REG - SigmaRoc PLC - Interim Results, Analyst Briefing & Investor Pres
05/09/2023 07:00
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RNS Number : 3418L SigmaRoc PLC 05 September 2023
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
5 September 2023
SigmaRoc plc
('SigmaRoc', the 'Company' or the 'Group')
Interim Results 2023
Strong H1 with resilient trading, further strategic progress, and full year
expectations unchanged
SigmaRoc plc, the specialist quarried materials group, is pleased to announce
its unaudited interim results for the six months ended 30 June 2023.
Highlights
Financial highlights
Underlying 1 results 30 June 2023 30 June 2022 YoY change
Revenue £290.0m £247.1m +17%
EBITDA £54.9m £47.6m +15%
EBITDA margin 18.9% 19.2% -30bps
Net Margin2 21.9% 21.2% +70bps
Profit before tax £33.0m £29.1m +13%
EPS 4.01p 3.61p +11%
Cash and cash equivalents £62.5m £46.4m +35%
Net debt3 £183.3m £216.9m -15%
Adjusted Leverage Ratio 1.69x 2.24x -25%
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. Pro-forma financial information is presented on a like-for-like basis
adjusting for impact of any acquisitions or non-recurring events.
2 Net Margin is EBITDA margin adjusted for impact of inflationary cost
pass-throughs, such as energy, materials, and distribution
3 Net debt including IFRS 16 lease liabilities.
Financial highlights
· Strong H1, further demonstrating the resilience of the Group's
model, together with its continued strategic development;
· LFL revenue growth of 13%, reflecting effective pricing actions
and benefits of diversified market exposure;
· Underlying LFL EBITDA growth of 12%, with further productivity
gains contributing to robust margins;
· Group volumes fell by 3% but demand remained resilient across key
markets with dynamic pricing supporting Net Margin improvement;
· Underlying EPS increased by 11% YoY, despite finance costs
doubling and impact of February fundraise;
· Adjusted Leverage Ratio reduced by 0.24x in the Period to 1.69x,
comfortably below 2.0x target;
Strategic highlights
· Acquisition and investment programme launched in February 2023,
following £30m equity placing, now fully committed:
o Six acquisitions expected to contribute c.£8m annualised EBITDA at an
effective multiple of 3.9 times;
o Organic growth investments expected to contribute a further c.£2m EBITDA,
once fully operational, at an effective multiple of 3.3 times;
o Divestment of four non-core assets generating £11m at an effective
multiple of 12.9 times (includes land holdings with no earnings impact);
· Continued success in market leading sustainability initiatives
including the Aqualung carbon capture project, and partnership with Materials
Evolution for low carbon cement;
Current trading and outlook - Positive start to second half and full year
expectations maintained
· H2 trading has started well, with continuing robust demand for
infrastructure and quicklime products, alongside stabilised conditions in the
paper, pulp & board market;
· Second half to see further benefit from the integration of recent
acquisitions as well as the organic development initiatives as they come on
stream;
· Normal seasonal cash flow profile expected to support further
de-levering over the remainder of the year, in the absence of further
acquisitions and/or development;
· The long-term potential remains exciting, with significant
opportunities to extend our geographical reach and product offering across a
range of markets for high quality construction materials and industrial
minerals;
· While the Board is mindful that trading conditions are likely to
remain challenging in several of the Group's markets, the Board expects that
the Group's diversified end market exposure, geographic spread, and
decentralised operating model will continue to deliver a resilient performance
and accordingly the Board's expectations for the full year remain unchanged.
Max Vermorken, CEO, commented:
"I am delighted to be sharing these results for the first half of 2023 which
show the resilience of SigmaRoc's diversified business and operations, which
have traded ahead of expectations. It has been an active period for the Group.
We have made continued strategic progress on the M&A front where we have
strengthened the Group's footprint with transactions at attractive multiples,
alongside a number of organic projects, all of which will contribute to the
Group's performance in the second half of the year and beyond.
The second half has started well, with resilient demand for infrastructure and
quicklime, alongside better conditions in the paper, pulp & board market.
Despite a tougher trading environment in some areas of the business, our
diversified business model, agile team, and a demonstrated ability to manage
prices and costs, has enabled SigmaRoc to deliver another set of robust
results. Longer term structural drivers of the business remain positive, and
we look forward to the future with optimism."
The full text of the interim 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 analysts at the offices of Peel
Hunt, 7th Floor, 100 Liverpool St, London EC2M 2AT at 8:30am today. Please
register to attend by emailing SigmaRoc@walbrookpr.com
(mailto:SigmaRoc@walbrookpr.com) , specifying whether you will be attending in
person or dialling in.
Private Investor Presentation
SigmaRoc's 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 interim results and
prospects via Investor Meet Company today at 11.30am BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted at any time during the live presentation via your Investor
Meet Company dashboard. Investors can sign up to Investor Meet Company for
free and add to meet SigmaRoc via:
https://www.investormeetcompany.com/sigmaroc-plc/register-investor
(https://www.investormeetcompany.com/sigmaroc-plc/register-investor)
Investors who already follow SigmaRoc on the Investor Meet Company platform
have automatically been invited.
Information on the Company is available on its website, www.sigmaroc.com
(http://www.sigmaroc.com/) .
Enquiries:
SigmaRoc plc Tel: +44 (0) 207 002 1080
Max Vermorken (Chief Executive Officer)
Garth Palmer (Chief Financial Officer) ir@sigmaroc.com
Tom Jenkins (Head of Investor Relations)
Liberum Capital (Co-Broker and Nominated Adviser) Tel: +44 (0) 203 100 2000
Dru Danford / Jamie Richards / Ben Cryer
Peel Hunt (Co-Broker) Tel: +44 (0) 20 7418 8900
Mike Bell / Ed Allsopp
Walbrook PR Ltd (Public Relations) Tel:+44 (0) 20 7933 8780
Tom Cooper / Nick Rome
Sigmaroc@walbrookpr.com (mailto:Sigmaroc@walbrookpr.com)
Mob: 07971 221972 / 07748 325 236
About SigmaRoc plc
SigmaRoc is an innovative quarrying and construction materials group with
sites in the UK and Northern Europe.
SigmaRoc's vision is to become the leading European quarried materials group,
seeking to create value by purchasing assets in fragmented materials markets
and extracting efficiencies through active management and forming the assets
into larger groups. In addition, through the development of new products and
services, the Group aims to meet the challenges of providing customers with
innovative and sustainable solutions for the future.
