Final Results and Notice of AGM

RNS Number : 6775F

SigmaRoc PLC

23 March 2022

 

SigmaRoc plc / EPIC: SRC / Market: AIM / Sector: Construction & Materials

23 March 2022

SigmaRoc plc

('SigmaRoc', the 'Company' or the 'Group')

Audited full year results for year ended 31 December 2021

Notice of AGM

SigmaRoc plc, the AIM listed buy-and-build construction materials group, is pleased to announce its audited results for the year ended 31 December 2021.

Financial highlights1	31 December 2021	31 December 2020	Change
Revenue	£272.0m	£124.2m	+118.9%
Underlying EBITDA	£49.3m	£23.9m	+106.1%
Underlying profit before tax	£26.8m	£12.2m	+120.4%
Underlying EPS	5.4p	4.5p	+19.4%
Adjusted Leverage Ratio2	1.88x	1.69x	+11.2%

¹ Underlying results are stated before acquisition related expenses, certain finance costs, redundancy and reorganisation costs, impairments, amortisation of acquisition intangibles and share option expense. References to an underlying profit measure throughout this Annual Report are defined on this basis.

² Adjusted leverage ratio compares net debt to underlying EBITDA for the last twelve months adjusted for pre-acquisition earnings of subsidiaries acquired during the year.

Operational highlights:

Invest

-  Significant new North European materials platform established through the acquisition of Nordkalk for €470 million

-  Acquisitions of B-Mix and Casters together with establishment of new Benelux aggregates platform

-  Johnston Quarry Group acquisition completed post year-end, further strengthening the Group's UK offering

Improve  

-  Systems: New ERP systems implemented in South Wales and PPG overhauling legacy setup

-  Operational efficiency: successful efficiency initiatives implemented at Casters, GduH and Harries

-  Corporate governance: Proposed appointment of new independent non-executive director

  Integrate  

-  Integration of Nordkalk with >800 people across 10 countries progressing well

-  Establishment of new Benelux aggregate platform integrating GduH, B-Mix & Casters

-  Group banking facilities refinanced to consolidate debt footprint across the Group in conjunction with acquisition of Nordkalk

Innovate  

-  Launch of Greenbloc cement free ultra-low carbon concrete block technology, to be made available across the entire PPG product portfolio

-  Partnership established with Marshalls to develop ultra-low carbon solutions

Annual General Meeting

SigmaRoc is also pleased to provide notice that its Annual General Meeting ('AGM') will be held on 26 April 2022 at 3.00 p.m. at the Washington Mayfair Hotel, 5 Curzon St, London, W1J 5HE. Copies of the Notice of AGM, together with the Form of Proxy and Annual Report have been posted to shareholders and are available to view on the Company's website.

Max Vermorken, CEO, commented:

"Two things make a quality business, a great team and supportive stakeholders. We are lucky to have both. Our nearly 1,900 colleagues have shown incredible resilience in the testing conditions of COVID-19 and incredible drive when the Group expanded yet again to welcome Nordkalk. We have positioned the business well for the next leg of its journey as a leading North European quarrying group. 2022 started with more unforeseen events than most could have predicted, in particular the deeply saddening conflict in Ukraine and the challenges it brings for the wider economy.

Yet whatever the challenge, the business will rise to it, as it has done over the past five years. The next five should see the Group evolve again, further developing its footprint, product offering, profitability and safety. The ESG targets set are industry leading and achievable in the timeframes set out. As 2022 has started with many head and tailwinds, we remain optimistic the underlying demand for all products in all regions is strong and opportunities to further expand the Group are plentiful.

Much remains to be done and much potential remains untapped. With the continued support of a great team and our shareholders, that potential can be turned into very exciting further developments."

END

The full text of the statement is set out below, together with detailed financial results.
 

SigmaRoc will host a meeting for invited analysts at 8.00 a.m. To participate in the call, please register by contacting [e-mail].

The Group has also organised a dedicated results call and Q&A session for private investors at 12.00 p.m. today. To participate in the call, please register interest via the following link:  https://us06web.zoom.us/webinar/register/WN_oFps-iCYRkqMViYs1NWbmw

A recording will also be available on request from the Company.

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For further information, please contact:

SigmaRoc plc Max Vermorken	Tel: [phone]
Strand Hanson Limited (Nominated and Financial Adviser) James Spinney / James Dance / Rob Patrick	Tel: [phone]
Liberum Capital (Co-Broker) Neil Patel / Jamie Richards / William Hall	Tel: [phone]
Peel Hunt (Co-Broker) Mike Bell/Ed Allsopp	Tel: [phone]
Investor Relations Dean Masefield / Florian Werner	Tel: [phone] [e-mail]

CHAIRMAN'S STATEMENT

On the fifth of January this year, we marked the fifth anniversary of the Ronez acquisition and the start of our SigmaRoc journey. In that short time, we have built a dynamic business and one with even greater potential. The success of this has undoubtedly been due to the drive and determination of our staff and the continued support of our shareholders.

Our staff's determination is evident in the commitment I see towards growth, safety, profitability and sustainability, in an environment which has clear and existing opportunities. In the following report we present, therefore, not only an account of SigmaRoc's 2021 performance but also of our ambitions for future growth and sustainability targets, as well as our proposals for managing the challenges ahead. 

One of these challenges has undoubtedly been the tragedy unfolding in Ukraine. We have three employees based there and staff have rallied to assist them. At the time of writing, we have ensured accommodation in Poland for their family members. Whilst the men have had to remain, we have transferred them to safe accommodation near the Polish border. It is a tragedy that military action was chosen over a diplomatic resolution. As a business we will continue to support the Ukrainian people where we can.

Growth

2021 was a year of both growth and development for SigmaRoc. Whilst acquisition activity was significant during the year, the Group also made substantial progress in enhancing operational performance. This further cemented the Group's leading position in local niche markets, while driving innovation in its product range. Financially, we exceeded all our targets and market expectations; we more than doubled our turnover to £ 272.0 million and Underlying EBITDA to £ 49.3 million, growing our Underlying earnings per share by 19.4%.  

We have done considerable work to develop a strategy that will enable us to take a leadership position on ESG matters and ambitious targets were set, as will be discussed further below. Our governance, safety reporting and management capabilities were all improved further and each of these aspects will be detailed below and in the various sections of this Annual Report.

Regarding strategic growth opportunities, 2021 was certainly one of the most active years since SigmaRoc's inception. We started the year with the creation of a new platform in Benelux, focusing exclusively on heavy construction materials. This is an embryonic platform, but one with significant potential given its strategic positioning in key markets. We also joined forces with Carrières du Boulonnais in the creation of a dedicated partnership addressing Belgium and Northern France for aggregates and concrete.

Most significantly, however, we expanded the Group in a new region: Scandinavia, Poland and the Baltics. Furthermore, we obtained additional products for our quarried materials through the acquisition of Nordkalk, a market leader in limestone products. This was a unique opportunity, allowing the Group to establish immediate scale and market leadership in a strategically important new region, diversifying our end customer base, whilst using the same upstream products and production processes.

As a result of these developments, the Group is now well positioned for its next chapter - to make use of its strong position across a range of attractive markets to grow, innovate, consolidate and improve its product portfolio, market access and operational efficiency. This is in line with the ambitions set at the acquisition of Nordkalk.

Operations, Safety and COVID-19

Throughout 2021, the Group delivered a solid operating performance, despite challenging conditions, with volumes of all materials sold across the Group in line, or ahead of, 2020.  Deliveries to residential construction and certain industrial applications at Nordkalk saw good year on year volume growth. Infrastructure demand remained strong in Benelux and Poland and we saw a good increase in the UK, with more projects coming online as the year progressed. Additionally, plant availability and efficiency were maintained consistently, limiting the impact of unplanned production stops.

Much progress was again made on safety reporting and management. The total safety events frequency rate recorded dropped by 25%, while the harm incidents frequency rate dropped by over 30% versus the previous years. Positive reporting, including Near Hits and Hazard and Risk Identification increased by more than 200%. While this progress is encouraging, work still needs to be done at several sites, in particular in Belgium, where the level of the safety culture remains behind that of other parts of the Group.

The overall operational and safety performance is pleasing in light of the challenging environment created by COVID-19 and the restrictions imposed. Across the Group, which is now operating in several countries across Europe, we have ensured compliance with local regulation. We continue to manage this at a local level, ensuring that we are rapid in implementing any policy changes. As a result, we have been effective in managing the health challenges posed by COVID-19, with no transmission within the workplace observed.

We thank all our colleagues for their support as these restrictions often make working conditions more challenging both physically and mentally.

Governance

In 2021 we made significant progress in further strengthening the Group's governance. With the appointment of a General Counsel in 2020, we reviewed all governance and compliance policies to ensure we are in line with QCA guidelines. We revised our Board composition, focussing on the independence of directors. We have now made a further step with the proposed appointment of Axelle Henry as a third Independent Non-Executive Director and fourth NED overall, as part of a board of seven, following publication of these Accounts. Ms Henry is CFO of Verlinvest, a private investment firm specialised in investments with a focus on consumer goods, where strong branding and innovation is key and where revenue and profitability models are very different to our Group. She also has significant understanding of our sector through her previous role as deputy-CFO at Groupe Bruxelles Lambert, a major shareholder in large operators in our sector.

With the acquisition of Nordkalk, we also took significant time to define our long term ESG strategy and net-zero targets. As a Group, we are well positioned in terms of our product portfolio. Most products we make are low in carbon intensity and form a positive alternative to competing products from an ESG perspective. We are working hard to mitigate the impact of the product streams that are higher in CO₂ intensity. In addition, it is not often known that lime, our most CO₂ intensive product, naturally reabsorbs nearly all the CO₂ emitted from its production within five years. As a result, our overall product portfolio is well balanced and presents us with the opportunity to set and reach ambitious net-zero targets. 

Outlook

Looking forward, the Group is well positioned for its next phase of growth and evolution. The first five years allowed us to build an efficient operation dedicated to investment and improvement of acquired businesses into locally focussed platforms. Nordkalk now gives the Group significant additional reach and scale, thereby multiplying the opportunities for continued development. The significantly enhanced cashflow generation capability of the Group provides the capacity for continued growth investment, supporting of our strategic objectives, whilst retaining a flexible and efficient capital structure.

Considering these various points independently, there are a few aspects worth noting. While the Group has continually grown its earnings, the cashflow generated from its own operations historically has only provided limited capacity for investment. The substantial change in the Group's cash generation potential is a significant development for the business, allowing for more dynamic opportunities. Firm discipline will be maintained regarding capital expenditure and setting returns targets on investments.

The Group also benefits from an expanded set of credit facilities, leaving it with headroom of £200m in total at the end of the year. As above, there is a strong disciplined focus within the Group to manage leverage and not exceed self-imposed leverage limits, save for short periods to take advantage of unique opportunities and where they are worked down quickly.

As a result of the above, I believe we are in a good position to continue on the path of growth we have followed to date and build a safer, stronger and more attractive business for shareholders, staff and the communities where we operate. It is evident that the Group will face challenges along the way - such is the nature of business. However, if the past five years can be a guide, it is clear that the Group and its structure is built to deal with the challenges it encounters, whilst continuing to create value for all its stakeholders.

David Barrett

Executive Chairman

22 March 2022

CEO's STRATEGIC REPORT

Whilst 2021 saw the Group take a transformational strategic step with the acquisition of Nordkalk, it also saw the wider business deliver continued operational and financial progress in what were very challenging conditions. This is testament both to our people and the clear strategy that we put in place at the outset of our journey and against which we are constantly measuring ourselves. 

We are proud of our progress, however, we recognise that it all fades into deep irrelevance when a war is fought in Europe, when families are separated, children lose parents and parents lose children. We will do our utmost to support our colleagues in Ukraine who, at the time of writing, are safe in western Ukraine or in Poland. We will continue to support those who flee the Ukrainian warzone and remain astonished war can ever be considered a justifiable outcome.

Our journey started five years ago as a cash shell with an ambitious business model, "the power of the platform". Integrating vertically, when the end markets are very localised, product specific and fragmented, is counterintuitive. Decentralising and making managers and staff accountable, is not. This became the backbone of our decentralised business model which, in 2020, showed its agility and in 2021 its relentlessness. It also resonated with the Rettig Group who understood how one of their companies, Nordkalk, could fit within our organisation and prosper. Delivering transactions of this scale and ambition is only possible with the support of our shareholders and this support has never been taken for granted. We hope that the progress we have made in the past five years and the vision we are articulating within this report for our future, will convince you in continuing your support for our journey.

2021 was a year of both significant strategic and financial progress. With four acquisitions in the year, including our largest to date, the creation of a strategically important JV with Carrières du Boulonnais and the launch of our Greenbloc technology, we have laid the foundations for the next phase of the Group's evolution. These actions helped to deliver significant increases in: revenue to £272.0 million, up 119% year on year; Underlying EBITDA to £49.3 million, up 106% year on year; and Underlying EPS to 5.37 pence, up 19% year on year.

2021 also saw the business commit to ESG targets which are industry leading and we believe more aggressive than any of our peers. The ESG section of this report presents them in detail and a dedicated ESG Report, to be published in April 2022, will provide further context. By 2040, we aim to reach net-zero and well before that, we intend to be free of fossil fuel usage. No other lime producer has set targets of this level of ambition and no other building materials producer has made progress in its ultra-low carbon offering that we have. It is a part of our development we are very proud of and will continue to pursue.

As 2021 was very busy, and to give sufficient context, I will provide a summarised account of the key strategic developments across the year before entering the detail of operational performance on a platform-by-platform basis.

Strategic development

In 2020 we had laid the foundations for a busy 2021, with our UK and Benelux platforms performing well and ready to be developed further.

Re-organising our Benelux based operations involved several separate actions. The first of these was to separate the dimension stone and aggregates businesses at Carrières du Hainaut given the distinct end market profiles and drivers of each. With the split and appointment of a dedicated Managing Director for Dimension Stone we set out to develop both platforms further. This included the creation of Granulats du Hainaut and its combination with our other quarrying assets in Belgium, as well as the acquisition of B-Mix with four concrete plants in highly strategic locations in the region. As a result of these efforts, our Benelux construction materials platform was established, the start of a highly concentrated and strategically located supplier of construction materials in Belgium and the Netherlands.

Having established a broader, marketable platform in Belgium we saw significant opportunity in extending our presence into the attractive and adjacent French Market. A joint venture with Group Boulonnais, France's most respected independent quarried materials supplier, presented an optimal entry point into this market with the Group able to benefit from our partner's deep knowledge of the sector, scale and customer standing.

Alongside operational development, our innovation and product development activities yielded significant success in 2021 with the launch of the UK's first ultra-low carbon concrete products technology, Greenbloc. This technology has been the product of over 18 months' development focus and we are delighted that, following successful testing, we are able to offer this across our concrete product range making SigmaRoc a clear leader in ultra-low carbon concrete across both the UK and Europe.

2021 also presented us with the opportunity to meaningfully extend our geographic footprint in Europe. The Northern Europe region has, since inception, been a very key target market for the Group, benefiting from strong demographic, regulatory and market drivers for the use of our materials. Nordkalk presented a unique route to the Group achieving credible scale in this territory, with over 100 years of history and a leading market position in quarried products for most of Scandinavia, Poland and the Baltics. Nordkalk also shared a similar operational structure to SigmaRoc, focussed on local quarried products for local markets in a decentralised way, which made it culturally an ideal fit for our business.

Operations and trading

Trading performance:

The Group's trading and operational performance for 2021 was solid. Overall, on a like-for-like basis, the value of upstream quarried materials sold increased by 2%. Value added product sales increased by 14%, with value added services increasing by 16%. These figures include the Nordkalk business and considering SigmaRoc pre-Nordkalk acquisition, the evolution is similar with total revenue increasing by 15% on a like-for-like basis.

For the Ronez platform, trading in both islands was solid and in line with expectations, with the impact of a lockdown in the first quarter recovered through strong demand as the year progressed. Several significant projects in both Jersey and Guernsey, including Admiral's Park in Guernsey and large residential developments in Jersey (both the public and private), as well as further demand for road maintenance helped deliver £28.9 million in turnover, which was slightly ahead of budget. The shipping business had an excellent year, with very high ship utilisation and a total of 51 cargoes carried. Operational plant and machinery investments of the past years has shown its worth with the renewed ready-mix fleet, ready-mix plant and further plant upgrades.

The three businesses which constitute our PPG platform, with seven sites across the UK, have developed well. Block production increased year over year, as did volumes for landscaping and flooring products. Bespoke project work was slow in the early part of the year, but accelerated in the second half with larger scale infrastructure and commercial projects such as car parks and traffic barriers coming online. The most exciting developments were, however, Greenbloc and our launch into ultra-low concrete products, leading to a strategic partnership with Marshall's. Cost pressures, particularly in cement and logistics, were managed via pass-through mechanisms and further searches for efficiency initiatives.

With our third platform in the southwest of the UK, we took the opportunity to expand our integrated aggregates and construction materials business in the region, starting in South Wales, with the Harries business. The business was fully integrated into the Group in September 2020 and much has developed since. Closing the year with £29.9 million in turnover the South Wales business performed in line with expectations. Work on further development of the entity is being undertaken currently with a view to extend our product offering. A complete review of the structure of the business will lead to a more efficiently organised business.

With the creation of a dedicated dimension stone business, with Carrières du Hainaut as its base, we ensured full focus on the production and delivery of a high value-add product, Belgian Bluestone. Demand for Bluestone was strong throughout the year across RMI, new build and infrastructure markets. We developed new sales regions by expanding the sales teams in Germany and focussing on commercial strategies for Austria and Switzerland. Focus on Scandinavia and the UK was achieved through dedicated partnerships with off takers and representatives. As a result, the combination of existing markets in the Benelux, France and Italy as well as new markets helped grow sales and volumes to reach 1 million square meters in the year. Further efforts are now being made on the commercial positioning of the product, helped by a new digital strategy and website, as well as operational changes to allow for further production efficiencies at higher volumes. The significant extension of the Bluestone quarry, currently underway, is central to that strategy and represents a substantial enhancement to the production set up.

As a consequence of the focus on Bluestone, all construction aggregate production at Carrieres du Hainaut was split off into a new business, Granulats du Hainaut, which now forms the base of a Benelux platform also including Cuvelier and B-Mix. The creation of GduH coincided with the take-over of the Holcim production plant in April and the creation of a joint venture with Carrières du Boulonnais to best serve the Benelux and French markets, in anticipation of the installation of new production infrastructure in 2024. The Cuvelier business had a good full year, despite sales being impacted in the first half by road closures limiting access. B-Mix, the concrete business in northeast Belgium had an excellent year with volumes of 177 thousand cubic meters and the integration of the Casters concrete business, acquired simultaneously. Combined the three businesses form a solid base for further development and growth in the Benelux market.

In September, a sixth platform joined the Group through the acquisition of Nordkalk, consisting of three operating divisions. In the north, its Finnish and Swedish operations had a good year overall, driven by strong demand from the pulp and paper industry as well as strong demand from steel producers in the region. Rationalisation of capacity by customers benefited the group through sustained volumes. As a result, volumes of lime and limestone were higher than anticipated. While this improved overall turnover and net profits, it also posed the challenge of dealing with very sharp rises in energy costs, exceeding 200% in many cases toward the end of the year. Efficient pass-through mechanism and hedging have allowed for protection of the net profitability of the business, but inevitably increased turnover more than anticipated. Further efficiency initiatives will target margin protection and improvement in 2022.

