
below and had, at that time, the following beneficial interests in the shares
of the Company:
31 December 2023 31 December 2022
Ordinary Shares Options Ordinary Shares Options
Max Vermorken 827,034 11,807,349 759,231 11,807,349
David Barrett 3,434,180 5,638,674 3,053,439 5,638,674
Garth Palmer 671,776 3,326,014 616,146 3,326,014
Tim Hall 400,176 750,000 400,176 750,000
Simon Chisholm - - - -
Jacques Emsens - - - -
Axelle Henry - - - -
Further details on options can be found in Note 29 to the Financial
Statements.
Details on the remuneration of the Directors can be found in Note 10 to the
Financial Statements.
Substantial Shareholdings
The Company is aware that, as at 17 March 2024, other than the Directors, the
interests of Shareholders holding three per cent or more of the issued share
capital of the Company were as shown in the table below:
Shareholder Shares held Percentage of holdings
CRH plc 171,578,948 15.39%
Blackrock 74,560,450 6.69%
Lombard Odier 54,355,474 4.88%
Rettig Group 50,276,521 4.51%
Conversant Capital 47,371,995 4.25%
Janus Henderson Investors 46,350,185 4.16%
BGF 46,105,973 4.14%
Slater Investments 40,597,422 3.64%
Canaccord Genuity Wealth Management 35,780,263 3.21%
Chelverton Asset Management 35,000,000 3.14%
Inheritance tax
Shares in AIM quoted trading companies or a holding company of a trading group
may, after a 2 year holding period, qualify for Business Property Relief for
United Kingdom inheritance tax purposes, subject to the detailed conditions
for the relief.
Investors should note that Business Property Relief would cease to be
available in the event that the Company's shares were to become listed on a
HMRC designated stock exchange, for example the Main Market of the London
Stock Exchange.
Employees
By being responsible for their own businesses, that are aligned with the
overall Group's strategy, employees are fully aware of their impact and
contribution as they are inherently responsible for their own success. The
Group and each business is committed to employing the best they can, not only
in skills and competence but also in their softer skills, regardless of who
they are or where they have come from. Once engaged, each employee is nurtured
and developed locally with opportunities within each business and platform
offered openly.
Political contribution
The Group did not make any contributions to political parties during either
the current or the previous year.
Annual General Meeting
The AGM will be held at the Washington Mayfair Hotel, 5 Curzon St, London W1J
5HE on 12 April 2024 at 12.30pm. The formal notice convening the AGM,
together with explanatory notes on the resolutions contained therein, is
included in the separate circular accompanying this document and is available
on the Company's website at www.sigmaroc.com.
Viability statement
The Directors have assessed the viability of the Group over a period to
December 2027. This is the same period over which financial projections were
prepared for the Group's strategic financial plan. In making their assessment
the Directors have taken into account the Group's current position and the
potential impact of the principal risks and uncertainties on its business
model, future performance, solvency or liquidity. They also stress tested
their analysis by running a number of credible scenarios and considered the
availability of mitigating actions. Based on this assessment, the Directors
confirm that they have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due over the
period to 31 December 2024. In making this statement, the Directors have
assumed that financing remains available and that mitigating actions are
effective.
Corporate responsibility
Environmental
SigmaRoc undertakes its activities in a manner that minimises or eliminates
negative environmental impacts and maximises positive impacts of an
environmental nature.
Health and safety
SigmaRoc operates a comprehensive health and safety programme to ensure the
wellness and security of its employees. The control and eventual elimination
of all work-related hazards require a dedicated team effort involving the
active participation of all employees. A comprehensive health and safety
programme is the primary means for delivering best practices in health and
safety management. This programme is regularly updated to incorporate employee
suggestions, lessons learned from past incidents and new guidelines related to
new projects, with the aim of identifying areas for further improvement of
health and safety management. This results in continuous improvement of the
health and safety programme. Employee involvement is regarded as fundamental
in recognising and reporting unsafe conditions and avoiding events that may
result in injuries and accidents.
Internal controls
The Board recognises the importance of both financial and non-financial
controls and has reviewed the Group's control environment and any related
shortfalls during the year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the Group, adequate
internal controls have been implemented. Whilst they are aware that no system
can provide absolute assurance against material misstatement or loss, in light
of the current activity and proposed future development of the Group,
continuing reviews of internal controls will be undertaken to ensure that they
are adequate and effective.
Further details of corporate governance can be found in the Corporate
Governance Report.
Going concern
The Group meets its day-to-day working capital and other funding requirements
through cash and banking facilities, which were renewed in November 2023.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and,
therefore, continue to adopt the going concern basis in preparing the Annual
Report and Financial Statements. Further details on their assumptions and
their conclusion thereon are included in the statement on going concern
included in Note 2.3 to the Financial Statements.
Directors' and officers' indemnity insurance
The Company has made qualifying third-party indemnity provisions for the
benefit of its Directors and officers. These were made during the year and
remain in force at the date of this Annual Report.
Events after the reporting period
Events after the reporting period are set out in Note 38 to the Financial
Statements.
Policy and practice on payment of creditors
The Group agrees terms and conditions for its business transactions with
suppliers. Payment is then made in accordance with these terms, subject to the
terms and conditions being met by the supplier. As at 31 December 2023, the
Company had an average of 53 days (2022: 54 days) purchases outstanding in
trade payables and the Group had an average of 62 days (2022: 58 days).
Future developments
Details of future developments for the Group are disclosed in the Chairman's
Statement and the CEO's Strategic Report.
Provision of information to Auditor
So far as each of the Directors is aware at the time this report is approved:
· there is no relevant audit information of which the Group's auditor
is unaware; and
· the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in office as
auditor.
This report was approved by the Board on 17 March 2024.
Garth Palmer
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended 31 December 2023 Year ended 31 December 2022
Underlying Non-underlying* (Note 11) Total Underlying Non-underlying* (Note 11) Total
Continued operations Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 7 580,285 - 580,285 537,993 - 537,993
Cost of sales 8 (441,076) - (441,076) (422,056) - (422,056)
Gross profit 139,209 - 139,209 115,937 - 115,937
Administrative expenses 8 (55,354) (43,099) (98,453) (46,144) (19,126) (65,270)
Profit from operations 83,855 (43,099) 40,756 69,793 (19,126) 50,667
Net finance (expense)/income 12 (14,336) (1,528) (15,864) (8,910) (1,528) (10,438)
Other net gains / (losses) 13 1,694 1,411 3,105 1,853 641 2,494
Profit/(loss) before tax 71,213 (43,216) 27,997 62,736 (20,013) 42,723
Tax expense 14 (12,428) 1,149 (11,279) (9,142) - (9,142)
Profit/(loss) 58,785 (42,067) 16,718 53,594 (20,013) 33,581
Profit/(loss) attributable to:
Owners of the parent 55,601 (42,067) 13,534 51,251 (20,013) 31,238
Non-controlling interest 31 3,184 - 3,184 2,343 - 2,343
58,785 (42,067) 16,718 53,594 (20,013) 33,581
Basic earnings per share attributable to owners of the parent (expressed in 32 8.12 (6.14) 1.98 8.03 (3.14) 4.89
pence per share)
Diluted earnings per share attributable to owners of the parent (expressed in 32 7.79 (5.89) 1.90 7.68 (3.00) 4.68
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 2023
Year ended 31 December 2023 Year ended 31 December 2022
Note £'000 £'000
Profit/(loss) for the year 16,718 33,581
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
FX translation reserve (3,223) 17,735
Cash flow hedges - effective portion of changes in fair value (5,468) 3,432
Remeasurement of the net defined benefits liability (38) 202
Other comprehensive income, net of tax (8,729) 21,369
Total comprehensive income 7,989 54,950
Total comprehensive income attributable to:
Owners of the parent 4,918 52,048
Non-controlling interests 3,070 2,902
Total comprehensive income for the period 7,989 54,950
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Consolidated Company
31 December 2023 31 December 2022 (Restated)* 31 December 2023 31 December 2022
Note £'000 £'000 £'000 £'000
Non-current assets
Property, plant and equipment 16 572,562 554,460 166 257
Intangible assets 17 188,048 169,110 - -
Available for sale assets 250 - 250 -
Investments in subsidiary undertakings 18 - - 567,305 583,421
Investment in equity-accounted associate 19 605 576 - -
Investment in joint ventures 19 6,448 5,942 412 -
Derivative financial asset 33 1,369 4,771 - -
Other receivables 20 3,398 4,259 - -
Deferred tax asset 14 38 4,426 - -
772,718 743,544 568,133 583,678
Current assets
Trade and other receivables 20 99,034 86,805 5,332 3,168
Inventories 21 84,309 67,780 - -
Cash and cash equivalents 22 55,872 68,623 7,925 5,055
Derivative financial asset 33 3,328 10,683 - -
242,543 233,891 13,257 8,223
Total assets 1,015,261 977,435 581,390 591,901
Current liabilities
Trade and other payables 23 158,199 140,443 34,082 13,527
Derivative financial liabilities 33 3,926 6,693 1,253 -
Provisions 25 8,489 6,596 - -
Borrowings 24 37,504 33,846 29,543 20,072
Current tax payable 3,844 1,251 - -
211,962 188,829 64,878 33,598
Non-current liabilities
Borrowings 24 200,792 228,630 174,090 206,369
Employee benefit liabilities 1,305 1,312 - -
Deferred tax liabilities 14 72,219 79,111 - -
Derivative financial liabilities 1,167 552 - -
Provisions 25 4,724 4,100 - -
Other payables 23 8,208 5,051 5,260 5,051
288,415 318,756 179,350 211,420
Total liabilities 500,377 507,585 244,228 245,018
Net assets 514,884 469,850 337,162 346,882
Equity attributable to owners of the parent
Share capital 28 6,939 6,383 6,939 6,383
Share premium 28 - 400,022 - 400,022
Share option reserve 29 11,482 7,483 11,482 7,483
Other reserves 30 629 10,261 600 1,362
Retained earnings 481,691 33,969 318,141 (68,368)
Equity attributable to owners of the parent 500,741 458,118 337,162 346,882
Non-controlling interest 31 14,143 11,732 - -
Total equity 514,884 469,850 337,162 346,882
* Restated for review of prior year acquisition accounting during the IFRS 3
hindsight period. Refer to note 17 for further information.
