SigmaRoc – a positive AGM Update leaves the shares at 93p looking even more appealing, brokers TP 158p

02.05.2025

Yesterday’s AGM Trading Update from SigmaRoc (LON:SRC) was positive, with the leading European lime and minerals group reporting that it had experienced a good start to its 2025 year.

The Business

SigmaRoc invests in and acquires businesses in the lime and minerals sector.

The £1bn-capitalised group looks to create value by purchasing assets in fragmented markets and extracting efficiencies through active management and by forming the assets into larger groups.

It seeks to de-risk its investments through the selection of projects with strong asset backing, then implementing operational efficiencies that improve safety, enhance productivity, increase profitability.

Key Resources

Lime and limestone are key resources in the transition to a more sustainable economy.

New applications for lime and limestone products, as part of a drive for sustainability, include the production and recycling of lithium batteries, the decarbonisation of construction including through substitution of cementitious material, and environmental applications including lake liming, air pollution and direct air capture.

The AGM Trading Update

In the three months to end-March, the group’s revenue, underlying EBITDA and EBITDA margin were marginally ahead of management expectations.

On a year-on-year basis revenue was up 18.3% to £252m, with underlying EBITDA of £49m (up 30.4%) and EBITDA margin 19.4% (up 180bps).

On a proforma basis revenue was up 0.2%, underlying EBITDA up 1.3%, and EBITDA margin was up 20bps.

The company reported that high-grade minerals volumes were marginally up for the quarter, with stone and value-add products modestly down, reflecting proactive margin and product mix optimisation including network optimisation and plant closures as part of the synergy programme.

The business is said to have performed well in a volatile first quarter, while its Management remains mindful of the increased level of political and economic uncertainty affecting the group’s end-markets.

However, the diversified nature of the business means SigmaRoc is well-positioned to benefit from any growth opportunities that arise.

The recently approved infrastructure fund in Germany will provide much-needed stimulus to the construction, steel and energy sectors, complimented by possible spillover effects in neighbouring economies, including Poland and the Czech Republic.

Management Comment

CEO Max Vermorken stated that:

"I reported at the time of our final results that the first two months of the year had started well, and I am pleased to say that this trend has continued in March with trading marginally ahead of our expectations.

Although the political and economic environment is currently volatile, the lime and minerals markets are indispensable to the proper functioning of all areas of the European economy. SigmaRoc remains at the heart of this with the supply of essential products to the industrial, environmental and construction markets."

Broker’s Views

Analyst Adrian Kearsey, at Panmure Liberum, rates the group’s shares as a Buy, with a 120p Target Price, he anticipates that its robust earnings performance and cash flow profile will drive investor interest.

For the current year to end-December he looks for £1,046m (£963m) sales, with pre-tax profits of £146.0m (£118.0m), and earnings of 9.4p (8.1p) per share.

For 2026 he has estimates of £1,096m sales, £162.0m profits and 10.4p earnings.

The 2027 year, he estimates, could see sales of £1,147m, with £176.0m profits and 11.4p of earnings per share.

At Zeus Capital, its analysts Andy Hanson and Charlie Williams also have a Buy rating on the shares, with a 158p Target Price.

For 2025 they look for £1,092m sales, adjusted pre-tax profits of £140.8m and 9.2p per share earnings.

Next year they foresee £1,148m sales, £165.0m profits, with 10.2p in earnings.

The 2027 year they suggest could report £1,182m sales, £178.4m profits and 11.0p per share earnings.

My View

Next Wednesday the group will be holding a Capital Markets Day for institutional investors and analysts, at which it will update on its strategy and business development – and that could possibly increase investor interest.

There is a certain confidence in the group’s ability to make further progress in the current year and beyond.

It is a proven business model that is showing that further success is due.

Its shares at just 93p offer even more upside.

(Profile 04.09.20 @ 49p set a target Price of 65p*)

(Profile 26.07.23 @ 62.20p set a target Price of 80p*)

Asterisks * denote that Target Prices have been achieved since Profile publication.