Annual results for year ended 31 December 2019

View All Articles

SigmaRoc plc / EPIC: SRC / Market: AIM / Sector: Construction & Materials

20 April 2020


SigmaRoc plc

(‘SigmaRoc’ or the ‘Company’)


Audited full year results for year ended 31 December 2019 and Notice of AGM


SigmaRoc plc, the AIM listed buy-and-build construction materials group, is pleased to announce its audited results for the year ended 31 December 2019.


Financial highlights1

31 December 2019

31 December 2018


Underlying revenue




Underlying EBITDA




Underlying profit before tax




Underlying EPS




Adjusted Leverage Ratio2





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 the Annual Report are defined on this basis.


2 Adjusted leverage ratio compares net debt to underlying EBITDA for the last twelve months adjusted for pre-acquisition earnings of subsidiaries acquired during the year


Operational highlights:


-       Four acquisitions during the year including CCP Building Products Limited and 40% holding in GDH (Holdings) Limited in the UK; and Carrieres du Hainaut and Stone Holdings Limited in Belgium;

-       The new ready-mix operations were opened at Ronez in Jersey in February 2019;

  • Revenue increased to £70.4 million, with underlying EBITDA increasing to £14.5 million, a growth of 47.6% year-on-year;
  • Entered into the Northern European market with the acquisition of Carrieres du Hainaut and Stone Holdings;
  • Implemented a Group-wide safety policy and saw the LTIFR reduce by 36%; and

-       The Groups operations expanded to over 30 production sites and close to 1,000 employees.

Annual General Meeting


SigmaRoc is also pleased to give notice that its Annual General Meeting (‘AGM’) will be held on 18 May 2020 at 1:00 p.m. at 56 Queen Anne Street, London, W1G 8LA. Copies of the Notice of AGM, together with the Form of Proxy and Annual Report have been posted to shareholders and are available to view on the Company’s website.


In light of the UK government’s response to the COVID-19 outbreak, which includes banning all non-essential travel and gatherings of more than two people, the Company strongly encourages all Shareholders to submit their form of proxy, rather than attend the AGM in person.


David Barrett, Executive Chairman, commented:


“I am pleased to report another strong year in 2019 where we were able to substantially grow the Group, meeting our ambitious expectations for the year. We made four acquisitions during the year, which collectively and on a pro-forma basis, add £112 million in revenue and £17 million in EBITDA annually.”


“I am extremely proud of our continued progress and believe we are well positioned to successfully manage the challenges presented to our business by the COVID-19 pandemic.”



Max Vermorken, CEO, commented:


“I would like to thank the great team we have at SigmaRoc for another excellent year. Through a combination of organic and acquisitive growth we increased revenue by 71% to £70.4 million, Underlying EBITDA by 48% to £14.5 million and Underlying EPS by 10% to 4.2p.”


“As Garth moves to a Non-Executive Director role, I am extremely grateful he helped us build a business in great financial shape, with a solid asset base, potential to grow across four existing platforms and the opportunity to create new platforms for further expansion. I also thank Dom and Patrick for their contributions and am pleased that both will remain involved with the Group as advisors.”


“Looking forward, we have the COVID-19 crisis to navigate. The Group is well prepared to confront the potential consequences of the crisis and to then continue its growth story, thanks to the resilience of its great workforce and supportive unions. I am therefore optimistic about what we can achieve in the months ahead of us this year and beyond.”



Text from the 2019 Annual Report is set out below, together with detailed financial results.
SigmaRoc will host a meeting for invited analysts at 9.00am and private investors at 2.00pm today. Conference call dial-in details are available from the Company upon request to join the analyst or private investor meetings. A recording will also be available on request from the Company.




For further information, please contact:


SigmaRoc plc

Max Vermorken

Tel: +44 (0) 207 002 1080

Strand Hanson Limited (Nominated and Financial Adviser)

James Spinney / James Dance / Jack Botros

Tel: +44(0) 207 409 3494

Peel Hunt (Joint Broker)

Mike Bell/Ed Allsopp

Tel: +44 (0) 20 7418 8900

Liberum Capital (Joint Broker)

Neil Patel / Jamie Richards / Jonathan Wilkes-Green / William Hall

Tel: +44 (0) 203 100 2000

Rubik Communications (Financial PR adviser)

Andrea Mora / Charlotte Hollinshead

Tel: +44 (0) 207 002 1080

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.





SigmaRoc has completed a very successful 2019. Our revenue reached £70 million, our underlying EBITDA grew by 47.6%, to £14.5 million with our underlying earnings per share growing further to 4.20 pence.


Underlying EBITDA margins remained strong at 20.7% when taking into account the incorporation of a lower margin and higher volume business with the acquisition of CCP. Our remaining business recorded EBITDA margins of 24.6%, which is in-line with our 2018 performance.