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 2023 was £42.9
million (year ended 31 December 2022: loss of £24.4 million).
The Financial Statements were approved and authorised for issue by the Board
of Directors on 17 March 2024 were signed on its behalf by:
Garth Palmer
Chief Financial Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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 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 4,379 687 615 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
Balance as at 1 January 2023 6,383 400,022 7,483 10,261 33,969 458,118 11,732 469,850
Profit for the year - - - - 13,534 13,534 3,184 16,718
Currency translation differences - - - (3,109) - (3,109) (114) (3,223)
Other comprehensive income - - - (5,506) - (5,506) - (5,506)
Total comprehensive income for the period - - - (8,615) 13,534 4,919 3,070 7,989
Contributions by and distributions to owners
Acquired via acquisition - - - - - - 616 616
Issue of share capital 28 556 29,444 - - - 30,000 - 30,000
Issue costs 28 - (782) - - - (782) - (782)
Share based payments - - 4,002 - - 4,002 - 4,002
Exercise of share options - - (3) - 3 - - -
Dividends - - - - - - (1,275) (1,275)
Other equity adjustments 28 - (428,684) - (1,017) 434,185 4,484 - 4,484
Total contributions by and distributions to owners 556 (400,022) 3,999 (1,017) 434,188 37,704 (659) 37,045
Balance as at 31 December 2023 6,939 - 11,482 629 481,691 500,741 14,143 514,884
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share Share premium Share option reserve Other reserves Retained earnings Total
capital
Note £'000 £'000 £'000 £'000 £'000 £'000
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
Share based payments - - 4,453 - - 4,453
Exercise of share options - - (74) - 74 -
Total contributions by and distributions to owners 4 125 4,379 - 74 4,582
Balance as at 31 December 2022 6,383 400,022 7,483 1,362 (68,368) 346,882
Balance as at 1 January 2023 6,383 400,022 7,483 1,362 (68,368) 346,882
Profit/(Loss) - - - - (42,940) (42,940)
Total comprehensive income for the period - - - - (42,940) (42,940)
Contributions by and distributions to owners
Issue of share capital 556 29,444 - - - 30,000
Issue costs 28 - (782) - - - (782)
Share based payments - - 4,002 - - 4,002
Exercise of share options - - (3) - 3 -
Other equity adjustments - (428,684) - (762) 429,446 -
Total contributions by and distributions to owners 556 (400,022) 3,999 (762) 429,449 33,220
Balance as at 31 December 2023 6,939 - 11,482 600 318,141 337,162
CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Company
Year ended 31 December 2023 Year ended 31 December 2022 Year ended 31 December 2023 Year ended 31 December 2022
Note £'000 £'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) 16,718 33,581 (42,941) (24,416)
Adjustments for:
Depreciation and amortisation 16 17 39,434 37,116 109 118
Impairments - 30 - -
Share option expense 4,001 4,453 4,001 4,453
Loss/(gain) on sale of PP&E (3,032) (1,471) - -
Net finance costs 15,865 10,438 8,703 7,032
Income tax expense 14 11,279 9,142 - -
Share of earnings from joint ventures (596) (786) - -
Non-cash items (869) (475) (2,120) 3,927
Increase in trade and other receivables (8,613) (6,807) (2,132) (450)
(Increase)/decrease in inventories (13,159) (17,322) - -
Increase in trade and other payables 14,637 31,182 19,888 4,151
Decrease in provisions 934 (19) - -
Income tax paid (11,194) (11,332) - -
Net cash inflows/(outflows) from operating activities 65,405 87,730 (14,492) (5,185)
Investing activities
Purchase of property, plant and equipment 15 16 15 (40,190) (51,008) (18) (14)
Sale of property, plant and equipment 5,890 10,235 - -
Proceeds of sale of subsidiary 1,822 - - -
Purchase of intangible assets 15 17 (2,857) (1,713) - -
Purchase of available for sale assets (250) - (250) -
Investment in joint venture (411) - (411) -
Acquisition of businesses (net of cash acquired) (30,169) (43,318) (6,760) (43,427)
Financial derivative 1,607 278 1,253 302
Interest received 1,271 603 201 7
Net cash used in investing activities (63,287) (84,923) (5,985) (43,132)
Financing activities
Proceeds from share issue 30,000 129 30,000 129
Cost of share issue (782) - (782) -
Proceeds from borrowings 5,064 36,154 - 26,840
Repayment of borrowings (32,050) (30,361) (20,055) (8,067)
Net loans with subsidiaries - - 26,432 22,801
Interest paid (14,553) (9,732) (12,148) (7,537)
Dividends paid (1,275) (3,038) - -
Net cash used in financing activities (13,596) (6,848) 23,447 34,166
Net increase/(decrease) in cash and cash equivalents (11,478) (4,041) 2,970 (14,151)
Cash and cash equivalents at beginning of period 68,623 69,916 5,055 19,038
Exchange (losses) / gains on cash (1,273) 2,748 (100) 168
Cash and cash equivalents and end of period 22 55,872 68,623 7,925 5,055
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 and with the requirements
of the Companies Act 2006. The consolidated financial statements have been
prepared under the historical cost convention, as modified by the revaluation
of property, plant and equipment and intangible assets; financial assets and
financial liabilities at fair value through profit or loss; derivatives held
for hedge accounting classified as financial assets at fair value through
other comprehensive income, and defined benefit pension plans for which the
plan assets are measured at fair value.
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, IAS 12 - Deferred Tax and Annual Improvements - 2018 -
2020 Cycle. The amendments and revisions were applicable for the period ended
31 December 2023 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 1 Non-current liabilities with covenants 1 January 2024
IAS 7 Statement of cash flows 1 January 2024
IFRS 16 Leases 1 January 2024
IFRS 7 Supplier finance arrangements 1 January 2024
IAS 21 The effects of changes in foreign exchange rates 1 January 2025
The Group and Company are evaluating the impact of the new and amended
standards above which are not expected to have a material impact on the Group
or Company'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 37 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, Goijens, Betons 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, GduH, B-Mix and Goijens processed several adjustments to
ensure the financial information included at a Group level complies with UK
IAS. CDH, GduH, B-Mix and Goijens 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.
The Group recognises any non-controlling interest at the non-controlling
interest's proportionate share of the recognised amounts of acquiree's
identifiable net assets.
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
comprise of a €600 million committed term facility, €150 million revolving
credit facility and a further €100 million uncommitted accordion which
matures on 21 November 2028. 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 2023, the Group had cash of £55.9 million (2022: £68.6
million) and undrawn banking facilities under the legacy debt of £173 million
(2022: £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 Company'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
The Group measures goodwill as the fair value of the purchase consideration
transferred including the recognised amount of any non-controlling interest in
the acquiree, less the fair value of the identifiable assets acquired and
liabilities assumed, all measured as of the acquisition date. 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 JQG and Goijens as at the completion
date. As a result of this exercise, goodwill in JQG decreased from £40.2
million to £7.1 million with the corresponding movement being land and
minerals and other intangibles. Goodwill in Goijens decreased from £5.1
million to £1.6 million with the corresponding movement being land and
buildings and customer relationships. The current accounting policies
regarding the subsequent treatment of 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 entities, or group of entities, that
are expected to benefit from the synergies of the combination. Goodwill is
monitored at a Group level.
Goodwill is not amortised however impairment reviews are undertaken annually,
or more frequently if events or changes in circumstances indicate a potential
impairment. When the carrying value of goodwill exceeds the recoverable
amount, (the higher of value in use and fair value less costs) an 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 earn revenue. Impairment
reviews are performed annually. Where the benefit of the intangible ceases or
has been superseded, these are written off to the Income Statement.
2.7. Property, Plant and Equipment
Property, plant and equipment is stated at cost, plus any PPA 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 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
The majority of the Group's strategic hedging programme is delivered using
executory contracts to forward purchase exchange contracts or commodities for
our own use.
The Group uses financial instruments to manage financial risks associated with
the Group's underlying business activities and the financing of those
activities. The Group does not undertake any trading in financial instruments.