SigmaRoc has a strong balance sheet and a growth strategy driven by both
acquisitive and organic growth initiatives.
The Group listed on AIM in 2017, has made over 15 acquisitions, and now
employs over 2,000 staff in more than 80 sites across the UK and Europe.
EXECUTIVE STATEMENT
The Group delivered a strong first half trading performance, with continued
underlying earnings growth despite broad macroeconomic uncertainty and
challenging conditions in some markets. Against this backdrop, Group LFL
volumes were 3% lower in the Period with the weakest demand conditions in
residential construction segments, primarily in the UK and Nordics, where the
Group has relatively low exposure. This was partially offset by continued
strong demand in several of the Group's markets and in particularly for
infrastructure and quicklime products. The Group continued to be effective in
passing through ongoing cost inflation, leveraging SigmaRoc's differentiated
product quality and service levels, with dynamic pricing leading to 17%
year-on-year growth in Group revenues to £290m.
Pleasingly, H1 EBITDA margins were maintained at 19%, with inflationary cost
pressures well managed and further productivity gains realised across the
network, resulting in a 15% YoY increase in EBITDA to £55m. The Group
generated £20m of Underlying operating cash, which was in-line with
expectations and consistent with seasonal working capital fluctuations. The
adjusted leverage ratio reduced by 0.24x in the Period to 1.69x, comfortably
below 2.0x target. Despite a step up in financing costs and the effect of the
equity fundraise in February 2023, underlying EPS increased 11%, to 4p, in the
Period.
Operations and trading
The Group's diversified business model and end market exposure continues to
provide resilience with several markets outperforming expectations.
· Industrial minerals - 43% of Group revenue for the Period derived
from industrial mineral markets which have seen demand in line with budget,
supported by structural drivers:
- Environmental, Agriculture and Chemical (19% of Group revenue):
The Group saw overall demand in this segment remain positive in H1 supported
by the environmental and chemical segments.
- Pulp, Paper & Board (13% of Group revenue): Paper had a slow
start to the year as a result of inventory corrections in the value chain
leading to lower demand for high grade and pigment grade limestone. Board and
pulp demand remained robust, supported by the continued transition away from
plastic packaging.
- Metals (11% of Group revenue): Order books and demand remained
strong, with the recovery experienced in 4Q22 continuing into H1.
· Construction - 57% of Group revenue for the Period derived from
construction markets, which have seen good demand from infrastructure segments
and a recovery in RMI, offsetting some localised slowing in new build
residential demand:
- Infrastructure (37% of Group revenue): Infrastructure markets
have continued to be strong in H1. Further projects have been launched in the
Group's key territories and increasingly in the energy transition sector,
which has provided sustained demand for our aggregates, dimension stone and
downstream products.
- Residential (20% of Group revenue): European residential
construction markets have seen a clear softening in new build demand, leading
to reduced housing starts, particularly in the UK, Finland, and Sweden.
Partially offsetting this has been more resilient demand in Poland and the
Baltic markets, as well as a more fragmented construction backdrop in Belgium.
In Jersey there has been a slight slowing, primarily related to the bankruptcy
of a major developer, but the pipeline of projects remains full. Renovation
and RMI spend has seen a recovery in most markets sequentially through the
Period.
The Group introduced a regional structure in 2022 to support further growth
and scale. Performance by region is summarised as follows:
Underlying £'M Revenue EBITDA
1H23 1H22 1H23 1H22
North West 73.8 66.4 14.7 14.2
West 51.4 43.2 12.8 10.0
North East 164.8 137.5 32.9 27.1
Corporate - - (5.5) (3.7)
Group 290.0 247.1 54.9 47.6
North East
The North East region had a strong H1, driven by quicklime industrial products
and Polish infrastructure demand. On a LFL basis, revenue was up 15% and
EBITDA up 16%, despite softer than expected volumes in Nordic residential
construction and PP&B.
Quicklime benefited from good volumes, dynamic pricing, and margin expansion,
with metals & mining, agriculture, and environment markets particularly
strong. Poland volumes were also up for the Period and were further supported
by strong pricing and cost control.
The Nordics suffered from weak volumes into the construction industry, with
volumes into cement majors down considerably, however this has relatively low
impact on the Group's profitability. PP&B was also softer than expected
due to destocking in the Period following build-up of inventories in the
second half of 2022.
West
Dimension Stone benefited from favourable pricing dynamics and good cost
control which translated into an 11% YoY improvement in EBITDA on subdued
volumes. Commercial highlights for the Period include paving for city centre
renewal at Charleroi and refurbishment of the Boulevard Adolphe Max in
Brussels.
Benelux traded exceptionally well in the first half, with EBITDA up 19% on a
LFL basis, against volumes that were down 3% and revenue up 4%. The ready-mix
businesses were the standout performers, with B-Mix profitability up over 15%
and Goijens integration into the Group performing well ahead of expectations.
GduH had a difficult H1 due to low volumes from its primary customer, however
given the contractual take-or-pay arrangements, this will correct in H2.
North West
PPG trading followed similar trends to those seen in the second half of 2022,
with softening demand at CCP and Allen being largely offset by strong
infrastructure demand at Poundfield and RightCast. The integration of
Retaining UK has been positive with trading for the Period exceeding
expectations. Performance was further supported by restructuring initiatives
at CCP to scale its cost base with reduced volumes.
At Johnston, construction aggregate demand from the Lincolnshire and Cotswolds
quarries remained subdued, with volumes down 3% YoY, however revenues were up
5% and most pleasingly EBITDA improved by over 20% due to product mix and cost
efficiencies.
Trading at Harries was robust, with YoY revenue up 15% and EBITDA up 12%,
while volumes were broadly in-line with 2022. Plant availability negatively
impacted profitability, with cost and margin improvement a key focus for H2.
In the Channel Islands, volumes were down 5% due to market disruption in
Jersey resulting from two construction contractor bankruptcies. However,
strong asphalt and surfacing demand across both islands, combined with
improving margins, meant that EBITDA was down only 1% YoY.
Safety
The Group has continued to progress and improve its safety culture in 2023 by
ensuring the business focuses on 3 key areas:
1. Structure & Compliance by ensuring corrective actions are properly
closed out and on time;
2. Proactive Prevention by focusing on each business' 3-5 core risks; and
3. Learn & Improve through thorough investigations and timely
communication.
