LONDON (ShareCast) - (Sharecast News) - Quarried materials specialist SigmaRoc reported strong first-half numbers on Tuesday, including 17% growth in revenue to £290m, and a 15% increase in EBITDA to £54.9m.
The AIM-traded firm put the promising results down to the resilience of its business model, and its diverse market exposure.

Its EBITDA margin contracted slightly by 30 basis points to 18.9%, but its net margin increased by 70 basis points to 21.9%.

Profit before tax grew 13% to £33m, while earnings per share increased 11% to 4.01p.

The strong financial performance was reflected in the company's balance sheet as well, with cash and cash equivalents rising 35% to £62.5m, and net debt declining 15% to £183.3m.

Additionally, the adjusted leverage ratio fell to 1.69x, comfortably below the company's target of 2.0x.

The report noted several key factors contributing to the performance, including 13% like-for-like revenue growth stemming from effective pricing actions and the benefits of diversified market exposure.

Despite a 3% decline in group volumes, demand remained strong across key markets, further supported by dynamic pricing that contributed to improved net margins.

Looking ahead, SigmaRoc anticipated a positive second half, with continuing robust demand in infrastructure and quicklime products, alongside stabilised conditions in the paper, pulp and board market.

In addition, the integration of recent acquisitions and organic development initiatives were expected to benefit the company in the second half.

SigmaRoc said it anticipated that its normal seasonal cash flow profile would support further de-levering over the rest of the year, provided there were no further acquisitions or developments.

The company said it was optimistic about its long-term prospects, with plans to extend its geographical reach and product offerings across various markets for high-quality construction materials and industrial minerals.

While acknowledging that trading conditions might continue to be challenging in several markets, the board said it was confident that SigmaRoc's diversified market exposure and decentralised operating model would continue to deliver strong results.

As a result, the board's full-year expectations for the company remained unchanged.

"I am delighted to be sharing these results for the first half of 2023 which show the resilience of SigmaRoc's diversified business and operations, which have traded ahead of expectations," said chief executive officer Max Vermorken.

"It has been an active period for the group.

"We have made continued strategic progress on the merger and acquisition front, where we have strengthened the group's footprint with transactions at attractive multiples, alongside a number of organic projects, all of which will contribute to the group's performance in the second half of the year and beyond."

Vermorken said the second half had started well, with resilient demand for infrastructure and quicklime, alongside better conditions in the paper, pulp and board market.

"Despite a tougher trading environment in some areas of the business, our diversified business model, agile team, and a demonstrated ability to manage prices and costs, has enabled SigmaRoc to deliver another set of robust results.

"Longer term structural drivers of the business remain positive, and we look forward to the future with optimism."

At 1125 BST, shares in SigmaRoc were down 0.28% at 53.85p.

Reporting by Josh White for Sharecast.com.

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