Derivatives are initially recognised at fair value and subsequently remeasured
in future periods at fair value. The gain or loss on remeasurement is
recognised immediately in profit or loss, unless a derivative financial
instrument is designated as a hedge of the variability in cash flows of a
recognised asset or liability. In this instance the effective part of any
gain or loss is recognised in the consolidated statement of comprehensive
income and in the revaluation reserve.
Amounts recorded in the revaluation reserve are subsequently reclassified to
the consolidated income statement when the expense for the hedged transaction
is actually recognised. To qualify for hedge accounting, the hedging
relationship must meet several conditions with respect to documentation,
probability of occurrence, hedge effectiveness and reliability of measurement.
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 the
need to recognise loss allowances for expected credit losses on financial
assets. These are measured at amortised cost. The Group measures loss
allowances at an amount equal to lifetime expected credit losses, except for
bank balances for which credit risk has not increased significantly since
initial recognition, which are measured as 12-month expected credit loss.
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.
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 2023 31 December 2022
£'000 £'000
Total factoring 5,927 5,004
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.
Capital Reserve - represents cash that can be used for future expenses or to
offset any capital losses.
Revaluation Reserve - represents the changes of values in certain assets and
includes derivative instruments used for cash-flow hedging
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.
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 Right-of-use assets and lease liability under IFRS 16.
Right-of-use assets are measured at cost, comprising the initial amount of the
lease liability adjusted for any lease prepayments, plus initial direct costs,
less any lease incentives received. Right-of-use assets are depreciated using
the straight-line method from the start of the lease to the earlier of the end
of the useful life of the right-of-use asset or the end of the lease term.
Each lease payment is allocated between the liability and finance charges. The
corresponding rental obligations, net of finance charges, are included in
long-term and short-term borrowings and are measured at the present value of
future lease payments, discounted at the Groups incremental borrowing rate and
adjusted for time value of money. 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. The lease liabilities are shown in Note 24.
The Group elects to apply the exemptions, permitted by IFRS 16, for lease
assets and liabilities regarding short-term and low-value leases. Charges
recognised in the consolidated income statement in respect of these leases are
not significant to the Group.
2.27. Prior year restatement
The statement of financial position has been restated for the finalisation of
provisional fair values of the assets and liabilities recognised in respect of
the JQG and Goijens acquisitions in 2022, following a PPA review during the
IFRS 3 hindsight period. See note 17 for further details.
3. Financial Risk Management
3.1. Financial Risk Factors
The Group and Company's activities expose it to a variety of financial risks:
market risk, credit risk and liquidity risk. The Group and Company's overall
risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group and Company'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 2023 31 December 2022
£'000 £'000
Trade and other receivables 102,432 91,064
Cash and cash equivalents 55,872 68,623
158,304 159,687
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 2023 31 December 2022
£'000 £'000
North West 21,822 21,505
West 19,892 13,387
North East 60,718 56,172
102,432 91,064
Impairment
At the reporting date the ageing of the trade receivables that were not
impaired, were as follows.
31 December 2023 31 December 2022
£'000 £'000
Total trade receivables 85,033 79,261
Not overdue 66,536 68,051
Overdue 1 - 30 days 15,286 8,913
Overdue 31 - 60 days 1,646 1,491
Overdue 61 - 90 days 495 437
More than 90 days 1,573 554
Impairment loss recognised (503) (185)
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 2023 31 December 2022
£'000 £'000
At January 1 382 1,060
Amounts arising from business combinations - 36
Charged to the Consolidated income statement during the year 177 132
Movement in provision 154 (846)
713 382
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.
2023
GBP thousand USD SEK NOK PLN EUR
Gross exposure (5,660) 24,942 (3,353) (3,177) 74,408
Hedged 11,441 (26,905) 2,646 3,187 (48,758)
Net exposure 5,781 (1,963) (707) 10 25,650
Sensitivity analysis (+/- 10%) 578 (196) (71) 1 2,565
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.
2023 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 30,709 31,663 148,414 -
Trade payables 158,199 2,525 1,060 4,623
188,908 34,188 149,474 4,623
Future forecast finance charges 11,712 9,807 19,621 -
200,620 43,995 169,095 4,623
Derivative financial liabilities
Forward exchange contracts used for hedging 1,843 - - -
Electricity hedges 2,713 538 - -
4,556 538 - -
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 2023 is as follows:
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Total borrowings (Note 24) 238,296 262,476
Less: Cash and cash equivalents (Note 22) (55,872) (68,623)
Net debt 182,424 193,853
Total equity 514,884 469,850
Total capital 697,308 663,703
Gearing ratio 0.26 0.29
4. Critical Accounting Estimates
The preparation of the Financial Statements, in conformity with UK IASs,
requires management to make estimates, assumptions and judgements that affect
the reported amounts of assets, 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, assumptions and judgements
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.
To determine the reserves, management will engage an independent volume and
tonnage assessment, which involves a topographic survey of the quarry
working, conducted in 3 dimensions for the date of the assessment using a
computer aided design (CAD) system and a series of theoretical
computer-generated models, taking into account geotechnical and
hydrogeological factors, as well as ensuring that there is a practical
extraction plan so that all the rock can be recovered. This produces a
removal of overburden model and removal of mineral model.
Following this, the volume of reserves is calculated and converted to tonnes
by multiplying the volume by the density of the mineral. This process is
based upon factors such as estimates of commodity prices and geological
assumptions and judgements. Additional estimates include future capital
requirements and production costs.
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, Nordkalk and JQG 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
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.
Where the carrying value exceeds the estimated recoverable amount (being the
greater of fair value less costs and value-in-use), an impairment loss is
recognised by writing down goodwill to its recoverable amount. When an
impairment is recognised as an expense, it is not subsequently reversed.
To assess the value-in-use, the net cash flow forecasts are extrapolated using
long-term growth rates to determine the terminal value. These net cash flow
forecasts reflect volumes, sales prices, cost of sales and administration
costs assumptions in addition to other cash flow movements. Future cash flows,
including the terminal value, are discounted to their present value using a
pre-tax discount rate takes into account the current market assessments of the
time value of money and the certain risks for which the future cash flow
estimates have not been adjusted. The future cash flow estimates exclude net
cash movement attributable to financing activities and income tax.
The impairment test process requires management to make significant judgements
and estimates regarding the valuation models, discount rates used and future
cash flows projected to be generated by the operating segment to which
goodwill has been allocated. Further information on the impairment assessment
and key assumptions used is detailed in note 17.
The PPA assessments provide a reduction to the goodwill for each operating
segment via the fair value assessment of the assets acquired in new entities
as at the completion date.
Goodwill has a carrying value of £169.7 million as at 31 December 2023 (31
December 2022: £115.2 million). Management has concluded that an impairment
charge was not necessary to the carrying value of goodwill for the period
ended 31 December 2023 (31 December 2022: £nil). See Note 2.6 to the
Financial Statements.
c) Restoration Provision
The Group's provision for restoration costs is an accounting estimate and has
a carrying value at 31 December 2023 of £7.9 million (31 December 2022: £6.1
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 is a judgement 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. Management judgements are based on a site-by-site
basis on the evaluation of available information such as prior experience and
current laws and regulations. There are a number of uncertainties which may
impact managements judgements including change in governments, laws and
regulations, unknown factors and changes in technology.
The restoration provision is a commitment to restore the site to a safe and
secure environment. These provisions are reviewed annually.
d) 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.
e) 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. Further information on fair value of
financial instruments is disclosed in note 33.
5. Dividends
No dividend has been declared or paid by the Company during the year ended 31
December 2023 (2022: 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 2023
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 142,505 98,203 339,577 580,285
Depreciation & Amortisation 10,566 5,986 22,882 39,434
Net finance (expense)/income 15,410 174 280 15,864
Underlying Profit from operations per reportable segment 12,085 17,258 54,512 83,855
Additions to non-current assets 13,243 20,375 5,447 39,065
Reportable segment non-current assets 192,197 121,467 459,054 772,718
Reportable segment assets 248,223 157,524 609,514 1,015,261
Reportable segment liabilities 287,443 42,174 170,760 500,377
31 December 2022
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 139,709 87,365 310,919 537,993
Depreciation & Amortisation 9,438 5,339 22,339 37,116
Net finance (expense)/income 9,855 151 432 10,438
Underlying 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 non-current assets 173,440 103,458 456,138 733,036
Reportable segment assets 221,317 138,823 606,788 966,928
Reportable segment liabilities 342,255 27,806 127,017 497,078
7. Revenue
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Upstream products 94,202 75,244
Value added products 422,301 401,012
Value added services 53,334 52,292
Other 10,448 9,445
580,285 537,993
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 contracting services revenue for the year ended 31 December 2023 was
£27 million (2022: £24.9 million). Refer to note 2.20 for further
information on contracting services.
