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

 16 May 2019

 

SigmaRoc plc

(‘SigmaRoc’ or the ‘Company’)

 

Audited full year results for year ended 31 December 2018

 

SigmaRoc plc, the AIM listed buy-and-build construction materials group, is pleased to announce its audited results for the year ended 31 December 2018.

 

Financial highlights1

31 December 2018

31 December 2017

Change

Underlying revenue

£41.2m

£27.2m

+52.0%

Underlying EBITDA

£9.8m

£5.5m

+78.5%

Underlying profit before tax

£5.5m

£2.6m

+113.8%

Underlying EPS

3.83p

2.02p

+89.6%

Net debt

£16.0m

£11.8m

+35.6%

 

1 Underlying results are stated before acquisition related expenses, certain finance costs, share option expense and warranty & indemnity insurance

 

Operational highlights:

 

  • More than doubled underlying profit before tax and close to doubled underlying EPS while reducing gearing and making substantial investments back into the business;
  • SigmaPPG platform created combining precast products offering and establishing basis for further growth in 2019;
  • 30% year-on-year operational EBITDA improvements versus previous 12 months at newly acquired businesses Allen and Poundfield Products under SigmaPPG ownership;
  • Acquisition of high PSV quarry in South Wales, with 120% resource increase post acquisition, to start third platform
  • Continued execution of strategy with two substantial transactions completed post year-end and acquisition pipeline under continued active development; and
  • Two major acquisitions, post period, which increases the estimated reserves and resources of the Group to approximately 100mt, 26 operational sites and 12 quarries across three platforms.

 

 

David Barrett, Executive Chairman, commented:

 

“I am pleased to report another strong year in 2018 where we were able to exceed our expectations and build a solid business from which to continue to deliver on our growth strategy.”

 

“We successfully integrated the two UK specialist concrete businesses acquired late in 2017 and formed the SigmaPPG platform, expanding this further in January 2019 with the acquisition of CCP Building Products Limited. While doing this we were also able to achieve a 78.5% uplift in EBITDA compared to the prior year and continued to develop our acquisition pipeline.”

 

“I am extremely proud of our progress and development and look forward to another successful year in 2019.”

 

 

Max Vermorken, CEO, commented:

 

“On a 52% uplift in revenue, we delivered a c.90% uplift in underlying EPS, while our leverage ratio decreased. I think these are excellent numbers and testimony to the determination of our Group.”

 

“Financial performance is, however, not everything. We materially improved our safety culture across all new businesses. We ensured our colleagues are engaged and motivated to deliver further improvements. As a result, we were able to deliver three important acquisitions in 2018 and early 2019 without losing focus on the underlying business.”

 

END


The full text of the statement is set out below, together with detailed financial results.
 
SigmaRoc will host a meeting for invited analysts at 9.00am today. Conference call dial-in details are available from the Company upon request to join the analyst meeting. A recording will also be available on request from the Company.

 

---------------------------------------------------------------------------------------------------------------------------

 

For further information, please contact:

 

SigmaRoc plc

Max Vermoken

 

Tel: +44 (0) 207 002 1080

Strand Hanson (Nominated and Financial adviser)

James Spinney / James Dance / Jack Botros

 

Tel: +44 (0) 207 409 3494

Liberum Capital (Joint Broker)

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

Tel: +44 (0) 203 100 2000

 

Berenberg (Joint Broker)

Ben Wright / Mark Whitmore

 

Tel: +44 (0) 203 207 7800

Investor Relations

Ben Feder

Tel: +44 (0) 207 002 1080

 

 

 

 

CHAIRMAN’S STATEMENT

 

Introduction

Please allow me to start with a summary of what SigmaRoc plc (the ‘Company’) and its subsidiary undertakings (which together comprise the ‘Group’ or ‘SigmaRoc’) does. SigmaRoc invests, in strong local businesses and in strong managers. SigmaRoc improves - starting immediately after acquisition - the financial, operational and safety performance of its companies. Finally, SigmaRoc integrates its acquisitions into platforms of compatible businesses without stifling itself or its acquisitions with heavy handed intervention from the top. Our performance to date is demonstrating that this model works. Our managers and staff are focussed, our safety records are excellent and our financial performance is again very solid.

