SigmaRoc (AIM:SRC) PLC, the pan-European construction materials group, reported strong trading heading towards the end of the year and said it is managing the effects of the UK’s HGV, energy and supply chain problems.
Revenues were GBP73m in the three months to 30 September 2021 with sustained demand across the range of its markets, it said in a trading update.
The AIM-listed company said precast products in the UK and aggregates, concrete and dimension stone in the Benelux, in particular, were doing well.
In Jersey, planning permission has been granted to allow a large extension to the Ronez quarry while margins were improving in South Wales.
SigmaRoc (AIM:SRC) is growing through a ‘buy and build’ strategy and the integration of its largest acquisition to date, Nordkalk for GBP470mln, was going well with the business trading as expected through the period.
Rises in energy costs and haulage and transport issues in the UK are under constant review, it added, with a series of measures taken to mitigate the effects.
These include fixing prices of fuel and gas costs, optimising production, price rises where necessary and building up its own fleet of drivers and HGV vehicles.
“Supply chain and inflationary pressures are being managed effectively, with the benefit of the group’s diversified platform model enabling local market-specific plans to be implemented,” the statement added.
“The outlook for the group for the remainder of the year remains positive, with the sustained demand seen across our businesses expected to continue into the fourth quarter.”
Max Vermorken, chief executive, said: “The third quarter has delivered solid results, building on our momentum from the first half of the year.
“We have delivered a transformational acquisition with Nordkalk and this is already beginning to deliver significant earnings growth and cash generation.
“The group is well-positioned to continue its strong performance and to develop future opportunities.
Broker Liberum added that at a meeting with the company yesterday, the key takeaway was Nordkalk is passing on energy costs and Greenbloc SigmaRoc’s unique cement-free, ultra-low carbon building block, is being taken up faster than expected.
“We continue to see over 20% upside to our unchanged (multiple based) target price of 125p”, the broker said.
