REG - SigmaRoc PLC - Q3 Trading Update

SigmarocAnnouncement

18/10/2023 07:00

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RNS Number : 4262Q  SigmaRoc PLC  18 October 2023

18 October 2023

 

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

 

SIGMAROC PLC

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

 

Q3 Trading Update

Continued strength in Q3, margin growth and full year expectations unchanged

 

SigmaRoc plc, the specialist quarried materials group, is pleased to update
the market on Group trading for the nine months ended 30 September 2023 (the
'Period').

 

Financial highlights

 

·      Like-for-like ('LFL') revenue growth of 7% in the Period to
£435.9m, reflecting the benefits of diversified market exposure together with
effective pricing actions;

·      LFL Group volumes evolved in line with 1H23, at -4%, given softer
demand in the residential construction sector which was largely offset by
resilient conditions in infrastructure and industrial mineral markets;

·      Underlying EBITDA margin in the Period of 20% was ahead of both
the prior year and management's expectations, resulting in underlying EBITDA
for the Period up 11% LFL to £87.1m;

·      Cash generation for the Period has been positive with the focus
on de-gearing through to 31 December 2023;

·      The Board remains confident in the Group delivering FY23
expectations*, while being mindful of the uncertain backdrop.

 

Strategic update

 

·      Integration of businesses acquired in 2023 progressing well and
delivering expected synergies;

·      Incorporation of JV with ArcelorMittal expected this week, with
the site for the new lime kilns now identified;

·      Aqualung carbon capture unit has completed trials to capture
CO(2,) and is now being developed to utilise captured CO(2) via a dedicated
purification, compression and liquefaction unit;

·      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.

 

Operations and trading

 

Q3 has seen continued robust trading in most markets, thereby offsetting the
anticipated weakness in new build construction, some agricultural products,
and the earlier weakness in paper. Overall pricing evolved favourably, while
some of the higher pass-through costs abated, along with further operational
improvements, translating into improved margins. As a result, revenues rose 7%
LFL on slightly softer volumes at -4% LFL. Including the contribution from
acquisitions, Group revenues increased by 10% year-on-year in the Period to
£435.9m.

 

Fundamental to this solid evolution across the third quarter is the
diversified model and end market exposure which continues to provide
resilience with several markets outperforming expectations.

 

·      42% of Group revenues for the Period ('Group Revenues') are
derived from industrial minerals markets which have seen demand in line with
budget, supported by structural drivers. In particular a recovery in pulp,
paper & board following some destocking earlier in the year, alongside
positive trends in environmental, agriculture & chemicals and continued
strength in metals have led to a good performance in industrial minerals
markets.

 

·      58% of Group Revenues are derived from construction markets, with
well over half of this from infrastructure applications which have experienced
continued strong demand. Whilst residential markets remain soft, we continue
to manage this and to divert our assets towards the stronger infrastructure
areas where we have greater visibility.

 

 

Outlook

Whilst remaining mindful of the continued challenging conditions in some of
the Group's markets, the delivery of a strong set of Q3 numbers, combined with
our diversified end market exposure and decentralised operating model,
provides the Board with confidence in delivering unchanged full year
expectations.

 

 

Max Vermorken, CEO of SigmaRoc, commented:

"We have delivered another quarter of solid performance. The backdrop is not a
steady one, but our team keeps delivering good products and good levels of
service to our customer base, thereby securing the performance of the Group.
The strategic initiatives we launched in H1 are all now contributing, and I am
looking forward to updating the market on what I expect to be another year of
growth and strategic progress."

 

*Consensus expectations for SigmaRoc, being the average of forecasts for the
year ending 31 December 2023 provided by Analysts covering the Company, are
revenue of £596.9m and underlying EBITDA of £110.2m.

 

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

 

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 (Co-Broker)                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 20 7933 8780 / sigmaroc@wallbrookpr.com

 Tom Cooper / Nick Rome

                                            Mob: +44 7971 221972 (Nick)

 

About SigmaRoc plc

SigmaRoc is an AIM-listed buy-and-build group targeting quarried materials
assets in the UK and Northern Europe. It seeks to create value by purchasing
assets in fragmented materials markets and extracting efficiencies through
active management and by forming the assets into larger groups. It seeks to
de-risk its investments via strong asset backing at its projects.

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