The second region consisting of the Polish and German operations had an equally good year driven by a highly effective local management team maximising efficiency of the operations. Demand was driven by infrastructure works in particular as well as deliveries to steelworks and the agricultural sectors. Energy cost pressures were managed through hedging and contractual mechanisms protecting profitability of the division. Further development of the division, in particular the extension of reserves at the key sites is underway to ensure future delivery to key sectors of the Polish economy.

The third operation within the Nordkalk platform consists of several joint ventures, including operations in Norway and Sweden in partnership with fellow minerals companies and steelworks. Trends seen in other parts of the business were also present here, where the main challenges were posed by supplying sustained volumes throughout periods of high energy costs. The business performed well and managed to improve its competitive position in the period.

The overall trend for the year 2021 was therefore similar across the Group with good demand for products in all main sectors of supply, be it private construction, infrastructure, steel, pulp and chemical or environmental applications of our quarried products. Managing rising energy costs and other supply chain disruptions was done effectively and led to good protection of the Group's bottom line.

Inflationary pressures and supply chain backdrop:

As was highlighted within the review above, the third and fourth quarter of 2021 saw several challenges to the business from a supply chain and cost inflation perspective. In both cases the businesses reacted well to ensure profitability was protected.

Supply chain issues have been well publicised in the sector, particularly in the UK. While these challenges were certainly real, the Group dealt with them effectively. Driver and logistical shortages were tackled through active fleet management and benefited from good long term relationships with haulage suppliers. Additional capacity was successfully secured where necessary in areas where demand was particularly strong.

Cost inflation, in some cases significant, was evident across a number of areas but the Group did well to substantially mitigate this through strong contractual pass-through arrangements and further internal efficiency gains. Cementitious products remained both in short supply and at higher-than-average prices. Existing supply arrangements and management of productivity allowed continued production at good volumes even when placed on allocation. In-house delivery capabilities for these products helped further.

Energy, gas and electricity supplies were the other area of significant and sudden price increases. Hedging strategies were already in place converging normalised base load consumption across the network of plants and operations. As energy price movements were very significant, further price movement was captured in contractual pass-through arrangements as part of long term supply structures allowing the Group to manage the inflationary environment.

As a result, while the environment was challenging, the strategies adopted allowed for the protection of the business and the continued supply and delivery of product to our customers without interruption.

Financial performance  

The Group delivered an excellent financial performance for the year, which was ahead of analysts' expectations. Reported revenues were £272.0 million, delivering Underlying EBITDA of £49.3 million, with demand and pricing pass through driving significant top line growth which, combined with continued efficiency gains realised across the business, enabled a strong margin performance in what was a challenging backdrop. This performance is a testament to effective local management taking the right decisions to protect their businesses without hesitation, whilst retaining focus on supporting their local markets.

From a balance sheet perspective, the Group dramatically changed across the year with completion of the various acquisitions. As at 31 December 2021, gross assets were £ 769.3 million, underpinned by over 1 billion tonnes of reserves and resources, land, plant and machinery in strategic locations. Net assets were £411.2 million following a refinancing of our debt facilities led by Santander. At year-end the Group had access to a further £200 million in RCF and credit facilities which will support the Group's further evolution. We maintain leverage targets at two times Underlying EBITDA with a significant down trend, giving the Group the ability to reinvest generated cashflows as the Group reduces its gearing. At the year-end our leverage ratio stood at 1.88 times Underlying EBITDA with cash at £70 million.

ESG, Safety and Innovation

ESG:

All topics captured under a broad heading of ESG equally saw incredible progress throughout the year. In April 2022 the Group will publish its first dedicated ESG report, giving ample detail on all the initiatives we are undertaking. In anticipation of that report, we can already announce several exciting points in relation to our net-zero targets, our Environmental and Social initiatives and our Governance improvements.

As part of our ESG reporting, we publish detailed statistics and reductions targets under TCFD and SASB norms. These targets are aggressive and industry leading. We aim to:

· provide option for 100% of manufactured products to utilise waste/recycled materials by 2025;

· utilise 100% of production materials by 2027;

· be free of fossil fuel use by 2032; and

· achieve net-zero by 2040.

No other operator in the lime sector has committed to these targets and no other building materials producer is presently able to offer certified products with ultra-low carbon credentials totally free of cement, across the entire range of its products.

We are also very focussed on supporting the communities where we work and several initiatives have been realised in 2021 to ensure we are a good neighbour with our operations. In Belgium, we have donated a large section of land to the city of Soignies and will assist in its development into a zone for recreation and sports. In Finland, we have built a large wooden exercise staircase alongside our operations to promote physical activity. In Poland, the business continues to support the mayor of Slawno who developed a museum next to our operations to preserve fossilised marine creatures found in our quarries. These are a few of the initiatives implemented this year, more of which will be detailed in our Sustainability report.

From a governance perspective, we continue to develop the leadership of the Group and are proud of the proposed appointment of Axelle Henry as an independent NED. Ms Henry brings significant financial skill to the Group given her role as CFO of a major investment fund. She also brings knowledge of sectors which are much more brand and innovation dependent, therefore providing fresh perspective and diversity of opinion to the Board, augmenting its specialist sector experience. The Board will therefore consist of a majority of independent Directors, with very complimentary skills and backgrounds.

On a more operational level, the Group has continued to maintain and increase its accreditation levels, both ISO and product specific, as well as conducting surveys to assess staff and management perception and engagement. In all cases, the results were extremely positive with areas identified where cross-learning could be obtained. As a result, regional advisory boards were set up to ensure the various platforms in similar legal jurisdictions would share best practices.

Safety and COVID-19:

Considering safety, the Group has also continued to progress with a year on year reduction of 25% in incident frequency rate; a year on year reduction of over 30% in harm frequency rate and a year on year increase of 200% for near hit, hazard and risk reporting. The safety culture of the Group is steadily improving which is a challenge as every year many new businesses with differing approaches to safety join SigmaRoc. Still, through the use of adequate tools, including our safety management tool Highvizz we are able to increase reporting, decrease harm and improve the awareness and culture that promotes a safe business.

2021 started with a lockdown and ended with a lockdown in many of the regions we operate in. As in 2020, the year was dominated by the COVID-19 pandemic and the restrictions it brought with it. As in 2020, we aimed to be proactive in implementing the required local restrictions to keep the business compliant and operating. As a result, our COVID-19 response continued to be managed at a local level, to remain quick and agile as local realities changed. We were effective in managing the pandemic and its impact on our business, having to date no evidence of any transmission of COVID-19 at work.

Innovation:

A key part of our focus on becoming an improved and sustainable business is innovation. Having begun development 18 or so months ago with the idea to create a carbon neutral concrete product we are now the leading supplier of ultra-low carbon concrete products in the UK through our Greenbloc technology.

In addition to Greenbloc, we continue to innovate across the Group. In Belgium, with support from the Nordic region, we commenced work on utilising saw sediment waste material from CDH production as additives and fillers for the chemical, construction and agriculture industries. In the UK, we supplied concrete products coated with pollution absorbing paint for a school playground. At Nordkalk, we launched several new products all developed in house, one of them being an ultra-white paint without the use a the TiO₂ pigments making it significantly less harmful.

Our efforts in innovation were also noticed by others. Marshalls, the leading UK supplier of landscaping products, joined the Group in a JV to develop ultra-low carbon solutions. In Belgium, we continue to develop our Bluestone business in order to propose new finishes and applications while promoting 100% material use from all our operations.

Our journey on the path of innovation is not very long, but we have already made an impact and good progress. It has become a key area of focus as we aim to provide solutions that are innovative and low carbon.

Post period announcements

The Group completed the acquisition of Johnston Quarry Group on 31 January 2022. This acquisition significantly enhances the Group's presence in the UK from a quarrying perspective, with Johnston Quarry Group and Harries forming part of the expanded Southern platform covering Southern England and Wales. A new ExCo member will be appointed to lead these two divisions.

The expanded platform offers a range of products and services covering a footprint from Pembroke to Lincoln, in aggregates, concrete, asphalt, surfacing, agricultural lime and dimensions stone. It is the base for a highly focussed and specialised platform along the main road axis of the UK and focussed on niche product and product delivery. It has the potential to deliver more and grow both in offering and region.

Forward look

The 2022 financial year has started well across the Group. Early January saw some disruption from COVID-19 restrictions and absenteeism, but the Group has responded well with performance strengthening through the first quarter. The overall trading situation has been challenging, but the agility of the Group has facilitated the right responses. Unprecedented energy price and input cost inflation continues from the second half of 2021, but the Group remains focused on mitigating these through a combination of hedging, contractual structures and dynamic pricing.  A strike at UPM, one of our key customers in Finland, has slowed demand for several higher end products in Q1'22, but once resolved we expect increased volumes as the customer seeks to recover lost production. Operations in the Belgium, Channel Islands and the UK also traded in line with expectations with only some minor delays in project starts in Jersey.

Following the ongoing situation in Ukraine, the Group's historical sales to Russia were de minimis on Group revenue level and have now ceased completely, with no historical sales in the Ukraine. We are fully complying with all UK and EU trading sanctions and are monitoring the situation closely.

Looking further ahead in the year, we are focussed on a number of important strategic projects. Firstly, we have set very ambitious targets in respect of our ESG commitments. We aim to be sector leaders and we believe have both teams and plans in place to achieve these targets. In particular, when it comes to lime and limestone related products as well as ultralow carbon concrete, we are uniquely positioned to achieve our ambitions. The partnerships we have developed with several key organisations in the last 12 months, such as Carrières du Boulonnais and Marshalls, are important enablers of this and the potential strategic environmental value of the projects being considered and developed are significant. In addition to these partnerships, several internal innovation projects will contribute both to our bottom line and our ESG credentials.

In parallel, we are extremely active on the investment front, having considered over 140 acquisition targets to date. We will continue to be highly disciplined and selective in our consideration of these, only progressing with potential acquisitions where there is clear path to meeting our financial and commercial criteria.

There also remains significant potential for the Group to achieve further organic growth and margin improvement. Expansion of our markets and growth of our sales networks will help deliver further top line improvement in each of our platforms and we will continue to build the local capability that enables our businesses to capitalise on growth and efficiency opportunities.

Taking all these developments and initiatives, I remain convinced the Group is very well placed to develop further, deliver growth and take on a leadership position when it comes to ESG. None of these targets will be easily met, however, nothing easy is worth the effort. I am certain the entire organisation shares the same commitment.

This report was approved by the Board on 22 March 2022 .

Max Vermorken

Chief Executive Officer

CHIEF FINANCIAL OFFICER'S REPORT

I am very pleased to report a strong year financially for the Group, during which we exceeded our own expectations while significantly expanding our business during a persisting global health crisis. We formed a new platform in Benelux, acquired Nordkalk via a reverse takeover, raised £260 million in equity and obtained access to £305 million in debt via a newly syndicated banking facility. 

In our 2021 financial year, the Group generated revenue of £272.0 million (2020: £124.2 million) and Underlying EBITDA of £49.3 million (2020: £23.9 million). The Underlying profit before taxation for the Group for the year ended 31 December 2021 was £26.8 million (2020: £12.2 million).

The statutory loss for the Company for the year ended 31 December 2021 before taxation amounts to £26.3 million (2020: loss £5.8 million), which includes £22.2 million of non-underlying expenses primarily pertaining to extensive M&A activity undertaken by the Company during the year.

The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the Board to assess performance over the period to 31 December 2022.

	2021 £'000	2020 £'000
Cash and cash equivalents	69,916	27,452
Revenue	271,986	124,231
Underlying EBITDA	49,262	23,896
Capital expenditure	22,555	6,452

Cash generated from operations was £29.5 million (2020: £28.5 million) with a net increase in cash of £42.9 million (2020 net increase of £17.5 million).

Revenue and Underlying EBITDA exceeded expectations and management forecasts.

Capital expenditure relates to purchase of new plant and machinery and improvements to existing infrastructure across the Group.

PPA

BDO UK undertook the PPA exercise required under IFRS 3 to allocate a fair value to the acquired assets of Harries.

The PPA process resulted in a reduction of goodwill recorded on the Statement of Financial Position of the Group for Harries from £6.1 million to £2 million. The reduction was to transfer the value of goodwill to tangible assets for land and buildings, land and mineral reserves, intangible assets for trade name and deferred tax assets.

Non-underlying items

The Company's loss after taxation for 2021 amounts to £26.3 million, of which £22.2 million relates to non-underlying items, while the Group's non-underlying items totalled £29.1 million for the year. These items relate to six categories:

1.  £1.9 million amortisation of acquired assets and adjustments to acquired assets

2.  £20.1 million in exclusivity, introducer, advisor, consulting, legal fees, accounting fees, stamp duty, insurance and other direct costs relating to acquisitions. During the year the Group acquired B-Mix, Casters, Nordkalk and undertook extensive due diligence on JQG which completed post year-end.

3.  £3.1 million legal and restructuring expenses relating to the rebranding and alignment of all subsidiaries across the Group.

4.  £2.3 million in share based payments relating to grants of options.

5.  £0.7 million on unwinding of discounts on deferred consideration payments for CDH and CCP.

6.  £1.0 million in other exceptional costs which primarily relate to non-cash balance sheet adjustments and COVID-19 costs.

Interest and tax

Net finance costs in the year totalled £7.0 million (2020: £2.7 million) including associated interest, bank finance facilities, as well as interest on finance leases (including IFRS 16 adjustments), hire purchase agreements.

A tax charge of £ 4.7 million (2020: £0.7 million) was recognised in the year, resulting in a tax charge on profitability generated from mineral extraction in the Channel Islands and profits generated through the Group's UK, Belgium and Nordic based operations.

Earnings per share

Basic EPS for the year was a loss of 1.89 pence (2020: profit of 2.55 pence) and Underlying basic EPS (adjusted for the non-underlying items mentioned above) for the year totalled 5.37 pence (2020: 4.50 pence).

Statement of financial position

Net assets at 31 December 2021 were £ 411.2 million (2020: £124 million). Net assets are underpinned by mineral resources, land & buildings and plant & machinery assets of the Group.

Cash flow

Cash generated by operations was £29.5 million (2020: £28.5 million). The Group spent £350.9 million on acquisitions net of cash acquired and £22.6 million on capital projects. The Group raised £255 million net of fees through the issue of equity and drew net borrowings of £138 million. The net result was a cash inflow for the year of £42.9 million.

Net debt

Net debt at 31 December 2021 was £ 164.0 million (2020: £43.8 million), and was refinanced on 15 July 2021.

Bank facilities

In July 2021 the Company entered a new Syndicated Senior Credit Facility of up to £305 million (the Debt Facilities) led by Santander UK and including several major UK and European banks. The Credit Facility, which comprises a £205 million committed term facility, £100 million revolving credit facility and a further £100 million accordion option, provides the Group with further capacity and flexibility to support its ongoing buy-and-build strategy, as well as reducing like-for-like borrowing costs. 

The Group's   new   Debt Facilities have a maturity date of 15 July 2026 and are subject to a variable interest rate based on SONIA/LIBOR plus a margin depending on EBITDA. As   at   31 December 2021, total undrawn facilities available to the Group via the   new   Debt Facilities amounted to approximately £ 200 million.  

The Group's   new   Debt Facilities are subject to covenants which are tested monthly and certified quarterly. These covenants are:

· Group interest cover ratio set at a minimum of 4.5   times   EBITDA;  and

· A maximum adjusted leverage ratio, which is the ratio of total net debt, including further borrowings such as deferred consideration, to adjusted EBITDA, of 3.5x in 2021. As at 31 December 2021, the Group comfortably complied with its bank facility covenants.

Capital Allocations

We prioritise the maintenance of a strong balance   sheet and deploy our capital responsibly, allowing us   to commit significant organic investment to our   business whilst continuing to pursue acquisitions to   accelerate our strategic development.   This conservative approach to financial management   will enable us to continue pursuing capital growth for   our shareholders.  

Dividends

Subject to availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so. The focus of the Group at this stage of its development will be on delivering capital growth for shareholders. The Directors therefore do not recommend the payment of a dividend for the year (31 December 2020: nil).

Post Balance Sheet event

Post 2021 close we have conducted a series of activities worthy of mention in this annual report .

Employee Benefits

All of our   UK employees, almost 400,   have been offered both Private Medical   Insurance and Group Life Assurance. Our benefits provider commented that the uptake of this offering from our   employees was unprecedented with many adding family members.  

SigmaRoc has also engaged Link Group to set up a Share Incentive Plan for all UK employees, an offering we already have in the Channel Islands. We are   continuing   to   investigate Share Plans for our European operations.  

This report was approved by the Board on 22 March 2022 and signed on its behalf.

Garth Palmer

22 March 2022

ESG REPORT

SigmaRoc has and will always be committed to the principles of ESG. As per our 2020 Annual report, following further work, we have formally aligned to both TCFD and SASB. Whilst TCFD recommendations serve as a global foundation for effective climate-related disclosures, the SASB standards will be used to collect, structure, and effectively disclose related performance data for the material, climate-related risks and opportunities identified. SASB standards represent a clear solution to TCFD implementation, and areas of future focus are well-established in the market. SASB rigorously developed TCFD-aligned reporting tools, and support the implementation of the recommendations and the 11 associated disclosures in a way that is both cost-effective and useful for all stakeholders.

The TCFD standards set out recommended disclosures structured under four core elements of how companies operate:

· Governance - The organisation's governance around climate-related risks and opportunities

· Strategy - The actual and potential impacts of climate-related risks and opportunities for an organisation's businesses, strategy, and financial planning

· Risk Management - The processes used by the organisation to identify, assess, and manage climate-related risks; and

· Metrics and Targets - The metrics and targets used to assess and manage relevant climate-related risks and opportunities.

These are supported by recommended disclosures that build on the framework with information intended to help investors and others understand how reporting companies assess climate-related risks and opportunities.

SASB provides industry-specific standards for disclosing performance on sustainability topics including, but not limited to climate in a comparable manner that are reasonably likely to have a material effect on financial performance of companies in each industry. They will be used when assessing the relevant disclosures under the Metrics and Targets Pillar of the TCFD and are among the most frequently cited tools in the TCFD's Implementation Annex.

TCFD Pillar	Recommended Disclosure	SigmaRoc Summary
Governance	· board's oversight of climate-related risks and opportunities · management's role in assessing and managing climate related risks and opportunities	The Board has the highest level of responsibility for climate-related issues and is supported by various committees including the Audit Committee, which is responsible for monitoring ESG performance. In 2021, the board agreed a road map to developing ESG through TCFD, SASB and development of ESG targets.
Strategy	· Climate-related risks and opportunities identification · climate-related risks and opportunities impacts · resilience of the organisation's strategy	ESG is core in all of our key decision-making. Both the Board and management teams review where climate-related risks and opportunities might occur, as well as their significance and connection to other risks. This information allows us to challenge our strategy to ensure it is as resilient as possible.
Risk Management	· identifying and assessing climate-related risks · managing climate-related risks · integration into overall risk management	Climate-related risks and opportunities are identified and managed both locally and at Group level with our CTO coordinating all aspects. The identification, assessment and effective management of climate-related risks and opportunities are actively discussed during Board and management meetings.
Metrics and Targets	· climate-related metrics · Scope 1, Scope 2, and Scope 3 emissions.  · climate-related targets	To ensure meaningful and appropriate metrics and targets for our stakeholders, we are adopting SASB recommended disclosures. We also comply with SECR, which is independently produced, and voluntarily expand the remit to include all our operations, not just the UK.

