Sigmaroc Share Discussion Threads

[dros1] 08/9/2020 12:33

Simon Thompson
SigmaRoc (SRC:51p), a company pursuing a buy-and-build strategy in the heavy building materials sector, is navigating the Covid-19 crisis far better than analysts had predicted, prompting a round of earnings upgrades following a robust set of interim results. I flagged up the potential for upgrades when I last suggested buying the shares, at 41p (‘Targeting value plays’, 3 August 2020).

Acquisitions helped boost first-half revenue by 83 per cent to £54.5m, but the key for me was that like-for-like revenue matched the prior year and on higher profit margins, too, despite Covid-19 disruption. Importantly, the recovery is gathering pace in some areas. For instance, Poundfield, a maker of pre-cast concrete products, reported record revenue in both May and June, and CCP Building Products, a supplier of concrete blocks and aggregates, has seen demand return to normal levels. Analysts at brokerage Peel Hunt have taken note, upgrading their full-year pre-tax profit and EPS estimates by 42 per cent to £10m and 3.3p, respectively.

The acquisition of the outstanding 60 per cent interest in South Wales quarrying group G.D. Harries (GDH) is a smart move. SigmaRoc can implement operational improvements by using its quarry management and concrete expertise, source lower cost materials (especially cement), and expand the customer base eastwards towards Cardiff. Consolidation in local asphalt production looks set to continue into aggregates, thus offering scope for improved profitability within the industry. GD Harries controls around 14 per cent of asphalt production in South Wales.

SigmaRoc has bought out GDH for an enterprise valuation of £26.5m, equating to a reasonable 7.6 times annual cash profit. Factoring in GDH’s contribution, and the stronger recovery, Peel Hunt upgraded its 2021 pre-tax profit and EPS estimates by 7 per cent to £15.5m and 5p, respectively. On this basis, the shares are priced on an undemanding forward PE ratio of 10, prompting me to tweak my target from 60p to 65p, having first suggested buying, at 46p (Alpha Report: ‘A General Election winner’, 12 December 2019). Buy.

[pastybap] 08/9/2020 12:21

Yep Simon Thompson in IC again.

[tomg23] 08/9/2020 12:12

Has this just been tipped somewhere? Rush of small buys from 12

[18bt] 08/9/2020 08:41

To register for the presentation on Thursday

[haywards26] 07/9/2020 23:20

Absolutely Arregius, this is going to £1 within 12-24 months!!

[arregius] 07/9/2020 20:45

This a very high q company and management is also very good. Sit longterm here

[energeticbacker] 07/9/2020 16:32

It was interesting to see a specific ESG statement in the interim results, which is unusual for a small business like this, and to be commended. No doubt we will be seeing similar statements from other AIM companies.

More on the Investor's Champion website.

[tole] 07/9/2020 09:21

STRONG FIRST-HALF FOR BUY-AND-BUILD CONSTRUCTION MATERIALS FIRM 7 Sep 2020 Wales Business Laurence Kilgannon Strong first-half for buy-and-build construction materials firmAn AIM listed buy-and-build construction materials group with operations in South Wales has reported a strong first half despite difficulties arising from the Covid-19 pandemic.SigmaRoc, which last week announced it had exercised an option to acquire the remaining 60 per cent of Welsh quarrying business GD Harries, upped revenue for the six months to 30 June 2020 by 83 per cent to £54.5m.Underlying EBITDA climbed by 91 per cent to £10.9m, while underlying profit before tax rose from £3.5m to £5.3m.SigmaRoc said GD Harries had demonstrated its resilience and strong economic viability in difficult circumstances.Executive chairman David Barrett said: "It gives me great pleasure to be reporting these results for the group in a year of an ongoing global pandemic, never before seen in my working career. "The ability for our businesses to keep safely confronting these challenging times demonstrates the strength of the group and its strategy."Chief executive Max Vermorken added: "Despite this year's ongoing pandemic, the group's performance across the first six months of 2020 was extremely strong. Our decentralised, locally focused business model continues to prove successful in our industry, allowing us to operate and perform even in the face of global adversity. "The group is backed by a solid asset base providing security in these times of uncertainty. We are therefore confident we can continue to build further shareholder value."

