Final Results and Notice of AGM

RNS Number : 2315U

SigmaRoc PLC

27 March 2023

 

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

27 March 2023

SigmaRoc plc

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

Audited full year results for year ended 31 December 2022

Notice of AGM

SigmaRoc (AIM: SRC), the quarried materials group , is pleased to announce its audited results for the year ended 31 December 2022.

Underlying 1 results	31 December 2022	31 December 2021	YoY change
Revenue	£538.0m	£272.0m	+98%
EBITDA	£101.7m	£49.3m	+106%
EBITDA margin	18.9%	18.1%	+80bps
Net Margin 2	21.8%	20.4%	+140bps
Profit before tax	£62.7m	£26.8m	+134%
EPS	8.0p	5.4p	+49%
Net debt 3	£193.8m	£164.0m	+18%
Leverage Ratio 4	1.77x	1.70x	+5%
CCR	86.6%	60.0%	+27ppt
Free Cash Flow 5	£54.3m	£29.7m	+83%
ROIC	10.7%	7.6%	+310bps

[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 Net Margin is EBITDA margin adjusted for impact of inflationary cost pass-throughs, such as energy, materials, and distribution.

3 Net debt including IFRS 16 lease liabilities.

4 Leverage Ratio takes Adjusted Leverage Ratio and excludes IFRS 16 related lease liabilities.

5 Free Cash Flow takes net cash flows from operating activities and adjusts for Maintenance CapEx, net interest paid, and net non-underlying expenses paid.

6 Company compiled analyst consensus estimates as of 12 December 2022: revenue of £512m, Underlying EBTIDA of £97m and Underlying EPS of 7p.

Financial highlights:

Record results, earnings enhancing acquisitions underpinned by organic growth

-  Another year of strong delivery, with full year results ahead of original expectations 6

-  Organic LFL revenue grew by 19% and Underlying EBITDA by 9%

-  Underlying EPS increased by 49% YoY

-  Ongoing focus on efficiency, with £5m of annualised EBITDA improvement initiatives delivered across the Group

Increased returns and strong financial position

-  Strong cash generation with £54m Free Cash Flow and 87% Cash Conversion Ratio supporting investment in bolt-on acquisitions and investment for organic growth

-  Adjusted Leverage Ratio comfortably below 2x target, despite continued growth investment

-  ROIC increased 310bps to 10.7%, with clear path to medium term target of 15%

Operational and Strategic highlights:

Divisional structure

-  New divisional structure implemented with regional head coordinating activities of platforms captured within the region

-  The Group's existing platforms are divided between the North West, West and North East and the Group intends to report key financial and performance metrics by region going forward

Growth

-  LFL volume growth of 1%, despite softer demand conditions through the year in certain markets

-  Benefited from broad diversification in both end markets and regions:

o  West region volumes grew 11% LFL and Baltics Platform volumes grew 24% LFL

o  Poundfield Products grew volumes by 8% LFL, helping offset softening elsewhere in the PPG Platform

-  Local focus, responsibility and commercial strategy supported market share gains in all regions

-  Sustainable products saw continued strong demand, with Greenbloc on track to represent c.50% of PPG production by the end of 2023

Investment

-  Successful integration of Nordkalk with synergies representing annualised EBITDA contribution of €5m identified in the year

-  Three acquisitions completed for a net initial cash consideration of £44.6m with average multiple of 7x EBITDA funded from operational cash flow

-  Investment to secure additional 216 million tonnes of high grade and strategic Reserves and Resources, equating to >40 years of production

-  Launch of JV with ArcelorMittal provides framework for expansion of the Group's lime business in Europe and create a new net-zero producer

Execution

-  Continued progress with safety initiatives - Total Incident Frequency Rate (TIFR) and Serious Harm Injury Frequency Rate (SHIFR) improved by 13% and 19%, respectively

-  Aqualung partnership to launch carbon capture facility in the Nordics with objective of de-carbonising all kiln operations

-  Published maiden ESG report with net-zero target set for 2040

Annual General Meeting

SigmaRoc is also pleased to provide notice that its Annual General Meeting ('AGM') will be held on 25 April 2023 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 will be posted to shareholders today and are available to view on the Company's website.

Change of Registered Office

SigmaRoc is also pleased to announce that it has changed its registered office to 6 Heddon Street, London, W1B 4BT with immediate effect.

Max Vermorken, CEO, commented:

"2022 was an extremely challenging year from an operational and a commercial standpoint. However, the Group delivered performance well ahead of expectations and made enormous strategic progress, demonstrating the strength of our operational model and management structure.  

This exceptional year has given us the opportunity to get on the front foot strategically at the start of 2023 with a robust pipeline of organic and acquisition investments to support our organic growth and accelerate our strategic goals.  

We remain vigilant towards continued variable conditions across our end markets, but we are confident that the Group can once again demonstrate its resilience and achieve further strategic progress in 2023."

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 9.00 a.m .

A live webcast of the presentation including Q&A will be held today at 9.00am and will be available via our website at   https://www.sigmaroc.com/   or on https://brrmedia.news/SigmaRoc_FY22 . This will be available for playback after the event.

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 by contacting [e-mail].

---------------------------------------------------------------------------------------------------------------------------

For further information, please contact:

SigmaRoc plc Max Vermorken / Garth Palmer	Tel: [phone]
Liberum Capital (Co-Broker & Nominated Adviser) Nick How / Jamie Richards / Ben Cryer	Tel: [phone]
Peel Hunt (Co-Broker) Mike Bell / Ed Allsopp	Tel: [phone]
Investor Relations Dean Masefield / Elisa Frenay	Tel: [phone] [e-mail]

CHAIRMAN'S STATEMENT

2022 produced many new challenges for SigmaRoc to contend with and I am pleased to report that the Group was able to meet those challenges and in doing so surpassed our expectations for the year. We had to deal with significant disruption to customers as a result of industrial action and plant issues, volatile energy prices, uncertain energy supply dynamics and the effects of the Russian invasion of Ukraine. In response to this, we were able to identify and execute multiple initiatives, across the business, to enhance growth and support returns. Our central team was able to find savings and efficiency gains to compensate for unexpected breakdowns and union strikes. Our commercial teams locally were able to deal with inflationary cost pressures, leveraging the strategic location of our footprint and our customer relationships. Our operators were able to react swiftly to an increasingly challenging energy market, production requirements and customer demand. We are pleased the quality of our operators, the inherent diversification in our model and our strong local market positions have demonstrated their true value in a time of rapid changes and numerous challenges.

Overview

Despite the aforementioned global and local challenges, the Group delivered a strong operating performance in 2022, with volumes on average ahead across the Group YoY by 1% on a LFL basis.

The Group is reporting 2022 revenue of £538.0 million, representing a 98% YoY increase, and Underlying EBITDA of £101.7 million, being an uplift of 106% YoY. Underlying profit before tax was £62.7 million and Underlying EPS was 8.0p representing a 49% improvement YoY. Revenue and Underlying EBITDA have increased primarily due to the inclusion of Nordkalk which was acquired in August 2021, together with the additions of Johnston and RightCast. On a LFL basis, revenue and Underlying EBITDA grew by 19% and 9%, respectively, during the year.

The strong trading performance and continuation of careful and effective cash management strategies have led to a strong year end cash position of £68.6 million. While the Group has continued its investment led growth strategy with the acquisitions of Johnston, RightCast and La Belonga, for a total initial consideration of £44.6 million, the Group's Leverage Ratio at 31 December 2022 reduced to 1.77x, which is comfortably within our long term target range.

Continued focus on safety translated into further progress on safety reporting and management. The Total Injury Frequency Rate (TIFR) recorded dropped by 13%, while the Serious Harm Incidents Frequency Rate (SHIFR) dropped by over 19% versus prior years; including both employees and contractors. Positive reporting, including near hits and hazard and risk identification increased by more than 70%. One positive engagement initiative, set up in Belgium in 2021, has YoY resulted in an increased engagement of nearly 400% for near hits, hazard, and risk identification and a subsequent reduction in SHIFR by 23%.

Governance

In April 2022 the Group published its first ESG report which contains extensive detail on its Environmental, Social and Governance policies and initiatives, as well as a detailed roadmap to net-zero. Further updates to that report and the various initiatives that are underway across the Group are provided in the ESG section of these Accounts.

Outlook

Trading in the early part of FY23 has been encouraging, with overall Group performance for January and February in line with expectations. The Group has made good progress in executing its capital investment pipeline, deploying £12 million of the £30 million equity fundraise completed in February on two businesses across Europe, with work ongoing to deploy the remainder and execute on the pipeline.

I am very optimistic about the Group's prospects for 2023 and expect the Group to deliver further improvement over what was a very successful 2022.

David Barrett

Executive Chairman

25 March 2023

CEO's STRATEGIC REPORT

2022 represented a real validation of our model as SigmaRoc delivered significant financial and strategic progress, despite a volatile and at times extremely challenging backdrop. Financially, the Group delivered significant earnings growth, to over £100m of underlying EBITDA and 8p of Underlying EPS, whilst retaining a strong balance sheet with leverage below 2.0x. Operationally, we have enhanced safety metrics and customer service levels, together with making sector leading progress on sustainability initiatives across the product range and asset base. Strategically, we have managed the successful integration of the transformational Nordkalk business and completed four further, earnings enhancing, transactions and reserve extensions in key locations. These achievements reinforce our belief that the businesses that form this Group and the more than 2,000 people that work for them, are of exceptional quality. This is particularly true of the operational and sales staff who, across the Group, had to contend with a series of acute challenges ranging from rapid cost inflation, energy availability and supply chain disruption. It is also true of the various support teams, who in a complicated year managed to keep the ship on course to deliver on all priorities we set well before 2022 started.

The content of this Annual Report therefore aims to highlight three key aspects of our model. First, that there continues to be significant opportunity to develop the Group, both organically and inorganically, across each of the platforms and that we have evidenced this potential again in a year of significant head winds. Second, that the diversified nature of our geographic footprint, end markets and product base, combined with the ability to implement high impact improvement programmes, has created real resilience in our trading performance. Thirdly, that these characteristics have enabled us to set challenging but attainable mid-term strategic goals, both financial and ESG focussed, which represent significant value creation potential for all our stakeholders. These goals are set out below and the potential of the Group and our confidence in achieving these goals are considered in more detail in the sections that follow.

Strategic development

Following a year of transformational investment in 2021, which included the acquisition of Nordkalk together with B-Mix and the establishment of the Benelux Platform, the Group made further significant strategic development in 2022. In total, the Group deployed c.£44.6m across three acquisitions which brought annualised revenues of c.£24.5m and EBITDA of c.£7.3m. The acquisitions were completed on attractive terms, in line with SigmaRoc's strict financial criteria, which represented an average EBITDA multiple of c.6x. The team expect to realise synergies and productivity gains at each of the acquired businesses which will support increasing returns on the invested capital over time.

Together with financial benefits, the Group's investment activities have further enabled the delivery of its long term growth ambitions through the enhancement of the asset base and commercial infrastructure. In aggregate, investment activities in 2022 added c.216 million tonnes of high quality reserves across the Group. In addition, the establishment of a strategic JV with ArcelorMittal provides a framework to accelerate the growth of the Group's lime business across continental Europe.

At the end of January 2022, the Group acquired Johnston for an initial cash consideration of £35.5 million and deferred consideration of £8.5 million. Johnston is a specialist quarried materials supplier producing construction aggregates and premium quality building stone, as well as agricultural lime for soil improvement. Its aggregate products are typically used in infrastructure projects, with its unique Cotswolds Ironstone and Bath Stone used in specified high end housing and architectural applications. The business operates five active quarries and three mines and two separate processing sites located across the south-west of England, Oxfordshire and Lincolnshire. Johnston has access to 86 million tonnes of freehold and leasehold reserves and resources giving JQG an average life of mine of over 40 years.

For the 12 months to 30 September 2021, Johnston reported revenue of £14.7 million, generating EBITDA of £5.9 million and profit before tax of £3.6 million. The acquisition was funded from the Group's existing resources, including the assumption of approximately £11.0 million in borrowings comprising long term debt and plant hire contracts.

In April 2022, the Group acquired RightCast for an initial cash consideration of £2.5 million with a further £0.5 million deferred consideration payable in 12 months subject to certain conditions. RightCast is a precast concrete producer specialising in the production of concrete stair flights and landings.

For the 12 months ended 31 October 2021, RightCast reported revenue of £3.1 million, generating EBITDA of £0.6 million and profit after tax of £0.5 million. The acquisition was funded from the Group's existing resources and RightCast has been integrated into the PPG platform. RightCast brought with it a strong pipeline of work, well established team and complimentary product offering to PPG.

In September 2022 the Group entered into a strategic JV agreement with ArcelorMittal to create a new net-zero European lime producer. The JV will be located close to Dunkirk's harbour and ArcelorMittal's steelworks, with ArcelorMittal being the main consumer of the lime produced. To reduce CO₂ emissions, the lime production process will use heat recovered from the ArcelorMittal steelworks plant and biofuels rather than natural gas. The location of the operations will allow the JV to be part of the Dunkirk CO₂ hub. The combination of these CO₂ reduction initiatives will enable the JV to offer net-zero lime.

Under the terms of the JV agreement, each of SigmaRoc and ArcelorMittal will take a 47.5% ownership stake. In the first phase of roll out, the new JV company will be responsible for the construction of three new lime kilns in Dunkirk. Initial planning has commenced on permitting and kiln specification for these operations, with final permitting approval expected toward the end of 2023 and commissioning in 2025. Long term supply and offtake agreements will be entered into between the JV partners.

In order to supply the new lime kilns in Dunkirk, in July 2022 La Belonga was acquired. La Belonga is a limestone quarry located in the north of Spain with 60 million tonnes of reserves and resources and potential for a further 120 million tonnes, subject to permitting. La Belonga is strategic to the Group as it is a large reserve of high quality limestone, possessing high calcium oxide and low sulphur content, which is suitable for use in the steel industry, and is located close to the Gijon port providing export opportunities into the Group's European operations.

La Belonga was acquired for an initial consideration of €2.2 million with a further €1.3 million of deferred consideration. For the 12 months ended 31 December 2021, La Belonga reported revenue of €3.5 million, EBITDA of €0.5 million and profit after tax of €0.2 million.

