- JQG has eight quarries with 86m tonnes of reserves
- SigmaRoc operates 78 sites in the UK and northern Europe
Building materials group SigmaRoc (SRC) agreed to buy Johnston Quarry Group and Guiting Quarry for £35.5m, as well as the conditional purchase of two further quarries for up to £14.5m.
Johnston Quarry Group operates eight quarries and two processing sites across the South West, Oxfordshire and Lincolnshire. The quarries contain up to 86m tonnes of reserves, including building stone used for premium housing, aggregates and agricultural lime.
JQG generated revenue of £14.7m and pre-tax profit of £3.6m in the year to 30 September, and had gross assets including land, reserves and machinery worth £22.1m, SigmaRoc said. It is buying the businesses from sellers Nicholas Johnston, Giantflow and Flowgiant and will fund the deal from its own resources, assuming £6m of JQG’s debt and £3.6m of plant hire leases.
The two additional quarries are being bought from the same sellers and have a “strategically attractive location relative to JQG”, SigmaRoc said. It expects these deals to complete between the second half of this year and the latter part of 2024, subject to conditions including possession of the necessary planning permissions.
SigmaRoc, which doubled pre-tax profit to £7.1m on a 56 per cent increase in revenue to £84.8m for the six months to 30 June, operates from 76 sites across the UK and northern Europe, employing about 1,800 people. The company’s shares jumped 5 per cent to 88p, bringing their 12-month gain to 39 per cent, although they are 23 per cent off September’s high of 115p.
The shares currently trade at about 13 times earnings, in line with their five-year average. During this time, they have consistently outperformed the FTSE All-Share index and given the robust demand in the company's end markets this doesn’t seem like much of a stretch. Buy.