[goliard] 07/9/2020 08:16

2020 has been a year for trading rather than investing but Sigmaroc is the one company I might just hold on to for the long term. Nice results in a challenging H1.

[masurenguy] 07/9/2020 07:59

Strong set of results. Main points.

*Sales of £54.5m, an 83% year-on-year increase.
*Underlying EBITDA of £10.9m, which was an increase of 91% year-on-year.
*Cash £17.3m, which was £7.4m up on last year.
"The Board expects the recovery trends experienced through the third quarter to be maintained over the remainder of the year. As a result and with the benefit of the GD Harries acquisition, the Board expects 2020 financial performance to reflect further significant year on year progress which could be further accelerated by a continued recovery in end-market conditions in 2021."

[18bt] 07/9/2020 07:44

At first sight these interims are excellent and should lead to upgraded expectations for the full year. Particularly impressive for me is the apparent cash generation - operational plus capex being a lot lower than depreciation. Need to have a slightly longer look at the details of the "non-underlying", but it doesn't feel unusually high.

[mfhmfh] 04/9/2020 11:50

hxxps://masterinvestor.co.uk/equities/sigmaroc-a-winner-in-the-making/

[jaf111] 03/9/2020 09:03

Market slowly waking up here.
Interims out Monday....with recent trading update not sure whether there will be any fresh news, but do believe the current rally has further to go....60 to 70p target prices are hardly aggressive IMO.

[jaf111] 02/9/2020 08:39

Peel Hunt also repeated its Buy recommendation with a 70p target

[masurenguy] 02/9/2020 08:24

SigmaRoc undervalued and underestimated, says Liberum

SigmaRoc (SRC) has exercised its right to buy the remaining 60% of Welsh quarry business GDH, which should enhance the building materials company, which Liberum believes is underappreciated.

Analyst Charlie Campbell retained his ‘buy’ recommendation and target price of 60p on the stock, which gained 2p, or 4.6%, to 46p. Campbell calculated the deal would "enhance earnings per share by around 9%" and said the group has "an excellent track record of improving returns from acquired assets. SigmaRoc shares have fallen only around 12% since 21 February, but the market continues to undervalue its infrastructure exposure, underestimates its financial position and is not yet giving the group much credit for its lengthening track record of improving acquired assets. We see over 36% upside to our target price of 60p." said Campbell.

[clocktower] 01/9/2020 17:19

Another good move, and I can envisage seeing the share price at over £1 before the end of 2021

This company is going to benefit from the growth in capitol projects that will get the country moving again.

[jamessmith23] 01/9/2020 09:40

The company is actually quite small though, the 60% was £7.5m and it was also quite likely that this was going to happen, so likely priced in for most people already I would guess

[arregius] 01/9/2020 08:31

Me too, waiting is good. Future will be multiples

[studentinvestor13] 01/9/2020 08:27

Nice update. Rock and roll

[jaf111] 01/9/2020 08:12

.....despite that a very subdued start to the day.....
Would have expected this to be immediately challenging 50p!

[jaf111] 01/9/2020 07:34

....significantly earnings enhancing!

[cheshire man] 01/9/2020 07:26

No dilution for remaining 60% of GDH (Holdings) Ltd :-)

[zcaprd7] 26/8/2020 12:52

https://www.constructionenquirer.com/2020/08/26/competition-fears-over-breedons-178m-cemex-deal/

[zcaprd7] 19/8/2020 16:39

Grimsby Live: New Cemex jobs blow as more redundancies planned at South Ferriby cement works.https://www.grimsbytelegraph.co.uk/news/local-news/new-cemex-jobs-blow-more-4438249

[goliard] 07/8/2020 15:44

Doesn't seem to be any problem placing the stock and the price is ticking up, so I am not too worried about an overhang.