As a result of these strong financial results the business was able to continue its growth by starting two new platforms in South Wales and Belgium respectively. The business now operates over 30 production sites, including 15 quarries, with over 400 million tonnes of mineral reserves and resources across the Group, with the potential to further expand each platform.


A year of substantial growth


2019 was characterised by significant growth, both organically and through acquisition. We completed a total of four acquisitions during the year, complementing our PPG Platform, substantially growing our South Wales platform and creating a new platform, in Belgium.


Additionally, we have invested in our existing businesses in order to expand the offering and production capacity, thereby organically growing our footprint. In 2019, we invested significantly in our ready-mix concrete offering at Ronez Jersey and expanded our production capacities at both Poundfield and CCP. We also upgraded our plant and machinery across the business to further solidify our operating base.


The most substantial acquisition saw our move into Belgium through the acquisitions of Carrieres du Hainaut, the leading producer of the world-famous Belgian Bluestone, as well as significant volumes of construction aggregates, and Stone Holdings, which specialises in armour rock for sea and river defence work. The potential for the business to now expand into the Benelux area is significant as we build out a quarrying platform that already includes three quarries in Belgium.




The safety and the wellbeing of our colleagues is paramount to our activity and to a well-run business. We have invested substantially to ensure that workplaces across the Group continuously improves and accidents are avoided. In November 2019, we implemented a new Group-wide safety policy to ensure uniform safety standards across the Group.


The impact of the policy has already been visible. Our Belgian platform recorded its longest period without incident on record, between the time of our acquisition and earlier this year. Our safety record in the other parts of the business also improved, with a net drop in LTIFR of 36% on the previous year. Total incident reporting increased across the Group, showing improved quality of information flow.


Governance and sustainability


As part of the continued transformation of the business, we have placed further emphasis on governance and sustainability. In September 2019, we announced the proposed appointment of Jacques Emsens, a renowned industrialist and expert in specialist minerals, to our Board as an independent Non-Executive Director. 


Immediately following the release of these Accounts, the Company intends to formally appoint Jacques Emsens to the Board, together with Simon Chisholm, who brings detailed knowledge of equity markets, fund management and market regulation. Simon qualified as a Chartered Accountant and has over 20 years of experience working in the investment arena. He is currently founder and managing director of Feros Advisers Limited and has previously worked as a fund manager investing in European equities at Singer & Friedlander, Henderson Global Investors and other large institutions. Simon will join the Board as a senior independent Non-Executive Director and will chair the Audit Committee.


In addition, we have created an advisory board with the aim of guiding our business through a number of exciting projects in the Benelux region. It is a privilege to have private equity investor, Count Christophe de Limburg Stirum, and former Heidelberg Benelux CEO Pascal Lesoinne, join our Benelux advisory board.


With these changes, we have put in place a solid supervisory body of high calibre individuals with significant experience in the industry, listed businesses and the fast-changing regulatory environment, to help us to guide the business forward. 


From a sustainability perspective, we also made significant progress throughout the year. A separate section of this report is dedicated to our specific efforts in this area, which include renewal programmes for our mobile and delivery fleet for lower emission vehicles, to product ranges aimed at assisting with the challenges faced by the effects of climate change, and the participation in breeding programmes for certain animal species near our sites.


Looking forward


The first important announcement at this stage is that we see our CFO, Garth Palmer, step down from the role he has held since we founded the business. Garth, who has served as our CFO on a part-time basis and is also a partner in accounting firm, Heytesbury Corporate LLP, has been an exceptional CFO to our business. Guiding us through sometimes challenging and always very intense times, his skill and dedication has been a significant contributing factor to our success to date. Garth has indicated, however, he will remain on our Board as a Non-Executive Director, for which we are extremely grateful.


We are also very pleased to announce our new fulltime CFO, Dean Masefield, who will also join the Board immediately following the release of these Accounts. Dean joined SigmaRoc in 2017 taking on the roles of Financial Director for the Ronez Platform and then Deputy CFO to the Group in 2019. Prior to joining SigmaRoc Dean served as Head of Finance of BNP Paribas and later Equiom Channel Islands overseeing all accounting, reporting, regulatory and systems aspects for tens of billions of USD in assets under management. Dean is a Chartered Accountant having qualified with BDO in 1997 and is presently an FCA, having qualified with the Institute of Chartered Accountants of England and Wales.


In order to maintain an appropriately sized Board relative to the size and stage of development of the Group, Dominic Traynor and Patrick Dolberg have both agreed to step down from their current positions as Non-Executive Directors of the Company, following completion of the Annual General Meeting to be held on 18 May 2020.


Dominic has been with us on this journey from the very beginning and we are extremely thankful to him for his contributions toward our success to date, which have culminated in the Group exceeding forecast annual turnover of £100 million. We are pleased that Dominic will be taking up a position on one of the subsidiary boards and will therefore remain involved with the Group in an advisory capacity.