 

This opening paragraph may sound a little triumphant. In a much more challenging market environment, with a Company management team not much larger than it was when we were only a cash shell, we have again delivered strong results on all fronts. It makes me proud to serve as the Chairman of a business with such capabilities, particularly the resilience and drive to continue to generate value for shareholders. I am equally proud that our shareholder base has recognised the potential in the business and has helped us through continued support and engagement.

 

There are three areas I would like to focus this year’s statement on in order to give you more insight into what challenges we have addressed and what achievements we’ve made to deliver these strong results. These areas are, firstly, the financial performance of the Group, secondly, our focus on making our business safe, and lastly, our continued investment into the business including its expansion through further acquisitions.

 

Financial performance

In many ways 2018 was a more challenging year than the year before. The winter was much longer and much harsher than expected, impacting the performance of our UK footprint. Coupled with the fact we were at the starting phase of our restructuring efforts of the newly acquired businesses Allen (Concrete) Limited (‘Allen’) and Poundfield Products Limited (‘Poundfield’) (together ‘SigmaPPG’), made our first quarter more than a little challenging. Our Channel Islands platform continued to perform in line with expectations helping us to achieve good numbers for the first half of the year.

 

The second half was characterised by continued efforts in terms of integration of the new businesses and management of the existing ones. Our Channel Islands platform continued to deliver as expected and in line with the phasing of the demand in the Islands. While volumes in Jersey remained strong and Guernsey’s volumes improved versus the previous year, they remained somewhat below previous trends and historical highs. On the mainland, Allen and Poundfield recovered from slow starts and began to contribute fully to the EBITDA of the Group leading to strong numbers for the Group as a whole.

 

While hard at work on the operational front we also strengthened our capital position. With the assistance of key shareholders, in January 2019 we were able to redeem the £10m convertible loan notes improving our cost of capital going forward. Santander UK plc (‘Santander’) was extremely helpful and provided us with an extended credit facility, increased from £20m to £34m on similar terms to the existing facility. The Group’s overall net debt position, of £16.0m, remained in line with our self-imposed targets. Strong cash generation kept net debt levels at 1.63 times underlying EBITDA.

 

Safety

I would also like to highlight the solid health and safety performance achieved throughout 2018. Ronez reached a landmark 1,000 cumulative days without incident in February 2019, a fantastic achievement. With the addition of two new businesses and over 70 new colleagues we faced a significant challenge in integrating a very different safety culture into our overall business. The safety culture at owner operated businesses is often inferior to what industry majors have put in place over many years. However, we were able to improve that safety culture in a short space of time with full buy-in from our new colleagues.

 

As a result of our efforts we have dramatically improved the safety culture at both Allen and Poundfield. Reporting of safety incidents has significantly increased while overall incidents have decreased. We are very much encouraged by the focus of the workforce and management across the Group, who have resolutely focused on, and implemented, Group safety initiatives. This remains a priority at every level of the Group as we continue to target zero-harm through ongoing safety improvements.

 

As the Group is growing, we have put additional focus on the areas of safety and compliance, with a dedicated person now in charge of ensuring that the highest safety and compliance standards are observed in a uniform way across the Group. Safety is and will always remain the responsibility of the line managers. However, as we continue to acquire businesses with varying health and safety records, it is paramount we bring all businesses up to a high level of safety culture whilst also providing the processes that help to embed the necessary culture that comes with it.

 

Investing for the future

Much of our outlook for the next 12 months is in fact driven by the investment and improvement work done this past year. We have spent both a lot of time and money to significantly improve the setup of the companies we acquired. At Poundfield we launched an extensive overhaul programme to improve the safety and operational performance of the business. This involved the acquisition of further land to allow for the business to grow. We also made great efforts in segregating traffic, separating production, stocking and loading, as well as the optimisation of the whole production process. This project is still ongoing and the results to date are promising in terms of what can be achieved going forward.

 

At Ronez, we have also continued our programme to make the business safer and better equipped to service customers to the highest standard. A programme of gradual replacement of plant and machinery is underway and already showing results in efficiency gains. A key investment this year was the new Readymix Concrete plant on Jersey and an overhaul of the fleet of delivery trucks. The new plant was designed specifically for the needs of the Island and was officially opened on 13 February 2019. Its reliability and performance have been exceptional in the first months of operations and customer feedback has been equally positive.

