SigmaRoc Group – ‘buy-to-build’ group has grown from nothing to a £1bn sales market-leading business, its shares at 71p are too cheap for growth investors to ignore, brokers TP 158p

05.02.2025

Earlier this week the leading European lime and minerals group SigmaRoc (LON:SRC) released a Trading Update for its year to end-December 2024. 

It gave the market guidance that its underlying EBITDA and earnings will show through ‘modestly ahead of expectations’ and that it felt that it was well-positioned for 2025. 

That Update was released on Monday, just when the whole market was suffering Trump Trade Tariff jitters. 

We now point investors to take advantage of the ‘non-response’ and add some of the group’s shares, now 71p, into portfolios, certainly ahead of the March release of the Final Results for last year. 

The Business 

The £791m-capitalised group is an excellent example of a ‘buy-to-build’ vehicle. 

Over the last few years, it has made some 12 or more very selective acquisitions, taking its turnover up from nothing to almost £1bn. 

In 2024, the group completed the acquisition of a portfolio of lime and limestone asset from the CRH group, which doubled the size of the entire SRC group. 

Today SigmaRoc is an ever-growing lime and minerals group, which is targeting quarried materials assets in the UK and Northern Europe. 

Its strategy is for ongoing expansion in its chosen niche – with lime and limestone being key resources in the transition to a more sustainable economy.  

The group declares that 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. 

SigmaRoc 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.  

As it expands, it seeks to de-risk its investments through the selection of projects with strong asset backing. 

The Trading Update 

On Monday, 3rd February, the group guided the market to expect modestly better results than were previously anticipated. 

It stated that, reflecting the contribution from its acquisitions, last year’s revenue is expected to be 72% higher year-on-year at around £998m (£580m). 

Its underlying EBITDA is expected to be over £222m, which will show an advance of some 90% (£116.7m), reflecting the group’s integration progress and its improving margins, generating a likely 8.3p per share in earnings. 

Outlook for FY25 

Last year was characterised by the transformational acquisition of lime and limestone businesses from CRH and a robust performance in infrastructure construction, with continued softness in residential construction and some areas within environmental and steel markets.  

Whilst these trends are likely to persist into 2025, the company reported that it is well placed to navigate those challenges given its diversified model and broad-end market exposure.    

Although the economic backdrop across Europe remains mixed, it will maintain its disciplined approach to cost management and focus on executing its strategy and successful delivery of synergies. 

Management remains confident in the group's ability to deliver another successful year, and to build on its leadership offering to customers in the lime and limestone sectors.  

Overall, SigmaRoc is well-positioned for 2025. 

Management Comment 

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 Views 

Some six analysts follow the company, each of whom rate the group’s shares as a Buy. 

Andy Hanson and Charlie Williams, at Zeus Capital have a Buy note out on the group, with a 158p a share Target Price. 

For 2024 they estimate £998.0m (£580.3m) revenues, with adjusted pre-tax profits of £119.1m (£71.2m), lifting earnings to 8.3p (8.1p) per share. 

For this year, they estimate £1,092.0m revenue and £140.8m profits, with 9.1p per share earnings. 

For the 2026 year, they expect £1,147.7m sales, £165.0m profits, and earnings of 10.6p. 

At Panmure Liberum, Adrian Kearsey has a Target Price of 120p a share, rating the shares as a Buy. 

For 2024 his estimates are for £998.0m turnover, £123.0m profits, and 8.1p earnings. 

His 2025 estimates are for £1,046.0m sales and £146.0m profits, with 9.0p per share in earnings. 

2026 could see £1,097.0m revenues, £162.0m profits and 10.1p earnings. 

My View 

For any growth portfolio, the shares of SigmaRoc, at just 71p, are too cheap to ignore. 

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

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