Builders and building materials
SigmaRoc rides lime wave with CRH deal for up to €1bn
Lime and limestone are seen as key resources in the transition to more sustainable construction, with lime products acting as natural carbon sinks
Company
LON:SRC
SigmaRoc PLC is a buy-and-build group targeting construction materials assets in the UK and Northern Europe. The company seeks to create value by purchasing assets in fragmented construction materials markets and extracting efficiencies through active management and by forming the assets into larger groups. SigmaRoc seeks to derisk its investments via strong asset backing at its projects.
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Builders and building materials
Lime and limestone are seen as key resources in the transition to more sustainable construction, with lime products acting as natural carbon sinks
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The buy-and-build quarried materials group said its long-term prospects are exciting with “significant opportunities” to extend its geographical reach and product offering
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Chief executive Mark Vermorken said the deal would extend Sigmaroc's footprint in "several key markets"
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Brokers Liberum and Peel Hunt repeated 'buy' recommendations on stock in the construction materials group
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SigmaRoc will become the first concrete products supplier in Europe to offer ultra-low carbon concrete products across its entire range from January 2022
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"Greenbloc receiving the EPD is a significant milestone for our ultra-low carbon building block.”
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“Supply chain and inflationary pressures are being managed effectively"
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AIM-listed SigmaRoc launched the world's first cement-free block in 2021
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Revenues and earnings were boosted by contributions from recent acquisitions and a strong underlying performance
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The deal was funded via a combination of cash, debt and equity
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Nordkalk brings scale and is comparatively low risk according to Liberum
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“Nordkalk expands its footprint to fill the area targeted, but also brings scale”
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The purchase price is about seven times Nordkalk’s underlying EBITDA for 2020
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GduH is SigmaRoc’s Benelux production and distribution subsidiary
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"The market is changing and we understand the need to acknowledge, address and action a tangible approach to decarbonisation," said Max Vermorken.
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"The year started well across the group with strong sales in every platform,” said Max Vermorken
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In a note, analysts reiterated their ‘buy’ rating on the construction materials group and increased their price target to 105p from 82p
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Liberum has upped its share price target to 92p from 86p
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Underlying revenues in the year to end-December 2020 rose by 76% to £124.2mln
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The purchases of B-Mix Beton and Casters Beton will bring aboard businesses that generated €22mln of annual turnover
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Sigmaroc expects to generate an incremental underlying profit [EBITDA] of €1m per annum from the move
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Founded in 2016, the firm looks to create value by purchasing assets in the fragmented construction materials market and forming them into larger groups to create efficiencies
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“It addresses a key challenge in the building products industry, the embodied CO2 in one of the most widely used building materials"
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House broker Liberum has increased its price target to 73p from 70p
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The building materials group said the £125mln facility and £12.4mln in funds raised in early December has placed it in a “solid position” to take advantage of “multiple near-term opportunities”
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The construction materials group said it has developed an investment pipeline of bolt-on acquisition and small expansion investment opportunities that the additional funds will allow it to execute
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GDH operates 17 production facilities producing asphalt, concrete and including a wharf operation, as well as four road contracting units
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The construction materials group said it has “delivered results ahead of its own expectations given the challenging trading environment”
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The project will consist of the displacement of two sections of public road currently separating 116 hectares of CDH's 351 hectares of permitted land and minerals from its main quarry site in the town of Soignies
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In some areas, the group's business is returning to pre-coronavirus pandemic levels
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The business is well-positioned to successfully manage the challenges presented by the coronavirus pandemic, according to chairman David Barrett.
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With necessary precautions in place, most of Sigmaroc's operations are continuing
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The company remains operational across all its sites, but all staff who can work from home are doing so
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Analysts at Liberum said the €81.3mln purchase will boost EPS by 20% and provide opportunities to lift EBITDA by over 30%
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CDH recorded €45.9mln in revenue and €12mln in underlying earnings in the year to 30 June
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Gearing ratios are expected to be “significantly reduced” by the sale
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The second half should see us deliver more from our existing business and enter new markets with significant potential for the group.”
"The acquisition of Stone will offer SigmaRoc an operating hub in the Benelux region, from which the group can expand," SigmaRock said.
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For the year ended 31 December, the construction materials group reported an underlying pre-tax profit of £5.5mln, 113.8% higher than the prior year
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SigmaRoc said it will purchase a 40% stake in GDH for £4.89mln with an option to acquire the remaining 60% for £7.5mln before 31 August 2020
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Footsie closed down around 0.19 at 7,436, while mid-cap FTSE 250 was up around 95 points at 19,807
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“SigmaRoc was set up to buy and build heavy building material assets. It is proving it can find and improve these assets and there are many more opportunities in this industry”
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Liberum is forecasting that SigmaRoc’s clean pre-tax profit will rise to £5.7mln in 2018, up from £2.6mln in 2017, with its forecasts for subsequent years rising to £7.7mln in 2019 and £8.7mln in 2019
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The AIM-quoted buy-and-build construction materials group said it placed 30,257,053 ordinary shares at a price of 41p each, a 1.4% discount to Thursday's closing price
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The UK's premier share index finished almost ten points down. It was also lower on the week as a whole
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SigmaRoc’s CEO Max Vermorken commented: “The refinancing of the CLNs significantly reduces potential shareholder dilution and demonstrates confidence in our business and the ability of those who work here"
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Max Vermorken, the company's chief executive, tells Proactive a "cross-UK" footprint is in development, while the future of the firm lies in the continent
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The new plant is expected to reduce turnaround time and improve efficiency with outputs expected to be up to 80 cubic metres of concrete per hour
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The construction materials group also said operating profits would be in-line with market expectations
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Since its half-year results in September, SigmaRoc has acquired two new firms while the CEO says the group is on track for "a strong full-year performance"
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The building materials firm said Foelfach, a high polished stone value (PSV) quarry, was acquired in 2018 with an estimated 1.8mln tonnes of high PSV materials
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