Invest, Improve,
Integrate & Innovate
Annual Report and Financial Statements
2020
Registered number: 05204176
Registered address: 7-9 Swallow Street, London, W1B 4DE
Contents
Strategic Report
Highlights
Company Information
Chairman’s Statement
CEO’s Strategic Report
Post Period Annoucements
2020 Timeline of Key Events
Business Review
Business Model
Our Strategy
Acquisitions
Key Measures and Statistics
Map of Assets
Platforms
Risk
Chief Financial Officer’s Report
Sustainability Report
Environment
ANNUAL REPORT
AND FINANCIAL
STATEMENTS
FOR THE YEAR
ENDED 31
DECEMBER
2020
Streamlined Energy and Carbon Reporting (SECR)
Social
Governance
Sustainability Roadmap
Governance
Governance Report
Corporate Governance Report
Audit Committee Report
Remuneration Committee Report
Annual Report on Remuneration
Nominations Committee
Directors Report
Statement of Directors’ Responsibilities
Financial Statements
Independent Auditor’s report to the Members of SigmaRoc plc
Definitions
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Cash Flow Statements
Notes to the Financial Statements
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STRATEGIC REPORT
Highlights
Financial Highlights1
UNDERLYING REVENUE
UNDERLYING EBITDA
£124.2m
+76.6% 2019: £70.4m
£23.9m
+64.1% 2019: £14.5m
UNDERLYING PROFIT BEFORE TAX
UNDERLYING EPS
£12.2m
+45.2% 2019: £8.4m
4.50p
+7% 2019: 4.20p
ADJUSTED LEVERAGE RATIO2
1.69x
-18.4% 2019: 2.07x
Operational highlights
1 Underlying results are stated before acquisition related expenses, certain
finance costs, redundancy and reorganisation costs, impairments,
amortisation of acquisition intangibles and share option expense.
References to an underlying profit measure throughout this Annual Report
are defined on this basis.
2 Adjusted leverage ratio compares net debt to Underlying EBITDA for the
last twelve months adjusted for pre-acquisition earnings of subsidiaries
acquired during the year.
Invest
Improve
Integrate
Innovate
GD Harries:
Completion of 100%
ownership
Benelux: 168mt
expansion at CDH
approved
Equity raise: £12.4m
raised for H1 2021
pipeline projects
Safety: Completion of
Safety external audits
and introduction of
HighVizz
Group debt facility:
Sustainability:
Consolidation of debt
facilities following
acquisition of CDH
Innovation in concrete
products and asphalt
solutions
Integration of CDH:
>400 people
Integration of GD
Harries: >200 people
Digital solutions:
Enhancement of
safety, operations and
asset utilisation
Products: Supply of
innovative product for
major project
Operation gearing:
Underlying EBITDA
margin remained
strong at 19%
Corporate
Governance:
Appointment of
independent non-
executive directors
and dedicated general
counsel
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STRATEGIC REPORT
Company Information
Directors
David Barrett (Executive Chairman)
Max Vermorken (Chief Executive Officer)
Dean Masefield (Chief Financial Officer)
Simon Chisholm (Independent Non-Executive Director)
Jacques Emsens (Independent Non-Executive Director)
Garth Palmer (Non-Executive Director)
Tim Hall (Non-Executive Director)
Company Secretary
Heytesbury Corporate LLP
Registered Office
7-9 Swallow Street
London
W1B 4DE
Company Number
05204176
Bankers
Santander UK plc
2 Triton Square
Regent’s Place
London
NW1 3AN
Nominated & Financial Adviser
Strand Hanson Limited
26 Mount Row
London
W1K 3SQ
Joint Broker
Liberum Capital Limited
25 Ropemaker Street
London
EC2Y 9LY
Joint Broker
Peel Hunt LLP
120 London Wall
London
EC2Y 5ET
Independent Auditor
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London
E14 4HD
Solicitors
Fieldfisher
Riverbank House
2 Swan Lane
London
EC4R 3TT
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
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SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate STRATEGIC REPORT
Chairman’s Statement
Dear Shareholders,
I am extremely proud that despite such challenging
circumstances our business performed very well, thanks to
a sound business model, high quality teams with motivated
staff around the Group and the ability to respond quickly to
changing circumstances. As a result, we delivered revenue
of £124 million, Underlying EBITDA of £23.9 million and
Underlying Earnings per share of 4.5 pence. Another year of
growth despite the exceptional challenges as we continue
with the journey of SigmaRoc.
Our timely response allowed us to do more than just manage
the unprecedented health crisis. As a Group we adapted
our methods of work to remain ‘open for business’ and also
delivered several key infrastructure projects which helped
the UK both battle the pandemic and prepare for Brexit. Our
improvement projects continued at the most recently acquired
businesses. We also prepared our Balance Sheet for further
growth through a debt refinancing and a very well supported
equity fundraise. To summarise, 2020 was another year of
significant progress for the SigmaRoc group of companies.
Growth
At the start of 2020 it was our ambition to continue the trend
set in 2019 and sustain our momentum. Our plans included
an ambitious debt refinancing, the acquisition of the remaining
60% of GD Harries, the improvement of margins and
operational quality across the Group and a continued focus
on Sustainability initiatives.
While the pandemic slowed our progress, I am happy to
report we delivered most of our initial objectives even as we
managed the impact of COVID-19 on our Group. GD Harries
now fully forms part of SigmaRoc. Our new debt facilities
allow us to pursue further growth, and we are grateful for the
continued support of Santander together with a consortium of
high quality European and UK banks. As a result, our Group
now starts to gain scale where an important source of its
further development will be funded from internally generated
free cash flows, to the benefit of our Shareholders.
Safety and COVID-19
2020 presented a very significant challenge from a Health &
Safety perspective, both due to COVID-19 and operationally.
Protecting our staff from COVID-19 and ensuring the virus did
not spread within the business was key. We were successful
in as much as only 34 COVID-19 self isolation cases were
recorded. This across the Group of nearly 1,000 staff and
pleasingly no confirmed spread of the virus within the
business was recorded.
A second real challenge was managing our operational
safety. With travel restrictions, people working from home
and people coming back into the workplace after a period of
absence, the risk of accidents and the probability of a lack of
reporting increases. However, the outcome was contrary to
that probability. Our LTIFR reduced 22% and TIFR reduced
6%. During the same period our number of reported incidents
increased materially in part due to improved safety software
and monitoring tools.
Governance
Last year was also a year of significant progress from a
governance perspective. Our Group had grown rapidly since
inception in 2017 and required a review of its Board and
governance structures, which we started in 2019. As a result
of this process, we restructured our Board composition,
adding two high calibre independent non-executive directors
in Jacques Emsens and Simon Chisholm. We improved our
corporate governance principles and reviewed the various
Board committees to ensure the right processes are in place.
We also appointed Anthony Brockbank as General Counsel.
Anthony’s expertise and experience in governance and
corporate law will ensure our compliance has a further level of
scrutiny and robustness.
We also made a significant leap forward in our Environmental
and Social initiatives with a substantial section of this report
dedicated to these efforts. Our combined Environmental,
Social and Governance initiatives will become an ever more
important component of our activities and we are proud of our
low carbon concrete products offering, our partnerships with
several innovative companies, our focus on renewable energy
sources where possible and our attention to our operating
footprint and what can be done to improve it.
Forward look
Looking forward I remain convinced we are on the right
track for further success to be built on the solid foundations
laid down during our first four years. This past year was
particularly challenging for most businesses, and for many,
personally. Our performance has demonstrated the quality of
our business model, the determination of our management
teams, the dedication of an exceptional workforce and the
potential our Group has for the future.
As we progress through 2021, I am convinced we will
continue on the road to further success. We have an exciting
list of projects on which we are actively working. We have
several high quality businesses in our Group which can
continue to deliver great results. We also have a series of
more recently acquired businesses which are the focus of our
attention to improve and integrate them to the benefit of the
wider Group. I therefore remain optimistic and curious as to
what future opportunities SigmaRoc can take advantage of for
the benefit of the Group and its Shareholders.
David Barrett
Executive Chairman
12 April 2021
My 45 years in the construction
materials industry was still not
enough to anticipate and prepare for
the extraordinary year we witnessed
in 2020.
David
Barrett
Executive Chairman
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CEO’s Strategic Report
Dear Shareholders,
2020 was the year of “unknown unknowns”. Nobody was
fully prepared for 2020 and in all honesty, neither were we.
A dedicated workforce, a business model built for speed
and agility and networks of supportive customers and
suppliers helped us through the worst of it and onto another
successful year. It is with a great sense of humility and
gratitude for the extraordinary hard work of the SigmaRoc
team throughout 2020 that I present this annual report.
Financial performance
In 2020 we outperformed pre-COVID broker estimates
set at the end of 2019. With revenues at £124.2 million,
Underlying EBITDA increasing to £23.9 million, a 64.1%
year-on-year increase and underlying profit before tax at
£12.2 million we delivered an extremely strong performance.
Underlying earnings per share rose to 4.50 pence, a 7%
growth on 2019, in a year with significant volume swings,
margin erosion and difficult trading conditions. Given the
circumstances we are extremely proud that we were able to
post another year of earnings growth for our Shareholders.
Significant efforts were made over the course of 2019 and
2020 to improve the margins across the Group, targeting
Underlying EBITDA margins of over 20%. Even as 2020
was a particularly challenging year with significant volume
swings, and the full integration of lower margin businesses
in Wales and Belgium, our overall Underlying EBITDA
margins remained strong at 19%. Over the course of the
next 18 months as our improvement efforts take hold, we
aim to see that margin increase to our targeted level of 20%.
As a result of our good performance and several
restructuring efforts in 2019, cash generation was strong in
2020. Starting the year with £9.9 million we ended the year
with £27.4 million (including £12.4 million cash raised in
December 2020) and after deduction of several significant
investments. These investments include the acquisition
of the remaining 60% stake in GD Harries at £7.3 million,
the payment of deferred consideration in Belgium of circa
£2 million, the acquisition of further land in Belgium for the
quarry extension of approximately £1.8 million, as well as
further general capital investments into the business.
The solid trading, margin improvement and cash generation
has had further positive consequences on the quality of
our Balance Sheet. Starting the year with £49.8 million in
net debt to Underlying EBITDA equating to a ratio of 2.07
times we finished the year at 1.69 times. This figure includes
the full consolidation of GD Harries in South Wales, which
historically held higher net debt levels than our Group’s
targeted ratio. Efforts are currently being made to ensure the
overall debt levels of the Group do not exceed a 2 times net
debt to Underlying EBITDA ratio after cash is spent on further
acquisitions, with the intention of a further downward trend.
Considering total and net tangible assets, further
improvements were also realised through the completion of
the PPA process for Carrieres du Hainaut and the inclusion
of GD Harries. A separate PPA process will be undertaken
for GD Harries during this year even though the business
has only a limited amount of goodwill at acquisition. Both
businesses are significantly asset backed, increasing our
total tangible assets to £145 million at 31 December 2020.
Calculating our total debt to tangible assets we arrive at a
ratio of below 2:1, further demonstrating the quality of the
Balance Sheet and asset backing available to both equity
and debt investors.
Trading and Operational Summary
As much as it may sound trivial, 2020 really was a year of
four very distinct quarters. In order to give sufficient detail, it
seems reasonable to discuss both trading and operational
aspects side-by-side on a quarter-by-quarter basis. Our
response to COVID-19 is covered in detail below and will
not be reviewed here. Additional information in the form
of data is also available in the Business Review section,
supplementing this narrative.
The first quarter of the year started fully in line with
expectations. Trading across all platforms started well with
volumes and turnover on track against budget. CDH and
GD Harries performed as expected putting the business on
track for the delivery of analyst expectations issued in 2019.
Operationally all platforms started the year as expected
delivering budgeted volumes. PPG being slightly more
seasonal, weather and major project driven would see its
volumes rise from an expected softer start in January to
more normal run rates in March. No specific impact from
COVID-19 or lockdowns would be felt in the first quarter.
As we started the second quarter the situation changed
dramatically. The lockdowns affecting each of the regions
we are operating in inferred significant volume drops. These
drops were in some cases more than 60% of budgeted
volumes. We had made the decision to remain open across
all sites and put in place our COVID-19 plans allowing
us to do so. Scenarios prepared in the months earlier on
cash burn, cost reductions, shift reductions and of course
all protocols allowing us to operate safely were put into
action. As demand dropped further significant concern
arose in relation to paying bills and getting paid. Reinforcing
the messaging to customers and suppliers that it was our
mission to help our local economies by remaining active,
paying our bills and delivering product, was well received
and any cash flow concerns subsided.
A dedicated workforce, a business
model built for speed and agility and
networks of supportive customers
and suppliers helped us through
the worst of 2020 and onto another
successful year.
Max
Vermorken
Chief Executive Officer
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CEO’s Strategic Report CONTINUED
April then provided a further blow as strict virus reduction
policies in Guernsey and Jersey meant complete shutdowns
of our activities. Luckily those measures were limited in
time and progressive relaxation in these measures allowed
for a gradual return to work. Across other platforms, those
customers who had initially decided to shut down were
returning to work leading to increased volumes. Entering
into May and June, the recovery gathered further pace. Our
volumes returned to pre-COVID levels as did turnover.
The fourth quarter on the other hand had remained an
enigma to us across the summer months. It was not obvious
from the indications received through our customer networks
what trading would look like. In part a lack of visibility in
terms of orderbooks contributed to this uncertainty. The
quarter did, however, turn out in line with normal trading,
allowing for small exceptions. Relatively mild weather
conditions helped as well as a slower than expected return
of lockdowns.
At this point it is interesting to give some context on
operational gearing across the Group. As volumes dropped
in April, we started to calculate our cash burn and estimate
our effective cost base. With cash levels over £10 million
across the Group we could sustain multiple months of near
nil revenue. However, our cost base had shown sufficient
flexibility without making specific use of COVID-19 related
Government aid packages. As a result, we were able to
remain EBITDA positive for the month of April. This is a great
demonstration that our effective operational gearing is low.
The third quarter presented a much more normalised picture
across the Group. While sales were impacted by sector
summer shutdowns in the Benelux region, overall trading
volumes returned to normal levels. Our ability to service
customers and have sufficient stock on the ground at our
various sites helped in delivering a solid performance.
Operationally the picture also returned to a more normal
situation, with most work shifts and personnel returning.
The narrative provided above is somewhat more lengthy
than usual, however, given the extraordinary year I wished
to present you with additional context. A key take-away of
last year’s performance must be the flexibility and agility
with which the business responded to the changes in the
trading environment. We prepared early for the possibility
of a lockdown and its consequences. All scenarios detailing
cash burn, cost reductions, shift reductions, possible
closures and other considerations had been prepared.
However, the agility with which each platform responded to
changing trading conditions on a daily basis is what made
the difference. Our Group has great teams in each platform,
who were able to make maximal use of our decentralised
operating model.
COVID-19
On Monday, 24 March 2020, having consulted with the
various Managing Directors, General Managers and staff,
we decided to remain open throughout the lockdowns in
Belgium, the UK and the Channel Islands. This decision
was not an easy one, but one supported by the various
management teams and representatives of staff.
It was taken in the knowledge that we had prepared the
business during the month of March for the scenario of a
lockdown and were able to keep staff sufficiently distanced,
in open air facilities or in sufficiently sanitised offices in
order to minimise the risk of COVID-19 contagion within
the Group.
During 2020 we had 34 cases of self-isolation on a
workforce of nearly 1000 people. As at the time of writing
we had 1 reported case of self-isolation. One person
was taken to hospital. We also confirmed that to our best
knowledge the virus did not spread within the Group,
having traced all cases of self-isolation to contamination
outside work. Of this record we are proud, but realise
that as time goes by, the probability of encountering more
positive COVID-19 cases increases.
Starting the year 2021 we continued our vigilance
reinforcing our COVID-19 protocols including working from
home where possible, sanitising workspaces, wearing
masks when working in less ventilated spaces or offices
and a renewed push to make people aware of the risk. At
the time of writing, we have one person self-isolating.
Operationally the lock downs of 2021 have not had
the same impact as the lockdown of spring 2020. The
UK government issued a renewed letter urging the
construction sector to remain active during this lockdown
period with similar albeit less formal messages of support
in Belgium and the Channel Islands. As a consequence, all
sites remain active with production at acceptable levels for
the time of the year.
Growth and development
Development
With all its complexities and the unknowns, we kept our
focus throughout the year on the continued development
of the Group. First and foremost was the acquisition of
the second tranche of GD Harries thereby forming a new
fourth platform in South Wales. GD Harries is an excellent
business with a strong market position in South Wales, a
solid asset base including 6 quarries, 80 million tonnes of
reserves and resources and several concrete and
asphalt plants.
The main attraction of the acquisition of GD Harries is
its potential to form the starting point of a new platform
in South West Wales. The business was built over many
decades by Ian Harries and his father before him. It
delivered a solid performance in 2019 with revenue of
£27.2 million and Underlying EBITDA of £3.2 million. While
2020 was a challenging year for Wales in general, GD
Harries delivered Underlying EBITDA of £3.0 million on
£26.7 million revenue. This performance is in line with our
expectations and further validates the acquisition rationale.
Further development work was undertaken in Belgium
where we closed off two major chapters in the extension
of Carrieres du Hainaut. Having received the required
zoning changes in August 2019, the quarry was awaiting
confirmation of approval to move a road that crosses its
current extraction zone. The Walloon regional government
granted this permission and agreed to contribute approx.
€700k to the envisaged cost of the project. Additionally, we
closed as planned the purchase of further land adjacent
to the current extraction zone for circa 1.8m GBP, thereby
finalising a long project lasting nearly a decade during
which over 100 parcels of land were bought or exchanged
in order to secure the future of the activities at Carrieres
du Hainaut for generations. The local management team at
Carrieres du Hainaut was key in this success, as was the
support of the local and regional governments.
In the rest of UK our development activities were
somewhat more limited and consisted primarily in the
extension of our existing sites, and the renovation of
these sites with the aim to increase our production
capacity, safety records and product offering. In particular,
Poundfield and CCP were the focus of these efforts as was
the creation of an improved South London sales depot for
Allen Concrete.
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Debt refinancing
A key project this year was the refinancing of our Group
Credit Facilities. With the acquisition of CDH at the end
of 2019 we acquired their existing credit facilities supplied
by four leading Belgian banks. As these facilities were at
the end of their life and as it made more practical sense to
agree a Group wide facility, simplifying cash management
and reducing overall financing cost, we launched a debt
refinancing project early in the year.
After an initial suspension of this project in March due to
COVID-19 and lockdowns, we were pleased to announce an
expanded £125 million multi-currency credit facility including
a £40 million uncommitted accordion facility supplied by
a consortium of high-quality UK and European banks
led by Santander. With adjusted leverage ratio covenant
commencing at 3.5 times Underlying EBITDA, the facility has
a term of 5 years of which 2 are non-amortising and a margin
rate of 2.5% over LIBOR at an effective 2 times leverage
ratio. These terms are an improvement on the facilities we
had in place and allow us to further develop the business,
while keeping our overall leverage at 2 times Underlying
EBITDA or less.
Equity raise
A second key project undertaken at the end of last year was
the equity raise using the 10% special authorities obtained
at the 2020 AGM. The equity raise of £12.4 million puts the
Group in a great position to take advantage of a series of
opportunities, both organic and through acquisition, identified
across this past year. We have indeed already started to
deploy the capital raised with further detail given in the post
period section below.
Safety
Continued focus was put on health and safety this year, with a
much broader scope than in normal years. Naturally we put in
place all Government guidelines in relation to COVID-19. For
those working from home we issued further guidelines and
support to aid in the transition to remote working. As a result
of these measures, we have been able to limit the spread of
COVID-19 in the business and keep the number of infected
people low.
While the challenges to operate safely increased as a
consequence of social distancing and other restrictions,
we were able to make further progress on safety this year.
Our LTIFR dropped 22% as did our TIFR by 6%. Incidents
decreased in part due to new systems put in place to track,
report and investigate all safety incidents. A dedicated safety
report in the Sustainability section of this Annual Report will
provide further context.
Sustainability
A dedicated Sustainability section is included in the Annual
Report and I will limit the review in this section to several
highlights. As announced last year we have now formalised
our Sustainability initiatives in line with market best practice
and as a result of this, we are now able to better report on the
initiatives we take and their impact.
Environmental
In 2019 we presented a first series of initiatives in our annual
report dedicated to the improvement of our environmental
impact, carbon footprint and product portfolio. Included in
this year’s report is a full review of our carbon footprint. I am
therefore happy to report we have been able to progress on
several initiatives reducing our carbon footprint across
the Group.
We have made a first significant step in the direction of
offering ultra-low carbon alternatives to every concrete
product we produce. In January 2021 we launched the
production of our Greenbloc product line with the launch of
the ultra-low carbon solid dense concrete block. We also
launched a collaboration with Airlite, a manufacturer of CO2,
SOx and NOx absorbing coatings, which we are applying
to several of our concrete products. Further innovations
are detailed in the Sustainability section as we improve our
footprint.
We were also able to make further progress in increasing
our electricity sourced from renewable sources through the
installation of the third phase of our photovoltaic park. Once
fully operational it will increase our electricity generated
renewably and on site, to 30% of our total electricity
consumption. In addition to this we continue to pump filter and
supply fresh drinking water to the water system in Belgium.
Further initiatives were undertaken to improve the
environmental impact of our operations through continuous
site improvement plans, engagement with local communities
as well as programmes to promote flora and fauna around
our sites.
Social
On a Social front several initiatives were launched which
are detailed in the Sustainability report. One highlight is in
Belgium where we have gifted to the city of Soignies an area
of land of 10 hectares adjacent to the quarry. The area forms
a large protective hill, onto which trees were planted. It is the
aim of the council to develop the area into a park or nature
walk from which our operations can be viewed. We have had
a lot of success with a similar project in Guernsey and will
assist the council.
In other areas of the business we have endeavoured to
engage more closely with the local communities to ensure
a better dialogue exists. As part of these initiatives’ events
were organised at some of our operations where COVID-19
restrictions permitted.
Governance
From a governance perspective 2020 was a year of
significant change and improvement for the Group. The
Governance report will provide ample more detail. Firstly,
our Board saw profound change with the joining of several
independent and highly skilled directors. The entire corporate
governance code was reviewed as well as the Articles in
order to align both to London Stock Exchange and QCA best
practices. We appointed a very experienced corporate lawyer
as our General Counsel to further improve our compliance
and created additional Board committees covering the
various listing requirements or recommendations.
Statement by the directors in
performance of their statutory duties
in accordance with s172(1) of the
Companies Act 2006
The Director’s believe they have acted in the way most
likely to promote the success of the Group for the benefit
of its members as a whole, as required by s712 of the
Companies Act 2006. The requirements of s172 are for the
Directors to:
■ Consider the likely consequences of any decision in the
long term;
■ Act fairly between the members of the Company;
■ Maintain a reputation for high standards of business
conduct;
■ Consider the interests of the Group’s employees;
■ Foster the Group’s relationships with suppliers,
customers and others; and
■ Consider the impact of the Group’s operations on the
community and environment.
The application of the s172 requirements are demonstrated
throughout this report and the Accounts as a whole,
with the following examples representing some of the
key decisions made in 2020 and up to the date of these
Accounts:
■ Response to the Coronavirus pandemic: as detailed
in the Coronavirus update on page 13, the Group has
taken various measures to protect the wellbeing of its
employees, maintain good working relationships with its
customers and suppliers, and ensure the commercial
viability of its business.
■ Continued pursuit of buy and build growth strategy: the
Group has aggressively continued its buy and build
growth strategy, completing two acquisitions during 2020,
which expanded the South Wales and Benelux platforms.
■ Safety initiatives: safety and wellbeing of our
colleagues is one of our top priorities and the Group
continued to improve its health and safety standards,
including implementing a Group wide health and safety
reporting tool.
Post period announcements
In the second half of 2020 we started to look forward to
2021 and what we could realise in the new year. Plans
were made to both improve our business further and
continue its expansion. To be in a good position to attack
2021 we raised some additional funding with the intention
to deploy it rapidly in the new year.
We were therefore happy we could make good on these
promised within the first quarter of 2021. A separate
section is dedicated to the three key transactions and
projects we completed, the first being the introduction of
Greenbloc. With the launch of our cement free concrete
building block we set a new benchmark for the industry by
being the first company in the UK to do so. The reduction
in embodied CO2 is significant and as the product gets
more widely adopted this reduction will have its impact on
the sustainability of construction in the UK as a whole.
We subsequently announced an important transaction
in Belgium where we reached a mutually beneficial
deal with LafargeHolcim at our Carrieres du Hainaut
operations. Taking over all crushing and screening plant
from LafargeHolcim and entering into a take-or-pay
agreement with them, we put ourselves in a great position
to prepare our entry into the Belgian aggregates market
as a large scale supplier. In the meantime, we benefit from
the additional EBITDA generated from the plant while not
having spent any further capital to generate these returns.
We then turned our eye to establishing our footprint more
widely in the Belgian market with the acquisition of B-mix
Beton and Casters Beton, two large scale suppliers of
concrete in the Limburg area. As a consequence of this, we
are gradually expanding our footprint in order to become
a significant operator in the Benelux region. More detail is
provided in the next section.
Strategic approach and outlook
It is evident the drive and determination of our teams
remains high to deliver excellent results and exciting new
opportunities for the business to expand and grow further.
The strategy of local focus through platforms which are
agile and close to the end customer remains robust and
has shown its value during the difficult times of this past
year. The outlook therefore remains positive and above all
exciting.
With your continued support, for which we are grateful
and which we never take for granted, we can continue to
Invest, Improve, Integrate and Innovate to the benefit of
our shareholders and our stakeholders.
This report was approved by the Board on 12 April 2021.
Max Vermorken
Chief Executive Officer
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Post Period
Announcements
STRATEGIC REPORT
Greenbloc
In February 2021 SigmaRoc pioneered a new product in the construction market with
the launch of the UK’s first Cement Free Ultra-low Carbon Concrete Building Block
under a new brand, Greenbloc.
Concrete blocks are used extensively in the construction
of real estate and infrastructure across all sectors.
SigmaRoc’s new Greenbloc range materially reduces
the carbon footprint of these blocks when compared to a
traditional product.
Greenbloc is completely cement free, making it unique in
the UK market and provides on average a significant net
reduction in embodied CO2 (‘eCO2’) of 77% per concrete
block, resulting in the following specific decreases:
■ an average reduction of 1.1kg of eCO2 per concrete block;
■ an average reduction of 2.7 tonnes of eCO2 per
average semi-detached house;
■ these average reductions are equivalent to the
CO2 emitted by an average household’s electricity
consumption for four years.
The product is produced by SigmaRoc’s PPG platform
at its various production facilities. Following extensive
research and development and initial trials throughout
2020, the product has been well received by the market
with strong interest from several leading national building
materials merchants. Further sizes and specifications of
concrete building blocks will be released over the next
weeks and months, extending the Greenbloc range.
SigmaRoc is committed to enhancing sustainability and
reducing environmental impact in the construction sector
and will continue to develop its sustainable product range
with the aim to offer a low-carbon alternative to each of the
concrete products it manufactures. As more products pass
the testing and trialling phase, we will update the market
on their specifications and commercial potential.
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STRATEGIC REPORT
Expansion of the Group’s Belgian aggregates operations
In March 2021 the Group made a further step forward at its Belgian operations
Carrieres du Hainaut. SigmaRoc entered into an agreement to assume control of
LafargeHolcim’s quarrying operations, which are co-located at the Group’s Carrieres
du Hainaut Belgian business (the ‘LH Agreement’), providing a platform for the
significant expansion of SigmaRoc’s European aggregates business.
Rationale for the agreement
The LH Agreement
In October 2019, SigmaRoc established its European
heavy side materials platform through the acquisition of
CDH, a major quarrying and dimension stone company
located in Belgium. In addition to annual production of c.1
million square meters of Belgian Blue Stone, a high value
decorative stone, the operations also produce approximately
1.5 million tonnes of standard construction aggregates.
Prior to entering into the LH Agreement, production and
commercialisation of these aggregates was undertaken by
LafargeHolcim, under an inefficient royalty deal which was
due to end in February 2023.
The LH Agreement gives the Group full control over CDH’s
production assets, putting SigmaRoc in a far stronger
position commercially and operationally to pursue its growth
strategy in the Belgian Aggregates market as a large
scale supplier.
In addition to generating an estimated incremental EBITDA
of €1m per annum, the assumption of full control of all
production at CDH will enable the Group to drive operational
efficiencies over time. Furthermore, the LH Agreement will
give SigmaRoc further flexibility to install new crushing and
screening equipment, further enhancing output.
Under the terms of the LH Agreement, SigmaRoc will, from
1 April 2021, take-over all of LafargeHolcim’s production
installations located at CDH for nil consideration. The
Group has agreed to supply LafargeHolcim Belgium with a
minimum of 1.5 million tonnes of aggregates per year until
31 December 2024, under a take-or-pay agreement, for
which SigmaRoc will charge a production margin. Additional
volumes produced are subject to a pre-emption right by
LafargeHolcim or to be utilised by SigmaRoc.
During the period of the agreement, SigmaRoc will build
and commission a new aggregates production facility
and decommission the old LafargeHolcim installations.
SigmaRoc expects this process to be seamless and the
decommissioning and demolition of the old installation to be
cost neutral.
Launch of materials company Granulats
du Hainaut (‘GDH’)
Given its entry into the Belgian market as a large scale
supplier of high quality aggregates, SigmaRoc has decided
to incorporate a new subsidiary and launch a new brand
for its quarrying operations, GDH. The new operations
will form part of a larger network of quarries in Belgium,
including the Group’s three existing Stone Holdings S.A.
sites. SigmaRoc’s total European production volume can
be up to 3 million tonnes per year.
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Acquisition of Belgian concrete assets and
establishment of two separate European heavy side
materials platforms
In line with its stated strategy, in April 2021 the Group has completed the acquisitions
of B-Mix Beton NV, J&G Overslag en Kraanbedrijf BV and Top Pomping NV
(collectively ‘B-Mix’), as well as Casters Beton NV (‘Casters’) from Groep Janssens
N.V. for a combined cash consideration of €13m (together, the ‘Acquisitions’).
B-Mix, located in Tessenderlo, and Casters, located in
Genk, operate four concrete plants, producing around
250,000 cubic meters annually. In addition the B-Mix
business include quayside operations along the Albert
Canal which links the cities of Antwerp and Liege and the
rivers Scheldt and Meuse.