1.1.  ESG Road Map & Focus Areas

As a business our overall aim is to ensure sustainable returns to our shareholders. As a Group we are committed to ensuring this can be done in a manner where we minimise risks, seize opportunities and so that our business continues to be strong in the years to come.

Our focus on returns to shareholders is through our 4i principles, all of which are underpinned by ESG.

Shareholder returns are an output of our inputs, which are our business model and ESG principles.

1.1.1.  Road Map to Net Zero

ESG	Subject	Target	Date
Environment	Carbon	All concrete products available in low carbon and ultra-low carbon	2025
		Carbon Capture Storage and utilisation trial plant operational	2025
		Alternative fuels used in mobile equipment	2030
		Alternative fuels used in fixed equipment (e.g lime and asphalt)	2032
		All kilns are carbon neutral	2038
		Net Zero	2040
	Energy intensity and efficiency	2.5% reduction in energy intensity	2030
		100% third party energy sourced from renewable means	2030
	Resource utilisation & circular economy	100% of all manufactured products can utilise waste / recycled materials*	2025
		100% utilisation of all production materials	2027

*where industry specifications allow for it

1.1.2.  Environment

Pillar	Key Focus Area	Targets	How Did we do	Focus for 2022
Environment	Sustainable use of reserves and resources;	Achieve Net Zero road map targets	First publication of net zero road map	Development and implementation of solution to achieve our Net Zero targets
Environment	Responsible use key resources including raw material, mineral and water;
Environment	Optimise energy use and minimise impact of our operations on the environment;
Environment	Contribute to sustainable construction and address environmental aspects either through product production or use.

1.1.3.  Social

Pillar	Key Focus Area	Targets	How Did we do	Focus for 2022
Social	Ensure people leave work in the same or better condition than when they arrived;	Total injury frequency rate and harm injury frequency rate reduction year on year	Achieved both total incident and harm incident reduction through continual engagement and support, especially during unprecedent global times	focus on 3 key areas Structure & Compliance by ensuring corrective actions properly closed out and on time. Proactive Prevention by focusing on each businesses' 3-5 core risks Learn & Improve through thorough investigations and timely communication
Social	Support the physical and mental health of our employees and their families;
Social	Attract, train, retain, and engage our workforce;	Increase workforce engagement and retention Increase board diversity	Climate survey conducted that has allowed each business to focus on key areas UK Employee benefits reviewed and updated Increased female board diversity with the appointment of Axelle Henry	Continue to increase diversity to achieve >25% diversity on the board Increase relationships with education to promote our industry at ages where career choices are being considered
Social	Be a good neighbour; Source local, buy local, sell local, invest local.

1.1.4.  Governance

Pillar	Key Focus Area	Targets	How Did we do	Focus for 2022
Governance	Promote QCA and Corporate Governance Codes;	Formalise and implement ESG framework and structure	The Board agreed to adopt the TCFD and SASB framework and guidelines which have been used in the creation and disclosure of this section	Collection of data for ongoing disclosure
Governance	Ensure proactive Board oversight and independence of committees;
Governance	Focus on Risk Management and mitigation, including cyber;
Governance	Ensure transparency on reporting and Tax.

1.2.  Group Health and Safety Report

2021 saw continued focus and commitments to Health and Safety in challenging environments created by COVID-19 and the restrictions imposed. Key statistics show year on year improvement; The total event and the Harm event frequency rates both improved 25% and 31% respectively. This was part aided by the significant increase in positive reporting, including Near Hits and Hazard and Risk Elimination by more than200%.

As the Group continues to grow, and which is now operating in numerous countries across Europe, we continue to ensure compliance with local regulation, which is managed at a local level, whilst at the same time integrating these businesses to align with Group H&S standards.

As a group we have set three overarching principals as well core aspects such as increased reporting and event management through the use of our in-house H&S app, Health and Safety Committees and training through NEBOSH and IOSH:

	Structured & Compliant 1.  All sites audited with identified improvement actions. 2.  All corrective actions properly closed out and on time.
	Proactive Prevention 1.  3-5 core risks with live action plan. 2.  Uncontrolled Risks and hazards (HIRE) logged and actioned.
	Learn & Improve 1.  Detailed investigations on all MTI, LTI and HiPo events suing aspects such as ICAM. 2.  Performance and events communicated throughout the business in a timely manner

The safety culture of the Group continues to have strong focus as every new business comes with differing approaches to safety prior to joining SigmaRoc. Through the use of adequate tools, including our safety app Highvizz, site improvement and Annual Focus Plans, safety committee structures and climate surveys we are increasing worker engagement and delivering a positive safety culture as these businesses become integrated. An initiative based on football league tables has recently been successfully trialled and saw a five-fold increase in hazard reporting.

During 2021 we have been effective in managing the both physical and mental health challenges posed by COVID-19, with no apparent transmission within the workplace observed.

1.3.  Streamlined Energy and Carbon Report (SECR)

This report is independently produced by Briar. The Group voluntarily expands the remit to include all operations, not just UK.

1.3.1.  UK energy use and associated greenhouse gas emissions

Current UK based annual energy usage and associated annual greenhouse gas ("GHG") emissions are reported pursuant to the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 ("the 2018 Regulations") that came into force 1 April 2019.

1.3.2.  Organisational boundary

Energy use and associated GHG emissions are reported across the Group as defined by the operational control approach. This includes operations in the UK, Channel Islands, Belgium and across northern Europe (Estonia, Finland, Poland & Sweden). This exceeds the minimum mandatory requirements set out in the 2018 Regulations for 'large quoted companies', which only requires reporting of UK based energy use and emissions.

1.3.3.  Reporting period

The annual reporting period is 1 January to 31 December each year and the energy and carbon emissions are aligned to this period. The subsidiary company, Nordkalk, was acquired in September 2021 and energy and emissions are only included for this subsidiary from this date.

1.3.4.  Quantification and reporting methodology

The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed. Emissions calculations were based on emission factors published in the 2021 UK Government GHG Conversion Factors for Company Reporting, Statistics Finland Fuel Classification 2021, Swedish Environmental Protection Agency Emission Factors 2022 and the latest available factors from the Association of Issuing Bodies (2020), Jersey Electricity (2020) and Guernsey Electricity (2020). The report has been reviewed independently by Briar Consulting Engineers Limited.

Electricity and gas consumption were based on invoice records with some pro-rata and benchmark estimations carried out to complete missing data. Transport usage was calculated from a combination of mileage and fuel records where possible. Transport is not reported separately outside the UK and Channel Islands as it is included within fuel usage and is considered immaterial for grey fleet. Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors.

The associated emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations. For large unquoted organisations, the 2018 Regulations define mandatory emissions as those originating in the UK coming from purchased electricity, gas combustion and purchased fuel for transport (including mileage expense claims). Reporting energy and emission sources outside of these sources is considered voluntary and reported separately.

The emissions are further divided into their relevant scopes as per the GHG Protocol. The scopes are defined as:

· Scope 1: Direct GHG emissions that occur from sources owned or controlled by the organisation.

· Scope 2: Indirect GHG emissions from the generation of acquired and consumed electricity, steam, heating or cooling.

· Scope 3: Other indirect GHG emissions that occur as a consequence of the organisations activities but occur from sources not owned or controlled by the organisation.

· Outside of scopes: Biogenic CO₂ emissions that scope 1 impact are determined to be 'net zero', since the fuel source itself absorbs an equivalent amount of CO₂ during the growth phase as the amount of CO₂ released through combustion. Therefore, the direct CO₂ emissions are reported separately.

Breakdown of energy consumption used to calculate emissions (kWh):

Energy type	2020			2021
Mandatory energy:	UK	Group Total1	UK		Group Total1
Gas	274,854	716,644	453,856		104,338,875
Purchased electricity	2,611,414	17,271,765	5,113,311		80,401,077
Transport fuel	6,274,566	9,179,726	16,253,123		25,774,101
Total energy (mandatory)	9,160,835	27,168,136	21,820,291		210,514,054
Voluntary energy:
Bioenergy	-	-	-		7,392,511
Coal	-	-	-		155,968,343
Oil	17,781,282	54,968,961	36,524,685		158,166,363
Generated electricity2	-	940,490	-		1,906,467
Total energy (voluntary)	17,781,282	55,909,451	36,524,685		323,433,684
Total energy (mandatory & voluntary)	26,942,117	83,077,587	58,344,976		533,947,737

¹ The Group total includes emissions from the UK, Channel Islands, Belgium, and Nordkalk (Estonia, Finland, Poland and Sweden from Sep 21 only).

² Electricity generated by solar photovoltaic panels. Reported energy includes any exported energy to the grid.

Breakdown of emissions associated with the reported energy use (tCO ₂ e)

Emission source	2020		2021
Mandatory emissions:	UK	Group Total1	UK	Group Total1
Scope 1
Gas	51	145	83	16,929
Transport (company owned vehicles)	1,472	2,171	3,775	6,247
Scope 2
Purchased electricity (location-based)	609	2,855	1,086	17,070
Scope 3
Transport (grey fleet)	41	41	78	104
Total gross emissions (mandatory)	2,173	5,212	5,022	40,349
Voluntary emissions:
Scope 1
Bioenergy (CH ₄ & N ₂ O)	-	-	-	0.5
Coal	-	-	-	52,657
Oil	4,514	14,054	9,259	41,179
Process related emissions	-	-	-	135,461
Total gross emissions (voluntary)	4,514	14,054	9,259	229,297
Total gross emissions (mandatory & voluntary)	6,687	19,266	14,281	269,647
Outside of scopes (CO2 only)
Bioenergy	-	-	-	2,529
Petrol/diesel biofuel content	30	30	227	251
Intensity ratio: tCO2e per million-pound turnover:
Mandatory emissions only	46.8	42.0	67.9	148.3
Mandatory & voluntary emissions	142.9	155.1	193.0	991.4

¹ The Group total includes emissions from the UK, Channel Islands, Belgium, and Nordkalk (Estonia, Finland, Poland and Sweden from Sep 21 only).

Breakdown of emissions across the Group for 2021 only (tCO₂e)

Emission source	2021
	UK	C.I	BE	Nordkalk3	Total
Scope 1
Bioenergy (CH ₄ & N ₂ O)	-	-	-	0.5	0.5
Coal	-	-	-	52,657	52,657
Gas	83	-	110	16,737	16,929
Oil	9,259	2,012	6,820	23,087	41,179
Transport - Company owned vehicles	3,775	2,471	-	-	6,247
Process related emissions	-	-	-	135,461	135,461
Scope 2
Purchased electricity (location-based)	1,086	123	2,663	13,199	17,070
Scope 3
Transport - Business travel in employee-owned vehicles	77	26	-	-	103
Total gross emissions	14,281	4,631	9,593	240,959	269,647
Outside of scopes
Bioenergy (CO2)	-	-	-	2,529	2,529
Petrol/diesel biofuel content	227	24	-	-	251
Intensity ratio
tCO2e per million-pound turnover	193.0	159.7	131.4	2,511.9	991.4

³ Nordkalk emissions are reported from Sep 2021 only and include sites within the operational control boundary in Estonia, Finland, Poland and Sweden.

1.3.5.  Intensity Ratio

The intensity ratio is total gross emissions in metric tonnes CO ₂ ei per total million-pound (£m) turnover. This is calculated separately for 'mandatory' emissions and 'mandatory & voluntary' emissions for the UK, Channel Islands, Belgium and Nordkalk. This financial metric is considered the most relevant to the Company's wide-ranging activities and allows a comparison of performance across other organisations and sectors.

The increase in the UK intensity ratio this year reflects a shift in production. In 2020, a large amount of production focused on a one-off project to deliver Road Zipper System highway barriers, which required relatively low energy intensive processes. From 2021, production has returned to typical projects that require higher energy intensity. Absolute UK emissions have also increased, primarily due to the inclusion of the subsidiary GD Harries & Sons Limited for a full 12 months this year, whereas in 2020 it was reported from September 2020 only (when the business joined the Group).

Group wide relative and absolute emissions have increased this year due to the acquisition of Nordkalk, a manufacturer of limestone-based products which have high process related CO ₂ emissions associated with limestone calcination reactions. Absolute emissions will increase further next year when a full 12 months of emissions is reported for Nordkalk. This is because this year's figures are only quantified from September 21, when the company joined the Group.

1.3.6.  Energy efficiency action during current financial year

In the period 1 January to 31 December 2021 for UK operations, energy efficiency action has focused on transport efficiency, with considerable work undertaken to optimise transport and logistics in CCP to reduce road miles covered by the haulage fleet.

On site renewable energy generation has increased following the completion of the third phase of the solar photovoltaic extension in Belgium. This has resulted in an increase in annual renewable electricity generation of 965,000 kWh this year compared to last year's generation; more than double the energy generation in 2020.

This year we have committed to going cement free in our precast portfolio from January 2022. This follows the launch of the CCP Greenbloc in February 2021; the UKs first cement-free ultra-low carbon dense concrete block. Compared to a dense concrete block manufactured with 100% Ordinary Portland Cement, Greenbloc has a 77% lower embodied CO2, resulting in an average reduction of 1.1kg CO2e per concrete block.

Operations at Ronez on the Channel Islands have increased the usage of GGBS in the low carbon product range, specifically for Ready Mix Concrete (RMX) and concrete blocks. 683 tonnes were switched from cement to GGBS this year compared to 2020, estimated to result in a CO2e reduction of 478 tonnes. The launch of Greenbloc and increased use of GGBS at Ronez will primarily impact scope 3 (upstream and downstream) emissions; however, scope 3 emissions are not fully quantified in these tables.

1.4.  Stakeholders

Stakeholders (in alphabetical order)	Description	How we engage
Colleagues	We have dedicated workforce of close to 2,000 across the Group. We recognise our dedicated workforce as a key driver of the value derived from the business. Our colleagues are experienced and continuously developed to fulfil their potential. All employees are offered a fair benefits and compensation package relative to their role and level in the organisation. We encourage share ownership where they are available and are working to set up where they are not currently in place.	Site presence and visual felt leadership. Employee groups and committees and unions. Focus on development training and succession planning. Decentralised approach with flat management allowing easy access to all staff. Employee benefit offerings that can also extend to family members.
Customers and Suppliers	All our businesses are decentralised and locally focused so that we know the customers and suppliers areas like they do. We work alongside our customers to provide "right first time" service and to seek proactive and innovative solutions to support requirements. "Right first time" is key to success and ensuring customer loyalty as part of our long-term success. We recognise the huge role our suppliers play in its long-term success. We strive to ensure timely payments, maximise value to support the delivery of our customers' needs. We balance economic requirements with sustainability considerations over the whole supply chain.	Prioritise a local focus on both customers and suppliers. Engage directly from our sites so that the customer and supplier deal directly with the site they are supplying or buying from. Ensure timely payments are made to suppliers. Functional and intuitive websites and digital solutions focused on the customer. Ensure adequate checks and due diligence are done on customers and suppliers.
Communities	By being decentralised and local we are at the heart of the communities in which we operate allowing us to be knowledgeable, good, supportive and engaging neighbours.	Proactive approach and active participation in community and industry working groups, forums and committees.
Investors	All our Shareholders play an important role in the continued success of our business. We maintain purposeful and close relationships with them either directly or via wider mediums such as Q&A webinars and when allowed, conferences. We seek to be transparent and give clear and consistent messages across all communication channels.	Dedicated forums such as AGM, Annual and Interim Webinar Q&As. Annual and interim reports, trading statements and RNS. Regular phone calls and dialogues. Broker and NED contacts. Site visits, investor roadshows, investor conferences.
Regulators / local Government	We look to develop and sustain good relationships with many regulators who govern our businesses to ensure the success of our business and maintaining our license to operate. We are committed to adherence of legal and regulatory requirements. We are committed to have independent review / oversight be it internally or externally. We are committed to a sustainability framework following review of international standards.	Regular dialogue with Governments, Government agencies, regulators, and industry groups. Active membership of the industry bodies such Mineral Products Association, Federation Industries Extractives and European Lime Association. Effective and clear policies to ensure governance. Education and training of staff to reinforce compliance with regulations.

Stakeholder engagement

The Director's believe they have acted in the way most likely to promote the success of the Group for the benefit of its members as a whole, as required by s172 of the Companies Act 2006. The requirements of s172 are for the Directors to:

· Consider the likely consequences of any decision in the long term;

· Act fairly between the members of the Company;

· Maintain a reputation for high standards of business conduct;

· Consider the interests of the Group's employees;

· Foster the Group's relationships with suppliers, customers and others; and

· Consider the impact of the Group's operations on the community and environment.

The application of the s172 requirements are demonstrated throughout this report and the Accounts as a whole, with the following examples representing some of the key decisions made in 2021 and up to the date of these Accounts:

· Continued pursuit of buy and build growth strategy: the Group has aggressively continued its buy and build growth strategy, completing two acquisitions during 2021, establishing two new platforms and entering into a strategic JV partnership. The acquisition of Nordkalk was transformational for the Group, giving scale to self fund further growth opportunities.

· Ongoing management of the COVID-19 pandemic: the Group continued to actively monitor and manage the various measures implemented in 2020 to ensure continued protection and wellbeing of its employees, maintenance of good working relationships with customers and suppliers, and the commercial viability of its business.

· Safety initiatives: safety and wellbeing of our colleagues is one of our top priorities and the Group continued to improve its health and safety standards.

1.5.  Membership

Membership to trade organisations, industry bodies and other agencies is critical to ensure continual improvement in all that we do and to help facilitate the ongoing changes our industry and our customers face. Across our platforms we both support and are supported by National and International bodies such as:

· Mineral Product Association (MPA): UK industry trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and silica sand industries.

· Federation Industries Extractives (Fediex) of which we have representation on the Board

· Benelux Natural Stone Association (BNSA) of which we have representation on the Board

· European Lime Association (EuLA) of which we have representation on the Board

· Industrial Minerals Association Europe (IMA Europe)

· European Calcium Carbonate Association (CCA)

· International Lime Association (ILA)

Further to these bodies, businesses in the Group also has ISO accreditation or equivalent in ISO 9001 Quality; ISO 14001 Environment and ISO 45001 Health & Safety. Currently 50% of our businesses have ISO with 75% in H1 2022. Currently Benelux is being reviewed as to what is the best form of accreditations to maintain in addition to their product and local accreditations

Further information on ESG will be available via our dedicated ESG Report and at www.sigmaroc.com .

DIRECTORS' REPORT

The Directors present their report, together with the audited Financial Statements, for the year ended 31 December 2021.  