Development of the 2 million tonne quarry extension in Jersey, which was consented in 2021, has progressed well, with sales of product from the extended area already underway. In Guernsey, the planning application to develop a greenfield quarry at Chouet Headland was unanimously approved by the Guernsey Development & Planning Authority in October 2022. With current reserves providing a further 7-8 years of production, this approval secures the supply of Ronez value added product streams and the external construction market in Guernsey for the next 20 years.

In Poland, a new limestone deposit was opened, with planned reserve extensions expected to add a total of 35 million tonnes to the Group's reserves and resources.

In Belgium, quarry extension works are on track at Soignies with construction of the new road around the extension area progressing well, which has enabled excavations of overburden to start.

Operations and trading

Group structure:

Following the substantial expansion and development of SigmaRoc in 2021, with the acquisition of Nordkalk, the Board determined that the Group's platform-based model could be enhanced through the overlay of an overarching regional structure. The platform model has proven effective, ensuring the Group remains locally focussed and agile, with the regional overlay supporting the Group's new expanded footprint and providing a strong foundation for further growth and expansion. This new regional structure will provide the basis for divisional reporting going forward.

Each region has a Managing Director and Financial Director who are responsible and accountable for overseeing performance, steering development, and driving growth. While these roles and responsibilities are new, the people occupying them are not. They are either MDs and FDs of existing platforms within the region, taking on a larger remit but retaining their prior responsibilities, or they are incumbents in the role (but with a new title) and the organisation beneath them has been reorganised, such is the case with Nordkalk.

The new regional structure aligns the Group as follows:

Region	MD	FD	Countries	Platforms
North West	Michael Roddy	Michael Crump	UK Channel Islands	PPG England Wales Channel Islands
West	Emmanuel Maes	Dean Masefield	Belgium Netherlands Luxembourg Northern France	Dimension Stone Benelux
North East	Paul Gustavsson	Marcel Gestranius	Finland Sweden Poland Norway Estonia Latvia Lithuania Spain1	Quicklime Nordics Poland Baltics

¹ La Belonga was acquired by Nordkalk and currently reports into the North East region, this will be reviewed as the Group develops.

Market dynamics:

The Group benefits from broad diversification across products, end markets and geography.

Approximately 44% of Group Revenue is derived from industrial mineral markets, which have seen resilient demand, supported by the following structural drivers:

-  Environmental, Agriculture and Chemical (20% of Group Revenue): Continued good structural demand pull through, with additional, ongoing substitution by customers of materials previously sourced from Russia.

-  Pulp, Paper & Board (14% of Group Revenue): Order books continue to replenish at historically high rates, with underlying demand from pulp customers increasing as part of the transition in packaging materials away from plastic and with the Group also benefitting from an increasing switch by customers to our products.

-  Metals & Mining (10% of Group Revenue): Order intake remains stable, despite lower European steel production in the second half of the year, with the Group able to sell product into a range of alternative local industrial markets.

The remaining 56% of Group revenues are derived from construction markets, with over half of this from infrastructure applications which have continued to see robust demand:

-  Infrastructure (32% of Group Revenue): Robust demand across the UK and European platforms, underpinned by customer guided volumes into 2023 as well as significant project wins.

-  Residential (25% of Group Revenue): Robust orderbooks in commercial markets and high specification products, including the Greenbloc range, offsetting low exposure to softening UK RMI market (total UK residential exposure is approximately 8% of Group Revenues).

The Group's sustainable product offering has been a contributing factor to the substantial growth in the PPG Platform over the past two years, with Greenbloc helping secure tier 1 building contractors as part of the customer base. From 2020 to 2022, the PPG Platform grew revenue by 48% and Underlying EBITDA by 65%.

Trading performance:

The business overall performed ahead of Board expectations in 2022, which enabled the Group to more than offset c.£5m of profit headwind in Q1 arising from a combination of industrial action and other customer disruption.

North West

In the Channel Islands phasing of significant construction projects created a modest decline in volumes for the year, however this was offset by operational cost improvements derived from productivity gains resulting from investment in plant & machinery and strategic procurement of raw materials, combined with efficient hedging. This enabled the Channel Islands to meet its targets for the year, growing EBITDA by 5%.

PPG continued its strong performance through the year. Demand in the first half was consistent across the platform and cost inflation was effectively passed-on through regular price increases. In the second half, a slight slowing in demand at CCP and Allen was offset by a very busy bespoke projects division at Poundfield and strong trading at RightCast. Poundfield had a record year, increasing revenue by 39% YoY.

At Johnston, construction aggregate demand from the Lincolnshire quarries was subdued as large infrastructure projects were delayed but this was offset by strong demand for agricultural lime. Performance post-acquisition was further improved through the integration process, including a review of operating costs and savings from utilisation of Group supply chains.

Revenue for Harries was strong throughout the period, but margin performance was impacted in January and February as a result of equipment issues which increased maintenance and plant hire costs. This was recovered by improved margins through a combination of premium aggregate product sales and operating cost efficiencies, which translated into an increase in EBITDA of 25% YoY.

West

Dimension Stone had another strong year of trading through 2022, with an exceptionally strong order book translating into high volumes. Inflationary input cost pressure was mitigated by regular price increases, and we further benefitted from very good electricity generation from a new solar panel installation. Commercial highlights for the year included the specification of Bluestone for new offices at Euralille in Lille, development around Penn Station New York, modernisation of Leuven railway and city centres of Charleroi and Gembloux.

Our Benelux platform performed ahead of expectations. B-Mix had a very strong year with volumes ahead of budget translating into strong EBITDA growth. Cuvelier was in line with expectations and while GduH was behind on volumes for much of the year, strong volumes in November and December combined with a contractual take-or-pay adjustment translated into results ahead of expectation.

North East

Nordkalk faced particularly challenging conditions in the early part of the year, including:

· The Russian invasion of Ukraine displacing three employees and their families;

· Significant energy cost increases and concern over supply arrangements;

· Union strike at UPM in Finland which persisted for almost 4 months; and

· Unexpected plant shutdown at customer, SSAB, in January.

Through active collaboration between SigmaRoc technical teams and the regional teams within Nordkalk, many of the challenges were met head-on. Further savings were found across the Group and Nordkalk's commercial teams were able to manage the inflationary pressure well through a combination of hedging and dynamic pricing. The impact from customer interruptions was successfully mitigated through the implementation of cost saving programmes across the Group combined with catchup demand through the remainder of the year. In response to the Ukraine conflict, Nordkalk staff in Poland were very active in assisting our Ukrainian staff and their families to relocate to safety when possible, with those who had to remain in Ukraine being located near the Polish border. As a result, Nordkalk had a strong 2022 in ways beyond the purely financial.

Financial performance  

The Group delivered an excellent financial performance for the year, which was ahead of both the Board's and market expectations. Reported revenues were £ 538.0 million, delivering Underlying EBITDA of £101.7 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, as at 31 December 2022, gross assets were £906.1 million, underpinned by over 1.6 billion tonnes of reserves and resources, land, plant and machinery in strategic locations. Net assets were £ 469.9 million . At year-end the Group had access to a further £173.0 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 Adjusted Leverage Ratio stood at 1.93 with cash at £68.6 million.

ESG, Safety and Innovation

ESG:

In April 2022 the Group published its first ESG report which contains extensive detail on its Environmental, Social and Governance policies and initiatives, as well as a detailed roadmap to net-zero. The report provides further detail on a large number of initiatives already in place across the Group to manage its energy use and sourcing, as well as accelerate its successful track record in innovation to both meet demanding ESG targets and further enhance competitiveness. In summary of the ESG report, we aim to:

· provide the 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.

We are not aware of any other operator in the lime sector having 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.

More specifically, feasibility studies have been initiated across the Group to further increase green energy sourcing. These include new wind and solar installations and further increases of existing solar capacity on site at Soignies.

In West Wales, Harries contributed to a successful "nappy-enhanced" asphalt trial, whereby 2.4km of roadway was surfaced using asphalt that contained recycled nappies. The fibres from the nappies improve binding of bitumen with aggregate, resulting in a more durable road surface which is expected to remain in situ for up to 20 years while also providing reduced road noise.

As part of our commitment to employees as well as their families and the communities they love and work in, West Wales held a Family Fun Day with over 200 people attending. This was an opportunity for everyone to come together, have fun and relax as well as raise money for local charities with additional support from other local businesses.

Furthering our governance initiatives, Julie Kuenzel was appointed as Company Secretary in September 2022. Julie holds a Bachelor of Commerce Degree, is a Chartered Accountant and working toward membership with the Chartered Governance Institute UK & Ireland. Julie has over 20 years' experience working in a wide range of industries in senior management positions. More recently, Julie has been focussed on providing financial and corporate governance advice to listed companies. Julie replaced Westend Corporate, who remain as the Group's financial accountants. Julie's appointment bolstered the Group's already strong corporate governance function, and she reports to the Board on all compliance related matters.

In April 2022, Axelle Henry joined the Board as an independent NED. Ms Henry brings significant financial skill to the Group given her role as CFO of a major investment fund and also adds fresh perspective to the Board with her knowledge of sectors which are more brand and innovation oriented.

To support both our businesses and our communities, we are continuing to develop our working relationships with the military and military employment charities and are registered with the Career Transition Partnership. We will help facilitate resettlement and transition from military to civilian life as well as support civilian spouses and partners of serving and ex-Forces personnel on their journey into employment.

Across all our platforms, our business model of local business for local communities ensures that we continue to integrate into the areas we work, supporting both other local businesses, projects, and communities .

Safety:

The Group has continued to progress and improve its safety culture in 2022 by focusing on 3 key areas:

1.  Structure & Compliance by ensuring corrective actions are properly closed out and on time;

2.  Proactive Prevention by focusing on each businesses' 3-5 core risks; and

3.  Learn & Improve through thorough investigations and timely communication.

We are pleased to report a 13% YoY reduction in incident frequency rate; 19% reduction in serious harm frequency rate and over 70% YoY increase in near hit, hazard and risk reporting, taking into account all those that work on our sites, employee and contractors alike. With the addition of three new businesses during the year the Group has leveraged its established health & safety tools and procedures, including the internally developed safety management system HighVizz which has helped increase reporting, decrease incidents, and improve safety awareness and culture .

Innovation:

In November 2022 we announced our partnership with Aqualung to construct Europe's first industrial scale carbon capture facility in Scandinavia, with the objective of rolling out across the Group's entire kiln network and capture all kiln process emissions by 2030.

The market reaction to Greenbloc has surpassed our expectations. We have invested significantly in our own manufacturing facilities to keep pace with demand, while the PPG platform has also acquired and developed additional UK sites to facilitate the development and manufacture of ultra-low carbon construction products that go beyond concrete blocks.

From the start of this year every product currently manufactured by SigmaRoc's PPG platform is now available in a cement-free ultra-low carbon option. 2023 will see up to 50% of all products produced across the PPG platform falling under Greenbloc low carbon alternative ranges.

Our strategic collaboration agreement with Marshalls, which was established on the back of our leadership in the market with Greenbloc, accelerated during 2022. We have multiple workstreams focusing on pushing existing technologies to their limits while also developing new manufacturing techniques. Together with Marshalls, we remain committed to improving how concrete is specified within the build environment and reducing its carbon footprint significantly.

In the Channel Islands all ready-mix concrete and concrete products are now offered with a low carbon cement blend option, and the ultra-low carbon offering for ready-mix concrete is gathering traction in the market .

Post period announcements

In February 2023 the Company successfully completed a £30 million fundraise to part fund ten potential near term strategic acquisition opportunities and four organic growth and carbon footprint reduction projects. Collectively, the strategic acquisitions and the organic growth investments are anticipated, should they all complete, to generate, net of proposed divestments, approximately £42 million of revenue, £10 million of EBITDA and profit after tax of £6 million on an annualised basis.

In March 2023 the Company announced completion of the following acquisitions, which form part of the near term strategic acquisition opportunities announced in February 2023, for an aggregate consideration of £12 million:

(a)  Goijens, a leading supplier of ready-mixed concrete and pumping solutions, located in the north east of Belgium. Goijens operates two concrete plants and concrete recycling facilities, as well as pumping and other services. Its footprint, located in the north east of Belgium on c.10 acres of freehold land, is highly complementary to the Benelux Platform, which is expected to enable commercial and operational synergies, as well as a swift integration into the Group; and

(b)  Juuan Dolomitik, a specialist supplier of high quality dolomitic limestone, used in agricultural and environmental sectors to improve regulation of soil pH and water retention. JD's operations are located close to the Group's existing Finnish business and represent a valuable extension into dolomitic limestone, adding approximately 1.5 million tonnes of reserves, equating to roughly 30 years of operating life.

Additionally in March 2023, the Company announced that it had been successful in its claim to seek compensation from the Swedish state in respect of land use restrictions. The verdict, pronounced on 14 March 2023, made an award to Nordkalk in compensation for economic loss, of which a sum of c. SEK 188 million (c. £17 million) that is to be adjusted for inflation and interest until payment is made, is receivable by the Group as its share. The verdict is subject to appeal until 4 April 2023 and receipt of funds remains subject to the outcome of any appeal, if lodged.

Forward look

The Group has started 2023 positively, trading broadly in line with expectations, supporting a cautious level of optimism for the remainder of the year . Whilst the significant reduction in energy prices in the UK and Europe has improved the demand outlook for many of the sectors we supply, we continue to see variable conditions across our end markets, with recovering demand and structural drivers in a number of segments offsetting continued subdued activity in others.

Notably, we have seen stronger than expected demand from European steel customers as a result of more benign energy conditions and our infrastructure construction pipeline remains healthy in all jurisdictions. Set against this, residential construction demand in the UK, and to a lesser extent Sweden and Finland, remains softer, although this represents c.10% of Group revenue.

We have continued to price dynamically, pass through inflationary cost increases and utilise hedging, and operational execution has remained strong, enabling the Group to deliver further efficiency, improvement and cost saving programmes.

The Group's pipeline of organic and acquisition investment opportunities is very robust, with the proceeds of the equity fundraising in February enabling the Group to execute on multiple value accretive projects in 2023 and toward the end of the year the Group will have generated c.£50 million in FCF with headroom to support further capital deployment.

The Group has a clear set of strategic priorities which support sustainable organic growth, robust margins, strong cash generation and expanding ROIC. Our broad footprint, product set and end market representation provides numerous avenues through which to accelerate delivery through further investment and a market leadership position in sustainability.

I am therefore confident in the Group's ability to deliver another exceptional year of growth and development.

This report was approved by the Board on 25 March 2023.