Patrick has been with us since we completed the reverse takeover of Ronez in early January 2017 and has been instrumental in guiding the Group through its early growth phase, for which we are extremely grateful. Patrick is a Belgian national and formerly ran Holcim’s European operations. Given our European growth aspirations we are pleased to report that Patrick will join our Benelux advisory committee and, therefore, will continue to provide guidance as we grow the Group.


With these Board changes we have positioned the business well for the future. With significant potential for further development. In the Benelux region, we have a well-balanced business that can capitalise on growth opportunities as and when they arise. Our position in South Wales is promising and can be expanded. Our precast group, SigmaPPG, is in great shape and fully integrated.


We started 2020 well with a strong first quarter, however, at the time of writing, the outbreak of the Coronavirus pandemic and its economic consequences create uncertainty. We continue to actively monitor the situation and implement required contingency plans as and when appropriate. We remain confident that we have a solid business with fantastic assets and that once the economy rebounds, we will be well positioned to resume delivering further shareholder value.



David Barrett

Executive Chairman

17 April 2020





2019 was a significant year for SigmaRoc. Nearly every month of the year, the business made a major step forward, whether it was through organic growth, acquisition, financial and operational improvement and/or a review of our safety, governance, reporting systems and environmental impact. As a result, where we started 2019 as a business with two platforms, we finished the year with four platforms across four regions, nearly 1,000 colleagues and ample opportunity to further expand and develop.


Financial performance


Focussing first on the financial performance of the Group, where we have delivered excellent results. Revenue increased to £70.4 million, with underlying EBITDA increasing to £14.5 million, a growth of 47.6% year-on-year. Underlying earnings per share increased to 4.20 pence. Underlying EBITDA margins continued to be strong at 20.7% when taking into account the integration of CCP, a quality business specialising in concrete blocks that typically attract a lower margin. As we further integrate and grow the Group, these margins are expected to continue to grow above 20%, assuming 2019 activity levels.


Our balance sheet has also continued to improve, with the refinancing of the £10 million, 6% convertible loan notes and the simultaneous extension of the Santander credit facilities from £20 million to £34 million. With the acquisition of CCP in the North West, our joint venture with G.D. Harries in South Wales and our acquisition of CDH in the Benelux, we have extended our mineral reserves and resources to over 400 million tonnes across the Group, at 15 quarries. The asset backing in the Group is therefore solid and is further complemented by land, plant and machinery at the various production sites.


Trading Summary


Throughout 2019, we have continued to press on with improvement programmes launched across the various businesses. A dedicated section in this report on our business model gives further detail of the progress made. As a result of these programmes, each business we own is performing better than it had prior to acquisition.


Ronez had another strong year of continued increased performance recording over £29 million in sales, biased to the first half. The markets in Jersey remained strong, while Guernsey has unfortunately not yet seen the higher volume months it witnessed five years ago. In particular, our new concrete offering in Jersey has helped solidify our position as the concrete supplier of choice, demonstrating that the investment case for the new plant was a robust one. The contracting division also did an outstanding job in both islands, delivering challenging jobs in sometimes difficult circumstances as both the weather and the structure of the sites can be tricky in the islands.


Our second platform, SigmaPPG, recorded a solid year all round after a slower start than expected. CCP, acquired in February 2019, showed slower trading in the initial few months of ownership, both in its block and aggregates businesses. However, the block business saw volumes increase rapidly across the year, with nightshifts being introduced for the first time to follow demand. The Aberdo quarry was restructured extensively making it an exemplary turn-around case and won the British Aggregate Association Quarry of the Year award.


Allen Concrete and Poundfield Products continued their strong performance with an expanded product range. After further investment to reorganise the Poundfield site as a result of increasing levels of demand, it has now captured a leading position in the UK as a supplier of choice for technically challenging bespoke precast concrete projects and retaining walls.


Across the second and third quarters of 2019, production levels hit record all-time highs propelling Poundfield’s revenues to over £9m. Large sea defence projects were delivered in the UK, protecting the British coastlines. The retaining wall business continued to diversify its offering to include new applications of the product and selling to, for example, nuclear facilities. The flooring business grew further with its end-to-end design solution and short lead times.




While we continued to focus on performance improvements, we did not lose focus on our acquisition growth strategy. We expanded into South Wales through a joint venture partnership with G.D. Harries, a leading construction materials supplier led by Ian Harries and assisted by our MD for the region, David McClelland. The business recorded an excellent year, well ahead of its performance in 2018 with an underlying EBITDA of £3.2 million, a year-on-year growth of 24.8%.


In the third quarter, we commenced our expansion into Belgium, following many months of planning, initially appointing Emmanuel Maes as MD of Europe, a highly experienced former CEO of dredging and aggregates supplier, Group De Cloedt, followed by the acquisition of Stone Holdings and subsequently and more significantly, Carrieres du Hainaut.


