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Sigmaroc swings to yearly profit
Buy-and-build construction materials group SigmaRoc delivered a solid set of results for its first year of trading profit as it successfully executed upon its strategy of extracting incremental value from acquisitions.
Underlying sales at the AIM-listed outfit printed at £27.1m over the twelve months to 31 December, with pre-tax profits hitting £2.6m, compared to a loss of £2.4m for 2016.
Earnings per share swung to a 2p profit from the 1.4p loss posted a year earlier and EBITDA swung 329% to sit £5.5m into the green.
The firm exceeded several of its targeted improvements while establishing a platform for growth that led to a 37% uplift in EBITDA from its Channel Islands cluster.
Sigmaroc made an opening move in the UK during the second half of 2017 with its acquisition of Allen Concrete in October 2017 and Poundfield Products in December 2017, presenting further opportunities for the group.
Cash balances soared 3,400% to £7m.
"I am pleased to report a strong year in 2017 where we were able to exceed our expectations and build a solid platform from which to continue to deliver on our growth strategy," executive chairman David Barrett said.
Max Vermorken, Sigmaroc's chief executive, added, "Our strategy is performing well, having completed the first four months of 2018 with Group sales on target. The upward revaluation of our Channel Islands fixed assets, together with the freehold land in our UK precast cluster, shows the strong asset backing underpinning our business. This provides a strong platform from which to grow and we look forward to further development in 2018."
"In our view, SigmaRoc remains one of the few acquirers of scale in Europe. The potential to purchase assets at 7-9x EBITDA and extract c20% in synergies should result in compelling returns to investors," analysts at Berenberg said following the results.
Berenberg stuck by its 'buy' recommendation and 105p target price for the shares.
"With the shares trading at a 40% EV/EBITDA discount to the sector, we think they represent good value, and we expect strong performance as this relatively new company develops a track record of delivering on its plans."
As of 1100 BST, Sigmaroc shares had gained 3.36% to 39.59p.