8. Expenses by Nature
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Cost of sales
Changes in inventories of finished goods and work in progress 9,287 9,003
Raw materials & production 188,419 198,984
Distribution & selling expenses 41,764 43,671
Employees & contractors 122,148 71,936
Maintenance expense 25,167 21,543
Plant hire expense 7,358 6,449
Depreciation & amortisation expense 31,138 30,085
Other costs of sale 15,795 40,385
Total cost of sales 441,076 422,056
Administrative expenses
Operational admin expenses 51,242 42,455
Corporate admin expenses 47,211 22,815
Total administrative expenses 98,453 65,270
Corporate administrative expenses include £36.6 million (2022: £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 2023 31 December 2022
£'000 £'000
Fees payable to the Company's auditor and its associates for the audit of the 533 414
Company and Consolidated Financial Statements
Fees paid or payable to the Company's auditor and its associates for reporting 600 117
accountant services associated with the readmission of the Company trading on
AIM
1,133 531
9. Employee Benefits Expense
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
Staff costs (excluding directors) £'000 £'000 £'000 £'000
Salaries and wages 94,227 87,682 4,265 2,990
Post-employment benefits 401 250 81 28
Social security contributions and similar taxes 3,852 1,891 1,051 329
Other employment costs 7,099 8,594 - 2
Share based payments 3 - 3 -
105,582 98,417 5,400 3,349
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
Average number of FTE employees by function # # # #
Management 68 69 7 6
Operations 1,655 1,550 - -
Administration 370 426 5 4
2,093 2,045 12 10
10. Directors' Remuneration
Directors' fees Bonus Taxable benefits Pension benefits Total
£'000 £'000 £'000 £'000 £'000
Executive Directors
David Barrett 375 469 15 22 881
Garth Palmer 375 469 15 33 892
Max Vermorken 475 594 15 48 1,132
Non-executive Directors
Timothy Hall 50 - - - 50
Simon Chisholm 50 - - 5 55
Jacques Emsens 50 - - - 50
Axelle Henry 50 - - - 50
1,425 1,532 45 108 3,110
Directors' fees Bonus Taxable benefits Pension benefits Total
£'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
(1) Appointed on 26 April 2022
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 2023 31 December 2022
£'000 £'000
Acquisition related expenses 25,907 4,842
Amortisation and remeasurement of acquired assets 6,572 6,761
Amortisation of finance costs 1,085 1,085
Restructuring expenses 3,691 1,877
Share option expense 4,001 4,670
Unwinding of discount on deferred consideration 443 443
Net other non-underlying expenses & gains 368 335
42,067 20,013
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.
Acquisition related expenses include exclusivity, introducer, advisor,
consulting, legal fees, accounting fees, insurance and other direct costs
relating to acquisitions. During the year the Group acquired Juuan Dolomitik,
Goijens, Retaining, Björka Mineral, ST Investicija, Beton and entered into
agreements to acquire CRH's European lime and industrial limestone assets
which comprises the vast majority of the costs incurred during the year.
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. These are net of the deferred tax
liability unwind on the asset fair value uplift.
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 LTIP's issued in 2021, 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.
Net other non-underlying expenses and gains include other advisory fees and
other associated costs.
12. Net Finance Income/(Expense)
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Net interest expense (14,759) (9,557)
Dividends 423 647
Other finance expense (1,085) (1,085)
Unwinding of discount on deferred consideration (443) (443)
(15,864) (10,438)
13. Other Net Gains/(Losses)
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Gain/(losses) on disposal of property, plant and equipment 3,032 1,471
Other gain/(loss) 83 20
Gain/(loss) on call options (306) 248
Impairment - (30)
Share of earnings from joint ventures 596 786
Forex movement (300) -
3,105 2,495
14. Taxation
Consolidated
31 December 2023 31 December 2022
Tax recognised in Consolidated Income Statement £'000 £'000
Current tax (10,850) (6,960)
Deferred tax (1,578) (2,182)
Total tax charge in the Income Statement (12,428) (9,142)
Consolidated
31 December 2023 31 December 2022
Recognised within the consolidated statement of Comprehensive Income £'000 £'000
Deferred tax - retirement benefit obligations 8 (49)
Deferred tax - cash flow hedges 1,379 (845)
Total tax recognised within the Consolidated Statement of Comprehensive Income 1,387 (894)
The differences between the total tax charge and the amount calculated by
applying the standard UK corporation tax of 23.52% (2022: 19%) to the profit
before tax of the Group are as follows:
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Profit/(loss) on ordinary activities before tax 27,997 42,723
Current tax using the UK corporation tax rate of 23.5% (2022: 19.00%) 6,579 8,117
Effects of:
Expenses not deductible 5,405 1,475
Income not taxable (2,228) (1,351)
Recognition of previously unrecognised deferred tax - (757)
Deferred tax not recognised 3,318 1,214
Adjustment to tax charge in respect of prior periods 784 (785)
Effect of overseas tax rates (1,238) 1,015
Changes in tax rates (192) 214
Tax charge 12,428 9,142
Legislation to increase the rate of corporation tax in the UK from 1 April
2023 was substantially enacted on 24 May 2021. The 25% rate has therefore
been applied to any timing differences that are expected to reverse on or
after 1 April 2023.
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK,
introducing a global minimum effective tax rate of 15%. The legislation
implements a domestic top-up tax and a multinational top-up tax, effective for
accounting periods starting on or after 31 December 2023. However, this
legislation does not apply to the Group in the financial year beginning 1
January 2024 as its consolidated revenue does not meet the legislation
requirements of being greater than €750m in two of the four preceding years,
the group will continue to monitor the legislation in future years.
Deferred Tax Asset Tax losses Temporary timing differences Total
£'000 £'000 £'000
At 1 January 2023 - 4,424 4,424
Reclassification - (4,424) (4,424)
Charged directly to income statement 14 24 38
At 31 December 2023 14 24 38
Deferred Tax Liability Tax losses Temporary timing differences Total
£'000 £'000 £'000
As at 1 January 2023 (as previously stated) (128) 68,732 68,604
Adjustment to PPA - 10,507 10,507
As at 1 January 2023 (as restated) (128) 79,239 79,111
Reclassification (2,034) (2,390) (4,424)
Acquisition of subsidiary (196) - (196)
Charged/(Credited) directly to income statement 156 429 585
Amount charged/(Credited) to OCI - (2,074) (2,074)
Amount charged/(Credited) to equity - 250 250
Effect of movements in foreign exchange 8 (1,041) (1,033)
At 31 December 2023 (2,194) 74,413 72,219
Deferred tax assets and liabilities are offset to the extent that there is a
legally enforceable right to offset current tax assets against current tax
liabilities.
Deferred tax assets in relation to losses of £3.6 million (2022: £3.5
million) and other temporary differences of £6.1 million (2022: £3.4
million) have not been recognised due to uncertainty over their
recoverability.
15. Asset Acquisition
During the year, the Group purchased four concrete plants located on the
Belgian border with France, along with operating permits, branding, and
customer relations. These are collectively considered to be the acquisition of
Betons.
The Directors have treated the acquisition of Betons as an asset acquisition
as the acquisition was not considered to meet the definition of a business
combination under IFRS 3, and therefore they judged the fair value of the
assets acquired to be equal to the fair value of the consideration.
The amounts acquired as an asset acquisition are shown below:
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Property, plant & equipment (refer to note 16) 954 -
Intangible assets (refer to note 17) 2,229 -
Total asset acquisition 3,183 -
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 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) - (13,155)
Forex 177 2,881 653 10,382 915 (696) (671) 13,641
As at 31 December 2022 (as previously stated) 5,093 406,134 157,908 325,213 22,525 39,434 11,695 968,002
Fair value adjustment - PPA* - 30,286 986 - - - - 31,272
As at 31 December 2022 (as restated) 5,093 436,420 158,894 325,213 22,525 39,434 11,695 999,274
As at 1 January 2023 5,093 436,420 158,894 325,213 22,525 39,434 11,695 999,274
Acquired through acquisition 92 3,218 10,533 23,595 2,689 938 245 41,310
Transfer between classes/ reallocation from intangibles - 6,478 (78) 1,798 (214) (154) (1,479) 6,351
Fair value adjustment - 406 - - - 2,507 - 2,913
Additions 206 5,849 3,072 15,416 3,388 2,211 10,048 40,190
Disposals - (36) (1,987) (7,234) (531) (3,079) - (12,867)
Forex (73) (3,705) 421 (2,849) (215) 217 18 (6,186)
As at 31 December 2023 5,318 448,630 170,855 355,939 27,642 42,074 20,527 1,070,985
Depreciation
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
As at 1 January 2023 4,440 79,901 81,382 239,308 17,337 22,446 - 444,814
Transfer between classes/ reallocation from intangibles 13 1,737 - 276 - 428 - 2,454
Acquired through acquisition 45 762 6,772 20,285 1,723 - - 29,587
Charge for the year 206 7,994 4,919 16,640 1,567 5,608 - 36,934
Disposals - (27) (1,718) (5,240) (217) (2,736) - (9,938)
Forex (64) (1,369) (456) (1,452) 67 (2,154) - (5,428)
As at 31 December 2023 4,640 88,998 90,899 269,817 20,477 23,592 - 498,423
Net book value
As at 31 December 2022 (restated) 653 356,519 77,512 85,905 5,188 16,988 11,695 554,460
As at 31 December 2023 678 359,632 79,956 86,122 7,165 18,482 20,527 572,562
* Refer to note 17 for further information regarding the PPA fair value
adjustment.
