SigmaRoc – ahead of its 2024 results this group’s shares look very appealing now at 89.50p, brokers TP up to 150p

13.03.2025

Next Monday morning, 17th March, will see SigmaRoc (LON:SRC), one of Europe’s leading lime and minerals groups, announcing its 2024 Final Results.

This business has built up a massive framework over the last few years, with its shares now offering even further upside in price.

The Business

The AIM-quoted group is a lime and industrial limestone company targeting quarried materials assets both in the UK and in Northern Europe.

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 new building materials, and environmental applications including lake liming, air pollution and direct air capture.

The group operates through three segments: North West, West, and North East.

The North West segment, which comprises of PPG, England, Wales and Channel Islands, is primarily focused on the construction industry, and the core product group is therefore construction minerals, including pre-cast concrete and concrete products, ready-mix concrete, asphalt and contract services, dimension stone and aggregates.

The West segment, which comprises of Dimension Stone and Benelux, is focused on the construction industry and the core product groups are dimension stone and construction minerals.

The North East segment, which comprises of Quicklime, Nordics, Poland and Baltics.

The activities in the North West, West and North East regions relate to the production and sale of construction material products and services.

The group seeks to create value by purchasing assets in fragmented materials markets and extracting efficiencies through active management and by forming the assets into larger groups.

The group aims to de-risk its investments through the selection of projects with strong asset-backing.

The company aims to implement operational efficiencies that improve safety, enhance productivity, increase profitability and ultimately create value for its Shareholders. 

Year-end Trading Update

On Monday 3rd February this year, the group updated the market with a guidance that its 2024 year will show that its underlying earnings and its earnings per share will be modestly ahead of consensus expectations, driven by transformational investment to create a leading European lime and minerals platform.

CEO Max Vermorken stated that:

"2024 was a transformational year for SigmaRoc.

We completed the acquisition of CRH's lime assets, securing our position as one of Europe's leading lime and limestone businesses.

We have delivered good results despite the challenging backdrop, and we are well positioned for 2025.

We have made the first steps on our divestment programme of non-core assets with the disposal of the Belgian ready-mix plants, with completion of the smaller French plants and earnout to follow.

Our business has been refocused on lime and limestone, and I am confident we are well positioned for future growth.

Lime is an essential product for life, that plays a critical role in several trends that impact our society, from decarbonisation to sustainable construction, to environmental protection and the electrification of the economy.  

Overall, we expect to report 2024 results modestly ahead of expectations and, despite the challenging backdrop, are well positioned to continue our growth in 2025 as a larger and more focused Group."

Broker’s View

Some 8 analysts follow the group, all of whom rate the group’s shares as a Buy.

The consensus average Target Price is 114p, with the Highest set at 158p, the Lowest at 95p.

Analyst Adrian Kearsey at Panmure Liberum currently has a Buy rating on this group’s shares, looking for 120p as his Target Price.

For the year about to be reported, to end-December 2024, he is looking for the group’s sales to have risen over 70% to £990.8m (£580.0m), while its pre-tax profits could have increased 73% to £123.0m (£71.0m), with its earnings rising to 8.1p (7.6p) per share, reflecting dilution from the major acquisition of the CRH assets.

For 2025 his estimate is for £1.05bn sales, £146.0m profits, with 9.0p per share earnings.

Kearsey’s 2026 figures suggest £1.10bn sales, £162.0m profits and earnings of 10.1p per share.

He believes that the group’s current valuation fails to reflect the defensive growth characteristics, sustained margin profile enjoyed by the lime and mineral assets, potential upside from the synergies and the earnings per share growth being delivered.

Analysts Andy Hanson and Charlie Williams, at Zeus Capital, rate the group’s shares as a Buy, with a Target Price of 158p.

For 2024 they also estimate £998.0m revenues but with adjusted pre-tax profits of £119.1m, worth 8.3p in earnings.

For this current year, they see £1.09bn revenues, £140.8m profits, and 9.1p per share earnings.

Into 2026 their figures suggest £1.15bn sales, £165.0m profits and 10.6p per share earnings.

They state that Zeus believes that the market is not recognising the improved earnings quality that comes with being a duopoly player in major European economies in the resilient higher margin lime market.

My View

To date this group has been a magnificent example of a ‘buy-to-build’ model.

Its Management has played a series of strong hands as it has constructed a powerful business.

I continue to rate highly its potential, with its shares now at 89.50p still offering attractive upside.

Hold very tightly.

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

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