Principal Activities  

The principal activity of the Company is to make investments and/or acquire businesses and assets in the construction materials sector. The principal activity of the Group is the production of high quality aggregates and supply of value-added construction materials.  

Board composition and head office   

The Board comprises three Executive Directors and three Non-Executive Directors at year end. The Corporate Head Office of the Company is located in London, UK . Following the publication of these accounts, a fourth Non-Executive Director will be appointed.

Risk Management

The Board is responsible for the Group's risk management and continues to develop policies and procedures that reflect the nature and scale of the Group's business.

Details of the Group's financial risk management policies are set out in Note 3 to the Financial Statements.

Results and Dividends  

For the year to 31 December 2021, the Group's Underlying profit before tax was £ 26.8 million (2020: £12.2 million) and Underlying profit after tax was £22.1 million (2020: £11.5 million). Recognising the Group's strategy, current position on its journey, the Directors are not proposing to adopt a dividend policy yet. 

Stated Capital  

Details of the Company's shares in issue are set out in note 28 to the Financial Statements.  

Directors  

The following Directors served during the year:  

Director	Position	Note
David Barrett	Chairman
Max Vermorken	Chief Executive Officer
Garth Palmer	Chief Financial Officer
Dean Masefield	Chief Financial Officer	Resigned 31 August 2021
Tim Hall	Non-Executive Director
Simon Chisholm	Independent Non-Executive Director
Jacques Emsens	Independent Non-Executive Director

Directors & Directors' interests

The Directors who served during the year ended 31 December 2021 are shown below and had, at that time, the following beneficial interests in the shares of the Company:

	31 December 2021		31 December 2020
	Ordinary Shares	Options	Ordinary Shares	Options
Max Vermorken	674,150	11,807,349	549,529	11,807,349
David Barrett	3,009,189	5,638,674	2,609,189	5,638,674
Garth Palmer	556,146	3,326,014	438,499	3,326,014
Dean Masefield1	45,748	500,000	28,101	30,000
Tim Hall	400,176	750,000	329,176	750,000
Simon Chisholm	-	-	-	-
Jacques Emsens	-	-	-	-

(1)  Resigned on 31 August 2021

Further details on options can be found in Note 29 to the Financial Statements.

Details on the remuneration of the Directors can be found in Note 10 to the Financial Statements.

Substantial Shareholdings  

The Company is aware that, as at   22 March 2022, other than the Directors, the interests of Shareholders holding three per cent or more of the issued share capital of the Company were as shown in the table below:

Shareholder	Shares held	Percentage of holdings
Blackrock Investment Mgt (UK)	82,943,051	13.00%
Rettig Group	50,276,521	7.88%
Ninety One	45,421,428	7.12%
M&G Investment Management	40,753,864	6.39%
Chelverton Asset Management	40,000,000	6.27%
BGF Investment LP	33,557,577	5.26%
Canaccord Genuity Wealth Management	32,972,287	5.17%
Janus Henderson Investors	32,338,004	5.07%
Polar Capital	25,983,914	4.07%
Premier Fund Managers	24,850,846	3.89%

Employees  

By being responsible for their own businesses, that are aligned with the overall Group's strategy, employees are fully aware of their impact and contribution as they are inherently responsible for their own success. The Group and each business is committed to employing the best they can, not only in skills and competence but also in their softer skills, regardless of who they are or where they have come from. Once engaged, each employee is nurtured and developed locally with opportunities within each business and platform offered openly.  

Political Contribution

The Group did not make any contributions to political parties during either the current or the previous year.

Annual General Meeting  

The AGM will be   held at the Washington Mayfair Hotel, 5 Curzon St, London W1J 5HE on 26 April 2022 at 3pm. The formal notice convening the AGM, together with explanatory notes on the resolutions contained therein, is included in the separate circular accompanying this document and is available on the Company's website at www.sigmaroc.com. 

Viability Statement  

The directors have assessed the viability of the Group over a period to December 2026. This is the same period over which financial projections were prepared for the Group's strategic financial plan. In making their assessment the directors have taken into account the Group's current position and the potential impact of the principal risks and uncertainties in its business model, future performance, solvency or liquidity. They also stress tested their analysis by running a number of credible scenarios and considered the availability of mitigating actions. Based on this assessment, the directors confirm that they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 31 December 2022. In making this statement, the directors have assumed that financing remains available and that mitigating actions are effective.  

Corporate responsibility

Environmental

SigmaRoc undertakes its activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature.

Health and safety

SigmaRoc operates a comprehensive health and safety programme to ensure the wellness and security of its employees. The control and eventual elimination of all work related hazards requires a dedicated team effort involving the active participation of all employees. A comprehensive health and safety programme is the primary means for delivering best practices in health and safety management. This programme is regularly updated to incorporate employee suggestions, lessons learned from past incidents and new guidelines related to new projects, with the aim of identifying areas for further improvement of health and safety management. This results in continuous improvement of the health and safety programme. Employee involvement is regarded as fundamental in recognising and reporting unsafe conditions and avoiding events that may result in injuries and accidents.

Internal controls

The Board recognises the importance of both financial and non-financial controls and has reviewed the Group's control environment and any related shortfalls during the year. Since the Group was established, the Directors are satisfied that, given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.

Going concern

The Group meets its day-to-day working capital and other funding requirements through cash and banking facilities; which were renewed in July 2021.

The impact of the COVID-19 pandemic on the Group's business, revenues and cash flow creates uncertainty. However, given the Group's robust balance sheet, solid performance through the COVID-19 pandemic to date and in conjunction with forecast projections, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the Annual Report and Financial Statements. Further details on their assumptions and their conclusion thereon are included in the statement on going concern included in Note 2.3 to the Financial Statements.

Directors' and officers' indemnity insurance

The Company has made qualifying third-party indemnity provisions for the benefit of its Directors and officers. These were made during the year and remain in force at the date of this Annual Report.

Events after the reporting period

Events after the reporting period are set out in Note 38 to the Financial Statements.

Policy and practice on payment of creditors

The Group agrees terms and conditions for its business transactions with suppliers. Payment is then made in accordance with these terms, subject to the terms and conditions being met by the supplier. As at 31 December 2021, the Company had an average of 58 days (2020: 9 days) purchases outstanding in trade payables and the Group had an average of 91 days (2020: 74 days).

Provision of information to Auditor

So far as each of the Directors is aware at the time this report is approved:

· there is no relevant audit information of which the Group's auditor is unaware; and

· the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Auditor

PKF Littlejohn LLP has signified its willingness to continue in office as auditor.

This report was approved by the Board on 22 March 2022.

Garth Palmer

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

		Year ended 31 December 2021						Year ended 31 December 2020
		Underlying	Non-underlying (Note 11)		Total		Underlying		Non-underlying* (Note 11 )		Total
Continued operations	Note	£'000	£'000		£'000		£'000		£'000		£'000
Revenue	7	271,987	-		271,987		124,231		-		124,231
Cost of sales	8	(210,068)	-		(210,068)		(90,028)		-		(90,028)
Profit from operations		61,919	-		61,919		34,203		-		34,203
Administrative expenses	8	(31,792)	(25,734)		(57,526)		(20,046)		(4,554)		(24,600)
Net finance (expense)/income	12	(5,317)	(1,682)		(6,999)		(2,379)		(360)		(2,739)
Other net gains / (losses)	13	1,978	(1,644)		334		374		(65)		309
Profit/(loss) before tax		26,788	(29,060)		(2,272)		12,152		(4,979)		7,173
Tax expense	15	(4,699)	-		(4,699)		(662)		-		(662)
Profit/(loss)		22,089	(29,060)		(6,971)		11,490		(4,979)		6,511
Profit/(loss) attributable to:
Owners of the parent		21,499	(29,060)		(7,561)		11,490		(4,979)		6,511
Non-controlling interest		590	-		590		-		-		-
		22,089	(29,060)		(6,971)		11,490		(4,979)		6,511
Basic earnings per share attributable to owners of the parent (expressed in pence per share)	32	5.37	(7.26)		(1.89)		4.50		(1.95)		2.55
Diluted earnings per share attributable to owners of the parent (expressed in pence per share)	32	5.02	(6.79)		(1.77)		4.15		(1.80)		2.35

* Non-underlying items represent acquisition related expenses, restructuring costs, certain finance costs, share option expense and amortisation of acquired intangibles. See Note 11 for more information.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

			Year ended 31 December 2021	Year ended 31 December 2020
		Note	£'000	£'000
Profit/(loss) for the year			(6,971)	6,511
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
FX translation reserve			(15,806)	2,379
Cash flow hedges - effective portion of changes in fair value		882	-
Remeasurement of the net defined benefits liability			155	-
Other comprehensive income, net of tax			(14,769)	2,379
Total comprehensive income			(21,740)	8,890
Total comprehensive income attributable to:
Owners of the parent			(22,343)	8,890
Non-controlling interests			603	-
Total comprehensive income for the period			(21,740)	8,890

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

		Consolidated			Company
		31 December 2021	31 December 2020		31 December 2021	31 December 2020
	Note	£'000	£'000		£'000	£'000
Non-current assets
Property, plant and equipment	16	256,436	144,793		429	52
Intangible assets	17	306,436	48,804		-	-
Investments in subsidiary undertakings	18	-	-		554,195	101,249
Investment in equity-accounted associate	19	524	-		-	-
Investment in joint ventures		5,134	-		-	-
Derivative financial asset	33	870	-		-	-
Other receivables	20	4,759	21		-	-
Deferred tax asset	15	3,129	1,412		-	-
		577,288	195,030		554,624	101,301
Current assets
Trade and other receivables	20	73,254	20,343		2,890	998
Inventories	21	44,530	14,247		-	-
Cash and cash equivalents	22	69,916	27,452		19,038	11,521
Derivative financial asset	33	4,327	152		302	152
		192,027	62,194		22,230	12,671
Total assets		769,315	257,224		576,854	113,972
Current liabilities
Trade and other payables	23	98,213	46,523		5,567	14,216
Derivative financial liabilities	33	737	-		-	-
Provisions	25	4,024	-		-	-
Borrowings	24	21,723	3,611		8,102	21
Current tax payable		3,934	708		-	-
		128,631	50,842		13,669	14,237
Non-current liabilities
Borrowings	24	212,199	67,688		192,068	22
Employee benefit liabilities		1,589	-		-	-
Deferred tax liabilities	15	5,190	3,871		-	-
Provisions	25	6,151	6,160		-	-
Other payables	23	4,401	5,100		4,401	5,100
		229,530	82,819		196,469	5,122
Total liabilities		358,161	133,661		210,138	19,359
Net assets		411,154	123,563		366,716	94,613
Equity attributable to owners of the parent
Share capital	28	6,379	2,787		6,379	2,787
Share premium	28	399,897	107,418		399,897	107,418
Share option reserve	29	3,104	847		3,104	847
Other reserves	30	(11,236)	3,293		1,362	1,362
Retained earnings		2,116	9,218		(44,026)	(17,801)
Equity attributable to owners of the parent		400,260	123,563		366,716	94,613
Non-controlling interest	31	10,894	-		-	-
Total equity		411,154	123,563		366,716	94,613

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Company's Income Statement and Statement of Comprehensive Income.

The loss for the Company for the year ended 31 December 2021 was £26.3 million (year ended 31 December 2020: £5.8 million).

The Financial Statements were approved and authorised for issue by the Board of Directors on 22 March 2022 and were signed on its behalf by:

Garth Palmer

Chief Financial Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

		Share capital	Share premium	Share option reserve	Other reserves	Retained earnings	Total	Non-controlling interest	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2020		2,537	95,359	531	914	2,707	102,048	-	102,048
Profit for the year		-	-	-	-	6,511	6,511	-	6,511
Currency translation differences		-	-	-	2,379	-	2,379	-	2,379
Total comprehensive income for the period		-	-	-	2,379	6,511	8,890	-	8,890
Contributions by and distributions to owners								-
Issue of share capital		243	12,156	-	-	-	12,399	-	12,399
Issue costs	28	-	(441)	-	-	-	(441)	-	(441)
Share based payments		7	344	316	-	-	667	-	667
Total contributions by and distributions to owners		250	12,059	316	-	-	12,625	-	12,625
Balance as at 31 December 2020		2,787	107,418	847	3,293	9,218	123,563	-	123,563
Balance as at 1 January 2021		2,787	107,418	847	3,293	9,218	123,563	-	123,563
Profit for the year		-	-	-	-	(7,561)	(7,561)	590	(6,971)
Currency translation differences		-	-	-	(15,819)	-	(15,819)	13	(15,806)
Other comprehensive income		-	-	-	1,037	-	1,037	-	1,037
Total comprehensive income for the period		-	-	-	(14,782)	(7,561)	(22,343)	603	(21,740)
Contributions by and distributions to owners
Acquired via acquisition		-	-	-	-	-	-	9,031	9,031
Issue of share capital		3,089	258,996	-	-	-	262,085	1,260	263,345
Issue costs	28	-	(8,748)	-	-	-	(8,748)	-	(8,748)
Share based payments		503	42,231	2,322	-	-	45,056	-	45,056
Exercise of share options		-	-	(65)		65	-	-	-
Other equity adjustments		-	-	-	253	394	647	-	647
Total contributions by and distributions to owners		3,592	292,479	2,257	253	460	299,040	10,291	309,331
Balance as at 31 December 2021		6,379	399,897	3,104	(11,236)	2,116	400,260	10,894	411,154

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

		Share capital	Share premium	Share option reserve	Other reserves	Retained earnings	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2020		2,537	95,359	531	1,362	(11,995)	87,794
Profit/(Loss)		-	-	-	-	(5,806)	(5,806)
Total comprehensive income for the period		-	-	-	-	(5,806)	(5,806)
Contributions by and distributions to owners
Issue of share capital		243	12,156	-	-	-	12,399
Issue costs	28	-	(441)	-	-	-	(441)
Share based payments		7	344	316	-	-	667
Total contributions by and distributions to owners		250	12,059	316	-	-	12,625
Balance as at 31 December 2020		2,787	107,418	847	1,362	(17,801)	94,613
Balance as at 1 January 2021		2,787	107,418	847	1,362	(17,801)	94,613
Profit/(Loss)		-	-	-	-	(26,290)	(26,290)
Total comprehensive income for the period		-	-	-	-	(26,290)	(26,290)
Contributions by and distributions to owners
Issue of share capital		3,089	258,996	-	-	-	262,085
Issue costs	28	-	(8,748)	-	-	-	(8,748)
Share based payments		503	42,231	2,322	-	-	45,056
Exercise of share options		-	-	(65)	-	65	-
Total contributions by and distributions to owners		3,592	292,479	2,257	-	65	298,393
Balance as at 31 December 2021		6,379	399,897	3,104	1,362	(44,026)	366,716

CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

		Consolidated			Company
		Year ended 31 December 2021	Year ended 31 December 2020		Year ended 31 December 2021	Year ended 31 December 2020
	Note	£'000	£'000		£'000	£'000
Cash flows from operating activities
Profit/(loss)		(6,971)	6,511		(26,290)	(5,484)
Adjustments for:
Depreciation and amortisation	16 17	19,115	10,889		49	29
Impairments		2,006	-		-	-
Share option expense		2,321	316		2,321	316
Loss/(gain) on sale of PP&E		101	(373)		-	-
Net finance costs		7,360	2,739		2,705	203
Income tax expense		4,699	662		-	-
Share of earnings from joint ventures		(291)	(294)		-	-
Non-cash items		(1,103)	650		(275)	351
(Increase)/decrease in trade and other receivables		(1,178)	7,559		(1,142)	(211)
(Increase)/decrease in inventories		130	(1,008)		-	-
(Decrease)/increase in trade and other payables		9,142	2,714		2,348	(136)
Increase in provisions		(1,339)	-		-	-
Income tax paid		(4,451)	(1,894)		-	-
Net cash inflows/(outflows) from operating activities		29,541	28,471		(20,284)	(4,932)
Investing activities
Purchase of property, plant and equipment	16	(22,555)	(6,452)		(426)	(9)
Sale of property, plant and equipment		3,475	896		-	-
Purchase of intangible assets	17	(62)	(153)		-	-
Acquisition of businesses (net of cash acquired)		(350,940)	(8,383)		(379,854)	(10,117)
Financial derivative		(4,327)	(152)		(302)	(152)
Loans granted		(750)	-		(750)	-
Interest received		-	186		5	38
Net cash used in investing activities		(375,159)	(14,058)		(381,327)	(10,240)
Financing activities
Proceeds from share issue		263,344	12,399		262,085	12,399
Cost of share issue		(8,748)	(441)		(8,748)	(441)
Proceeds from borrowings		155,734	67,646		167,020	-
Cost of borrowings		(5,425)	(859)		(5,425)	-
Repayment of borrowings		(12,253)	(73,148)		-	-
Net loans with subsidiaries		-	-		(3,927)	10,810
Interest paid		(3,511)	(2,487)		(1,858)	(0.7)
Repayment of finance lease obligations		(601)	-		(21)	(23)
Net cash used in financing activities		388,540	3,110		409,126	22,744
Net increase/(decrease) in cash and cash equivalents		42,922	17,523		7,515	7,572
Cash and cash equivalents at beginning of period		27,452	9,868		11,521	3,936
Exchange losses on cash		(458)	61		2	13
Cash and cash equivalents and end of period	22	69,916	27,452		19,038	11,521

Major non-cash transactions

During the year ended 31 December 2021 there were share based payments of £42.7 million as part of the Nordkalk acquisition. The remainder of non-cash movements are not considered material.

NOTES TO THE FINANCIAL STATEMENTS

1.  General Information

The principal activity of SigmaRoc plc (the 'Company') is to make investments and/or acquire projects in the construction materials sector and through its subsidiaries (together the 'Group') is the production of high-quality aggregates and supply of value-added construction materials. The Company's shares are admitted to trading on the AIM Market of the London Stock Exchange ('AIM'). The Company is incorporated and domiciled in the United Kingdom.

The address of its registered office is Suite 1, 15 Ingestre Place, London W1F 0DU.

2.  Accounting Policies

The principal accounting policies applied in the preparation of these Financial Statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1.  Basis of Preparing the Financial Statements

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRIC Interpretations Committee ('IFRIC IC') i n conformity with the requirements of the Companies Act 2006 . The Financial Statements have also been prepared under the historical cost convention.

The Financial Statements are presented in UK Pounds Sterling rounded to the nearest thousand.

The preparation of Financial Statements in conformity with IFRS's requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Information are disclosed in Note 4 .

a)  Changes in Accounting Policy

i)  New standards and amendments adopted by the Group

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 31 December 2021 but did not result in any material changes to the financial statements of the Group or Company.

ii) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

Standard	Impact on initial application	Effective date
IFRS 3	Reference to Conceptual Framework	1 January 2022
IAS 37	Onerous contracts	1 January 2022
IAS 16	Proceeds before intended use	1 January 2022
Annual improvements	2018-2020 Cycle	1 January 2022
IAS 8	Accounting estimates	1 January 2023
IAS 1	Classification of Liabilities as Current or Non-Current.	1 January 2023

The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group's results or shareholders' funds

2.2.  Basis of Consolidation

The Consolidated Financial Statements consolidate the Financial Statements of the Company and the accounts of all of its subsidiary undertakings for all periods presented.

Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Investments in subsidiaries are accounted for at cost less impairment.

Associates are entities over which the Group has significant influence but not control over the financial and operating policies. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in reserves is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.

Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

Where considered appropriate, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between Group enterprises are eliminated on consolidation.

CDH, B-Mix, Stone and GduH use Belgian GAAP rules to prepare and report their financial statements. The Group reports using IFRS standards and in order to comply with the Group's reporting standards, management of CDH and B-Mix processed several adjustments to ensure the financial information included at a Group level complies with IFRS. CDH and B-Mix will continue to prepare their company financial statements in line with the Belgian GAAP rules.

Nordkalk entities use local GAAP rules to prepare and report their financial statements. The Group reports using IFRS standards and in order to comply with the Group's reporting standards, management of Nordkalk processed several adjustments to ensure the financial information included at a Group level complies with IFRS. Nordkalk will continue to prepare their company financial statements in line with the local GAAP rules.

The Employee Benefit Trust is considered to be a special purpose entity in which the substance of the relationship is that of control by the group in order that the group may benefit from its control. The assets held by the trust are consolidated into the group

2.3.  Going Concern

Whilst COVID-19 is now endemic and is expected to have less of an impact in the future years, it still bears uncertainty. The executive management team believe that the Group has a sufficiently robust balance sheet to endure any further uncertainty around COVID-19.

The Financial Statements have been prepared on a going concern basis. The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Financial Statements.

2.4.  Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

2.5.  Foreign Currencies

a)  Functional and Presentation Currency

Items included in the Financial Statements are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The Financial Statements are presented in Pounds Sterling, rounded to the nearest £000's, which is the Group's functional currency.

b)  Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement.  Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Income Statement within 'finance income or costs. All other foreign exchange gains and losses are presented in the Income Statement within 'Other net gains/(losses)'.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets measured at fair value, such as equities classified as available for sale, are included in other comprehensive income.

c)  Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· assets and liabilities for each period end date presented are translated at the period-end closing rate;

· income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

· all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.

2.6.  Intangible Assets

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred and the acquisition date fair value of any previous equity interest in the acquire over the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquire.  If the total of consideration transferred, non-controlling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the Income Statement.

As reported within the CEO's strategic report, a PPA was carried out to assess the fair value of the assets acquired in Harries as at the completion date. As a result of this exercise, goodwill in Harries decreased from £6.1 million to £2 million with the corresponding movement being property and land and minerals. The current accounting policies regarding the subsequent treatment intangible assets will apply to fair value uplift attributable to the PPA.

Amortisation is provided on intangible assets to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates:

Goodwill	0%
Customer relations	7% - 12.5%
Intellectual property	10 - 12%
Research and Development	10% - 20%
Branding	5% - 10%
Other intangibles	10% - 20%

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill is not amortised however impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use, discounted to present value using a pre-tax discount rate reflective of the time value of money and risks specific to the business unit. Any impairment is recognised immediately as an expense and is not subsequently reversed.

Other intangibles consist of capitalised development costs for assets produced that assist in the operations of the Group and incur revenue. Impairment reviews are performed annually. Where the benefit of the intangible ceases or has been superseded, these are written off the Income Statement.

2.7.  Property, Plant and Equipment

Property, plant and equipment is stated at cost, plus any purchase price allocation uplift, less accumulated depreciation and any accumulated impairment losses. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the Income Statement during the financial period in which they are incurred.

Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates:

Office equipment	12.5% - 50%
Land and minerals	0 - 10%
Land and Buildings	0 - 10%
Plant and machinery	4% - 33%
Furniture and vehicles	7.5% - 33.3%
Construction in progress	0%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other net gains/(losses)' in the Income Statement.

2.8.  Land, Mineral Rights and Restoration Costs

Land, quarry development costs, which include directly attributable construction overheads and mineral rights are recorded at cost plus any purchase price allocation uplift.  Land and quarry development are depreciated and amortised, respectively, using the units of production method, based on estimated recoverable tonnage.

Where the Group has a legal or constructive obligation for restoration of a site the costs of restoring this site is provided for.  The initial cost of creating this provision is capitalised within property, plant and equipment and depreciated over the life of the site.  The provisions are discounted to their present value at a rate which reflects the time value of money and risks specific to the liability.  Changes in the measurement of a previously capitalized provision are accordingly added or deducted from the value of the asset. 

The depletion of mineral rights and depreciation of restoration costs are expensed by reference to the quarry activity during the period and remaining estimated amounts of mineral to be recovered over the expected life of the operation.

The process of removing overburden and other mine waste materials to access mineral deposits is referred to as stripping.

There are two types of stripping activity:

· Development stripping is the initial overburden removal during the development phase to obtain access to a mineral deposit that will be commercially produced.

· Production stripping relates to overburden removal during the normal course of production activities and commences after the first saleable minerals have been extracted from the component.

Development stripping costs are capitalised as a development stripping asset when:

· It is probable that future economic benefits associated with the asset will flow to the entity; and

· The costs can be measured reliably.

Production stripping can give rise to two benefits, the extraction of ore in the current period and improved access to the ore body component in future periods. To the extent that the benefit is the extraction of ore stripping costs are recognised as an inventory cost. To the extent that the benefit is improved access to future ore, stripping costs are recognised as a production stripping asset if the following criteria are met:

· It is probable that the future economic benefit (improved access to ore) will flow to the entity;

· The component of the ore body for which access has been improved can be identified; and

· The costs relating to the stripping activity can be measured reliably.

The development and production stripping assets are depreciated in accordance with units of production based on the proven and probable reserves of the relevant components. Stripping assets are classified as other minerals assets in property, plant and equipment.

2.9.  Financial Assets

Classification

The Group's financial assets consist of loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i)  Financial Assets at Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held for trading.  A financial asset is classified in this category if acquired principally for the purpose of selling in the short term.  Derivatives are also categorised as held for trading unless they are designated as hedges.

Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current. 

(ii)  Financial Assets at Fair Value through other comprehensive income

A financial asset is classified and subsequently measured at fair value through other comprehensive income if it meets the SPPI criterion and is managed in a business model in which assets are held both for sale and to collect contractual cash flows, or if an investment in an equity instrument is elected to be measured at fair value through other comprehensive income. Derivatives eligible for hedge accounting are classified as financial assets at fair value through other comprehensive income.

(iii)  Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.  They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents at the year-end.

Recognition and Measurement

Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchasing or selling the asset.  Financial assets carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Income Statement.  Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership.

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Income Statement within "Other (Losses)/Gains" in the period in which they arise.

Impairment of Financial Assets

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the assets (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

· significant financial difficulty of the issuer or obligor;

· a breach of contract, such as a default or delinquency in interest or principal repayments;

· the Group, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that the lender would not otherwise consider; and

· it becomes probable that the borrower will enter bankruptcy or another financial reorganisation.

The Group first assesses whether objective evidence of impairment exists.

The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced and the loss is recognised in the Income Statement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Income Statement.

2.10.  Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Weighted average cost is used to determine the cost of ordinarily interchangeable items.

2.11.  Trade Receivables

Trade receivables are amounts due from third parties in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables - factoring

The carrying amounts of the trade receivables excludes receivables which are subject to a factoring arrangement. Under this arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash without recourse. Therefore, it doesn't recognise the transferred assets in their entirety in its balance sheet.

The value of factored receivables at each year end are as follows:

	31 December 2021	31 December 2020
	£'000	£'000
Total factoring	2,960	-

2.12.  Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and in hand and are subject to an insignificant risk of changes in value.

2.13.  Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.14.  Reserves

Share Premium - the reserve for shares issued above the nominal value. This also includes the cost of share issues that occurred during the year.

Retained Earnings - the retained earnings reserve includes all current and prior periods retained profit and losses.

Share Option Reserve - represents share options awarded by the Company.

Other Reserves comprise the following:

Capital Redemption Reserve - the capital redemption reserve is the amount equivalent to the nominal value of shares redeemed by the Group.

Foreign Currency Translation Reserve - represents the translation differences arising from translating the financial statement items from functional currency to presentational currency.

Deferred Shares - are shares that effectively do not have any rights or entitlements.

Hedging Reserve - includes derivative instruments used for cash-flow hedging.

Fair-value Reserve - represents the changes of values in certain assets.

2.15.  Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.16.  Provisions

The Group provides for the costs of restoring a site where a legal or constructive obligation exists. The estimated future costs for known restoration requirements are determined on a site-by-site basis and are calculated based on the present value of estimated future costs.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material). The increase in provisions due to the passage of time is included in the Consolidated Statement of Profit or Loss and Comprehensive Loss.

2.17.  Borrowings

Bank and Other Borrowings

Interest-bearing bank loans and overdrafts and other loans are recognised initially at fair value less attributable transaction costs. All borrowings are subsequently stated at amortised cost with the difference between initial net proceeds and redemption value recognised in the Income Statement over the period to redemption on an effective interest basis.

2.18.  Taxation

Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.19.  Non-Underlying Items

Non-underlying items are a non IFRS measure, but the Group have disclosed these separately in the financial statements, where it is necessary to do so to provide further understanding of the financial performance of the Group.  They are items that are  not expected to be recurring or do not relate to the ongoing operations of the Group's business and non-cash items which distort the underlying performance of the business.

2.20.  Revenue Recognition

Group revenue arises from the sale of goods and contracting services. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and value added taxes. The Group recognises revenue in accordance with IFRS 15, identifying performance obligations within its contracts with customers, determining the transaction price applicable to each of these performance obligations and selecting an appropriate method for the timing of revenue recognition, reflecting the substance of the performance obligation at either a point in time or over time.

Sale of goods

The majority of the Group's revenue is derived from the sale of physical goods to customers. Depending on whether the goods are delivered to or collected by the customer, the contract contains either one performance obligation which is satisfied at the point of collection, or two performance obligations which are satisfied simultaneously at the point of delivery. The performance obligation of products sold are transferred according to the specific terms that have been formally agreed with the customer, generally upon delivery when the bill of lading is signed as evidence that they have accepted the product delivered to them.

The transaction price for this revenue is the amount which can be invoiced to the customer once the performance obligations are fulfilled, reduced to reflect provisions recognised for returns, trade discounts and rebates. The Group does not routinely offer discounts or volume rebates, but where it does the variable element of revenue is based on the most likely amount of consideration that the Group believes it will receive. This value excludes items collected on behalf of third parties, such as sales and value added taxes.

For all sales of goods, revenue is recognised at a point in time, being the point that the goods are transferred to the customer.

Contracting services

The majority of contracting services revenue arises from contract surfacing work, which typically comprises short-term contracts with a performance obligation to supply and lay product. Other contracting services revenue can contain more than one performance obligation dependent on the nature of the contract.

The transaction price is calculated as consideration specified by the contract, adjusted to reflect provisions recognised for returns, remedial work arising in the normal course of business, trade discounts and rebates.

Where the contract provides for elements of variable consideration, these values are included in the calculation of the transaction price only to the extent that it is 'highly probable' that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. Where the transaction price is allocated between multiple performance obligations on other contracts, this typically reflects the allocation of value to each performance obligation agreed with the end customer, unless this does not reflect the economic substance of the transaction.

As contracting services performance obligations are satisfied over time, revenue is recognised over time. Revenue is recognised on an output basis, being volume of product laid for contract surfacing.

2.21.  Finance Income

Interest income is recognised using the effective interest method.

2.22.  Employee Benefits - Defined contribution plans

The Group maintains defined contribution plans for which the Group pays fixed contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis and will have no legal or constructive obligation to pay further amounts. The Group's contributions to defined contribution plans are charged to the Income Statement in the period to which the contributions relate.

2.23.  Employee Benefits - Defined benefit plans

The Group's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of the future benefit that employees have earned in the current and prior periods, discounting the amount and deducting the fair value of any plan assets.

Defined benefit obligations are calculated annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The Group determines the net interest expense (income) for the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense relating to defined benefit plans are recognised in profit or loss in net financial items.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on the curtailment is recognised immediately in the profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

2.24.  Share Based Payments

The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third-party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

· including any market performance conditions;

· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

· including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

2.25.  Discontinued Operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

· represents a separate major line of business or geographic area of operations;

· is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or

· is a subsidiary acquired exclusively with a view to re-sale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. The Group operates several business units which are constantly reviewed to ensure profitability. During 2019 it was determined that the flagging & paving division at CCP's Bury site was loss making and therefore it was decided that the operations at this site be discontinued. For further information, refer to note 14 .

2.26.  Leases

The Group leases certain plant and equipment. Leases of plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases under IFRS 16.  Finance leases are capitalised on the lease's commencement at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Other leases are either small in value or cover a period of less than 12 months.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in long-term borrowings. The interest element of the finance cost is charged to the Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Assets obtained under finance leases are depreciated over their useful lives. The lease liabilities are shown in note 24 .

Rent payable under operating leases on which the short term exemption has been taken, less any lease incentives received, is charged to the income statement on a straight-line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

3.  Financial Risk Management

3.1.  Financial Risk Factors

The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the UK based management team under policies approved by the Board of Directors.

a)  Market Risk

The Group is exposed to market risk, primarily relating to interest rate, foreign exchange and commodity prices. The Group has not sensitised the figures for fluctuations in interest rates, foreign exchange or commodity prices as the Directors are of the opinion that these fluctuations would not have a significant impact on the Financial Statements at the present time. The Directors will continue to assess the effect of movements in market risks on the Group's financial operations and initiate suitable risk management measures where necessary.

b)  Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises from cash and cash equivalents, derivative financial instruments and, principally, from the Group's receivables from customers.

Management monitors the exposure to credit risk on an ongoing basis and have credit insurance at a number of its subsidiaries. The Nordkalk entities don't hold credit insurance as they have a stable customer base with minimal credit losses. No credit limits were exceeded during the period, and management does not expect any losses from non-performance by these counterparties.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	31 December 2021	31 December 2020
	£'000	£'000
Trade and other receivables	78,013	20,364
Cash and cash equivalents	69,916	27,452
	147,929	47,816

Credit risk associated with cash balances is managed and limited by transacting with financial institutions with high-quality credit ratings.

Trade and other receivables

The Group's exposure to credit risk stems mainly from the individual characteristics of each customer. However, management also considers the factors that could influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Group has established a credit policy under which each new customer is analysed individually for creditworthiness, before the Group's standard payment and delivery terms and conditions are offered to the customer. The Group's review includes external ratings, when available, and in some cases bank references.

Most of the Group's customers have been trading with the Group for years, and no major credit losses have occurred with these customers. Credit risk is monitored by grouping customers according to their credit characteristics, including whether they are individuals or legal entities and whether they are wholesale, retail or end-user customers, as well as by geographic location, industry and the existence of previous financial difficulties.

The maximum exposure to credit risk for trade and other receivables by reportable segment, was:

	31 December 2021	31 December 2020
	£'000	£'000
United Kingdom	15,433	11,397
Channel Islands	3,298	3,059
Belgium	9,103	5,887
Northern Europe	50,179	-
	78,013	20,343

Impairment

At the reporting date the ageing of the trade receivables that were not impaired, were as follows.

	31 December 2021	31 December 2020
	£'000	£'000
Total trade receivables	66,166	18,074
Not overdue	47,345	9,314
Overdue 1 - 30 days	14,211	6,272
Overdue 31 - 60 days	1,996	786
Overdue 61 - 90 days	815	480
More than 90 days	1,799	1,222
Impairment loss recognised	(182)	(63)

Provisions for impairment of trade and other receivables are calculated on a lifetime expected loss model in line with the simplified approach available under IFRS 9 for Trade Receivables. The key inputs in determining the level of provision are the historical level of bad debts experienced by the Group and ageing of outstanding amounts. Movements during the year were as follows:

	31 December 2021	31 December 2020
	£'000	£'000
At January 1	763	50
Amounts arising from business combinations	571	510
Charged to the Consolidated income statement during the year	182	63
Movement in provision	(456)	140
	1,060	763

Derivatives

Subsidiary currency risks are hedged by the parent or ultimate parent acting as counterparty in currency forward deals. External currency hedging is performed by finance and treasury functions as appropriate. In such deals, the counterparty is a bank or financial institution with a rating at least Baa3 from Moody's rating agency. A comparable credit rating from a reputable credit rating agency is acceptable. Exceptions may be granted on an individual basis in rare cases where a bank is chosen for geographical reasons, but does not fulfil the stipulated rating criteria.

Items hedged against are CO₂ emission rights, forecast energy consumption, loans in foreign currency and forecast earnings.

c)  Currency Risk

Following the Nordkalk acquisition, the Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated and the respective functional currencies of Group companies. The functional currencies of Group companies are primarily the Pound, the Euro, the Polish Zlothy (PLN) and the Swedish Krona (SEK). The currencies in which these transactions are primarily denominated are GBP, EUR, PLN and SEK. Additional exposures may arise from purchase of fuel in USD.

At any point in time, the Group hedges on average 60 to 100 per cent of its estimated foreign currency exposure in respect of forecast sales and purchases over the following 12-18 months. The Group uses forward exchange contracts to hedge its currency risk, with a maturity of up to 12 months from the reporting date.

Borrowings are, with a few exceptions, denominated in the subsidiaries domestic currencies.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group's policy is to ensure that its net exposure remains at an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Exposure to currency risk

Currency risk sensitivity to a +/- 10 per cent change in the exchange rate is shown for the net currency position per currency. The summary of quantitative data relating to the Group's exposure to currency risk as reported to the Group management is as follows.

2021

GBP thousand	EUR	SEK	USD	PLN
Gross exposure	35,344	43,607	(4,660)	3,787
Hedged	(25,000)	(39,961)	5,260	(9,317)
Net exposure	10,344	3,646	600	(5,530)
Sensitivity analysis (+/- 10%)	1,034	365	60	(553)

d)  Liquidity Risk

The Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance operations owing to the continued support of the lenders and a history of successful capital raises. Controls over expenditure are carefully managed.

2021	1-12 months	1-2 years	2-5 years	More than 5 years
Contractual cash flows	£'000	£'000	£'000	£'000
Non-derivative financial liabilities
Loans	13,302	20,073	171,936	-
Trade payables	98,182	761	480	3,190
	111,484	20,834	172,416	3,190
Derivative financial liabilities
Forward exchange contracts used for hedging	608	-	-	-
Electricity hedges	129	-	-	-
	737	-	-	-

The outflows disclosed in the above tables represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposed and which are not usually closed out before contractual maturity.

The interest payments on the variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change in line with changes in market interest rates. The future cash flows from derivative instruments may differ from the amount in the above table as interest rates and exchange rates change. With the exception of these financial liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

3.2.  Capital Risk Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its construction material investment activities, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.

The Group defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned operational activities and the Company may issue new shares in order to raise further funds from time to time.

The gearing ratio at 31 December 2021 is as follows:

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Total borrowings (Note 24 )	233,923	71,300
Less: Cash and cash equivalents (Note 22 )	(69,916)	(27,452)
Net debt	164,007	43,848
Total equity	411,154	123,563
Total capital	575,161	167,411
Gearing ratio	0.29	0.26

4.  Critical Accounting Estimates

The preparation of the Financial Statements, in conformity with IFRSs, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

a)  Land and Mineral Reserves

The determination of fair values of land and mineral reserves are carried out by appropriately qualified persons in accordance with the Appraisal and Valuation standards published by the Royal Institution of Chartered Surveyors. The estimation of recoverable reserves is based upon factors such as estimates of commodity prices, future capital requirements and production costs along with geological assumptions and judgements.

