9 June 2020
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
(‘SigmaRoc’, the ‘Company’ or the ‘Group’)
Group returns to normal operating activity levels from May
SigmaRoc plc, a heavy construction materials Group active in the UK, Channel Islands and the Benelux, is pleased to update the market on its resilient trading performance across the first five months of 2020.
For the five-month period ended 31 May 2020, the Group reported unaudited revenues of £42m. This represents 84% of revenues recorded for the same period in 2019 on a like-for-like basis adjusting for subsequent acquisitions (‘pro-forma’). Comparing pro-forma monthly performance to the prior year, Group revenues tracked at 60% in April and recovered to 98% in May. As a result, each platform within the Group, and the Group itself, has been EBITDA positive for each month of this year-to-date.
SigmaRoc has rigorously implemented government recommended health and social distancing protocols across all its operating regions. As such, the Group is pleased it could continue to operate at the majority of its operations and continue to serve customers, pay suppliers and thereby support its local communities in difficult times.
Across the months of April and May, restrictions in the Channel Islands were lifted allowing the Ronez operations to resume more normal trading, albeit against a backdrop of somewhat reduced activity in road contracting in Guernsey and certain major projects in Jersey.
In the UK, the Group’s PPG and South Wales platforms scaled up towards full production at the end of April and into May as RMI and housing demand recovered. The supply of large-scale precast concrete products for infrastructure projects helped the PPG platform deliver good results. South Wales relied more heavily on the reopening of local road and civil engineering schemes, which gradually happened across May.
Operations in Belgium remained active throughout April, albeit at a lower activity level. Production activity returned to full capacity in May as order books recovered to standard run rates. By the end of May, shipments of dimension stone materials had returned to pre-COVID-19 levels. Aggregate supplies resumed with the reopening of our partner’s operations in May.
As a result of the solid trading performance and effective cash management strategies implemented, SigmaRoc’s cash position increased from £11m to £13.5m during the two months to 31 May 2020, while its long-term debt position remained largely unchanged. SigmaRoc’s adjusted leverage ratio, which was approximately 2 times underlying EBITDA on 31 March 2020, is expected to remain at similar levels when covenant tests are calculated on 30 June 2020. SigmaRoc retains the ability to draw further bank funding within its existing facilities but does not presently foresee the need to do so.
Summary and outlook
The Group has delivered excellent results in the face of uncertainty, rapidly changing conditions and challenging working environments, thereby further demonstrating the resilience of its business model.
Providing accurate guidance for the remainder of the year would, however, be premature. Too many uncertainties remain in terms of future demand for construction materials in our key markets, as well as the state of the wider economy. However, the resilience of the business through April, together with the recovery in activity levels during May, gives the Board confidence that SigmaRoc will be able to manage effectively through the crisis and maintain progress in its growth strategy.
David Barrett, Chairman of SigmaRoc, commented:
“I am very pleased to be reporting relatively strong results in a time of great uncertainty. The whole economy has felt the heavy impact the COVID-19 crisis has brought with it and so have we. However, our business model and management team have allowed us to respond quickly and effectively. I believe this further demonstrates the strength of our strategy and its implementation.”
Max Vermorken, CEO of SigmaRoc, commented:
“Firstly, I would like to thank all of the Group’s team members, who have shown exemplary drive and determination in the face of uncertainty and difficulty. Secondly, I would like to express my gratitude to our customers and suppliers who continued to support their local economies while keeping their staff safe. Lastly, I am proud of the flexibility of the SigmaRoc group in the face of fast changing conditions. Being a decentralised, local and entrepreneurial group allows us to be quick in our response in each area of our business.”
Information on the Company is available on the Company’s website, www.sigmaroc.com.
For further information, please contact:
|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|
|Liberum Capital (Co-Broker)
Neil Patel / Jamie Richards / Jonathan Wilkes-Green / William Hall
|Tel: +44 (0) 203 100 2000
|Peel Hunt (Co-Broker)
Mike Bell/Ed Allsop
|Tel: +44 (0) 20 7418 8900|
|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.