In total, the businesses generated a turnover of €22m,
EBITDA of €3.3m and a net profit of €1.6m in the year
ended 31 December 2020 and net assets of €5.9m. The
Acquisitions will be immediately enhancing to the Group’s
underlying earnings and will be funded from cash raised in
December 2020.
Creation of New European Platforms
Following the Acquisitions and the creation of the GDH
aggregates brand, as announced on 26 March 2021,
SigmaRoc has decided to separate its European heavy-
side materials operations into two separate platforms.
CDH will continue as a Europe wide dimension
stone platform under Managing Director Christophe
Huyghebaert, turning over approximately €44m per year.
A new integrated concrete and construction aggregates
platform will be created to include GDH, Stone Holdings,
B-Mix and Casters. The new platform will be managed by
Emmanuel Maes and Pascal Lesoinne, with initial annual
sales of around €36m per year.
Option to acquire 11ha of quayside
industrial land
Alongside the Acquisitions, SigmaRoc is also pleased to
announce it has entered into an option agreement (the
‘Option’) with Jabo N.V., granting it the right to acquire 11
hectares of quayside industrial land in Tessenderlo, for
a consideration of €9m. The land subject to the Option
includes approximately 260m of quayside along the
Albert Canal, one of the busiest national shipping lanes in
Belgium, and houses the B-Mix concrete business, as well
as a significant unutilised area.
Should the Option be exercised, SigmaRoc estimates
it would utilise approximately 4 hectares for the B-Mix
business and is exploring opportunities to utilise the
remaining land as part of its strategy for further expansion
in the Belgian market. Should opportunities not be
identified which meet the Group’s investment criteria, the
sale or development of the land would be considered.
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Invest, Improve, Integrate and Innovate STRATEGIC REPORT
2020 Timeline of Key Events
January
Completion of the
acquisition of Stone
Holdings in Belgium
consisting of two quarries
and a wharf facility
supplying primary river
defence and armour stone
with Belgium and Holland.
March
Daily and weekly
meetings held to review
COVID-19 and review
the counter measures
that had been put in
place, including safety
of our staff and local
communities as well as
cash management,
operational gearing and
contingency plans.
May
AGM held where PKF
reappointed as auditors
and authorities received
to allot shares for GD
Harries and CDH.
July
Trading statement on first
half year performance with
proforma adjusted
revenues consistent
with prior year and
decentralised model
proven to work during
a global pandemic.
September
Completion of remaining
60% of GD Harries funded
through existing cash
following strong cash
generation in H1 2020.
Interim results published
showing a strong
performance despite
COVID-19 with Underlying
EBITDA margins at 20%.
November
Greenbloc production
trials underway with public
launch in February 2021.
Recruitment of Martin
Bains, former Head of
LafargeHolcim cement
production, process and
environment Europe, as
General Manager of CCP.
February
April
June
August
October
December
Following early
announcement in the
news on COVID-19,
the management team
convened on a regular
basis to monitor
the situation.
Q1 trading update issued
stating performance was
ahead of budget and
analysts’ estimates
despite government forced
closures in the Channel
Islands.
Trading statement issued
stating normal operating
levels returned from May
with levels at 98%
of prior year and cash
increased to £13.5m at
the end of May.
Peel Hunt appointed as
joint broker.
Simon Chisholm and
Jacques Emsens
appointed as independent
Non-Executive Directors
and Dean Masefield
appointed as Chief
Financial Officer with
Garth Palmer becoming
a Non-Executive Director
(20 April).
Option exercised to
acquire remaining 60%
of GD Harries.
Appointment of Christophe
Huyghebaert, former
Commercial
Director of Heidelberg
Belgium as permanent
Managing Director of
CDH and Nick Cleary,
formerly Operations
Director of Alun Griffiths
and Managing Director
Galliford Try Highways,
as permanent Managing
Director of GD Harries.
Trading update with
revenue up 78% on prior
year and cash at £14.5m
after paying for GD
Harries.
Fundraise of £12.4m
with strong director
participation.
£125m credit facility
including a £40m
accordion.
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Business
Review
STRATEGIC REPORT
Business Model
Every acquisition is made on the basis that it can stand
on its own two feet and not just be a route to market.
Historically in our industry, standalone business have been
purchased due to their individual success, often to only
become routes to market and have their value eroded.
Our decentralised business model allows us to ensure
that all our product and service offerings perform the best
they can, leveraging group opportunities where it is in their
best interest. This has allowed us to build a competitive
construction materials group focussed on the long term
benefits our industry has to offer.
The ability to extract the maximum value of every product and
service we offer has been conceived on 5 simple statements:
Commodity market set apart by quality of
product and service
A family approach of being local and personally known to
the customer base, with the management skill and approach
of a Major allows our business to compete with anyone.
Local products that do not travel
Construction materials are a local product, consumed and
produced locally, due to their high mass to price ratio. This
brings a particular dynamic to the sector, focussed on local
and fragmented.
Synergies are local not global
Each local market is different, with its own particularities,
competitive pressures and local history. Our platform
structure allows local synergies to be maximised that are
best for each platform ensuring true cost savings and
empowered businesses.
Agility and speed
Autonomous local managers fully understand requirements
of local markets; each decentralised business can decide
what is best for it at any moment in time allowing nimble
reactions to changing economic environments as well as
major events such as COVID-19.
Decentralised approach
A decentralised approach that extracts maximum
competitive value from each business; reducing
unnecessary central costs and ensuring self-sustaining
value driven businesses; by empowering autonomous
management.
Our decentralised model allows our platforms and
businesses to focus on their delivery whilst a lean group
level structure ensures governance and performance of the
operations and the ability to engage in proactive investment
activities.
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Invest, Improve, Integrate and InnovateSigmaRoc Annual Report and Financial Statements STRATEGIC REPORT
Our Business Model
INTERNAL
SigmaRoc
INDEPENDENT
Remuneration
Committee
New Platform /
Business
Integration
M&A
Strategy
Governance & Compliance
Audit Committee
Risk & ESG
Existing
Platform
Nomination
Committee
Financial Controls
Profit & Cash
STRATEGIC REPORT
Our Strategy
Our strategy continues to follow our original three ‘core
principles’. As we continued to grow, during 2020, we
introduced a fourth Principle: Innovation. This principle can
already be seen in our development of our Greenbloc (p.17).
Mono Product
Platform
Business
Business
Cross Selling
IP / Resource Sharing
Multi Products
Platform
Business
Business
Local
Supplier
Local
Customer
Local
Supplier
Local
Customer
National
Customer
National
Supplier
Invest
Improve
Integrate
Innovate
■
■
■
Only in businesses with solid
intrinsic value;
Only in businesses with the potential to
be improved and grown;
Only in businesses which can be bought
at an attractive valuation.
■
■
■
The motivation of management to
drive growth;
The ultimate offering to the local market
and community;
The operational and financial
performance of the business.
■
■
■
By building platforms of compatible
businesses;
By unlocking those synergies which do
not come at a significant cost;
By recognising the value of what
previous owners built.
■
■
■
By providing product and service
solutions to current and future problems;
By embracing technological advance
within the running of our businesses;
By challenging the status quo to drive
our businesses and industry forward
to meet social and environmental
challenges ahead.
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27
STRATEGIC REPORT
Acquisitions
During the year we continued to Invest; completing on GD
Harries and paving the way for our recently announcement
expansion of Belgium with the acquisition of B-Mix &
Casters using our equity raise towards the end of the year.
We look to continue our investment journey with our buy and
build approach.
Our platforms continue to focus on Improving their
businesses, including our greatest assets; our people.
We were able to ensure provision of improved employee
benefits for existing employees as well as offering jobs to
many who had found themselves recently made redundant
by others. We will continue to responsibly drive maximum
value of all our assets with focus on our newly acquired
business such as GD Harries and B-Mix & Casters.
Recently acquired businesses, such as CDH and GD
Harries, continued to be Integrated, creating various
opportunities. As with all our previous businesses we will
look to integrate our newly acquired business and continue
to unlock synergies where appropriate.
Having introduced the Innovation part of our strategy, we
were quickly able to bring to market Greenbloc, a significant
product in our proactive approach to sustainability. With
a suitability roadmap under development, Innovation will
become an area of opportunity.
Based on our strategy, since inception and during 2020, we
have been able to continue to grow through acquisition and
organic growth.
Multiple statistic based on purchase multiple
15/10/2019 CARRIÈRES DU HAINAUT
11/09/2019 STONE HOLDINGS
6.8x
CDH’s Underlying EBITDA
for past 12 months
4.4x
Underlying EBITDA for past
three years
With each business, by adhering to our investment principles and applying our Improvement and Integration programs, we
have ensured both improved performance and value.
15/04/2019 GD HARRIES
25/01/2019 CCP
Underlying EBITDA Growth by type versus prior year
+4%
+12%
+10%
+9%
+21%
+17%
+60%
+31%
2017
2018
2019
2020
Acquisition
Organic
7.6x
Underlying EBITDA for the
previous financial year
5.85x
Underlying EBITDA for the
previous financial year
13/12/2017 POUNDFIELD
19/10/2017 ALLEN CONCRETE
6.8x
Underlying EBITDA for the
previous financial year
6.25x
Underlying EBITDA for the
previous financial year
15/04/2017 MV RONEZ SHIPPING ASSETS
05/01/2017 RONEZ
2.5x
Underlying EBITDA for the
previous financial year
9.0x
Underlying EBITDA for the
previous financial year
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29
STRATEGIC REPORT
Key Measures and Statistics
The following KPIs are used to measure our progress and are reviewed in relationship to our
both our strategy and our risks and opportunities.
Financial
Revenue
(£m)
EBITDA
(£m)
£23.9m
£14.53m
£124.23m
£70.36m
£41.24m
£27.07m
£9.82m
£5.50m
2017
2018
2019
2020
2017
2018
2019
2020
By measuring top line growth we can ensure that our
business is continually improving as per our strategic
principles. This year we seen year on year growth both
organically and from acquisition.
By measuring EBITDA growth we can ensure that our
business continues to deliver. Despite a challenging year,
through cost control and operational gearing we have been
able to ensure a like for like year on year improvement as
additional EBITDA growth through acquisition.
Financial
Leverage Ratio
(net debt to Underlying EBITDA)
2.07
1.63
1.69
2017
2018
2019
2020
By committing to a self imposed leverage ration of circa 40% below our covenants we are able to ensure we can generate
enough cash flow to service the business and to pursue our investment strategy with out the risk of breaching our debt-servicing
obligations. This year we completed a significant debt refinancing and we have been able to reduce our leverage ratio compared
to last year through strong cash management.
Operational
Underlying EBITDA Margins
(%)
Underlying EPS
(£p)
Aggregate Tonnage sold
(thousand tonnes)
Concrete & Concrete Products sold
(cubic metres)
25%
20%
15%
10%
5%
0%
4.20
4.50
3.83
2.02
3,111
1,783
463,671
416,550
364,859
2017
2018
2019
2020
2017
2018
2019
2020
230
239
69,445
2017
2018
2019
2020
2017
2018
2019
2020
By measuring margin, we can ensure obtaining the best we
can out of our businesses. We set ourselves a target of 20%.
Despite a challenging year and the initial integration of lower
margin businesses in Wales and Belgium we completed 2020
just behind our targets at 19%.
EPS is a significant indicator of performance to our
Shareholders and as such is a key metric. With every
acquisition and financial operating year we look to ensure
EPS growth. Despite a challenging year in 2020, it proves to
be no different a year in the improvement of our EPS.
Aggregates and dimension stone volumes continue to grow
with significant increase due to full operational year at CDH
and increase like for like volumes.
Concrete and concrete product volumes continue to grow due
to like for like volumes in GD Harries and our PPG platform
with increase in manufacturing capacity, new products and
projects.
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STRATEGIC REPORT
Key Measures and Statistics CONTINUED
Operational
Asphalt and asphalt laid
(tonnes)
Emissions intensity
(tc02e/£ revenue kg)
Assets
Total assets
(£m)
164,108
163,024
0.16
257.22
207.78
Tangible assets
(£m)
144.79
78.72
51,500
56,700
81.82
84.03
46.56
49.97
2017
2018
2019
2020
2017
2018
2019
2020
2017
2018
2019
2020
2017
2018
2019
2020
Asphalt and contracting volumes remain consistent across
all our platforms.
As per the UK Government’s SECR regime, we start our
first year of reporting and have voluntarily committed to
measuring all our businesses with regards to emissions.
Total assets increased with the acquisition of GD Harries.
Tangible assets increased following the completion of the
PPA process on CDH and the acquisition of GD Harries.
Reserve and resources
(thousand tonnes)
Number of sites
Personnel
378,484
374,522
30
31
942
717
9,371
2017
13,137
2018
2019
2020
2017
2018
2019
2020
2016
2017
2018
2019
2020
10
6
260
256
4
Following the acquisition of GD Harries and CDH, mineral reserves and resources have increased significantly with each
relevant business having adequate mineral to maintain operations for the future.
Our sites continue to be developed through platform
integration to ensure optimal geographical reach, synergies
and cross selling can be maximised where beneficial.
People are one of our key assets and through our growth our
businesses are able to maximise a wide array of skills and
knowledge from amongst each other. Our staff are currently
distributed approximately 60:40 between UK and Europe.
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STRATEGIC REPORT
Map of Assets
6
5
4
14
16
17
20
15
21
19
9
18
11
12
10
13
2
1
3
26
27
22
23
25
24
7
8
UK Precast Platform
Allen Concrete (1,2)
Poundfield (3)
CCP (4,5,6)
Ronez Platform
Guernsey Site (7)
Jersey Site (8)
South Wales Platform
GD Harries HQ (9)
Coygen Quarries (10)
Foel Fach Quarry (11)
Concrete Supplies (12,13,14,15)
Alltgoch Quaries (16)
Bolton Hill Quarry (17)
Blaencilgoed Quarry (18)
Garnwen Quarry (19)
Syke Quarry (20)
The Sand Wharf (21)
Benelux Platform
Carrières du Hainaut (23)
Cuvelier Philippe S.A. (24,25)
Granulats du Hainaut (22)
B-Mix Beton NV (26)
Casters (27)
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STRATEGIC REPORT
Platforms
Ronez
Ronez operations supply
the Channel Islands with
aggregates, ready-mixed
concrete, asphalt and precast
concrete products and services.
Operating out of multiple sites
across Jersey and Guernsey
with satellite offerings on
other islands, Ronez offers
a full range of high-quality
construction products and
services.
Platform Highlights
A client’s project was found to have a significant amount of solid rock that would impact
the development of the project. The project was a building development in the centre of
the capital parish surrounded by horizontal and vertical infrastructure and utilities where
traditional construction techniques were not suitable. This was due to significant health
and safety, environment, and engineering constraints. We were able to work with the
client and Government agencies to provide a solution using our in-house expertise. Using
pyrotechnic breaking capsules, we were able to conduct field trials in our quarry and then
conduct over 20 separate operations for the client on site.
Mike Osborne
Managing Director
The creation of a shipping division, SigmaGsy,
by SigmaRoc upon acquisition of Ronez has
helped with transporting dry-bulk materials to
and from our own sites as well as third party
sites in the UK and Europe, resulting in higher
profits and operational efficiency.
Ronez continues to be a cornerstone asset of
SigmaRoc, delivering consistently strong results
with a history of riding economic cyclic waves
normally associated with the UK.
In Jersey, the asphalt contracting arm of the Ronez Platform, Pallot Tarmac, maintained a healthy level of activity
through the lockdown. Following proactive discussions with the Government department for Growth Housing and
Infrastructure, we were able to demonstrate that work could be undertaken safely with adequate social distancing.
Because of this our client was able to take advantage of the lower traffic levels during lockdown and through the
subsequent periods. With traffic congestion and traffic management being a critical operational and safety factor
when planning works in the Channel Islands, this new way of working allowed a number of sensitive re-surfacing
schemes to be undertaken very efficiently, benefiting the client and the public.
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SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate STRATEGIC REPORT
Platforms
PPG
PPG is a platform of
companies managed
by Michael Roddy
specialising in
manufacturing precast
concrete products
and blocks. The
platform includes Allen
Concrete, Poundfield
Products and Cheshire
Concrete Products.
Platform Highlights
The Department for Transport announced in February 2020 that a new Moveable
Barrier System would be deployed on the M20 to resolve current operational issues as
well as to prepare for Brexit at Dover. The project allows for the separation of HGVs
on one side of the motorway heading to cross-Channel ports, with all other traffic
being managed on a contraflow system at times of disruption, while also allowing
the motorway to retain three lanes, a hard shoulder and 70mph speed limits in both
directions during normal traffic conditions. Compared to the speed restrictions and
month-long overnight motorway closures required for Operation Brock, the new scheme
causes less disruption to traffic with barriers being able to be deployed within hours
from the hard shoulder.
Poundfield Products worked closely with Highways England and US based partner,
Lindsay Transportation, to manufacture and deliver the 23,000, “Road Zipper” concrete
barriers with interlocking pins that are key to the state-of-the-art technology.
Michael Roddy
Managing Director
With a triangulation of points from London, to East Coast to North
West and sites in between, PPG supply a wide and diverse range of
industries ranging from house builders and farmers to national sea
defence projects and international contractors, be it direct or through
merchants. The PPG companies are some of the most experienced
and innovative in their industry; some operating for over 70 years,
while others own a significant number of patents and licences.
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SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate STRATEGIC REPORT
Platforms
Benelux
CDH is our first European
Platform, based in
Belgium. The growth of
the platform continues to
be led by Emmanuel Maes
whilst the management
of the existing business is
led by recently appointed
Christophe Huyghebaert,
formerly Commercial
Director Heidelberg.
The current operations
produced over 3 million
tonnes of aggregates and
dimension stone from
our quarries in Belgium.
Emmanuel
Maes
Christophe
Huyghebaert
ExCo
Europe
Managing
Director
In 2020, we have two distinct product
lines; Aggregates and Dimension
Stone.
■ Our Aggregate products supply a
range of partners and construction
companies with products for
concrete, sea defence work,
riverbank fortification and general
horizontal and vertical.
■ Our Dimension Stone products,
one of only a handful of certified
‘Pierre Bleue’ globally, are part
of Belgium’s heritage and can be
seen throughout buildings and
infrastructure as well as being
supplied globally on iconic projects
such as the Abu Dhabi Louvre.
Our businesses in the
Benelux is well positioned
with reserves and resources
of over 150 million tonnes
of construction aggregates
and over 28,000,000m3
of high quality Belgian
Blue Stone. The business
employs over 420 people
and has a proud history,
dating back 130 years, of
extracting a highly sought-
after material.
Platform Highlights
The European Medicines Agency (EMA)
relocated from UK to the Netherlands;
due to our Europe wide network we were
able to work with the project and supply
Bluestone for use in its construction
and fit out. The building is 81m high and
covers 39,000 square meters, housing
offices, workplaces, meeting rooms and
conference rooms for a total of 1,300
people from 30 countries over 19 floors.
Sustainability is the key word of the entire
complex that obtained the BREEAM
Excellent certification.
40
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EMA communal area with Bluestone – Photo courtesy of Corné BastiaansenSigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate Platform Highlights
Working in connection with the welsh government,
we took the challenge of designing new products
that meet new proposed asphalt specifications with
an overarching objective of “Sustainability through
Durability”. Typically, the current specification
creates products that have a 6 year life cycle,
whereas the new specification aims to create a 20
year life cycle.
Our technical and production teams have worked
to create designs that meet these specifications
and throughout 2020 and into 2021 we have been
conducting both multiple laboratory and field trials,
with success. We look forward to continuing to
work with the Welsh Government and their pipeline
of further specifications.
STRATEGIC REPORT
Platforms
South
Wales
GD Harries is the
cornerstone for SigmaRoc’s
South West platform. With
100% ownership completed
in September 2020, we
now have a significant
footprint in the region with
opportunities to expand the
businesses organically and
acquisitively. GD Harries
was previously owned by
Ian Harries, who has stayed
on with the business whilst
Nick Cleary has been
appointed as Managing
Director; previously MD
of Galliford Try Highways
and Operations Director
at Alun Griffiths.
Ian Harries
Nick Cleary
Chairman
Managing
Director
GD Harries is one of Wales’ largest
independent suppliers of aggregates.
Founded by Mr. Gerald D. Harries,
his son – Ian Harries – still remains
committed to the business and
SigmaRoc.
Based in West Wales, the platform
now operates out of seven granite
and limestone quarries; incorporating
three asphalt plants, six concrete
plants, and a wharf operation, as
well as a civil engineering division
delivering significant infrastructure
projects.
42
43
SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate
STRATEGIC REPORT
Risk
The Group’s risk appetite is reviewed annually and approved
by the Board in order to guide management. It defines the
level of risk the Group is willing to accept in pursuit of its
strategy as well as considering ESG risks. The Group also
look at how we change any risks into opportunities.
Sustainability & Risk is managed by our Technical Director,
Charles Trigg, a co-founder of SigmaRoc who currently
oversees M&A and Integration, Projects & Capex, HR &
benefits, Insurance and now Sustainability & Risk. The
Group has key members that contribute to Sustainability &
Risk with specialities in legal, safety and systems.
Board
Responsible for the risk management and internal control
and for reviewing effectiveness, with specific oversight of
Code of Conduct and ESG risks.
Audit Committee
Reviews the suitability and effectiveness of risk management
processes and internal controls on behalf of the Board.
Risk Representative
Responsibility for managing and reporting to the Board on
the key risks, controls and opportunities, including ESG,
within the Group.
Senior Management Team
Directors and senior managers identify, assess and manage
the key risks, controls, ESG matters and opportunities
and report them to the Risk representative. Their key
responsibilities include ensuring an effective risk culture is in
place, with risk and opportunity management embedded in
their businesses.
Charles
Trigg
Technical Director
44
Risk
Description
Mitigation
Competition
& Margins
Increase in costs or prices; reliance on key
suppliers and key customers, including national
merchants, could impact supply and profitability.
A number of existing competitors compete on
range, price, quality and service. Potential new
low-cost competitors may be attracted into the
market through increased demand.
Economic
and political
Environment
& Climate
Change
The Group is dependent on the level of
activity in its end markets. Accordingly, it is
susceptible to economic downturn, the impact
of Government policy, interest rates and any
political and economic uncertainty, such as
COVID-19.
Difficult economic conditions could also
increase our exposure to credit risk from our
customers.
Operational impact on the environment or
the effects of climate change could expose
the Group to regulatory breaches, significant
disruption, reputational risk or a reduction in
demand for our products.
Finance,
Liquidity and
Currency
Foreign exchange risk: As the Group
transacts in currencies other than Sterling,
exchange rate fluctuations may adversely
impact the Group’s results.
Credit risk: Through its customers, the Group
is exposed to a counterparty risk that accounts
receivable will not be settled leading to a
financial loss to the Group.
Liquidity risk: Insufficient funds could result in
the Group being unable to fund its operations or
to continue to invest organically or to undertake
acquisitions.
Interest rate risk: Movements in interest rates
could adversely impact the Group and result in
higher financing payments to service debt.
Operate a strategic purchasing plan to minimise key
supplier risks, notably in cement and bitumen.
Seek to offset rising commodity prices through our
product pricing strategy and hedging programmes.
Maintain a diverse customer and project base focuses
on quality, service, reliability continuing focus on new
product development.
Operate a decentralised model matching focus of
independents and new entrants.
The Group has a strong focus on operational gearing,
allowing it to be flexible during economically disruptive
events.
The Group has a diverse product portfolio across
multiple end markets and jurisdictions.
The Group’s relationship with suppliers and customers
allow for management of risk including credit risk and
where necessary credit risk insurance is sourced.
Committed to reducing level of carbon emissions,
reuse and recycling schemes and implementation of
sustainability initiatives.
Group now falls under SECR and has committed to
monitoring all of its operations, not just the UK, through
an independent external organisation.
Management, training and control systems are in place to
prevent environmental incidents.
Promotion of EMS and ISO14001 accreditation of which
currently 50% of our businesses have.
Foreign exchange risk: The Group undertakes limited
foreign exchange transactions as it sells domestically
or in domestic currency with largely local input
costs. Some M&A, Opex and Capex requires foreign
exchange purchases and management considers
foreign exchange hedging strategies where significant
exposures may arise.
Credit risk: Customer credit risk is managed by each
subsidiary. The Group principally manages credit risk
through management of customer credit limits. The
credit limits are set for each customer based on the
creditworthiness of the customer and the anticipated
levels of business activity. These limits are initially
determined when the customer account is first set up
and are regularly monitored thereafter.
Liquidity risk: Ensure sufficient funding and facilities
in place to meet any foreseeable peak in borrowing
requirements and liabilities by maintain strong
relationships with our banks and shareholders. Internal,
we continuously monitoring forecasts and cash flows to
ensure that we maintain significant headroom and have
self-imposed 2 times leverage.
Interest rate risk: The Group finances its operations
through a mixture of retained profits and bank
borrowings, based on floating rates. Interest rate fixing
has been reviewed but none have been entered into
during the year or at the year end.
45
SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate STRATEGIC REPORT
Risk CONTINUED
Risk
Description
Mitigation
Risk
Description
Mitigation
Health and
Safety
Failure to manage health and safety risks could
cause harm to our employees or those around
us and expose the Group to significant potential
disruption, regulatory breaches, liabilities and
reputational damage.
IT & Cyber
Legal &
Regulatory
Disruption to the IT environment could affect our
operational performance and lead to reputational
damage, regulatory penalties or significant
financial loss.
Failure to keep up to date with advances in
technology could impact demand and our ability to
access the market.
Exposure to developments that lead to political,
legal and regulatory changes requiring significant
changes to Group operations which could impact
the Group’s financial results, together with any
associated negative reputational damage.
Inadvertent failure to comply with elements of a
significantly increased governance, legislative and
regulatory business environment.
A legal or regulatory breach could result in
disruption to operations, financial consequence
and reputational damage.
M&A
Overpay; fail to integrate; fail to deliver the
expected returns from an acquisition.
Failure to identify potential acquisitions to sustain
our growth strategy or not be an acquirer of
choice.
We safeguard the health and safety of employees,
contractors and others working on behalf of
the Group, with experienced health and safety
professionals who provide relevant training and help
develop a strong culture alongside the management
teams; all of which is overseen and audited by our
group HSEQ director and the support of consultants
where necessary.
We are constantly improving communication and
reporting across the Group through simple and
effective systems and processes such as our HS
Engagement & Monitoring software, Visible Felt
Leadership, HS Committees, back to work and
pitstops.
IT support teams and service providers continue
to monitor and respond to new and expanding
cyber risks by implementing best practice in IT
security management, back-up systems and
risk management software courtesy of our cyber
insurance providers.
Outdated software and hardware are updated and
cloud solutions embraced to minimise negative
impacts and allow continual operations.
Group general counsel and engagement of external
specialists to monitor legislative changes and
conduct ongoing training.
Hold appropriate business accreditations and
insurances and ensure there are compliance
procedures, policies, ISO standards and
independent audit processes which seek to ensure
that regulatory and compliance procedures are fully
complied with.
Strong acquisition track record supported by our
specialist advisers and rigorous due diligence
processes.
All acquisitions are approved by the Board and all
acquisitions are subject to detailed due diligence
processes which are executed by project teams,
with progress monitored by the Board.
We have developed a management structure
which facilitates our growth strategy and, where
appropriate, we make arrangements to retain
acquired senior management and minimise negative
change upon acquiring businesses.
The Board uses its networks and reputation to review
wider acquisition opportunities and our businesses
are all tasked with bringing forward potential
acquisition targets for review at Group level.
Operational
disruption
and key
equipment
failure
A material disruption at one of the Group’s
operational sites or at one of the Group’s
suppliers’ facilities, could prevent the Group from
meeting customer demand.
Quality
The nature of the Group’s business may expose
it to warranty claims and to claims for product
liability, construction defects, project delay,
property damage, personal injury and other
damages. Any damage to the Group’s brands,
including through actual or alleged issues with its
products, could harm our business, reputation and
the Group’s financial results.
Raw
Materials
sourcing
& internal
resources
The Group is susceptible to significant increases
in the price of raw materials, utilities, fuel oil and
haulage costs and decreases in availability.
Risks exist around our ability to pass on increased
costs through price increases to our customers.
Recruitment
and retention
Failure to recruit, develop and retain the right
people.
Failing to create a corporate culture that is based
upon ethical values and behaviours.
Technology
& New
Business
Models
Reduction in demand for traditional products.
Risk of new competitors and new substitute
products appearing.
Failure to react to market developments, including
digital and technological advances.
The Group has the ability to transfer some of its
production across its network of plants and is able
to engage subcontractors to reduce the impact of
certain production disruptions. In relation to supplier
disruption or failure, further third-party suppliers
have been identified who can maintain service in the
event of a disruption.
The Group’s wide geographical spread mitigates
this risk to some extent and allows it to manage its
production facilities to mitigate the impact of such
disruption.
The Group operates comprehensive quality control
procedures across its sites with both internal and
external audit reviews of product quality completed
to ensure conformance with internationally
recognised standards. All accredited staff undergo
rigorous training programmes on quality and the
technical teams carry out regular testing of all of our
products to provide full technical data on our product
range.
Resource expansion plans developed at all sites to
ensure timely access to future materials.
The Group focuses on its multiple supplier
relationships, flexible contracts and the use of
hedging instruments.
Ensure businesses are self-sufficient with ability to
increase resources through subcontractors during
peak demands.
The Board, newly appointed Nomination Committee,
and senior management teams conduct reviews and
plan succession for key roles.
The Board and the newly appointed Remuneration
Committee review all key aspects of remuneration to
ensure appropriate packages are in place to assist
in the attraction and retention of key employees.
Each business has a grading and employee benefit
structure with review of incentive plans underway to
give help support long term employee commitment.
A focus on identifying internal talent and recruitment
of upcoming talent is under review to ensure
succession planning and maintain a dynamic talent
pool which is supported with development plans.
Digital and product development groups that work
local and cross business reviewing both our industry
and external offerings and opportunities.
46
SigmaRoc Annual Report and Financial Statements
Invest, Improve, Integrate and Innovate
47
47
Invest, Improve, Integrate and Innovate STRATEGIC REPORT
Chief Financial Officer’s Report
Following my first year as an executive Board member and
Chief Financial Officer, having taken over from Garth Palmer
in 2020, I would like to begin this report by thanking the
Board and shareholders for the opportunity.
