Page 140 - Sigmaroc Annual-Report 2023

SIGMAROC ANNUAL REPORT 2023 STRATEGIC REPORT
Chief Financial Officer’s Report
Cash generated from operations was £65.4 million (2022: £87.7 million) with a net decrease in cash of £11.5 million (2022: £4.0 million) after spending £30.2 million on acquisitions net of cash acquired, £37.1 million in net capital expenditure and £20.0 million in senior loan amortisation repayments.
Underlying EBITDA exceeded expectations and management forecasts, while revenue and volumes were somewhat softer due to difficult residential construction markets and dynamic pricing effects of lower input costs.
Capital expenditure relates to purchases of land and minerals, new plant and machinery and improvements to existing infrastructure across the Group.
PPA
BDO UK LLP undertook the PPA exercise required under IFRS 3 to allocate a fair value to the acquired assets of JQG and Goijens.
The PPA process resulted in a reduction of goodwill recorded on the Statement of Financial Position of the Group for JQG from £49.8 million to £16.7 million and a reduction in Goijens from £5.1 million to £1.6 million. The reduction was to transfer the value of goodwill to tangible assets for land and buildings, land and mineral reserves, intangible assets and deferred tax assets.
NON-UNDERLYING ITEMS
The Company’s loss after taxation for 2023 amounts to £42.9 million, of which £30.0 million relates to non- underlying items, while the Group’s non-underlying items totalled £42.1 million for the year, of which £12.3 million, representing approximately 30%, are non-cash and non-tax deductible. These items relate to seven categories:
1. £25.9 million in exclusivity, introducer, advisor, consulting, legal fees, accounting fees, insurance and other direct costs relating to acquisitions. During the year the Group acquired Juuan Dolomitik, Goijens, Retaining, Björka Mineral, ST Investicija, Betons and entered into agreements for the CRH Lime Acquisitions which comprise the vast majority of the costs incurred during the year.
2. £6.6 million amortisation of acquired assets and adjustments to acquired assets.
3. £4.0 million in share-based payments relating to grants of options.
4. £3.7 million legal and restructuring expenses relating to the reorganisation and integration of recently acquired subsidiaries, including costs associated with discontinuing sites and operations, transitional salary costs, redundancies, severance and recruitment fees, and costs associated with financial reporting and system migrations.
5. £1.1 million on amortisation of finance costs arising from the syndicated 5-year debt facilities established in July 2021.
6. £0.4 million on unwinding of discounts on deferred consideration payments for Harries.
7. £0.4 million in other exceptional costs which primarily relate to non-cash balance sheet adjustments.
INTEREST AND TAX
Net finance costs in the year totalled £15.9 million (2022: £10.4 million) including associated interest on bank finance facilities, as well as interest on finance leases (including IFRS 16 adjustments) and hire purchase agreements.
A tax charge of £12.4 million (2022: £9.1 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, Belgium and Nordic based operations.
EARNINGS PER SHARE
Basic EPS for the year was 1.98 pence (2022: 4.89 pence) and underlying basic EPS (adjusted for the non-underlying items mentioned above) for the year totalled 8.12 pence (2022: 8.03 pence).
STATEMENT OF FINANCIAL POSITION
Net assets at 31 December 2023 were £514.9 million (2022: £469.9 million). Net assets are underpinned by mineral resources, land and buildings and plant and machinery assets of the Group.
CASH FLOW
Cash generated by operations was £65.4 million (2022: £87.7 million). The Group spent £30.2 million on acquisitions net of cash acquired, £37.1 million on capital projects including acquisition of intangibles, raised £29.2 million net of fees from the issue of equity, generated £5.2 million through the disposal of non-core property, plant & equipment, and repaid net borrowings of £27.0 million. The net result was a cash outflow for the year of £11.5 million.
NET DEBT
Net debt at 31 December 2023 was £182.4 million (2022: £193.8 million).
BANK FACILITIES
On 22 November 2023 the Company entered a new syndicated senior credit facility of up to €750 million (the ‘New Debt Facilities’) led by Santander UK and BNPP, with the syndicate including several major UK and European banks and a further €125 million bridge loan (‘Bridge Loan’). The New Debt Facilities were partially drawn on 4 January 2024 in connection with the CRH Lime Acquisitions, specifically CRH Deal 1, and the legacy debt facility was repaid as part of this process.
The New Debt Facilities comprise a €600 million committed term facility, €150 million revolving credit facility and a further €100 million uncommitted accordion.
The Group’s New Debt Facilities have a maturity date of 21 November 2028 and are subject to a variable interest rate based on EURIBOR plus a margin depending on underlying EBITDA.