Carrieres du Hainaut is globally the leading supplier of Belgian Blue Stone, a highly sought-after decorative stone with applications in infrastructure, housing and public spaces. It recorded sales of €51.4 million and an underlying EBITDA of €13.6 million in 2019. Extension projects are ongoing to extend the site to over 300 hectares. Additionally, CDH is a major producer of construction aggregates with volumes of nearly 2 million tonnes per year, one of the largest operations of its kind in Belgium. Combined, CDH has approximately 200 million tonnes of aggregate and over 27 million cubic metres of dimension stone, enough for over 100 years of production at the current rate.


The potential with this acquisition lies in the fact that the business offers a real platform for growth. Belgian Blue Stone remains undiscovered in many markets including the UK, yet we believe that we have the required commercial teams in place within our PPG Platform to change this. The partnership on the production of construction aggregates comes to an end in three years giving us full flexibility to consider all options to produce and even commercialise this valuable material ourselves, or in continued collaboration with a quality partner.




Major progress was made in the field of safety and the wellbeing of our colleagues. As an executive committee we designed and implemented a Group-wide safety policy in line with the highest standards in the industry. We appointed Clinton White as Safety and Estates Director and he coordinates with line managers in each business to ensure safety is an output of best practice operations. We continue to use external auditors to review our safety performance independently, to ensure we constantly improve.


Year-on-year the results are visible. The total number of incidents has declined while the business grew. Our Group-wide LTIFR reduced by 36%. Total reported near misses increased indicating better reporting. The culture in each platform is changing to embrace our best practice safety policy. A key example would be our Belgian platform which saw the longest period without incident on record subsequent to our take-over of the business.


Environment, Social and Governance (ESG)


Over the course of 2019 we made significant progress on all aspects of our ESG focus. A dedicated section of this report provides full details, however, some aspects we can highlight here. 


During the course of 2019, we started the search to extend our Board with further independent Non-Executive Directors, with a view to ensuring robust governance of the business. With the proposed appointments of industrialist, Jacques Emsens, and former fund manager and Chartered Accountant, Simon Chisholm, we will add solid experience to our Board in the management of large listed industrial groups as well as the regulatory aspects of publicly listed companies.


At an operational level, in May 2020, we are very pleased to be appointing Anthony Brockbank, Equity Capital Markets (ECM) partner with law firm, Fieldfisher LLP, as our General Council, on a part time basis. We consider Anthony to be amongst the most experienced ECM lawyers in the UK and he will further assure compliance with the market rules and regulations.


On a social and environmental front, we continued to reinforce our existing initiatives to reduce our environmental impact, protect our operational sites from pollution, care for indigenous species of wildlife and actively seek to produce products which help with the mitigation of some of the impacts of climate change. Further details on these initiatives are provided in the dedicated section further into this report.


Promotion of the Company for the benefit of members as a whole


The Director’s believe they have acted in the way most likely to promote the success of the Group for the benefit of its members as a whole, as required by s712 of the Companies Act 2006. The requirements of s172 are for the Directors to:


  • Consider the likely consequences of any decision in the long term;
  • Act fairly between the members of the Company;
  • Maintain a reputation for high standards of business conduct;
  • Consider the interests of the Group’s employees;
  • Foster the Group’s relationships with suppliers, customers and others; and
  • Consider the impact of the Group’s operations on the community and environment.


The application of the s172 requirements are demonstrated throughout this report and the Accounts as a whole, with the following examples representing some of the key decisions made in 2019 and up to the date of these Accounts:


  • Response to the Coronavirus pandemic: as detailed in the Coronavirus update, the Group has taken various measures to protect the wellbeing of its employees, maintain good working relationships with its customers and suppliers, and ensure the commercial viability of its business.


  • Continued pursuit of buy and build growth strategy: the Group has aggressively continued its buy and build growth strategy, completing four acquisitions during 2019, which expanded the SigmaPPG and South Wales platforms and created a new platform in Belgium.


  • Safety initiatives: safety and wellbeing of our colleagues is one of our top priorities and the Group continued to improve its health and safety standards, including adopting a Group-wide safety policy to ensure uniform safety standards across the Group.


Strategic approach and outlook


Our strategic approach is to build clusters of local and complementary businesses to deliver shareholder value from synergies, operational improvement and competitive advantage. We target assets that deliver a value proposition to customers, have a strong local market presence and hard asset backing, resulting in improved margins. We seek income streams that are diversified and supported by quality assets producing aggregates, concrete, precast and prestressed concrete and related products and services.


At the time of writing the outlook is complex. The underlying business is sound, filled with significant potential and the capacity to expand both organically and through acquisition. The teams are skilled and the operational structure is efficient, following several improvement initiatives. The project pipeline remains filled with exciting projects, both in terms of product development and potential acquisition targets that could strongly complement our existing footprint.