I am very pleased to report a strong year financially for the
Group, during which we exceeded our ambitious financial
targets, while continuing to expand our business during a
global pandemic crisis. We completed the acquisition of the
remaining parts of Stone Holdings and GD Harries as well
as a full debt refinancing.
In our full 2020 financial year, the Group generated revenue
of £124.2 million (2019: £70.4 million) and Underlying
EBITDA of £23.9 million (2019: £14.5 million). The Underlying
profit before taxation for the Group for the year ended 31
December 2020 was £12.2 million (2019: £8.4 million).
The loss for the Company for the year ended 31 December
2020 before taxation amounts to £5.8 million (2019: loss
£4.7 million), which includes £2 million of non-underlying
expenses.
The Board monitors the activities and performance of the
Group on a regular basis. The Board uses financial indicators
based on budget versus actual to assess the performance
of the Group. The indicators set out below will continue to be
used by the Board to assess performance over the period to
31 December 2021.
Cash and cash equivalents
Revenue
Underlying EBITDA
Capital expenditure
2020
2019
£27,451,984
£9,867,696
£124,231,115
£70,362,472
£23,896,126
£14,534,647
£6,451,893
£3,384,363
Cash generated from operations was £28.5 million (2019: £2.1
million) with a net increase in cash of £17.5 million (2019: net
increase of £6.1 million). In December 2020 the Group raised,
in aggregate, £12.4 million in relation to future acquisitions.
Revenue and Underlying EBITDA exceeded expectations
and management forecasts.
Capital expenditure relates to purchase of new plant and
machinery and improvements to existing infrastructure
across the Group.
PPA
BDO UK undertook the PPA exercise required under IFRS 3
to allocate a fair value to the acquired assets of CDH.
The PPA process resulted in a reduction of goodwill
recorded on the Statement of Financial Position of the
Group for CDH from £51 million to £7.2 million. The
reduction was to transfer the value of goodwill to tangible
assets for land and buildings, land and mineral reserves,
intangible assets for trade name and deferred tax assets.
Non-underlying items
The Company’s loss after taxation for 2020 amounts to £5.8
million, of which £2 million relates to non-underlying items,
while the Group’s non-underlying items totaled £5 million for
the year. These items relate to eight categories:
1. £1.4 million amortisation of acquired assets and
adjustments to acquired assets.
2. £1.4 million in exclusivity, introducer, consulting, legal
fees and other direct costs relating to acquisitions.
During the year the Group acquired the remaining
shares in GD Harries and Stone Holdings SA.
3. £0.8 million legal and restructuring expenses relating to
the rebranding and alignment of all subsidiaries across
the Group.
4. £0.3 million in share based payments relating to grants
of options.
5. £0.3 million on unwinding of discounts on deferred
consideration payments for CDH and CCP.
6. £0.6 million in other exceptional costs which primarily
relate to non-cash balance sheet adjustments and
COVID-19 costs.
7. £0.1 million in discontinued operations including the
trading expenses, stock adjustments and redundancies
incurred at the Bury site for the 2020FY.
8. £0.1 million for provision of legal fees.
Interest and tax
Net finance costs in the year totaled £2.7 million (2019:
£2.0 million) including associated interest, bank finance
facilities, as well as interest on finance leases (including
IFRS 16 adjustments), hire purchase agreements and non-
cash adjustment for unwinding of discounts on deferred
consideration payments for CDH and CCP.
A tax charge of £0.7 million (2019: £0.5 million) was
recognised in the year, resulting in a tax charge on profitability
generated from mineral extraction in the Channel Islands and
profits generated through the Group’s UK and Belgium based
operations.
49
Dean
Masefield
Chief Financial Officer
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SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate STRATEGIC REPORT
Chief Financial Officer’s Report CONTINUED
Earnings per share
Capital Allocations
We prioritise the maintenance of a strong balance sheet
and deploy our capital responsibly, allowing us to commit
significant organic investment to our business whilst
continuing to pursue acquisitions to accelerate our strategic
development. This conservative approach to financial
management will enable us to continue pursuing capital
growth for our shareholders.
Dividends
Subject to availability of distributable reserves, dividends
will be paid to shareholders when the Directors believe it is
appropriate and prudent to do so. The focus of the Group
at this stage of its development will be on delivering capital
growth for shareholders. The Directors therefore do not
recommend the payment of a dividend for the year (31
December 2019: nil).
Post Balance Sheet event
Post 2020 close we have conducted a series of activities
worthy of mention in this annual report. Further information
is set out in note 38.
Employee Benefits
All of our UK employees, almost 400, have been offered
both Private Medical Insurance and Group Life Assurance.
Our benefits provider commented that the uptake of this
offering from our employees was unprecedented with many
adding family members.
SigmaRoc has also engaged Link Group to set up a
Share Incentive Plan for all UK employees, an offering we
already have in the Channel Islands. We are continuing to
investigate Share Plans for our European operations.
This report was approved by the Board on 12 April 2021 and
signed on its behalf.
Dean Masefield
Chief Financial Officer
Basic EPS for the year was 2.55 pence (2019: 0.92 pence),
adjusted for the non-underlying items mentioned above.
Underlying basic EPS for the year totaled 4.50 pence (2019:
4.20 pence).
Statement of financial position
Net assets at 31 December 2020 were £124 million (2019:
£102 million). Net assets are underpinned by mineral
resources, land & buildings and plant & machinery assets of
the Group.
Cash flow
Cash generated by operations was £28.5 million (2019: £2.1
million). The Group spent £8.4 million on acquisitions net
of cash acquired and £6.5 million on capital projects. The
Group raised £12.0 million net of fees through the issue of
equity and repaid net borrowings of £6.4 million. The net
result was a cash inflow for the year of £17.5 million.
Net debt
Net debt at 31 December 2020 was £43.8 million (2019:
£49.8 million), and was refinanced on 21 December 2020.
Bank facilities
In December 2020 the Company entered a new Syndicated
Senior Credit Facility of up to £125 million (the ‘Credit
Facility’) led by Santander UK and including several
major UK and European banks. The Credit Facility, which
comprises an £85 million committed term facility and a £40
million accordion option, will provide the Group with further
capacity and flexibility to support its ongoing buy-and-build
strategy, as well as reducing like-for-like borrowing costs.
The Group’s new Debt Facilities have a maturity date of 21
December 2025 and are subject to a variable interest rate
based on LIBOR plus a margin depending on EBITDA. As at
31 December 2020, total undrawn facilities available to the
Group via the new Debt Facilities amounted to £63.7 million.
The Group’s new Debt Facilities are subject to covenants
which are tested monthly and certified quarterly. These
covenants are:
■ Group interest cover ratio set at a minimum of 3.5 times
EBITDA; and
■ A maximum adjusted leverage ratio, which is the ratio
of total net debt, including further borrowings such as
deferred consideration, to adjusted EBITDA, of 3.5x in
2020. As at 31 December 2020, the Group comfortably
complied with its bank facility covenants.
50
51
SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate Sustainability
Report
SigmaRoc is committed to sustainability and
disclosure and going forward will have a dedicated
section in the annual report on sustainability. With
sustainability being such a key subject, we have
committed to a sustainability framework relevant
to our size and industry following review of global
frameworks such as TCFD, SASB and FTSE
Russell, of which themselves align to the UN
Sustainable Development Goals.
STRATEGIC REPORT
Environment
SigmaRoc looks to follow four key statements with regards to our commitment to environmental responsibility:
1.
Sustainable
use of reserves and
resources;
2.
Responsible
use of key resources
including raw material,
mineral and water;
3.
Optimise
energy use and minimise
impact of our operations on
the environment; and
4.
Contribute
to sustainable construction
and address environmental
aspects either through
production or consumption.
2020 continued to be a very focused year with several areas delivering or creating the foundation to deliver some
inspirational opportunities
Biodiversity
Climate Change
Energy use
As our extractive operations
continue, areas that have been long
since mined have been nurtured
overtime. This year we were proud to
be able to give a large restored part
of a previously working site back to
the community where walking and
cycling trails can be set up for the
local communities to enjoy. We have
also conducted land swaps where
areas of our ownership have been
swapped with local farmers, thereby
allowing them more land whilst in
return giving us better access to
mineral with less environmental
impact. We have also participated
in smaller projects with more remote
communities such as the planting of
over 1,000 trees and the successful
translocation of blue grass following
ongoing operations at one of
our sites.
With regards to energy use, we have
continued to extend our change over
to LED lighting, and have successfully
completed more sites, with others still
transitioning. We have also extended
our focus on energy to our mobile
plant, with several aging machines
being upgraded to more fuel-efficient
models, and one of our primary
haulage contractors upgrading their
fleet to Euro 6 HGV. As we have
shown commitment, so have our
employees, with several identifying
the UK Government backed cycle
scheme which we have supported.
Energy monitoring
To ensure we are not using fuel
unnecessarily we have also continued
to roll out MachineMax that allows
monitoring and management of our
assets thereby reducing idle times
and unnecessary operation.
This will be our first year of SECR
reporting and whilst this is limited
to the UK, in the interests of full
disclosure, we have voluntarily
exceeded the minimum requirements
set out in the 2018 Regulations
by also including energy use and
greenhouse gas emissions for
operations outside of the UK. Further
SECR details can be found in the
next section.
Over the year we have continued to
embrace technology; this includes
energy sourcing, consumption and
energy management.
Energy sourcing
Continuing our commitment to
renewable energy where possible,
we have signed the contract for the
third phase of the solar photovoltaic
extension, to be installed in 2021,
increasing energy generation from
950MWh to 3,800MWh. We continue
to look at alternative energy options
across our other sites and have been
in discussions with various energy
suppliers for the installation of solar
farms to feed our plants with surplus
being added to the grid.
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Invest, Improve, Integrate and InnovateSigmaRoc Annual Report and Financial Statements
STRATEGIC REPORT
Environment CONTINUED
STRATEGIC REPORT
Streamlined Energy and Carbon Reporting (SECR)
Energy use and associated greenhouse gas emissions
Pollution and resources
Contribution to sustainable products and uses
We regularly review our production processes to minimise
resource use and waste generation. This year has included
ensuring where we do not already harvest rain water, we
do so, thereby reducing the impact on water tables or
potable water supply. In Belgium this has been taken one
step further by ensuring a closed circuit which includes the
supply of 40,000 families in the local community.
Where waste does occur, we continue to have dedicated
recycling functions and actively look to reuse it by feeding
waste material back into our process.
In additional to our own waste, we also review other
industries waste to see what opportunities exist, such as
for substitution in full or part of raw materials to minimise
environmental impact. This includes working in conjunction
with Natural UK to replace the use of conventional fibres
in asphalt to using recycled, clean nappies from local
recycling facilities.
In 2020 we developed Greenbloc, a cement free block that
reduces the CO2 footprint of a traditional block by up to
77%. Further to this we also looked at our products to see
how they themselves can reduce pollution and improve
the environment. Through research and working in close
partnerships with others, we are working with product
ranges that not only offset aspects such as carbon, but also
remove pollutions such as CO2, NOx and SOx.
Further information on our policies (biodiversity,
environment and pollution) can be found at
www.sigmaroc.com
Reporting period
The annual reporting period is 1
January to 31 December each year
and the energy and carbon emissions
are aligned to this period. GD Harries
was fully acquired on 21 September
2020, meaning energy and emissions
are only included for this subsidiary
from the date of full control as per the
operational control approach.
Organisational boundary
In the interests of full disclosure,
SigmaRoc has voluntarily exceeded
the minimum requirements set out
in the 2018 Regulations by also
including energy use and greenhouse
gas emissions for operations outside
of the UK. Therefore, energy use and
emissions are reported for assets and
operations in the UK, the Channel
Islands and Belgium, covering the
entire Group as defined by the
operational control approach.
Quantification and
reporting methodology
The 2019 UK Government
Environmental Reporting Guidelines
and the GHG Protocol Corporate
Accounting and Reporting Standard
(revised edition) were followed.
The 2020 UK Government GHG
Conversion Factors for Company
Reporting were used in the majority
of emission calculations with the
exception of electricity emission
factors for Belgium, Jersey and
Guernsey. These ‘location-based’
factors were sourced from the
Association of Issuing Bodies,
Jersey Electricity and Guernsey
Electricity respectively and exclude
transmission and distribution losses.
The report has been reviewed
independently by Briar Consulting
Engineers Limited.
Electricity and gas consumption
records were based on invoices,
with some pro-rata and benchmark
estimations carried out to complete
missing data. Transport emissions
were calculated from a combination
of mileage and fuel records. Fuel
used for off-highway fleet vehicles
were reported separately from fuel
used for other stationary machinery
where possible. Gross calorific values
were used except for mileage energy
calculations as per Government GHG
Conversion Factors.
The associated emissions are
divided into mandatory and voluntary
emissions according to the 2018
Regulations. For large unquoted
organisations, the 2018 Regulations
define mandatory emissions as
purchased electricity, gas combustion
and transport fuel purchased by the
organisation (including company cars,
off-highway fleet and expense claims
for business mileage in personal
or hire cars). Reporting energy and
emission sources outside of these
sources is considered voluntary and
reported separately.
The emissions are further divided into
their relevant scopes as per the GHG
Protocol. The scopes are defined as:
■ Scope 1: Direct GHG emissions
that occur from sources owned or
controlled by the organisation.
■ Scope 2: Indirect GHG emissions
from the generation of acquired
and consumed electricity, steam,
heating or cooling.
■ Scope 3: Other indirect GHG
emissions that occur as a
consequence of the organisations
activities but occur from sources
not owned or controlled by the
organisation.
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Invest, Improve, Integrate and InnovateSigmaRoc Annual Report and Financial Statements
STRATEGIC REPORT
Streamlined Energy and Carbon Reporting (SECR)
CONTINUED
Breakdown of energy consumption used to calculate emissions (kWh):
Energy type
Mandatory energy:
Gas
United
Kingdom
274,854
2020
Channel
Islands
Belgium
Total
Breakdown of emissions associated with the reported energy use (tCO₂e)
Emission source
Mandatory emissions:
Scope 1
Gas
2020
United
Kingdom
Channel
Islands
Belgium
Total
50.5
-
94.8
145.3
-
441,790
716,644
Transport - Company owned fleet
1,471.6
431.6
4,784.9
6,688.1
Purchased electricity
2,611,414
2,398,867
12,261,484
17,271,765
Scope 2
Transport (including off-highway fleet)
6,274,566
1,793,945
18,708,177
26,776,689
Purchased electricity (location-based)
608.8
368.7
1,877.6
2,855.1
Total mandatory energy consumed
9,160,834
4,192,812
31,411,451
44,765,098
Scope 3
Voluntary energy:
Gas oil (for stationary machinery)
12,704,112
14,123,496
4,752,326
31,579,934
Burning oil
Generated electricity1 (solar photovoltaic)
5,077,170
-
-
-
714,895
5,792,065
940,490
940,490
Total voluntary energy consumed
17,781,282
14,123,496
6,407,711
38,312,489
Total mandatory & voluntary
energy consumed
26,942,117
18,316,308
37,819,162
83,077,587
1 Solar photovoltaic electricity generated includes any exported energy to the grid
Transport – Business travel in employee-owned
vehicles
41.5
-
-
41.5
Total gross mandatory emissions
2,172.4
800.2
6,757.3
9,730.0
Voluntary emissions:
Scope 1
Gas oil
Burning oil
Generated electricity consumed on site
Total gross voluntary emissions
Total gross mandatory & voluntary
emissions
Intensity ratios: tCO2e per £million turnover
Mandatory emissions only
Mandatory & voluntary emissions
3,625.9
1,220.0
3,261.5
1,252.4
-
4,513.9
6,686.3
-
-
3,625.9
4,426.1
176.3
-
8,107.4
1,428.7
-
1,396.3
9,536.1
8,153.7
19,266.1
46.4
142.9
29.3
162.1
134.9
162.7
78.3
155.1
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57
Intensity ratio
The intensity ratio is total gross emissions in metric
tonnes CO2 equivalent per total million-pound (£m)
turnover. This is calculated separately for ‘mandatory’
emissions and ‘mandatory & voluntary’ emissions for the
UK, Channel Islands and Belgium. This financial metric
is considered the most relevant to the company’s energy
consuming activities and provides a good comparison
of performance over time and across different
organisations and sectors.
Energy efficiency action during
current financial year
In the period 1 January to 31 December 2020 for UK
operations, no specific energy efficiency actions were
undertaken; however, in Belgium we have signed the
contract for the third phase of the solar photovoltaic
extension to be installed in 2021. This is set to increase
energy generation from 950MWh to 3,800MWh.
STRATEGIC REPORT
Social
SigmaRoc looks to follow four key statements with regards to our commitment to social responsibility:
Ensure
people leave work in the
same or better condition than
when they arrived;
Support
the physical and mental
health of our employees and
their families;
Attract
train, retain, and engage our
workforce; and
Be a good neighbour
Source local, buy local, sell
local, invest local.
Two key areas in 2020 following significant growth at the end of 2019 were:
We remain committed to
continuing to improve the
health, mental wellbeing and
safety of our staff, contractors
and visitors.
Health and Safety
November 2019 saw the re-issue of the group Health &
Safety policy and framework, and during 2020 all then
supervisor and managers put through IOSH and or
NEBOSH training to support them and their commitment to
the new Health & Safety policy and framework.
In the spirit of a reset, we also took the opportunity
to conduct a health and safety benchmark review by
conducting full external audit of all our sites during 2020.
We are proud to say that internal follow up has shown many
actions and focal areas have been addressed and good
work is on-going with those still remaining.
We can take comfort in that our overall incident rate has
reduced by 6% and that our LTIFR has reduced again this
year by 22% and that one of our businesses was one of the
first in our industry to achieve the new ISO 45001. During
2021 at least 2 other businesses should achieve ISO 45001,
subject to any ongoing travel restriction.
Health and safety engagement has seen positive trends
both locally with local management teams engage with
worker representatives, unions and local government and
across the groups with the introduction of HighVizz, a
mobile engagement and safety management system, as
well as monthly cross business safety meetings and the
Group safety committee.
The Group safety committee is chaired by our CEO, Max
Vermorken and as of 2021 will be joined by Non-Executive
Director Tim Hall. The committee:
■ Reviews and agrees the framework and policy for
Health, Safety and Wellbeing across the Group
annually
■ Determines each year Group focus areas and
performance targets
■ Monitors integrity of information and overall Group
performance biannually
■ Monitors progress and performance against audits
and plans
■ Reviews and challenges health and safety process
and procedures across the Group
■ Reviews and promotes engaging and proactive
health, safety and wellbeing culture and focus
During a time of unprecedented global pandemic, we
have leveraged our various programs such as Employee
Assistance Programs, cash plans with access to medical
and counselling services, buddy systems that allow peers
to call each other even if it is to just say “hi, how you doing”
and Rehabilitation programs that allow people to be returned
to work, regardless if they are hurt at home or not to ensure
that not only are our staff’s physical and mental health
proactively supported, but also their loved ones at home.
As of 2020 we have engaged programs to review our entire
employee benefits such as life assurance and healthcare to
expand out offering throughout the businesses and through
2021 we remain committed to continuing to improve the
health, mental wellbeing and safety of our staff, contractors
and visitors.
Helping with safety beyond ourselves
Our approach to health and safety extends beyond our
own walls; by engaging our communities, we can help
minimise health and safety matters with regards to visitors,
contractors and customers coming on to our sites. After
serving the maximum nine years term as a voluntary
Board member of the Jersey Safety Council, Mike
Osborne stood down during 2020 with Kirsten du Heaume
being elected independently to serve on the council,
keeping Ronez at the front of the behavioural safety
agenda in Jersey. In Guernsey we are proud to have
Seamus Gillespie as a committee member of Guernsey
Occupational Safety and Health Association.
Clint White is responsible for group Health,
Safety, Environment and Planning and has
been with SigmaRoc since 2017. Clint is a qualified
geologist and Health and Safety professional having
worked around the world in both underground and
open pit mining as well as oil and gas for such
companies as Ineos Fluor, Laporte Minerals and
British Petroleum. Clint is primarily responsible
for ensuring that SigmaRoc businesses maintain
robust systems for the delivery of a compliant and
progressive health, safety and environmental culture
with a focus on continuous improvement. During
the pandemic, Clint has championed our COVID-19
response, ensuring that all those involved with our
operations and services are protected and conform
to the government criteria. Clint has led the setup
and promotion of COVID-19 working polices, health
screening, asset disinfecting and fumigation, testing
and wellbeing programs for those that have been
self-isolating or working from home.
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Social CONTINUED
Employee and Communities Engagement
As we have grown and our presence and reputation has
become stronger, ensuring we have the right people has
been an important focus during 2020. It has been essential
that we attract and recruit the best candidates for our
jobs by focusing on their overall potential both in terms of
technical capability but equally importantly in terms of their
soft skills. By offering autonomy within our businesses, each
employee can not only become part of the business, but
they can help the business become part of the community.
By being locally focused, each business can focus on what
is important to their communities, be it support with local
schools, sports teams or charities.
Mark De Carteret, Ronez’s Technical &
Quality Manager joined the Board of charity
group, GO LBG, who provide training and support
to disadvantaged people with a primary objective of
getting them work ready in as close to a business
environment as is practical. Mark contributed by
providing hands on practical help; implementing
a full suite of H&S policies and risk assessments
together with providing much needed materials
including procurement of uniforms and heaters
with the support of Ronez. Mark has also taken a
fundamental lead with the very ambitious premise
relocation, coaching and mentoring the Go team
to adapt to change; offering essential input to the
project management, logistics and budget.
Retaining & Attracting
This year we have seen many of our
staff achieve service levels that are
a testament to the culture we look to
have and retain in our businesses; a
working environment where people
feel part of a family. Across a business
of close to 1,000 employees 32%
have dedicated 15 years to our
businesses.
As proud as it is to have such long
serving members of staff, we have
also focused on ensuring that those
at the very start of their working lives
have the opportunity to become long
serving members of the team. This
starts at the very beginning, even
before people are job hunting and are
in school looking at career directions.
Across our businesses we have
engaged with; over 25 trainees and
apprentices; informal and formal work
experience such as Project Trident
providing work experience for school
students under the mentorship of
technical and operational staff; and
cooperation with Universities and
industrial training centers in the UK,
Europe and America.
At the end of the year, nearly all of
our workforce are directly employed
by our businesses with almost
80% working in operational and
manufacturing roles.
Working with local companies
when help is needed
Our local presence and commitment
led us to become aware of, engage
with, and help support approximately
50 people facing redundancy in
unprecedent times for a high-profile
project who otherwise would have
been made redundant. Since the
end of the project, we have retained
people and helped others with finding
jobs elsewhere.
Supporting our communities and
committing to our industry
This year we have seen our support
take many forms from supporting local
charities, be it fundraising, material or
services, to our teams volunteering
their time, knowledge and skills.
It is our industry and our people that
have led us to be where we are today,
and it is testimony to our employees
that they want to continue to support
where they have come from, often
volunteering time outside of normal
working hours; Industry working
parties, Board member of national
industrial federations, director and
committee roles of business councils
and associations as well as offering
educational commitments ranging
from schools to universities.
Further information on our policies can be found at www.sigmaroc.com
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Invest, Improve, Integrate and InnovateSigmaRoc Annual Report and Financial Statements Transparency
Engagement of a full time CFO to ensure adequate time
was dedicated to ensuring accurate and transparent
reporting as well as overall compliance. This has included
the separation of our tax and audit partners as well as the
appointment of a training provider on Criminal Finances
Act 2017 that was undertaken in early 2021.
We continue to maintain our policies such as Anti Bribery
& Corruption, which is overseen by the Board and trained
annually and cascaded throughout the business, as well
as our Whistleblowing policy. The Whistleblowing policy
gives its employees, or indeed any other third party, the
means to raise concerns in confidence and (if they wish)
anonymously. The Audit Committee reviews reports on
notifications received and ensures that arrangements
are in place for the proportionate and independent
investigation of such matters and for follow up action.
We are also committed to having transparency with all
of our Shareholders and as per last annual reports and
interim reports we will continue to give a presentation
webinar to all Shareholders with an online or moderated
Q&A session.
Further information on our policies
(Whistleblowing, Anti Slavery & Human Rights,
Anti Bribery & Corruption) can be found at
www.sigmaroc.com
STRATEGIC REPORT
Governance
SigmaRoc looks to follow four key statements with regards to our commitment to governance:
1.
Promote
QCA and Corporate
Governance Codes;
2.
Ensure
proactive Board oversight
and independence of
committees;
3.
Focus
on risk management
& mitigation (including
cyber) and conversion
of risk into generation of
opportunity; and
4.
Ensure
transparency and
disclosure on both reporting
and tax
Following significant growth at the end of 2019, in 2020 heavy emphasis has been placed on three main areas:
Corporate governance
Risk Management
We appointed two independent non-executive directors,
including new independent chairs for the audit, remuneration
and nominations committees (see page 68), and a highly
qualified inhouse general counsel, with a specialty in ECM.
This has already led to a full review of all existing corporate
governance handbook and going forward will ensure not
only our compliance with the QCA Corporate Governance
Code but alignment with best practice wherever possible.
In addition to the formal boards and committees we have
also engaged an independent advisory board in Belgium,
consisting of Emmanuel Maes (former CEO DeCloedt),
Pascal Lesoinne (former CEO Heidelberg Belgium),
Christophe de Limburg Stirum (Investor and entrepreneur
specialising in Industrial companies) and Patrick Dolberg
(former CEO Holcim Europe). The function of this board
is to ensure that within Belgium and Europe we have a
governance structure that can work on a local level where
there are jurisdictional differences.
This year we adopted a risk management framework as
per page 44 of this Annual Report. In the current business
climate, where remote working and communication has
become essential, we have also reviewed our cyber
protection with both insurance policies in place as well as
cyber risk management software that allow for testing and
training of cyber security. In addition, through our service
providers, security checks are performed on a regular
basis both at Group and subsidiary level.
Anthony
Brockbank,
our General Counsel,
is a qualified solicitor
specialising in
Corporate Finance,
M&A and Equity
Capital Markets.
Anthony is a partner
at Fieldfisher,
Hobson Audley
and Linklaters and has over 30 years’ experience
in mergers and acquisitions, flotations and
fundraisings with particular expertise in small and
mid-size public company transactions on the Official
List and AIM Market of the London Stock Exchange.
Anthony is ranked by Chambers in Band 1 for
capital markets work and as a leading individual in
Legal 500.
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Sustainability Roadmap
STRATEGIC REPORT
Our Stakeholders
Development
Analyse and Disclose
In 2020 we committed to define SigmaRoc’s framework
following review of international and industry standards.
We have agreed commitment statements have have
already started work and disclosure on various aspects,
including safety and CO2 emissions and launch of
sustainable products such as Greenbloc. Through ongoing
engagement with investors we continue to identify areas of
focus and disclosure.
Measure
2020 was our first year of collating information for SECR.
We will continue to set up practical and meaningful
measuring processes to help determine more relevant and
quantifiable targets as well as our ongoing contribution to
national industry bodies.
Having captured all practical and meaningful data, we can
identify those areas of focus that will bring the biggest wins
for the overall position and performance of the company.
Short and long term targets will be able to be captured
and disclosed.
Improve
We will continue to monitor, disclose and drive
continual improvement.
Stakeholders
(in alphabetical
order)
Colleagues
Customers
and Suppliers
Communities
We have dedicated workforce of close to1,000 across
the Group.
We recognise our dedicated workforce as a key driver
of the value derived from the business.
Our colleagues are experienced and continuously
developed to fulfil their potential.
All employees are offered a fair benefits and
compensation package relative to their role and level in
the organisation.
We encourage share ownership where they are
available and are working to set up where they are not
currently in place.
All our businesses are decentralised and locally
focused so that we know the customers and suppliers
areas like they do.
We work alongside our customers to provide “right
first time” service and to seek proactive and innovative
solutions to support requirements.
“right first time” is key to success and ensuring
customer loyalty as part of our long-term success.
We recognise the huge role our suppliers play in
its long-term success. We strive to ensure timely
payments, maximise value to support the delivery of
our customers’ needs.
We balance economic requirements with sustainability
considerations over the whole supply chain.
By being decentralised and local we are at the heart
of the communities in which we operate allowing us
to be knowledgeable, good, supportive and engaging
neighbours.
How we engage
Site presence and visual felt leadership.
Employee groups and committees and unions.
Focus on development training and succession
planning.
Decentralised approach with flat management
allowing easy access to all staff.
Employee benefit offerings that can also extend
to family members.
Prioritise a local focus on both customers and
suppliers.
Engage directly from our sites so that the
customer and supplier deal directly with the site
they are supplying or buying from.
Ensure timely payments are made to suppliers.
Functional and intuitive websites and digital
solutions focused on the customer.
Ensure adequate checks and due diligence are
done on customers and suppliers.
Proactive approach and active participation in
community and industry working groups, forums
and committees.
Investors
All our Shareholders play an important role in the
continued success of our business.
Dedicated forums such as AGM, Annual and
Interim Webinar Q&As.
We maintain purposeful and close relationships with
them either directly or via wider mediums such as Q&A
webinars and when allowed, conferences.
We seek to be transparent and give clear and
consistent messages across all communication
channels.
Regulators
/ local
Government
We look to develop and sustain good relationships with
many regulators who govern our businesses to ensure
the success of our business and maintaining our
license to operate.
We are committed to adherence of legal and regulatory
requirements.
We are committed to have independent review /
oversight be it internally or externally.
We are committed to a sustainability framework
following review of international standards.
Annual and interim reports, trading statements
and RNS.
Regular phone calls and dialogues.
Broker and NED contacts.
Site visits, investor roadshows, investor
conferences.
Regular dialogue with Governments,
Government agencies, regulators, and industry
groups.
Active membership of the industry bodies such
Mineral Products Association and Fediex.
Effective and clear policies to ensure
governance.
Education and training of staff to reinforce
compliance with regulations.
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GOVERNANCE
Governance Report
Board members
Existing members
Our Board comprises an executive leadership
team with extensive experience of the international
aggregates industry, supported by experienced
non-executive directors who bring strong
governance disciplines and a valuable external
perspective to our business.