The PPAs included the revaluation of land and minerals based on the estimated remaining reserves within St John's, Les Vardes, Aberdo, Carrières du Hainaut and Harries quarries. These are then valued based on the estimated remaining life of the mines and the net present value for the price per tonnage.

b)  Estimated Impairment of Goodwill

The determination of fair values of assets acquired and liabilities assumed in a business combination involves the use of estimates and assumptions; such as discount rates used and valuation models applied as well as goodwill allocation.

Goodwill has a carrying value of £293 million as at 31 December 2021 (31 December 2020: £39.9 million). The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.6 to the Financial Statements.

Management has concluded that an impairment charge was not necessary to the carrying value of goodwill for the period ended 31 December 2021 (31 December 2020: £nil). See Note 2.6 to the Financial Statements.

c)  Restoration Provision

The Group's provision for restoration costs has a carrying value at 31 December 2021 of £4.3 million (31 December 2020: £0.9 million) and relate to the removal of the plant and equipment held at quarries in the Channel Islands, United Kingdom and Northern Europe. The cost of removal was determined by management for the removal and disposal of the machinery at the point of which the reserves are no longer available for business use.

The restoration provision is a commitment to restore the site to a safe and secure environment. The provisions are reviewed annually. 

d)  Fair Value of Share Options

The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration packages. Certain warrants have also been issued to suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 29 to the Financial Statements.

e)  Valuation and timing of deferred consideration

As part of the acquisition of Harries, the Group has agreed to pay royalty payments over the next 10 years with a minimum total value of £10m. The estimated present value of these payments is £4.8m. In determining this value, management must make critical estimates as to the timing, value and cost of money of these payments.

f)  Recognition of deferred tax assets

Uncertainty exists related to the availability of future taxable profit against which tax losses carried forward can be used, however deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies. Further information on income taxes is disclosed in note 15.

g)  Defined benefit obligations - actuarial assumptions

The present value of the pension obligations is subject to actuarial assumptions used by actuaries to calculate these obligations. Actuarial assumptions include the discount rate, the annual rate of increase in future compensation levels and inflation rate. Further details on assumptions used are disclosed in note 26 .

h)  Fair value of financial instruments

The fair values of financial instruments that cannot be determined based on quoted market prices and rates are established using different valuation techniques. The Group uses judgement to select methods and make assumptions that are mainly based on market conditions existing at the end of the reporting period. Factors regarding valuation techniques and their assumptions could affect the reported fair values.

5.  Dividends

No dividend has been declared or paid by the Company during the year ended 31 December 2021 (2020: nil).

6.  Segment Information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the periods presented the Group had interests in four key geographical segments, being the United Kingdom, Channel Islands, Belgium and Northern Europe. The Northern Europe segment has been established with the acquisition of Nordkalk. Activities in the United Kingdom, Channel Islands, Belgium and Northern Europe relate to the production and sale of construction material products and services.

	31 December 2021
	United Kingdom		Channel Islands		Belgium		Northern Europe	Total
	£'000		£'000		£'000		£'000	£'000
Revenue	74,417		28,946		72,668		95,956	271,987
Profit from operations per reportable segment	14,275		9,819		20,050		17,775	61,919
Additions to non-current assets	(5,007)		(1,520)		10,611		378,174	382,258
Reportable segment assets	117,086		47,273		109,386		495,570	769,315
Reportable segment liabilities	235,443		5,471		27,714		89,533	358,161

	31 December 2020
	United Kingdom	Channel Islands	Belgium	Total
	£'000	£'000	£'000	£'000
Revenue	46,790	27,325	50,116	124,231
Profit from operations per reportable segment	10,017	9,230	14,956	34,203
Additions to non-current assets	32,030	(1,891)	371	30,510
Reportable segment assets	107,559	49,214	100,451	257,224
Reportable segment liabilities	76,031	5,369	52,261	133,661

7.  Revenue

		Consolidated
	31 December 2021		31 December 2020
	£'000		£'000
Upstream products	44,190		13,334
Value added products	198,107		105,428
Value added services	24,064		3,921
Other	5,626		1,548
	271,987		124,231

Upstream products revenue relates to the sale of aggregates and cement. Value added products is the sale of finished goods that have undertaken a manufacturing process within each of the subsidiaries. Value added services consists of the transportation, installation and contracting services provided.

All revenues from upstream and value added products relate to products for which revenue is recognised at a point in time as the product is transferred to the customer. Value added services revenues are accounted for as products and services for which revenue is recognised over time.

Whilst the Group has contract revenue, this amount is not deemed to be material under IFRS 15

8.  Expenses by Nature

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Cost of sales
Changes in inventories of finished goods and work in progress	10,854	(1,758)
Raw materials & production	75,452	27,741
Distribution & selling expenses	18,622	6,541
Employees & contractors	48,698	29,508
Maintenance expense	12,556	4,865
Plant hire expense	5,374	3,079
Depreciation & amortisation expense	17,156	9,365
Other costs of sale	21,356	10,687
Total cost of sales	210,068	90,028
Administrative expenses
Operational admin expenses	30,175	17,270
Corporate admin expenses	27,351	7,330
Total administrative expenses	57,526	24,600

Corporate administrative expenses include £25.7 million of non-underlying expenses (refer to note 11 ).

During the year the Group (including its overseas subsidiaries) obtained the following services from the Company's auditors and its associates:

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Fees payable to the Company's auditor and its associates for the audit of the Company and Consolidated Financial Statements	360	194
Fees payable to the Company's auditor and its associates for tax services	-	9
Fees paid or payable to the Company's auditor and its associates for due diligence and transactional services associated with the readmission of the Company trading on AIM	300	24
Fees paid to the Company's auditor for other services	-	-
	660	227

9.  Employee Benefits Expense

	Consolidated			Company
	31 December 2021	31 December 2020		31 December 2021	31 December 2020
Staff costs (excluding directors)	£'000	£'000		£'000	£'000
Salaries and wages	54,071	31,639		2,104	1,424
Post-employment benefits	278	114		80	52
Social security contributions and similar taxes	1,679	432		386	212
Other employment costs	8,436	7,939		17	65
	64,464	40,124		2,587	1,753

	Consolidated			Company
	31 December 2021	31 December 2020		31 December 2021	31 December 2020
Average number of FTE employees by function	#	#		#	#
Management	85	58		5	5
Operations	1,371	744		-	-
Administration	409	140		4	2
	1,865	942		9	7

10.  Directors' Remuneration

		31 December 2021
	Directors' fees	Bonus	Taxable benefits	Pension benefits	Options issued (3)	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Executive Directors
David Barrett	358	469	14	-	61	902
Garth Palmer (1)	151	180	5	13	52	401
Max Vermorken	456	594	14	30	129	1,223
Non-executive Directors
Timothy Hall	43	-	-	-	22	65
Dean Masefield (2)	120	-	6	8	-	134
Simon Chisholm	43	-	-	4	-	47
Jacques Emsens	43	-	-	-	-	43
	1,214	1,243	39	55	264	2,815

		31 December 2020
	Directors' fees	Bonus	Taxable benefits	Pension benefits	Options issued (3)	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Executive Directors
David Barrett	305	280	14	-	46	645
Dean Masefield	125	90	6	13	-	234
Max Vermorken	395	380	13	40	110	938
Non-executive Directors
Dominic Traynor	40	-	-	5	5	50
Patrick Dolberg	40	-	-	-	4	44
Timothy Hall	40	-	-	-	27	67
Garth Palmer	55	25	-	5	30	115
Simon Chisholm	28	-	-	3	-	31
Jacques Emsens	28	-	-	-	-	28
	1,056	775	33	66	222	2,152

(1)  Garth Palmer was reappointed as CFO on 31 August 2021. His bonus was performance based for the period 31 August 2021 to 31 December 2021. 

(2)  Resigned on 31 August 2021.

(3)  Options issued relate to options granted in the 2019 financial year and vesting in the 2021/2020 financial years.

The bonuses earned in the year by the Directors reflect the performance of the business, were based on industry standard criteria taking into account external market data, were recommended by the Remuneration Committee and approved by the Board.

Details of fees paid to companies and partnerships of which the Directors are related have been disclosed in Note 36 .

11.  Non-underlying Items

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Acquisition related expenses	20,125	1,372
Amortisation and remeasurement of acquired assets	1,888	1,409
Restructuring expenses	3,118	803
Equity & debt funding expenses	-	145
Discontinued operations	169	100
Share option expense	2,321	316
Unwinding of discount on deferred consideration	825	322
Net other non-underlying expenses & gains	614	512
	29,060	4,979

Under IFRS 3 - Business Combinations, acquisition costs have been expensed as incurred. Additionally, the Group incurred costs associated with obtaining debt financing, including advisory fees to restructure the Group to satisfy lender requirements.

Acquisition related expenses include costs relating to the due diligence of prospective pipeline acquisitions, stamp duty on completed acquisitions, warranty & indemnity insurance and other direct costs associated with merger & acquisition activity. During the year the Group acquired B-Mix, Nordkalk and undertook due diligence on various other prospective acquisitions including Johnston Quarry Group which was completed post year-end.

Amortisation and remeasurement of acquired assets are non-cash items which distort the underlying performance of the businesses acquired. Amortisation of acquired assets arise from certain fair value uplifts resulting from the PPA. Remeasurement of acquired assets arises from ensuring assets from acquisitions are depreciated in line with Group policy. 

Restructuring expenses include advisory fees, redundancy costs and moving expenses. During the year these primarily related to the SigmaPPG and South Wales platform.

Equity & debt funding expenses relates to consulting fees for debt refinance.

Share option expense is the fair value of the share options issued during the year, refer to note 29 more information.

Unwinding of discount on deferred consideration is a non-cash adjustment relating to deferred consideration arising on acquisitions.

Discontinued operations include the trading expenses, stock adjustments and redundancies incurred at the Bury site for the period from January 2021 to December 2021. Refer to note 14 for more information.

Net other non-underlying expenses and gains include COVID-19 related costs, legal fees and other associated costs.

12.  Net Finance (Expense)/Income

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Other interest expense	(5,029)	(2,291)
Other finance expense	(1,145)	(126)
Unwinding of discount on deferred consideration	(825)	(322)
	(6,999)	(2,739)

13.  Other Net Gains/(Losses)

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Gain/(losses) on disposal of property, plant and equipment	(101)	373
Other gain/(loss)	730	(252)
Gain/(loss) on call options	632	(38)
Impairment	(2,006)	-
Share of earnings from associates	-	294
Share of earnings from joint ventures	291	-
Loss on discontinued operations	-	(101)
Forex movement	788	33
	334	309

For more information on the loss on discontinued operations, please refer to note 14.

14.  Discontinued Operations

From due diligence undertaken as part of the acquisition of CCP in January 2019, doubts existed over the viability of the flagging & paving division at its site in Bury. After a detailed review it was determined that the business unit was loss making and it was decided that the operations at this site be discontinued effective from 1 February 2019.

Financial information relating to the discontinued operation for the period is set out below.

Income statement	31 December 2021 £'000	31 December 2020 £'000
Revenue	-	-
Cost of sales	-	(150)
Gross profit	-	(150)
Administration	(169)	(56)
Other expenses	-	106
Loss from discontinued operation	(169)	(100)
Basic earnings per share attributable to owners of the parent (expressed in pence per share)	(0.04)	(0.04)

Cash movement	31 December 2021 £'000	31 December 2020 £'000
Net cash outflow from operating activities	(62)	(94)
Net cash inflow from investing activities	-	288
Net cash inflow from financing activities	-	-
Net increase / (decrease) in cash generated by the subsidiary	(62)	194

15.  Taxation

	Consolidated
	31 December 2021	31 December 2020
Tax recognised in profit or loss	£'000	£'000
Current tax	(4,529)	(790)
Deferred tax	(170)	128
Total tax charge in the Income Statement	(4,699)	(662)

The tax on the Group's profit/(loss) before taxation differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits/(losses) of the consolidated entities as follows:

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Profit/(loss) on ordinary activities before tax	(2,272)	7,096
Tax on profit on ordinary activities at standard CT rate	494	1,784
Effects of:
Expenditure not deductible for tax purposes	4,874	1,241
Deferred tax not recognised	1,268	(1,859)
Remeasurement of deferred tax for changes in tax rates	(120)	(436)
Income not taxable for tax purposes	(903)	(659)
Prior year adjustments	(864)	-
Depreciation in excess of/(less than) capital allowances	(61)	613
Tax losses	11	(22)
Tax charge	4,699	662

The weighted average applicable tax rate of 21.74% (2020: 25.14%) used is a combination of the standard rate of corporation tax rate for entities in the United Kingdom of 19% (2020: 19%), 20% on quarrying of minerals and rental property (2020: 20%) in Jersey and Guernsey, 25% (2020: 25%) in Belgium, 20% in Finland, 20.6% in Sweden, 19% in Poland and 20% in Estonia.

Deferred Tax Asset	Tax losses	Temporary timing differences	Total
At 1 January 2021	402	1,010	1,412
Acquisition of subsidiary	-	2,530	2,530
Charged/(credited) directly to equity	(402)	(411)	(813)
At 31 December 2021	-	3,129	3,129

Deferred Tax Liability	Tax losses	Temporary timing differences	Total
At 1 January 2021	(128)	3,999	3,871
Acquisition of subsidiary	-	2,070	2,070
Charged/(credited) directly to income statement	-	(751)	(751)
At 31 December 2021	(128)	5,318	5,190

Deferred income tax assets of £3.1 million (2020: £1.4 million) are recognised to the extent that the realisation of related tax benefits through future taxable profits is probable.  Deferred tax liabilities of £5.2 million (2020: 3.9 million) are recognised in full.  

The UK Government announced the corporate tax rate from 1 April 2023 will be 25%. The UK deferred tax closing balances have been calculated using the new rate as it is assumed these are likely to become realised after the change in tax rates.

16.  Property, Plant and Equipment

	Consolidated
	Office Equipment	Land and minerals	Land and buildings	Plant and machinery	Furniture and vehicles	Construction in progress	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
As at 1 January 2020	3,692	49,764	38,373	77,111	17,677	846	187,463
Acquired through acquisition	303	15,085	1,139	17,420	6,503	-	40,450
Transfer between classes	-	-	-	133	-	(133)	-
Fair value adjustment	-	35,954	5,322	(48)	-	-	41,228
Additions	67	2,937	570	1,473	871	534	6,452
Disposals	-	(192)	-	(581)	(780)	-	(1,553)
Forex	163	831	545	2,990	266	-	4,795
As at 31 December 2020	4,225	104,379	45,949	98,498	24,537	1,247	278,835
As at 1 January 2021	4,225	104,379	45,949	98,498	24,537	1,247	278,835
Acquired through acquisition	210	81,482	70,622	193,425	3,813	10,504	360,056
Transfer between classes	-	-	1,149	(122)	342	(1,369)	-
Fair value adjustment	-	3,433	1,539	-	-	-	4,972
Additions	364	3,324	3,768	9,944	2,294	2,861	22,555
Disposals	-	(190)	(592)	(7,764)	(6,008)	-	(14,554)
Forex	(206)	(2,461)	(1,202)	(4,063)	(383)	-	(8,315)
As at 31 December 2021	4,593	189,967	121,233	289,918	24,595	13,243	643,549
Depreciation
As at 1 January 2020	3,221	8,590	22,689	62,619	11,626	-	108,745
Acquired through acquisition	198	1,164	39	8,062	3,246	-	12,709
Charge for the year	250	1579	1,905	3,899	2,404	-	10,037
Disposals	-	-	-	(497)	(531)	-	(1,028)
Forex	148	40	451	2,654	286	-	3,579
As at 31 December 2020	3,817	11,373	25,084	76,737	17,031	-	134,042
As at 1 January 2021	3,817	11,373	25,084	76,737	17,031	-	134,042
Transfer between classes	-	-	-	(309)	309	-	-
Acquired through acquisition	150	57,487	40,927	149,510	3,114	-	251,188
Charge for the year	267	2,396	3,423	10,038	1,635	-	17,759
Disposals	-	-	(592)	(7,298)	(3,087)	-	(10,977)
Impairment	-	-	380	684	-	-	1,064
Forex	(194)	(1,082)	(829)	(3,088)	(770)	-	(5,963)
As at 31 December 2021	4,040	70,174	68,393	226,274	18,232	-	387,113
Net book value
As at 31 December 2020	408	93,006	20,865	21,761	7,506	1,247	144,793
As at 31 December 2021	553	119,793	52,840	63,644	6,363	13,243	256,436

The depreciation on the right of use assets for the year ended 31 December 2021 was £6 million (2020: £1.4 million) and the net book value is £16.5 million (2020: £5.5 million).

		Company
	Office Equipment		Land & Buildings	Motor Vehicle	Total
	£'000		£'000	£'000	£'000
Cost
As at 1 January 2020	21		54	25	100
Additions	9		-	-	9
Disposals	-		-	-	-
Forex	-		-	-	-
As at 31 December 2020	30		54	25	109
As at 1 January 2021	30		54	25	109
Additions	215		211	-	426
Disposals	-		-	-	-
Forex	-		-	-	-
As at 31 December 2021	245		265	25	535
Depreciation
As at 1 January 2020	14		14	-	28
Charge for the year	8		13	8	29
Disposals	-		-	-	-
As at 31 December 2020	22		27	8	57
As at 1 January 2021	22		27	8	57
Charge for the year	28		13	8	49
Disposals	-		-	-	-
As at 31 December 2021	50		40	16	106
Net book value
As at 31 December 2020	8		27	17	52
As at 31 December 2021	195		225	9	429

The depreciation on the right of use assets for the year ended 31 December 2021 was £13,314 (2020: £13,313) and the net book value is £225,459 (2020: £27,737).

17.  Intangible Assets

								Consolidated
		Goodwill	Customer Relations	Intellectual property			Research & Development		Branding	Other Intangibles	Total
		£'000	£'000	£'000			£'000		£'000	£'000	£'000
Cost & net book value
As at 1 January 2020	73,005		3,850	556			1,167		1,266	400	80,244
Additions	-		-	-			153		-	-	153
Additions through business combination	7,887		-	-			-		-	-	7,887
Price Purchase Allocation - CDH	(43,780)		-	-			-		2,292	-	(41,488)
Amortisation	-		(517)	(85)			(88)		(160)	-	(850)
Forex	2,854		-	-			5		-	-	2,859
As at 31 December 2020	39,966		3,333	471			1,237		3,398	400	48,805
As at 1 January 2021	39,966		3,333	471			1,237		3,398	400	48,805
Additions	-		-	-			-		-	62	62
Additions through business combination	260,944		-	-			331		-	6,387	267,663
Price Purchase Allocation -Harries	(4,098)		-	-			-		-	-	(4,098)
Amortisation	-		(517)	(85)			(594)		(160)	-	(1,356)
Impairment	-		-	-			(400)		-	(400)	(800)
Forex	(3,374)		-	-			(3)		-	(463)	(3,840)
As at 31 December 2021	293,438		2,816	386			571		3,238	5,986	306,436

An adjustment has been made to reflect the initial accounting for the acquisition of Harries by the Company, being the elimination of the investment in Harries against the non-monetary assets acquired and recognition of goodwill. In 2020, the Company determined the fair value of the net assets acquired pursuant to the acquisition of CDH, via a Purchase Price Allocation ('PPA') exercise.  The PPA's determined a decrease of £4.1m of goodwill in Harries with the corresponding movement to uplift the value of the Land and Buildings and Land and Minerals.