Company
Office Equipment Land & Buildings Motor Vehicle Right of Use Total
£'000 £'000 £'000 £'000 £'000
Cost
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
As at 1 January 2023 259 - - 222 481
Additions 6 - - 12 18
Disposals - - - - -
As at 31 December 2023 265 - - 234 499
Depreciation
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
As at 1 January 2023 100 - - 124 224
Charge for the year 50 - - 59 109
Disposals - - - - -
As at 31 December 2023 150 - - 183 333
Net book value
As at 31 December 2022 159 - - 98 257
As at 31 December 2023 115 - - 51 166
17. Intangible Assets
Consolidated
Goodwill Customer Relations Intellectual property Research & Development Branding Other Intangibles Total
£'000 £'000 £'000 £'000 £'000
Cost
As at 1 January 2022 305,966 4,414 2,027 5,938 3,611 18,798 340,754
Additions - - - - - 1,713 1,713
Provisional 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)
Forex 17,147 - - - - 336 17,483
As at 31 December 2022 (as previously stated) 173,825 8,209 2,027 5,938 3,611 20,847 214,457
Price Purchase Allocation - JQG (23,448) - - - - 2,805 (20,643)
Price Purchase Allocation - Goijens (2,638) 2,516 - - - - (122)
As at 31 December 2022 (as restated) 147,739 10,725 2,027 5,938 3,611 23,652 193,692
As at 1 January 2023 147,739 10,725 2,027 5,938 3,611 23,652 193,692
Additions - 1,114 - 4 - 1,739 2,857
Reallocations - (77) (2,027) (122) (401) (6,490) (9,117)
Provisional additions through business combination 23,685 - - - - - 23,685
Forex (1,087) - - 132 - 1,225 270
As at 31 December 2023 170,337 11,762 - 5,952 3,210 20,126 211,387
Depreciation
As at 1 January 2022 - 1,598 1,641 5,367 373 12,617 21,596
Charge for the year - 826 85 87 160 1,507 2,665
Forex - - - - - 321 321
As at 31 December 2022 - 2,424 1,726 5,454 533 14,445 24,582
As at 1 January 2023 - 2,424 1,726 5,454 533 14,445 24,582
Charge for the year - 1,079 - 60 159 1,215 2,513
Reallocations - - (1,726) - - (1,735) (3,461)
Forex - - - 132 - (427) (295)
As at 31 December 2023 - 3,503 - 5,646 692 13,498 23,339
Net book value
As at 31 December 2022 (restated) 147,739 8,301 301 484 3,078 9,207 169,110
As at 31 December 2023 170,337 8,259 - 306 2,518 6,628 188,048
An adjustment has been made to reflect the initial accounting for the
acquisition of JQG and Goijens by the Company, being the elimination of the
investment in JQG and Goijens against the non-monetary assets acquired and
recognition of goodwill. In 2023, the Company determined the fair value of the
net assets acquired pursuant to the acquisition of JQG and Goijens, via a
Purchase Price Allocation ('PPA') exercise. For JQG, the PPA determined a
decrease of £33.1 million of goodwill with the corresponding movement to
uplift the value of the land and minerals and other intangibles, this is net
off by a deferred tax liability on the PPA of £9.6 million. For Goijens, the
PPA determined a decrease of £3.5 million of goodwill with the corresponding
movement to uplift the value of the Customer relations and Land and Buildings,
this is net off by a deferred tax liability on the PPA of £0.9 million. This
adheres to the requirements of IFRS 3 and this adjustment has been made as a
prior year adjustment.
In 2022, PPA adjustments were made to acquisitions in 2021, Nordkalk and BMix,
during the measurement period and the adjustment of £235 million was made as
a separate line item rather than as a prior year adjustment in line with IFRS
3. No adjustment has been made to align with IFRS 3 as any restatement
would only affect comparative opening balances in this annual report and
accounts such that the matter has no ongoing relevance. The Group didn't
include provisional adjustments for the reduction in goodwill in the year
ended 31 December 2021, which is when the assets were acquired, leaving the
initial accounting for these assets incomplete as they were pending completion
of the PPA during the measurement period. The Group refrains from making
internal provisional adjustments to goodwill given the subjectivity and
difficulty in quantifying the potential uplifts. All PPA adjustments to
goodwill are provided by an independent third party and are completed during
the measurement period in line with IFRS 3.
The PPA for the acquisitions post July 2023, being Björka and ST Investicija,
will be prepared within the measurement period.
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 acquisition 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.
A total of eighteen operating segments are considered to be Ronez in the
Channel Islands; Topcrete, Poundfield, CCP, Rightcast, Retaining, Harries and
Johnston in the UK; CDH, Stone, GduH, B-Mix, Goijens and Betons in Belgium;
and Quicklime, Nordics, Baltics and Poland in Northern Europe. The operating
segments are then allocated to regions.
The Goodwill allocated to each region is shown below:
31 December 2023 31 December 2022
North West West North East North West West North East
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill allocated to region at balance sheet date 53,621 23,200 93,516 71,798 20,400 81,627
Discount rate applied to cash flow projections 9.3% 12.24% 11.17% 10% 10% 10%
Average EBITDA margin over 5 years 23.1% 22.9% 21.9% 23.6% 22.4% 21.1%
Headroom 157,640 37,963 261,047 139,705 66,291 129,296
Long term growth rates 2% 2% 2% 2% 2% 2%
Key assumptions
The key assumptions used in performing the impairment review are set out
below:
Cash flow projections
The key assumptions and methodology used in respect of the operating segments
are consistent with those described above. The values applied to each of the
key estimates and assumptions are specific to the individual operating segment
and are based on past experience and forecast future trading conditions. The
cash flows and terminal value were projected in line with the methodology
disclosed above.
Long-term growth rates
Cash flow projections are prudently based on 2 per cent (2022: 2 per cent) and
therefore provides plenty of headroom.
Discount rate
Forecast cash flows for each operating segment have been discounted at rates
of 9.30 per cent to 12.24 per cent (2022: 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. The table below identifies the
amounts by which each of the following assumptions would decline or increase
to arrive at a zero excess of the present value of future cash flows over the
book value of net assets in the two operating segments selected for
sensitivity analysis disclosures:
Reduction in cash flows 6.0% - 7.0%
Increase in discount rate 2.0% - 3.7%
Reduction in growth rate 2.0%
This demonstrated that a 1.0% (2022: 1.0%) increase in the discount rate would
not cause an impairment and the annual growth rate is assumed to be 2.0%
(2022: 2.0%).
The Directors have therefore concluded that no impairment to goodwill is
necessary.
18. Investment in Subsidiary Undertakings
Company
31 December 2023 31 December 2022
£'000 £'000
Shares in subsidiary undertakings
At beginning of the year 482,622 435,085
Additions 6,190 47,537
Disposals - -
At period end 488,812 482,622
Loan to/(from) Group undertakings 78,493 100,799
Total 567,305 583,421
Investments in Group undertakings are stated at cost less impairment.
Details of subsidiaries at 31 December 2023 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
Stone Service Center 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
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
Nayles Barn Quarry Limited England £100 Dormant
C B Collier Quarry Limited England £1 Dormant
Gripeco BV Belgium €284,762 Concrete producer
Goijens Recycling NV Belgium €62,000 Concrete producer
G&G Betonpompen BV Belgium €50,000 Concrete producer
Retaining Holdings Limited England £67 Holding company
Retaining (UK) Limited England £100 Retaining wall system
Geocast Ltd England £100 Retaining wall system
Juuan Dolomiittikalkki Oy Finland €52,700 Limestone quarrying and processing
ST Investicija UAB Lithuania €2,900 Limestone quarrying and processing
Compus UAB Lithuania €2,896 Limestone quarrying and processing
Draseikiu Karjeras UAB Lithuania €203,000 Limestone quarrying and processing
Baltijos Karjerai UAB Lithuania €12,876 Limestone quarrying and processing
Karjeru Verslas UAB Lithuania €61,712 Limestone quarrying and processing
Kvykliu Karjeras UAB Lithuania €102,500 Limestone quarrying and processing
Björka Mineral AB Sweden €60 Limestone quarrying and processing
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
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
Nayles Barn Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
C B Collier Quarry Limited Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire,
England, OX7 4AD
Gripeco BV Industrieterrein Kanaal-Noord 1150, 3960 Bree, Belgium
Goijens Recycling NV Industrieterrein Kanaal-Noord 1150, 3960 Bree, Belgium
G&G Betonpompen BV Industrieterrein Kanaal-Noord 1150, 3960 Bree, Belgium
Retaining Holdings Limited Hughes House, Cargo Fleet Road, Middlesbrough, United Kingdom, TS3 6AG
Retaining (UK) Limited Hughes House, Cargo Fleet Road, Middlesbrough, United Kingdom, TS3 6AG
Geocast Ltd Hughes House, Cargo Fleet Road, Middlesbrough, United Kingdom, TS3 6AG
Juuan Dolomiittikalkki Oy Onninpolku 1, 83900 Juuka, Finland
ST Investicija UAB Raudondvario pl. 131B, Kaunas, Lithuania
Compus UAB Raudondvario pl. 131B, Kaunas, Lithuania
Draseikiu Karjeras UAB Raudondvario pl. 131B, Kaunas, Lithuania
Baltijos Karjerai UAB Raudondvario pl. 131B, Kaunas, Lithuania
Karjeru Verslas UAB Raudondvario pl. 131B, Kaunas, Lithuania
Kvykliu Karjeras UAB Raudondvario pl. 131B, Kaunas, Lithuania
Björka Mineral AB Södra Tullgatan 3, 211 40 Malmö, Sweden
For the year ended 31 December 2023 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
· Retaining Holdings Limited
· Retaining (UK) Limited
· Geocast Ltd
· Nayles Barn Quarry Limited
· C B Collier Quarry Limited
Impairment review
The performance of all companies for the year ended 31 December 2023 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.