David Barrett
Executive Chairman
Appointed to board: August 2016
Independent: No
Committees: Nominations Committee
Background: Previously David co-founded
London Concrete in 1997, subsequently
building the business from one concrete plant
in London to over a dozen plants around the
capital. London Concrete was sold to Aggregate
Industries and is currently the number one
concrete supplier in London, with flagship
projects such as the London Olympics, the
Shard, the US embassy and the new Bloomberg
building. Having previously worked with Pioneer,
David retired from London Concrete in 2015 and
is widely considered an expert in the industry.
Other Key Directorships: David also holds
directorships in various London based
Companies including Thames Aggregates
Limited, Thames Recycling Limited and Capital
Concrete Limited.
Max Vermorken
Chief Executive Officer
Dean Masefield
Chief Financial Officer
Appointed to board: August 2016
Appointed to board: April 2020
Independent: No
Committees: none
Background prior to SigmaRoc: Max was
strategic advisor to the CEO of LafargeHolcim Ltd
(“LafargeHolcim”) Northern Europe, the world’s
largest construction materials group. His role
included responsibility for the merger of Lafarge
SA and Holcim Ltd in the region involving the
only Day 1 integration of the two businesses
following the hive-down and integration of two
large asset portfolios – a mix which included two
cement plants and a multitude of down-stream
aggregates and construction materials assets.
Prior to working for LafargeHolcim, Max worked
in private equity at Luxembourg-headquartered
The Genii Group, where he reported directly
to its founding principals. Max holds a PhD in
Financial Economics from University College
London and Bachelor and Master degrees in both
Civil Engineering and Financial Economics from
University College London and the University of
Brussels respectively.
Other Key Directorships: Max doesn’t hold any
other directorships outside the group.
Independent: No
Committees: none
Background since joining Ronez: Dean has
been responsible for the implementation and
development of new accounting procedures
and controls, ensuring that the business meets
its reporting and statutory requirements, as
well as contributing to the growth ambitions
of the organisation. Dean has held a number
of roles within the finance industry in Jersey,
predominantly in trust companies and banks,
including a Head of Finance role at BNP Paribas
where he played a pivotal role in the migration of
accounting systems from legacy systems. Dean
started his career providing, audit, accountancy
and tax services, whilst qualifying with BDO
in Jersey Dean is a fellow of the Institute of
Chartered Accountants in England and Wales.
Other Key Directorships: Dean doesn’t hold
any other directorships outside the group.
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SigmaRoc Annual Report and Financial Statements GOVERNANCE
Governance Report CONTINUED
Jacques Emsens
Non-Executive Director
Appointed to board: April 2020
Independent: Yes
Committees: Member of the Audit Committee;
Member of the Nominations Committee
Background: Jacques is a founding member
of JPSeven and is a member of the Board of
Sofina, and numerous other companies. Jacques
has a long history in defining and implementing
strategies of industrial businesses including
Sibelco. Jacques holds a degree in Business
Administration from the European University of
Antwerp, from the Université Libre de Bruxelles
and from the London Chamber of Commerce and
Industry and speaks French, Dutch and English.
Other Key Directorships: Jacques holds
directorships in multiple businesses including
JPSeven, Sofina, Le Pain Quotidien.
Simon Chisholm
Non-Executive Director
Appointed to board: April 2020
Independent: Yes
Committees: Chairman of Audit Committee;
Chairman of the AIM and MAR Compliance
Committee; Chairman of the Remuneration
Committee; Chairman of the Nominations
Committee
Background: Simon is the founder and
managing director of Feros Advisers spending
over 20 years working in the Investment arena
including as a fund manager with Henderson. In
2013 Simon left Berenberg and established Feros
Advisers in response to the significant regulatory
and technological changes that are impacting
investment managers and quoted companies.
Simon joined Berenberg in 2003 and established
an office for them in London. Over the next 10
years Simon was one of the principle architects
in building the business from 3 people in London
to around 140 and establishing the bank as a
recognised brand name in the global investment
community. Before joining the sell-side, Simon
was a fund manager investing in European
equities first at Singer & Friedlander and then at
Henderson Global Investors and ran European
Smaller Companies investment products. After
University Simon joined Coopers and Lybrand
and qualified as a Chartered Accountant
Other Key Directorships: Simon is currently
an active director at Feros Advisers Ltd and
Munnypot Ltd.
Garth Palmer
Non-Executive Director
Tim Hall
Non-Executive Director
Appointed to board: January 2017
Appointed to board: April 2019
Independent: No
Committees: none
Background: Tim has spent his entire career in
the aggregates industry, most recently as CEO of
Breedon South, a business he helped build from
inception. Prior to this he was Director of Tarmac
Limited’s Western Area; Managing Director of
Tarmac Western Limited, the company formed by
Anglo American from the former assets of Nash
Rocks, Tilcon and Tarmac. He spent the previous
27 years with Nash Rocks, latterly as Managing
Director. Tim brings a wealth of experience and
knowledge of the industry to the Board and will be
an asset in SigmaRoc’s continued development,
as he has been with Breedon. In particular, Tim’s
knowledge and network within the industry will
benefit SigmaRoc’s growth in the aggregates and
construction materials market in the UK.
Other Key Directorships: Tim holds
directorships in multiple businesses including
Langsun Developments Limited and T G
Concrete Bridgnorth Limited.
Independent: No
Committees: Member of the AIM and MAR
Compliance Committee, Member of the
Remuneration Committee
Background: Garth was CFO and an Executive
Director of SigmaRoc from inception until April
2020 and remains as Company Secretary through
his partnership at Heytesbury Corporate LLP who
are engaged in the provision of corporate financial
and company secretarial services. Garth holds a
Bachelor of Commerce Degree and is a member of
the Institute of Chartered Accountants in England
and Wales. Garth began his career providing audit
and corporate services in Perth, qualifying while at
KPMG, before moving to London in 2005 where he
provided compliance services, with a focus on U.S.
Sarbanes-Oxley legislation, for numerous large
companies across a range of industries. This led
Garth to a Finance Manager role at Apple where
he spent four years working on business process
improvement, developing and implementing new
and improved financial processes and systems.
More recently, Garth has been working with AIM
listed companies, predominantly within the mining
and resources industries, providing corporate and
financial consulting services.
Other Key Directorships: Garth holds
directorships in multiple businesses including
Sport:80 Limited, GT Corporate Limited and is a
partner at Heytesbury Corporate LLP.
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69
GOVERNANCE
Corporate Governance Report
The Directors recognise the importance of sound corporate
governance. As a company whose shares are traded on
AIM, the Board has decided to comply with the QCA Code.
In addition, the Directors have adopted a code of conduct
for dealings in the shares of the Company by directors and
employees and are committed to maintaining the highest
standards of corporate governance. Dean Masefield, in his
capacity as CFO, has assumed responsibility for ensuring
that the Company has appropriate corporate governance
standards in place and that these requirements are followed
and applied within the Company as a whole.
The corporate governance arrangements that the Board has
adopted are designed to ensure that the Company delivers
long term value to its Shareholders and that Shareholders
have the opportunity to express their views and expectations
for the Company in a manner that encourages open dialogue
with the Board.
The Board recognises that its decisions regarding strategy
and risk will impact the corporate culture of the Company
as a whole and that this will impact the performance of
the Company. The Board is very aware that the tone and
culture set by the Board will greatly impact all aspects of the
Company as a whole and the way that employees behave.
A large part of the Company’s activities is centred upon what
needs to be an open and respectful dialogue with employees,
clients and other stakeholders. Therefore, the importance
of sound ethical values and behaviours is crucial to the
ability of the Company to successfully achieve its corporate
objectives. The Board places great importance on this aspect
of corporate life and seeks to ensure that this flows through
all that the Company does.
The key governance related matter that occurred during
the financial year ended 31 December 2020 was the
appointment of two independent non-executive Directors
together with the appointment of Anthony Brockbank as
Group General Counsel.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied.
These are listed below together with a short explanation of
how the Company applies each of the principles:
Principle One
Establish a strategy and business model which
promote long-term value for shareholders
Strategy & purpose: The Company invests in and acquires
businesses in the construction materials sector. The
principal activity of the Group is the production of high quality
aggregates and supply of value-added construction materials.
The Group’s aim is to create value for shareholders through
the successful execution of its buy and build strategy in the
construction materials sector.
Business model: The Group’s business plan is to acquire
high quality and well managed assets in the construction
materials sector, providing the Group with a strong operating
platform, diversified income streams and stable cash flows in
order to grow the Group and execute on its strategy further.
The Group is run as a commercially-minded business,
seeking to return an increase on investment capital to
Shareholders. Proven methods of raising capital through
recognised means available to publicly-listed companies
are relied on to fund growth acquisitions. Following each
acquisition, the Group seeks to implement operational
efficiencies that improve safety, enhance productivity,
increase profitability and ultimately create value for
Shareholders.
Principle Two
Seek to understand and meet shareholder needs
and expectations
Shareholder dialogue: The Company remains committed
to listening and communicating openly with its shareholders
to ensure that its strategy, business model and performance
are clearly understood. Understanding what analysts and
investors think about the Company, and in turn, helping these
audiences understand the Company’s business, is a key part
of driving the business forward and the Company actively
seeks dialogue with the market. The Company does so via
investor roadshows, attending investor conferences, hosting
capital markets days and through regular reporting.
Private Shareholders: The AGM is the main forum for
dialogue between retail Shareholders and the Company.
The Directors routinely attend the AGM and are available
to answer questions raised by Shareholders. The results
of the AGM are subsequently published on the Company’s
corporate website. Private Shareholder events are intended
to be held periodically.
Institutional Shareholders: The Company actively seeks
to build relationships with institutional Shareholders through
calls, presentations, and visits. Shareholder relations are
managed primarily by the CEO, but the Executive Chairman
and Senior Independent Non-Executive Director are also
available to meet with major shareholders to discuss issues
of importance.
Principle Three
Take into account wider stakeholder and social
responsibilities and their implications for long-term
success
Engagement: Engaging with stakeholders strengthens
relationships and helps make better business decisions to
deliver on commitments. The Company is regularly updated
on wider stakeholder engagement feedback to stay abreast
of stakeholder insights into the issues that matter most to
them and the Group’s business, and to enable the Board to
understand and consider these issues in decision-making.
With Shareholders, suppliers and customers, employees are
one of the most important stakeholder groups and employees’
engagement surveys and feedback are closely monitored.
Employees, contractors & suppliers: The Group has
established a safe and healthy work environment, which
complies with the relevant occupational health & safety
laws. The Group ensures that the workforce is provided
with sufficient training to develop the appropriate skills and
knowledge to complete the tasks requested of them.
The Board has ultimate responsibility for the Group’s system
of internal control and for reviewing its effectiveness. The
Audit Committee assists the Board in discharging its duties
regarding the financial statements, accounting policies
and the maintenance of proper internal business, and
operational and financial controls.
The Board presently considers that the internal controls in
place are appropriate for the size, complexity and risk profile
of the Group.
For the sake of occupational health & safety, all contractors
and sub-contractors are treated in exactly the same manner
as employees.
Principle Five
Maintain the board as a well-functioning, balanced
team led by the chair
Communities: The Group has supported and given back to
the community by participating in a selection of projects in
recent years. Further details of the Group’s environmental,
social and governance related initiatives are in the relevant
annual reports.
Modern slavery: As part of our mission to “do the right
thing” we oppose modern slavery in all its forms and work
to prevent it by any means that we can. We expect anyone
who has any suspicions of modern slavery in our business
or our supply chain to raise their concerns without delay.
Principle Four
Risk Management
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Risk register: To assist the Board with effectively managing
risk across the Group the Company has established a risk
register which is reviewed periodically.
Internal control: The Company has an established
framework of internal control, the effectiveness of which
is regularly reviewed by executive management, the Audit
Committee and the Board in light of an ongoing assessment
of significant risks facing the Company and the Group.
The Company recognises that maintaining sound controls
and discipline is critical to managing the downside risks to its
business plan.
Board composition: The Board comprises the Executive
Chairman, two Executive Directors, two Independent Non-
Executive Directors and two Non-Executive Directors. The
Board considers, after careful review, that the Independent
Non-Executive Directors bring an independent judgement
to bear.
The biographies of the members of the Board can be found on
the Company’s website (https://www.sigmaroc.com/board/).
The Board is satisfied that it has a suitable balance
between independence and knowledge of the Group and
its operations to discharge its duties and responsibilities
effectively. The Board receives periodic updates from the
management team. All directors are encouraged to use
their independent judgement and to challenge all matters,
whether strategic, operational or financial.
Membership of the Board, its activities, performance and
composition are subject to periodic review.
Conflicts of interest: The Company has effective
procedures in place to monitor and deal with conflicts of
interest. The Board is aware of the other commitments and
interests of its Directors, and changes to these commitments
and interests are reported to, and, where appropriate,
agreed with the rest of the Board.
Director
Formal quarterly meetings and meetings post change to Articles
Attended
Eligible to attend
Max Vermorken
David Barrett
Dean Masefield
Garth Palmer
Simon Chisholm
Jacques Emsens
Tim Hall
Dominic Traynor
Patrick Dolberg
8
8
4
8
4
4
8
4
4
8
8
4
8
4
4
8
4
4
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Corporate Governance Report CONTINUED
Principle Six
Ensure that between them the directors have the
necessary up-to-date experience, skills and capabilities
An evaluation of the Board will be carried out annually and on
a three-yearly cycle the evaluations may be facilitated by an
independent evaluator.
Suitability: The Board guides and monitors the business
and affairs of the Company on behalf of the Shareholders by
whom they are elected and to whom they are accountable.
The Remuneration Committee will compare the performance
of the Board with the requirements of its charter, the
Company vision and KPIs.
The Board is satisfied that given its size and stage of
development, between the Directors, it has an effective and
appropriate balance of skills and experience across technical,
commercial and financial disciplines.
Succession planning is considered by the Board as a whole.
The Board will annually review and make recommendations
relating to talent management and succession planning for
the Board and the CEO.
The Company complies with the QCA Code and full
biographical details of the Directors and their skills and
experience can be found on the Company’s website (https://
www.sigmaroc.com/board/)
Appointment, removal & re-election: The Nominations
Committee makes decisions regarding the appointment and
removal of Directors, and there is a formal, rigorous and
transparent procedure for appointments.
Independent advice: All Directors are able to take
independent professional advice in the furtherance of their
duties, if necessary, at the Company’s expense. In addition,
the Directors have direct access to the advice and services of
the Company Secretary and Chief Financial Officer.
Principle Seven
Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement
Appraisal: The Chairman assesses the individual
contributions of each member of the Board to ensure
that their contribution is relevant and effective; they are
committed; and where relevant, they have maintained their
independence.
Principle Eight
Promote a corporate culture that is based on ethical
values and behaviours
Code of conduct: The Board has adopted a code of conduct
which provides a framework for ethical decision-making and
actions across the Group. The code of conduct reiterates
the Group’s commitment to integrity and fair dealing in
its business affairs and its duty of care to all employees,
contractors and stakeholders.
Each Board members adherence to the Group’s code of
conduct is assessed as part of the annual Board review
& appraisal.
Anti-corruption and bribery: The Board has adopted an
anti-corruption and bribery policy to further ensure honest and
ethical conduct of employees. The Company also provides
periodic training to employees to ensure they are aware of
their responsibilities in relation to bribery and corruption.
The Company has a zero-tolerance approach to bribery and
corruption. The Company’s General Counsel is responsible
for monitoring compliance with and maintaining the anti-
corruption and bribery policy.
Principle Nine
Maintain governance structures and processes that are
fit for purpose and support good decision-making by
the board
Principle Ten
Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders
and other relevant stakeholders
Communication: The Company attaches great importance
to providing shareholders with clear and transparent
information on the Company’s activities, strategy and
financial position through the Annual Report and Accounts,
full-year and half-year announcements, the Annual General
Meeting (AGM) and one-to-one meetings with large existing
or potential new shareholders.
The Company announces significant developments via
various outlets including the London Stock Exchange’s
Regulatory News Service (RNS).
The Board receives regular updates on the views of
shareholders through briefings and reports from the CEO
and the Company’s brokers. The Company communicates
with institutional investors frequently through briefings with
management. In addition, analysts’ notes and brokers’
briefings are reviewed to achieve a wide understanding of
investors’ views.
Board programme: The Board is responsible for approving
the Company strategy and policies, for safeguarding the
assets of the Company, and is the ultimate decision-making
body of the Company in all matters except those that are
reserved for specific shareholder approval.
The Board meets at least four times each year in accordance
with its scheduled meeting calendar and maintains regular
dialogue between Board members, in particular between the
CEO, the Chairman and the non-executive Board members.
The Board and its Committees receive appropriate and timely
information prior to each meeting, with a formal agenda
being produced for each meeting, and Board and Committee
papers distributed several days before meetings take place.
Roles & responsibilities: There is a clear division of
responsibility at the head of the Company between the
Chairman and the CEO.
The Board is supported by the Audit, Remuneration, AIM
and MAR Compliance and Nominations committees. Each
committee has access to such resources, information and
advice as it deems necessary, at the cost of the Company, to
enable the committee to discharge its duties.
As the Group grows and develops the Board will periodically
review its corporate governance framework to ensure it
remains appropriate for the size, complexity and risk profile of
the Group.
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Audit Committee Report
The Company has an established framework of internal
control, the effectiveness of which is regularly reviewed by
the Audit Committee in light of an ongoing assessment of
significant risks facing the Company and the Group. The
Audit Committee assists the Board in discharging its duties
regarding the financial statements, accounting policies and
the maintenance of proper internal business, and operational
and financial controls.
Key Activities carried out in 2020
During the year, the Committee met formally three times
and discussed the following:
■ External audit tender process
■ Audit planning
■ Auditor’s fees and independence
■ Auditor’s effectiveness
■ Interim report and annual report
■ Internal audit
■ Internal controls and risk management
■ Taxation
■ Going concern and viability statement
■ Significant accounting matters
■ Plans for transition to new accounting standards
■ Whistleblowing
■ The Audit Committee’s terms of reference
Meeting Attendance
The Committee is made up of Independent, Non-Executive
Directors and shall meet not less than twice in each financial
year.
Director
Meetings
Attended
Eligible to
attend
Dominic Traynor
Patrick Dolberg
Simon Chisholm
Jacques Emsens
1
1
2
2
1
1
2
2
Committee Duties
The Audit Committee should carry out the duties below for
the parent company, major subsidiary undertakings and the
group as a whole, as appropriate:
■ Monitor integrity of the financial statements and financial
performance;
■ Review financial statements, significant financial returns
to regulators and any financial information of a sensitive
nature;
■ Review and challenge internal financial controls and risk
management systems including the review of matters of a
non-financial nature;
■ Review and challenge accounting policies, accounting
methods and adherence to accounting standards;
■ Review and make recommendation with regards to the
external auditor, including appointment, independence,
objectivity, effectiveness. Performance and renumeration;
■ Consults with the external auditor on the scope of their
work and reviews all major points arising from the audit;
■ Ensure fully functional whistleblowing policy.
Chair Statement
The Audit Committee was chaired by myself from 20 April
2020, prior to this it was chaired by Dominic Traynor, and
comprises of Jacques Emsens as the other member. The
Committee has relevant financial experience at a senior
level as set out in their biographies on pages 68 and 69.
The Audit Committee met 3 times formally in 2020 and
also held informal discussions with the external auditor as
appropriate. The principal activities of the Audit Committee
in respect of the year ended 31 December 2020, and the
manner in which it discharged its responsibilities, were as
follows:
Financial Statements
The Audit Committee reviewed and agreed the external
auditor’s strategy and approach in advance of their audit for
the year ended 31 December 2020, and reviewed reports
on the outcome of the audit. The Audit Committee also
reviewed the 2020 Preliminary Results Announcement,
the 2019 Annual Report, the 2020 Interim Results
Announcement and the 2020 Interim Report.
75
Simon
Chisholm
Independent
Non-Executive Director
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GOVERNANCE
Remuneration Committee Report
Significant Accounting Matters
During the year, the Audit Committee considered key
accounting issues, judgements and disclosures in relation
to the Group’s Financial Statements. The most significant of
which was the risk of the value of inventory, the carrying value
of investments and carrying value of tangible and intangible
assets. The Audit Committee also received communications
from management and the external auditor on a number of
other accounting matters, the valuation of mineral reserves
and resources, revenue recognition, restoration provisions,
and the possible impact of Brexit on the Group.
Going Concern and Viability
The Audit Committee reviews supporting papers from
management to support the Going Concern and Viability
statements set out on page 85. This includes sensitivity
analysis over key assumptions. Following this review, the
Committee recommended to the Board the approval of
both statements.
External Auditor
The external auditor, PKF Littlejohn LLP (‘PKF’), attends
meetings of the Audit Committee. The Audit Committee has
the opportunity to meet with the external auditor without
the executive directors being present to provide a forum to
raise any matters of concern in confidence and together
discusses and agrees the scope of the audit plan for the full
year. The external auditor reports on the control environment
in the Group, key accounting matters and mandatory
communications. The Audit Committee also receives and
reviews a report from the external auditor setting out to
its satisfaction how its independence and objectivity is
safeguarded when providing non-audit services. The value
of non-audit services provided by PKF in respect of the year
ending 31 December 2020 amounted to £33,078 for tax
services and due diligence and transactional services (2019:
£189,381, principally in respect of tax services and due
diligence and transactional services). During the year there
were no circumstances where PKF was engaged to provide
services prohibited by the FRC’s 2016 ethical standard or
which might have led to a conflict of interest.
The Audit Committee continues to be satisfied with the
work of PKF and that they continue to remain objective
and independent. Following the conclusion of the 2020
audit, the lead audit partner, Dominic Roberts, has served a
tenure of five years.
Internal Audit
The Group does not have a formal internal audit function, the
CFO performs a number of activities that an internal audit
function would perform. The Audit Committee receive regular
formal updates covering planned activities, findings of reviews
performed and updates on agreed actions from previous
reviews. The Audit Committee considers this is appropriate
given the close involvement of the executive directors and
senior management on a day-to-day basis. However, the
need for an internal audit function will be kept under review by
the Audit Committee on behalf of the Board.
This report was approved by the Board on 12 April 2021.
Simon Chisholm
Non-Executive Director
Key Activities carried out in 2020
During the year, the Remuneration Committee met formally
twice and discussed the following:
■ Executive salaries
■ Annual bonuses
■ Pay and benefit levels across the Group
■ The Directors’ Remuneration report
Meeting Attendance
During the year, the Remuneration Committee met
formally twice and discussed the following:
Director
Meetings
Attended
Eligible to
attend
Going forward, I intend to review all aspects of our
remuneration policy together with our advisers, to ensure it is
appropriate for SigmaRoc given their growth to date and their
future growth and development ambition. Upon completion,
I intend to consult with our major shareholders to ensure we
have alignment.
2020 was an extremely busy and successful year for the
Group with the first full year contribution of CDH in Belgium
and the completion of the remaining 60% of GD Harries,
the successful debt refinance, giving access to £125 million
including a £40 million accordion and a successful equity
raise all in the midst of a global pandemic. With regards
to remuneration, our success in 2020, as detailed in the
Chairman, CEO and CFO reports on pages 8, 10 and 46
in the face of global adverse conditions led to the annual
cash bonus qualifying to be paid in full, however it has been
elected to pay the Chairman, CEO and CFO less than their
full qualifying amount.
Simon Chisholm
Garth Palmer
1
1
1
1
Policy Report
Base salary
Committee Duties
The Remuneration Committee shall be responsible for:
■ Determining and agreeing with the Board the framework or
broad policy for the remuneration of the executive offices
and other senior managers;
■ Take into account all factors which it deems necessary
including the level of the Company’s remuneration
relative to other companies to ensure that members of
the company are provided with appropriate incentives
to encourage enhanced performance and are, in a fair
and reasonable manner, rewarded for their individual
contributions to the success of the Company; and
■ Determining each year whether awards will be made, and
if so, the overall amounts of such awards, the individual
awards to executive directors and other senior executives
and the performance targets to be used.
Chair Statement
Having been appointed as independent non-executive
director on 20 April 2020 and chair of the Remuneration
Committee on the same day, I am pleased to present
the Directors’ Remuneration report for the year ended 31
December 2020 and can report that all aspects of executive
remuneration are in order.
Given the global pandemic, both the Chairman and CEO
volunteered a reduction in salary to the Committee and
depending on the impact in 2021 will consider the same
again. This reduction was acknowledged and accepted by
the Committee.
Our objective is to provide a competitive base salary reflective
of the skills and experience of the relevant individual.
These are reviewed annually or on a significant change of
responsibilities or change in market practice or a change in
the size or complexity of the business. The Remuneration
Committee also takes into account external market data and
pay and employment conditions elsewhere in the Group and
industry when considering increases to base salary levels.
There are no performance criteria associated with receiving
this benefit.
Annual cash bonus
To incentivise the delivery of annual financial, strategic
and safety objectives, Executive Directors and senior
management may participate in the annual bonus scheme.
The Remuneration Committee sets performance measures
and targets at the start of the financial year, or later if
appropriate and based on the performance, bonuses are paid
in cash shortly after the completion of the audit of the annual
results. For Executive Directors, the maximum opportunity is
125 per cent of salary for the Chairman and CEO and 100 per
cent of salary for the CFO. This level of incentive opportunity
reflects the Committee’s desire to retain a high proportion
of remuneration on variable pay (which is not pensionable).
Performance is assessed against financial targets and may
be reduced or eliminated if safety performance or accident
records reach unacceptable levels.
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Pension
Pensions are provided to aid recruitment and retention by
allowing the Executive Directors to make provision for long-
term retirement benefits. These are comparable with similar
roles in similar companies. Executive Directors currently
receive 10% of their base salary. There is no performance
criteria associated with receiving this benefit.
Other benefits
To Group also provides competitive and cost-effective
benefits that may include private medical insurance,
car allowance, employee benefits insurance and the
reimbursement of certain travel costs. There is no
performance criteria associated with receiving this benefit.
Committee sets targets that are aligned with the Company’s
strategy as well as both external expectations and the
economic environment. The 2020 annual bonus targets were
linked to both underlying EBIT and EPS growth which tracks
improvements in the profitability of the Group and returns to
the shareholders. The health and safety of our workplace is
fundamental to the Group and as such the annual bonus may
be reduced or eliminated if safety performance or accident
records reach unacceptable levels.
If due to changing circumstance such as material acquisitions
or changes in market conditions; the Committee retains the
ability to adjust or amend performance measures and targets
to ensure that they are relevant to ensure they still incentive
whilst minimising excessive risk exposure.
Performance measured benefits
Non-Executive Directors
Remuneration performance measures are selected to align
with the Group’s key performance indicators and the interests
of Shareholders. Performance targets are set so that they
are stretching to achieve maximum pay-out but also ensure
excessive risk exposure is mitigated. The Remuneration
Non-executive directors each receive a market rate basic
fee, subject to time commitment requirements, for holding the
office of non-executive director which is set by the board as a
whole.
Service agreements / letters of appointment of Directors and loss of office
Each of the directors has a service agreement or letter of appointment with the Company as follows:
Director
Attended
Notice Director
Notice Company
David Barrett
22 August 2016
Max Vermorken
22 August 2016
Dean Masefield
20 April 2020
Simon Chisholm
20 April 2020
Jacques Emsens
20 April 2020
Garth Palmer
5 January 2017
Tim Hall
18 April 2019
12
12
12
6
6
6
6
12
12
12
6
6
6
6
When it comes to payments and loss of office, the Board will always look to act in the Shareholders’ interest.
Notice periods and payments in lieu of notice
Recruitment Remuneration
The maximum notice period for executive directors is 12
months however the Committee retains the right to terminate
an executive director’s service agreement by making a
payment in lieu of notice. The payment will include salary,
cost of benefits and loss of pension provision for the notice
period (or the unexpired portion of it).
Annual bonus
The payment of a bonus for the year in which the Executive
Director leaves is determined by the Remuneration
Committee, taking into consideration their contribution up
to the leaving date and normal pro-rating for time in service
during the year.
Other payments
In appropriate circumstances, other payments may also
be made, such as in respect of accrued holiday and
outplacement and legal fees.
The Remuneration Committee will seek to ensure that when
appointing a new executive director, their remuneration
arrangements are in the best interests of the Company, and
not more than is appropriate. The Committee will determine
a new executive director’s remuneration package in line
with the policy set out above, however discretionary awards
maybe made in appropriate circumstances, such as:
■ An interim appointment to fill a role on a short-term basis;
■ Provide relocation, travel and subsistence payments;
■ Reflect remuneration arrangements provided by a previous
employer; and
■ Reimbursement of costs incurred as a consequence of
resigning from their previous employment.
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GOVERNANCE
Annual Report on Remuneration
The remuneration of the Executive Directors for the year ended 31 December 2020 was as shown in the table below:
31 December 2020
Directors’
fees
£
Bonus
£
Taxable
benefits
£
Pension
benefits
£
Options
issued
£
Total
£
Executive Directors
David Barrett
305,278
280,000
13,800
-
45,855
644,933
Dean Masefield (1)
125,000
90,000
5,792
12,500
66
233,358
Max Vermorken
395,000
380,000
13,800
39,500
109,634
937,934
Garth Palmer(1)
54,962
25,000
-
5,496
30,155
115,613
880,240
775,000
33,392
57,496
185,710
1,931,838
(1) Garth Palmer was CFO until 20 April 2020 to which when he stepped down and stayed on the Board as a Non-Executive
Director. Dean Masefield was appointed on this date.
The remuneration of the Executive Directors for the year ended 31 December 2019 was as shown in the table below:
Directors’
fees
£
Bonus
£
Taxable
benefits
£
Pension
benefits
£
Options
issued
£
Total
£
Executive Directors
David Barrett
190,000
230,000
13,800
-
27,700
461,500
Garth Palmer
60,000
-
-
6,000
22,100
88,100
Max Vermorken
250,000
340,000
13,800
25,000
60,676
689,476
500,000
570,000
27,600
31,000
110,476
1,239,076
Remuneration policy review
Executive Directors bonus opportunity
A review of the remuneration policy will take place in 2021
followed by consultation with our major shareholders.
Executive Directors’ salaries
In light of the Chairman and CEO volunteered a reduction in
salary in 2020 and despite SigmaRoc’s usual salary review
timetable for the business as a whole, all Executive Directors’
have volunteered that their salaries are not automatically
increased in line with the range of increases awarded to the
wider workforce, but will be reviewed based on the ongoing
global pandemic and any variations will be reported in the
2021 Directors’ Remuneration report.
Non-Executive Directors’ Fees
The basic fee for the non-executive directors for 2021
is £40,000.