 

We also significantly expanded our footprint in the UK with the acquisition of a high polished stone value (‘PSV’) quarry in South Wales and progressed due diligence on two additional transactions that culminated in the acquisition of CCP Building Products Limited (‘CCP’) in January 2019 and a 40% interest in GDH (Holdings) Limited (‘GDH’) in April 2019. CCP significantly expands our precast and prestressed concrete platform in the UK and GDH will be the cornerstone of our new construction materials platform in South Wales. The addition of CCP and GDH post year-end supports future expansion and further opportunities for the Group.

 

Conclusion

The Board therefore believes that the outlook for the Group is very good. The markets in the Channel Islands are performing as expected, with a slight dip in Jersey being offset by a corresponding increase in Guernsey, after a number of subdued years, volumes were up in 2018. The trend remains below some of its historically stronger years and we see potential for continued recovery over time. The shipping division launched in 2017 remains a strong performer and continues to contribute strategically and to the overall performance of the Channel Island platform.

 

In mainland UK, work to integrate the precast platform has been successful, following a similar path to the Channel Islands business in H1 2017. In this, strengthening of operational and commercial efforts, where our Group’s expertise can bring benefits, was key, with our industry leading health and safety standards being a priority.

 

Looking further ahead it is evident that the value we create for shareholders lies in the identification, acquisition and integration of businesses into platforms which run at a high operational standard. The resources and management capacity required to pursue this process and deliver acquisitive growth is in place within the Group and we are pleased with the progress made towards delivering on our acquisition pipeline this year. The number of opportunities both in the UK and in selected European countries is encouraging and we remain disciplined in our selection and appraisal of target companies in line with our strategy.

 

We have every expectation of making further progress this year.

 

David Barrett

Executive Chairman

15 May 2019 

 

 

CEO’S STATEMENT

 

At the tail end of 2016 we launched SigmaRoc plc as a buy-and-build construction materials company, to drive shareholder value by creating platforms of connected and compatible quality businesses focused on their local and regional markets. Our 2018 results show we are delivering on our strategy having met our targets and I see plenty of opportunity ahead to build SigmaRoc into a significant operator in the construction materials sector. The review of 2018 below provides some colour to the achievements in our second full year and to what may lie ahead.

 

Review of business

In October 2017 the Group acquired Topcrete Limited (‘Topcrete’) which via its wholly owned subsidiary Allen provides specialist wetcast concrete products in London and the Midlands. Then in December 2017 the Group acquired Poundfield which provides specialised patented concrete products and systems within the United Kingdom primarily for complex infrastructure projects and retaining wall systems.

 

With the acquisition of these two businesses, SigmaRoc established its SigmaPPG platform and took a strong position in the UK market for precast and prestressed products, targeting the industrial and agricultural sectors, as well as housing and specialist infrastructure projects. Both companies are asset backed with significant land holdings and intellectual property in the form of patents and trademarks, making these businesses an ideal fit within the SigmaRoc business model.

 

A key driver for the acquisition of any business by SigmaRoc is our ability to improve the business’ performance in a relatively short period of time, without, however, destroying the main fabric of that business through asset stripping and redundancy driven cost cutting. The graphic below gives a relatively good perspective of our impact on those businesses we purchase. It shows a like-for-like comparison of the 12 months prior to our ownership versus the first 12 months of our ownership for the Channel Islands Platform and the Precast Platform.

 

During 2018 the Group also laid foundations for a new platform in the UK, acquiring the high PSV Foelfach Stone quarry in South Wales. Sources of high PSV aggregates are scarce in the UK and are of key importance for road surfacing because of the skid resistance qualities. In January 2019, we were pleased to announce a 120% increase in the Foelfach Stone quarry resource and the appointment of David McClelland to the Group’s executive team as Managing Director for the new UK platform.

 

Trading summary

Last year started slowly in the UK with the harsh winter causing some disruption to demand and our ability to produce and deliver effectively. The slow start to the year was rectified, with Poundfield having a particularly strong finish to the year. Activity in the Channel Islands was generally consistent with our expectations, although a slight downturn in Jersey was offset by an increase in volumes in Guernsey. Delays to some projects in Jersey affected concrete and aggregate volumes, although this was partially offset by a strong road contracting performance. In Guernsey the opposite was true, with projects coming online earlier than expected resulting in improved volumes for aggregates and concrete.

 

Overall, the Ronez platform performed well, delivering £27 million in revenue, representing an increase of 4% compared to 2017. The SigmaPPG platform achieved £14 million in revenue, being an increase of 8% relative to the prior year.