Max Vermorken

Chief Executive Officer

CHIEF FINANCIAL OFFICER'S REPORT

I am pleased to report another strong year financially for the Group, where we exceeded expectations despite considerable challenges in the operational and market backdrop. We were able to more than offset these headwinds through a combination of volume outperformance in the less impacted parts of the Group, dynamic pricing, effective hedging, and numerous operational improvement programmes and cost saving initiatives.

For the year ending 31 December 2022, the Group generated revenue of £538.0 million (2021: £272.0 million) and Underlying EBITDA of £101.7 million (2021: £49.3 million). Underlying profit before taxation for the Group was £62.7 million (2021: £26.8 million).

The statutory loss for the Company for the year ended 31 December 2022 before taxation amounts to £24.4 million (2021: loss £26.3 million), which includes £10.2 million of non-underlying expenses primarily pertaining to non-cash share option expense, amortisation of finance costs, and M&A related cash fees.

The Board monitors the activities and performance of the Group on a regular basis and 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.

	2022 £'000	2021 £'000
Cash and cash equivalents	68,623	69,916
Revenue	537,993	271,986
Underlying EBITDA	101,723	49,262
Capital expenditure	51,008	22,555

Cash generated from operations was £87.7 million (2021: £29.5 million) with a net decrease in cash of £4 million (2021 net increase of £42.9 million) after spending £43.3 million on acquisitions net of cash acquired and £40.8 million in net capital expenditure.

Revenue and Underlying EBITDA exceeded expectations and management forecasts.

Capital expenditure relates to purchases of land & minerals, new plant & machinery, and improvements to existing infrastructure across the Group.

PPA

BDO UK LLP undertook the PPA exercise required under IFRS 3 to allocate a fair value to the acquired assets of B-Mix and Nordkalk.

The PPA process resulted in a reduction of goodwill recorded on the Statement of Financial Position of the Group for Nordkalk from £268.8 million to £35 million. The reduction was to transfer the value of goodwill to tangible assets for plant and equipment, land and buildings, land and mineral reserves, intangible assets and deferred tax assets.

Non-underlying items

The Company's loss after taxation for 2022 amounts to £24.4 million, of which £10.2 million relates to non-underlying items, while the Group's non-underlying items totalled £20.0 million for the year, of which £13.1 million, representing over 65%, are non-cash and non-tax deductible. These items relate to nine categories:

1.  £6.7 million amortisation of acquired assets and adjustments to acquired assets, which has increased by £5.0 million resulting from the Nordkalk PPA adjustment.

2.  £4.7 million in share-based payments relating to grants of options, including £0.5 million pertaining to option revaluations resulting from changes to exercise dates.

3.  £3.5 million in exclusivity, introducer, advisor, consulting, legal fees, accounting fees, insurance and other direct costs relating to acquisitions. During the year the Group acquired Johnston, RightCast, La Belonga and entered into the ArcelorMittal joint venture. The Group also undertook extensive due diligence on over 20 other potential transactions, some of which were completed, and others which are expected to complete, post year-end.

4.  £1.8 million legal and restructuring expenses relating to the reorganisation and integration of recently acquired subsidiaries, including costs associated with discontinuing sites and operations, transitional salary costs, redundancies, severance and recruitment fees, and costs associated with financial reporting and system migrations.

5.  £1.1 million on amortisation of finance costs arising from the syndicated 5-year debt facilities established in July 2021.

6.  £0.9 million in stamp duty and other taxes, primarily relating to taxes paid in relation to the acquisition of 11 hectares of land in Belgium.

7.  £0.5 million on expenses relating to innovation and sustainable practices, including continued development of Greenbloc, alternative carbon-free cement solutions, Aqualung carbon capture technology and utilisation of alternative fuels.

8.  £0.4 million on unwinding of discounts on deferred consideration payments for Harries.

9.  £0.4 million in other exceptional costs which primarily relate to non-cash balance sheet adjustments.

Interest and tax

Net finance costs in the year totalled £10.4 million (2021: £7.0 million) including associated interest on bank finance facilities, as well as interest on finance leases (including IFRS 16 adjustments) and hire purchase agreements.

A tax charge of £ 9.1 million (2021: £4.7 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 4.89 pence (2021: loss of 1.89 pence) and Underlying basic EPS (adjusted for the non-underlying items mentioned above) for the year totalled 8.03 pence (2021: 5.37 pence).

Statement of financial position

Net assets at 31 December 2022 were £469.9 million (2021: £411.2 million). Net assets are underpinned by mineral resources, land and buildings and plant and machinery assets of the Group.

Cash flow

Cash generated by operations was £87.7 million (2021: £29.5 million). The Group spent £43.3 million on acquisitions net of cash acquired, £51.0 million on capital projects, raised £9.2 million through the disposal of surplus land holdings, and drew net borrowings of £5.8 million. The net result was a cash outflow for the year of £4 million.

Net debt

Net debt at 31 December 2022 was £193.8 million (2021: £164.0 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 £405 million (the 'Debt Facilities') led by Santander UK and including several major UK and European banks. The Debt Facilities, 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   Debt Facilities have a maturity date of 15 July 2026 and are subject to a variable interest rate based on SONIA/EURIBOR plus a margin depending on Underlying EBITDA. As   at   31 December 2022, total undrawn facilities available to the Group via the   new   Debt Facilities amounted to approximately £ 173 million.

The Group's   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   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 3.25x in 2022. As at 31 December 2022, the Group comfortably complied with its bank facility covenants.

Capital Allocation

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 2021: nil).

Post Balance Sheet event

Post 2022 close we have conducted a series of activities worthy of mention in this Annual Report .

This report was approved by the Board on 25 March 2023 and signed on its behalf.

Garth Palmer

Chief Financial Officer

ESG REPORT

SigmaRoc has and will always be committed to the principles of ESG. ESG encompasses a company's Environmental, Social and Governance aspects, however there is no global definition with each company and sector potentially having different focus priorities.

Following on from our 2021 annual report and standalone annual 2021 ESG Report, we continue to commit to reporting and disclosure of ESG and sustainability matters through frameworks such as TCFD and SASB. During 2022, we have extended our pledge by committing to Science Base Target Initiatives (SBTi).

1.1.  Frameworks

TCFD & SASB

The Group's ESG report has been guided using the principles of TCFD and SASB. Whilst TCFD recommendations serve as a global foundation for effective climate-related disclosures, in terms of disclosure, the Group has adopted, where possible, the SASB Construction Materials disclosure topics and accounting metrics.

SASB standards represent a clear solution to TCFD implementation having rigorously developed TCFD-aligned reporting tools to promote disclosures in a way that is both cost-effective and useful for all stakeholders.

As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to build on the industry-based SASB Standards and leverage SASB's industry-based approach to standards development and encourages preparers and investors to continue to provide full support for and to use the SASB Standards until IFRS Sustainability Disclosure Standards replace SASB Standards.

ISSB in 2022 published exposure drafts consolidating content from the TCFD, CDSB, SASB, Integrated Reporting, and WEF IBC's stakeholder capitalism metrics into a coherent whole with the intention to become the global standard-setter for sustainability disclosures for the financial markets.

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.

SBTi

Science-based targets provide a clearly defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. They show organisations how much and how quickly they need to reduce their greenhouse gas (GHG) emissions.

Through the 2015 Paris Agreement, world governments committed to curbing global temperature rise to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. In 2018, the Intergovernmental Panel on Climate Change warned that global warming must not exceed 1.5°C to avoid the impacts of climate change. To achieve this, global GHG emissions must halve by 2030 - and drop to net-zero by 2050.

Targets are considered 'science-based' if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement.

As we continue our commitment to net zero, SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science.

There are 5 stages of SBTi:

1.  Commit: Register online and submit a letter to commit to setting a science-based target, or to have existing targets independently verified.

2.  Develop a target : Develop target(s) in line with SBTi science-based criteria.

3.  Submit target for validation: Review of targets by SBTi team of technical experts to validate it against our science-based criteria.

4.  Announce target and inform stakeholders: SBTi will publish targets on their Companies Taking Action Page.

5.  Disclose progress: Disclose company's emissions annually and monitor progress on reaching target.

1.2.  ESG Road Map and 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 and seize opportunities 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.

1.2.1.  Road Map to Net Zero

ESG	Subject	Target	Date	Progress to date
Environment	Carbon	All concrete products available in low carbon and ultra-low carbon.	2025	50% of concrete products available in low carbon and ultra-low carbon.
		Carbon capture storage and utilisation trial plant operational.	2025	First module ordered and due for commissioning in April 2023.
		Alternative fuels used in mobile equipment.	2030	Trials with alternative fuels for fleet and electronic fleet and mobile equipment.
		Alternative fuels used in fixed equipment (e.g. lime and asphalt).	2032	Upgrade of fuel handling systems and burners underway in Nordkalk for the use of alternative fuels.
		All kilns are carbon neutral.	2038	Aqualung agreement signed that will look to have all kilns carbon neutral by 2030.
		Net-zero.	2040
	Energy intensity and efficiency	2.5% reduction in energy intensity.	2030
		100% third party energy sourced from renewable means.	2030	Site and Virtual PPA under review across each business with some businesses already expanding their renewable energy sources.
	Resource utilisation and circular economy	100% of all manufactured products can utilise waste / recycled materials [1] .	2025	Products such as asphalt, concrete, and concrete products are already using, where specification allows, waste / recycled materials such as nappies, RAP, PFA, GGBS and recycled aggregates. The production of quicklime uses waste materials as fuel in the process of making quicklime.
		100% utilisation of all production materials.	2027	Set up of Baltic Aggregates enables the aggregates not suitable for industrial mineral application to be processed and supplied to construction markets.

1.2.2.  Environment

Pillar	Key Focus Area	Targets	How Did we do	Focus for 2023
Environment	Sustainable use of reserves and resources.	Achieve Carbon net-zero road map targets. Reduction in energy intensity and increase in energy efficiency. Maximisation of resource utilisation and circular economy.	Published first ESG report which contains extensive detail on its Environmental, Social and Governance policies and initiatives, as well as a detailed roadmap to net-zero. Energy surveys commissioned across platforms that have found multiple opportunities and savings. Appointment of Kinect Energy to give dedicated focus on energy procurement and hedging. Increase green energy sourcing initiatives including new wind and solar installations and further increases of existing solar capacity on site at Soignies. Successful "nappy-enhanced" asphalt trial using asphalt that contained recycled nappies. Partnership with Aqualung, to construct Europe's first industrial scale carbon capture facility in Scandinavia. PPG platform acquired and developed additional UK sites to facilitate the development and manufacture of ultra-low carbon products. Our strategic collaboration with Marshalls focusing on pushing existing technologies while also developing new manufacturing techniques.	Continue to focus and accelerate where possible our net-zero road map targets. Commissioning of first carbon capture aqualung module. Continue energy and fuel optimisation to reduce the reliance on fossil fuels. Submission and validation of SBTi data.
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.

1.2.3.  Social

Pillar	Key Focus Area	Targets	How Did we do	Focus for 2023
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. Increase workforce engagement and retention. Increase board diversity.	13% year-on-year reduction in incident frequency rate; 19% reduction in serious harm frequency rate and over 70% year-on-year increase in near hit, hazard, and risk reporting. This data is not just limited to employees, but included all those that work on our sites including contractors. Commitment to employees as well as their families and the communities through Family Fun Day with over 200 people attending. Climate and supervisor surveys that has allowed each business to focus on key areas identified by our employees. Increased female board diversity to 25% with regards to NEDs through the appointment of Axelle Henry. Continued development of our working relationships with the military and military employment charities. Engagement of apprenticeship schemes as well as school and university placements to offer careers to those both at the start of their careers or those looking for change or coming back to work later in life.	Continual roll out of supervisor alignment programme for Health & Safety. Continued focus on 3 core Health & Safety areas: Structure & Compliance; Proactive Prevention; and Learn & Improve. Alignment of all business to group core risks to continue to drive SIF reduction. Continue to promote Board diversity in addition to current diversity of 25% of female NEDs. Continue to work with government agencies, education establishments and communities to offer long term employment opportunities.
Social	Support the physical and mental health of our employees and their families.
Social	Attract, train, retain, and engage our workforce.
Social	Be a good neighbour; Source local, buy local, sell local, invest local.

1.2.4.  Governance

Governance	Promote QCA and Corporate Governance Codes	Continue to implement, and transparently disclose, compliance and matters relating to ESG. Maintain ongoing compliance in a dynamic environment across multiple jurisdictions.	Appointment of Axelle Henry as an independent NED. Appointment of  Company Secretary to bolster the Group's already strong corporate governance function, reporting to the Board on all compliance related matters. Alignment of cyber security policy as well as other overarching policies across the Group. Enhancement of governance education within the Group through the use of Formity training and compliance system.	Review opportunity for improvement of Investor relations function within the Group. Interaction with institutional investors' ESG & Stewardship analysts to ensure compliance with reporting requirements. Be a leading business of compliance that meets the expectations of our shareholders and potential investors in a timely fashion.
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

1.3.  Disclosure

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 with 2022 being the first year of reporting to SASB and where data limited, putting process in place to capture for the following year.
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 adopted 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. As a further commitment in 2022 we committed to SBTi and will use the 2022 data to submit and independently validate targets.

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.