For 2021, the executive Chairman and CEO will continue
to have the opportunity to earn a bonus of up to 125 per
cent of salary and the CFO up to 100 per cent of salary. The
bonus will be subject to stretching performance conditions
based on Underlying EBIT and EPS.
Directors’ interest in share plans
Details of the Directors’ interests in the Company’s share-
based incentive schemes are set out on page 84.
This report was approved by the Board on 12 April 2021.
Simon Chisholm
Non-Executive Director
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Nominations Committee
A Nomination Committee has been agreed to be set up
following significant growth last year in the Group. The
Nomination Committee will keep the leadership of the Group
under review, and ensure adequate resources are made
available to support its future development.
Key activities carried out in 2020
2020 saw the agreement of the Board to enact a nominations
committee of which Simon Chisholm is the chair as an
independent non-executive Director and will be joined by our
Chairman, David Barrett.
Committee Duties
The duties of the Nomination Committee are as follows:
■ To be responsible for identifying and nominating for the
approval of the Board, candidates to fill Board vacancies
as and when they arise;
■ Evaluate the balance of skills, knowledge and experience
on the Board;
■ Keep up to date and fully informed about strategic issues
and commercial changes affecting the Group and the
market in which it operates;
■ Give full consideration to succession planning for both
executive and non-executive directors and other senior
management in the course of its work, taking into account
the challenges and opportunities facing the Company
and what skills and expertise are therefore needed on the
Board in the future;
■ Regularly review the structure, size and composition
(including the skills, knowledge and experience) required
of the Board compared to its current position and make
recommendations to the Board with regard to any
changes;
■ Keep under review the leadership needs of the
organisation, both executive and non- executive, with a
view to ensuring the continued ability of the organisation to
compete effectively in the marketplace;
■ The Nomination Committee shall make recommendations
to the Board as regards plans for succession for both
executive and non-executive directors.
Chair Statement
It is a pleasure to be the Chairman of the Nominations
Committee in a business that is exponentially growing. As we
move in to 2021 and beyond following a strong end in 2020
and with funding in place for further expansion, I look forward
to supporting the Group in ensuring that we have the best
executive and senior management teams in place that suit
the strategy, business model and culture of SigmaRoc.
This report was approved by the Board on 12 April 2021.
Simon Chisholm
Non-Executive Director
GOVERNANCE
Directors Report
The Directors present their report, together with the audited
Financial Statements, for the year ended 31 December 2020.
of the key areas of risk to the business identified by the Group
are included on pages 44-47.
Details of the Group’s financial risk management policies are
set out in Note 3 to the Financial Statements.
Results and Dividends
For the year to 31 December 2020, the Group’s Underlying
profit before tax was £12.2 million (2019: £8.4 million) and
Underlying profit after tax was £11.5 million (2019: £7.9
million). Recognising the Group’s strategy, current position
on its journey, the Directors are not proposing to adopt a
dividend policy yet.
Stated Capital
Details of the Company’s shares in issue are set out in note
28 to the Financial Statements.
Principal Activities
The principal activity of the Company is to make investments
and/or acquire businesses and assets in the construction
materials sector. The principal activity of the Group is the
production of high quality aggregates and supply of value-
added construction materials.
Board composition and head office
The Board comprises three Executive Directors and four
Non-Executive Directors. The Corporate Head Office of the
Company is located in London, UK.
Risk Management
The Board is responsible for the Group’s risk management
and continues to develop policies and procedures that reflect
the nature and scale of the Group’s business. Further details
Directors
The following Directors served during the year:
Director
David Barrett
Position
Chairman
Note
Max Vermorken
Chief Executive Officer
Dean Masefield
Chief Financial Officer
Appointed 20 April 2020
Garth Palmer
Non-Executive Director
Tim Hall
Non-Executive Director
Simon Chisholm
Independent Non-Executive Director
Appointed 20 April 2020
Jacques Emsens
Independent Non-Executive Director
Appointed 20 April 2020
Dominic Traynor
Non-Executive Director
Resigned 18 May 2020
Patrick Dolberg
Independent Non-Executive Director
Resigned 18 May 2020
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Directors & Directors’ interests
The Directors who served during the year ended 31 December 2020 are shown below and had, at that time, the following
beneficial interests in the shares of the Company:
31 December 2020
31 December 2019
Ordinary
Shares
549,529
Options
11,807,349
Ordinary
Shares
447,511
Options
11,807,349
2,609,189
5,638,674
2,175,640
5,638,674
28,101
438,499
329,176
-
-
30,000
3,326,014
750,000
-
-
-
256,186
300,000
-
-
-
3,326,014
750,000
-
-
Max Vermorken
David Barrett
Dean Masefield1
Garth Palmer
Tim Hall
Simon Chisholm2
Jacques Emsens3
(1) Appointed on 20 April 2020
(2) Appointed on 20 April 2020
(3) Appointed on 20 April 2020
Further details on options can be found in Note 29 to the Financial Statements.
Details on the remuneration of the Director’s can be found in Note 10 to the Financial Statements.
Significant Shareholders
The Company is aware that, as at 18 March 2021, other than the Directors, the interests of Shareholders holding three per
cent or more of the issued share capital of the Company were as shown in the table below:
Shareholder
M&G Investment Management
BGF Investment Management Limited
Ravenscroft
Balliwick Investments
Hermco Property Limited
Chelverton Asset Management
Slater Investments
Janus Henderson Group plc
Canaccord Genuity Wealth Management (Inst)
Legal & General Investment Management
Nigel Wray
Shares held
Percentage of
holdings
26,352,595
21,792,872
21,345,901
18,910,000
18,502,502
17,952,460
14,582,422
13,693,048
12,500,000
12,018,925
10,580,048
9.45%
7.82%
7.66%
6.78%
6.64%
6.44%
5.23%
4.91%
4.48%
4.31%
3.80%
Employees
Health and safety
By being responsible for their own businesses, that are
aligned with the overall Group’s strategy, employees are fully
aware of their impact and contribution as they are inherently
responsible for their own success. The Group and each
business is committed to employing the best they can, not
only in skills and competence but also in their softer skills,
regardless of who they are or where they have come from.
Once engaged, each employee is nurtured and developed
locally with opportunities within each business and platform
offered openly.
Political Contribution
The Group did not make any contributions to political parties
during either the current or the previous year.
SigmaRoc operates a comprehensive health and safety
programme to ensure the wellness and security of its
employees. The control and eventual elimination of all work
related hazards requires a dedicated team effort involving
the active participation of all employees. A comprehensive
health and safety programme is the primary means for
delivering best practices in health and safety management.
This programme is regularly updated to incorporate
employee suggestions, lessons learned from past incidents
and new guidelines related to new projects, with the aim
of identifying areas for further improvement of health and
safety management. This results in continuous improvement
of the health and safety programme. Employee involvement
is regarded as fundamental in recognising and reporting
unsafe conditions and avoiding events that may result in
injuries and accidents.
Annual General Meeting
Internal controls
The Annual General Meeting will be held 56 Queen Anne
Street, London, W1G 8LA on 19 May 2021 at 3pm. The
formal notice convening the AGM, together with explanatory
notes on the resolutions contained therein, is included in
the separate circular accompanying this document and is
available on the Company’s website at www.sigmaroc.com.
Viability Statement
The directors have assessed the viability of the Group over
a period to December 2022. This is the same period over
which financial projections were prepared for the Group’s
strategic financial plan. In making their assessment the
directors have taken into account the Group’s current
position and the potential impact of the principal risks and
uncertainties set out on pages 44 to 47 on its business
model, future performance, solvency or liquidity. They also
stress tested their analysis by running a number of credible
scenarios and considered the availability of mitigating
actions. Based on this assessment, the directors confirm
that they have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as
they fall due over the period to December 2022. In making
this statement, the directors have assumed that financing
remains available and that mitigating actions are effective.
Corporate responsibility
Environmental
SigmaRoc undertakes its activities in a manner that
minimises or eliminates negative environmental impacts and
maximises positive impacts of an environmental nature.
The Board recognises the importance of both financial
and non-financial controls and has reviewed the Group’s
control environment and any related shortfalls during the
year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the
Group, adequate internal controls have been implemented.
Whilst they are aware that no system can provide absolute
assurance against material misstatement or loss, in light
of the current activity and proposed future development of
the Group, continuing reviews of internal controls will be
undertaken to ensure that they are adequate and effective.
Further details of corporate governance can be found in the
Corporate Governance Report on page 66.
Going concern
The Group meets its day-to-day working capital and other
funding requirements through cash and banking facilities;
which were renewed in December 2020 and of which more
information can be found on page 50.
The impact of the COVID-19 pandemic on the Group’s
business, revenues and cash flow creates uncertainty.
However, given the Group’s robust balance sheet, solid
performance through the COVID-19 pandemic to date and
in conjunction with forecast projections, the Directors have
a reasonable expectation that the Group has adequate
resources to continue in operational existence for the
foreseeable future and, therefore, continue to adopt the going
concern basis in preparing the Annual Report and Financial
Statements. Further details on their assumptions and their
conclusion thereon are included in the statement on going
concern included in Note 2.3 to the Financial Statements.
Directors’ and officers’ indemnity insurance
The Company has made qualifying third-party indemnity
provisions for the benefit of its Directors and officers. These
were made during the year and remain in force at the date
of this Annual Report.
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85
GOVERNANCE
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulations, including the AIM Rules for
Companies.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the Group and Company
Financial Statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the
European Union. Under company law the Directors must not
approve the Financial Statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Group and Company, and of the profit or loss of the Group
for that period. In preparing these Financial Statements, the
Directors are required to:
■ select suitable accounting policies and then apply them
consistently;
■ make judgments and accounting estimates that are
reasonable and prudent;
■ state whether applicable IFRSs as adopted by the
European Union have been followed, subject to any
material departures disclosed and explained in the
financial statements; and
■ prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company, and enable them to ensure that the
Financial Statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of
the Group and Company, and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website, www.sigmaroc.com. Legislation
in the United Kingdom governing the preparation and
dissemination of the Financial Statements may differ from
legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the
Company’s website.
The Directors confirm that they have complied with the
above requirements in preparing the Financial Statements.
Events after the reporting period
Provision of information to Auditor
Events after the reporting period are set out in Note 38 to
the Financial Statements.
Policy and practice on payment of creditors
The Group agrees terms and conditions for its business
transactions with suppliers. Payment is then made in
accordance with these terms, subject to the terms and
conditions being met by the supplier. As at 31 December
2020, the Company had an average of 9 days (2019: 51
days) purchases outstanding in trade payables and the Group
had an average of 74 days (2019: 82 days).
Future developments
Details of future developments for the Group are disclosed
in the Chairman’s Statement on page 8 and the CEO’s
Strategic Report on page 10.
So far as each of the Directors is aware at the time this
report is approved:
■ there is no relevant audit information of which the
Group’s auditor is unaware; and
■ the Directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of
that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in
office as auditor.
This report was approved by the Board on 12 April 2021.
Dean Masefield
Chief Financial Officer
86
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SigmaRoc Annual Report and Financial StatementsInvest, Improve, Integrate and Innovate FINANCIAL STATEMENTS
Independent Auditor’s report to the Members
of SigmaRoc plc
Opinion
We have audited the financial statements of SigmaRoc
(the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 December 2020 which comprise the
Consolidated Income Statement, Consolidated Statement
of Comprehensive Income, the Consolidated and Parent
Company Statement of Financial Position, the Consolidated
and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash
Flows and notes to the financial statements, including
significant accounting policies. The financial reporting
framework that has been applied in their preparation is
applicable law and international accounting standards in
conformity with the requirements of the Companies Act 2006
and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies
Act 2006.
In our opinion:
■ the financial statements give a true and fair view of the
state of the group’s and of the parent company’s affairs
as at 31 December 2020 and of the group’s and parent
company’s profit and parent company’s loss for the year
then ended;
■ the group financial statements have been properly
prepared in accordance with international financial
reporting standards as adopted by the EU in conformity
with the requirements of the Companies Act 2006;
■ the parent company financial statements have been
properly prepared in accordance with international
accounting standards in conformity with the requirements
of the Companies Act 2006 and as applied in accordance
with the provisions of the Companies Act 2006; and
■ the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report.
We are independent of the group and parent company in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the director’s use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s
and parent company’s ability to continue to adopt the going
concern basis of accounting included consideration of the
inherent risks to the group’s business model and analysed
how those risks might affect the group’s financial resources
or ability to continue operations over the period from the
date of signing the financial statements to May 2022. The
risks that we considered most likely to affect the group’s
financial resources or ability to continue operations over
this period were adverse circumstances impacting timely
conversion of trade receivables to cash, growth in revenues,
reduction in expenses and operating cash outflows, and
access to financial resources in the form of debt facilities
if so required. We considered this through a review of the
application of reasonably foreseeable downside scenarios.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s or parent company’s ability
to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised
for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
Materiality applied to the group financial statements was
£1,240,000 (2019: £700,000) with performance materiality
set at £868,000 (2019: £490,000). This amount has been
determined taking into consideration the group’s Revenue.
Our determination was considered appropriate based upon
where the areas of significant audit risk arose. We apply the
concept of materiality both in planning and performing our
audit, and in evaluating the effect of misstatement. At the
planning stage materiality is used to determine the financial
statement areas that are included within the scope of our
audit.
Component materiality was applied and ranged from
£900,000 to £125,000 (2019: £550,000 to £125,000), having
regard to the mix of size and risk profile of the group across
the components.
We agreed with the audit committee that we would report
all individual audit differences identified during the course
of our audit in excess of £62,000 (2019: £35,000). We also
agreed to report any other audit misstatements below that
threshold that we believe warranted reporting on qualitative
grounds.
Materiality applied to the Company’s financial statements
was £500,000 (2019: £350,000). The benchmark for
determining materiality of the Company was 0.5% of gross
assets owing to the investments held by the Company in its
subsidiaries. We agreed with the audit committee that we
would report all individual audit differences identified during
the course of our audit in excess of £25,000 (2019: £17,500)
together with any other audit misstatements below that
threshold that we believe warranted reporting on qualitative
grounds.
Our approach to the audit
In designing our audit, we determined materiality, as
above, and assessed the risk of material misstatement in
the financial statements. In particular, we looked at areas
involving significant accounting estimates and judgement
by the directors and considered future events that are
inherently uncertain. We note that the group have made
a significant acquisition during the period and have also
performed a purchase price allocation during the year
on the goodwill asset recognised in the prior year. Both
of these areas are inherently complicated and require a
significant amount of judgement by management. We also
addressed the risk of management override of internal
controls, including evaluating whether there was evidence
of bias by the directors that represented a risk of material
misstatement due to fraud.
The head office in the United Kingdom oversees the
accounting function of the group and its subsidiaries,
however, each regional grouping of subsidiaries maintains
the accounting records for the subsidiaries within it. During
the year ended 31 December 2020, a full 12 months’ of
trading in the group’s expanded operations in the Benelux
region was included in the Group’s result’s for the first
time. Given the nature of the location and language of
the subsidiaries in the Benelux region, our audit of those
subsidiaries was conducted by a local component auditor.
The subsidiaries audited by the component auditor were
CDH Développement SA and its subsidiary undertakings,
including Carrières du Hainaut SCA.
The audit was overseen and concluded in London where
we acted as group auditor. As group auditor we maintained
regular contact with the component auditor throughout all
stages of the audit and we were responsible for the scope
and direction of their work. We ensured that we challenged
their findings in order to form an opinion on the group.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
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FINANCIAL STATEMENTS
Independent Auditor’s report to the Members
of SigmaRoc plc CONTINUED
Key Audit Matter
How our scope addressed this matter
Carrying value of investments, goodwill and
intangible assets
The group carries a material amount of separately
identifiable goodwill, tangible fixed assets and intangible
assets relating to the subsidiary undertakings previously
acquired: Ronez Limited, Topcrete Limited, Poundfield
Products (group) Limited, CCP Building Products Limited,
Carrières du Hainaut, Stone Holdings SA and GD Harries
(refer to note 17).
There is a risk that these balances may not be fully
recoverable or that incorrect assumptions and estimates
could lead to misallocation of balances.
The Company carries a material amount of investments
in its Statement of Financial Position related to these
subsidiaries (refer to note 18).
There is a risk that the carrying value of these
investments could be overstated.
Inventory
The group holds a material amount of inventory (see note
21). There is the risk that Inventory is not accounted for
in line with IAS 2 - Inventories, and specifically that:
■ Inventory is not valued with a consistent methodology
across the Group.
■ Inventory has been valued using cost inputs and
allocated overheads which are not wholly attributable
to its production.
■ Inventory has become obsolete, by way of damage or
falling resaleable value.
■ We corroborated accounting entries in respect of acquired
and revalued assets and liabilities to Purchase Price
Allocation (“PPA”) work performed by independent and
competent experts. We also assessed the independence,
objectivity, and competence of these experts.
■ We reviewed the key PPA assumptions and critically
assessed the methodology applied and estimates contained.
■ We analysed accounting policies in place within each
subsidiary to ensure that they were materially consistent
with the group accounting policies.
■ We reviewed the group’s forecast cash flows to assess
the expected performance of each of the subsidiaries.
We assessed the appropriateness of the forecasts having
regard to post year end management information and our
understanding of each business.
■ We considered management’s impairment assessment of
the group’s investments and associated assets as at the
year-end. We carried out discounted cash flow analysis,
including sensitivities, for each CGU on the forecasts
prepared by management.
■ Depreciation and amortisation calculation base costs were
compared to those arising in the PPA reports to ensure
that there was not a material error in carrying values or
depreciation charges.
■ We evaluated whether adequate disclosures have been
disclosed included within the group financial statements.
■ We, and the component auditor, attended inventory counts
performed at each subsidiary holding a material amount of
inventory, ensuring accuracy of the count and subsequently
reconciled the quantities, using sales and production
reports, to the year-end listing.
■ We reviewed and corroborated the cost inputs and allocated
overheads that underpin the inventory valuation.
■ We compared carrying values per the year-end inventory
listing to post year-end sales, to ensure that inventory was
not being held at more than its net realisable value.
■ We assessed slow moving and possibly obsolete inventory
by reviewing the post year-end inventory sheets for
evidence of post year end sale or usage.
Key Audit Matter
Acquisition of G.D Harries
How our scope addressed this matter
During the year, the group acquired the remaining 60% of
G.D. Harries.
■ We assessed management’s assertion that this is a
business combination under IFRS 3.
Management judgement is involved in determining the
appropriate accounting treatment, including whether the
acquisition met the definition of a business combination,
date of transfer of control and accounting for
consideration. Management judgement is also required in
the assessment of the fair values of assets and liabilities
acquired, and their associated useful lives, and the use
of estimates in the determination of these values and the
resultant intangible assets and goodwill recognised.
As a result of acquisition accounting being applied, an
assessment of the allocation of the purchase price was
required, including recognition of intangible assets and
goodwill arising in the consolidated financial statement.
We therefore identified acquisition accounting in
accordance with the requirements of IFRS 3 ‘Business
Combinations’ as a significant risk, which was one of the
most significant assessed risks of material misstatement.
Other information
The other information comprises the information included in
the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible
for the other information contained within the annual report.
Our opinion on the group and parent company financial
statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by
the Companies Act 2006
In our opinion, based on the work undertaken in the course
of the audit:
■ the information given in the strategic report and the
directors’ report for the financial year for which the
■ We agreed significant inputs used in the acquisition
accounting to underlying purchase agreements and other
supporting documentation.
■ We reviewed and corroborated the assets and liabilities
within GD Harries nominal ledger at the date of acquisition
by the group to ensure that the correct opening position was
used by management when calculating their goodwill figure.
■ We assessed and challenged the key judgements and
assumptions, such as revenue growth rates and discount
rates, used by management in the valuation model;
■ We evaluated whether adequate disclosures have been
included within the group financial statements in accordance
with IFRS 3.
financial statements are prepared is consistent with the
financial statements; and
■ the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and understanding of the group
and the parent company and their environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
■ adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
■ the parent company financial statements are not in
agreement with the accounting records and returns; or
■ certain disclosures of directors’ remuneration specified by
law are not made; or
■ we have not received all the information and explanations
we require for our audit.
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FINANCIAL STATEMENTS
Independent Auditor’s report to the Members
of SigmaRoc plc CONTINUED
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation
of the group and parent company financial statements and
for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial
statements, the directors are responsible for assessing the
group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed
below:
■ We obtained an understanding of the group and parent
company and the sector in which they operate to identify
laws and regulations that could reasonably be expected
to have a direct effect on the financial statements.
We obtained our understanding in this regard through
discussions with management, industry research
and application of cumulative audit knowledge and
experience of the sector.
■ We determined the principal laws and regulations
relevant to the group and parent company in this regard
to be those arising from the Companies Act 2006 and the
British Standards Institution (BSI)
■ We designed our audit procedures to ensure the audit
team considered whether there were any indications of
non-compliance by the group and parent company with
those laws and regulations. These procedures included,
but were not limited to:
- enquiries of management, review of minutes & review
of legal / regulatory correspondence etc).
■ As in all of our audits, we addressed the risk of fraud
arising from management override of controls by
performing audit procedures which included, but were not
limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the
business rationale of any significant transactions that are
unusual or outside the normal course of business.
■ As part of the group audit, we have communicated with
component auditors the fraud risks associated with
the group and the need for the component auditors to
address this in their testing. To ensure that this has been
completed, we have reviewed component auditor working
papers in this area and obtained responses to our group
instructions from the component auditors.
Because of the inherent limitations of an audit, there is
a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial
statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation
is removed from the events and transactions reflected
in the financial statements, as we will be less likely to
become aware of instances of non-compliance. The risk is
also greater regarding irregularities occurring due to fraud
rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone, other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Alistair Roberts (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
12 April 2021
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FINANCIAL STATEMENTS
Definitions
‘2018 Regulations’
The Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report)
Regulations 2018 that came into force on 1 April 2019
‘Accounts’ or ‘Annual Report’
the consolidated financial statements of the Group for
the year ended 31 December 2020 together with the
Chairman’s Statement, CEO’s Strategic Report, Directors’
Report and additional reports contained therein
‘Adjusted Leverage Ratio’
the comparison of net debt to Underlying EBITDA for
the last twelve months adjusted for pre-acquisition
earnings of subsidiaries acquired during the year
‘AGM’
an annual general meeting of the Company
‘Allen’ or ‘Allen Concrete’
Topcrete Limited and its subsidiary undertakings,
including Allen (Concrete) Limited
‘Articles’
the Company’s Articles of Association
‘Board’ or ‘Directors’
The board directors of the Company, being the
existing Directors (whose names are set out on
page 66 of this document), proposed Directors
or both, as the context may require
‘Capex’
capital expenditure on property, plant and equipment
‘Carrieres du Hainaut’ or ‘CDH’
CDH Développement SA and its subsidiary
undertakings, including Carrières du Hainaut SCA
‘CEO’
Chief Executive Officer of the Company
occupied by Max Vermorken
‘CFO’
Chief Financial Officer of the Company occupied
by Garth Palmer as at the date of the Accounts
and thereafter by Dean Masefield
‘Cheshire Concrete Products’ or ‘CCP’
CCP Building Products Limited and
its subsidiary undertakings
‘CO2’
carbon dioxide
‘Company’ or ‘SigmaRoc’
SigmaRoc plc
‘Coronavirus’, ‘COVID’ or ‘COVID-19’
coronavirus (COVID-19) infectious disease
and its pandemic outbreak
‘EBITDA’
earnings before interest, tax, depreciation and amortisation
‘EMS’
environmental management system
‘EPS’
earnings per share
‘ESG’
environment, social and governance
‘Financial Statements’
the consolidated income statement, consolidated statement
of comprehensive income, statements of financial position,
consolidated statement of changes in equity, Company
statement of changes in equity, cash flow statements and
the accompanying notes to the financial statements
‘Foelfach’
Foelfach Stone Limited
‘FTSE Russell’
subsidiary of London Stock Exchange Group that produces,
maintains, licenses, and markets stock market indices
‘GD Harries’
GD Harries (Holdings) Limited and its subsidiary
undertakings including Gerald D. Harries & Sons Limited
‘GDH’
Granulats du Hainaut
‘GGBS’
ground-granulated blast-furnace slag
‘Group’
the Company and its subsidiary undertakings
‘HSEQ’
health, safety, environment and quality
‘H&S’
health & safety
‘IOSH’
Institution of Occupational Safety and Health
‘ISO’
International Organisation for Standardisation
‘ISO 14001’
international standard that specifies requirements
for an effective EMS, provides a framework that an
organisation can follow, rather than establishing
environmental performance requirements
‘ISO 45001’
standard for management systems of occupational
health and safety focused on reduction of occupational
injuries and diseases, including promoting and
protecting physical and mental health
‘JV’
joint venture
‘kWh’
kilowatt-hour
‘LIBOR’
London Interbank Offered Rate
‘LTIFR’
lost time injury frequency rate
‘M&A’
mergers & acquisitions
‘MD’
Managing Director of business or platform
‘NEBOSH’
The National Examination Board in
Occupational Safety and Health
‘NOx’
nitrogen oxides
‘Ordinary Shares’
the ordinary shares of 1 penny each
in the capital of the Company
‘Opex’
operating expenditure
‘PFA’
pulverised fuel ash
‘Poundfield’ or ‘Poundfield Products’
Poundfield Products (Group) Limited and its subsidiary
undertakings, including Poundfield Products Limited
‘PPA’
purchase price allocation
‘QCA Code’
Quoted Companies Alliance’s Corporate Governance Code
‘RCF’
revolving credit facility
‘Ronez’
Ronez Limited and its subsidiary undertakings
‘Ronez Platform’
the Group’s construction materials platform covering the
Channel Islands market including Ronez and SigmaGsy
‘Santander’
Santander plc
‘SASB’
sustainability accounting standards board
‘SECR’
streamlined energy and carbon reporting
‘SigmaBE’ or ‘Benelux Platform’
the Group’s construction materials platform covering
the Benelux market including CDH and Stone
‘SigmaGsy’
SigmaGsy Limited
‘SigmaPPG’, ‘PPG’ or ‘PPG Platform’
the Group’s precast concrete products platform covering
the UK market including Allen, Poundfield and CCP
‘SOx’
sulphur oxides
‘South Wales Platform’ or ‘SW Platform’
the Group’s construction materials platform covering the
Southern Welsh market including GD Harries and Foelfach
‘Sterling’
pound sterling currency of the UK and Channel Islands
‘Stone’ or ‘Stone Holdings’
Stone Holdings S.A and its subsidiary Philippe Cuvelier S.A
‘TCFD’
task force on climate-related financial disclosures
‘tCO₂e’
tonnes of carbon dioxide equivalent
‘TIFR’
total incident frequency rate
‘UK’
United Kingdom
‘Underlying’*
Underlying results are stated before acquisition
related expenses, certain finance costs, redundancy
and reorganisation costs, impairments, amortisation
of acquisition intangibles and share option expense.
References to an underlying profit measure throughout
this Annual Report are defined on this basis
‘USA’
United States of America
* These measures are not defined by International
Reporting Standards (IFRS) and therefore may not
be directly comparable to similar measures adopted
by other companies. These alternative performance
measures should be considered in addition to and
are not intended to be a substitute for, or superior to,
IFRS measures but provide useful information on the
performance of the group and underlying trends.
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FINANCIAL STATEMENTS
SIGMAROC PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
SIGMAROC PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Year ended 31 December 2020
Year ended 31 December 2019
Non-
underlying
(Note 11)
£
Underlying
£
Total
£
Underlying
£
Non-
underlying*
(Note 11)
£
Total
£
Continued operations
Note
Revenue
Cost of sales
7
8
124,231,115
(90,028,317)
Profit from operations
34,202,798
-
-
-
124,231,115
70,362,472
(90,028,317)
(50,924,209)
34,202,798
19,438,263
-
-
-
70,362,472
(50,924,209)
19,438,263
Administrative expenses
8
(20,045,509)
(4,554,557)
(24,600,066)
(9,922,199)
(4,953,675)
(14,875,874)
Profit/(loss) for the year
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
FX translation reserve
Net finance (expense)/
income
Other net gains / (losses)
12
(2,379,230)
(359,599)
(2,738,829)
(1,268,122)
(695,457)
(1,963,579)
Total comprehensive income
13
14
340,890
(65,035)
275,855
125,843
(529,948)
(404,105)
Total comprehensive income attributable to:
Owners of the parent
Foreign Exchange
33,151
-
33,151
(19,641)
-
(19,641)
Total comprehensive income for the period
Profit/(loss) before tax
12,152,100
(4,979,191))
7,172,909
8,354,144
(6,179,080)
2,175,064
Note
Year ended
31 December
2020
£
Year ended
31 December
2019
£
6,510,868
1,726,546
2,379,173
(447,978)
8,890,041
1,278,568
8,890,041
1,278,568
8,890,041
1,278,568
8,890,041
1,278,568
Tax expense
Profit/(loss)
Profit/(loss) attributable to:
Owners of the parent
Basic earnings per share
attributable to owners of
the parent (expressed in
pence per share)
Diluted earnings per share
attributable to owners of
the parent (expressed in
pence per share)
31
31
15
(662,041)
-
(662,041)
(448,518)
-
(448,518)
11,490,059
(4,979,191)
6,510,868
7,905,626
(6,179,080)
1,726,546
11,490,059
(4,979,191)
6,510,868
7,905,626
(6,179,080)
1,726,546
11,490,059
(4,979,191)
6,510,868
7,905,626
(6,179,080)
1,726,546
4.50
(1.95)
2.55
4.20
(3.28)
0.92
4.15
(1.80)
2.35
3.78
(2.96)
0.82
* Non-underlying items represent acquisition related expenses, restructuring costs, certain finance costs, share option expense
and amortisation of acquired intangibles. See Note 11 for more information.