We started the year well with solid performance in all parts of the business. While Ronez had some inclement weather to deal with, in the shape of several storms passing through the Channel Islands, its underlying demand and project pipeline remains solid. The Benelux platform recorded robust sales in both aggregates and dimension stone, indicating a good pipeline overall.


Our discussions with Santander and four banks in Belgium to put in place a Group-wide credit facility, which would provide further financial flexibility to support our growth, are far advanced and we look forward to providing further updates as and when appropriate.


In consideration of the above, I believe it is only fitting to close this report with three facts: firstly, our business made excellent progress in 2019 and Q1 2020; secondly, as a management team we have, since early March 2020, made preparations to mitigate the impact of COVID-19 on our business through several action plans and mitigation strategies; and thirdly, the underlying business, its asset backing and strength of its senior management team position the Group well to deliver shareholder value.


This report was approved by the Board on 17 April 2020.



Max Vermorken

Chief Executive Officer





Since the end of February 2020, we have been working to prepare our business for scenarios that I do not think anyone could have anticipated, namely, those brought about by the impact of the Coronavirus pandemic. Fortunately, as a team, we believe were ahead of most and found ourselves in a good position to help protect our staff and our business from the potential consequences of COVID-19. With this message, I intend to give you some insight into how we are approaching this challenge.


(a) Preparation and uniform approach


In early March 2020, it became apparent that the Coronavirus would pose a serious challenge to all of us. To prepare for this challenge, we instructed our Health and Safety Director, Clint White, and the Group MDs to immediately start coordinating our response across the entire business. A Group-wide campaign on how to prevent contracting the virus, based on scientific and Government advice, was started. At the time of writing, this has been successful, with all our operations remaining free of confirmed or probable Coronavirus cases.


(b) Increasing our readiness


As time passed, it quickly became apparent that basic hygiene rules would not be enough and that we needed to do more; we needed strict social distancing. As a business, we are fortunate in that we mostly work in the open air, on sites with plenty of space and carry out jobs that can be reconfigured to be performed alone, indicating a relatively lower risk profile.


However, across the Group we also have administrative offices, portacabins, breakrooms and toilets. We have made sure to ventilate these spaces well where possible, otherwise deciding to limit access or closing them completely. We have also enhanced cleaning routines and surfaces touched by staff are now cleaned more frequently. Those who could work from home were instructed to do so, in order to respect the social distancing instructions. In addition, a programme was put in place to ensure those working from home did so in the right setup and environment.


(c) Financial preparation


As a team, we also looked carefully at the possible financial implications to our business resulting from Coronavirus. I am happy to report that, at an early stage of pandemic, we developed contingency plans that prepared our business well for the possible consequences of this virus. Simulations were run to understand how long we could survive with zero revenue, how much revenue loss we could stand to remain cash positive, how much revenue could be lost before banking covenants were breached and what would need to be done to make our financial position as secure as possible.


The plans we developed were reassuring. Our cash balance was robust and would allow us to operate for over six months with zero revenue and without drawing any further debt. We have access to further bank facilities if required. Even more encouraging is the fact that these plans were prepared, finalised and presented to the Board well before the UK and Belgium governments announced the various financial support packages. When it became clear how such financial support could help us if required, we felt we were in an excellent position as a Group to deal with the challenges ahead.


(d) Brace for impact


As Coronavirus started to spread and Belgium, the UK and the Channel Islands started reporting a significant number of cases, the implementation of our contingency plans became the priority. Several additional steps were taken:


  • Daily calls: To coordinate activity across all businesses and facilitate a uniform approach across the Group, daily calls with all managers were set up to report on the situation in each business.


  • Continuing to operate: The next dilemma became whether to stay open or shut our sites. Government regulations in the UK and Belgium indicated our activities could continue, as long as all health recommendations were followed. In the Channel Islands the indications changed over time. As a management team, we debated the matter extensively, to conclude that if we could guarantee correct social distancing and hygiene measures, staying open where permitted was the right answer. While keeping our staff out of harm was our key focus, our second priority had to be supporting our local economies and communities by paying our bills and supplying materials required for projects such as hospitals and road infrastructure. If we could continue to operate and trade, we were not a burden to the economy, but in fact, contributing to it. This ultimately felt like the right approach.


As a result, the Group had to close all but essential infrastructure maintenance operations, in both Guernsey and Jersey, for a period of 14 days commencing effective from 26 March 2020 and 4 April 2020 respectively. Guernsey has remained closed up until the publication of these Accounts, however, there is an expectation of an easing of restrictions and a controlled restart of business activity during the week commencing 20 April 2020. The Jersey Government has implemented a permitting system that is progressively facilitating the reopening of accredited construction sites and small works. At the time of writing modest supplies have commenced, with an acceleration in the Group’s operations expected to commence from 20 April 2020.