SASB Topic	Accounting Metric	Category	Unit of Measure	Code	2022 Result
Greenhouse Gas Emissions	Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations	Quantitative	Metric tons (t) CO ₂ -e, Percentage (%)	EM-CM-110a.1	665,937 tCo2e 90% covered by EUETS
Greenhouse Gas Emissions	Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets	Discussion and Analysis	n/a	EM-CM-110a.2
Air Quality	Air emissions such as:	Quantitative	Metric tons (t)	EM-CM-120a.1
	(1) Nox,				699.10
	(2) Sox,				1544.19
Energy Management	(1) Total energy consumed,	Quantitative	Gigajoules (GJ) Percentage (%)	EM-CM-130a.1	4,413,519 GJ of energy
	(2) percentage grid electricity,				16% from grid
	(3) percentage alternative,				21% alternative energy including Guarantee of origin for alternative energy.
	(4) percentage renewable				2% renewable energy including guarantee of origin of renewable energy and solar PV
Water Management	Total fresh water withdrawn,	Quantitative	Thousand cubic meters (m.) Percentage (%)	EM-CM-140a.1	312,878m3 of water withdrawn 14% of process water is drawn from fresh water supplies
Waste Management	Amount of waste generated	Quantitative	Metric tons (t)	EM-CM-150a.1	4,496,901t This is predominantly related to overburden removal at quarries. These materials are often stored or used for restoration purposes including the recultivation of indigenous soils for remediation. The creation of new business is also looking to use surplus material into other business streams and therefore reprocess historical and future material once deemed waste.
Biodiversity Impacts	Description of environmental management policies and practices for active sites	Discussion and Analysis	n/a	EM-CM-160a.1
Biodiversity Impacts	Terrestrial acreage disturbed; percentage of impacted area restored	Quantitative	Acres (ac) Percentage (%)	EM-CM-160a.2	3,737 acres of land is disturbed. 16% of land was restored
Workforce Health & Safety	Total recordable incident rate (TRIR)	Quantitative	Rate	EM-CM-320a.1	Data has historically been collected as an amalgamation for Direct Employee, Contract employee and external contractors as it is believed that we are responsible for all those on our site regardless of employment status.
Workforce Health & Safety	Number of reported cases of silicosis	Quantitative	Number	EM-CM-320a.2	None
Product Innovation	Total addressable market and share of market for products that reduce energy, water, and/or material impacts during usage and/or production	Quantitative	Reporting currency Percentage (%)	EM-CM-410a.2	Market share is not a straightforward number to capture given all the industries and end markets we operate in, however in the Greenbloc and Sustainability section on we clearly show how construction material product innovation is being driven.
Pricing Integrity and Transparency	Total amount of monetary losses as a result of legal proceedings associated with cartel activities, price fixing, and anti-trust activities	Quantitative	Reporting currency	EM-CM-520a.1	Zero

1.1 Group Environmental Report

1.1.1.  Dealing with Carbon Dioxide

To deal with CO₂, it is crucial to understand how CO₂ is governed and how it is produced.

European Union Emissions Trading System (EUETS)

The EUETS regulates greenhouse gas emissions of energy and energy-intensive industries as well as inner-European aviation. The EUETS puts a cap on the carbon dioxide (CO₂) emitted by business and creates a market and price for carbon allowances. It covers 45% of EU emissions, including energy intensive sectors and approximately 12,000 installations.

The EUETS works on the 'cap and trade' principle. A 'cap', or limit, is set on the total amount of certain greenhouse gases that can be emitted by factories, power plants and other installations in the system within the cap, and companies receive or buy emission allowances which they can consume, or trade as needed.

An allowance gives the right to emit a tonne of CO₂, and any allowance surplus to requirement can be accumulated and used to offset future emissions or traded. The current surpluses were inherited from previous phases of the scheme where emissions were consistently below the system's cap. As such the value of these allowances was low and were traded at less than €10/tonne.

The directive concerning Phase IV (2021-2030) of the ETS entered into force on 8 April 2018. However, secondary legislation and guidance documents defining the legislative background of the Phase IV Trading Period are still ongoing. The new benchmark values (the value at which the free allowance is set) is below the actual emissions of the covered industries, and this deficit, along with market measures such as a stability reserve held by the EU and the faster reduction in year-on-year allowances has driven traded prices up to current values of €80-€100/tonne.

Lime Industry and CO2

For lime there are sources of CO₂ along the production process, however there are two primary sources that make up the majority of CO₂ emissions: fuel and process emissions from the calcination part of the process.

The calcination process is simply the formula of deriving CaO from CaCO₃ using heat.

The two main sources of CO₂ from the calcination part of the process are as follows: Combustion CO₂ (~25% to 35%) is produced from the burning of fossil fuels, while process CO₂ (~65% to 75%) results from the actual calcination of limestone.

All the CO₂ sources have different mitigation solutions.

Power and energy CO₂ can be reduced through energy efficiency, renewable electricity, fuel efficiency and renewable / alternative fuels. We are actively working on renewable energy solutions and Power Purchase Agreements.

Combustion CO₂ can be reduced by energy efficiency and fuel selection, as well as by carbon capture utilisation or sequestration (CCUS). We are in the process of moving away from fossil fuels and are due to commission our first module of the CCUS in April 2023.

Process CO₂ can only be addressed by CCUS, with our first module due to be commissioned in April 2023.

Carbon capture utilisation or sequestration

The emissions from lime kilns are well suited to technologies such as CCUS as they have a higher CO₂ content than most post-combustion gases and contain fewer contaminants due to using only limestone as feedstock and, due to product requirements, more stringent fuel quality requirements and typically lower gas filtration temperatures.

Post-combustion capture (PCC) systems constitute a technically and economically viable solution to reduce emissions in a variety of sectors. Retrofitting existing plants with post-combustion capture units may be the only effective and economically viable way to reduce emissions at the stack, without affecting the process upstream. The availability of a range of commercially ready technologies suitable for different types of CO₂ point sources is crucial for the wide deployment of CCUS systems. Given the wide ranges of plant sizes and flue gas specifications relevant to different emitting sources, it is unlikely that a single technology could fit best in all cases. Therefore, for effective process design, it is convenient to consider multiple technologies and select the most efficient and economically viable option to serve the purpose.

In addition to the membrane technology chosen by SigmaRoc, there are a few other options, each with their own opportunities and risks:

· Amine scrubbing is acknowledged as the most mature CCUS solution. Absorption-based processes for the separation of CO₂ from flue gases have been widely researched, and their effectiveness has been proven through testing on a variety of scales, from laboratory to commercial. For lime, this solution is both costly and requires a substantial footprint with significant energy consumption and issues with disposal of waste residues.

· Cryogenic capture and separation is a more recent development offered by industrial gas companies as an extension of their in-house process. For Lime, this solution is both costly and requires a substantial footprint with significant energy consumption.

SigmaRoc believes that membrane technology is optimally suited to our operations, in summary, due to the proven technology, small footprint, low capital and operating costs, and high efficiencies.

Membrane-based processes, on the one hand, are characterised by relatively simple process schemes (e.g., no flowing liquid phase, fewer auxiliary streams and fewer pieces of equipment), which make them cost-competitive at small scales. On the other hand, components like membrane modules are generally limited in their maximum size and benefit less from economies of scale, but do offer a modularity that allows for smaller investments over time to follow market effects.

The choice to pursue membrane technology in our lime production process was based upon several criteria - capital requirement, footprint, cost of operation, complexity of operation and overall environmental impact.

Membrane technology is, as mentioned previously, limited in scale and suitable for modularity, allowing smaller capital investment to track, as an example, allowances in EUETS. The modules are small (within a sea container) and would require, in our largest plant, four modules to cover process emissions. There are relatively few moving parts, no hazardous liquids or residues and, due to efficient kiln processes where we have little remaining waste heat which can be used in amine technologies, lower energy penalty to operate (typically less than 50% of competitive technologies). In addition, when the produced CO₂ is utilised in other processes, specific purity requirements could be met by the addition of another stage of separation within the existing modules.

1.1.2.  Streamlined Energy and Carbon Report (SECR)

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 2018 Regulations.

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 and Channel Islands (North West), Belgium (West) and Estonia, Finland, Poland, Sweden, Turkey & Spain (North East). This exceeds the minimum mandatory requirements set out in the 2018 Regulations for 'large unquoted companies', which only requires reporting of UK based energy use and emissions.

Acquisitions during 2022 include Johnston Quarry Group in January 2022 which forms the England Platform and RightCast which joined the UK based PPG Platform in April 2022. Spanish based La Belonga joined the North East region in July 2022.

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 energy and emissions for the newly acquired entities have been included from their respective acquisition dates. Reported emissions for Nordkalk in 2021 have been revised to present a full 12 months, thereby providing a more accurate like for like comparison with 2022 emissions.

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 2022 UK Government GHG Conversion Factors for Company Reporting, Statistics Finland Fuel Classification 2022, Swedish Environmental Protection Agency Emission Factors 2022 and the latest available factors from the Association of Issuing Bodies (2021), 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 necessarily reported separately outside the UK and Channel Islands as it is included within onsite fuel usage. 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 organisation's 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	2021		2022
Mandatory energy:	UK	Group Total1		UK	Group Total1
Gas	453,856	302,329,485		362,199	208,190,947
Purchased electricity	5,113,311	189,655,953		7,024,295	192,100,497
Transport fuel & site fuel	52,777,809	396,547,065		55,806,376	434,579,215
Total energy (mandatory)	58,344,976	888,532,503		63,192,870	834,870,659
Voluntary energy:
Bioenergy	-	22,177,534		-	32,094,230
Coal	-	428,002,960		-	387,013,242
Generated electricity2	-	1,906,467		-	4,499,105
Total energy (voluntary)	-	452,086,961		-	423,606,577
Total energy (mandatory & voluntary)	58,344,976	1,340,619,464		63,192,870	1,258,477,236

¹ The Group total includes emissions from the UK, Channel Islands, Belgium, and Nordkalk (Estonia, Finland, Poland, Sweden and Turkey, with Spain from August 2022 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	2021		2022
Mandatory emissions:	UK	Group Total3	UK	Group Total3
Scope 1
Gas	83	49,091	66	32,501
Company owned vehicles & site fuel	13,035	103,962	13,859	113,712
Scope 2
Purchased electricity (location-based)	1,086	43,200	1,358	42,771
Scope 3
Category 6: Business travel (grey fleet only)	77	103	88	311
Total gross emissions (mandatory)	14,281	196,356	15,371	189,295
Voluntary emissions:
Scope 1
Bioenergy (CH ₄ & N ₂ O)	-	1.4	-	2.0
Coal	-	140,333	-	131,205
Process related emissions	-	413,896	-	388,517
Total gross emissions (voluntary)	-	554,230	-	519,724
Total gross emissions (mandatory & voluntary)	14,281	750,586	15,371	709,020
Outside of scopes (CO2 only)
Bioenergy	-	7,586		11,013
Petrol/diesel biofuel content	227	251	223	239
Intensity ratio: tCO2e per million-pound turnover:
Mandatory emissions only	193.0	423.2	142.3	351.9
Mandatory & voluntary emissions	193.0	1,617.6	142.3	1,317.9

³ The Group total includes emissions from the UK, Channel Islands, Belgium, and Nordkalk (Estonia, Finland, Poland, Sweden, and Turkey, with Spain from August 2022 only).

Breakdown of emissions across the Group by region for 2022 only (tCO₂e)⁴

Emission source	2022
	North West	West	North East	Total
Scope 1
Bioenergy (CH ₄ & N ₂ O)	-	-	2	2.0
Coal	-	-	131,205	131,205
Gas	66	108	32,328	32,501
Company owned vehicles & site fuel	18,431	6,180	89,101	113,712
Process related emissions	-	-	388,517	388,517
Scope 2
Purchased electricity (location-based)	1,473	1,715	39,583	42,771
Scope 3
Category 6: Business travel (grey fleet only)	95	-	216	311
Total gross emissions	20,065	8,003	680,952	709,020
Outside of scopes
Bioenergy (CO2)	-	-	11,013	11,013
Petrol/diesel biofuel content	239	-	-	239
Intensity ratio
tCO2e per million-pound turnover	144.2	91.6	2,186.2	1,317.9

⁴ The North West includes the UK and Channel Islands; the West region includes Belgium; the North East region includes Nordkalk.

Intensity Ratio

The intensity ratio is total gross emissions in metric tonnes CO₂e per total million-pound (£m) turnover. This is calculated separately for 'mandatory' emissions and 'mandatory & voluntary' emissions for the UK and regionally for the North West, West and North East SigmaRoc regions. 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.

Energy efficiency action during current financial year

Emissions for Nordkalk (the North East region) have been reported for a full 12 months in 2021 (despite joining SigmaRoc in September 2021) and 2022 to provide comparable annual emissions for the Group. Consequently, the reported emissions reveal that Group wide relative and absolute emissions have reduced in 2022 despite the acquisitions of Johnston Quarry Group, RightCast and La Belonga.

Fuel consumption emissions in the North East region have reduced with a transition away from coal (reduced by 9,128 tCO₂e) and coke gas (reduced by 4,648 tCO₂e) to alternative and biofuel sources, such as recycled fuel oil (increased by 6,459 tCO₂e) and biofuel in Finland and Sweden rotary kilns.

Gross UK emissions have increased by 1,090 tCO₂e in 2022, largely due to the acquisitions of Johnston Quarry Group (1,816 tCO₂e) in 2022, which has countered emission reductions elsewhere in UK operations. Nevertheless, operational efficiencies at the Wales Platform quarries of Harries have resulted in energy efficiency improvements. In Blaencilgoed Quarry, usage of DERV has reduced by 0.14 litres per tonne of aggregate production when compared to 2021 data. At the same quarry, power to a small submersible water pump has been converted from a diesel generator onto mains electricity, which has a lower carbon intensity.

At the Harries Bolton Hill Quarry, operational efficiencies have resulted in DERV usage reducing by 0.3 litres per tonne in mobile plant aggregate production, while at the main fixed crushing plant, electricity consumption has reduced by 1.5 kWh per tonne in aggregate production compared to 2021 data. Furthermore, a fabricated steel structure has been constructed at Alltgoch Quarry over the cold feed bins at the asphalt plant as part of a development to keep the aggregate and dust drier and save energy costs.

The Ronez operations are trialling low temperature asphalt to reduce use of gas oil and have been improving metering and monitoring of energy usage to identify further opportunities in 2023. At Poundfield Products, work has begun to replace the diesel-powered forklift truck fleet with electric powered models, while also investigating the feasibility of installing solar panels at the main manufacturing sites.

1.1.3.  Water management and Biodiversity

SigmaRoc  understands the pressing need for businesses to preserve the environment they operate in, safeguarding our shared home for current and future generations.

SigmaRoc is dedicated to limiting and mitigating the impact of its activities on the environment and focusing on growing sustainably. To do so, we have implemented several polices including Biodiversity and Environment & Water.

Water management

Our operations minimise the amount of fresh water extracted, with 86% of our water being recycled and reused. In several sites, excess water is routed to local water supply companies for treatment and then use in local communities. Several of our quarries have extensive amounts of naturally collected water which, subject to agreement with local authorities, can be used as alternative water sources.

Biodiversity

Despite the Group operating over a large area of approximately 4,000 acres, this year saw around 16% restored according to agreed programs. Even in our working environments, we take a proactive approach to biodiversity and our sites have created working ecosystems. This includes breeding programs and the re-introduction of wildlife such as the Red Bill Chough, not seen for over 100 years, nesting of peregrine falcons, as well as other flora and fauna. Operational considerations not only seek to minimise impact, but also actively enhance biodiversity in surrounding areas.