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FINANCIAL STATEMENTS
SIGMAROC PLC
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020 COMPANY NUMBER: 05204176
Consolidated
Company
31 December
2020
£
31 December
2019
£
31 December
2020
£
31 December
2019
£
Note
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiary undertakings
Investment in equity-accounted associate
Other receivables
Deferred tax asset
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Derivative financial asset
Total assets
Current liabilities
Trade and other payables
Current tax payable
Borrowings
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Other payables
Total liabilities
Net assets
Equity attributable to owners of the parent
Share capital
Share premium
Share option reserve
Other reserves
Retained earnings
Total equity
16
16
18
19
15
20
21
22
23
24
24
15
25
23
28
28
29
30
144,793,014
78,718,333
52,005
71,765
48,803,895
80,243,724
-
-
-
-
21,327
1,411,980
-
101,249,110
94,370,845
5,538,212
19,996
-
-
-
-
5,538,212
-
-
195,030,216
164,520,265
101,301,115
99,980,822
20,342,578
22,232,596
997,856
787,825
14,247,379
11,160,574
-
-
27,451,984
9,867,696
11,521,206
3,935,831
151,770
-
151,770
-
62,193,711
43,260,866
12,670,832
4,723,656
257,223,927
207,781,131
113,971,947
104,704,478
3,611,169
4,461,336
20,653
24,827
50,840,415
42,504,218
14,236,103
16,868,845
67,688,396
55,194,015
22,341
41,671
3,871,086
6,160,325
5,100,196
1,098,148
6,936,754
-
82,820,030
63,228,917
-
-
5,100,196
5,122,537
-
-
-
41,671
133,660,445
105,733,135
19,358,640
16,910,516
123,563,482
102,047,996
94,613,307
87,793,962
2,787,393
2,537,393
2,787,393
2,537,393
107,417,822
95,358,556
107,417,822
95,358,556
847,392
3,292,913
9,217,962
531,213
913,740
847,392
531,213
1,361,718
1,361,718
2,707,094
(17,801,018)
(11,994,918)
123,563,482
102,047,996
94,613,307
87,793,962
SIGMAROC PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Share
capital
£
Share
premium
£
Note
Share
option
reserve
£
Other
reserves
£
Retained
earnings
£
Total
£
Balance as at 1 January 2019
1,367,056
50,136,904
352,877
1,361,718
910,556
54,129,111
Profit for the year
Currency translation differences
Total comprehensive income for
the period
Contributions by and distributions
to owners
-
-
-
-
-
-
Issue of share capital
1,101,788
44,071,478
Issue costs
28
-
(1,531,276)
-
-
-
-
-
Share based payments
IFRS 16 Adjustments
Total contributions by and
distributions to owners
68,549
2,681,450
178,336
-
-
-
1,170,337
45,221,652
178,336
-
1,726,546
1,726,546
(447,978)
-
(447,978)
(447,978)
1,726,546
1,278,568
-
-
-
-
-
-
-
-
45,173,266
(1,531,276)
2,928,335
69,992
69,992
69,992
46,640,317
Balance as at 31 December 2019
2,537,393
95,358,556
531,213
913,740
2,707,094
102,047,996
Balance as at 1 January 2020
2,537,393
95,358,556
531,213
913,740
2,707,094
102,047,996
-
-
-
-
-
-
Total comprehensive income for
the period
Contributions by and
distributions to owners
Issue of share capital
243,127
12,156,369
Issue costs
28
-
(440,735)
Share based payments
6,873
343,632
316,179
Total contributions by and
distributions to owners
250,000
12,059,266
316,179
-
-
-
-
-
-
6,510,868
6,510,868
2,379,173
-
2,379,173
2,379,173
6,510,868
8,890,041
-
-
-
-
-
-
-
-
12,399,496
(440,735)
666,684
12,625,445
Balance as at 31 December 2020
2,787,393
107,417,822
847,392
3,292,913
9,217,962
123,563,482
46,522,548
37,158,011
14,215,450
16,844,018
Profit for the year
706,698
884,871
-
-
Currency translation differences
The Company has elected to take the exemption under
Section 408 of the Companies Act 2006 from presenting
the Company’s Income Statement and Statement of
Comprehensive Income. The loss for the Company for the
year ended 31 December 2020 was £5,806,100 (year ended
31 December 2019: £4,699,471).
The Financial Statements were approved and authorised for
issue by the Board of Directors on 12 April 2021 and were
signed on its behalf by:
Dean Masefield, Chief Financial Officer
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FINANCIAL STATEMENTS
SIGMAROC PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Share
capital
£
Share
premium
£
Note
Share
option
reserve
£
Other
reserves
£
Retained
earnings
£
Total
£
Balance as at 1 January 2019
1,367,056
50,136,904
352,877 1,361,718
(7,294,779) 45,923,776
Profit/(Loss)
Total comprehensive income for
the period
Contributions by and distributions
to owners
-
-
-
-
Issue of share capital
1,101,788
44,071,478
Issue costs
28
-
(1,531,276)
-
-
-
-
Share based payments
IFRS 16 Adjustments
Total contributions by and
distributions to owners
68,549
2,681,450
178,336
-
-
-
1,170,337
45,221,652
178,336
-
-
-
-
-
-
-
(4,699,471)
(4,699,471)
(4,699,471)
(4,699,471)
- 45,173,266
-
-
(1,531,276)
2,928,335
SIGMAROC PLC
CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Note
16
17
Consolidated
Company
Year ended
31 December
2020
£
Year ended
31 December
2019
£
Year ended
31 December
2020
£
Year ended
31 December
2019
£
6,510,868
1,726,545
(5,484,197)
(4,699,471)
10,886,578
6,125,957
28,951
19,472
316,179
(372,966)
178,336
41,438
316,179
178,336
-
-
2,738,829
1,963,579
203,280
361,796
662,041
(293,975)
448,518
(84,018)
-
-
-
-
649,799
(2,852,839)
350,505
(1,257,541)
Cash flows from operating activities
Profit/(loss)
Adjustments for:
Depreciation and amortisation
Share option expense
Loss/(gain) on sale of PP&E
Net finance costs
Income tax expense
Share of earnings from associates
(668)
(668)
Non-cash items
(668)
46,569,657
(Increase)/decrease in inventories
(1,008,047)
490,462
-
-
(Increase)/decrease in trade and other receivables
7,558,948
(838,384)
(211,035)
(620,575)
Balance as at 31 December 2019
2,537,393
95,358,556
531,213 1,361,718 (11,994,918) 87,793,962
Balance as at 1 January 2020
2,537,393
95,358,556
531,213 1,361,718 (11,994,918) 87,793,962
Profit/(Loss)
Total comprehensive income for
the period
Contributions by and distributions
to owners
-
-
-
-
Issue of share capital
243,127
12,156,369
Issue costs
28
-
(440,735)
-
-
-
-
Share based payments
6,873
343,632
316,179
Total contributions by and
distributions to owners
250,000
12,059,266
316,179
-
-
-
-
-
-
(5,806,100)
(5,806,100)
(5,806,100)
(5,806,100)
- 12,399,496
-
-
-
(440,735)
666,684
12,625,445
Balance as at 31 December 2020
2,787,393
107,417,822
847,392 1,361,718 (17,801,018) 94,613,307
(Decrease)/increase in trade and other payables
2,713,707
(4,522,142)
(135,808)
1,356,158
Increase in provisions
Income tax paid
-
91,407
(1,894,398)
(615,128)
-
-
-
-
Net cash flows from operating activities
28,467,563
2,153,731
(4,932,125)
(4,661,825)
Investing activities
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of intangible assets
16
17
(6,451,893)
(3,384,363)
(8,886)
(32,535)
895,962
(152,617)
48,475
(3,611)
-
-
-
-
Acquisition of businesses (net of cash acquired)
(8,382,804)
(35,931,107)
(10,116,675)
(36,741,325)
Financial derivative
Interest received
(151,770)
185,704
-
773
(151,770)
37,813
773
Net cash used in investing activities
(14,057,418)
(39,269,833)
(10,239,518)
(36,773,087)
Financing activities
Proceeds from share issue
Cost of share issue
Proceeds from borrowings
Cost of borrowings
Repayment of borrowings
Net loans with subsidiaries
Interest paid
Repayment of finance lease obligations
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Exchange losses on cash
12,399,496
45,173,266
12,399,496
45,173,266
(440,735)
(1,531,274)
(440,735)
(1,531,274)
67,645,725
20,171,691
(858,562)
(184,000)
-
-
-
-
(73,148,153)
(18,720,774)
(23,032)
(10,000,000)
-
-
10,809,549
11,655,492
(2,486,688)
(1,678,500)
-
-
(695)
-
(40,927)
-
3,111,083
43,230,409
22,744,583
45,256,557
17,521,228
9,867,696
63,060
6,114,307
3,771,735
(18,346)
7,572,940
3,935,831
12,435
3,821,645
115,756
(1,570)
Cash and cash equivalents and end of period
22
27,451,984
9,867,696
11,521,206
3,935,831
Major non-cash transactions
During the year ended 31 December 2020 there were share based payments of £350,505 to CDH employees and consultants
and non-cash additions of property, plant and equipment. The remainder of non-cash movements are not considered material.
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
The principal activity of SigmaRoc plc (the ‘Company’) is to
make investments and/or acquire projects in the construction
materials sector and through its subsidiaries (together
the ‘Group’) is the production of high-quality aggregates
and supply of value-added construction materials. The
Company’s shares are admitted to trading on the AIM Market
of the London Stock Exchange (‘AIM’). The Company is
incorporated and domiciled in the United Kingdom.
The address of its registered office is 7-9 Swallow Street,
London, W1B 4DE.
2. Accounting Policies
The principal accounting policies applied in the preparation
of these Financial Statements are set out below
(‘Accounting Policies’ or ‘Policies’). These Policies have
been consistently applied to all the periods presented,
unless otherwise stated.
2.1. Basis of Preparing the Financial
Statements
The Financial Statements have been prepared in
accordance with International Financial Reporting Standards
(‘IFRS’) and IFRIC Interpretations Committee (‘IFRIC
IC’) as adopted by the European Union. The Financial
Statements have also been prepared under the historical
cost convention.
The Financial Statements are presented in UK Pounds
Sterling rounded to the nearest pound.
The preparation of Financial Statements in conformity
with IFRS’s requires the use of certain critical accounting
estimates. It also requires management to exercise
its judgement in the process of applying the Group’s
Accounting Policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and
estimates are significant to the Financial Information are
disclosed in Note 4.
a) Changes in Accounting Policy
i) New and amended standards adopted by the Group
The Group has adopted the following standards from 1
January 2020:
■ Amendments to References to Conceptual Framework in
IFRS Standards
■ Amendments to IFRS 3
■ Definition of a business
■ Amendments to IAS 1 and IAS 8 – Definition of material
■ Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest
Rate Benchmark Reform
The adoption of these standards has not had a material
impact on the Financial Statements.
New IFRS Standards and Interpretations not adopted.
At the date on which these Financial Statements were
authorised, there were no Standards, Interpretations and
Amendments which had been issued but were not effective
for the year ended 31 December 2020 that are expected to
materially impact the Group’s Financial Statements.
ii) New standards, amendments and interpretations in
issue but not yet effective or not yet endorsed and not early
adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard
IFRS 3
IAS 37
IAS 16
Impact on initial application
Reference to Conceptual Framework
Onerous contracts
Proceeds before intended use
Annual improvements
2018-2020 Cycle
IFRS 17
IAS 8
IAS 1
Insurance contracts
Accounting estimates
Effective date
1 January 2022
1 January 2022
1 January 2022
1 January 2022
1 January 2023
1 January 2023
Classification of Liabilities as Current or Non-Current.
1 January 2023
The Group is evaluating the impact of the new and amended standards above which are not expected to have a material
impact on the Group’s results or shareholders’ funds
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SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
2.2. Basis of Consolidation
The Consolidated Financial Statements consolidate the
Financial Statements of the Company and the accounts of all
of its subsidiary undertakings for all periods presented.
Subsidiaries are entities over which the Group has control.
The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The Group applies the acquisition method of accounting
to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values
of the assets transferred, the liabilities incurred to the former
owners of the acquiree and the equity interests issued by the
Group. The consideration transferred includes the fair value of
any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred unless
they result from the issuance of shares, in which case they are
offset against the premium on those shares within equity.
Any contingent consideration to be transferred by the Group
is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration
that is deemed to be an asset or liability is recognised in
accordance with IAS 39 either in profit or loss or as a change
to other comprehensive income. Contingent consideration that
is classified as equity is not re-measured, and its subsequent
settlement is accounted for within equity.
Investments in subsidiaries are accounted for at cost
less impairment.
Associates are entities over which the Group has significant
influence but not control over the financial and operating
policies. Investments in associates are accounted for using
the equity method of accounting and are initially recognised
at cost. The Group’s share of its associates’ post-acquisition
profits or losses is recognised in profit or loss, and its share
of post-acquisition movements in reserves is recognised in
other comprehensive income. The cumulative post-acquisition
movements are adjusted against the carrying amount of
the investment.
Accounting policies of equity–accounted investees have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
Where considered appropriate, adjustments are made to the
financial information of subsidiaries to bring the accounting
policies used into line with those used by other members
of the Group. All intercompany transactions and balances
between Group enterprises are eliminated on consolidation.
CDH use Belgian GAAP rules to prepare and report their
financial statements. The Group reports using IFRS standards
and in order to comply with the Group’s reporting standards,
management of CDH processed several adjustments to ensure
the financial information included at a Group level complies
with IFRS. CDH will continue to prepare their company
financial statements in line with the Belgian GAAP rules.
2.3. Going Concern
As described in in the CEO’s strategic report, the Group
is managing the impact of the COVID-19 pandemic on
its business and the uncertainty it creates. The Executive
management team have prepared a range of simulated
scenarios based on reductions in revenues, and from
these, they believe that the Group has a sufficiently robust
balance sheet to endure the Coronavirus pandemic. Further
information as to the Group’s plans to both prepare for and
mitigate the effect of the COVID-19 outbreak is available in the
Coronavirus update on page 13.
The Financial Statements have been prepared on a going
concern basis. The Directors have a reasonable expectation
that the Group and Company have adequate resources to
continue in operational existence for the foreseeable future.
Thus they continue to adopt the going concern basis of
accounting in preparing the Financial Statements.
2.4. Segment Reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the
operating segments, has been identified as the Board of
Directors that makes strategic decisions.
2.5. Foreign Currencies
a) Functional and Presentation Currency
Items included in the Financial Statements are measured
using the currency of the primary economic environment
in which the entity operates (the ‘functional currency’). The
Financial Statements are presented in Pounds Sterling,
rounded to the nearest pound, which is the Group’s functional
currency.
b) Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates
of the transactions or valuation where such items are re-
measured. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the
Income Statement. Foreign exchange gains and losses that
relate to borrowings and cash and cash equivalents are
presented in the Income Statement within ‘finance income
or costs. All other foreign exchange gains and losses are
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
presented in the Income Statement within ‘Other net gains/
(losses)’.
Translation differences on non-monetary financial assets and
liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value
gain or loss. Translation differences on non-monetary financial
assets measured at fair value, such as equities classified
as available for sale, are included in other comprehensive
income.
c) Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the
presentation currency are translated into the presentation
currency as follows:
■ assets and liabilities for each period end date presented
are translated at the period-end closing rate;
■ income and expenses for each Income Statement are
translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of
the transactions); and
■ all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities, and of
monetary items receivable from foreign subsidiaries for
which settlement is neither planned nor likely to occur in the
foreseeable future, are taken to other comprehensive income.
When a foreign operation is sold, such exchange differences
are recognised in the Income Statement as part of the gain or
loss on sale.
2.6. Intangible Assets
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred and
the acquisition date fair value of any previous equity interest
in the acquire over the fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquire. If the total of
consideration transferred, non-controlling interest recognised
and previously held interest measured at fair value is less than
the fair value of the net assets of the subsidiary acquired, in
the case of a bargain purchase, the difference is recognised
directly in the Income Statement.
As reported within the CEO’s strategic report, a PPA was
carried out to assess the fair value of the assets acquired in
CDH as at the completion date. As a result of this exercise,
goodwill in CDH decreased from £51 million to £7.2 million
with the corresponding movement being property, plant and
equipment and intangible assets. The current accounting
policies regarding the subsequent treatment intangible assets
will apply to fair value uplift attributable to the PPA.
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SigmaRoc Annual Report and Financial Statements
Amortisation is provided on intangible assets to write off the
cost less estimated residual value of each asset over its
expected useful economic life on a straight-line basis at the
following annual rates:
Goodwill
Customer relations
Intellectual property
Research and Development
Branding
Other intangibles
0%
7% – 12.5%
10% – 12%
10% – 20%
5% – 10%
0%
For the purpose of impairment testing, goodwill acquired
in a business combination is allocated to each of the cash-
generating units, or groups of cash-generating units, that are
expected to benefit from the synergies of the combination.
Each unit or group of units to which the goodwill is allocated
represents the lowest level within the entity at which the
goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill is not amortised however impairment reviews are
undertaken annually, or more frequently if events or changes
in circumstances indicate a potential impairment. The carrying
value of goodwill is compared to the recoverable amount,
which is the higher of value in use, discounted to present
value using a pre tax discount rate reflective of the time
value of money and risks specific to the business unit. Any
impairment is recognised immediately as an expense and is
not subsequently reversed.
Other intangibles consist of an option over gravel in Poundfield
and capitalised development costs for assets produced that
assist in the operations of the Group and incur revenue. The
option for gravel is amortised based on units of production and
the development costs are amortised over the life of the asset.
Impairment reviews are performed annually. Where the benefit
of the intangible ceases or has been superseded, these are
written off the Income Statement.
2.7. Property, Plant and Equipment
Property, plant and equipment is stated at cost, plus
any purchase price allocation uplift, less accumulated
depreciation and any accumulated impairment losses.
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can
be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are
charged to the Income Statement during the financial period
in which they are incurred.
Depreciation is provided on all property, plant and equipment
to write off the cost less estimated residual value of each asset
over its expected useful economic life on a straight-line basis
at the following annual rates:
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Office equipment
Land and Buildings
Plant and machinery
Furniture and vehicles
Construction in progress
12.5% – 50%
0 – 2%
5% – 20%
7.5% – 33.3%
0%
Assets in this category are classified as current assets if
expected to be settled within 12 months; otherwise, they
are classified as non-current. The Group holds call options
to cover their exposure relative to fluctuations against the
Euro. They hold call options to purchase €4,000,000 on 30
June 2021 and €6,000,000 on 31 December 2021, such call
options being bought for £190,145. These were purchased
on 11 December 2020 and as the value is deemed to be
immaterial to the Group, hedge accounting is not required.
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
(ii) Loans and Receivables
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposal are determined by comparing
the proceeds with the carrying amount and are recognised
within ‘Other net gains/(losses)’ in the Income Statement.
2.8. Land, Mineral Rights and
Restoration Costs
Land, quarry development costs, which include directly
attributable construction overheads and mineral rights are
recorded at cost plus any purchase price allocation uplift.
Land and quarry development are depreciated and amortised,
respectively, using the units of production method, based on
estimated recoverable tonnage.
Where the Group has a legal or constructive obligation for
restoration of a site the costs of restoring this site is provided
for. The initial cost of creating this provision is capitalised
within property, plant and equipment and depreciated over the
life of the site. The provisions are discounted to their present
value at a rate which reflects the time value of money and
risks specific to the liability. Changes in the measurement of
a previously capitalized provision are accordingly added or
deducted from the value of the asset.
The depletion of mineral rights and depreciation of restoration
costs are expensed by reference to the quarry activity during
the period and remaining estimated amounts of mineral to be
recovered over the expected life of the operation.
2.9. Financial Assets
Classification
The Group’s financial assets consist of loans and receivables.
The classification depends on the purpose for which the
financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
(i) Financial Assets at Fair Value through Profit or Loss
Financial assets at fair value through profit or loss are financial
assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the
short term. Derivatives are also categorised as held for trading
unless they are designated as hedges.
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except
for maturities greater than 12 months after the balance sheet
date. These are classified as non-current assets. The Group’s
loans and receivables comprise trade and other receivables
and cash and cash equivalents at the year-end.
Recognition and Measurement
Regular purchases and sales of financial assets are
recognised on the trade date – the date on which the Group
commits to purchasing or selling the asset. Financial assets
carried at fair value through profit or loss is initially recognised
at fair value, and transaction costs are expensed in the
Income Statement. Financial assets are derecognised when
the rights to receive cash flows from the assets have expired
or have been transferred, and the Group has transferred
substantially all of the risks and rewards of ownership.
Loans and receivables are subsequently carried at amortised
cost using the effective interest method.
Gains or losses arising from changes in the fair value
of financial assets at fair value through profit or loss are
presented in the Income Statement within “Other (Losses)/
Gains” in the period in which they arise.
Impairment of Financial Assets
The Group assesses at the end of each reporting period
whether there is objective evidence that a financial asset, or
a group of financial assets, is impaired. A financial asset, or a
group of financial assets, is impaired and impairment losses
are incurred, only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial
recognition of the assets (a “loss event”), and that loss event
(or events) has an impact on the estimated future cash flows
of the financial asset, or group of financial assets, that can be
reliably estimated.
The criteria that the Group uses to determine that there is
objective evidence of an impairment loss include:
■ significant financial difficulty of the issuer or obligor;
■ a breach of contract, such as a default or delinquency in
interest or principal repayments;
■ the Group, for economic or legal reasons relating to the
borrower’s financial difficulty, granting to the borrower a
concession that the lender would not otherwise consider;
and
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105
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
■ it becomes probable that the borrower will enter
bankruptcy or another financial reorganisation.
The Group first assesses whether objective evidence of
impairment exists.
The amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not
been incurred), discounted at the financial asset’s original
effective interest rate. The asset’s carrying amount is reduced
and the loss is recognised in the Income Statement.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such
as an improvement in the debtor’s credit rating), the reversal
of the previously recognised impairment loss is recognised in
the Income Statement.
2.10. Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost and net realisable value. Cost comprises
all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location
and condition. In the case of manufactured inventories and
work in progress, cost includes an appropriate share of
overheads based on normal operating capacity.
Weighted average cost is used to determine the cost of
ordinarily interchangeable items.
2.11. Trade Receivables
Trade receivables are amounts due from third parties in the
ordinary course of business. If collection is expected in one
year or less, they are classified as current assets. If not,
they are presented as non-current assets.
2.12. Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in
hand and are subject to an insignificant risk of changes
in value.
2.13. Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
2.14. Reserves
Share Premium – the reserve for shares issued above the
nominal value. This also includes the cost of share issues
that occurred during the year.
Retained Earnings – the retained earnings reserve includes
all current and prior periods retained profit and losses.
Share Option Reserve – represents share options awarded
by the Company.
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SigmaRoc Annual Report and Financial Statements
Other Reserves comprise the following:
Capital Redemption Reserve – the capital redemption
reserve is the amount equivalent to the nominal value of
shares redeemed by the Group.
Foreign Currency Translation Reserve – represents the
translation differences arising from translating the financial
statement items from functional currency to presentational
currency.
Deferred Shares – are shares that effectively do not have
any rights or entitlements.
2.15. Trade Payables
Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities.
Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method.
2.16. Provisions
The Group provides for the costs of restoring a site where a
legal or constructive obligation exists. The estimated future
costs for known restoration requirements are determined on
a site-by-site basis and are calculated based on the present
value of estimated future costs.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle
the present obligation, its carrying amount is the present
value of those cash flows (where the effect of the time value
of money is material). The increase in provisions due to the
passage of time is included in the Consolidated Statement of
Profit or Loss and Comprehensive Loss.
2.17. Borrowings
Bank and Other Borrowings
Interest-bearing bank loans and overdrafts and other
loans are recognised initially at fair value less attributable
transaction costs. All borrowings are subsequently stated
at amortised cost with the difference between initial net
proceeds and redemption value recognised in the Income
Statement over the period to redemption on an effective
interest basis.
2.18. Taxation
Tax is recognised in the Income Statement, except to
the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the
tax is also recognised in other comprehensive income or
directly in equity, respectively.
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
2.19. Non-Underlying Items
Non-underlying items are a non IFRS measure, but the
Group have disclosed these separately in the financial
statements, where it is necessary to do so to provide
further understanding of the financial performance of the
Group. They are items that are material, not expected to
be recurring or do not relate to the ongoing operations of
the Group’s business and non-cash items which distort the
underlying performance of the business.
2.20. Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable
for goods or services supplied in course of ordinary
business, stated net of discounts, returns and value added
taxes. The Group recognises revenue in accordance with
IFRS 15 at either a point in time of over time, depending
on the nature of the goods or services and existence of
acceptance clauses.
Revenue from the sale of goods is recognised when delivery
has taken place and the performance obligation of delivering
the goods has taken place. The performance obligation
of products sold are transferred according to the specific
delivery terms that have been formally agreed with the
customer, generally upon delivery when the bill of lading
is signed as evidence that they have accepted the product
delivered to them.
Revenue from the provision of services is recognised as
the services are rendered, in accordance with customer
contractual terms.
2.21. Finance Income
Interest income is recognised using the effective
interest method.
2.22. Employee Benefits - Defined
Contribution Plans
The Group maintains defined contribution plans for which
the Group pays fixed contributions to publicly or privately
administered pension insurance plans on a mandatory,
contractual or voluntary basis and will have no legal
or constructive obligation to pay further amounts. The
Group’s contributions to defined contribution plans are
charged to the Income Statement in the period to which the
contributions relate.
2.23. Share Based Payments
The Group operates a number of equity-settled, share-based
schemes, under which the entity receives services from
employees or third-party suppliers as consideration for equity
instruments (options and warrants) of the Group. The fair value
of the third-party suppliers’ services received in exchange for
the grant of the options is recognised as an expense in the
Statement of Comprehensive Income or charged to equity
depending on the nature of the service provided. The value
of the employee services received is expensed in the Income
Statement and its value is determined by reference to the fair
value of the options granted:
■ including any market performance conditions;
■ excluding the impact of any service and non-market
performance vesting conditions (for example, profitability
or sales growth targets, or remaining an employee of the
entity over a specified time period); and
■ including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
Non-market vesting conditions are included in assumptions
about the number of options that are expected to vest.
The total expense or charge is recognised over the vesting
period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each
reporting period, the entity revises its estimates of the
number of options that are expected to vest based on the
non-market vesting conditions. It recognises the impact
of the revision to original estimates, if any, in the Income
Statement or equity as appropriate, with a corresponding
adjustment to a separate reserve in equity.
When the options are exercised, the Company issues new
shares. The proceeds received, net of any directly attributable
transaction costs, are credited to share capital (nominal value)
and share premium when the options are exercised.
2.24. Discontinued Operations
A discontinued operation is a component of the Group’s
business, the operations and cash flows of which can be
clearly distinguished from the rest of the Group and which:
■ represents a separate major line of business or geographic
area of operations;
■ is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of
operations; or
■ is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs at the
earlier of disposal or when the operation meets the criteria
to be classified as held-for-sale. The Group operates several
business units which are constantly reviewed to ensure
profitability. During 2019 it was determined that the flagging
& paving division at CCP’s Bury site was loss making and
therefore it was decided that the operations at this site be
discontinued. For further information, refer to note 14.
2.25. Leases
The Group leases certain plant and equipment. Leases of
plant and equipment where the Group has substantially all
the risks and rewards of ownership are classified as finance
leases under IFRS 16. Finance leases are capitalised on the
lease’s commencement at the lower of the fair value of the
Invest, Improve, Integrate and Innovate
107
a) Market Risk
The gearing ratio at 31 December 2020 is as follows:
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
leased assets and the present value of the minimum lease
payments. Other leases are either small in value or cover a
period of less than 12 months.
Each lease payment is allocated between the liability and
finance charges. The corresponding rental obligations, net of
finance charges, are included in long-term borrowings. The
interest element of the finance cost is charged to the Income
Statement over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability
for each period. Assets obtained under finance leases are
depreciated over their useful lives. The lease liabilities are
shown in note 24.
Rent payable under operating leases on which the short term
exemption has been taken, less any lease incentives received,
is charged to the income statement on a straight-line basis
over the term of the relevant lease except where another more
systematic basis is more representative of the time pattern in
which economic benefits from the lease asset are consumed.
3. Financial Risk Management
3.1. Financial Risk Factors
The Group’s activities expose it to a variety of financial risks:
market risk, credit risk and liquidity risk. The Group’s overall
risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the Group’s financial performance.
Risk management is carried out by the UK based
management team under policies approved by the Board of
Directors.
The Group is exposed to market risk, primarily relating to
interest rate, foreign exchange and commodity prices. The
Group has not sensitised the figures for fluctuations in interest
rates, foreign exchange or commodity prices as the Directors
are of the opinion that these fluctuations would not have a
significant impact on the Financial Statements at the present
time. The Directors will continue to assess the effect of
movements in market risks on the Group’s financial operations
and initiate suitable risk management measures where
necessary.
b) Credit Risk
Credit risk arises from cash and cash equivalents as well as
exposure to customers including outstanding receivables. To
manage this risk, the Group periodically assesses the financial
reliability of customers and counterparties.
No credit limits were exceeded during the period, and
management does not expect any losses from non-
performance by these counterparties.
c) Liquidity Risk
The Group’s continued future operations depend on the
ability to raise sufficient working capital through the issue of
equity share capital or debt. The Directors are reasonably
confident that adequate funding will be forthcoming with which
to finance operations. Controls over expenditure are carefully
managed.
Borrowings
Trade and other payables
Less than
1 year
£
3,611,169
46,522,548
50,133,717
31 December 2020
Between
1 and 2 years
£
Between
2 and 5 years
£
2,768,017
64,407,879
708,737
361,511
3,476,754
64,769,390
Over 5 years
£
512,500
4,029,948
4,542,448
3.2. Capital Risk Management
The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern,
in order to enable the Group to continue its construction
material investment activities, and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group
may adjust the issue of shares or sell assets to reduce debts.
The Group defines capital based on the total equity of the
Company. The Group monitors its level of cash resources
available against future planned operational activities and
the Company may issue new shares in order to raise further
funds from time to time.
Total borrowings (Note 24)
Less: Cash and cash equivalents (Note 22)
Net debt
Total equity
Total capital
Gearing ratio
Consolidated
31 December
2020
£
71,299,565
(27,451,984)
43,847,581
31 December
2019
£
59,655,351
(9,867,696)
49,787,655
123,563,482
102,047,996
167,411,063
151,835,651
0.26
0.33
4. Critical Accounting Estimates
b) Estimated Impairment of Goodwill
The preparation of the Financial Statements in conformity
with IFRSs requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the Financial Statements and the
reported amount of expenses during the year. Actual
results may vary from the estimates used to produce these
Financial Statements.
Estimates and judgements are continually evaluated and
are based on historical experience and other factors,
including expectations of future events that are believed to
be reasonable under the circumstances.
