Further M&A could provide the catalyst to revive a moribund share price

SigmaRoc (SRC:AIM) 38.8p

Loss to date: 10%

Original entry price: Buy at 43.25p, 26 Oct 2017


You’re going to need a bit more patience with heavy construction products firm SigmaRoc (SRC:AIM). We think it is worth sticking with the shares.

Full results on 21 May highlighted the company’s ability to squeeze more out of the assets it has already acquired. The numbers show the Ronez and SigmaGsy operations saw combined sales improve to £27m, with earnings of £5.5m.

Ronez is a hard rock quarry operator and construction materials producer based in Guernsey and Jersey. SigmaGsy is a bulk shipping outfit.

With a large number of independent operators still active in its market, chief executive Max Vermorken tells Shares there are plenty of M&A opportunities available to the company.

With full integration of the businesses it has already acquired expected in the first half of 2018 the company can turn to further deals.

Investment bank Berenberg comments: ‘With estimated group gearing at 1.1x 2018E net debt/EBITDA, we believe the balance sheet offers capacity for further value-creating transactions; while management is pleased with the progress made towards delivering on the pipeline this year.’

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