Some sites are close to Sites of Specific Scientific Interest where our working relationships with local groups and national agencies have helped ensure they thrive. Where there is risk of impact, the valuable species are moved to other suitable or created areas.

The businesses' environmental aspects are guided by their individual operating policies, ensuring that local requirements, as well as wider requirements, are met.

The operating policies list the guiding principles of the management system and provide a framework for setting quality, environmental and H&S goals supporting strategy and aiming for continuous improvements being implemented within all businesses.

Before commencing operation of a site, the potential environmental and social impacts are assessed through an Environmental Impact Assessment process, after which an application for an environmental permit is typically made.

During the operating phase of the sites, environmental management is guided by environmental permits, which set regulatory requirements for the operation and closure, and by the environmental management system of the Company including ISO14001.

Active sites have restoration and water management plans which are often set as part of the permitting process and are updated as required. The environmental management of the sites covers matters such as ecological and biodiversity impacts, waste generation, noise impacts, emissions to air, discharges to water, natural resource consumption, and hazardous chemical usage.

The Group is committed to minimising its impact on the natural environment where it operates. We integrate biodiversity management into all steps of planning, production and closure of sites whilst maintaining a hierarchy of mitigation (avoid, minimize, restore, and finally offset).

1.2.  Group Health and Safety Report

2022 once again saw continued focus and commitment to health & safety across a larger and more diverse Group. Importantly, the Group has seen a further 13% reduction in the Total Recordable Incident Rate (TRIFR) and 8% reduction in Lost Time Injury Frequency Rate (LTIFR). Strong focus on near hits and hazard & risk elimination resulted in an increase in positive and lead indicating reporting by more than 70%. It should be clearly noted that when reporting we cover all those that work on our site regardless of employment status and as such this includes employees, agency staff, consultants, and contractors.

Operating in numerous countries across the UK and 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 best practice Group H&S standards.

Principles

The Group continues to drive its overarching H&S standards which we believe supported the continual improvement in health and safety in 2022.

Core Risks

SigmaRoc has worked closely with consultants and post-graduate researchers to continual improve our health & safety. This year has seen the focus on core risks which include:

· Contact with moving vehicles / objects

· Entrapment by machinery / moving parts

· Hit by suspended load / falling objects

· Falls from height

· Trapped by significant mass / energy

· Powders and COSHH material handling

Two primary areas of focus to improve our control of core risks has been on:

1.  Serious Injury or Fatality (SIF) framework; and

2.  Investigations.

SIF is the focus on events that could lead to Serious Injury or Fatality; in simple terms those events that cause or have the potential to cause life threatening / changing injuries. This work has been heavily developed in recent times and is seen to be the next evolution of well-grounded traditional H&S principles; driving the focus to those areas that are of the most serious nature. This has supported and aligns with our core risks and enables us to develop improved reporting to ensure action on those key areas.

The Group also maintains a strong focus on conducting detailed investigations, not only after an event has happened, but also before events happen. For example, through Bow Tie analysis, core risk events can be reviewed before they happen. This allows causes to be proactively identified so safety barriers can be implemented to mitigate routes to an adverse H&S event. On the flip side, the effects and consequences of the event are also proactively identified so safety barriers can be implemented to mitigate the impacts of such an event.

Post event investigation, including investigation on near hits, and externally publicised events both in our industry and beyond, is conducted. The level of investigation is proportional to the severity and seeks to review not just the event, but also organisation factors, task and environmental conditions, individual and team actions, and absent or failed defences.

It is by these principles and through core risk management and investigation that the Group can act to continually deliver its year-on-year H&S improvement.

Front line leadership

Following on from 2021, in 2022 the Group concluded its initial Group front line leadership initiative. The Group continues to support and drive NEBOSH and IOSH (or equivalent) training of supervisor and front-line management as an on-going process.

2022 laid the foundation for the 2023 initiative to ensure all front-line leaders spend optimal time on site, leading and managing safety, quality, and productivity. This includes engagement of our front-line leaders, which includes both supervisors and managers, and working closely with them to ensure they continue to be supported and equipped, whilst identifying and eliminating unnecessary process and reporting, to maintain a safe, lean, and agile business.

By focusing on the inputs of having boots on the ground and lean processes driven by our front-line leaders, the Group is confident that it will see continued improvement in the output of not only safety, but also quality and productivity.

HighVizz

Our ability to manage and report safety continues to thrive and develop through our HighVizz app. This includes supporting SIF identification, as well as new modules such as pre-start inspections, and enables our teams to have lean processes and systems that ensure risks are managed more effectively and efficiently.

Culture

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. In 2022, the H&S part of the monthly senior management meeting was given its own specific meeting held two weeks earlier. The meeting has been expanded to a wider audience to promote focus, communication and prompt closure of actions, with the ability to follow up key actions in the main senior management team meeting two weeks later; thereby driving the "plan, do, check, act" cycle used by the UK HSE.

The initiative based on football league tables in Belgium has shown huge success and has resulted in year-on-year increased engagement of nearly 400% for near hits, hazard, and risk identification and a subsequent reduction in SHIFR by 23%.

Occupational Health

Both SASB and the UK Minerals Product Association have a focus on occupational health, especially Silicosis. As a Group we have a hierarchy of controls, based upon best health and safety guidance and an assessment of the risks within our sites and workplaces ensuring compliance with HASWA 1974, MHSWR 1999, COSHH Regulations, L140 - HSE ACOP for HAVS, PUWER 1998, HSG258 - HSE Controlling airborne contaminants at work (use of LEVs) and EH75-4 and INDG 463 Silica and control methods.

These include:

· Use of Risk assessments, safe systems of works and COSHH assessments;

· Minimising dust generated by our operations through engineering controls such as enclosing processing equipment and transfer points, water suppression, use of spray systems for dust encapsulation and local exhaust ventilation;

· Periodic personal and local monitoring by external consultants and subsequent personal assessments against recognised exposure limits;

· Health questionnaires and health surveillance of staff by Occupational Health specialists;

· Where surveys identify potential exposure above recognised exposure limits warning signage is posted and workers are required to wear appropriate respiratory protective equipment including full and half masks, and air fed breathing systems;

· Time limits set for and policy of job rotation to minimise exposure times in addition to the use of specialised PPE in areas of risk;

· Training for new employees and regular refresher training for existing employees to raise awareness of the risks to health that can arise from exposure; and

· Training in the correct use and maintenance of PPE provided to protect their health and other checks such as face fit testing for dust masks.

1.3.  Stakeholders

Stakeholders (in alphabetical order)	Description	How we engage
Colleagues	We have a dedicated workforce of over 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 it is available and, where possible, are working to setup where it is 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 our long-term success. We strive to ensure timely payments and 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 good, knowledgeable, 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 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 and/or interactive investor presentations. 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 areommited 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 Directors 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 2022 and up to the date of these Accounts:

· Continued pursuit of buy and build growth strategy: the Group has continued its buy and build growth strategy, completing three acquisitions during 2022 and entering into a strategic JV partnership with ArcelorMittal.

· Management of Russian invasion into Ukraine: the Group successfully evacuated family members of Ukrainian colleagues into Poland and provided support near the Ukrainian border to those that were unable to evacuate.

· Dealing with impact from UPM union strike: the Group endured a 4-month union strike at one of its largest customers and managed to mitigate the impact through a combination of operational efficiency programmes and cost savings initiatives.

· 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.

1.4.  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.

· 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).

· FedBeton: Federation for ready-mixed concrete in Belgium.

Further to these bodies, businesses in the Group also have ISO accreditation or equivalent in ISO 9001 Quality (78%); ISO 14001 Environment (76%) and ISO 45001 Health & Safety (69%). Some businesses are currently going through ISO accreditation programs. Benelux was reviewed, however the local business and product accreditations held were deemed to have greater relevance than the ISO, for both our customers and end-users. 

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

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2022

		Year ended 31 December 2022						Year ended 31 December 2021
		Underlying	Non-underlying* (Note 11)		Total		Underlying		Non-underlying* (Note 11 )		Total
Continued operations	Note	£'000	£'000		£'000		£'000		£'000		£'000
Revenue	7	537,993	-		537,993		271,987		-		271,987
Cost of sales	8	(422,056)	-		(422,056)		(210,068)		-		(210,068)
Profit from operations		115,937	-		115,937		61,919		-		61,919
Administrative expenses	8	(46,144)	(19,126)		(65,270)		(31,792)		(25,734)		(57,526)
Net finance (expense)/income	12	(8,910)	(1,528)		(10,438)		(5,317)		(1,682)		(6,999)
Other net gains / (losses)	13	1,853	641		2,494		1,978		(1,644)		334
Profit/(loss) before tax		62,736	(20,013)		42,723		26,788		(29,060)		(2,272)
Tax expense	15	(9,142)	-		(9,142)		(4,699)		-		(4,699)
Profit/(loss)		53,594	(20,013)		33,581		22,089		(29,060)		(6,971)
Profit/(loss) attributable to:
Owners of the parent		51,251	(20,013)		31,238		21,499		(29,060)		(7,561)
Non-controlling interest	31	2,343	-		2,343		590		-		590
		53,594	(20,013)		33,581		22,089		(29,060)		(6,971)
Basic earnings per share attributable to owners of the parent (expressed in pence per share)	32	8.03	(3.14)		4.89		5.37		(7.26)		(1.89)
Diluted earnings per share attributable to owners of the parent (expressed in pence per share)	32	7.68	(3.00)		4.68		5.02		(6.79)		(1.77)

* 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 2022

			Year ended 31 December 2022	Year ended 31 December 2021
		Note	£'000	£'000
Profit/(loss) for the year			33,581	(6,971)
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
FX translation reserve			17,735	(15,806)
Cash flow hedges - effective portion of changes in fair value		3,432	882
Remeasurement of the net defined benefits liability			202	155
Other comprehensive income, net of tax			21,369	(14,769)
Total comprehensive income			54,950	(21,740)
Total comprehensive income attributable to:
Owners of the parent			52,048	(22,343)
Non-controlling interests			2,902	603
Total comprehensive income for the period			54,950	(21,740)

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2022

		Consolidated				Company
		31 December 2022	31 December 2021			31 December 2022	31 December 2021
	Note	£'000	£'000			£'000	£'000
Non-current assets
Property, plant and equipment	16	523,188	256,436			257	429
Intangible assets	17	189,875	318,963			-	-
Investments in subsidiary undertakings	18	-	-			583,421	554,195
Investment in equity-accounted associate	19	576	524			-	-
Investment in joint ventures	19	5,942	5,134			-	-
Derivative financial asset	33	4,771	870			-	-
Other receivables	20	4,259	4,759			-	-
Deferred tax asset	15	4,426	3,129			-	-
		733,037	589,815			583,678	554,624
Current assets
Trade and other receivables	20	86,805	73,254			3,168	2,890
Inventories	21	67,780	44,530			-	-
Cash and cash equivalents	22	68,623	69,916			5,055	19,038
Derivative financial asset	33	10,683	4,327			-	302
		233,891	192,027			8,223	22,230
Total assets		966,928	781,842			591,901	576,854
Current liabilities
Trade and other payables	23	140,443	98,213			13,526	5,567
Derivative financial liabilities	33	6,693	737			-	-
Provisions	25	6,596	4,024			-	-
Borrowings	24	33,846	21,723			20,072	8,102
Current tax payable		1,251	3,934			-	-
		188,829	128,631			33,598	13,669
Non-current liabilities
Borrowings	24	228,630	212,199			206,369	192,068
Employee benefit liabilities		1,312	1,589			-	-
Deferred tax liabilities	15	68,604	17,717			-	-
Derivative financial liabilities		552	-			-	-
Provisions	25	4,100	6,151			-	-
Other payables	23	5,051	4,401			5,051	4,401
		308,249	242,057			211,420	196,469
Total liabilities		497,078	370,688			245,018	210,138
Net assets		469,850	411,154			346,882	366,716
Equity attributable to owners of the parent
Share capital	28	6,383	6,379			6,383	6,379
Share premium	28	400,022	399,897			400,022	399,897
Share option reserve	29	7,483	3,104			7,483	3,104
Other reserves	30	10,261	(11,236)			1,362	1,362
Retained earnings		33,969	2,116			(68,368)	(44,026)
Equity attributable to owners of the parent		458,118	400,260			346,882	366,716
Non-controlling interest	31	11,732	10,894			-	-
Total equity		469,850	411,154			346,882	366,716

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 2022 was £24.4 million (year ended 31 December 2021: loss of £26.3 million).