 

Group underlying EBITDA performance was strong, delivering £9.8 million, an increase of 78.5% from 2017.  We generated a full year underlying net profit after tax of £5.2 million equating to an earnings per share of 3.83p. Total capital expenditure (‘Capex’) was £6.7 million, however this includes £3.5 million investment in land and minerals and £1.2 million for the new ready-mix plant in Jersey, leaving a balance of £2 million which is consistent with the prior year despite addition of two new operating entities.

 

Safety & compliance

Our industry keeps appearing in the news with disappointing stories of injured colleagues. At SigmaRoc, however, we have doubled our efforts to improve our safety systems across the Group. This is crucial as we are acquiring companies with often very different approaches to safety. Some are relatively up to standard, others not at all. We are encouraged, however, by the progress made since we took over the respective businesses. Employee engagement has been a significant contributing factor, with safety representation now on site, employees engaged in training programs, including LOTTO through to NEBOSH Diploma’s. Safety is now openly and actively spoken about.

 

Across the Group we have recorded an increase in safety conversations and incident recording, pointing clearly to the increased focus on safety and the adoption of a much improved safety culture. While this increase in reporting could or perhaps should have increased the number of incidents recorded versus the prior year, we in fact recorded a year-on-year drop in incidents of 15% across all businesses. This is significant as it points to the improved safety culture being adopted across the Group. Even at Ronez, a business managed by a major with excellent health & safety standards, we managed to reduce Total Harm Incidents by 36% year on year. At SigmaPPG the net reduction was 10%, however, starting from a position where the safety culture lagged well behind our Group standards.

 

The results above have been achieved through tangible efforts by managers and supervisors on the ground. Personal Protective Equipment (‘PPE’) standards have been increased across the Group. Segregation of foot traffic and vehicle traffic has now been enforced across the Group. We now also have a dedicated person in charge of auditing all safety best practices, ensuring these are followed and implemented. Safety therefore remains the responsibility of managers and supervisors, but there is a clear uniform set of best practices and a central person to ensure they are followed. We are therefore encouraged the right focus on safety and compliance is present in the business, yet much work remains on the road to zero harm.

 

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, and have a strong local market presence and hard asset backing, resulting in improved margins. The income stream is diversified and supported by quality assets that produce aggregates, concrete, precast and prestressed concrete and related products and services.

 

As a result of this strategy we have been able to show a significant increase in EPS since we launched SigmaRoc in 2016. The graphic below tracks the sales, EBITDA and earnings improvements across the relevant period and clearly shows the success of our strategy. With sales in line with expectations for the first quarter of 2019 we look forward to further expansion across the year.

 

Looking further ahead we were pleased to announce that we successfully completed the acquisition of CCP in January 2019 to expand the footprint of our SigmaPPG platform. Then, in April 2019 we completed an initial 40% acquisition of GDH with an 18 month exclusive option to acquire the remaining 60% on or before 31 August 2020, which we plan to do through a combination of our own cash and Santander debt.

 

Our focus for the next 12 months is on driving financial performance across the enlarged Group and completing the full acquisition of GDH, however we will continue to assess further opportunities to expand through the acquisition of high quality local businesses. We maintain our philosophy that local businesses in our sector are fundamentally better if they retain their strong local branding but are complemented by being part of a group with management, sales, operational and commercial expertise.

 

Overall, we remain optimistic about the future and of achieving further progress in 2019.

 

This report was approved by the Board on 15 May 2019.

 

Max Vermorken

CEO

 

 

DIRECTOR’S REPORT

 

I am pleased to report a strong year financially for the Group during which we achieved our ambitious financial targets, which assisted us in taking several key steps in expanding our business. This is the first year in which Ronez, Topcrete and Poundfield are consolidated into our results for the full year.


Accordingly, our full year for 2018 generated revenue of £41.2 million (2017: £27.1 million) of which £27 million was generated from our Channel Islands operations. The underlying earnings before our share of associated undertakings, depreciation, amortisation and tax (‘EBITDA’) was £9.8 million (2017: £5.5 million). The profit before taxation for the Group for the year ended 31 December 2018 was £3.8 million (2017: £0.8 million).

The loss for the Company for the year ended 31 December 2018 before taxation amounts to £0.9 million (2017: loss £3.3 million).

 

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 2019.

