SigmaRoc upbeat on strong first half

24th Jul 2023 10:33

(Sharecast News) - Quarried materials specialist SigmaRoc reported significant growth in revenue and underlying EBITDA in a first-half trading update on Monday.

The AIM-traded firm said revenue in the first six months of the financial year reached £290m, up from £247m in the same period in 2022.

That made for robust year-on-year growth of 17%, and a like-for-like increase of 13%.

Similarly, underlying EBITDA stood at £55m, representing 15% growth on the year, and a 12% like-for-like increase from the first half 2022 figure of £48m.

Additionally, the group's underlying earnings per share ticked up to 4p from 3.6p, for an 11% increase.

SigmaRoc reported strong cash generation, with cash reserves totalling £63m at the end of the period, compared to £46m in 2022.

Additionally, SigmaRoc said its adjusted leverage ratio improved to 1.7x from 2.2x in the prior year.

The board put much of the growth down to the firm's acquisition and investment programme, launched in February.

SigmaRoc said its acquisitions would contribute around £8m in annualised EBITDA at an effective multiple of 3.9x, while organic growth investments were projected to add a further £2m to the group's earnings once fully operational, with an effective multiple of 3.3x.

In line with its strategic focus, SigmaRoc divested four non-core assets during the period, generating £11m at an effective multiple of 12.9x.

The board said the divestment included land holdings with no significant earnings impact, streamlining its portfolio.

"The first half of 2023 has been a further validation of the group's model," said chief executive officer Max Vermorken.

"A number of the group's end markets have performed ahead of expectations, and we have been able to move swiftly to implement targeted commercial and operational initiatives in response to destocking and slower demand in some product areas and regions, which has contributed to a very resilient performance in the period.

"In parallel, we were very active on the mergers and acquisitions front, seizing a number of opportunities to strengthen the group's footprint through transactions at highly attractive multiples."

Vermorken said SigmaRoc was integrating those which had already closed, and was preparing to welcome others in the second half.

"Competitively, strategically, and financially the group has taken a firm step forward.

"Looking further ahead we need to respond to the challenges of more volatile end markets and adapt accordingly.

"We continue to focus our efforts on operational, safety and governance improvements to build a leading group in quarrying, limestone and industrial materials."

At 1011 BST, shares in SigmaRoc were up 1.3% at 63.21p.

Reporting by Josh White for Sharecast.com.