At a site level, each business has three core expectations demanded from it
with regards to health & safety:
1. Paperwork
a. Safe Systems of Work and Risk Assessments
b. Traffic Management Plan, Site Improvement Plan, Contractor Management
Plan
c. Management of Core Risk Management and SIFs relevant to the site
2. On Site Prevention
a. Pre-Start huddles & inspections
b. Supervisors' boots on the ground and off the tools
c. Hazards and risks (HIRE) identified and mitigated
3. Learn & Improve
a. Information cascade
b. Follow up (plan do check act principle)
c. Proportionally detailed root cause investigations
A structured internal audit process measures businesses against these three
key focus areas and expectations above and as such we are pleased to report a
14% YoY reduction in harm frequency rate; over 42% reduction in serious harm
frequency rate and Lost time Frequency Rate and over 28% YoY increase in near
hit, hazard and risk reporting, taking into account all those that work on our
sites, employee and contractors alike.
With the integration of three new businesses during the Period the Group has
leveraged its established health & safety tools and procedures, including
the internally developed safety management system HighVizz, which has helped
increase reporting, decrease incidents, and improve safety awareness and
culture.
Growth and development
The Company's acquisition strategy is focused on enhancing market position,
driving scale, productivity and margins, as operations are integrated,
invested in and de-risked.
In February 2023, the Group raised £30m of equity to accelerate execution on
a pipeline of acquisitions, disposals, and investment projects, across the
Group, which had been assembled over the previous 12 months. The Directors are
pleased to update the market that this programme, consisting of 14 projects
(including acquisitions, disposals, and organic investments), has been fully
committed with all acquisitions and disposals successfully executed and the
organic investments proceeding to plan.
The acquisitions were made on an average EV/EBITDA multiple of 3.9 times and
are expected to contribute an additional c. £8m of annualised EBITDA. The
organic investment projects were made on an average EV/EBITDA multiple of 3.3
times and will contribute an expected additional £2m of EBITDA, once fully
operational.
As part of the development pipeline, the Group also committed to divest of
certain non-core assets, all of which have either been completed or are signed
subject to regulatory approval, and collectively have, or will, return to the
Group approximately £11m in proceeds.
Further details on each of the acquisition, organic investment and divestment
projects is provided in the Growth Initiatives and Development Pipeline
section of these Accounts.
Environmental, Social and Governance (ESG)
In April 2023, the Group published its second annual ESG report which contains
extensive detail on its ESG policies and initiatives, as well as a detailed
roadmap to net-zero. The report provides further detail on a large number of
initiatives, already in place across the Group, to continue to manage as well
as accelerate its successful track record in both meeting demanding ESG
targets and further enhancing competitiveness.
Environment: On going work includes aspects such as reducing our climate and
biodiversity impact. Key projects include:
(a) increasing the share of biomass in our fuel mix including successful
substitution at 100%;
(b) installing renewable energy such as the 50kW solar system at Slavno,
Poland; and
(c) officially capturing CO(2) with our first carbon capture module at the
Köping lime kiln in Sweden.
In terms of Biodiversity, in addition to our ongoing biodiversity projects, we
have assessed our biodiversity impacts and opportunities in certain
businesses. This assessment helps us to prioritise biodiversity projects in
areas with the highest potential to increase biodiversity values over time.
Social: The Group continues to improve with regards to health & safety
with a 14% YoY reduction in harm frequency rate; over 42% reduction in serious
harm frequency rate and lost time frequency Rate. This has been supported by
proactive internal audits and focus on core risks and management plans. The
Group also continues to ensure proactive engagement with staff, contractors,
and communities through the likes of our Supervisor Workshop program and
community engagement programs, including partnering with Hope House Ty
Gobaith.
Governance: the Group continues to drive routine training and development
through Formity, while also ensuring its policies and procedures are
regularly reviewed.
The Group is currently covered by MSCI (ESG rating agency) and is AA rated,
but as part of a continued focus on ESG, engaged CEN-ESG, an ESG consultancy,
to conduct a gap analysis to optimise our ESG reporting and disclosure.
With new regulation for AIM companies, the Group will disclose a TCFD report
in the FY23 Annual Report.
Corporate
Our 2022 annual results were released on 27 March 2023 and on 25 April 2023 we
held our AGM with all resolutions being passed.
Outlook
Whilst conditions are likely to remain challenging in several of the Group's
markets in the coming months, early trading into the second half of FY23 has
been encouraging.
Demand conditions in the Group's infrastructure markets remains positive, with
several significant projects underpinning visibility into H2. In quicklime
products, demand continues to be resilient in the Metals, Agriculture and
Environment sectors with conditions stabilising in the Paper, Pulp & Board
sector following the de-stocking in H1. Residential construction demand is
expected to remain weak, particularly in the UK and Scandinavian markets.
Against this diversified backdrop, we also expect that our focus on
productivity enhancement and a decentralised operating model will continue to
support a resilient performance. As such, the Board's expectations for the
full year remain unchanged.
The full impact of the acquisition and investment programme launched in
February 2023, will manifest over the course of H2, strengthening the Group's
competitive position in several local markets, while adding to our geographic
diversification in others. Many of these end markets are underpinned by longer
term structural growth dynamics, including infrastructure investment,
sustainability, energy transition and the increasing use of limestone in
various industrial production processes, which should enable the Group to
accelerate its growth momentum as macroeconomic conditions improve.
The Group continues to be cash generative and, with cash flow also typically
seasonally weighted to the second half, leverage is expected to continue to
decline absent of further acquisitions and/or development investment.