In the UK, the Group remains active across all sites, albeit at reduced volume levels, supplying product where doing so is an economically viable proposition for its customers. In this context, the Group has decided to suspend some of its production capacity and supply from stock. In Wales, G.D. Harries remains active across a number of civil engineering and road maintenance contracts, having reduced production and haulage capacity in-line with current local demand.


The Group’s Belgian businesses also remain operational with the support of staff and unions, supplying bluestone to a reduced number of active customers. The Group’s partner in the sale of aggregates from its Soignies quarry has decided to close its production entirely until further notice. However, the Group continues to supply customers from its other aggregate quarries near the town of Huy.


  • Consultation with unions and staff: In order to ensure our operations could continue, a dialogue with staff commenced at each production site. Those who were considered to potentially be at risk (for example those that had a pre-existing medical condition), those who had any symptoms similar to those experienced by people suffering from COVID-19, or those who were in contact with COVID-19 patients, were instructed to go home and isolate. Surveys were conducted to understand requirements to stay home with children, providing management with a good understanding of the pressures on our staff.


In Belgium and in Jersey, where the workforces are unionised, a dialogue was started with the unions, who in every case were proactive, supportive and understanding that, as long as staff could be kept safe, there was a local community and economy to consider, as well as the future of the business. The union representatives showed true leadership and vision during those discussions.


  • Face masks: A topic that followed from our staff consultations was the need for face masks. After failing to secure the required number we decided to hire a team of seamstresses and make them ourselves. 2,000 face masks have been ordered of which 1,000 have been received and distributed to members of staff. The remaining 1,000 are planned to be donated to local hospitals. Appropriate instructions were given to each staff member to ensure proper use of the masks.


  • Paying our bills and helping the community: The next challenge became the management of our cash in a climate where more and more customers were signalling that they would not be making timely payment of their outstanding liabilities. Daily cash monitoring and bi-weekly calls were set up between all accounting and credit control teams to ensure we managed our cash prudently. Through discussions with our customers and suppliers, we were able to continue to pay our bills and maintain our cash position without significant erosion. In the end, our mission has been to be a supportive business, helping its local communities where it could while not endangering its own liquidity position. 


At the time of writing, the above summary provides a detailed perspective of our position and our approach to dealing with the Coronavirus. We firmly believe that the Group is in a strong position. We have remained operational where permitted and where deemed safe, selling product, collecting cash and paying suppliers. We are supplying products to those who needed them for their activities, including hospitals and for the maintenance of roads. Wherever possible we have helped our local communities without forgetting our mandate to our shareholders.


To conclude this additional update, I want to make it very clear that none of the above could have been achieved without the tireless support of a phenomenal team of individuals who collectively make up the SigmaRoc group. In the face of this crisis, they remained humble, disciplined, understanding and a true team. They understood how little we could do as individuals but how much we could accomplish as a team, as a business, as a society.



Max Vermorken


SigmaRoc plc





Our business model


SigmaRoc was set up with the vision to build a competitive construction materials group, focussed on the long term benefits our industry has to offer. Our business model was conceived out of the experiences of many high level executives and entrepreneurs in the sector, allowing several important conclusions to be drawn.


Construction materials are a local product, consumed and produced locally, and, due to their high mass to price ratio, they tend to travel shorter distances to end customers than other commodities, such as oil or metals. This brings a particular dynamic to the sector, focussed on local and fragmented markets.


Our business model starts from the understanding that each local market is different, with its own particularities, competitive pressures and local history. Understanding that structure, preserving its history and local dynamics, while applying best-in-class operational and financial management, will ultimately, all things being equal, lead to a better offering, for investors, customers, employees and local communities.


A particular ingredient in that structure is empowering local managers and operators to take full responsibility for their business or division. Only local managers fully understand the requirements of the local market. Product innovation, customer engagement and Capex decisions are all driven by local requirements and not by a group agenda, which may or may not be adequate for what is required on the ground.


At a group level, we utilise this decentralised approach to focus on what we are best at; finding appealing investment opportunities, helping the acquired businesses reach a best-in-class status operationally and financially, and lock in synergies available to us through scale and expertise.


Implementing our strategy


In practice, the implementation of the vision expressed above can be achieved through three core principles:


We invest in businesses. This is not the same as acquiring them. We aim to keep and improve those aspects which made them worth acquiring, whether that is their independent mind-set, their entrepreneurial nature or their founder.


We improve the businesses we have bought by targeting those aspects which were less efficient than they could be. This can vary widely from inefficient sales efforts, poor cash management to operational difficulties.