The Group entered into a joint venture agreement partnering with Arcelor
Mittal, to invest in green quicklime and dolime production in Dunkirk, which
was entered into on 11 September 2022.
The Group has one non-material local associate in Pargas, Pargas Hyreshus Ab.
31 December 2023 31 December 2022
£'000 £'000
Interests in associates 605 576
Interest in joint venture 6,448 5,942
7,053 6,518
Proportion of ownership interest held
Name Country of incorporation 31 December 2023 31 December 2022
NorFraKalk AS Norway 50% 50%
AMeLi Green Lime Solutions France 47.5% -
Summarised financial information
NorFraKalk AS - Cost and net book value 31 December 2023 31 December 2022
£'000 £'000
Current assets 7,735 8,815
Non-current assets 10,078 7,338
Current liabilities (2,739) (3,388)
Non-current liabilities (4,651) (1,872)
10,423 10,893
For the period 1 January 2023 to 31 December 2023 For the period 1 September 2022 to 31 December 2022
£'000 £'000
Revenues 15,903 20,055
Profit after tax from continuing operations 1,372 1,602
20. Trade and Other Receivables
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
£'000 £'000 £'000 £'000
Current asset
Trade receivables 85,033 78,879 3,690 2,555
Prepayments 6,961 4,917 422 358
Other receivables 7,040 3,009 1,220 255
99,034 86,805 5,332 3,168
Non-current asset
Other receivables 3,398 4,259 - -
3,398 4,259 - -
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 2023 31 December 2022 31 December 2023 31 December 2022
£'000 £'000 £'000 £'000
UK Pounds 22,013 21,479 5,052 3,168
Euros 57,839 49,112 - -
Swedish Krona 15,240 13,945 - -
Zlotys 6,518 5,803 - -
Ukrainian Hryvnia - - - -
Turkish Lira 822 725 - -
102,432 91,064 5,052 3,168
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 2023 31 December 2022
Cost and net book value £'000 £'000
Raw materials and consumables 32,823 26,104
Finished and semi-finished goods 44,265 36,187
Work in progress 7,221 5,489
84,309 67,780
The amount recognised as change of value in inventory included in cost of
sales was £9 million (31 December 2022: (£9 million)).
22. Cash and Cash Equivalents
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
£'000 £'000 £'000 £'000
Cash at bank and on hand 55,872 68,623 7,925 5,055
55,872 68,623 7,925 5,055
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 2023 31 December 2022 31 December 2023 31 December 2022
'000 '000 '000 '000
UK Pounds 11,111 8,536 4,617 1,576
Euros 37,308 56,322 3,308 3,479
Swedish krona 4,938 1,100 - -
Zlotys 2,137 2,479 - -
Ukrainian Hryvnia 43 20 - -
Turkish Lira 335 166 - -
55,872 68,623 7,925 5,055
23. Trade and Other Payables
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
£'000 £'000 £'000 £'000
Current liabilities
Trade payables 78,572 69,907 15,184 2,964
Wages Payable 13,715 13,662 - 1,032
Accruals 46,120 39,627 15,462 4,475
VAT payable/(receivable) 3,366 3,785 (1,654) (12)
Deferred consideration 8,887 5,873 3,865 4,243
Other payables 7,539 7,589 1,225 825
158,199 140,443 34,082 13,527
Non-Current liabilities
Deferred consideration 8,208 5,051 5,260 5,051
8,208 5,051 5,260 5,051
The carrying amounts of the Group and Company's trade and other payables are
denominated in the following currencies:
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
'000 '000 '000 '000
UK Pounds 49,003 44,493 29,114 16,419
Euros 80,349 69,579 9,908 2,159
Swedish krona 26,712 21,523 320 -
Zlotys 10,029 9,663 - -
Ukrainian Hryvnia 11 9 - -
Turkish Lira 303 227 - -
166,407 145,494 39,342 18,578
24. Borrowings
Consolidated Company
31 December 2023 31 December 2022 31 December 2023 31 December 2022
£'000 £'000 £'000 £'000
Non-current liabilities
Syndicated Senior Credit Facility 174,090 206,342 174,090 206,342
Bank Loans 5,986 2,617 - -
Finance lease liabilities 7,853 7,375 - -
IFRS 16 leases 12,863 12,296 - 27
200,792 228,630 174,090 206,369
Current liabilities
Syndicated Senior Credit Facility 29,500 20,000 29,500 20,000
Bank Loans 1,209 6,500 - -
Finance lease liabilities 2,066 2,927 - -
IFRS 16 leases 4,729 4,419 43 72
37,504 33,846 29,543 20,072
In July 2021, the Group entered into a new Syndicated Senior Credit Facility
of up to £305 million (the 'Legacy Debt') led by Santander UK and including
several major UK and European banks. The Legacy Debt, 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 Legacy Debt 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 2023 the
Interest Margin was 2.35%.
On 22 November 2023 the Company entered into a new syndicated senior credit
facility of up to €750 million (the 'New Debt Facilities') led by Santander
UK and BNPP, with the syndicate including several major UK and European banks
and a further €125 million bridge loan ('Bridge Loan'). The New Debt
Facilities comprise a €600 million committed term facility, €150 million
revolving credit facility and a further €100 million uncommitted accordion.
The New Debt Facilities are conditional on the completion of the acquisition
of the CRH Deal 1, following completion, the Legacy Debt will be repaid in
full. As of 31 December 2023, the Group hadn't drawn any funds from the New
Debt Facilities.
The carrying amounts and fair value of the non-current borrowings are:
Carrying amount and fair value
31 December 2023 31 December 2022
£'000 £'000
Syndicated Senior Credit Facility 174,090 206,342
Bank Loans 5,986 2,617
Finance lease liabilities 7,853 7,375
IFRS 16 leases 12,863 12,296
200,792 228,630
Lease Liabilities
Lease liabilities are effectively secured, as the rights to the leased asset
revert to the lessor in the event of default.
Leases which are entered into as a hire purchase agreement, or a finance lease
is shown as finance leases.
Consolidated
31 December 2023 31 December 2022
Finance lease liabilities - minimum lease payments £'000 £'000
Not later than one year 6,795 7,346
Later than one year and no later than five years 15,647 14,547
Later than five years 5,069 5,124
27,511 27,017
Future finance charges on finance lease liabilities 4,466 3,200
Present value of finance lease liabilities 31,977 30,217
For the year ended 31 December 2023, the total finance charges were £1
million (2022: £0.6 million)
The contracted and planned lease commitments were discounted using a weighted
average incremental borrowing rate of 6.5%.