The Financial Statements were approved and authorised for issue by the Board of Directors on 25 March 2023 were signed on its behalf by:

Garth Palmer

Chief Financial Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2022

		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 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	459	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
Balance as at 1 January 2022		6,379	399,897	3,104	(11,236)	2,116	400,260	10,894	411,154
Profit for the year		-	-	-	-	31,238	31,238	2,343	33,581
Currency translation differences		-	-	-	17,176	-	17,176	559	17,735
Other comprehensive income		-	-	-	3,634	-	3,634	-	3,634
Total comprehensive income for the period		-	-	-	20,810	31,238	52,048	2,902	54,950
Contributions by and distributions to owners
Acquired via acquisition		-	-	-	-	-	-	974	974
Issue of share capital	28	4	125	-	-	-	129	-	129
Share based payments		-	-	4,453	-	-	4,453	-	4,453
Exercise of share options		-	-	(74)	-	74	-	-	-
Dividends		-	-	-	-	-	-	(3,038)	(3,038)
Other equity adjustments		-	-	-	687	541	1,228	-	1,228
Total contributions by and distributions to owners		4	125	4,276	687	615	5,810	(2,064)	3,746
Balance as at 31 December 2022		6,383	400,022	7,483	10,261	33,969	458,118	11,732	469,850

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2022

		Share capital	Share premium	Share option reserve	Other reserves	Retained earnings	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
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
Balance as at 1 January 2022		6,379	399,897	3,104	1,362	(44,026)	366,716
Profit/(Loss)		-	-	-	-	(24,416)	(24,416)
Total comprehensive income for the period		-	-	-	-	(24,416)	(24,416)
Contributions by and distributions to owners
Issue of share capital		4	125	-	-	-	129
Issue costs	28	-	-	-	-	-	-
Share based payments		-	-	4,453	-	-	4,453
Exercise of share options		-	-	(74)	-	74	-
Total contributions by and distributions to owners		4	125	4,276	-	74	4,582
Balance as at 31 December 2022		6,383	400,022	7,483	1,362	(68,368)	346,882

CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

		Consolidated			Company
		Year ended 31 December 2022	Year ended 31 December 2021		Year ended 31 December 2022	Year ended 31 December 2021
	Note	£'000	£'000		£'000	£'000
Cash flows from operating activities
Profit/(loss)		33,581	(6,971)		(24,416)	(26,290)
Adjustments for:
Depreciation and amortisation	16 17	37,116	19,115		118	49
Impairments		30	2,006		-	-
Share option expense		4,453	2,321		4,453	2,321
Loss/(gain) on sale of PP&E		(1,471)	101			-
Net finance costs		10,438	7,360		7,032	2,705
Income tax expense	15	9,142	4,699		-	-
Share of earnings from joint ventures		(786)	(291)		-	-
Non-cash items		(475)	(1,103)		3,927	(275)
Increase in trade and other receivables		(6,807)	(1,178)		(450)	(1,142)
(Increase)/decrease in inventories		(17,322)	130		-	-
Increase in trade and other payables		31,182	9,142		4,151	2,348
Decrease in provisions		(19)	(1,339)		-	-
Income tax paid		(11,332)	(4,451)		-	-
Net cash inflows/(outflows) from operating activities		87,730	29,541		(5,185)	(20,284)
Investing activities
Purchase of property, plant and equipment	16	(51,008)	(22,555)		(14)	(426)
Sale of property, plant and equipment		10,235	3,475		-	-
Purchase of intangible assets	17	(1,713)	(62)		-	-
Acquisition of businesses (net of cash acquired)		(43,318)	(350,940)		(43,427)	(379,854)
Financial derivative		278	(4,327)		302	(302)
Loans granted		-	(750)		-	(750)
Interest received		603	-		7	5
Net cash used in investing activities		(84,923)	(375,159)		(43,132)	(381,327)
Financing activities
Proceeds from share issue		129	263,344		129	262,085
Cost of share issue		-	(8,748)		-	(8,748)
Proceeds from borrowings		36,154	155,734		26,840	167,020
Cost of borrowings		-	(5,425)		-	(5,425)
Repayment of borrowings		(30,361)	(12,253)		(8,067)	-
Net loans with subsidiaries		-	-		22,801	(3,927)
Interest paid		(9,732)	(3,511)		(7,537)	(1,858)
Dividends paid		(3,038)	(601)		-	-
Net cash used in financing activities		(6,848)	388,540		34,166	409,126
Net increase/(decrease) in cash and cash equivalents		(4,041)	42,922		(14,151)	7,515
Cash and cash equivalents at beginning of period		69,916	27,452		19,038	11,521
Exchange losses on cash		2,748	(458)		168	2
Cash and cash equivalents and end of period	22	68,623	69,916		5,055	19,038

Major non-cash transactions

During the year ended 31 December 2022 there were share based payments of £0.5 million. During the year ended 31 December 2021 there were share based payments of £42.7 million as part of the Nordkalk acquisition. £0.8m is a non-cash gain on a liquidation of Coordination du Hainaut SCS and the remainder of non-cash movements are not considered material.

NOTES TO THE FINANCIAL STATEMENTS

1.  General Information

The principal activity of SigmaRoc is to make investments and/or acquire projects in the quarried materials sector, and the principal activity of the Group is the production of high-quality aggregates and supply of value-added industrial and construction materials. The Company's shares are admitted to trading on AIM and it is incorporated and domiciled in the United Kingdom.

The address of its registered office is 6 Heddon Street, London, W1B 4BT.

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 Group and Company Financial Statements have been prepared in accordance with  UK-adopted International Accounting Standards in accordance 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 UK IASs 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 IASB issued various amendments and revisions to UK IAS and IFRSIC interpretations which include IFRS 3 - Reference to Conceptual Framework, IAS 37 - Onerous Contracts, IAS 16 - Proceeds before intended use, IAS 8 - Accounting estimates and Annual Improvements - 2018 - 2020 Cycle. The amendments and revisions were applicable for the period ended 31 December 2022 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 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
IAS 12	Income taxes	1 January 2023
IFRS 17	Insurance contracts	1 January 2023
IAS 8	Accounting estimates	1 January 2023
IAS 1	Presentation of Financial Statements	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

a)  Subsidiaries

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. On consolidation all inter-company transactions, balances and unrealised gains and losses on transactions between group companies are eliminated. 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.

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 UK IAS 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 UK IAS. 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 UK IAS 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 UK IAS. Nordkalk will continue to prepare their company financial statements in line with the local GAAP rules.

b)  Associates

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.

c)  Joint Arrangement

A joint arrangement is an arrangement in which two or more parties have joint control. A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement. Joint arrangements 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. 

d)  Employee Benefit Trust

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.

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

The Financial Statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.

The Group meets its day-to-day working capital and other funding requirements through operating cash generation and its Debt Facilities. The Debt Facilities comprises of a £205 million committed term facility, £100 million revolving credit facility and a further £100 million accordion option which matures on 15 July 2026. The Group has met all covenants on its Debt Facilities.

The Group has prepared cash flow forecasts for a period of more than 12 months which anticipate a continuous upward trend of profitability and cash generation. As the Group has a strong focus on operational gearing, it can remain flexible during economically disruptive events which can have a negative effect on cash flow .

At 31 December 2022, the Group had cash of £68.6 million and undrawn banking facilities of £173 million, and at the date of this report has similar levels of liquidity which is expected to provide sufficient funds for the Group to discharge its liabilities as and when they fall due and ensure covenants are met.

Based on the above, the directors believe that it remains appropriate to prepare the financial statements on a Going Concern basis.

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

e)  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.

f)  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'. An exception to this is when the borrowings exchange differences arise on monetary items that form part of the reporting entity's net investment in a foreign operation, in the consolidated financial statements the exchange gain or loss will be shown in other comprehensive income. 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.

g)  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.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.  Exchange differences arising 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 B-Mix and Nordkalk as at the completion date. As a result of this exercise, goodwill in B-Mix decreased from £6.4 million to £2 million with the corresponding movement being land and buildings. Goodwill in Nordkalk decreased from £268.8 million to £35 million with the corresponding movement being customer relations, vehicles, land and buildings 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 PPA 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.

Derivative Financial Instruments and Hedging Activities recognition and measurement

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and, if so, the nature of the item being hedged.  The Group designates certain derivatives as either:

· hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

· hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or

· hedges of a net investment in a foreign operation (net investment hedge).

At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items, including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge transactions.

The fair values of various derivative instruments used for hedging purposes are disclosed in Note 33 .  Movements on the revaluation reserve in shareholders' equity are shown in Note 30 .  The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.  Trading derivatives are classified as a current asset or liability.

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, which is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. 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 recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less provision for impairment. 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 2022	31 December 2021
	£'000	£'000
Total factoring	5,004	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 Income Statement.

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.

Deferred tax is recognised using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised, or the deferred tax liability is settled.

Deferred tax assets and liabilities are not discounted.

2.19.  Non-Underlying Items

Non-underlying items are a non UK IAS 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.

Performance obligations for contracting services are satisfied over time. Revenue is therefore recognised over time on an output basis, being volume of product laid for contract surfacing. As the performance obligations relating to contracting revenues have an expected duration less than 12 months, the Group has taken the practical expedient on the performance obligations disclosures. 

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 Consolidated Income Statement 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.

2.27.  Prior year restatement

During the year, the prior year accounting treatment of the PPA on acquisitions has been revisited. The fair value uplift on assets acquired as part of the PPA exercise should have resulted in a deferred tax liability being recognised in accordance with IFRS 3 and IAS 12. As a result, a prior year restatement to include deferred tax with acquired goodwill increasing by the same amount has been reflected within the financial statements. There are no changes to the prior period income statement, statement of comprehensive income, statement of changes in equity or the statement of cash flows. See Note 39 for details of the impact on the financial statement.

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 Group has a strong focus on operational gearing, allowing it to be flexible during economically disruptive events however 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 2022	31 December 2021
	£'000	£'000
Trade and other receivables	91,064	78,013
Cash and cash equivalents	68,623	69,916
	159,687	147,929

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 2022	31 December 2021
	£'000	£'000
North West	21,505	18,731
West	13,387	9,103
North East	56,172	50,179
	91,064	78,013

Impairment

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

	31 December 2022	31 December 2021
	£'000	£'000
Total trade receivables	79,261	66,166
Not overdue	68,051	47,345
Overdue 1 - 30 days	8,913	14,211
Overdue 31 - 60 days	1,491	1,996
Overdue 61 - 90 days	437	815
More than 90 days	554	1,799
Impairment loss recognised	(185)	(182)

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 2022	31 December 2021
	£'000	£'000
At January 1	1,060	763
Amounts arising from business combinations	36	571
Charged to the Consolidated income statement during the year	132	182
Movement in provision	(846)	(456)
	382	1,060

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.

2022

GBP thousand	USD	SEK	NOK	PLN
Gross exposure	(17,126)	17,028	(3,571)	(1,185)
Hedged	17,532	(14,068)	3,012	720
Net exposure	406	2,960	(559)	(465)
Sensitivity analysis (+/- 10%)	41	296	(56)	(47)

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.

2022	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	26,500	29,879	177,503	1,577
Trade payables	69,907	-	-	-
	96,407	29,879	177,503	1,577
Derivative financial liabilities
Forward exchange contracts used for hedging	556	-	-	-
Electricity hedges	825	526	26	-
	1,381	526	26	-

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 2022 is as follows:

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Total borrowings (Note 24 )	262,476	233,923
Less: Cash and cash equivalents (Note 22 )	(68,623)	(69,916)
Net debt	193,853	164,007
Total equity	469,850	411,154
Total capital	663,703	575,161
Gearing ratio	0.29	0.29

4.  Critical Accounting Estimates

The preparation of the Financial Statements, in conformity with UK IASs, 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, Harries and Nordkalk 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 £115.2 million as at 31 December 2022 (31 December 2021: £293 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 2022 (31 December 2021: £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 2022 of £6.1 million (31 December 2021: £4.3 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.

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 £5.1m. 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 2022 (2021: 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 has three geographical regions, North West which comprises of PPG, England, Wales and Channel Islands; West which comprises of Dimension Stone and Benelux; and North East which comprises of Quicklime, Nordics, Poland and Baltics. Activities in the North West, West and North East regions relate to the production and sale of construction material products and services.

			31 December 2022
			North West		West		North East		Total
			£'000		£'000		£'000		£'000
Revenue			139,709		87,365		310,919		537,993
Profit from operations per reportable segment			36,444		22,478		57,015		115,937
Additions to non-current assets			62,400		6,137		28,612		97,149
Reportable segment assets			221,317		138,823		606,788		966,928
Reportable segment liabilities			342,255		27,806		127,017		497,078
				31 December 2021
				North West		West		North East		Total
				£'000		£'000		£'000		£'000
Revenue				103,363		72,668		95,956		271,987
Profit from operations per reportable segment				24,094		20,050		17,775		61,919
Additions to non-current assets				(6,527)		10,611		378,174		382,258
Reportable segment assets (restated)				166,641		119,631		495,570		781,842
Reportable segment liabilities (restated)				253,441		27,714		89,533		370,688

7.  Revenue

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Upstream products	75,244	44,190
Value added products	401,012	198,107
Value added services	52,292	24,064
Other	9,445	5,626
	537,993	271,987

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.

The Group contract revenue for the year ended 31 December 2022 was £24.9m.

8.  Expenses by Nature

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Cost of sales
Changes in inventories of finished goods and work in progress	9,003	10,854
Raw materials & production	198,984	75,452
Distribution & selling expenses	43,671	18,622
Employees & contractors	71,936	48,698
Maintenance expense	21,543	12,556
Plant hire expense	6,449	5,374
Depreciation & amortisation expense	30,085	17,156
Other costs of sale	40,385	21,356
Total cost of sales	422,056	210,068
Administrative expenses
Operational admin expenses	42,455	30,175
Corporate admin expenses	22,815	27,351
Total administrative expenses	65,270	57,526

Corporate administrative expenses include £14.1 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 2022	31 December 2021
	£'000	£'000
Fees payable to the Company's auditor and its associates for the audit of the Company and Consolidated Financial Statements	414	360
Fees payable to the Company's auditor and its associates for tax services	-	-
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	117	300
Fees paid to the Company's auditor for other services	-	-
	531	660

9.  Employee Benefits Expense

	Consolidated			Company
	31 December 2022	31 December 2021		31 December 2022	31 December 2021
Staff costs (excluding directors)	£'000	£'000		£'000	£'000
Salaries and wages	87,682	54,071		2,990	2,104
Post-employment benefits	250	278		28	80
Social security contributions and similar taxes	1,891	1,679		329	386
Other employment costs	8,594	8,436		2	17
	98,417	64,464		3,349	2,587

	Consolidated			Company
	31 December 2022	31 December 2021		31 December 2022	31 December 2021
Average number of FTE employees by function	#	#		#	#
Management	69	85		6	5
Operations	1,550	1,371		-	-
Administration	426	409		4	4
	2,045	1,865		10	9

10.  Directors' Remuneration

		31 December 2022
	Directors' fees	Bonus	Taxable benefits	Pension benefits	Options issued	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Executive Directors
David Barrett	375	469	15	-	-	859
Garth Palmer	375	469	15	40	-	899
Max Vermorken	475	594	15	60	-	1,144
Non-executive Directors
Timothy Hall	50	-	-	-	-	50
Simon Chisholm	50	-	-	5	-	55
Jacques Emsens	50	-	-	-	-	50
Axelle Henry (1)	34	-	-	-	-	34
	1,409	1,532	45	105	-	3,091
		31 December 2021
	Directors' fees	Bonus	Taxable benefits	Pension benefits	Options issued (4)	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Executive Directors
David Barrett	358	469	14	-	61	902
Garth Palmer (2)	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 (3)	120	-	6	8	-	134
Simon Chisholm	43	-	-	4	-	47
Jacques Emsens	43	-	-	-	-	43
	1,214	1,243	39	55	264	2,815

(1)  Appointed on 26 April 2022

(2)  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. 

(3)  Resigned on 31 August 2021.

(4)  Options issued relate to options granted in the 2019 financial year and vesting in the 2021 financial year. 

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.

11.  Non-underlying Items

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Acquisition related expenses	4,345	20,125
Amortisation and remeasurement of acquired assets	6,761	1,888
Amortisation of finance costs	1,085	784
Restructuring expenses	1,780	2,334
Innovation	497	-
Discontinued operations	97	169
Share option expense	4,670	2,321
Unwinding of discount on deferred consideration	443	825
Net other non-underlying expenses & gains	335	614
	20,013	29,060

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 Johnston Quarry Group, RightCast and La Belonga and undertook due diligence on numerous other prospective acquisitions.