David Barrett Max Vermorken Garth Palmer
Executive Chairman Chief Executive Officer Chief Financial Officer
4 September 2023
CONSOLIDATED INCOME STATEMENT
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
Underlying Non-underlying* (Note 8) Total Underlying Non-underlying* (Note 8) Total
Continued operations Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 6 290,018 - 290,018 247,067 - 247,067
Cost of sales 7 (223,320) - (223,320) (193,918) - (193,918)
Gross profit 66,698 - 66,698 53,150 - 53,150
Administrative expenses 7 (28,013) (7,960) (35,973) (21,410) (9,766) (31,176)
Profit from operations 38,685 (7,960) 30,725 31,739 (9,766) 21,973
Net finance (expense)/income (6,649) (764) (7,413) (3,349) (764) (4,113)
Other net (losses)/gains 738 634 1,372 576 (9) 567
Foreign exchange 268 - 268 157 - 157
Profit/(loss) before tax 33,042 (8,090) 24,952 29,123 (10,539) 18,584
Tax expense (4,660) - (4,660) (5,206) - (5,206)
Profit/(loss) 28,382 (8,090) 20,292 23,917 (10,539) 13,378
Profit/(loss) attributable to:
Owners of the parent 27,101 (8,090) 19,011 23,067 (10,539) 12,528
Non-controlling interests 1,281 - 1,281 850 - 850
28,382 (8,090) 20,292 23,917 (10,539) 13,378
Basic earnings per share attributable to owners of the parent (expressed in 15 4.01 (1.20) 2.81 3.61 (1.65) 1.96
pence per share)
Diluted earnings per share attributable to owners of the parent (expressed in 15 3.84 (1.15) 2.70 3.46 (1.58) 1.88
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 8 for more information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
Note £'000 £'000
Profit for the period 20,292 13,378
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Currency translation (losses) / gains (20,095) 11,306
Cash settled hedges - effective portion of changes in fair value (8,858) 11,678
Cash settled hedges - reclassified to profit or loss 105 -
Remeasurement of the net defined benefits liability - 13
Related tax 1,743 -
(27,105) 22,997
Total comprehensive income (6,813) 36,375
Total comprehensive income attributable to:
Owners of the parent (7,661) 35,518
Non-controlling interests 12 847 857
Total comprehensive income for the period (6,813) 36,375
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number: 05204176
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Non-current assets
Property, plant and equipment 9 525,007 277,364 523,188
Intangible assets 10 182,191 355,222 189,875
Available for sale assets 250 - -
Investment in equity-accounted associate 11 591 528 576
Investment in joint ventures 11 5,574 5,283 5,942
Derivative financial assets 3,904 11,989 4,771
Other receivables 4,134 4,879 4,259
Deferred tax asset 5,132 3,915 4,426
726,783 659,180 733,037
Current assets
Trade and other receivables 100,264 94,097 86,805
Inventories 72,765 56,028 67,780
Cash and cash equivalents 62,526 46,427 68,623
Derivative financial assets 1,423 10,180 10,683
236,978 206,732 233,891
Total assets 963,761 865,912 966,928
Current liabilities
Trade and other payables 130,053 119,933 140,443
Derivative financial liabilities 3,545 1,372 6,693
Provisions 6,373 4,982 6,596
Current tax payable 2,640 3,811 1,251
Borrowings 13 35,540 30,021 33,846
178,151 160,119 188,829
Non-current liabilities
Borrowings 13 210,254 233,363 228,630
Employee benefit liabilities 1,242 1,575 1,312
Derivative financial liabilities 2,510 1,057 552
Deferred tax liabilities 65,468 9,710 68,604
Provisions 3,810 5,094 4,100
Other payables 5,374 4,484 5,051
288,658 255,283 308,249
Total Liabilities 466,809 415,402 497,078
Net assets 496,952 450,510 469,850
Equity attributable to owners of the parent
Share capital 14 6,939 6,383 6,383
Share premium 14 - 400,022 400,022
Share option reserve 9,481 9,307 7,483
Other reserves (17,077) 12,796 10,261
Retained earnings 485,872 12,781 33,969
Equity attributable to owners of the parent 485,215 441,289 458,118
Non-controlling interest 12 11,737 9,221 11,732
Total Equity 496,952 450,510 469,850
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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 period - - - - 12,528 12,528 850 13,378
Currency translation differences - - - 11,299 - 11,299 7 11,306
Other comprehensive income - - - 11,691 - 11,691 - 11,691
Total comprehensive income for the period - - - 22,990 12,528 35,518 857 36,375
Contributions by and distributions to owners
Issue of ordinary shares 4 125 - - - 129 - 129
Share option charge - - 6,380 - - 6,380 - 6,380
Exercise of share options - - (177) - 177 - - -
Dividends - - - - (1,686) (1,686) (2,530) (4,216)
Movement in equity - - - 1,042 (354) 688 - 688
Total contributions by and distributions to owners 4 125 6,203 1,042 (1,863) 5,511 (2,530) 2,981
Balance as at 30 June 2022 6,383 400,022 9,307 12,796 12,781 441,289 9,221 450,510
Balance as at 1 July 2022 6,383 400,022 9,307 12,796 12,781 441,289 9,221 450,510
Profit for the period - - - - 18,710 18,710 1,493 20,203
Currency translation differences - - - 5,877 - 5,877 552 6,429
Other comprehensive income - - - (8,057) - (8,057) - (8,057)
Total comprehensive income for the period - - - (2,180) 18,710 16,530 2,045 18,575
Contributions by and distributions to owners
Acquired via acquisition - - - - - - 974 974
Issue of ordinary shares - - - - - - - -
Share option charge - - (1,824) (1,824) - (1,824)
Movement in equity - - (355) 2,478 2,123 (508) 1,615
Total contributions by and distributions to owners - - (1,824) (355) 2,478 299 466 765
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 period - - - - 19,011 19,011 1,281 20,292
Currency translation differences - - - (19,662) - (19,662) (433) (20,095)
Other comprehensive income - - - (7,010) - (7,010) - (7,010)
Total comprehensive income for the period - - - (26,672) 19,011 (7,661) 847 (6,813)
Contributions by and distributions to owners
Issue of ordinary shares 14 556 29,444 - - - 30,000 - 30,000
Issue of share capital - (782) - - - (782) - (782)
Share option charge - - 2,001 - - 2,001 - 2,001
Exercise of share options - - (3) - 3 - - -
Dividends - - - - 3,438 3,438 (843) 2,595
Movement in equity - (428,684) - (666) 429,451 101 - 101
Total contributions by and distributions to owners 556 (400,022) 1,998 (666) 432,892 34,758 (843) 33,915
Balance as at 30 June 2023 6,939 - 9,481 (17,077) 485,872 485,215 11,737 496,952
CASH FLOW STATEMENTS
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
Note £'000 £'000
Cash flows from operating activities
Profit 20,292 13,378
Adjustments for:
Depreciation and amortisation 18,533 15,830
Share option expense 2,001 6,597
Loss/(gain) on sale of property, plant and equipment (229) (358)
Net finance costs 7,413 4,113
Other non-cash adjustments (548) 407
Net tax paid (197) (1,441)
Share of earnings from associates (414) (201)
Increase in trade and other receivables (11,280) (13,325)
Increase in inventories (5,950) (8,501)
(Decrease)/increase in trade and other payables (12,342) 3,383
Decrease in provisions (178) (539)
Net cash flows from operating activities 17,101 19,343
Investing activities
Purchase of property, plant and equipment 9 (14,617) (15,063)
Cash paid for acquisition of subsidiaries (net of cash acquired) (17,012) (36,648)
Proceeds from sale of subsidiary 1,720 -
Sale of property plant and equipment 1,014 779
Purchase of intangible assets 10 (7) (535)
Purchase of available for sale assets (250) -
Financial derivatives (4) 302
Interest received 1,487 2,959
Net cash used in investing activities (27,669) (48,206)
Financing activities
Proceeds from share issue 30,000 128
Cost of share issues (782) -
Finance costs (10,342) (6,714)
Proceeds from borrowings 2,135 28,901
Repayment of borrowings (13,997) (16,257)
Dividends paid (843) (1,686)
Net cash generated from financing activities 6,171 4,372
Net increase in cash and cash equivalents (4,397) (24,491)
Cash and cash equivalents at beginning of period 68,623 69,916
Exchange (losses)/gains on cash (1,700) 1,002
Cash and cash equivalents and end of period 62,526 46,427
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 the AIM market of the London Stock Exchange ('AIM'). The Company is
incorporated and domiciled in the United Kingdom.