The present value of finance lease liabilities is as follows:
Consolidated
31 December 2023 31 December 2022
£'000 £'000
Not later than one year 7,236 7,566
Later than one year and no later than five years 16,664 14,983
Later than five years 5,398 5,278
Present value of finance lease liabilities 29,298 27,827
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 2023 208,959 26,500 27,017 262,476
Increase/(decrease) through financing cash flows - (22,932) (9,118) (32,050)
Increase from refinancing - 549 4,515 5,064
Amortisation of finance arrangement fees (1,085) - - (1,085)
Increase through obtaining control of subsidiaries - 135 836 971
Transfer between classes (25,673) 25,673 - -
Revaluation - - 4,673 4,673
Foreign exchange movement (2,125) 784 (412) (1,753)
As at 31 December 2023 180,076 30,709 27,511 238,296
25. Provisions
Consolidated
31 December 2023 31 December 2022
£'000 £'000
As at 1 January 10,697 10,175
Acquired on business combination 1,546 631
Addition/(Deduction) 970 (110)
13,213 10,696
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; £6.7 million 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, £242,000 is to cover the loss on the Holcim contract
in GduH, £62,000 for legal fees, £1.69 million for other restructuring costs
in the Nordkalk entities, £3.19 million is the provision for early retirement
in Belgium, where salaried workers can qualify for early retirement based on
age and £70,000 for early retirement in the Nordkalk entities. 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% (2022 8%) 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 31 December 2023 31 December 2022
£'000 £'000
Assets - -
Liabilities 4,355 3,543
Net defined benefit liability at end of year 4,355 3,543
Amounts recognised in the Statement of Financial Position 31 December 2023 31 December 2022
£'000 £'000
Present value of funded defined benefit obligations 967 2,468
Fair value of plan assets (153) (2,071)
814 397
Present value of unfunded defined benefit obligation 3,541 3,128
Unrecognised past service cost - -
Total 4,355 3,543
Amounts recognised in the Income Statement 31 December 2023 31 December 2022
£'000 £'000
Current service cost 152 160
Interest cost 112 47
Expected return on plan assets 163 (127)
Total pension expense 427 80
Changes in the present value of the defined benefit obligation 31 December 2023 31 December 2022
£'000 £'000
Defined benefit obligation at beginning of year 3,543 4,292
Current service cost 152 160
Interest cost 112 47
Benefits paid (354) (317)
Remeasurements 163 (127)
Remeasurements in OCI 978 (844)
Other significant events (40) 249
Foreign exchange movement (199) 83
Defined benefit obligation at end of year 4,355 3,543
Amounts recognised in the Statement of Changes in Equity 31 December 2023 31 December 2022
£'000 £'000
Prior year cumulative actuarial remeasurements - 152
Remeasurements 978 (844)
Foreign exchange movement - 54
Cumulative amount of actuarial gains and losses recognised in the Statement of 978 (638)
recognised income / (expense)
Movements in the net liability/(asset) recognised in the Statement of 31 December 2023 31 December 2022
Financial Position
£'000 £'000
Net liability in the balance sheet at beginning of year 3,543 4,292
Total expense recognised in the income statement 264 207
Contributions paid by the company (354) (317)
Amount recognised in the statement of recognised (income)/expense 163 (127)
Remeasurements in OCI 978 (844)
Other significant events (40) 249
Foreign exchange movement (199) 83
Defined benefit obligation at end of year 4,355 3,543
Principal actuarial assumptions as at 31 December 2023
Discount rate 3.87%
Future salary increases 2.93%
Future inflation 2.00%
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 2023
Loans & receivables Total
Assets per Statement of Financial Performance £'000 £'000
Trade and other receivables (excluding prepayments) 95,471 95,471
Cash and cash equivalents 55,872 55,872
151,343 151,343
At amortised cost Total
Liabilities per Statement of Financial Performance £'000 £'000
Borrowings (excluding finance leases) 210,785 210,785
Finance lease liabilities 27,511 27,511
Trade and other payables (excluding non-financial liabilities) 166,407 166,407
404,703 404,703
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
Company 31 December 2023
Loans & receivables Total
Assets per Statement of Financial Performance £'000 £'000
Trade and other receivables (excluding prepayments) 4,909 4,909
Cash and cash equivalents 7,925 7,925
12,834 12,834
At amortised cost Total
Liabilities per Statement of Financial Performance £'000 £'000
Borrowings (excluding finance leases) 203,589 203,589
Finance lease liabilities 43 43
Trade and other payables (excluding non-financial liabilities) 39,345 39,345
242,977 242,977
31 December 2022
Company
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
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 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
As at 1 January 2023 638,246,344 6,383 400,022 406,405
Issue of new shares - 28 February 2023 (1) 55,555,555 556 28,682 29,238
Capital reduction - 23 May 2023 - - (428,704) (428,704)
As at 31 December 2023 693,801,899 6,939 - 6,939
4
125
129
As at 31 December 2022
638,246,344
6,383
400,022
406,405
As at 1 January 2023
638,246,344
6,383
400,022
406,405
Issue of new shares - 28 February 2023 (1)
55,555,555
556
28,682
29,238
Capital reduction - 23 May 2023
-
-
(428,704)
(428,704)
As at 31 December 2023
693,801,899
6,939
-
6,939
(1) Includes issue costs of £781,679
The authorised share capital consists of 1,114,854,530 ordinary shares at a
par value of 1 penny.
On 23 February 2023, the Company raised £29.2 million net of issue costs via
the issue and allotment of 55,555,555 new Ordinary Shares at a price of 54
pence per share.
On 23 May 2023, the Company undertook a capital reduction whereby the existing
share premium and the deferred shares were cancelled.
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 2023 31 December 2022
Grant date Expiry date Exercise price in £ per share # #
5 January 2017 30 December 2026 0.25 260,146 260,146
5 January 2017 30 December 2026 0.40 11,878,645 11,878,645
15 April 2019 15 April 2026 0.46 9,030,934 9,030,934
30 December 2019 30 December 2026 0.46 7,943,058 7,976,392
29,112,783 29,146,117
The Company and Group have no legal or constructive obligation to settle or
repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined using the
Black Scholes valuation model. The parameters used are detailed below:
2017 Options A 2017 Options B 2019 Options C 2019 Options D
Vested on 5/1/2017 5/1/2017 15/4/2019 30/12/2019
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 2023 is shown below:
Options and warrants
31 December 2023 31 December 2022
Weighted average exercise price Weighted average exercise price
# £ # £
Outstanding at beginning of the year 29,146,117 0.44 30,200,045 0.45
Granted - - - -
Vested - - - -
Exercised (33,334) 0.46 (1,053,927) 0.44
Outstanding as at year end 29,112,783 0.44 29,146,117 0.44
Exercisable at year end 29,112,783 0.44 29,146,117 0.44
LTIP awards
31 December 2023 31 December 2022
Weighted average valuation price Weighted average valuation price
# £ # £
Outstanding at beginning of the year 25,620,000 0.69 25,620,000 0.69
Granted - - - -
Vested - - - -
Exercised - - - -
Outstanding as at year end 25,620,000 0.69 25,620,000 0.69
Exercisable at year end - - - -
30. Other Reserves
Consolidated
Deferred shares Capital redemption reserve Revaluation reserve Capital reserve Foreign currency translation reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
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
As at 1 January 2023 762 600 4,671 687 3,541 10,261
Other comprehensive income - - (5,506) - - (5,506)
Currency translation differences - - - - (3,109) (3,109)
Other adjustments (762) - - (255) - (1,017)
As at 31 December 2023 - 600 (835) 432 432 629
31. Non-controlling interests
Consolidated
31 December 2023 31 December 2022
£'000 £'000
As at 1 January 2023 11,732 10,894
Acquired in business combination 616 974
Non-controlling interests share of profit in the period 3,184 2,343
Dividends paid (1,275) (3,038)
Foreign exchange movement (114) 559
As at 31 December 2023 14,143 11,732
31 December 2023 31 December 2022
Suomen Karbonaatti Other individually immaterial subsidiaries Suomen Karbonaatti Other individually immaterial subsidiaries
£'000 £'000 £'000 £'000
Current assets 18,762 14,459 17,592 12,427
Non-current assets 2,489 23,612 3,348 19,605
Current liabilities (4,919) (8,442) (7,975) (7,627)
Non-current liabilities (7,807) (6,082) (5,767) (4,361)
Net Assets 8,525 23,547 7,198 20,044
Net Assets Attributable to NCI 4,192 7,800 3,527 7,366
Revenue 38,252 32,062 37,760 23,662
Profit after taxation 4,108 3,705 3,294 1,993
Other comprehensive income - - - -
Total comprehensive income 4,108 3,705 3,294 1,993
Net operating cash flow 4,486 5,081 4,196 1,556
Net investing cash flow (324) (8,971) (679) (2,782)
Net financing cash flow (2,610) 4,021 (6,208) 1,701
Dividends paid to NCI 1,275 - 3,038 -
32. Earnings Per Share
The calculation of the total basic earnings per share of 1.98 pence (2022:
4.89 pence) is calculated by dividing the profit attributable to shareholders
of £13,534 million (2022: £31,238 million) by the weighted average number of
ordinary shares of 684,973,893 (2022: 638,243,627) in issue during the period.
Diluted earnings per share of 1.90 pence (2022: 4.68 pence) is calculated by
dividing the profit attributable to shareholders of £13,534 million (2022:
£31,238 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
714,091,517 (2022: 667,430,527). The weighted average number of shares is the
opening balance of ordinary shares plus the weighted average of 46,727,549
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.
Items which are categorised as Level 2 financial assets and liabilities are
forward exchange contracts and these are valued using the year end exchange
rate for the relevant currencies.
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 - 122 580 - - 702 - 702 702
Electricity hedges - - 3,995 - - 3,995 3,995 - 3,995
Financials assets not measured at fair value
Trade and other receivables (excl. Derivatives) - - - 102,432 - 102,432 - - -
Cash and cash equivalents - - - 55,872 - 55,872 - - -
Financial liabilities measured at fair value
Forward exchange contracts - 1,253 590 - - 1,843 - 1,843 1,843
Electricity hedges - - 3,250 - - 3,250 3,250 - 3,250
Financial liabilities not measured at fair value
Loans - - - - 210,786 210,786 - - -
Finance lease liability - - - - 27,510 27,510 - - -
Trade and other payables (excl. derivative) - - - - 166,406 166,406 - - -
34. Business Combinations
Nayles Barn Quarry Limited
On 27 January 2023, the Group acquired 100 per cent. of the share capital of
Nayles Barn Quarry Limited ('Nayles Barn') for cash consideration of £3.5
million. This was part of the deferred consideration from the JQG acquisition.
Nayles Barn is registered and incorporated in England.
The following table summarises the consideration paid for Nayles Barn and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Net cash consideration 3,500
3,500
Recognised amounts of assets and liabilities acquired £'000
Trade and other receivables 15
Property, plant & equipment 73
Trade and other payables (771)
Investment in Subsidiary 670
Total identifiable net assets (13)
Goodwill (refer to note 17) 3,513
Total consideration 3,500
Since 27 January 2023 Nayles Barn hasn't contributed profit or revenue.