It has been determined that the acquisition of Nordkalk is considered a reverse takeover under the AIM Rules definition but does not meet the requirements of the IFRS definition and therefore will be treated as a business combination under IFRS 3.

The goodwill total is made up of £254.6m for the Nordkalk platform, £21.2m for the PPG Platform, £7.6m for the Benelux platform, £5m for Dimension Stone, £2.1m for the South Wales platform and £3m for the Ronez platform.

The intangible asset classes are:

-  Goodwill is the excess of the consideration transferred and the acquisition date fair value of any previous equity interest in the acquire over the fair value of the net identifiable assets.

-  Customer relations is the value attributed to the key customer lists and relationships.

-  Intellectual property is the patents owned by the Group.

-  Research and development is the acquiring of new technical knowledge and trying to improve existing processes or products or; developing new processes or products.

-  Branding is the value attributed to the established company brand.

-  Other intangibles consist of capitalised development costs for assets produced that assist in the operations of the Group and incur revenue

Amortisation of intangible assets is included in cost of sales on the Income Statement. Development costs have been capitalised in accordance with the requirements of IAS 38 and are therefore not treated, for dividend purposes, as a realised loss.

Impairment tests for goodwill

Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual basis, or more frequently if there are indications that the goodwill may be impaired. Goodwill is allocated to groups of cash generating units according to the level at which management monitor that goodwill, which is at the level of operating segments.

The ten operating segments are considered to be Ronez in the Channel Islands, Topcrete in the UK, Poundfield in the UK, CCP in the UK, Harries in the UK, CDH in Belgium, Stone in Belgium, GduH in Belgium, B-Mix in Belgium and Nordkalk in Northern Europe.

Key assumptions

The key assumptions used in performing the impairment review are set out below:

Cash flow projections

Cash flow projections for each operating segment are derived from the annual budget approved by the Board for 2022 and the five year plan to 2026. The key assumptions on which budgets and forecasts are based include sales volumes, product mix and operating costs. These cash flows are then extrapolated forward for a further 17 years, with the total period of 20 years reflecting the long-term nature of the underlying assets. Budgeted cash flows are based on past experience and forecast future trading conditions.

Long-term growth rates

Cash flow projections are prudently based on 2 per cent and therefore provides plenty of headroom.

Discount rate

Forecast cash flows for each operating segment have been discounted at rates of 8 per cent; which was calculated by an external expert based on market participants' cost of capital and adjusted to reflect factors specific to each operating segment.

Sensitivity

The Group has applied sensitivities to assess whether any reasonable possible changes in assumptions could cause an impairment that would be material to these consolidated Financial Statements. This demonstrated that a 1% increase in the discount rate would not cause an impairment and the annual growth rate is assumed to be 2%.

The Directors have therefore concluded that no impairment to goodwill is necessary.

18.  Investment in Subsidiary Undertakings

	Company
	31 December 2021	31 December 2020
	£'000	£'000
Shares in subsidiary undertakings
At beginning of the year	120,039	94,371
Additions	315,046	25,668
Disposals	-	-
At period end	435,085	120,039
Loan to/(from) Group undertakings	119,110	(18,789)
Total	554,195	101,250

Investments in Group undertakings are stated at cost less impairment.

Details of subsidiaries at 31 December 2021 are as follows:

Name of subsidiary	Country of incorporation	Share capital held by Company	Share capital held by Group	Principal activities
SigmaFin Limited	England	£45,181,877		Holding company
Foelfach Stone Limited	England		£1	Construction materials
SigmaGsy Limited	Guernsey		£1	Shipping logistics
Ronez Limited	Jersey		£2,500,000	Construction materials
Pallot Tarmac (2002) Limited	Jersey		£2	Road contracting services
Island Aggregates Limited	Guernsey		£6,500	Waste recycling
Topcrete Limited	England		£926,828	Pre-cast concrete producer
A. Larkin (Concrete) Limited	England		£37,660	Dormant
Allen (Concrete) Limited	England		£100	Holding company
Poundfield Products (Group) Limited	England	£22,167		Holding company
Poundfield Products (Holdings) Limited	England		£651	Holding company
Poundfield Innovations Limited	England		£6,357	Patents & licencing
Poundfield Precast Limited	England		£63,568	Pre-cast concrete producer
Alfabloc Limited	England		£1	Dormant
CCP Building Products Limited	England	£50		Construction materials
Cheshire Concrete Products Limited	England		£1	Dormant
Clwyd Concrete Products Limited	England		£100	Dormant
Country Concrete Products Limited	England		£100	Dormant
CCP Trading Limited	England		£100	Dormant
CCP Aggregates Limited	England		£100,000	Construction materials
CDH Développement SA	Belgium	€23,660,763		Holding company
Carrières du Hainaut SCA	Belgium		€16,316,089	Construction materials
Granulats du Hainaut SA	Belgium		€62,000	International marketing
CDH Management 2 SPRL	Belgium		€760,000	Holding company
GDH (Holdings) Limited	England		£54,054	Construction materials
Gerald D. Harries & Sons Limited	England		£112	Construction materials
Stone Holding Company SA	Belgium		€100	Construction materials
Cuvelier Philippe SA	Belgium		€750	Construction materials
B-Mix Beton NV	Belgium		€680,600	Concrete producer
J&G Overslag en Kraanbedrijf BV	Belgium		€18,600	Concrete producer
Top Pomping NV	Belgium		€62,000	Concrete producer
Nordkalk Oy Ab	Finland		€1,000,000	Limestone quarrying and processing
Nordkalk AB	Sweden		€2,439,000	Limestone quarrying and processing
Kalkproduktion Storugns AB	Sweden		€293,000	Limestone quarrying and processing
Nordkalk AS	Estonia		€959,000	Limestone quarrying and processing
Nordkalk GmbH	Germany		€50,000	Limestone quarrying and processing
Nordkalk Sp.z o.o	Poland		€19,637,000	Limestone quarrying and processing
Suomen Karbonaatti Oy	Finland		€2,102,000	Limestone quarrying and processing
NKD Holding Oy Ab	Finland		€3,000	Holding company
Nordeka Maden A.S	Turkey		€1,020,000	Limestone quarrying and processing

Name of subsidiary	Registered office address
SigmaFin Limited	Suite 1, 15 Ingestre place, London, W1F 0DU
Foelfach Stone Limited	Suite 1, 15 Ingestre place, London, W1F 0DU
SigmaGsy Limited	Les Vardes Quarry, Route de Port Grat, St Sampson, Guernsey, GY2 4TF
Ronez Limited	Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Pallot Tarmac (2002) Limited	Ronez Quarry, La Route Du Nord, St John, Jersey, JE3 4AR
Island Aggregates Limited	Les Vardes Quarry, Route de Port Grat, St Sampson, Guernsey, GY2 4TF
Topcrete Limited	38 Willow Lane, Mitcham, Surrey, CR4 4NA
A. Larkin (Concrete) Limited	38 Willow Lane, Mitcham, Surrey, CR4 4NA
Allen (Concrete) Limited	38 Willow Lane, Mitcham, Surrey, CR4 4NA
Poundfield Products (Group) Limited	The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Products (Holdings) Limited	The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Innovations Limited	The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Poundfield Precast Limited	The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
Greenbloc Limited	The Grove, Creeting St. Peter, Ipswich, England, IP6 8QG
CCP Building Products Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Cheshire Concrete Products Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Clwyd Concrete Products Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
Country Concrete Products Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Trading Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CCP Aggregates Limited	Llay Road, Llay, Wrexham, Clwyd, LL12 0TL
CDH Développement SA	Rue de Cognebeau 245, B-7060 Soignies, Belgium
Carrières du Hainaut SCA	Rue de Cognebeau 245, B-7060 Soignies, Belgium
Granulats du Hainaut SA	Rue de Cognebeau 245, B-7060 Soignies, Belgium
CDH Management 2 SPRL	Rue de Cognebeau 245, B-7060 Soignies, Belgium
GDH (Holdings) Limited	Rowlands View, Templeton, Narbeth, SA67 8RG
Gerald D. Harries & Sons Limited	Rowlands View, Templeton, Narbeth, SA67 8RG
Stone Holding Company SA	Avenue Louise 292, BE-1050 Ixelles, Belgium
Cuvelier Philippe SA	Avenue Louise 292, BE-1050 Ixelles, Belgium
B-Mix Beton NV	Kanaalweg 110, B-3980 Tessenderlo, Belgium
J&G Overslag en Kraanbedrijf BV	Kanaalweg 110, B-3980 Tessenderlo, Belgium
Top Pomping NV	Kanaalweg 110, B-3980 Tessenderlo, Belgium
Nordkalk Oy Ab	Skräbbölentie 18, FI-21600, Parainen, Finland
Nordkalk AB	Box 901, 731 29 Köping
Kalkproduktion Storugns AB	Strugns, 620 34 Lärbro
Nordkalk AS	Läne-Viru maakond, Väike- Maarja vald, Rakke alevik, F.R Faehlmanni tee 11a, 46301
Nordkalk GmbH	Innungsstrabe 7, 21244 Buchholz in der Nordheide
Nordkalk Sp.z o.o	ul. Plac Na Groblach, nr 21, lok. Miejsc, Krakow, kod 31-101, poczta, Krakow, kraj Polska
Suomen Karbonaatti Oy	Ihalaisen teollisuusalue, 53500 Lappeenranta
NKD Holding Oy Ab	Skräbbölentie 18, 21600 Parainen
Nordeka Maden A.S	Levent MH.Cömert Sk. Yapi Kredi Blokl.c Blok no.1 c/17 Besiktas

For the year ended 31 December 2021 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 related to the following subsidiary companies:

· SigmaFin Limited

· Foelfach Stone Limited

· Topcrete Limited

· A. Larkin (Concrete) Limited

· Allen (Concrete) Limited

· Poundfield Products (Group) Limited

· Poundfield Products (Holdings) Limited

· Poundfield Innovations Limited

· Poundfield Precast Limited

· Greenbloc Limited

· CCP Building Products Limited

· Cheshire Concrete Products Limited

· Clwyd Concrete Products Limited

· Country Concrete Products Limited

· CCP Trading Limited

· CCP Aggregates Limited

· GDH (Holdings) Limited

· Gerald D. Harries & Sons Limited

Impairment review

The performance of all companies for the year ended 31 December 2021 are in line with forecasted expectations and as such there have been no indications of impairment.

19.  Investment in Equity Accounted Associates & Joint Ventures

Nordkalk has a joint venture agreement with Franzefoss Minerals AS, to build a lime kiln located in Norway which was entered into on 5 August 2004. NorFraKalk AS is the only joint agreement in which the Group participates.

The Group has one non-material local associate in Pargas, Pargas Hyreshus Ab.

	31 December 2021
	£'000
Interests in associates	524
Interest in joint venture	5,134
	5,658

					Proportion of ownership interest held
Name	Country of incorporation		31 December 2021			31 December 2020
NorFraKalk AS	Norway			50%		-

Summarised financial information

NorFraKalk AS - Cost and net book value	31 December 2021	31 December 2020
	£'000	£'000
Current assets	10,184	-
Non-current assets	6,507	-
Current liabilities	3,989	-
Non-current liabilities	2,621	-
	23,301	-

	For the period 1 September 2021 to 31 December 2021	For the period 1 January 2020 to 31 December 2020
	£'000	£'000
Revenues	5,694	-
Profit after tax from continuing operations	442	-

20.  Trade and Other Receivables

	Consolidated			Company
	31 December 2021	31 December 2020		31 December 2021	31 December 2020
	£'000	£'000		£'000	£'000
Trade receivables	66,166	18,074		1,787	877
Prepayments	3,598	1,143		346	114
Other receivables	3,490	1,126		757	7
	73,254	20,343		2,890	998
Non-current
Other receivables	4,759	21		-	-
	4,759	21		-	-

The carrying value of trade and other receivables classified as loans and receivables approximates fair value.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

		Group				Company
	31 December 2021 £'000		31 December 2020 £'000		31 December 2021 £'000		31 December 2020 £'000
UK Pounds	18,731		14,367		2,890		998
Euros	38,435		5,997		-		-
Swedish krona	14,976		-		-		-
Zlotys	5,088		-		-		-
Ukrainian Hryvnia	7		-		-		-
Turkish Lira	666		-		-		-
Russian Ruble	110		-		-		-
	78,013		20,364		2,890		998

Other classes of financial assets included within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

21.  Inventories

	Consolidated
	31 December 2021	31 December 2020
Cost and net book value	£'000	£'000
Raw materials and consumables	18,642	5,706
Finished and semi-finished goods	22,543	7,871
Work in progress	3,345	670
	44,530	14,247

The value of inventories recognised as a debit and included in cost of sales was £10.8 million (31 December 2020: (£1.7 million)).

22.  Cash and Cash Equivalents

	Consolidated			Company
	31 December 2021	31 December 2020		31 December 2021	31 December 2020
	£'000	£'000		£'000	£'000
Cash at bank and on hand	69,916	27,452		19,038	11,521
	69,916	27,452		19,038	11,521

All of the Group's cash at bank is held with institutions with a credit rating of at least A-. Exceptions may be granted on an individual basis in rare cases where a bank is chosen for geographical reasons, but does not fulfil the stipulated rating criteria.

The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:

		Group				Company
	31 December 2021 '000		31 December 2020 '000		31 December 2021 '000		31 December 2020 '000
UK Pounds	25,555		19,929		14,704		11,521
Euros	43,163		7,523		4,334		-
Swedish krona	991		-		-		-
Zlotys	17		-		-		-
Ukrainian Hryvnia	64		-		-		-
Turkish Lira	112		-		-		-
Russian Ruble	14		-		-		-
	69,916		27,452		19,038		11,521

23.  Trade and Other Payables

		Consolidated				Company
	31 December 2021		31 December 2020		31 December 2021		31 December 2020
	£'000		£'000		£'000		£'000
Current liabilities
Trade payables	55,865		16,288		984		147
Wages Payable	11,910		4,308		-		-
Accruals	19,681		6,291		3,402		1,676
VAT payable/(receivable)	3,975		2,282		(223)		(39)
Deferred consideration	1,331		13,390		730		12,389
Other payables	5,451		3,964		674		43
	98,213		46,523		5,567		14,216
Non - Current liabilities
Deferred consideration	4,401		5,100		4,401		5,100
	4,401		5,100		4,401		5,100

The carrying amounts of the Group and Company's trade and other payables are denominated in the following currencies:

		Group				Company
	31 December 2021 '000		31 December 2020 '000		31 December 2021 '000		31 December 2020 '000
UK Pounds	30,073		38,548		9,539		19,316
Euros	46,161		13,075		429		-
Swedish krona	15,924		-		-		-
Zlotys	10,336		-		-		-
Ukrainian Hryvnia	9		-		-		-
Turkish Lira	96		-		-		-
Russian Ruble	15		-		-		-
	102,614		51,623		9,968		19,316

24.  Borrowings

	Consolidated				Company
	31 December 2021	31 December 2020		31 December 2021		31 December 2020
	£'000	£'000		£'000		£'000
Non-current liabilities
Syndicated Senior Credit Facility	191,937	61,235		191,937		-
Bank Loans	73	-		-		-
Finance lease liabilities	20,189	6,453		131		22
	212,199	67,688		192,068		22
Current liabilities
Syndicated Senior Credit Facility	8,000	-		8,000		-
Finance lease liabilities	8,422	3,611		102		21
Bank Loans	5,301	-		-		-
	21,723	3,611		8,102		21

In July 2021, the Group entered into a new Syndicated Senior Credit Facility of up to £305 million (the 'Credit Facility') led by Santander UK and including several major UK and European banks. The Credit Facility, which comprises a £205 million committed term facility, a £100 million revolving facility commitment and a further £100 million accordion option. This new facility replaces all previously existing bank loans within the Group.

The Credit Facility is secured by a floating charge over the assets of SigmaFin Limited, Carrieres du Hainaut and Nordkalk and is secured by a combination of debentures, security interest agreements, pledges and floating rate charges over the assets of SigmaRoc plc, SigmaFin Limited, B-Mix, Carrieres du Hainaut and Nordkalk. Interest is charged at a rate between 1.85% and 3.35% above SONIA ('Interest Margin'), based on the calculation of the adjusted leverage ratio for the relevant period. For the period ending 31 December 2021 the Interest Margin was 2.35%.

The carrying amounts and fair value of the non-current borrowings are:

	Carrying amount and fair value
	31 December 2021	31 December 2020
	£'000	£'000
Santander term facility	191,937	61,235
Bank loans	73	-
Finance lease liabilities	20,189	10,064
	212,199	71,299

Finance Lease Liabilities

Lease liabilities are effectively secured, as the rights to the leased asset revert to the lessor in the event of default.

	Consolidated
	31 December 2021	31 December 2020
Finance lease liabilities - minimum lease payments	£'000	£'000
Not later than one year	8,037	3,612
Later than one year and no later than five years	14,643	5,823
Later than five years	3,666	629
	26,346	10,064
Future finance charges on finance lease liabilities	2,265	681
Present value of finance lease liabilities	28,611	10,745

For the year ended 31 December 2021, the total finance charges were £1 million.

The contracted and planned lease commitments were discounted using a weighted average incremental borrowing rate of 3%.

The present value of finance lease liabilities is as follows:

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
Not later than one year	8,278	3,720
Later than one year and no later than five years	15,082	5,998
Later than five years	3,776	648
Present value of finance lease liabilities	27,136	10,366

Reconciliation of liabilities arising from financing activities is as follows:

	Consolidated
	Long-term borrowings	Short-term borrowings	Lease liabilities	Liabilities arising from financing activities
	£'000	£'000	£'000	£'000
As at 1 January 2021	61,235	-	10,064	71,299
Increase/(decrease) through financing cash flows	(1,830)	(601)	607	(1,824)
Increase from refinancing	137,980	8,000	-	145,980
Cost of borrowings	(5,425)	-	-	(5,425)
Amortisation of finance arrangement fees	(784)	-	-	(784)
Increase through obtaining control of subsidiaries	834	5,903	17,940	24,677
As at 31 December 2021	192,010	13,302	28,611	233,923

25.  Provisions

	Consolidated
	31 December 2021	31 December 2020
	£'000	£'000
As at 1 January	6,160	6,937
Acquired on business combination	5,721	172
Deduction	(1,706)	(949)
	10,175	6,160

The provision total is made up of £632,011 as a restoration provision for the St John's and Les Vardes sites; £86,812 for the Aberdo site; £172,303 for quarries in Wales; and £3.5m for the Nordkalk sites which are all based on the removal costs of the plant and machinery at the sites and restoration of the land. Cost estimates in Jersey and Guernsey are not increased on an annual basis - there is no legal or planning obligation to enhance the sites through restoration. The commitment is to restore the site to a safe environment; thus the provision is reviewed on an annual basis. The estimated expiry on the quarries ranges between 5 - 35 years. 