The address of its registered office is 6 Heddon Street, London, W1B 4BT.
2. Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34
- Interim Financial Reporting, as adopted by the UK. The interim financial
statements have been prepared applying the accounting policies and
presentation that were applied in the annual financial statements for the year
ended 31 December 2022. The condensed interim financial statements should be
read in conjunction with the annual financial statements for the year ended 31
December 2022.
The interim financial information set out above does not constitute statutory
accounts within the meaning of the Companies Act 2006. It has been prepared on
a going concern basis in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) as adopted by
the UK.
Statutory financial statements for the period ended 31 December 2022 were
approved by the Board of Directors on 25 March 2023 and delivered to the
Registrar of Companies. The report of the auditors on those financial
statements was unqualified. The comparative financial information for the
interim period ended 30 June 2022 and year ended 31 December 2022 is for the
Group only.
Going concern
The Directors, having made appropriate enquiries, consider that adequate
resources exist for the Company and Group to continue in operational existence
for the foreseeable future and that, therefore, it is appropriate to adopt the
going concern basis in preparing the condensed interim financial statements
for the period ended 30 June 2023.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Company's medium-term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Company's 2022 Annual Report and Financial Statements, a copy
of which is available on the Company's website: www.sigmaroc.com
(http://www.sigmaroc.com) . The key financial risks are liquidity risk, credit
risk, interest rate risk and fair value estimation.
Critical accounting estimates
The preparation of condensed interim financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the end of the reporting period. Significant items subject
to such estimates are set out in Note 4 of the Company's 2022 Annual Report
and Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
Foreign Currencies
a) Functional and Presentation Currency
Items included in the Financial Statements are measured using the currency of
the primary economic environment in which the entity operates (the 'functional
currency'). The Financial Statements are presented in Pounds Sterling, rounded
to the nearest pound, which is the Group's functional currency.
b) Transactions and Balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Income Statement. Foreign exchange
gains and losses that relate to borrowings and cash and cash equivalents are
presented in the Income Statement within 'finance income or costs. All other
foreign exchange gains and losses are presented in the Income Statement within
'Other net gains/(losses)'.
Translation differences on non-monetary financial assets and liabilities such
as equities held at fair value through profit or loss are recognised in profit
or loss as part of the fair value gain or loss. Translation differences on
non-monetary financial assets measured at fair value, such as equities
classified as available for sale, are included in other comprehensive income.
c) Group companies
The results and financial position of all the Group entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each period end date presented are
translated at the period-end closing rate;
· income and expenses for each Income Statement are translated at
average exchange rates (unless this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the
transactions); and
· all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised in the
Income Statement as part of the gain or loss on sale.
3. Accounting policies
Except as described below, the same accounting policies, presentation and
methods of computation have been followed in these condensed interim financial
statements as were applied in the preparation of the company's annual
financial statements for the year ended 31 December 2022, except for the
impact of the adoption of the Standards and interpretations described in para
3.1 below:
3.1. Changes in accounting policy and disclosures
(a) Accounting developments during 2023
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the period
ended 30 June 2023 but did not result in any material changes to the financial
statements of the Group or Company.
(b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standard Impact on initial application Effective date
IFRS 16 Leases 1 January 2024
IAS 1 Classification of Liabilities as Current or Non-Current. 1 January 2024
The Group is evaluating the impact of the new and amended standards above
which are not expected to have a material impact on the Group's results or
shareholders' funds.
4. Dividends
No dividend has been declared or paid by the Company during the six months
ended 30 June 2023 (2022: nil).
5. 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.
6 months to 30 June 2023
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 73,789 51,416 164,813 290,018
Profit from operations per reportable segment (1,384) 9,307 22,802 30,725
Additions to non-current assets 1,300 (195) (7,358) (6,253)
Reportable segment assets 240,470 139,634 583,657 963,761
Reportable segment liabilities 325,536 27,421 113,852 466,809
6 months to 30 June 2022
North West West North East Total
£'000 £'000 £'000 £'000
Revenue 66,364 43,224 137,479 247,067
Profit from operations per reportable segment (2,766) 6,978 17,761 21,973
Additions to non-current assets 57,100 (2,191) 26,984 81,893
Reportable segment assets 230,693 116,653 518,566 865,912
Reportable segment liabilities 286,173 30,015 99,214 415,102
6. Revenue
Consolidated
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
Upstream products 42,667 28,009
Value added products 217,164 191,046
Value added services 25,695 23,171
Other 4,492 4,842
290,018 247,067
Upstream products revenue relates to the sale of aggregates and cement. Value
added products is the sale of finished goods that have undertaken a
manufacturing process within each of the subsidiaries. Value added services
consists of the transportation, installation and contracting services
provided.
All revenues from upstream and value added products relate to products for
which revenue is recognised at a point in time as the product is transferred
to the customer. Value added services revenues are accounted for as products
and services for which revenue is recognised over time.
Whilst the Group has contract revenue, this amount is not deemed to be
material under IFRS 15.
7. Expenses by nature
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
Cost of sales
Raw materials and production 102,035 92,942
Distribution and selling expenses 20,837 19,654
Employee benefit expenses 61,473 46,614
Maintenance expense 12,572 10,196
Plant hire expense 3,267 3,008
Depreciation and amortisation expense 15,176 15,091
Other costs of sale 7,960 6,413
Total cost of sales 223,320 193,918
Administrative expenses
Operational admin expenses 27,253 19,666
Corporate admin expenses 8,720 11,510
Total administrative expenses 35,973 31,176
Depreciation and amortisation expense is a combination of property, plant and
equipment depreciation and amortisation of intangible assets.