Significant items subject to such estimates and assumptions
include, but are not limited to:
The determination of fair values of assets acquired and
liabilities assumed in a business combination involves the
use of estimates and assumptions such as discount rates
used and valuation models applied as well as goodwill
allocation.
Goodwill has a carrying value of £39,965,803 as at 31
December 2020 (31 December 2019: £73,004,627). The
Group tests annually whether goodwill has suffered any
impairment, in accordance with the accounting policy stated
in Note 2.6 to the Financial Statements.
Management has concluded that an impairment charge was
not necessary to the carrying value of goodwill for the period
ended 31 December 2020 (31 December 2019: £nil). See
Note 2.6 to the Financial Statements.
a) Land and Mineral Reserves
c) Restoration Provision
The determination of fair values of land and mineral
reserves are carried out by appropriately qualified persons
in accordance with the Appraisal and Valuation standards
published by the Royal Institution of Chartered Surveyors.
The estimation of recoverable reserves is based upon
factors such as estimates of commodity prices, future capital
requirements and production costs along with geological
assumptions and judgements.
The Group’s provision for restoration costs has a carrying
value at 31 December 2020 of £891,125 (31 December
2019: £718,822) and relate to the removal of the plant and
equipment held at quarries in the Channel Islands and
United Kingdom. The cost of removal was determined by
management for the removal and disposal of the machinery
at the point of which the reserves are no longer available for
business use.
The PPAs included the revaluation of land and minerals
based on the estimated remaining reserves within St
John’s, Les Vardes, Aberdo and Carrières du Hainaut
quarries. These are then valued based on the estimated
remaining life of the mines and the net present value for
the price per tonnage.
The restoration provision is a commitment to restore the
site to a safe and secure environment. The provisions are
reviewed annually.
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SigmaRoc Annual Report and Financial Statements
Invest, Improve, Integrate and Innovate
109
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
d) Fair Value of Share Options
5. Dividends
7. Revenue
The Group has made awards of options and warrants
over its unissued share capital to certain Directors and
employees as part of their remuneration packages. Certain
warrants have also been issued to suppliers for various
services received.
The valuation of these options and warrants involves making
a number of critical estimates relating to price volatility,
future dividend yields, expected life of the options and
forfeiture rates. These assumptions have been described in
more detail in Note 29 to the Financial Statements.
e) Valuation and timing of deferred consideration
As part of the acquisition of GD Harries, the Group has
agreed to pay royalty payments over the next 10 years with
a minimum total value of £10m. The estimated present value
of these payments is £4.69m. In determining this value,
management must make critical estimates as to timing,
value and cost of money of these payments.
No dividend has been declared or paid by the Company
during the year ended 31 December 2020 (2019: nil).
6. Segment Information
Management has determined the operating segments based
on reports reviewed by the Board of Directors that are used
to make strategic decisions. During the periods presented
the Group had interests in three key geographical segments,
being the United Kingdom, Channel Islands and Belgium.
The Belgium segment was included as a key geographical
segment in October 2019 when the Group acquired CDH
Développement SA. Activities in the United Kingdom,
Channel Islands and Belgium relate to the production and
sale of construction material products and services.
31 December 2020
United Kingdom
£
Channel Islands
£
Belgium
£
Total
£
Revenue
46,790,487
27,324,939
50,115,689
124,231,115
Profit from operations per reportable segment
10,016,729
9,230,303
14,955,766
34,202,798
Upstream products
Value added products
Value added services
Other
Consolidated
31 December
2020
£
13,333,702
105,428,101
3,921,116
1,548,196
124,231,115
31 December
2019
£
6,972,097
56,086,965
6,652,397
651,013
70,362,472
Upstream products revenue relates to the sale of aggregates and cement. Value added products is the sale of finished
goods that have undertaken a manufacturing process within each of the subsidiaries. Value added services consists of the
transportation, installation and contracting services provided.
8. Expenses by Nature
Additions to non-current assets
32,030,117
(1,891,258)
371,094
30,509,953
Cost of sales
Reportable segment assets
107,559,239
49,214,403
100,450,285
257,223,927
Changes in inventories of finished goods and work in progress
Reportable segment liabilities
76,031,131
5,369,328
52,259,986
133,660,445
31 December 2019
United Kingdom
£
Channel Islands
£
Belgium
£
Total
£
Revenue
32,964,660
29,241,597
8,156,215
70,362,472
Profit from operations per reportable segment
8,170,774
9,198,697
2,068,792
19,438,263
Additions to non-current assets
20,908,087
(1,689,474)
76,354,868
95,573,481
Reportable segment assets
72,555,343
49,710,145
85,515,641
207,781,129
Reportable segment liabilities
51,548,505
4,796,404
49,388,226
105,733,135
Production cost of goods sold
Distribution and selling expenses
Raw materials and consumables used
Employee benefit expenses
Depreciation and amortisation expense
Other costs of sale
Total cost of sales
Administrative expenses
Operational admin expenses
Corporate admin expenses
Total administrative expenses
Consolidated
31 December
2020
£
31 December
2019
£
(1,757,994)
11,975,751
8,136,509
(680,415)
6,869,232
5,921,567
27,740,858
19,320,078
29,507,527
12,792,817
9,364,796
5,060,870
4,912,383
1,788,547
90,028,317
50,924,209
17,270,000
7,330,006
9,922,199
4,953,675
24,600,066
14,875,874
Corporate administrative expenses include £2,047,521 of non-underlying expenses (refer to note 11).
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors
and its associates:
10. Directors’ Remuneration
Fees payable to the Company’s auditor and its associates for the audit of the
Company and Consolidated Financial Statements
Fees payable to the Company’s auditor and its associates for tax services
Fees paid or payable to the Company’s auditor and its associates for due diligence
and transactional services
Fees paid to the Company’s auditor for other services
Consolidated
31 December
2020
31 December
2019
£
£
193,994
171,165
9,028
24,050
-
227,072
30,572
140,932
17,877
360,546
Executive Directors
David Barrett
Dean Masefield (1)
Max Vermorken
Non-executive
Directors
Dominic Traynor (2)
Patrick Dolberg (3)
Timothy Hall
Garth Palmer (4)
Simon Chisholm (5)
Jacques Emsens (6)
Directors’ fees
£
Bonus
£
Taxable benefits
£
Pension benefits
£
Options issued
£
Total
£
31 December 2020
305,278
280,000
125,000
90,000
395,000
380,000
13,800
5,792
13,800
40,000
40,000
40,000
-
-
-
54,962
25,000
28,030
28,030
-
-
-
-
-
-
-
-
1,056,300
775,000
33,392
-
12,500
39,500
5,000
-
-
5,496
2,803
-
65,299
45,855
644,933
66
233,358
109,634
937,934
5,101
4,430
27,263
30,155
-
-
50,101
44,430
67,263
115,613
30,833
28,030
222,504
2,152,495
9. Employee Benefits Expense
Staff costs (excluding directors)
Salaries and wages
Post-employment benefits
Social security contributions and similar taxes
Other employment costs
Average number of FTE employees by function
Management
Operations
Administration
Consolidated
Company
31 December
2020
£
31 December
2019
£
31 December
2020
£
31 December
2019
£
31,638,511
16,823,415
1,423,765
902,710
Executive Directors
Directors’ fees
£
Bonus
£
Taxable benefits
£
Pension benefits
£
Options issued
£
Total
£
31 December 2019
114,443
431,962
7,938,620
107,206
134,524
867,944
51,896
211,651
65,420
36,430
59,217
20,724
40,123,536
17,933,089
1,752,732
1,019,081
Consolidated
Company
31 December
2020
#
31 December
2019
#
31 December
2020
#
31 December
2019
#
58
744
140
942
63
576
78
717
5
-
2
7
3
-
1
4
David Barrett
Garth Palmer
Max Vermorken
Non-executive
Directors
Dominic Traynor
Patrick Dolberg
Timothy Hall
190,000
230,000
60,000
-
250,000
340,000
32,005
32,005
24,580
-
-
-
13,800
-
13,800
-
-
-
-
6,000
25,000
3,201
-
-
27,700
461,500
22,100
88,100
60,676
689,476
5,009
3,442
11,897
40,215
35,447
36,477
588,590
570,000
27,600
34,201
130,824
1,351,215
(1) Appointed on 20 April 2020
(2) Resigned on 18 May 2020
(3) Resigned on 18 May 2020
(4) Garth Palmer was CFO until 20 April 2020 to which when he stepped down and stayed on the board as a Non-Executive
director. His bonus was performance based for the period 1 January 2020 until 20 April 20.
(5) Appointed on 20 April 2020
(6) Appointed on 20 April 2020
The bonuses earned in the year by the Directors reflect the performance of the business, were based on industry standard criteria
taking into account external market data, were recommended by the Remuneration Committee and approved by the Board.
Details of fees paid to companies and partnerships of which the Directors are related have been disclosed in Note 36.
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
11. Non-underlying Items
12. Net Finance (Expense)/Income
As required by IFRS 3 – Business Combinations, acquisition costs have been expensed as incurred. Additionally, the Group incurred
costs associated with obtaining debt financing, including advisory fees to restructure the Group to satisfy lender requirements.
Acquisition related expenses
Amortisation and remeasurement of acquired assets
Restructuring expenses
Equity & debt funding expenses
Discontinued operations
Share option expense
Unwinding of discount on deferred consideration
Net other non-underlying expenses & gains
Consolidated
31 December
2020
£
1,371,797
1,408,964
802,804
144,906
100,209
316,179
321,903
512,429
4,979,191
31 December
2019
£
2,615,860
1,213,574
820,949
659,823
529,948
178,336
-
160,590
6,179,080
Acquisition related expenses include costs relating to the due
diligence of prospective pipeline acquisitions, stamp duty on
completed acquisitions and other direct costs associated with
merger & acquisition activity including a completion bonus
to certain employees in relation to the acquisition of CDH.
During the year the Group acquired the remaining share
capital in GD Harries and Stone Holdings S.A.
Amortisation and remeasurement of acquired assets are
non-cash items which distort the underlying performance of
the businesses acquired. Amortisation of acquired assets
arise from certain fair value uplifts resulting from the PPA.
Remeasurement of acquired assets arises from ensuring
assets from acquisitions are depreciated in line with Group
policy.
Restructuring expenses include advisory fees, redundancy
costs and moving expenses. During the year these primarily
related to the SigmaPPG platform.
Equity & debt funding expenses relates to consulting fees
for the debt refinance.
Share option expense is the fair value of the share options
issued during the year, refer to note 29 more information.
Unwinding of discount on deferred consideration is a non-
cash adjustment relating to deferred consideration arising
on acquisitions.
Discontinued operations include the trading expenses, stock
adjustments and redundancies incurred at the Bury site for
the period from January 2020 to December 2020. Refer to
note 14 for more information.
Net other non-underlying expenses and gains include
COVID-19 related costs such as purchases of face
masks and other protective equipment, procurement and
administration of testing kits, modifications to working
environments to ensure safety and other associated costs.
Convertible loan redemption interest premium
Convertible loan note interest expense
Other interest (expense)/income
Other finance (expense)/income
Unwinding of discount on deferred consideration
13. Other Net Gains/(Losses)
Gain/(losses) on disposal of property, plant and equipment
Other gain/(loss)
Loss on call options
Share of earnings from associates
Loss on discontinued operations
For more information on the loss on discontinued operations, please refer to note 14.
Consolidated
31 December
2020
£
-
-
(2,290,520)
(126,406)
(321,903)
31 December
2019
£
(500,000)
(39,452)
(1,294,666)
(129,461)
(2,738,829)
(1,963,579)
Consolidated
31 December
2020
£
31 December
2019
£
372,966
(251,464)
(38,375)
293,975
(101,247)
275,855
(14,536)
56,361
-
84,018
(529,948)
(404,105)
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
14. Discontinued Operations
From due diligence undertaken as part of the acquisition of CCP in January 2019, doubts existed over the viability of the
flagging & paving division at its site in Bury. After a detailed review it was determined that the business unit was loss making
and it was decided that the operations at this site be discontinued effective from 1 February 2019.
Financial information relating to the discontinued operation for the period is set out below.
Income statement
Revenue
Cost of sales
Gross profit
Administration
Other expenses
Loss from discontinued operation
Basic earnings per share attributable to owners of the parent (expressed
in pence per share)
Cash movement
Net cash outflow from operating activities
Net cash inflow from investing activities
Net cash inflow from financing activities
31 December
2020
£
-
(150,038)
(150,038)
(55,781)
105,610
(100,209)
(0.04)
31 December
2019
£
811,862
(1,103,550)
(291,688)
(146,429)
(91,831)
(529,948)
(0.28)
31 December
2020
£
31 December
2019
£
(94,040)
287,500
-
(125,846)
(212,465)
-
Net increase / (decrease) in cash generated by the subsidiary
193,460
(338,311)
15. Taxation
Tax recognised in profit or loss
Current tax
Deferred tax
Total tax charge in the Income Statement
Consolidated
31 December
2020
£
31 December
2019
£
(789,683)
(448,518)
127,642
-
(662,041)
(448,518)
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
The tax on the Group’s profit/(loss) before taxation differs from the theoretical amount that would arise using the weighted
average tax rate applicable to the profits/(losses) of the consolidated entities as follows:
Profit/(loss) before tax subject to charge
Tax at the applicable rate of 25.14%
Effects of:
Expenditure not deductible for tax purposes
Deferred tax not recognised
Remeasurement of deferred tax for changes in tax rates
Income not taxable for tax purposes
Depreciation in excess of/(less than) capital allowances
Net tax effect of losses carried forward
Tax charge
Consolidated
31 December
2020
£
31 December
2019
£
7,095,798
1,784,309
1,726,545
359,294
1,241,151
(1,859,472)
639,226
237,384
(435,771)
(1,041,015)
(659,432)
613,251
(21,995)
662,041
-
227,160
26,469
448,518
The weighted average applicable tax rate of 25.14% (2019: 20.81%) used is a combination of the standard rate of corporation
tax rate for entities in the United Kingdom of 19% (2019: 19%), 20% on quarrying of minerals and rental property (2019: 20%)
in Jersey and Guernsey and 30% (2019: 33.99%) in Belgium.
Deferred Tax Asset
At 1 January 2020
Charged/(credited) directly to equity
At 31 December 2020
Deferred Tax Liability
At 1 January 2020
Acquisition of subsidiary
Charged/(credited) directly to income statement
At 31 December 2020
Tax losses
-
402,088
402,088
Tax losses
-
(127,642)
(127,642)
Temporary
timing
differences
-
1,009,892
1,009,892
Temporary
timing
differences
1,098,148
2,900,580
-
3,998,728
Total
-
1,411,980
1,411,980
Total
1,098,148
2,900,580
(127,642)
3,871,086
Deferred income tax assets of £1,411,980 (2019: nil) are recognised to the extent that the realisation of related tax benefits
through future taxable profits is probable. Deferred tax liabilities of £3,871,086 (2019: 1,098,148) are recognised in full.
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As at 31 December 2019
3,691,539
49,763,665 38,372,676
77,111,333
17,677,443
846,212 187,462,868
As at 31 December 2020
29,693
54,363
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Office Equipment
£
Land & Buildings
£
Motor Vehicle
£
Total
£
Company
Cost
As at 1 January 2019
Additions
IFRS 16 Adjustment
Disposals
As at 31 December 2019
As at 1 January 2020
Additions
Disposals
Forex
12,600
8,207
-
-
20,807
20,807
8,886
-
-
-
-
54,363
-
54,363
54,363
-
-
-
Depreciation
As at 1 January 2019
Charge for the year
Disposals
As at 31 December 2019
As at 1 January 2020
Charge for the year
Disposals
As at 31 December 2020
Net book value
As at 31 December 2019
As at 31 December 2020
8,261
6,072
-
14,333
14,333
7,456
-
21,789
6,474
7,904
-
13,313
-
13,313
13,313
13,313
-
26,626
41,050
27,737
-
24,328
-
-
24,328
24,328
-
-
305
24,633
-
87
-
87
87
8,182
-
8,269
24,241
16,364
12,600
32,535
54,363
-
99,498
99,498
8,886
-
305
108,689
8,261
19,472
-
27,733
27,733
28,951
-
56,684
71,765
52,005
The depreciation on the right of use assets for the year ended 31 December 2020 was £13,313 (2019: £13,313) and the net
book value is £27,737 (2019: £41,050).
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
16. Property, Plant and Equipment
Consolidated
Cost
Office
Equipment
£
Land and
minerals
£
Land and
buildings
£
Plant and
machinery
£
Furniture
and vehicles
£
Construction
in progress
£
Total
£
As at 1 January 2019
383,440
37,855,548 22,472,510
17,970,282
7,437,362
1,932,082
88,051,224
Acquired through acquisition
3,194,969
14,844,352 13,385,643
57,825,258
9,642,516
-
98,892,738
Transfer between classes
Fair value adjustment
-
-
(4,600,000)
5,760,000
1,762,000
-
-
-
IFRS 16 Adjustment
22,689
-
584,785
875,388
-
-
-
(1,160,000)
-
-
-
1,762,000
1,482,862
Additions
Disposals
Forex
139,414
145,140
435,886
1,403,634
869,033
391,256
3,384,363
(1,173)
-
(4,105,000)
(81,860)
(117,000)
(317,126)
(4,477,693)
(47,800)
(243,375)
(161,148)
(881,369)
(154,468)
-
(1,488,160)
As at 1 January 2020
3,691,539
49,763,665 38,372,676
77,111,333
17,677,443
846,212 187,462,868
Acquired through acquisition
302,871
15,085,384
1,138,624
17,420,145
6,503,077
-
40,450,102
Transfer between classes
Fair value adjustment
-
-
-
-
133,245
35,954,347
5,322,372
(48,419)
-
-
(133,245)
-
-
41,228,300
Additions
Disposals
Forex
66,574
2,937,442
570,150
1,472,808
870,548
534,371
6,451,893
-
(192,147)
-
(580,752)
(780,076)
164,480
830,659
544,608
2,989,989
265,970
-
-
(1,552,975)
4,795,706
As at 31 December 2020
4,225,464 104,379,350 45,948,430
98,498,349
24,536,962
1,247,338 278,835,894
Depreciation
As at 1 January 2019
321,323
6,950,843 13,405,493
11,192,348
6,209,206
Acquired through acquisition
2,812,176
703,698
8,309,696
49,944,448
4,789,797
Transfer between classes
IFRS 16 Adjustment
-
-
(63,594)
63,594
-
-
153,779
292,103
-
-
Charge for the year
130,206
1,010,954
1,089,546
2,019,029
820,604
Disposals
Forex
(159)
-
(200,298)
(51,769)
(117,000)
(42,585)
(11,537)
(132,643)
(777,290)
(77,433)
As at 31 December 2019
3,220,961
8,590,364 22,689,167
62,618,869
11,625,174
As at 1 January 2020
3,220,961
8,590,364 22,689,167
62,618,869
11,625,174
Acquired through acquisition
197,810
1,164,293
39,368
8,062,189
3,246,089
Charge for the year
250,226
1,579,146
1,904,968
3,898,612
2,403,723
Disposals
Forex
-
-
-
(496,507)
(530,725)
148,051
39,536
451,292
2,654,356
285,917
-
-
-
-
-
-
-
38,079,213
66,559,815
-
445,882
5,070,339
(369,226)
(1,041,488)
- 108,744,535
- 108,744,535
-
-
-
-
12,709,749
10,036,675
(1,027,232)
3,579,152
As at 31 December 2020
3,817,048
11,373,339 25,084,795
76,737,519
17,030,178
- 134,042,879
Net book value
As at 31 December 2019
470,578
41,173,301 15,683,509
14,492,464
6,052,269
846,212
78,718,333
As at 31 December 2020
408,416
93,006,011 20,863,635
21,760,830
7,506,784
1,247,338 144,793,014
The depreciation on the right of use assets for the year ended 31 December 2020 was £1,367,375 (2019: £611,627) and the
net book value is £5,475,572 (2019: £6,969,922).
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FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
17. Intangible Assets
Impairment tests for goodwill
Discount rate
(83,843)
1,210,452
400,000
414,018
63,657,885
Key assumptions
Consolidated
Goodwill
£
Customer
Relations
£
Intellectual
property
£
Research &
Development
£
Branding
£
Other
Intangibles
£
Total
£
Cost & net book value
As at 1 January 2019
16,826,369
850,846
684,556
-
613,000
-
3,611
-
-
-
18,974,771
3,611
Additions
Additions through business
combination
Price Purchase Allocation - CCP
-
61,717,258
-
-
Amortisation
Forex
As at 31 December 2019
(5,539,000)
3,480,000
-
-
297,000
-
(1,762,000)
-
-
(481,324)
(44,481)
(26,174)
(43,969)
(13,788)
(609,736)
-
-
(20,807)
-
-
(20,807)
As at 1 January 2020
73,004,627
3,849,522
556,232
1,167,082 1,266,031
400,230
80,243,724
73,004,627
3,849,522
556,232
1,167,082
1,266,031
400,230
80,243,724
Additions
Additions through business
combination
-
7,887,073
Price Purchase Allocation – CDH (43,779,628)
-
-
-
-
-
-
152,617
-
-
-
- 2,292,000
-
-
-
-
152,617
7,887,073
(41,487,628)
(849,903)
Amortisation
Forex
-
(516,930)
(84,860)
(88,323)
(159,790)
2,853,731
-
-
4,511
-
(230)
2,882,103
As at 31 December 2020
39,965,803
3,332,592
471,372
1,235,887 3,398,241
400,000
48,803,895
An adjustment has been made to reflect the initial
accounting for the acquisition of Carrières Du Hainaut
(‘CDH’) by the Company, being the elimination of the
investment in CDH against the non-monetary assets
acquired and recognition of goodwill. In 2020, the Company
determined the fair value of the net assets acquired
pursuant to the acquisition of CDH, via a Purchase
Price Allocation (‘PPA’) exercise. The PPA’s determined
a decrease of £43.8m of goodwill in CDH with the
corresponding movement to be recognised as Trademarks
and Licences, uplift the value of the Land and Buildings and
Land and Minerals and recognition of a deferred tax asset.
The goodwill is total is made up of £21.2m for the PPG
Platform, £8.9m for the Benelux platform, £6.2m for the
South Wales platform and £3.7m for the Ronez platform.
The intangible asset classes are:
■ Goodwill is the excess of the consideration transferred
and the acquisition date fair value of any previous equity
interest in the acquire over the fair value of the net
identifiable assets.
■ Customer relations is the value attributed to the key
customer lists and relationships.
■ Intellectual property is the patents owned by the Group.
■ Research and development is the acquiring of new
technical knowledge and trying to improve existing
processes or products or developing new processes or
products.
■ Branding is the value attributed to the established
company brand.
■ Other intangibles consist of an option over gravel in
Poundfield and capitalised development costs for assets
produced that assist in the operations of the Group and
incur revenue.
Amortisation of intangible assets is included in cost of sales
on the Income Statement.
Goodwill arising on business combinations is not amortised
but is reviewed for impairment on an annual basis, or more
frequently if there are indications that the goodwill may be
impaired. Goodwill is allocated to groups of cash generating
units according to the level at which management monitor
that goodwill, which is at the level of operating segments.
The seven operating segments are considered to be Ronez
in the Channel Islands, Topcrete in the UK, Poundfield in the
UK, CCP in the UK, GD Harries in the UK, CDH in Belgium
and Stone in Belgium.
The key assumptions used in performing the impairment
review are set out below:
Cash flow projections
Cash flow projections for each operating segment are
derived from the annual budget approved by the Board for
2020 and the three-year plan to 2021 and 2022. The key
assumptions on which budgets and forecasts are based
include sales volumes, product mix and operating costs.
These cash flows are then extrapolated forward for a further
17 years, with the total period of 20 years reflecting the long-
term nature of the underlying assets. Budgeted cash flows
are based on past experience and forecast future trading
conditions.
Long-term growth rates
Cash flow projections are prudently based on 2 per cent and
therefore provides plenty of headroom.
18. Investment in Subsidiary Undertakings
Shares in subsidiary undertakings
At beginning of the year
Additions
Disposals
At period end
Loan from Group undertakings
Total
Forecast cash flows for each operating segment have been
discounted at rates of 8 per cent which was calculated by an
external expert based on market participants’ cost of capital
and adjusted to reflect factors specific to each operating
segment.
Sensitivity
The Group has applied sensitivities to assess whether any
reasonable possible changes in assumptions could cause
an impairment that would be material to these consolidated
Financial Statements. This demonstrated that a 1% increase
in the discount rate would not cause an impairment and the
annual growth rate is assumed to be 2%.
The Directors have therefore concluded that no impairment
to goodwill is necessary.
Impact of Brexit
In performing the impairment review, the Directors have
carefully considered the additional uncertainty arising from
Brexit through performing additional sensitivity analysis
based on Brexit specific scenarios. These included changes
to the discount rate and modelling the impact of a significant
decline in short-to-medium term growth caused by an
economic shock following an exit. This additional analysis
indicated the existence of continued headroom for all
segments.
Company
31 December
2020
£
31 December
2019
£
94,370,845
55,481,505
25,667,619
45,723,272
-
-
120,038,464
101,204,777
(18,789,354)
(6,833,932)
101,249,110
94,370,845
Investments in Group undertakings are stated at cost less impairment. During the year the Company acquired the remaining
60% in GD Harries (Holdings) Limited and 51% in Stone Holdings.
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121
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Details of subsidiaries at 31 December 2020 are as follows:
Name of subsidiary
Country of
incorporation
Share capital held
by Company
Share capital
held by Group
Principal activities
SigmaFin Limited
England
£45,181,877
Holding company
Foelfach Stone Limited
SigmaGsy Limited
Ronez Limited
Pallot Tarmac (2002) Limited
England
Guernsey
Jersey
Jersey
£1
£1
Construction materials
Shipping logistics
£2,500,000
Construction materials
£2
Road contracting services
Island Aggregates Limited
Guernsey
£6,500
Waste recycling
Topcrete Limited
A. Larkin (Concrete) Limited
Allen (Concrete) Limited
England
England
England
Poundfield Products (Group) Limited
England
£22,167
Poundfield Products (Holdings) Limited
England
Poundfield Innovations Limited
Poundfield Precast Limited
Greenbloc Limited
England
England
England
£926,828
Pre-cast concrete producer
£37,660
Dormant
£100
Holding company
£651
£6,357
Holding company
Holding company
Patents & licencing
£63,568
Pre-cast concrete producer
£1
Dormant
CCP Building Products Limited
England
£50
Construction materials
Cheshire Concrete Products Limited
England
Clwyd Concrete Products Limited
England
Country Concrete Products Limited
England
CCP Trading Limited
CCP Aggregates Limited
England
England
£1
£100
£100
£100
Dormant
Dormant
Dormant
Dormant
£100,000
Construction materials
CDH Développement SA
Belgium
€23,660,763
Holding company
Carrières du Hainaut SCA
Coordination du Hainaut SCS
CDH International SCA
CDH Management 2 SPRL
GD Harries (Holdings) Limited
Belgium
Belgium
Belgium
Belgium
England
Gerald D. Harries & Sons Limited
England
Stone Holding Company SA
Cuvelier Philippe SA
Belgium
Belgium
€16,316,089
Construction materials
€45,184,400
Financing company
€62,000
International marketing
€760,000
Holding company
£54,054
Construction materials
£112
€100
€750
Construction materials
Construction materials
Construction materials
Name of subsidiary
Registered office address
SigmaFin Limited
7-9 Swallow Street, London, W1B 4DE
Foelfach Stone Limited
7-9 Swallow Street, London, W1B 4DE
SigmaGsy Limited
Ronez Limited
Les Vardes Quarry, Route de Port Grat, St Sampson, Guernsey, GY2 4TF
Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Pallot Tarmac (2002) Limited
Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Island Aggregates Limited
Les Vardes Quarry, Route de Port Grat, St Sampson, Guernsey, GY2 4TF
Topcrete Limited
38 Willow Lane, Mitcham, Surrey, CR4 4NA
A. Larkin (Concrete) Limited
38 Willow Lane, Mitcham, Surrey, CR4 4NA
Allen (Concrete) Limited
38 Willow Lane, Mitcham, Surrey, CR4 4NA
Poundfield Products (Group) Limited
The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Products (Holdings) Limited
The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Innovations Limited
The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Precast Limited
The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Greenbloc Limited
The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
CCP Building Products Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Cheshire Concrete Products Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Clwyd Concrete Products Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Country Concrete Products Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Trading Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Aggregates Limited
Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CDH Développement SA
Rue de Cognebeau 245, B-7060 Soignies, Belgium
Carrières du Hainaut SCA
Rue de Cognebeau 245, B-7060 Soignies, Belgium
Coordination du Hainaut SCS
Rue de Cognebeau 245, B-7060 Soignies, Belgium
CDH International SCA
Rue de Cognebeau 245, B-7060 Soignies, Belgium
CDH Management 2 SPRL
Rue de Cognebeau 245, B-7060 Soignies, Belgium
GD Harries (Holdings) Limited
Rowlands View, Templeton, Narbeth, SA67 8RG
Gerald D. Harries & Sons Limited
Rowlands View, Templeton, Narbeth, SA67 8RG
Stone Holding Company SA
Avenue Louise 292, BE-1050 Ixelles, Belgium
Cuvelier Philippe SA
Avenue Louise 292, BE-1050 Ixelles, Belgium
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123
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020 the Company was
entitled to exemption from audit under section 479A of the
Companies Act 2006 related to the following subsidiary
companies:
■ SigmaFin Limited
■ Foelfach Stone Limited
■ Topcrete Limited
■ A. Larkin (Concrete) Limited
■ Allen (Concrete) Limited
■ Poundfield Products (Group) Limited
■ Poundfield Products (Holdings) Limited
■ Poundfield Innovations Limited
■ Poundfield Precast Limited
■ Greenbloc Limited
■ CCP Building Products Limited
■ Cheshire Concrete Products Limited
■ Clwyd Concrete Products Limited
■ Country Concrete Products Limited
■ CCP Trading Limited
■ CCP Aggregates Limited
■ GD Harries (Holdings) Limited
■ Gerald D. Harries & Sons Limited
Impairment review
The performance of all companies for the year ended 31
December 2020 are in line with forecasted expectations
and as such there have been no indications of impairment.
19. Investment in Equity Accounted
Associates
On 18 April 2019, the Company acquired a 40% equity
interest in GD Harries (Holdings) Limited (‘GD Harries'),
a quarrying group located in South Wales for a cash
consideration of £4.89 million. GD Harries is based in
South Wales and owns six quarries as well as concrete
and tarmac plants and is a provider of aggregates for
commercial and domestic customers.
