Operational Update

RNS Number : 8192I

SigmaRoc PLC

06 April 2020

 

6 April 2020

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

SIGMAROC PLC

( ' SigmaRoc ' , the 'Company' or the 'Group' )

Q1 2020 trading ahead of estimates

H1 2020 operational outlook

FY 2020 guidance

Q1 2020 trading momentum a continuation of strong H2 2019 performance and ahead of analyst estimates

For the first quarter of 2020, SigmaRoc has performed ahead of budget and analyst estimates, despite significant weather disruption and flooding across the UK and the Channel Islands, and the start of the Covid-19 pandemic. For the quarter, the Group recorded unaudited revenues of £26.5m, an 87% year-on-year increase, and unaudited underlying EBITDA of £5.25m, representing a 144% year-on-year increase.

This performance is a continuation of the trend set in the second half of 2019, where the Group made further progress with the rollout of its strategy. As a result, the Group was able to generate sufficient cash from operations to cover both its non-underlying acquisition and restructuring expenses of £3.9m relating to the purchase and integration of four businesses in 2019, whilst also reducing gross debt by €2m in its Benelux operations.

Operational update for Q2 2020

Further to the Company's announcement of 25 March 2020, the Group has decided to remain active across its operations where it can ensure compliance with all applicable government welfare guidelines and where there is a clear strategic and financial case in the local market.

As required by local government instructions, the Group has had to close all but essential infrastructure maintenance operations, in both Guernsey and Jersey, for a period of 14 days. It is expected that permitting system will be implemented in Jersey shortly, which will allow the reopening of accredited construction sites and in turn the Group's operations.

In the UK, the Group remains active across all sites supplying product where doing so is an economically viable proposition for its customers. In this context, the Group has decided to suspend some of its production capacity and supply from stock. In Wales, G.D Harries remains active across a number of civil engineering and road maintenance contracts, having reduced production and haulage capacity in-line with current local demand.

The Group's Belgian businesses also remain operational with the support of staff and unions, supplying bluestone to a reduced number of active customers. The Group's partner in the sale of aggregates from its Soignies quarry has decided to close its production entirely until further notice. However, the Group continues to supply customers from its other aggregate quarries near the town of Huy.

FY 2020 guidance

In light of the operational picture provided above, the Group anticipates that reduced activity and demand levels in the month of April and possibly the month of May, will result in substantially reduced revenue and EBITDA performance in the second quarter, relative to the Group's expectations prior to the onset of the Covid-19 pandemic. The Group is confident that it has robust business continuity and cost mitigation plans, however, given the very high level of uncertainty presented by current events, it does not believe it is possible to provide accurate guidance to the market for the current financial year at this time.

The Group benefits from both a diverse regional market base and operational footprint, with experienced local management teams. Continuity plans have been implemented swiftly, to ensure the business can remain operational where end market demand continues to require our support. SigmaRoc has a tightly controlled cost base in any event and actions have, and will continue to be taken, to conserve cash further as appropriate. As at 3 April 2020, the Group had £11m in cash reserves and undrawn headroom of £5m under its RCF facilities, providing a solid liquidity position from which to navigate through even a protracted period of disruption. As such, the Board is confident that the Group remains in a strong position to confront the currently foreseen consequences of the Covid-19 pandemic and respond quickly as markets recover.

The Group will provide further updates on its progress with the release of its FY2019 results scheduled for 20 April 2020.

Max Vermorken, CEO of SigmaRoc, commented:

"I am pleased to report good numbers for the first quarter of 2020, demonstrating the underlying quality of the Group. As the Covid-19 pandemic continues to evolve, we will see it impact our Group through site closures in-line with government regulations. As a Group, we continue to strictly adhere to government guidelines, to ensure our sites comply with the required safety protocols and keep our staff safe. In this way, we can remain operational, to the extent possible, to support our suppliers, customers and local economies, such that we best prepare our business for a recovery post the Covid-19 pandemic."

Information on the Company is available on the Company's website, www.sigmaroc.com .

For further information, please contact:

SigmaRoc plc Max Vermorken	Tel: [phone]
Strand Hanson Limited (Nominated and Financial Adviser) James Spinney / James Dance / Jack Botros	Tel: [phone]
Liberum Capital (Broker) Neil Patel / Jamie Richards / Jonathan Wilkes-Green / William Hall	Tel: [phone]
Rubik Communications (Financial PR adviser) Andrea Mora / Charlotte Hollinshead	Tel: [phone] [e-mail]

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.

 

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