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 relate to the reorganisation and integration of recently acquired subsidiaries, including costs associated with site optimisation, transitional salary costs, redundancies, severance & recruitment fees, and costs associated with financial reporting and system migrations.

Share option expense is the fair value of the share options issued during the year and also includes fair value adjustment in 2022 resulting from changes to certain option exercise dates, refer to Note 29 more information.

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

Amortisation of finance costs is the amortisation of borrowing costs on the Syndicated Senior Credit Facility. These costs are amortised over a 5-year period.

Discontinued operations include the trading expenses, stock adjustments and redundancies incurred at the Bury site for the period from January 2022 to December 2022. Refer to Note 14 for more information.

Net other non-underlying expenses and gains include other advisory fees and other associated costs.

12.  Net Finance (Expense)/Income

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Net interest expense	(9,557)	(5,066)
Dividends	647	37
Other finance expense	(1,085)	(1,145)
Unwinding of discount on deferred consideration	(443)	(825)
	(10,438)	(6,999)

13.  Other Net Gains/(Losses)

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
Gain/(losses) on disposal of property, plant and equipment	1,471	(101)
Other gain/(loss)	20	730
Gain/(loss) on call options	248	632
Impairment	(30)	(2,006)
Share of earnings from joint ventures	786	291
Forex movement	-	788
	2,495	334

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 2022 £'000	31 December 2021 £'000
Revenue	-	-
Cost of sales	-	-
Gross profit	-	-
Administration	(97)	(169)
Other expenses	-	-
Loss from discontinued operation	(97)	(169)
Basic earnings per share attributable to owners of the parent (expressed in pence per share)	(0.04)	(0.04)

Cash movement	31 December 2022 £'000	31 December 2021 £'000
Net cash outflow from operating activities	-	(62)
Net cash inflow from investing activities	-	-
Net cash inflow from financing activities	-	-
Net increase / (decrease) in cash generated by the subsidiary	-	(62)

15.  Taxation

	Consolidated
	31 December 2022	31 December 2021
Tax recognised in profit or loss	£'000	£'000
Current tax	(6,960)	(4,529)
Deferred tax	(2,182)	(170)
Total tax charge in the Income Statement	(9,142)	(4,699)

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 2022	31 December 2021
	£'000	£'000
Profit/(loss) on ordinary activities before tax	42,723	(2,272)
Tax on profit on ordinary activities at standard CT rate	9,806	494
Effects of:
Expenditure not deductible for tax purposes	1,119	4,874
Deferred tax not recognised	274	1,268
Remeasurement of deferred tax for changes in tax rates	214	(120)
Income not taxable for tax purposes	(2,016)	(903)
Prior year adjustments	(785)	(864)
Depreciation in excess of/(less than) capital allowances	347	(61)
Tax losses	183	11
Tax charge	9,142	4,699

The weighted average applicable tax rate of 18.26% (2021: 21.74%) used is a combination of the standard rate of corporation tax rate for entities in the United Kingdom of 19% (2021: 19%), 20% on quarrying of minerals and rental property (2021: 20%) in Jersey and Guernsey, 25% (2021: 25%) in Belgium, 20% (2021: 20%) in Finland, 20.6% (2021: 20.6%)  in Sweden, 19% (2021: 19%)  in Poland and 20% (2021: 20%) in Estonia.

Deferred Tax Asset	Tax losses	Temporary timing differences	Total
At 1 January 2022	-	3,129	3,129
Acquisition of subsidiary	-	-	-
Charged/(credited) directly to equity	-	1,295	1,295
At 31 December 2022	-	4,424	4,424

Deferred Tax Liability	Tax losses	Temporary timing differences	Total
As at 1 January 2022 (As previously stated)	(128)	5,318	5,190
Prior year adjustment - refer to Note 39	-	12,527	12,527
As at 1 January 2022 (As restated)	(128)	17,845	17,717
Acquisition of subsidiary	-	827	827
Arising on fair value adjustments on PPA	-	47,127	47,127
Charged/(credited) directly to income statement	-	2,933	2,933
At 31 December 2022	(128)	68,732	68,604

Deferred income tax assets of £4.4 million (2021: £3.1 million) are recognised to the extent that the realisation of related tax benefits through future taxable profits is probable.  Deferred tax liabilities of £68.6 million (2021: 5.2 million) are recognised in full.  

16.  Property, Plant and Equipment

		Consolidated
		Office Equipment	Land and minerals	Land and buildings	Plant and machinery	Vehicles	Right of use	Construction in progress	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
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
As at 1 January 2022		4,593	189,967	121,233	289,918	24,595		13,243	643,549
Acquired through acquisition		157	-	20,601	15,294	227	2,052	38	38,369
Transfer between classes		-	74	(5,722)	(24,217)	(2,350)	35,014	(2,799)	-
Fair value adjustment		-	211,629	10,508	12,450	3	-	-	234,590
Additions		222	2,051	15,160	24,274	1,491	5,926	1,884	51,008
Disposals		(56)	(468)	(4,525)	(2,888)	(2,356)	(2,862)	-	(13,156)
Forex		177	2,881	653	10,382	915	(696)	(671)	13,642
As at 31 December 2022		5,093	406,134	157,908	325,213	22,525	39,434	11,695	968,002
Depreciation
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
As at 1 January 2022		4,040	70,174	68,393	226,274	18,232		-	387,113
Transfer between classes		-	-	(1,850)	(14,533)	(1,101)	17,484	-	-
Acquired through acquisition		77	-	8,693	7,588	32	392	-	16,782
Charge for the year		208	6,548	5,139	14,996	1,303	6,257	-	34,451
Disposals		(55)	-	(91)	(1,597)	(1,742)	(907)	-	(4,392)
Forex		170	3,179	1,098	6,580	613	(780)	-	10,860
As at 31 December 2022		4,440	79,901	81,382	239,308	17,337	22,446	-	444,814
Net book value
As at 31 December 2021		553	119,793	52,840	63,644	6,363	-	13,243	256,436
As at 31 December 2022		653	326,233	76,526	85,905	5,188	16,988	11,695	523,188

The transfer between classes relates to reclassing the assets which are right of use assets. 

				Company
	Office Equipment		Land & Buildings		Motor Vehicle	Right of Use	Total
	£'000		£'000		£'000	£'000	£'000
Cost
As at 1 January 2021	30		54		25	-	109
Additions	215		211		-	-	426
Disposals	-		-		-	-	-
As at 31 December 2021	245		265		25	-	535
As at 1 January 2022	245		265		25	-	535
Transfer between classes	-		(265)		(25)	290	-
Fair value adjustment	-		-		-	(68)	(68)
Additions	14		-		-	-	14
Disposals	-		-		-	-	-
As at 31 December 2022	259		-		-	222	481
Depreciation
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
As at 1 January 2022	50		40		16	-	106
Transfer between classes	-		(40)		(16)	56	-
Charge for the year	50		-		-	68	118
Disposals	-		-		-	-	-
As at 31 December 2022	100		-		-	124	224
Net book value
As at 31 December 2021	195		225		9	-	429
As at 31 December 2022	159		-		-	98	257

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 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	(3,373)		-	-	(3)	-	(463)	(3,839)
As at 31 December 2021	293,439		2,816	386	571	3,238	5,986	306,436
As at 1 January 2022 (As previously stated)	293,439		2,816	386	571	3,238	5,986	306,436
Prior year adjustment - refer to Note 39	12,527		-	-	-	-		12,527
As at 1 January 2022 (As restated)	305,966		2,816	386	571	3,238	5,986	318,963
Additions	-		-	-	-	-	1,713	1,713
Additions through business combination	89,096		-	-	-	-	-	89,096
Price Purchase Allocation - B-Mix	(4,429)		-	-	-	-	-	(4,429)
Price Purchase Allocation - Nordkalk	(233,955)		3,795	-	-	-	-	(230,160)
Amortisation	-		(826)	(85)	(87)	(160)	(1,507)	(2,665)
Forex	17,147		-	-	-	-	210	17,357
As at 31 December 2022	173,825		5,785	301	484	3,078	6,402	189,875

An adjustment has been made to reflect the initial accounting for the acquisition of B-Mix and Nordkalk by the Company, being the elimination of the investment in B-Mix and Nordkalk against the non-monetary assets acquired and recognition of goodwill. In 2022, the Company determined the fair value of the net assets acquired pursuant to the acquisition of B-Mix and Nordkalk, via a Purchase Price Allocation ('PPA') exercise.  For B-Mix, the PPA determined a decrease of £4.4 million of goodwill with the corresponding movement to uplift the value of the Land and Buildings. For Nordkalk, the PPA determined a decrease of £234 million of goodwill with the corresponding movement to uplift the value of the Customer relations, Vehicles, Land and Buildings and Land and Minerals

The goodwill total is made up of £40.2 million for Johnston, £81.3 million for Nordkalk, £24.7 million for the PPG Platform, £3.7 million for the Benelux platform, £16.7 million for Dimension Stone, £3.2 million for Harries, £3.7 million for the Ronez and £327,000 for La Belonga.

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 sixteen operating segments are considered to be Ronez in the Channel Islands; Topcrete, Poundfield, CCP, RightCast, Harries and Johnston in the UK; CDH, Stone, GduH and B-Mix in Belgium; and Quicklime, Nordics, Baltics and Poland 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 2023 and the five year plan to 2027. The key assumptions on which budgets and forecasts are based include sales volumes, product mix and operating costs. These cash flows are then valued using a discounted cashflow model, with a terminal value based on a perpetuity growth model. 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 10 per cent; which was calculated 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 2022	31 December 2021
	£'000	£'000
Shares in subsidiary undertakings
At beginning of the year	435,085	120,039
Additions	47,537	315,046
Disposals	-	-
At period end	482,622	435,085
Loan to/(from) Group undertakings	100,799	119,110
Total	583,421	554,195

Investments in Group undertakings are stated at cost less impairment.

Details of subsidiaries at 31 December 2022 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
Greenbloc 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
GD Harries & Sons Limited	England		£1	Dormant
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
Baltic Aggregates Oy	Finland		€1	Crushing stone
NK - East Oy	Finland		€8,869	Holding company
Nordkalk Ukraine TOV	Ukraine		€539	Mining rights
Nordkalk Prykarpattya TOV	Ukraine		€308	Dormant
Johnston Quarry Group Limited	England		£190	Holding company
Building Stone Limited	England		£1	Stone producing
CSSL No.2 Limited	England		£1	Dormant
Guiting Quarry Limited	England		£100	Construction materials
Bath Stone Group Limited	England		£110	Holding company
Monks Park Minerals Limited	England		£1	Dormant
Stoke Hill Minerals Limited	England		£13,620	Minerals rights
The Bath Stone Company Limited	England		£1	Construction materials
Hartham Park Minerals Limited	England		£1	Dormant
Costwold Stone Sales Limited	England		£1	Dormant
Flick Quarry Limited	England		£1	Dormant
Creeton Quarry Limited	England		£100	Dormant
Oathill Quarry Limited	England		£1	Dormant
Ropsley Quarry Limited	England		£100	Dormant
Righcast Limited	England		£103	Concrete manufacturer
Canteras La Belonga SA	Spain		€273,575	Construction materials

Name of subsidiary	Registered office address
SigmaFin Limited	6 Heddon Street, London W1B 4BT
Foelfach Stone Limited	6 Heddon Street, London W1B 4BT
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
GD Harries & Sons Limited	6 Heddon Street, London W1B 4BT
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, Finland
Nordeka Maden A.S	Levent MH.Cömert Sk. Yapi Kredi Blokl.c Blok no.1 c/17 Besiktas
Baltic Aggregates Oy	Skräbbölentie 18, FI-21600, Parainen, Finland
NK - East Oy	Skräbbölentie 18, FI-21600, Parainen, Finland
Nordkalk Ukraine TOV	Ivana Makukha st. 14, 78000, Ivano-Frankivsk Oblast, Tlumach, Ukraine
Nordkalk Prykarpattya TOV	Galytska st 10, 7600 Ivano-Frankivsk, Ukraine
Johnston Quarry Group Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Building Stone Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
CSSL No.2 Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Guiting Quarry Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Bath Stone Group Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Monks Park Minerals Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Stoke Hill Minerals Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
The Bath Stone Company Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Hartham Park Minerals Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Costwold Stone Sales Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Flick Quarry Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Creeton Quarry Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Oathill Quarry Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
Ropsley Quarry Limited	Westfield Lodge Butchers Hill, Great Tew, Chipping Norton, Oxfordshire, England, OX7 4AD
RightCast Limited	Unit W4 Junction 38 Business Park, Darton, Barnsley, South Yorkshire, S75 5QQ
Canteras La Belonga SA	Oviedo, Cellagu-Latores, 33193, Spain

For the year ended 31 December 2022 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

· GD Harries & Sons Limited

· Johnston Quarry Group Limited

· Building Stone Limited

· CSSL No.2 Limited

· Guiting Quarry Limited

· Bath Stone Group Limited

· Monks Park Minerals Limited

· Stoke Hill Minerals Limited

· The Bath Stone Company Limited

· Hartham Park Minerals Limited

· Costwold Stone Sales Limited

· Flick Quarry Limited

· Creeton Quarry Limited

· Oathill Quarry Limited

· Ropsley Quarry Limited

· RightCast Limited

Impairment review

The performance of all companies for the year ended 31 December 2022 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, managing 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 2022	31 December 2021
	£'000	£'000
Interests in associates	576	524
Interest in joint venture	5,942	5,134
	6,518	5,658

					Proportion of ownership interest held
Name	Country of incorporation		31 December 2022			31 December 2021
NorFraKalk AS	Norway			50%		50%

Summarised financial information

NorFraKalk AS - Cost and net book value	31 December 2022	31 December 2021
	£'000	£'000
Current assets	8,815	10,184
Non-current assets	7,338	6,507
Current liabilities	3,388	3,989
Non-current liabilities	1,872	2,621
	21,413	23,301

	For the period 1 January 2022 to 31 December 2022	For the period 1 September 2021 to 31 December 2021
	£'000	£'000
Revenues	20,055	5,694
Profit after tax from continuing operations	1,602	442

20.  Trade and Other Receivables

	Consolidated			Company
	31 December 2022	31 December 2021		31 December 2022	31 December 2021
	£'000	£'000		£'000	£'000
Trade receivables	78,879	66,166		2,555	1,787
Prepayments	4,917	3,598		358	346
Other receivables	3,009	3,490		255	757
	86,805	73,254		3,168	2,890
Non-current
Other receivables	4,259	4,759		-	-
	4,259	4,759		-	-

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:

	Consolidated			Company
	31 December 2022	31 December 2021		31 December 2022	31 December 2021
	£'000	£'000		£'000	£'000
UK Pounds	21,479	18,731		3,168	2,890
Euros	49,112	38,435		-	-
Swedish Krona	13,945	14,976		-	-
Zlotys	5,803	5,088		-	-
Ukrainian Hryvnia	-	7		-	-
Turkish Lira	725	666		-	-
Russian Ruble	-	110		-	-
	91,064	78,013		3,168	2,890

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 2022	31 December 2021
Cost and net book value	£'000	£'000
Raw materials and consumables	26,104	18,642
Finished and semi-finished goods	36,187	22,543
Work in progress	5,489	3,345
	67,780	44,530

The value of inventories recognised as a debit and included in cost of sales was £9 million (31 December 2021: (£10.8 million)).