 

 

2018

2017

Cash and cash equivalents

£3,771,735

£7,001,058

Revenue

£41,241,673

£27,073,686

Underlying EBITDA

£9,823,080

£5,504,375

Capital expenditure

£6,670,447

£1,793,164

 

Cash in 2017 was inflated due to the timing of the fundraise for Poundfield which included provision for the £3.5 million deferred cash consideration for Topcrete and £1.5 million for the purchase of Poundfield land & buildings. Cash generated from operations was £5.5 million with £2 million spent to acquire land & minerals and £2.2 million invested back into the Group’s businesses.

 

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

 

Capital expenditure includes £3.5 million for the acquisition of land & minerals, £1.2 million for the new Jersey ready-mix plant and the balance consisting of new plant & machinery and improvements to existing infrastructure across the Group.

 

PPA

BDO UK undertook the Purchase Price Allocation (‘PPA’) exercise required under IFRS 3 to allocate a fair value to the acquired assets of Topcrete and Poundfield.

 

The PPA process resulted in a reduction of goodwill recorded on the Statement of Financial Position of the Group for Topcrete from £7 million to £6.1 million and for Poundfield from £6.9 million to £6.5 million. The reduction was to shift the value of goodwill to intangible assets for trade name, patented processes, order backlog, workforce and customer relations.

 

Non-underlying items

The Company’s loss after taxation for 2018 amounts to £0.9 million, of which £0.06 million relates to non-underlying items, while the Group’s non-underlying items totaled £1.6 million for the year. These items relate to four categories.

 

First, the Group incurred £0.6 million in consulting and legal fees relating to prospective acquisitions.

 

Second, the Group incurred £0.4 million in legal and restructuring expenses relating to the rebranding and alignment of all subsidiaries across the Group.

 

Thirdly, the Group incurred £0.3 million in amortisation of acquired intangible assets.

 

Finally, the Group incurred £0.3 million in exceptional costs which relate to shareholder and investor matters and other start up business costs in Foelfach Stone Limited.

 

Interest and tax

Net finance costs in the year totaled £1 million (2017: £0.7 million) and included interest on the Group’s convertible loan notes, bank finance facilities, as well as interest on finance leases and hire purchase agreements.

 

A tax charge of £0.3 million (2017: £0.5 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 based operations.


Earnings per share

Basic earnings per share (‘EPS’) for the year was 2.65 pence (2017: 0.34 pence), adjusted for the non-underlying items mentioned above. Underlying basic EPS for the year totaled 3.83 pence (2017: 2.02 pence).

 

Statement of financial position

Net assets at 31 December 2018 were £54 million (2017: £50.5 million). Net assets are underpinned by mineral resources, land & buildings and plant & machinery assets of the Group.

 

Cash flow

Cash generated by operations was £5.5 million (2017: consumed £0.4 million). The Group spent £3.0 million on deferred cash consideration for acquisitions made in 2017 and £6.7 million on capital projects including £3.5 million for the purchase of land & minerals. The Group drew down £1 million from its revolving credit facility with Santander plc (‘Santander’). The net result was a cash outflow for the year of £3.2 million. Net debt at 31 December 2018 was £16.0 million (2017: £11.8 million).

 

Bank facilities

In 2017 the Group secured debt facilities with Santander consisting of a £2 million revolving credit facility (the ‘Santander RCF’), an £18 million term facility (the ‘Santander Term Facility’) and a further “accordion” facility of £10 million. In December 2018 the Group received credit approval from Santander to increase the Santander RCF to £4 million and the Santander Term Facility to £30 million, bringing the total debt facilities available with Santander to £34 million. The Group’s bank loans 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 2018, total undrawn facilities available to the Group amounted to £10 million based on the original facilities, with this increasing to £11.7 million in January 2019 following acquisition of CCP and redemption of the CLN’s.

 

The Group’s bank 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 3.25 in 2018. At 31 December 2018 the Group comfortably complied with its bank facility covenants.

 

Dividends

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 2017: 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 event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Group.

 

Reserve and resource estimates

The Group’s reporting reserves and resources are estimates, and so there is potential uncertainty over the amount of reserves 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 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 which 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 2018 are shown below and had, at that time, the following beneficial interests in the shares of the Company:

 

 

 

31 December 2018

31 December 2017

 

Ordinary Shares

Options

Ordinary Shares

Options

Max Vermorken

210,032

4,368,188

183,032

4,368,188

David Barrett

760,032

1,879,513

760,032

1,879,513

Dominic Traynor

-

26,014

-

26,014

Garth Palmer

114,594

26,014

10,000

26,014

Patrick Dolberg

75,000

304,580

75,000

304,580

Gary Drinkwater1

-

-

-

-

 

(1) Resigned on 7 November 2018

 

Further details on options can be found in Note 26 to the Financial Statements.