8. Non-underlying items
As required by IFRS 3 - Business Combinations, acquisition costs have been
expensed as incurred. Additionally, the Group incurred costs associated with
obtaining debt financing, including advisory fees to restructure the Group to
satisfy lender requirements.
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
Acquisition related expenses 2,112 1,849
Restructuring expenses 285 801
Share options expense 2,001 6,696
Amortisation and remeasurement of acquired intangibles 2,725 739
Amortisation of finance costs 543 -
Unwinding of discount on deferred consideration 222 -
Other non-underlying 202 454
8,090 10,539
Acquisition related expenses include costs relating to the due diligence of
prospective pipeline acquisitions, stamp duty and other direct costs
associated with merger & acquisition activity including accounting fees,
legal fees and other consulting fees.
Restructuring expenses relate to the reorganisation and integration of
recently acquired subsidiaries, including costs associated with site
optimisation, transitional salary costs, redundancies, severance &
recruitment fees, and costs associated with financial reporting and system
migrations.
Share option expense is the fair value of the share options issued and or
vested during the period.
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
Purchase Price Allocation ("PPA"). Remeasurement of acquired assets arises
from ensuring assets from acquisitions are depreciated in line with Group
policy.
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.
Unwinding of discount on deferred consideration is a non-cash adjustment
relating to deferred consideration arising on acquisitions.
Other non-underlying costs include professional adviser fees and other
miscellaneous non-recurring costs.
9. Property, plant and equipment
Office equipment Land and minerals Land and buildings Plant and machinery Furniture and vehicles Right of use assets Construction in progress Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
As at 1 January 2022 4,594 189,967 121,233 289,918 24,595 - 13,199 643,506
Acquired through acquisition of subsidiary 160 9,248 994 10,931 251 -- 1,730 23,314
Transfer between classes - - - 364 - - (364) -
Fair value adjustment - - (68) - 2,192 - - 2,124
Additions 106 2,303 1,176 8,085 423 - 2,970 15,063
Disposals (5) - - (1,254) (112) - - (1,371)
Forex 93 2,741 975 2,206 200 - 0 6,215
As at 30 June 2022 4,948 204,259 124,310 310,250 27,549 - 17,535 688,851
Acquired through acquisition of subsidiary - - 19,607 4,363 - 2,052 36 26,058
Transfer between classes - (9,175) (5,720) (13,907) (1,776) 35,014 (4,436) -
Fair value adjustments - 211,629 10,576 12,450 - - - 234,655
Additions 116 - 13,984 14,853 1,068 5,926 - 35,947
Disposals (51) (468) (4,525) (1,634) (2,244) (2,862) - (11,784)
Forex 82 (113) (322) (1,161) (2,071) (696) (1,442) (5,723)
As at 31 December 2022 5,095 406,132 157,910 325,214 22,526 39,434 11,693 968,004
Acquired through acquisition of subsidiary 207 348 3,474 6,190 3,632 - - 13,851
Transfer between classes - 4,456 709 188 - - (884) 4,469
Additions 85 1,762 280 5,192 810 992 5,496 14,617
Disposals (25) - - (2,107) (900) - - (3,032)
Forex (292) 7,403 (14,568) (15,787) (1,297) (1,093) 667 (24,968)
As at 30 June 2023 5,070 420,101 147,805 318,890 24,771 39,333 16,971 972,941
Depreciation
As at 1 January 2022 4,041 70,174 68,392 226,274 18,232 - - 387,113
Acquired through acquisition of subsidiary 78 1,947 68 4,140 53 - - 6,286
Charge for the year 102 1,157 3,207 8,847 1,477 - - 14,790
Disposals (3) - - (888) (58) - - (949)
Forex 89 2,500 (380) 1,885 153 - - 4,247
As at 30 June 2022 4,307 75,778 71,287 240,258 19,857 - - 411,487
Acquired through acquisition of subsidiary - - 8,625 3,448 - 393 - 12,466
Charge for the year 106 5,391 1,932 6,149 522 6,257 - 20,357
Disposals (52) - (91) (709) (1,684) (907) - (3,443)
Transfer between classes - (1,947) (1,850) (12,585) (1,101) 17,483 - -
Forex 79 679 1,478 2,749 (256) (780) - 3,949
As at 31 December 2022 4,440 79,901 81,381 239,310 17,336 22,446 - 444,816
Acquired through acquisition of subsidiary 80 - 1,064 4,070 2,386 - - 7,600
Charge for the year 77 3,384 2,424 8,232 612 2,615 - 17,344
Disposals (24) - - (1,614) (608) - - (2,246)
Forex (191) 588 (4,541) (13,796) (531) (1,109) - (19,580)
As at 30 June 2023 4,382 83,873 80,328 236,202 19,197 23,952 - 447,934
Net book value
As at 30 June 2022 641 128,481 53,023 69,992 7,692 - 17,535 277,364
As at 31 December 2022 655 326,231 76,529 85,904 5,188 16,988 11,693 523,188
As at 30 June 2023 688 336,228 67,477 82,688 5,574 15,381 16,971 525,007
10. Intangible assets
Consolidated
Goodwill Customer Relations Intellectual property Research & Development Branding Other Intangibles Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost & net book value
As at 1 January 2022 293,438 2,816 386 571 3,238 5,986 306,435
Additions - - - 4 - 531 535
Additions through business combination 41,496 - - - - 41,496
Amortisation - (258) (42) (54) (80) (607) (1,041)
Forex 7,647 - - 4 - 146 7,797
As at 30 June 2022 342,581 2,558 344 525 3,158 6,056 355,222
2021 Adjustment 12,527 12,527
Additions - - - - - 1,182 1,182
Additions through business combination 47,600 - - - - - 47,600
Price Purchase Allocation - B-Mix (4,429) - - - - - (4,429)
Price Purchase Allocation - Nordkalk (233,955) 3,795 - - - - (230,160)
Amortisation - (568) (43) (33) (80) (900) (1,624)
Forex 9,501 - - (8) - 64 9,558
As at 31 December 2022 173,825 5,785 301 484 3,078 6,402 189,875
Reallocation - - - - - (4,496) (4,496)
Additions - - - 3 - 4 7
Additions through business combination 8,019 - - - - - 8,019
Amortisation - (413) (42) (31) (80) (623) (1,189)
Forex (9,593) - - (425) - (7) (10,025)
As at 30 June 2023 172,251 5,372 259 31 2,998 1,280 182,191
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 acquired
over the fair value of the net identifiable assets.