Lastly, we integrate the businesses we buy into clusters where compatibility secures synergies and where scale helps to generate local buying power. We also integrate acquired businesses into the infrastructure of the Group, providing centralised technical, financial and managerial support, allowing the newly integrated business to capture efficiencies and economies of scale. 



  • Only in businesses with solid intrinsic value;
  • Only in businesses with the potential to be improved and grown;
  • Only in businesses which can be bought at an attractive valuation.



  • The operational and financial performance of the business;
  • The motivation of management to drive growth;
  • The ultimate offering to the local market and community.



  1. By building platforms of compatible businesses;
  2. By unlocking those synergies which do not come at a significant cost;
  3. By recognising the value of what previous owners built.





As I will be stepping down from my role as an executive Board member and Chief Financial Officer following publication of these Accounts, I would like to begin this report by thanking the Board and shareholders for the opportunities afforded to me over the better part of four years. Due to other business interests, I have occupied my role in a part time capacity, and it was always envisioned I would step aside when the time was right. Now more than ever the Group needs a fulltime CFO and we are extremely pleased to have Dean Masefield taking over. I have immensely enjoyed my time to date with SigmaRoc, am extremely proud of everything we have achieved together and look forward to continuing the journey as a Non-Executive Director.


I am very pleased to report a strong year financially for the Group, during which we exceeded our ambitious financial targets, while continuing to expand our business. We completed four acquisitions during the year, with CCP in January, GDH in April, Stone in September and then CDH in October.


In our full 2019 financial year, the Group generated revenue of £70.4 million (2018: £41.2 million) and underlying EBITDA of £14.5 million (2018: £9.8 million). The underlying profit before taxation for the Group for the year ended 31 December 2019 was £8.4 million (2017: £5.5 million).


The loss for the Company for the year ended 31 December 2019 before taxation amounts to £4.7 million (2018: loss £0.9 million), which includes £3.6 million of non-underlying expenses.


The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the Board to assess performance over the period to 31 December 2020.





Cash and cash equivalents






Underlying EBITDA



Capital expenditure




Cash generated from operations was £2.1 million (2018: £5.5 million) with a net increase in cash of £6.1 million (2018: net decrease of £3.2 million). In October 2019, the Group raised in aggregate, £33 million in relation to the acquisition of CDH, which resulted in a net cash surplus of £5 million after paying cash consideration and associated transaction costs.


Revenue and underlying EBITDA is in line with expectations and management forecasts.


Capital expenditure relates to purchase of new plant and machinery and improvements to existing infrastructure across the Group.




BDO UK undertook the PPA exercise required under IFRS 3 to allocate a fair value to the acquired assets of CCP.


The PPA process resulted in a reduction of goodwill recorded on the Statement of Financial Position of the Group for CCP from £13.5 million to £7.9 million. The reduction was to transfer the value of goodwill to intangible assets for land and mineral reserves, trade name, workforce and customer relations.


Non-underlying items


The Company’s loss after taxation for 2019 amounts to £4.7 million, of which £3.6 million relates to non-underlying items, while the Group’s non-underlying items totaled £6.2 million for the year. These items relate to seven categories:


  1. £2.6 million in exclusivity, introducer, consulting, legal fees and other direct costs relating to prospective acquisitions. During the year the Group acquired four businesses, being CCP, GDH, Stone and CDH for a combined enterprise value of approximately £112 million and proforma EBITDA of approximately £17 million.


  1. £0.8 million legal and restructuring expenses relating to the rebranding and alignment of all subsidiaries across the Group.


  1. £1.2 million amortisation of acquired assets.


  1. £0.7 million in relation to the convertible loan note redemption premium and associated advisor fees.


  1. £0.5 million loss on discontinued operations at its Bury site.


  1. £0.2 million in share based payments relating to grants of options.


  1. £0.2 million in other exceptional costs which primarily relate to non-cash balance sheet adjustments.


Interest and tax


Net finance costs in the year totaled £2 million (2018: £1 million) and included £0.5 million redemption premium on the Group’s convertible loan notes plus associated interest, bank finance facilities, as well as interest on finance leases (including IFRS 16 adjustments) and hire purchase agreements.


A tax charge of £0.5 million (2018: £0.3 million) was recognised in the year, resulting in a tax charge on profitability generated from mineral extraction in the Channel Islands and profits generated through the Group’s UK and Belgium based operations.

Earnings per share


Basic EPS for the year was 0.92 pence (2018: 2.65 pence), adjusted for the non-underlying items mentioned above. Underlying basic EPS for the year totaled 4.20 pence (2018: 3.83 pence).


Statement of financial position


Net assets at 31 December 2019 were £102 million (2018: £54 million). Net assets are underpinned by mineral resources, land and buildings and plant and machinery assets of the Group.