On 11 September 2019, the Company acquired 49%
equity interest in Stone Holdings SA (‘Stone’) for a
cash consideration of £563k (€658k). Stone is based
in Belgium and operates two quarries and a wharf and
contracting business which focusses on armour rock for
river and sea defence work.
On 21 September 2020, the Company acquired the
remaining 60% of the share capital in GD Harries and
its subsidiaries.
On 1 January 2020, the Company acquired a further 25%
of Stone for £287k (€339k), and was therefore treated as
a subsidiary of the Group for the full 2020 financial year.
On 7 August 2020, the Company acquired the remaining
26% of Stone for £287k (€339k).
Further details on the acquisitions are in note 34 Business
Combinations.
For the period 1 January 2020 to 21 September 2020,
GD Harries is included in the consolidated financial
statements using the equity method.
Name
GD Harries
Country of incorporation
United Kingdom
Stone Holdings SA
Belgium
Proportion of ownership interest held
31 December
31 December
2020
-
-
2019
40%
49%
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Summarised financial information
GD Harries
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenues
Profit after tax from continuing operations
Stone Holdings
As 31 December 2020
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenues
Profit after tax from continuing operations
20. Trade and Other Receivables
Trade receivables
Prepayments
Other receivables
21 September
2020
£
9,222,637
27,864,288
(17,329,654)
(7,354,166)
31 December
2019
£
10,275,551
26,343,207
(11,234,400)
(10,939,312)
For the period 1 January
2020 to 21 September 2020
For the period 19 April 2019
to 31 December 2019
18,479,517
293,975
1 January
2020
£
830,404
3,586,218
(1,716,439)
(549,671)
18,982,758
83,054
31 December
2019
£
830,404
3,586,218
(1,716,439)
(549,671)
For the period 1 January
2019 to 1 January 2020
For the period 11 September
2019 to 31 December 2019
-
-
482,704
964
Consolidated
Company
31
December
2020
31
December
2019
31
December
2020
31
December
2019
£
£
£
£
18,074,224
14,662,423
876,972
533,606
1,142,601
1,111,141
113,715
247,050
1,125,753
6,459,032
7,169
7,169
20,342,578
22,232,596
997,856
787,825
124
SigmaRoc Annual Report and Financial Statements
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125
The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following
currencies:
The carrying amounts of the Group and Company’s cash and cash equivalents are denominated in the following currencies:
UK Pounds
Euros
Group
Company
31
December
2020
31
December
2019
31
December
2020
31
December
2019
14,366,762
15,939,755
997,856
787,825
5,975,816
6,292,841
-
-
20,342,578
22,232,596
997,856
787,825
UK Pounds
Euros
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned
above. The Group does not hold any collateral as security.
23. Trade and Other Payables
21. Inventories
Cost and net book value
Raw materials and consumables
Finished and semi-finished goods
Work in progress
Consolidated
31 December 2020
£
31 December 2019
£
5,705,723
7,872,034
669,622
3,695,360
7,416,751
48,463
14,247,379
11,160,574
The value of inventories recognised as a credit and included in cost of sales was £1,757,994 (31 December 2019: £490,462).
22. Cash and Cash Equivalents
Consolidated
Company
31 December
2020
£
31 December
2019
£
31 December
2020
£
31 December
2019
£
Current liabilities
Trade payables
Wages payable
Accruals
VAT payable / (receivable)
Deferred consideration
Other payables
Non - Current liabilities
Deferred consideration
Cash at bank and on hand
27,451,984
9,867,696
11,521,206
3,935,831
27,451,984
9,867,696
11,521,206
3,935,831
All of the Group’s cash at bank is held with institutions with a credit rating of at least A-.
UK Pounds
Euros
Group
Company
31 December
2020
31 December
2019
31 December
2020
31 December
2019
19,928,816
8,410,763
11,521,206
3,935,831
7,523,168
1,456,933
-
-
27,451,984
9,867,696
11,521,206
3,935,831
Consolidated
Company
31 December
2020
£
31 December
2019
£
31 December
2020
£
31 December
2019
£
16,287,914
10,306,033
147,026
763,808
4,307,610
4,072,972
133
-
6,290,699
4,173,341
1,675,603
1,268,750
2,282,241
660,033
(38,859)
(85,508)
13,390,253
16,025,254
12,388,733
14,881,493
3,963,831
1,920,378
42,814
15,475
46,522,548
55,194,015
14,215,450
16,844,018
5,100,196
5,100,196
-
-
5,100,196
-
5,100,196
-
Group
Company
31 December
2020
31 December
2019
31 December
2020
31 December
2019
38,548,115
27,130,229
19,315,646
16,844,018
13,074,629
10,027,782
-
-
51,622,744
37,158,011
19,315,646
16,844,018
The carrying amounts of the Group and Company’s trade and other payables are denominated in the following currencies:
126
SigmaRoc Annual Report and Financial Statements
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127
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
24. Borrowings
Consolidated
Company
31 December
2020
£
31 December
2019
£
31 December
2020
£
31 December
2019
£
Non-current liabilities
Syndicated Senior Credit Facility
61,235,485
-
Santander term facility
Bank Loans
Finance lease liabilities
Current liabilities
Finance lease liabilities
-
-
25,907,847
26,216,013
-
-
-
-
-
-
6,452,911
3,070,155
67,688,396
55,194,015
22,341
22,341
41,671
41,671
3,611,169
4,461,336
20,653
24,827
3,611,169
4,461,336
20,653
24,827
In December 2020 the Group entered into a new Syndicated
Senior Credit Facility of up to £125 million (the ‘Credit
Facility’) led by Santander UK and including several major UK
and European banks. The Credit Facility, which comprises
an £85 million committed term facility and a £40 million
accordion option. This new facility replaces all previously
existing bank loans within the Group.
pledges and floating rate charges over the assets of
SigmaRoc Plc, SigmaFin Ltd, Carrieres du Hainaut and their
subsidiary undertakings. Interest is charged at a rate between
1.5% and 3.25% above LIBOR (‘Interest Margin’), based on
the calculation of the adjusted leverage ratio for the relevant
period. For the period ending 31 December 2020 the Interest
Margin was 2.25%.
The restated facility is secured by a floating charge over the
assets of SigmaFin Limited and CDH and is secured by a
combination of debentures, security interest agreements,
The carrying amounts and fair value of the non-current
borrowings are:
Santander term facility
Belgian bank loans
Convertible loan notes
Finance lease liabilities
Carrying amount and fair value
31 December
2020
£
31 December
2019
£
61,235,485
25,907,847
-
-
26,216,013
-
10,064,080
7,531,491
71,299,565
59,655,351
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Finance Lease Liabilities
Lease liabilities are effectively secured, as the rights to the leased asset revert to the lessor in the event of default.
Finance lease liabilities – minimum lease payments
Not later than one year
Later than one year and no later than five years
Later than five years
Future finance charges on finance lease liabilities
Present value of finance lease liabilities
Consolidated
31 December
2020
£
31 December
2019
£
£
3,611,673
4,461,336
5,823,464
2,902,039
628,944
168,116
10,064,081
7,531,491
680,551
367,910
10,744,632
7,899,401
For the year ended 31 December 2020, the total finance charges were £2,661,447.
The contracted and planned lease commitments were discounted using a weighted average incremental borrowing rate of 3%.
The present value of finance lease liabilities is as follows:
Not later than one year
Later than one year and no later than five years
Later than five years
Present value of finance lease liabilities
Reconciliation of liabilities arising from financing activities is as follows:
Consolidated
31 December
2020
£
31 December
2019
£
3,720,023
4,595,176
5,998,168
2,989,100
647,812
173,160
10,366,003
7,757,436
Consolidated
Long-term
borrowings
£
Short-term
borrowings
£
Lease
liabilities
£
Liabilities arising from
financing activities
£
As at 1 January 2020
52,123,860
Increase/(decrease) through financing cash flows
1,540,341
Amortisation of finance arrangement fees
(126,406)
Increase through IFRS 16
-
Increase through obtaining control of subsidiaries
7,697,690
As at 31 December 2020
61,235,485
-
-
-
-
-
-
7,531,491
(3,679,232)
-
-
6,211,821
10,064,080
59,655,351
(2,138,891)
(126,406)
-
13,909,511
71,299,565
128
SigmaRoc Annual Report and Financial Statements
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129
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
25. Provisions
As at 1 January
Acquired on business combination
Deduction
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Consolidated
Present value of funded defined benefit obligations
Amounts recognised in the Statement of Financial Position
31 December
2020
£
31 December
2019
£
6,936,754
632,011
172,303
6,620,250
(948,705)
(315,507)
6,160,352
6,936,754
The provision total is made up of £632,011 as a restoration
provision for the St John’s and Les Vardes sites, £86,812
for the Aberdo site and £172,303 for quarries in Wales
which are all based on the removal costs of the plant and
machinery at the sites and restoration of the land. Cost
estimates in Jersey and Guernsey are not increased on an
annual basis – there is no legal or planning obligation to
enhance the sites through restoration. The commitment is
to restore the site to a safe environment; thus the provision
is reviewed on an annual basis. The estimated expiry on the
quarries ranges between 5 – 35 years.
Of the remaining amount £1.5m is to cover the loss on
the Holcim contract in CDH, £150,000 for legal fees and
£3.6m is the provision for early retirement in Belgium, where
salaried workers can qualify for early retirement based on
age and the number of years of service. The provision
for early retirement consists of the estimated amount that
will be paid by the employer to the “early retired workers”
till the age of the full pension. Refer to note 26 for more
information.
The future reclamation cost value is discounted by 7.39%
(2019: 12%) which is the weighted average cost of capital
within the Group.
26. Retirement benefit schemes
Defined benefit plans
The Group sponsors various post-employment benefit
plans. These include both defined contribution and defined
benefit plans as defined by IAS 19 Employee Benefits.
Defined contribution plans
For defined contribution plans outside Belgium, the Group
pays contributions to publicly or privately administered
pension funds or insurance contracts. Once the
contributions have been paid, the Group has no further
payment obligation. The contributions are expensed
in the year in which they are due. For the year ended,
contributions paid into defined contribution plans amounted
to £434k.
The Group has group insurance plans for some of its
Belgian employees funded through defined payments to
insurance companies. The Belgian pension plans are by law
subject to minimum guaranteed rates of return. In the past
the minimum guaranteed rates were 3.25% on employer
contributions and 3.75% on employee contributions. A law
of December 2015 (enforced on 1 January 2016) modifies
the minimum guaranteed rates of return applicable to the
Group’s Belgian pension plans. For insured plans, the rates
of 3.25% on employer contributions and 3.75% on employee
contributions will continue to apply to the contributions
accumulated before 2016. For contributions paid on or after
1 January 2016, a variable minimum guaranteed rate of
return with a floor of 1.75% applies. The Group obtained
actuarial calculations for the periods reported based on the
projected unit credit method.
Employee benefits amounts in the Statement of Financial Position
Assets
Liabilities
Net defined benefit liability at end of year
2020
£
-
3,592,713
3,592,713
2019
£
-
3,758,285
3,758,285
Fair value of plan assets
Present value of unfunded defined benefit obligation
Unrecognised past service cost
Total
Amounts recognised in the Income Statement
Current service cost
Interest cost
Expected return on plan assets
Total pension expense
Changes in the present value of the defined benefit obligation
Defined benefit obligation at beginning of year
Current service cost
Interest cost
Benefits paid
Remeasurements
Acquired in business combination
Foreign exchange movement
Defined benefit obligation at end of year
Amounts recognised in the Statement of Changes in Equity
Prior year cumulative actuarial remeasurements
Remeasurements
Foreign exchange movement
Cumulative amount of actuarial gains and losses recognised in the
Statement of recognised income / (expense)
Movements in the net liability/(asset) recognised in the Statement of
Financial Position
Net liability in the balance sheet at beginning of year
Total expense recognised in the income statement
Contributions paid by the company
Amount recognised in the statement of recognised (income)/expense
Acquired in business combination
Foreign exchange movement
2020
£
2019
£
2,379,055
2,252,187
(2,213,854)
(2,095,797)
165,201
3,427,512
-
156,390
3,601,895
-
3,592,713
3,758,285
2020
£
128,321
18,894
(31,257)
115,958
2020
£
3,758,285
128,321
18,894
(493,238)
(31,257)
2019
£
61,871
3,308
(46,342)
18,837
2019
£
-
61,871
3,308
(84,815)
(46,342)
-
3,824,263
211,707
3,592,712
2020
£
(46,342)
(31,257)
2,610
(74,989)
2020
£
3,758,285
147,215
(493,238)
(31,257)
-
211,707
-
3,758,285
2019
£
-
(46,342)
-
(46,342)
2019
£
-
61,871
3,308
(84,815)
3,777,921
-
Defined benefit obligation at end of year
3,592,712
3,758,285
130
SigmaRoc Annual Report and Financial Statements
Invest, Improve, Integrate and Innovate
131
18%
1.60%
1.68%
terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation
and the fair value of plan assets. This cost is included
in employee benefit expense in the Income Statement.
Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in
other comprehensive income. They are included in retained
earnings in the Statement of Changes in Equity and in the
Statement of Financial Position.
For defined contribution plans, the Group pays contributions
to publicly or privately administered pension insurance plans
on a mandatory, contractual or voluntary basis. The Group
has no further payment obligations once the contributions
have been paid. The contributions are recognised as
employee benefit expense when they are due.
31 December 2020
Consolidated
Loans & receivables
£
31 December
2020
£
19,178,650
27,451,984
6,936,754
46,630,634
Total
£
31 December
2019
19,178,650
£
27,451,984
632,011
46,630,634
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Principal actuarial assumptions as at 31 December 2020
Discount rate
Future salary increases
Future inflation
Post-retirement benefits
The Group operates both defined benefit and defined
contribution pension plans.
Pension plans in Belgium are of the defined benefit type
because of the minimum promised return on contributions
required by law. The liability or asset recognised in the
Statement of Financial Position in respect of defined
benefit pension plans is the present value of the defined
benefit obligation at the end of the reporting period less
the fair value of plan assets. The defined benefit obligation
is calculated annually by independent actuaries using the
projected unit credit method. The present value of the
defined benefit obligation is determined by discounting
the estimated future cash outflows using interest rates of
high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have
27. Financial Instruments by Category
Consolidated
Assets per Statement of Financial Performance
Trade and other receivables (excluding prepayments)
Cash and cash equivalents
As at 1 January
Acquired on business combination
Deduction
Liabilities per Statement of Financial Performance
Borrowings (excluding finance leases)
Finance lease liabilities
Consolidated
Trade and other payables (excluding non-financial liabilities)
The provision total is made up of £632,011 as a restoration
provision for the St John’s and Les Vardes sites which is
based on the removal costs of the plant and machinery
at both sites, £86,812 as a restoration provision for the
Aberdo site which is based on the removal costs of the plant
and machinery at the site. Cost estimates in Jersey and
Guernsey are not increased on an annual basis – there is
no legal or planning obligation to enhance the sites through
restoration. The commitment is to restore the site to a safe
Trade and other receivables (excluding prepayments)
environment; thus the provision is reviewed on an annual
basis. St John’s quarry has an estimated expiry of 7 years,
Les Vardes is 5 years and Aberdo is 14 years.
Assets per Statement of Financial Performance
Cash and cash equivalents
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
Liabilities per Statement of Financial Performance
Borrowings (excluding finance leases)
Finance lease liabilities
Trade and other payables (excluding non-financial liabilities)
At amortised cost
£
52,123,860
7,531,491
37,158,011
96,813,362
Company
31 December 2020
Assets per Statement of Financial Performance
Trade and other receivables (excluding prepayments)
Cash and cash equivalents
Liabilities per Statement of Financial Performance
Borrowings (excluding finance leases)
Finance lease liabilities
Trade and other payables (excluding non-financial liabilities)
Company
Assets per Statement of Financial Performance
Trade and other receivables (excluding prepayments)
Total
£
52,123,860
7,531,491
37,158,011
96,813,362
Total
£
884,141
11,521,206
12,405,347
Total
£
-
42,994
18,993,743
19,036,737
Total
£
540,775
3,935,831
4,476,606
Total
£
-
66,498
19,315,646
19,382,144
Loans & receivables
£
884,141
11,521,206
12,405,347
At amortised cost
£
-
42,994
18,993,743
19,036,737
31 December 2019
Loans & receivables
£
540,775
3,935,831
4,476,606
At amortised cost
£
-
66,498
19,315,646
19,382,144
-
6,620,250
Cash and cash equivalents
At amortised cost
(948,705)
£
Total
(315,507)
£
61,235,485
5,988,049
6,936,754
61,235,485
10,064,080
10,064,080
51,622,744
51,622,744
Of the remaining amount £1.5m is to cover the loss on
the Holcim contract in CDH, £150,000 for legal fees and
122,922,309
£3.6m is the provision for early retirement in Belgium, where
salaried workers can qualify for early retirement based on
age and the number of years of service. The provision for
early retirement consists of the estimated amount that will
be paid by the employer to the “early retired workers” till the
Total
age of the full pension.
£
Loans & receivables
£
31 December 2019
122,922,309
The future reclamation cost value is discounted by 12%
21,121,455
(2019: 12%) which is the weighted average cost of capital
within the Group.
9,867,696
21,121,455
9,867,696
Liabilities per Statement of Financial Performance
Borrowings (excluding finance leases)
Finance lease liabilities
Trade and other payables (excluding non-financial liabilities)
132
SigmaRoc Annual Report and Financial Statements
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133
30,989,151
30,989,151
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
28. Share Capital and Share Premium
Issued and fully paid
As at 1 January 2019
Number of
shares
Ordinary
shares
£
Share premium
£
Total
£
136,705,557
1,367,056
50,136,904
51,503,960
Issue of new shares – 25 January 2019 (1)
35,135,101
351,351
13,596,828
13,948,179
Issue of new shares – 1 February 2019
1,976,888
19,770
730,230
750,000
Issue of new shares – 15 October 2019 (2)
79,921,640
799,216
30,894,594
31,693,810
As at 31 December 2019
253,739,186
2,537,393
95,358,556
97,895,949
As at 1 January 2020
253,739,186
2,537,393
95,358,556
97,895,949
Issue of new shares – 9 December 2020 (3)
25,000,000
250,000
12,059,266
12,309,266
As at 31 December 2020
278,739,186
2,787,393
107,417,822
110,205,215
(1) Includes issue costs of £457,215
(2) Includes issue costs of £1,074,061
(3) Includes issue costs of £440,736
On 9 December 2020 the Company raised £11,958,760 net of issue costs via the issue and allotment of 24,312,737 new
Ordinary Shares at a price of 51 pence per share. On the same day the Company issued and allotted 687,263 new Ordinary
Shares at a price of 51 pence per share as share based payments.
29. Share Options
Share options and warrants outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:
Grant date
Expiry date
Exercise price in £
per share
5 January 2017
4 January 2022
5 January 2017
22 August 2021
5 January 2017
5 January 2022
5 January 2017
5 January 2022
15 April 2019
15 April 2026
30 December 2019
30 December 2026
30 December 2020
30 December 2026
0.44
0.25
0.25
0.40
0.46
0.46
0.46
Options & Warrants
31 December
2020
31 December
2019
1,026,014
1,026,014
78,044
286,160
78,044
286,160
12,183,225
12,183,225
3,216,978
2,704,353
5,921,331
3,216,978
2,704,353
-
25,416,105
19,494,774
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
134
SigmaRoc Annual Report and Financial Statements
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters
used are detailed below:
Vested on
Life (years)
Share price
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value
Vested on
Life (years)
Share price
Risk free rate
Expected volatility
Expected dividend yield
Total fair value
2017 Options
A
2017 Options
B
2017 Options
C
2017 Options
D
5/1/2017
5/1/2017
5/1/2017
5/1/2017
5
0.425
0.52%
24.81%
-
50%
4
0.425
0.52%
24.81%
-
-
5
0.425
0.52%
24.81%
-
-
5
0.425
0.52%
24.81%
-
50%
£46,900
£15,083
£76,418
£234,854
2019 Options
E
2019 Options
F
2019 Options
G
2019 Options
H
15/4/2019
30/12/2019
15/4/2020
30/12/2020
7
0.465
0.31%
4.69%
-
7
0.525
0.55%
8.19%
-
6
0.295
0.40%
17.46%
-
6
0.6575
0.50%
12.04%
-
£49,638
£128,698
£21,259
£294,920
The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life. The volatility is
calculated by dividing the standard deviation of the closing share price from the prior six months by the average of the closing
share price from the prior six months.
A 50% discount was applied to Options A & D due to the uncertainty surrounding the future performance of the Group. The
Options A & D were issued in the first year of acquisitions which at the time had not had a significant impact on the Company’s
share price. Therefore a 50% discount was applied to reflect the fact the Company was still in an early stage with regards to
acquiring niche company’s and building value for the shareholders.
A reconciliation of options and warrants granted over the year to 31 December 2020 is shown below:
31 December 2020
31 December 2019
Weighted
average exercise
price
£
Number
Outstanding at beginning of the year
19,494,774
Granted
Vested
Exercised
Outstanding as at year end
Exercisable at year end
-
5,921,331
-
31,337,434
25,416,105
0.40
-
0.46
-
0.44
0.42
Weighted
average exercise
price
£
0.40
0.46
-
-
0.44
0.42
Number
13,573,443
17,777,991
-
-
31,351,434
19,494,774
Invest, Improve, Integrate and Innovate
135
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
30. Other Reserves
Company
Deferred
share
£
Capital
redemption
reserve
£
Foreign
currency
translation
reserve
£
Total
£
As at 1 January 2019
761,679
600,039
-
1,361,718
Currency translation differences
As at 31 December 2019
As at 1 January 2020
Currency translation differences
-
761,679
761,679
-
-
(447,978)
(447,978)
600,039
600,039
(447,978)
(447,978)
913,740
913,740
-
2,379,173
2,379,173
As at 31 December 2020
761,679
600,039
1,931,195
3,292,913
33. Fair Value of Financial Assets and
Liabilities Measured at Amortised Costs
Financial assets and liabilities comprise the following:
■ Trade and other receivables
■ Cash and cash equivalents
■ Trade and other payables
The fair values of these items equate to their carrying values
as at the reporting date.
31. Earnings Per Share
The calculation of the total basic earnings per share of
2.5548 pence (2019: 0.92 pence) is calculated by dividing
the profit attributable to shareholders of £6,510,868 (2019:
£1,726,546) by the weighted average number of ordinary
shares of 255,310,224 (2019: 188,418,538) in issue during
the period.
Diluted earnings per share of 2.3528 pence (2019: 0.82
pence) is calculated by dividing the profit attributable to
shareholders of £6,510,868 (2019: £1,726,546) by the
weighted average number of ordinary shares in issue
during the period plus the weighted average number of
share options and warrants to subscribe for ordinary shares
in the Company, which together total 277,113,850 (2019:
209,045,831). The weighted average number of shares is
the opening balance of ordinary shares plus the weighted
average of 1,571,038 shares.
Details of share options that could potentially dilute earnings
per share in future periods are disclosed in Note 29.
32. Fair Value Estimation
The Group holds call options to purchase €4,000,000 on 30
June 2021 and €6,000,000 on 30 December 2021.
The call options were bought on 11 December 2020 for
£190,145 and as at 31 December they had a fair value of
£151,770 resulting in a loss of £38,375. Refer to note 13 for
more information.
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
34. Business Combinations
Stone Holdings SA
On 11 September 2019, the Company acquired 49% equity interest in Stone Holdings SA and its subsidiaries (‘Stone’) for a
cash consideration of £563k (€658k). On 1 January 2020, the Group acquired an additional 25% of the share capital of Stone
for cash consideration of £312k (€339k) and on 7 August 2020 the Group acquired the remaining 26% for £308k (€339). Stone
is registered and incorporated in Belgium. Stone is based in Belgium and operates two quarries and a wharf and contracting
business which focusses on armour rock for river and sea defence work. At the time of taking control of Stone they it did not own
the mineral reserves and held only a small amount of depreciated assets.
The following table summarises the consideration paid for Stone and the values of the assets and equity assumed at the
acquisition date.
Total consideration
49% Initial cash consideration
Share of profit for 2019
Fair Value as at 31 December 2019 & Acquisition
26% Deferred cash consideration – 1 January 2020
25% Deferred cash consideration – 5 August 2020
Loans repaid
Recognised amounts of assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant & equipment
Trade and other payables
Borrowings
Total identifiable net liabilities
Goodwill (refer to note 17)
Total consideration
£
551,886
816
552,702
287,206
287,206
(321,500)
805,614
£
71,510
475,165
161,445
275,535
(884,030)
(1,026,302)
(926,677)
1,732,291
805,614
136
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Invest, Improve, Integrate and Innovate
137
FINANCIAL STATEMENTS
SIGMAROC PLC
NOTES TO THE FINANCIAL STATEMENTS
GD Harries
On 16 April 2019, the Group acquired 40% of the share capital of GD Harries and its subsidiaries for cash consideration of
£4.8m. On 21 September 2020, the Group acquired the remaining 60% of the share capital for cash consideration of £6.4
million (being £7.3 million less adjustments for various obligations assumed by the Group as part of the acquisition). Royalty
payments are due over the next 12 years and total a minimum of £10m. A minimum amount of £160k is due each year. The
royalty payments have been discounted at discount rate, reflecting the Group’s cost of money and risks associated with the
industry, of 7.39%. For the period that GD Harries was treated as an associate to the Group the share of profit attributed was
£377,029.
In accordance with IFRS 3, the Company will perform a PPA within the 12 months of fully acquiring GD Harries.
GD Harries is registered and incorporated in the United Kingdom. The principal activity is the production of high-quality
aggregates and supply of value-added construction materials.
The following table summarises the consideration paid for GD Harries and the values of the assets and equity assumed at the
acquisition date.
Total consideration
Share of profit for 2019
Fair value as at 31 December 2019
Share of profit for period 1/1/20 – 21/9/20
Fair value as at 21 September 2020
60% cash consideration
Discounted Royalty payments
Loans repaid
Recognised amounts of assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant & equipment
Tax liabilities
Trade and other payables
Provisions
Borrowings
Total identifiable net liabilities
Goodwill (refer to note 17)
Total consideration
35. Contingencies
The Group is not aware of any material personal injury or damage claims open against the Group.
36. Related party transactions
Loans with Group Undertakings
Amounts receivable/(payable) as a result of loans granted to/(from) subsidiary undertakings are as follows:
£
83,054
4,973,846
293,975
5,267,821
6,442,922
4,679,186
893,266
17,283,195
£
1,731,621
4,823,982
2,238,313
27,190,620
(2,843,842)
(8,462,138)
(172,303)
(13,377,840)
11,128,413
6,154,782
17,283,195
Ronez Limited
SigmaGsy Limited
SigmaFin Limited
Topcrete Limited
Poundfield Products (Group) Limited
Foelfach Stone Limited
CCP Building Products Limited
Carrières du Hainaut SCA
GD Harries (Holdings) Limited
Stone Holdings SA
Company
31 December
2020
£
31 December
2019
£
(12,878,274)
(9,625,760)
(4,455,066)
(3,014,167)
(7,138,810)
(8,756,846)
(8,178,013)
(1,022,931)
6,363,536
7,088,761
457,326
5,785,781
(6,186)
1,233,517
368,321
442,858
6,372,333
1,681,820
-
-
(18,447,868)
(6,833,932)
Loans granted to or from subsidiaries are unsecured,
interest free and repayable in Pounds Sterling on demand
from the Company.
All intra Group transactions are eliminated on consolidation.
Other Transactions
Heytesbury Corporate LLP, a limited liability partnership
of which Garth Palmer is a partner, invoiced a total fee of
£249,997 (2019: £370,000) for the provision of corporate
management and consulting services to the Company. No
balance was outstanding at the year-end.
Druces LLP, a limited liability partnership of which Dominic
Traynor is a partner, invoiced a fee of £65,542 (2019:
£330,072) for the provision of legal services for acquisitions.
There was no balance outstanding at year end.
Julia Traynor, the wife of Non-Executive Director Dominic
Traynor, invoiced a fee of £26,250 (2019: £40,000) for
the provision of administrative and legal services to the
Company in relation to prospective acquisitions. No balance
was outstanding at the year-end.
Patrick Dolberg invoiced a fee of £45,000 (2019: £45,000)
for the provision of consulting services to the Company
in relation to prospective acquisitions. No balance was
outstanding at the year-end.
37. Ultimate Controlling Party
The Directors believe there is no ultimate controlling party.
38. Events After the Reporting Date
Expansion of aggregates operations in Belgium
On 26 March 2021, the Group entered into an agreement
to assume control of LaFargeHolcim’s quarrying operations
which are located at the Group’s CDH site. Prior to
entering this agreement, production and commercialisation
of the aggregates at the CDH site was undertaken by
LaFargeHolcim under an inefficient royalty deal which was
due to end in February 2023.
This agreement gives the Group full control over CDH’s
production assets and will enable the Group to drive
operational efficiencies over time.
Acquisition of Belgian concrete assets
On 6 April 2021, the Group, in line with its stated
strategy, completed the acquisitions of B-Mix Beton NV,
J&G Overslag en Kraanbedrijf BV and Top Pomping
NV (collectively ‘B-Mix’), as well as Casters Beton NV
(‘Casters’) from Groep Janssens N.V. for a combined cash
consideration of €13m.
B-Mix and Casters operate four concrete plants in
Tessenderlo and Genk in Belgium. In the year ended 31
December 2020 the businesses, in total, generated a
turnover of €22m, EBITDA of €3.3m and a net profit of
€1.5m. They will be immediately enhancing to the Group’s
underlying earnings, and the acquisitions were funded from
the net cash proceeds generated by the Group’s equity
fundraising in December 2020.
No further financial information on these transactions is
available at this time, due to the proximity of the acquisitions
to the reporting date of these financial statements.
Alongside these acquisitions, the Group has also entered
into an option agreement with Jabo N.V., granting it the
right to acquire 11 hectares of quayside industrial land in
Tessenderlo, for a consideration of €9m. The land subject to
the Option includes approximately 260m of quayside along
the Albert Canal which houses the B-Mix concrete business.
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139
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London W1B 4DE
United Kingdom
+44 20 7129 7828
info@sigmaroc.com
www.sigmaroc.com