REG - SigmaRoc PLC - Trading Update

SigmarocAnnouncement

12/12/2022 07:00

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RNS Number : 2949J  SigmaRoc PLC  12 December 2022

12 December 2022

 

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

 

SIGMAROC PLC

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

 

Trading update

2022 earnings ahead of market expectations

 

SigmaRoc (AIM: SRC), the quarried materials group, is pleased to provide the
following update in relation to trading to 30 November 2022 and expectations
for the year ending 31 December 2022:

 

Highlights

 

-    Revenues to 30 November 2022 of £498m, up 20% year-on-year on a
like-for-like basis;

-   Demand conditions have evolved broadly as expected across market
segments, with the Group benefitting from its broad end market and geographic
diversification;

-  Cost pressures managed through dynamic pricing, savings initiatives and
performance improvement programmes;

-    FY22 underlying EPS expected to be c.10% ahead of the market's
expectations(1);

-    FY23 outlook remains unchanged;

-    Active pipeline of acquisition and investment opportunities with
potential to significantly develop the Group.

 

Trading summary

 

For the 11-month period ended 30 November 2022, the Group recorded revenues of
£498m, representing a 20% like-for-like increase over the same period in
2021.

 

Volumes trends for the period from July into December across the Group's
markets have been, overall, consistent with those set out in the Q3 trading
update on 20 October 2022. Our industrial mineral markets have continued to be
resilient, with infrastructure demand remaining above historical levels. While
there has been some softening in UK lower end housing and RMI demand, the
Group has relatively low exposure to these markets and this has been more than
offset by the strong performance of the industrial and infrastructure
segments.

 

Cost management has remained a key focus area for the businesses. Q4 has seen
some localised softening in electricity prices, which the Group has
capitalised on by maximising production. More recent pressure in energy prices
continues to be managed through dynamic pricing and hedging. Wider
inflationary cost pressures have been further mitigated by both performance
improvement programmes and cost saving initiatives.

 

FY 2022 Outturn

 

As a result of the delivery on cost saving and performance improvement
programmes, resilient trading and development initiatives, the Group expects
to report revenue and EBITDA for the year to 31 December 2022 ahead of
consensus estimates, with Underlying EPS expected to be c.10% ahead of
expectations(1).

 

The Group intends to publish its results for the year ended 31 December 2022
at the end of March 2023, followed by its ESG report in April 2023.

 

Outlook for FY 2023

 

Visibility into 2023 remains challenging given continued uncertainty around
the global economy. Our current expectation is for demand in both the
industrial and infrastructure markets to maintain current trends into the
early part of 2023, albeit we anticipate some customers will take the
opportunity to bring forward seasonal maintenance stops, to coincide with
anticipated higher energy prices and the holiday period.

 

The Group continues to implement highly effective performance improvement
programmes, in each of its platforms, which have enhanced throughput and
utilisation, improved commercial terms, increased materials reserves, and
extended and de-bottle necked capacity. The initiatives which we announced in
October 2022 which are expected to realise EBITDA benefits of £5m this year
and deliver significant further scope for performance enhancement in 2023 and
beyond, are progressing well. The success of these initiatives gives us
confidence in our ability to mitigate further inflationary cost pressures.

 

Notwithstanding the challenging market conditions in the short term, the Board
remains very confident in the Group's long term prospects, supported by its
proven business model, and the diversification provided by its European and
multi-product footprint.

 

Aqualung update

 

In November 2022, the Group announced its partnership with Aqualung, and its
intention to materially accelerate carbon capture roll-out across its lime
kiln network. The Group is pleased to report the first Aqualung carbon capture
facility is presently on route to Scandinavia for installation in Q1 2023.  A
further video is being released to give additional information on the
technology and the chosen implementation programme.

 

https://www.youtube.com/watch?v=4FwVMLgwVOg&ab_channel=SigmaRoc
(https://www.youtube.com/watch?v=4FwVMLgwVOg&ab_channel=SigmaRoc)

 

Videos with further information in relation to our Aqualung partnership can be
found here:

 

https://www.brrmedia.co.uk/broadcasts-embed/636ba004aad758108bbd9181/event/?popup=true
(https://www.brrmedia.co.uk/broadcasts-embed/636ba004aad758108bbd9181/event/?popup=true)

 

https://www.brrmedia.co.uk/broadcasts-embed/636e71c9ce306e2e48f6bb56/?popup=true
(https://www.brrmedia.co.uk/broadcasts-embed/636e71c9ce306e2e48f6bb56/?popup=true)

 

 

Further development of the Group's footprint

 

The Group remains as active as ever in the development of its footprint,
targeting further value enhancing ideas, both organic and inorganic. Within
this pipeline there is the potential to deliver attractive returns, enhance
earnings and also decrease leverage. One of the Group's core strengths is its
proven ability to drive strategic improvement irrespective of market
conditions and the Company expects to update shareholders on progress early in
the new year.

 

 

Max Vermorken, CEO of SigmaRoc, commented:

 

"Nothing easy is worth doing and 2022 wasn't easy. Well done to our nearly
1,860 staff. While it is likely that 2023 will present further unforeseen
challenges, the agility of our business model and the diverse footprint of the
Group will help us confront them as they arise. Naturally we keep a keen eye
on ideas and projects which will help drive further growth."

 

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

 

(1)Average of Analyst consensus estimates anticipate revenue of £512m,
underlying EBITDA of £97.3m and underlying EPS of 7p.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European (Withdrawal) Act 2018.

 

 

 SigmaRoc plc                                         Tel: +44 (0) 207 002 1080

 Max Vermorken / Garth Palmer

 Liberum Capital (Co-Broker & Nominated Adviser)      Tel: +44 (0) 203 100 2000

 Neil Patel / Jamie Richards / Ben Cryer

 Peel Hunt (Co-Broker)                                Tel: +44 (0) 20 7418 8900

 Mike Bell / Ed Allsopp

 Investor Relations                                   Tel: +44 (0) 207 002 1080

 Dean Masefield / Elisa Frenay                        ir@sigmaroc.com

 

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