Cash flow


Cash generated by operations was £2.1 million (2018: £5.5 million). The Group spent £35.9 million on acquisitions net of cash acquired and £3.4 million on capital projects. The Group raised £44 million net of fees through the issue of equity and drew down net borrowings of £1.2 million which included repayment of the £10 million convertible loan notes, £16.3 million drawdown from the Santander credit facility and £5.1 million of debt repayments in acquired subsidiaries. The net result was a cash inflow for the year of £6.1 million. Net debt at 31 December 2019 was £49.8 million (2018: £16.0 million), £32.0 million arising from the recent acquisition of CDH and is in the process of being refinanced.


Bank facilities


In 2017 the Group secured debt facilities with Santander consisting of a £2 million RCF, an £18 million term facility and a further “accordion” facility of £10 million. In December 2018 the Group received credit approval from Santander to increase the RCF to £4 million and the term facility to £30 million, bringing the total debt facilities available with Santander to £34 million (the ‘Existing Debt Facilities’).


The Group is currently in the final stages of agreeing a new club financing facility agreement with Santander and several Belgian banks for an RCF of £15 million, term facility of £45 million and an acquisition and Capex facility of £20 million (the ‘Club Refinance’). Successful negotiation of the Club Refinance, which is at an advanced stage, will result in total debt facilities being made available to the Group of £80 million, with a further £40 million accordion facility on materially the same terms as the Existing Debt Facilities. As a result of the Coronavirus pandemic, it has been mutually agreed to extend the existing Belgian debt facilities to 31 December 2020 and it is expected that the Club Refinance will be formalised on or before this date.


The Group’s Existing Debt Facilities have a maturity date of 29 August 2022 and are subject to a variable interest rate based on LIBOR plus a margin depending on EBITDA. As at 31 December 2019, total undrawn facilities available to the Group via the Existing Debt Facilities amounted to £7.7 million.


The Group’s Existing Debt Facilities are subject to covenants which are tested monthly and certified quarterly. These covenants are: Group interest cover ratio set at a minimum of 3.5 times EBITDA; a maximum adjusted leverage ratio, which is the ratio of total net debt, including further borrowings such as the convertible loan notes, to adjusted EBITDA, of 3.25x in 2019. At 31 December 2019, the Group comfortably complied with its bank facility covenants.




Subject to availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so. The focus of the Group at this stage of its development will be on delivering capital growth for shareholders. The Directors therefore do not recommend the payment of a dividend for the year (31 December 2018: nil).


Principal risks and uncertainties


The management of the business and the execution of the Group’s strategy are subject to a number of risks. The key business risks affecting the Group are set out below.


Risks are formally reviewed by the Board and appropriate processes are put in place to monitor and mitigate them. If more than one risk event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Group.


Operational risk


Since the period under review, the Coronavirus pandemic has become a significant emerging risk to the global economy. Due to inherent uncertainty, the Group cannot reasonably estimate the potential impact on the Group’s financial position, results of operations or cash flows in the future, however the Board continues to actively monitor the situation as more information about COVID-19 emerges and responds accordingly, taking into consideration the various contingency and mitigation plans it implemented from the early outset of the Coronavirus outbreak.


Reserve and resource estimates


The Group’s reporting of reserves and resources are estimates, and so there is potential uncertainty over the amount of such reserves and resources held at the year-end. These may require revision based on future actual production. In addition, there is risk of new leases (in particular Chouet phase 2 and the West extension at St John’s) not being approved and, as such, leading to revised valuation and future income streams for the operations at Ronez.


Dependence on key personnel


The Group is dependent upon its executive management team. Whilst it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions.


Uninsured risk


The Group may become subject to liability for hazards that cannot be insured against or third-party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond its control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupation and health hazards and weather conditions or other acts of God.


Funding risk


The only sources of funding currently available to the Group are through the issue of additional equity capital in the Company or through debt financing. The Company’s ability to raise further funds will depend on the success of the Group’s activities and its investment strategy. The Group may not be successful in procuring funds on terms that are attractive and, if such funding is unavailable, the Group may be required to reduce the scope of its investment activities.


Financial risks


The Group’s operations expose it to a variety of financial risks that can include market risk (including foreign currency, price and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance costs. The Group does not use derivative financial instruments to manage interest rate costs and, as such, no hedge accounting is applied.


Details of the Group’s financial risk management policies are set out in Note 3 to the Financial Statements.


Principal activity


The principal activity of the Company is to make investments and/or acquire businesses and assets in the construction materials sector. The principal activity of the Group is the production of high quality aggregates and supply of value-added construction materials.


Board composition and head office


The Board comprises three Executive Directors and three Non-Executive Directors. The Corporate Head Office of the Company is located in London, UK.


Directors & Directors’ interests


The Directors who served during the year ended 31 December 2019 are shown below and had, at that time, the following beneficial interests in the shares of the Company:



31 December 2019

31 December 2018


Ordinary Shares


Ordinary Shares


Max Vermorken





David Barrett