 

Corporate responsibility

 

Environmental

SigmaRoc undertakes its activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature.

 

Health and safety

SigmaRoc operates a comprehensive health and safety programme to ensure the wellness and security of its employees. The control and eventual elimination of all work related hazards requires a dedicated team effort involving the active participation of all employees. A comprehensive health and safety programme is the primary means for delivering best practices in health and safety management. This programme is regularly updated to incorporate employee suggestions, lessons learned from past incidents and new guidelines related to new projects with the aim of identifying areas for further improvement of health and safety management. This results in continuous improvement of the health and safety programme. Employee involvement is regarded as fundamental in recognising and reporting unsafe conditions and avoiding events that may result in injuries and accidents.

 

Internal controls

The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control environment and any related shortfalls during the year. Since the Group was established, the Directors are satisfied that, given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.

 

Further details of corporate governance can be found in the Corporate Governance Report on page 20.

 

Going concern

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the Annual Report and Financial Statements. Further details on their assumptions and their conclusion thereon are included in the statement on going concern included in Note 2.3 to the Financial Statements.

 

Directors’ and Officers’ indemnity insurance

The Company has made qualifying third-party indemnity provisions for the benefit of its Directors and Officers. These were made during the year and remain in force at the date of this report.

 

Events after the reporting period

Events after the reporting period are set out in Note 35 to the Financial Statements.

 

Policy and practice on payment of creditors

The Group agrees terms and conditions for its business transactions with suppliers. Payment is then made in accordance with these terms, subject to the terms and conditions being met by the supplier. As at 31 December 2018, the Company had an average of 26 days (2017: 31 days) purchases outstanding in trade payables and the Group had an average of 43 days (2017: 39 days).

 

Future developments

Details of future developments for the Group are disclosed in the Chairman’s Statement on page 5 and the CEO’s Strategic Report on page 9.

 

Provision of information to Auditor

So far as each of the Directors is aware at the time this report is approved:

 

  • there is no relevant audit information of which the Group's auditor is unaware; and
  • the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

 

Auditor

PKF Littlejohn LLP has signified its willingness to continue in office as auditor.

 

This report was approved by the Board on 15 May 2019 and signed on its behalf

Garth Palmer

CFO

 

 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

 

Year ended 31 December 2018

Year ended 31 December 2017

 

 

Underlying

Non-underlying* (Note 11)

Total

Underlying

Non-underlying* (Note 11)

Total

Continued operations

Note

£

£

£

£

£

£

 

 

 

 

 

 

 

 

Revenue

7

41,241,673

-

41,241,673

27,073,686

-

27,073,686

 

 

 

 

 

 

 

 

Cost of sales

8

(29,805,080)

-

(29,805,080)

(21,120,246)

-

(21,120,246)

 

 

 

 

 

 

 

 

Profit from operations

 

11,436,593

-

11,436,593

5,953,440

-

5,953,440

 

 

 

 

 

 

 

 

Administrative expenses

8

(4,899,620)

(1,622,778)

(6,522,398)

(2,593,628)

(1,676,126)

(4,269,754)

Net finance (expense)/income

12

(1,047,670)

-

(1,047,670)

(704,816)

(56,564)

(761,380)

Other net (losses)/gains

13

48,308

-

48,308

(70,088)

-

(70,088)

Foreign Exchange

 

(16,934)

-

(16,934)

(2,724)

-

(2,724)

 

 

 

 

 

 

 

 

Profit before tax

 

5,520,677

(1,622,778)

3,897,899

2,582,184

(1,732,690)

849,494

 

 

 

 

 

 

 

 

Tax expense

14

(278,755)

-

(278,755)

(494,036)

-

(494,036)

 

 

 

 

 

 

 

 

Profit/(loss)

 

5,241,922

(1,622,778)

3,619,144

2,088,148

(1,732,690)

355,458

 

 

 

 

 

 

 

 

Profit/(loss) attributable to:

 

 

 

 

 

 

 

Owners of the parent

 

5,241,922

(1,622,778)

3,619,144

2,088,148

(1,732,690)

355,458

 

 

5,241,922

(1,622,778)

3,619,144

2,088,148

(1,732,690)

355,458