- Customer relations is the value attributed to the key customer
lists and relationships.
- Intellectual property is the patents owned by the Group.
- Research and development is the acquiring of new technical
knowledge and trying to improve existing processes or products or; developing
new processes or products.
- Branding is the value attributed to the established company
brand.
- Other intangibles consist of capitalised development costs for
assets produced that assist in the operations of the Group and incur revenue.
Amortisation of intangible assets is included in cost of sales on the Income
Statement. Development costs have been capitalised in accordance with the
requirements of IAS 38 and are therefore not treated, for dividend purposes,
as a realised loss.
The Purchase Price Allocation ('PPA') exercise for Johnston Quarry Group has
commenced but is still subject to finalisation.
Impairment tests for goodwill
Goodwill arising on business combinations is not amortised but is reviewed for
impairment on an annual basis, or more frequently if there are indications
that the goodwill may be impaired. Goodwill is allocated to groups of cash
generating units according to the level at which management monitor that
goodwill, which is at the level of operating segments.
The primary operating segments are considered to be Ronez in the Channel
Islands, Topcrete, Poundfield, CCP, Rightcast, Retaining, GD Harries and
Johnston Quarry Group in the UK, CDH, Stone, GDH, B-Mix and Goijens in Belgium
and Nordkalk in Finland, Sweden, Poland and Spain.
Key assumptions
The key assumptions used in performing the impairment review are set out
below:
Cash flow projections
Cash flow projections for each operating segment are derived from the annual
budget approved by the Board for 2023 and the three-year plan to 2023 and
2025. The key assumptions on which budgets and forecasts are based include
sales volumes, product mix and operating costs. These cash flows are then
extrapolated forward for a further 17 years, with the total period of 20 years
reflecting the long-term nature of the underlying assets. Budgeted cash flows
are based on past experience and forecast future trading conditions.
Long-term growth rates
Cash flow projections are prudently based on 2 per cent. and therefore
provides plenty of headroom.
Discount rate
Forecast cash flows for each operating segment have been discounted at rates
of 8 per cent which was calculated by an external expert based on market
participants' cost of capital and adjusted to reflect factors specific to each
operating segment.
Sensitivity
The Group has applied sensitivities to assess whether any reasonable possible
changes in assumptions could cause an impairment that would be material to
these consolidated Financial Statements. This demonstrated that a 1% increase
in the discount rate would not cause an impairment and the annual growth rate
is assumed to be 2%.
The Directors have therefore concluded that no impairment to goodwill is
necessary.
11. Investment in Equity Accounted Associates & Joint Ventures
Nordkalk has a joint venture agreement with Franzefoss Minerals AS, to build a
lime kiln located in Norway which was entered into on 5 August 2004.
NorFraKalk AS is the only joint agreement in which the Group participates.
The Group has one non-material local associate in Pargas, Pargas Hyreshus Ab.
30 June 2023 30 June 2022
Unaudited Unaudited
£'000 £'000
Interests in associates 591 528
Interest in joint venture 5,574 5,283
6,165 5,811
Proportion of ownership interest held
Name Country of incorporation 30 June 2023 30 June 2022
Unaudited Unaudited
NorFraKalk AS Norway 50% 50%
Summarised financial information
NorFraKalk AS - Cost and net book value 30 June 2023 30 June 2022
Unaudited Unaudited
£'000 £'000
Current assets 7,994 10,960
Non-current assets 6,584 9,867
Current liabilities 2,781 4,199
Non-current liabilities 2,144 5,488
19,503 30,514
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
Revenues 5,947 10,559
Profit after tax from continuing operations 812 478
12. Non-controlling interests
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
As at 1 January 11,732 10,894
Non-controlling interests share of profit in the period 1,281 850
Dividends paid (843) (2,530)
Foreign exchange movement (433) 7
As at 30 June 11,737 9,221
30 June 2023 30 June 2022
Suomen Karbonaatti Other individually immaterial subsidiaries Suomen Karbonaatti Other individually immaterial subsidiaries
£'000 £'000 £'000 £'000
Current assets 15,103 11,537 18,491 9,091
Non-current assets 3,130 19,606 3,611 13,545
Current liabilities 11,074 8,057 9,432 4,709
Non-current liabilities 10 5,131 7,774 2,150
Net Assets 7,149 17,955 4,897 15,777
Net Assets Attributable to NCI 3,503 6,817 2400 5,300
Revenue 18,253 12,719 14,254 9,527
Profit after taxation 1,870 1,050 1,029 1,026
Other comprehensive income - - - -
Total comprehensive income 1,870 1,050 1,029 1,026
Net operating cash flow 1,552 977 977 841
Net investing cash flow (137) (812) (398) (370)
Net financing cash flow (1,717) (1,391) (3,452) (380)
Dividends paid to NCI (843) - (1,691) -
13. Borrowings
30 June 2023 30 June 2022
Unaudited Unaudited
£'000 £'000
Non-current liabilities
Santander term facility 189,458 211,320
Bank Loans 2,351 65
Finance lease liabilities 7,192 8,897
IFRS16 Leases 11,253 13,081
210,254 233,363
Current liabilities
Santander term facility 24,000 16,000
Bank loans 6,234 6,962
Finance lease liabilities 1,294 588
IFRS16 Leases 4,012 6,471
35,540 30,021
In July 2022, the Group entered into a new Syndicated Senior Credit Facility
of up to £305 million (the 'Credit Facility') led by Santander UK and
including several major UK and European banks. The Credit Facility, which
comprises a £205 million committed term facility, a £100 million revolving
facility commitment and a further £100 million accordion option. This new
facility replaces all previously existing bank loans within the Group.
The Credit Facility is secured by a floating charge over the assets of
SigmaFin Limited, Carrieres du Hainaut and Nordkalk and is secured by a
combination of debentures, security interest agreements, pledges and floating
rate charges over the assets of SigmaRoc plc, SigmaFin Limited, B-Mix,
Carrieres du Hainaut and Nordkalk. Interest is charged at a rate between 1.85%
and 3.35% above SONIA ('Interest Margin'), based on the calculation of the
adjusted leverage ratio for the relevant period. For the period ending 30 June
2023 the Interest Margin was 2.60%.