Goijens
On 31 January 2023, the Group acquired 100 per cent. of the share capital of
Gripeco BV and its subsidiaries ('Goijens') for a cash consideration of €14
million. Goijens is registered and incorporated in Belgium. The principal
activity is the operation of concrete plants.
The following table summarises the consideration paid for Goijens and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 12,144
12,144
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 1,904
Trade and other receivables 2,175
Investment in subsidiaries 713
Inventories 233
Property, plant & equipment 3,790
Trade and other payables (1,499)
Income tax payable (25)
Borrowings (234)
Total identifiable net assets 7,057
Goodwill (refer to note 17) 5,087
Total consideration 12,144
Since 31 January 2023, Goijens has contributed a profit of £1.3 million and
revenue of £14.7 million. Had Goijens been consolidated from 1 January 2023,
the consolidated statement of income would show additional loss of £0.1
million and revenue of £0.5 million.
Juuan Dolomitik
On 1 February 2023, the Group acquired 70 per cent. of the share capital of
Juuan Dolomitik and its subsidiaries for a cash consideration of €1.83
million. Juuan Dolomitik is registered and incorporated in Finland. Juuan
Dolomitik is a land improvement lime manufacturing company.
The following table summarises the consideration paid for Juuan Dolomitik and
the values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 530
Deferred consideration 1,059
1,589
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 794
Trade and other receivables 361
Inventories 93
Property, plant & equipment 879
Investment in Subsidiary 36
Trade and other payables (79)
Borrowings (29)
Non-controlling interest (616)
Total identifiable net assets 1,439
Goodwill (refer to note 17) 150
Total consideration 1,589
Since 1 February 2023, Juuan Dolomitik has contributed a profit of £0.1
million and revenue of £1.5 million. Had Juuan Dolomitik been consolidated
from 1 January 2023, the consolidated statement of income would show no
additional profit and revenue of £0.2 million.
Retaining
On 7 April 2023, the Group acquired 100 per cent. of the share capital of
Retaining and its subsidiaries for a cash consideration of £2.45 million.
Retaining is registered and incorporated in England. Retaining provides
retaining wall solutions across the United Kingdom.
The following table summarises the consideration paid for Retaining and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 2,450
2,450
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 150
Trade and other receivables 300
Inventories 1,372
Property, plant & equipment 396
Trade and other payables (889)
Income tax payable (46)
Deferred tax liability (30)
Borrowings (459)
Total identifiable net assets 794
Goodwill (refer to note 17) 1,656
Total consideration 2,450
Since 7 April 2023, Retaining has contributed a profit of £0.6 million and
revenue of £4.2 million. Had Retaining been consolidated from 1 January 2023,
the consolidated statement of income would show additional loss of £0.1
million and revenue of £1.4 million.
Björka Mineral
On 31 July 2023, the Group acquired 100 per cent. of the share capital of
Björka Mineral for a cash consideration of €14.7 million. Björka Mineral
is registered and incorporated in Sweden. Björka Mineral is a leading
supplier of high-grade limestone and dolomite powders.
The following table summarises the consideration paid for Björka Mineral and
the values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash consideration 9,543
Equity contributions 468
Deferred consideration 2,982
12,993
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 104
Trade and other receivables 2,043
Inventories 1,849
Property, plant & equipment 6,964
Intangible assets 11
Trade and other payables (1,756)
Income tax refund 112
Deferred tax liability (179)
Borrowings (5,619)
Provisions (1,554)
Total identifiable net assets 1,975
Provisional goodwill (refer to note 17) 11,018
Total consideration 12,993
Since 31 July 2023, Björka Mineral has contributed a profit of £0.7 million
and revenue of £5.5 million. Had Björka Mineral been consolidated from 1
January 2023, the consolidated statement of income would show additional
profit of £0.1 million and revenue of £7.3 million.
ST Investicija
On 12 July 2023, the Group acquired 100 per cent. of the share capital of ST
Investicija and its subsidiaries for a cash consideration of €4.3 million.
ST Investicija is registered and incorporated in Lithuania. ST Investicija
operates three quarries in Lithuania.
The following table summarises the consideration paid for ST Investicija and
the values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 3,714
3,714
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 753
Trade and other receivables 694
Inventories 230
Investments 14
Property, plant & equipment 899
Trade and other payables (517)
Income tax payable (82)
Deferred tax liability
Borrowings (490)
Provisions (48)
Total identifiable net assets 1,453
Provisional goodwill (refer to note 17) 2,261
Total consideration 3,714
Since 12 July 2023, ST Investicija has contributed a profit of £0.4 million
and revenue of £1.9 million. Had Retaining been consolidated from 1 January
2023, the consolidated statement of income would show additional profit of
£0.3 million and revenue of £1.6 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 2023 31 December 2022
£'000 £'000
Ronez Limited (27,152) (22,764)
SigmaGsy Limited (9,013) (7,663)
SigmaFin Limited 21,885 20,549
Topcrete Limited (11,179) (10,346)
Poundfield Products (Group) Limited 5,012 5,356
Foelfach Stone Limited 594 557
CCP Building Products Limited 5,311 4,586
Carrières du Hainaut SCA 16,799 14,948
GDH (Holdings) Limited 11,435 10,035
B-Mix Beton NV 10,349 8,013
Stone Holdings SA 409 384
Nordkalk Oy Ab 43,062 70,196
Johnston Quarry Group 12,604 7,747
Rightcast Limited (1,117) (799)
Retaining (UK) Limited (506) -
78,493 100,799
Loans granted to or from subsidiaries are unsecured, have interest charged at
6.5% 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 4 January 2024 the Company:
· raised gross proceeds of approximately £200 million through the
issue of 421,052,631 new Ordinary Shares at a price of 47.5 pence per share;
· refinanced its senior debt with a new €875 million finance
facility; and
· completed the acquisitions of Fels Holding GmbH and its
subsidiaries, Vapenka Vitošov s.r.o. and Clogrennane Lime Limited for an
aggregate consideration of €745 million before customary purchase price
deductions. Financial information for each entity acquired shown below:
Fels Holdings GmbH
On 4 January 2024, the Group acquired 100 per cent. of the share capital of
Fels Holding GmbH ('Fels') and its subsidiaries for a cash consideration of
€500.7 million. Fels is registered and incorporated in Germany. Fels is a
lime producer with the key operations of extracting limestone from quarries as
well further processing the limestone.
The following table summarises the consideration paid for Fels and the values
of the assets and equity assumed at the acquisition date.
Total consideration £'000
Initial cash 249,876
Deferred settlement (8,675)
Purchase of shareholder loan 128,059
Deferred consideration 65,060
434,320
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 26,928
Trade and other receivables 26,103
Inventories 22,134
Property, plant & equipment 447,811
Intangible assets 122,619
Intercompany borrowings (128,273)
Trade and other payables (55,302)
Income tax payable (5,384)
Deferred tax liability (93,120)
Borrowings (10)
Provisions (43,841)
Total identifiable net assets 319,665
Provisional goodwill 114,655
Total consideration 434,320
Vapenka Vitošov s.r.o
On 4 January 2024, the Group acquired 75 per cent. of the share capital of
Vapenka Vitošov s.r.o ('Vapenka') for a cash consideration of €85.8
million. Vapenka is registered and incorporated in the Czech Republic. Vapenka
is a lime producer with the key operations of extracting limestone from
quarries as well further processing the limestone.
The following table summarises the consideration paid for Vapenka and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 74,388
74,388
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 2,951
Trade and other receivables 5,266
Inventories 4,434
Property, plant & equipment 64,446
Intangible assets 13,375
Trade and other payables (4,617)
Income tax payable (748)
Deferred tax liability (12,394)
Borrowings (8)
Provisions (442)
Total identifiable net assets 72,263
Provisional goodwill 2,125
Total consideration 74,388
Clogrennane Lime Limited
On 4 January 2024, the Group acquired 100 per cent. of the share capital of
Clogrennane Lime Limited ('Clogrennane') for a cash consideration of €58.2
million. Clogrennane is registered and incorporated in Ireland. Clogrennane is
a lime producer with the key operations of extracting limestone from quarries
as well further processing the limestone.
The following table summarises the consideration paid for Clogrennane and the
values of the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 50,517
50,517
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 8,523
Trade and other receivables 3,671
Inventories 2,609
Property, plant & equipment 9,327
Trade and other payables (4,265)
Income tax payable (1,215)
Deferred tax liability (986)
Borrowings (1)
Total identifiable net assets 17,663
Provisional goodwill 32,854
Total consideration 50,517
On 4 March 2024, the Company issued notice of exercise of the call option,
entered on 22 November 2023, to acquire the UK lime operations of CRH plc for
a total consideration of €155 million. Completion is expected by the end of
March 2024.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BRGDXSXBDGSRRecent news on Sigmaroc
See all newsREG - SigmaRoc PLC - Holding(s) in Company
AnnouncementREG - SigmaRoc PLC - Result of AGM
AnnouncementREG - SigmaRoc PLC - AGM Statement
AnnouncementREG - SigmaRoc PLC - Completion of acquisition of UK Lime operations
AnnouncementREG - SigmaRoc PLC - Director/PDMR Shareholding
Announcement