SigmaRoc maintains expectations after solid third quarter

Lime and minerals supplier SigmaRoc reported strong trading in the first nine months of the year on Monday, positioning it for a solid year-end finish.

The AIM-traded company said revenue was up 67% year-on-year to £729m, while underlying EBITDA increased 88% to £165m, improving the EBITDA margin to 22.6%.

On a proforma basis, SigmaRoc experienced a 3% decline in volumes due to weaker demand in the residential construction and environmental sectors.

However, the firm noted strong performance in the food, agriculture, mining, and infrastructure sectors, which helped mitigate the declines.

Proforma revenue decreased 4%, mainly due to lower input cost pass-throughs and softer volumes, but proforma underlying EBITDA improved by 2%, thanks to the company’s cost management and resilient pricing strategy.

SigmaRoc said it was on track to reduce leverage to below 2.3x by the end of the year, as the board said it was confident in achieving its full-year consensus expectations for 2024.

The company completed the acquisition of Polish lime assets on 1 September, as part of its integration of CRH lime businesses acquired earlier in the year.

It said integration was nearing completion, adding that it had raised its synergy guidance to €35m, up from the previous €30m, with further benefits expected from the newly-acquired Polish assets.

The upper end of the synergy guidance remained at €60m by 2027.

Despite mixed demand in the residential construction and German power and automotive sectors, SigmaRoc reported resilient trading in most markets, supported by its diversified model and strong exposure to the food, agriculture, mining, and infrastructure sectors.

The firm also highlighted that its north-east and north-west regions performed particularly well.

Looking ahead, SigmaRoc said it was optimistic about the rest of the year.

The group said it expected interest rate reductions in Europe and the UK to boost sentiment, particularly in residential construction.

With its robust position in the European lime market and access to high-quality mineral resources, the company said it expected to maintain its momentum.

The board’s outlook for the full year remained unchanged, with EBITDA expected to align with market consensus expectations.

“The group has delivered excellent results for the period despite the current mixed landscape and is well positioned to benefit from improving market sentiment,” said chief executive officer Max Vermorken.

“Whilst remaining mindful of conditions in some of the group's markets, the strong third quarter performance, combined with our diversified end market exposure and decentralised operating model, gives the board confidence in maintaining full year expectations.”

At 0931 GMT, shares in SigmaRoc were up 1.89% at 75.4p.

Reporting by Josh White for Sharecast.com.