Of the remaining amount, £1.05m is to cover the loss on the Holcim contract in CDH, £160,000 for legal fees, £1.62m for other restructuring costs in the Nordkalk entities and £3m is the provision for early retirement in Belgium, where salaried workers can qualify for early retirement based on age. The provision for early retirement consists of the estimated amount that will be paid by the employer to the "early retired workers" till the age of the full pension. Refer to note 26 for more information.

The future reclamation cost value is discounted by 7.07% (2020: 7.39%) which is the weighted average cost of capital within the Group.

26.  Retirement benefit schemes

The Group sponsors various post-employment benefit plans. These include both defined contribution and defined benefit plans as defined by IAS 19 Employee Benefits.

Defined contribution plans

For defined contribution plans outside Belgium, the Group pays contributions to publicly or privately administered pension funds or insurance contracts. Once the contributions have been paid, the Group has no further payment obligation. The contributions are expensed in the year in which they are due. For the year ended, contributions paid into defined contribution plans amounted to £220k.

Defined benefit plans

The Group has group insurance plans for some of its Belgian, Swedish and Polish employees funded through defined payments to insurance companies. The Belgian pension plans are by law subject to minimum guaranteed rates of return. In the past the minimum guaranteed rates were 3.25% on employer contributions and 3.75% on employee contributions. A law of December 2015 (enforced on 1 January 2016) modifies the minimum guaranteed rates of return applicable to the Group's Belgian pension plans. For insured plans, the rates of 3.25% on employer contributions and 3.75% on employee contributions will continue to apply to the contributions accumulated before 2016. For contributions paid on or after 1 January 2016, a variable minimum guaranteed rate of return with a floor of 1.75% applies. The Group obtained actuarial calculations for the periods reported based on the projected unit credit method.

The Swedish plan provides an old-age pension cover for plan members whereas plan members receive a lump sum payment upon retirement in the Polish plan. Both Swedish and Polish plans are based on collective labour agreements. Through its defined benefit plans, the Group is exposed to a number of risks. A decrease in bond yields will increase the plan liabilities. Some of the Group's pension obligations are linked to inflation and higher inflation will lead to higher liabilities. The majority of the plans obligations are to provide benefits for the life of the plan member, so increases in life expectancy will result in an increase in the plans liabilities.

Employee benefits amounts in the Statement of Financial Position	2021 £'000	2020 £'000
Assets	-	-
Liabilities	4,292	3,593
Net defined benefit liability at end of year	4,292	3,593

Amounts recognised in the Statement of Financial Position	2021 £'000	2020 £'000
Present value of funded defined benefit obligations	2,222	2,379
Fair value of plan assets	(2,068)	(2,214)
	154	165
Present value of unfunded defined benefit obligation	4,138	3,428
Unrecognised past service cost	-	-
Total	4,292	3,593

Amounts recognised in the Income Statement	2021 £'000	2020 £'000
Current service cost	32	128
Interest cost	26	19
Expected return on plan assets	227	(31)
Total pension expense	285	116

Changes in the present value of the defined benefit obligation	2021 £'000	2020 £'000
Defined benefit obligation at beginning of year	3,593	3,758
Current service cost	32	128
Interest cost	26	19
Benefits paid	(220)	(493)
Remeasurements	227	(31)
Acquired in business combination	1,524	-
Foreign exchange movement	(890)	212
Defined benefit obligation at end of year	4,292	3,593

Amounts recognised in the Statement of Changes in Equity	2021 £'000	2020 £'000
Prior year cumulative actuarial remeasurements	(75)	(46)
Remeasurements	227	(31)
Foreign exchange movement	-	3
Cumulative amount of actuarial gains and losses recognised in the Statement of recognised income / (expense)	152	(74)

Movements in the net liability/(asset) recognised in the Statement of Financial Position	2021 £'000	2020 £'000
Net liability in the balance sheet at beginning of year	3,593	3,758
Total expense recognised in the income statement	58	147
Contributions paid by the company	(220)	(493)
Amount recognised in the statement of recognised (income)/expense	227	(31)
Acquired in business combination	1,524	-
Foreign exchange movement	(890)	212
Defined benefit obligation at end of year	4,292	3,593

Principal actuarial assumptions as at 31 December 2021
Discount rate	0.53%
Future salary increases	1.62%
Future inflation	1.65%

Post-retirement benefits

The Group operates both defined benefit and defined contribution pension plans.

Pension plans in Belgium are of the defined benefit type because of the minimum promised return on contributions required by law. The liability or asset recognised in the Statement of Financial Position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Income Statement. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Statement of Changes in Equity and in the Statement of Financial Position.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due.

27.  Financial Instruments by Category

Consolidated	31 December 2021
	Loans & receivables	Total
Assets per Statement of Financial Performance	£'000	£'000
Trade and other receivables (excluding prepayments)	69,656	69,656
Cash and cash equivalents	69,916	69,916
	139,572	139,572
	At amortised cost	Total
Liabilities per Statement of Financial Performance	£'000	£'000
Borrowings (excluding finance leases)	205,312	205,312
Finance lease liabilities	28,611	28,611
Trade and other payables (excluding non-financial liabilities)	102,614	102,614
	336,537	336,537

Consolidated		31 December 2020
		Loans & receivables	Total
Assets per Statement of Financial Performance		£'000	£'000
Trade and other receivables (excluding prepayments)		19,179	19,179
Cash and cash equivalents		27,452	27,452
		46,631	46,631
	At amortised cost		Total
Liabilities per Statement of Financial Performance	£'000		£'000
Borrowings (excluding finance leases)	61,235		61,235
Finance lease liabilities	10,064		10,064
Trade and other payables (excluding non-financial liabilities)	51,623		51,623
	122,922		122,922

Company				31 December 2021
				Loans & receivables		Total
Assets per Statement of Financial Performance				£'000		£'000
Trade and other receivables (excluding prepayments)				2,544		2,544
Cash and cash equivalents				19,038		19,038
				21,582		21,582
		At amortised cost				Total
Liabilities per Statement of Financial Performance		£'000				£'000
Borrowings (excluding finance leases)		199,937				199,937
Finance lease liabilities		233				233
Trade and other payables (excluding non-financial liabilities)		9,968				9,968
		210,138				210,138
Company	31 December 2020
	Loans & receivables				Total
Assets per Statement of Financial Performance	£'000				£'000
Trade and other receivables (excluding prepayments)	884				884
Cash and cash equivalents	11,521				11,521
	12,405				12,405
	At amortised cost				Total
Liabilities per Statement of Financial Performance	£'000				£'000
Borrowings (excluding finance leases)	-				-
Finance lease liabilities	43				43
Trade and other payables (excluding non-financial liabilities)	18,994				18,994
	19,037				19,037

28.  Share Capital and Share Premium

	Number of shares	Ordinary shares	Share premium	Total
		£'000	£'000	£'000
Issued and fully paid
As at 1 January 2020	253,739,186	2,537	95,359	97,896
Issue of new shares - 9 December 2020 (1)	25,000,000	250	12,059	12,309
As at 31 December 2020	278,739,186	2,787	107,418	110,205
As at 1 January 2021	278,739,186	2,787	107,418	110,205
Exercise of options & warrants - 27 April 2021	1,059,346	11	456	467
Exercise of warrants - 7 May 2021	78,044	1	19	20
Issue of new shares - 31 August 2021 (2)	307,762,653	3,059	249,772	252,831
Issue of new shares - 31 August 2021	50,276,521	521	42,232	42,753
As at 31 December 2021	637,915,750	6,379	399,897	406,276

(1)  Includes issue costs of £440,736

(2)  Includes issue costs of £8,748,365

The authorised share capital consists of 914,345,908 ordinary shares at a par value of 1 penny.

On 27 April 2021 the Company issued and allotted 33,332 new Ordinary Shares at a price of 46 pence per share for options exercised. On the same day, the Company issued and allotted 1,026,014 new Ordinary Shares at a price of 46 pence per share for warrants exercised.

On 7 May 2021 the Company issued and allotted 78,044 new Ordinary Shares at a price of 46 pence per share for warrants exercised.

On 31 August 2021 the Company raised £252,849,890 net of issue costs via the issue and allotment of 307,762,653 new Ordinary Shares at a price of 85 pence per share. On the same day the Company issued and allotted 50,276,521 new Ordinary Shares at a price of 85 pence per share as shares issued as part of the Nordkalk acquisition.

29.  Share Options

In 2021, the Company introduced a long term incentive plan ('LTIP') for senior management personnel. Shares are awarded in the Company and vest in 3 parts over the third, fourth and fifth anniversary to the extent the performance conditions are met.

Share options and warrants outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:

			Options & Warrants
			31 December 2021	31 December 2020
Grant date	Expiry date	Exercise price in £ per share	#	#
5 January 2017	4 January 2022	0.44	-	1,026,014
5 January 2017	22 August 2021	0.25	-	78,044
5 January 2017	5 January 2022	0.25	286,160	286,160
5 January 2017	5 January 2022	0.40	12,183,225	12,183,225
15 April 2019	15 April 2026	0.46	9,340,934	6,433,956
30 December 2019	30 December 2026	0.46	8,389,726	5,408,706
			30,200,045	25,416,105

The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.

The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:

		2017 Options A	2017 Options B	2019 Options C	2019 Options D
Vested on		5/1/2017	5/1/2017	15/4	30/12
Life (years)		5	5	7	7
Share price		0.425	0.425	0.465	0.525
Risk free rate		0.52%	0.52%	0.31%	0.55%
Expected volatility		24.81%	24.81%	4.69%	8.19%
Expected dividend yield		-	-	-	-
Marketability discount		-	50%	-	-
Total fair value		£56,039	£234,854	£419,130	£729,632

The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.

The volatility is calculated by dividing the standard deviation of the closing share price from the prior six months by the average of the closing share price from the prior six months.

A 50% discount was applied to Options B due to the uncertainty surrounding the future performance of the Group. The Options A & B were issued in the first year of acquisitions which at the time had not had a significant impact on the Company's share price. Therefore a 50% discount was applied to reflect the fact the Company was still in an early stage with regards to acquiring niche company's and building value for the shareholders.

A reconciliation of options and warrants and LTIP awards granted over the year to 31 December 2021 is shown below:

Options and warrants

	31 December 2021					31 December 2020
		Weighted average exercise price					Weighted average exercise price
	#	£			#		£
Outstanding at beginning of the year	25,416,105	0.42			19,494,774		0.40
Granted	-	-			-		-
Vested	5,921,330	0.46			5,921,331		0.46
Exercised	(1,137,390)	0.40			-		-
Outstanding as at year end	30,200,045	0.45			31,337,434		0.44
Exercisable at year end	30,200,045	0.45			25,416,105		0.42

LTIP awards

	31 December 2021					31 December 2020
		Weighted average valuation price					Weighted average valuation price
	#	£			#		£
Outstanding at beginning of the year	-	-			-		-
Granted	25,620,000	0.69			-		-
Vested	-	-			-		-
Exercised	-	-			-		-
Outstanding as at year end	25,620,000	0.69			-		-
Exercisable at year end	-	-			-		-

30.  Other Reserves

				Company
	Deferred shares		Capital redemption reserve		Revaluation reserve	Foreign currency translation reserve	Total
	£'000		£'000		£'000	£'000	£'000
As at 1 January 2020	762		600		-	(448)	914
Currency translation differences	-		-		-	2,379	2,379
As at 31 December 2020	762		600		-	1,931	3,293
As at 1 January 2021	762		600		-	1,931	3,293
Other comprehensive income	-		-		1,037	-	1,037
Currency translation differences	-		-		-	(15,566)	(15,566)
As at 31 December 2021	762		600		1,037	(13,635)	(11,237)

31.  Non-controlling interests

As at 1 January 2021	-
Shares issued to non-controlling interest	1,260
Acquired in business combination	9,031
Non-controlling interests share of profit in the period	590
Foreign exchange movement	13
As at 31 December 2021	10,894

32.  Earnings Per Share

The calculation of the total basic earnings per share of (1.89) pence (2020: 2.55 pence) is calculated by dividing the loss attributable to shareholders of £6,971 million (2020: profit of £6,511 million) by the weighted average number of ordinary shares of 400,170,256 (2020: 255,310,224) in issue during the period.

Diluted earnings per share of (1.77) pence (2020: 2.35 pence) is calculated by dividing the loss attributable to shareholders of £6,971 million  (2020: £6,511 million) by the weighted average number of ordinary shares in issue during the period plus the weighted average number of share options and warrants to subscribe for ordinary shares in the Company, which together total 427,854,251 (2020: 277,113,850). The weighted average number of shares is the opening balance of ordinary shares plus the weighted average of 2,290,811 shares.

Details of share options that could potentially dilute earnings per share in future periods are disclosed in Note 29 .

33.  Fair Value of Financial Assets and Liabilities Measured at Amortised Costs

The following table shows the carrying amounts and fair values of the financial assets and liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measures at fair value if the carrying amount is a reasonable approximation of fair value.

Items where the carrying amount equates to the fair value are categorised to three levels:

· Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

· Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

· Level 3 inputs are unobservable inputs for the asset or liability.

		Carrying Amount							Fair value
			Fair value - Hedging instruments	Fair value through P&L	Fair value through OCI	Financial asset at amortised cost	Other financial liabilities	Total		Level 1	Level 2	Total
			£'000	£'000	£'000	£'000	£'000	£'000		£'000	£'000	£'000
Forward exchange contracts			-	561	-	-	-	561		-	561	561
Co2 emission hedge			-	125	-	-	-	125		125	-	125
Electricity hedges			4,628	243	-	-	-	4,511		4,511	-	4,511
Financials assets not measure at fair value
Trade and other receivables (excl. Derivatives)			-	-	-	78,013	-	78,013		-	-	-
Cash and cash equivalents			-	-	-	69,916	-	69,916		-	-	-
Financial liabilities measured at fair value
Forward exchange contracts			608	-	-	-	-	608		-	608	608
Electricity hedges			129	-	-	-	-	129		129	-	129
Financial liabilities not measured at fair value
Loans			-	-	-	-	205,312	205,312		-	-	-
Finance lease liability			-	-	-	-	28,611	28,611		-	-	-
Trade and other payables (excl. derivative)			-	-	-	-	102,613	102,613		-	-	-

34.  Business Combinations

Nordkalk

On 31 August 2021, the Group acquired 100 per cent of the share capital of Nordkalk and its subsidiaries for a total consideration of €355 million (being €470 355 million (being €470 million less adjustments for various obligations assumed by the Group as part of the acquisition)) less adjustments for various obligations assumed by the Group as part of the acquisitionwhich translates to £297.8 million. Nordkalk is registered and incorporated in Finland with subsidiaries across Northern Europe. Nordkalk develops limestone-based solutions for agricultural, construction and chemical industries.

The following table summarises the consideration paid for Nordkalk and the values of the assets and equity assumed at the acquisition date.

Total consideration	£'000
Cash consideration	348,225
Consideration paid in shares	41,982
Purchase of shareholder loans	(92,360)
	297,847

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	23,403
Trade and other receivables	49,281
Inventories	30,733
Derivative financial assets	3,737
Deferred tax	460
Property, plant & equipment	103,907
Intangible assets	6,965
Investment in associates	524
Investments in joint ventures	4,719
Trade and other payables	(50,330)
Derivative financial liabilities	(1,074)
Borrowings	(113,084)
Provisions	(5,720)
Income Tax	(1,483)
Non-controlling interests	(9,031)
Total identifiable net liabilities	43,007
Goodwill (refer to note 17 )	254,840
Total consideration	297,847

B-Mix

On 7 April 2021, the Group acquired 100 per cent of the share capital of B-Mix and its subsidiaries for a cash consideration of €12.03 million (being €13 million less adjustments for various obligations assumed by the Group as part of the acquisition) which translates to £10.2 million. B-Mix is registered and incorporated in Belgium. The principal activity is the operation of concrete plants. 

The following table summarises the consideration paid for B-Mix and the values of the assets and equity assumed at the acquisition date.

Total consideration	£'000
Cash consideration	10,105
	10,105

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	1,013
Trade and other receivables	3,002
Inventories	301
Property, plant & equipment	4,122
Trade and other payables	(1,965)
Income tax payable	(296)
Borrowings	(2,161)
Deferred tax liability	(15)
Total identifiable net liabilities	4,001
Goodwill (refer to note 17 )	6,104
Total consideration	10,105

35.  Contingencies

The Group is not aware of any material personal injury or damage claims open against the Group.

36.  Related party transactions

Loans with Group Undertakings

Amounts receivable/(payable) as a result of loans granted to/(from) subsidiary undertakings are as follows:

	Company
	31 December 2021	31 December 2020
	£'000	£'000
Ronez Limited	(18,328)	(12,878)
SigmaGsy Limited	(5,705)	(4,455)
SigmaFin Limited	20,146	(7,139)
Topcrete Limited	(9,494)	(8,178)
Poundfield Products (Group) Limited	5,501	6,364
Foelfach Stone Limited	466	457
CCP Building Products Limited	5,647	5,786
Carrières du Hainaut SCA	18,251	(6)
GDH (Holdings) Limited	9,588	1,234
B-Mix Beton NV	1,295	-
Stone Holdings SA	376	368
Nordkalk Oy Ab	91,367	-
	119,110	(18,447)

Loans granted to or from subsidiaries are unsecured, have interest payable at 2% and are repayable in Pounds Sterling on demand from the Company.

All intra Group transactions are eliminated on consolidation.

Other Transactions

Westend Corporate LLP, a limited liability partnership of which Garth Palmer was a partner but resigned effective 31 August 2021, invoiced a total fee of £326,821 (2020: £249,997) for the provision of corporate management and consulting services to the Company until 31 August 2021, which included £160,000 for services relating to the acquisition of Nordkalk Oy Ab.

37.  Ultimate Controlling Party

The Directors believe there is no ultimate controlling party.

38.  Events After the Reporting Date

On 4 January 2022, the Company issued and allotted 26,014 new Ordinary Shares at a price of 25 pence per share and 304,580 new Ordinary Shares at a price of 40 pence per share for options exercised.

On 1 February 2022, the Group acquired 100 per cent. of the share capital of Johnston Quarry Group Limited ('JQG') for a cash consideration of £ 35.1 million (being £ 35.5 million less adjustments for various obligations assumed by the Group as part of the acquisition). JQG is registered and incorporated in the England. JQG is a high-quality producer of construction aggregates, building stone and agricultural lime. 

The following table summarises the consideration paid for JQG and the values of the assets and equity assumed at the acquisition date.

Total consideration	£'000
Cash consideration	35,090
	35,090

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	1,587
Trade and other receivables	1,840
Inventories	1,463
Property, plant & equipment	16,908
Intangible assets	264
Trade and other payables	(3,477)
Borrowings	(9,947)
Provisions	(325)
Deferred tax liability	(826)
Total identifiable net liabilities	7,487
Goodwill	27,603
Total consideration	35,090

 

END

 

 

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