The carrying amounts and fair value of the non-current borrowings are:
Carrying amount and fair value
30 June 2023 30 June 2022
Unaudited Unaudited
£'000 £'000
Santander term facility (net of establishment fees) 189,458 211,320
Bank loans 2,351 65
Finance lease liabilities 7,192 8,897
IFRS16 leases 11,253 13,081
210,254 233,363
14. Share capital and share premium
Number of shares Ordinary shares Share premium Total
£ £ £
Issued and fully paid
As at 1 January 2022 637,915,750 6,379 399,897 406,276
Issue of new shares - 4 January 2022 330,594 4 125 129
As at 30 June 2022 638,246,344 6,383 400,022 406,405
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 55,555,555 556 28,682 29,238
Capital reduction - 23 May 2023 - - (428,704) (428,704)
As at 30 June 2023 693,801,899 6,939 - 6,939
(1) Includes issue costs of £781,679
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 share
premium account was transferred to retaining earnings and the deferred shares
were cancelled.
15. Earnings per share
The calculation of the total basic earnings per share of 2.81 pence (2022:
1.96 pence) is calculated by dividing the profit attributable to shareholders
of £20,292 million (2022: £13,378 million) by the weighted average number of
ordinary shares of 675,999,566 (2022: 638,240,865) in issue during the period.
Diluted earnings per share of 2.70 pence (2022: 1.88 pence) is calculated by
dividing the profit attributable to shareholders of £20,292 million (2022:
£13,378 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
705,122,110 (2022: 667,404,450).
Details of share options that could potentially dilute earnings per share in
future periods are disclosed in the notes to the Group's Annual Report and
Financial Statements for the year ended 31 December 2022.
16. Fair value of financial assets and liabilities measured at amortised
costs
The following table shows the carrying amounts and fair values of the
financial assets and liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and
financial liabilities not measures at fair value if the carrying amount is a
reasonable approximation of fair value.
Items where the carrying amount equates to the fair value are categorised to
three levels:
· Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date
· Level 2 inputs are inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly
or indirectly
· Level 3 inputs are unobservable inputs for the asset or
liability.
Carrying amount Fair value
Fair value - Hedging instruments Fair value through P&L Fair value through OCI Financial asset at amortised cost Other financial liabilities Total Level 1 Level 2 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial assets measured at fair value
Forward exchange contracts - (2,615) 1,550 - - (1,064) - (1,064) (1,064)
CO(2) emission hedge - - - - - - - - -
Electricity hedges - - 6,391 - - 6,391 6,391 - 6,391
Financials assets not measured at fair value
Trade and other receivables (excl. Derivatives) - - - 100,264 - 100,264 - - -
Cash and cash equivalents - - - 62,526 - 62,526 - - -
Financial liabilities measured at fair value
Forward exchange contracts - (2,954) 1,518 - - (1,436) - (1,436) (1,436)
Electricity hedges - - 7,492 - - 7,491 7,491 - 7,491
Financial liabilities not measured at fair value
Loans - - - - 222,042 222,042 - - -
Finance lease liability - - - - 23,751 23,751 - - -
Trade and other payables (excl. derivative) - - - - 135,427 135,427 - - -
17. Business combination
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 a cash consideration of £3.5
million. Nayles Barn is registered and incorporated in England. Nayles Barn is
a high-quality producer of construction aggregates, building stone and
agricultural lime.
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 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 12,037
12,037
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 1,888
Trade and other receivables 2,166
Inventories 231
Property, plant & equipment 3,756
Investment in Subsidiary 2,426
Trade and other payables (1,485)
Income tax payable (24)
Borrowings (233)
Total identifiable net assets 8,725
Goodwill (refer to note 8) 3,312
Total consideration 12,037
Since 31 January 2023, Goijens has contributed a profit of £1.2 million and
revenue of £8.2 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 Dolomiittikalkki Oy
On 1 February 2023, the Group acquired 70 per cent. of the share capital of JD
and its subsidiaries for a cash consideration of €1.83 million. JD is
registered and incorporated in Finland. JD is a land improvement lime
manufacturing company.
The following table summarises the consideration paid for JD and the values of
the assets and equity assumed at the acquisition date.
Total consideration £'000
Cash 527
Deferred consideration 1,054
1,581
Recognised amounts of assets and liabilities acquired £'000
Cash and cash equivalents 790
Trade and other receivables 362
Inventories 93
Property, plant & equipment 875
Investment in Subsidiary 32
Trade and other payables (78)
Borrowings (29)
Total identifiable net assets 2,045
Goodwill (refer to note 8) (464)
Total consideration 1,581
Since 1 February 2023, JD has contributed a profit of £0.2 million and
revenue of £0.8 million. Had JD been consolidated from 1 January 2023, the
consolidated statement of income would show no additional and revenue of £0.2
million.
Retaining UK Limited
On 7 April 2023, the Group acquired 100 per cent. of the share capital of
Retaining UK Limited ('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 8) 1,656
Total consideration 2,450
Since 7 April 2023, Retaining has contributed a profit of £0.2 million and
revenue of £1.4 million. Had Retaining been consolidated from 1 January 2023,
the consolidated statement of income would show additional profit of £0.1
million and revenue of £1.4 million.
18. Related party transactions
Loans with Group Undertakings
Amounts receivable/(payable) as a result of loans granted to/(from) subsidiary
undertakings are as follows:
Company
6 months to 30 June 2023 6 months to 30 June 2022
Unaudited Unaudited
£'000 £'000
Ronez Limited (23,044) (19,728)
SigmaGsy Limited (7,663) (6,763)
SigmaFin Limited 20,549 20,146
Topcrete Limited (10,346) (9,494)
Poundfield Products (Group) Limited 5,356 5,251
Foelfach Stone Limited 557 466
CCP Building Products Limited 5,086 5,396
Carrières du Hainaut SCA 13,633 16,388
GDH (Holdings) Limited 10,737 9,838
B-Mix Beton NV 11,279 517
Stone Holdings SA 384 376
Nordkalk Oy Ab 55,924 73,939
Johnston Quarry Group 11,975 10,451
Rightcast Limited (799) -
93,628 106,783
Loans granted to or from subsidiaries are unsecured, have interest charged at
2% and are repayable in Pounds Sterling on demand from the Company.
All intra Group transactions are eliminated on consolidation.
Other Transactions
During the period, there were no related party transactions.
19. Events after the reporting date
There have been no events after the reporting date of a material nature.
20. Approval of interim financial statements
The condensed interim financial statements were approved by the Board of
Directors on 4 September 2023.
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