22.  Cash and Cash Equivalents

	Consolidated			Company
	31 December 2022	31 December 2021		31 December 2022	31 December 2021
	£'000	£'000		£'000	£'000
Cash at bank and on hand	68,623	69,916		5,055	19,038
	68,623	69,916		5,055	19,038

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:

		Consolidated				Company
	31 December 2022 '000		31 December 2021 '000		31 December 2022 '000		31 December 2021 '000
UK Pounds	8,536		25,555		1,576		14,704
Euros	56,322		43,163		3,479		4,334
Swedish krona	1,100		991		-		-
Zlotys	2,479		17		-		-
Ukrainian Hryvnia	20		64		-		-
Turkish Lira	166		112		-		-
Russian Ruble	-		14		-		-
	68,623		69,916		5,055		19,038

23.  Trade and Other Payables

		Consolidated				Company
	31 December 2022		31 December 2021		31 December 2022		31 December 2021
	£'000		£'000		£'000		£'000
Current liabilities
Trade payables	69,907		55,865		2,964		984
Wages Payable	13,662		11,910		1,032		-
Accruals	39,627		19,681		4,475		3,402
VAT payable/(receivable)	3,785		3,975		(12)		(223)
Deferred consideration	5,873		1,331		4,243		730
Other payables	7,589		5,451		824		674
	140,443		98,213		13,526		5,567
Non - Current liabilities
Deferred consideration	5,051		4,401		5,051		4,401
	5,051		4,401		5,051		4,401

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

		Group				Company
	31 December 2022 '000		31 December 2021 '000		31 December 2022 '000		31 December 2021 '000
UK Pounds	44,493		30,073		16,418		9,539
Euros	69,579		46,161		2,159		429
Swedish krona	21,523		15,924		-		-
Zlotys	9,663		10,336		-		-
Ukrainian Hryvnia	9		9		-		-
Turkish Lira	227		96		-		-
Russian Ruble	-		15		-		-
	145,494		102,614		18,577		9,968

24.  Borrowings

	Consolidated				Company
	31 December 2022	31 December 2021		31 December 2022		31 December 2021
	£'000	£'000		£'000		£'000
Non-current liabilities
Syndicated Senior Credit Facility	206,342	191,937		206,342		191,937
Bank Loans	2,617	73		-		-
Finance lease liabilities	7,375	8,177		-		-
IFRS 16 leases	12,296	12,012		27		131
	228,630	212,199		206,369		192,068
Current liabilities
Syndicated Senior Credit Facility	20,000	8,000		20,000		8,000
Bank Loans	6,500	5,301		-		-
Finance lease liabilities	2,927	3,442		-		-
IFRS 16 leases	4,419	4,980		72		102
	33,846	21,723		20,072		8,102

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 2022 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 2022	31 December 2021
	£'000	£'000
Syndicated Senior Credit Facility	206,342	191,937
Bank Loans	2,617	73
Finance lease liabilities	7,375	20,189
IFRS 16 leases	12,296	-
	228,630	212,199

Finance Lease Liabilities (including IFRS 16 leases)

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

	Consolidated
	31 December 2022	31 December 2021
Finance lease liabilities - minimum lease payments	£'000	£'000
Not later than one year	7,346	8,037
Later than one year and no later than five years	14,547	14,643
Later than five years	5,124	3,666
	27,017	26,346
Future finance charges on finance lease liabilities	3,200	2,265
Present value of finance lease liabilities	30,217	28,611

For the year ended 31 December 2022, the total finance charges were £0.6m.

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 2022	31 December 2021
	£'000	£'000
Not later than one year	7,566	8,278
Later than one year and no later than five years	14,983	15,082
Later than five years	5,278	3,776
Present value of finance lease liabilities	27,827	27,136

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 2022	192,010	13,302	28,611	233,923
Increase/(decrease) through financing cash flows	(10)	(17,371)	(12,980)	(30,361)
Increase from refinancing	26,189	3,023	6,942	36,154
Amortisation of finance arrangement fees	(1,085)	-	-	(1,085)
Increase through obtaining control of subsidiaries	3,205	7,017	4,098	14,320
Transfer between classes	(20,000)	20,000	-	-
Foreign exchange movement	8,650	529	346	9,525
As at 31 December 2022	208,959	26,500	27,017	262,476

25.  Provisions

	Consolidated
	31 December 2022	31 December 2021
	£'000	£'000
As at 1 January	10,175	6,160
Acquired on business combination	631	5,721
Deduction	(109)	(1,706)
	10,697	10,175

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; £4.84m for the Nordkalk sites; and £338,943 for the Johnston 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, £83,000 is to cover the loss on the Holcim contract in CDH, £106,000 for legal fees, £1.76m for other restructuring costs in the Nordkalk entities and £2.66m 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 8% (2021: 7.07%) 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 £317,000.

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	2022 £'000	2021 £'000
Assets	-	-
Liabilities	3,543	4,292
Net defined benefit liability at end of year	3,543	4,292

Amounts recognised in the Statement of Financial Position	2022 £'000	2021 £'000
Present value of funded defined benefit obligations	2,468	2,222
Fair value of plan assets	(2,071)	(2,068)
	397	154
Present value of unfunded defined benefit obligation	3,128	4,138
Unrecognised past service cost	-	-
Total	3,543	4,292

Amounts recognised in the Income Statement	2022 £'000	2021 £'000
Current service cost	160	32
Interest cost	47	26
Expected return on plan assets	(127)	227
Total pension expense	80	285

Changes in the present value of the defined benefit obligation	2022 £'000	2021 £'000
Defined benefit obligation at beginning of year	4,292	3,593
Current service cost	160	32
Interest cost	47	26
Benefits paid	(317)	(220)
Remeasurements	(127)	227
Acquired in business combination	-	1,524
Remeasurements in OCI	(844)	-
Other significant events	249	-
Foreign exchange movement	83	(890)
Defined benefit obligation at end of year	3,543	4,292

Amounts recognised in the Statement of Changes in Equity	2022 £'000		2021 £'000
Prior year cumulative actuarial remeasurements	152		(75)
Remeasurements	(844)		227
Foreign exchange movement	54		-
Cumulative amount of actuarial gains and losses recognised in the Statement of recognised income / (expense)	(638)		152
Movements in the net liability/(asset) recognised in the Statement of Financial Position		2022 £'000		2021 £'000
Net liability in the balance sheet at beginning of year		4,292		3,593
Total expense recognised in the income statement		207		58
Contributions paid by the company		(317)		(220)
Amount recognised in the statement of recognised (income)/expense		(127)		227
Acquired in business combination		-		1,524
Remeasurements in OCI		(844)		-
Other significant events		249		-
Foreign exchange movement		83		(890)
Defined benefit obligation at end of year		3,543		4,292

Principal actuarial assumptions as at 31 December 2022
Discount rate	2.77%
Future salary increases	2.56%
Future inflation	2.20%

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 2022
	Loans & receivables	Total
Assets per Statement of Financial Performance	£'000	£'000
Trade and other receivables (excluding prepayments)	86,148	86,148
Cash and cash equivalents	68,623	68,623
	154,771	154,771
	At amortised cost	Total
Liabilities per Statement of Financial Performance	£'000	£'000
Borrowings (excluding finance leases)	235,459	235,459
Finance lease liabilities	27,017	27,017
Trade and other payables (excluding non-financial liabilities)	145,495	145,495
	407,971	407,971

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

Company			31 December 2022
			Loans & receivables		Total
Assets per Statement of Financial Performance			£'000		£'000
Trade and other receivables (excluding prepayments)			2,810		2,810
Cash and cash equivalents			5,055		5,055
			7,865		7,865
		At amortised cost			Total
Liabilities per Statement of Financial Performance		£'000			£'000
Borrowings (excluding finance leases)		226,342			226,342
Finance lease liabilities		99			99
Trade and other payables (excluding non-financial liabilities)		18,577			18,577
		245,018			245,018
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

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 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 (1)	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
As at 1 January 2022	637,915,750	6,379	399,897	406,276
Exercise of options & warrants - 4 January 2022	330,594 3 125 128	4	125	129
As at 31 December 2022	638,246,344	6,383	400,022	406,405

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

The authorised share capital consists of 702,070,978 ordinary shares at a par value of 1 penny.

On 4 January 2022, the Company issued and allotted 304,580 new Ordinary Shares at a price of 40 pence per share as an exercise of options. On this same day the Company issued and allotted 26,014. new Ordinary Shares at a price of 25 pence per share as an exercise of options.

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 2022	31 December 2021
Grant date	Expiry date	Exercise price in £ per share	#	#
5 January 2017	30 December 2026	0.25	260,146	286,160
5 January 2017	30 December 2026	0.40	11,878,645	12,183,225
15 April 2019	15 April 2026	0.46	9,030,934	9,340,934
30 December 2019	30 December 2026	0.46	7,976,392	8,389,726
			29,146,117	30,200,045

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

The Options issued on 5 January 2017 expiry date was extended from 5 January 2022 until 30 December 2026 on 15 December 2021.

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
Revalued on		15/12/2021	15/12/2021	-	-
Life (years)		5	5	7	7
Share price		0.8295	0.8295	0.465	0.525
Risk free rate		0.40%	0.40%	0.31%	0.55%
Expected volatility		31.32%	31.32%	4.69%	8.19%
Expected dividend yield		-	-	-	-
Marketability discount		-	-	-	-
Total fair value		£58,345	£661,604	£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.

2017 Options A and B were extended for another 5 years by the Board on 15 December 2021 and were revalued on this day.

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 2022					31 December 2021
		Weighted average exercise price					Weighted average exercise price
	#	£			#		£
Outstanding at beginning of the year	30,200,045	0.45			25,416,105		0.42
Granted	-	-			-		-
Vested	-	-			5,921,330		0.46
Exercised	(1,053,927)	0.44			(1,137,390)		0.40
Outstanding as at year end	29,146,117	0.44			30,200,045		0.45
Exercisable at year end	29,146,117	0.44			30,200,045		0.45

LTIP awards

	31 December 2022					31 December 2021
		Weighted average valuation price					Weighted average valuation price
	#	£			#		£
Outstanding at beginning of the year	-	-			-		-
Granted	25,620,000	0.69			25,620,000		0.69
Vested	-	-			-		-
Exercised	-	-			-		-
Outstanding as at year end	25,620,000	0.69			25,620,000		0.69
Exercisable at year end	-	-			-		-

30.  Other Reserves

	Group
	Deferred shares	Capital redemption reserve	Revaluation reserve	Capital reserve	Foreign currency translation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
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)	(11,236)
As at 1 January 2022	762	600	1,037	-	(13,635)	(11,236)
Other comprehensive income	-	-	3,634	-	-	3,634
Currency translation differences	-	-	-	-	17,176	17,176
Other equity adjustments	-	-	-	687	-	687
As at 31 December 2022	762	600	4,671	687	3,541	10,261

31.  Non-controlling interests

	Group £'000
As at 1 January 2022	10,894
Shares issued to non-controlling interest	-
Acquired in business combination	974
Non-controlling interests share of profit in the period	2,343
Dividends paid	(3,038)
Foreign exchange movement	559
As at 31 December 2022	11,732

		31 December 2022			31 December 2021
	Suomen Karbonaatti		Other individually immaterial subsidiaries		Suomen Karbonaatti	Other individually immaterial subsidiaries
	£'000		£'000		£'000	£'000
Current assets	17,592		12,427		22,164	3,970
Non-current assets	3,348		19,605		4,430	13,166
Current liabilities	7,975		7,627		6,100	2,232
Non-current liabilities	5,767		4,361		9,011	885
Net Assets	7,197		20,045		11,483	14,019
Net Assets Attributable to NCI	3,527		7,366		3,981	5,905
Revenue	37,760		23,662		52,245	9,734
Profit after taxation	3,294		1,993		6,748	148
Other comprehensive income	-		-		-	-
Total comprehensive income	3,294		1,993		6748	148
Net operating cash flow	4,196		1,556		7,326	1,596
Net investing cash flow	(679)		(2,782)		(603)	(2,170)
Net financing cash flow	(6,208)		1,701		(6,012)	(4,040)
Dividends paid to NCI	3,038		-		601	-

32.  Earnings Per Share

The calculation of the total basic earnings per share of 4.89 pence (2021: (1.89) pence) is calculated by dividing the profit attributable to shareholders of £31,238 million (2021: loss of £6,971 million) by the weighted average number of ordinary shares of 638,243,627 (2021: 400,170,256) in issue during the period.

Diluted earnings per share of 4.68 pence (2021: (1.77) pence) is calculated by dividing the profit attributable to shareholders of £31,238 million (2021: loss of £6,971 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 667,430,527 (2021: 427,854,251). The weighted average number of shares is the opening balance of ordinary shares plus the weighted average of 327,877 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 measured 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			-	436	1,526	-	-	1,962		-	1,962	1,962
CO2 emission hedge			-	-	-	-	-	-		-	-	-
Electricity hedges			-	-	13,493	-	-	13,493		13,493	-	13,493
Financials assets not measured at fair value
Trade and other receivables (excl. Derivatives)			-	-	-	91,065	-	91,065		-	-	-
Cash and cash equivalents			-	-	-	68,623	-	68,623		-	-	-
Financial liabilities measured at fair value
Forward exchange contracts			-	-	1,441	-	-	1,441		-	1,441	1,441
Electricity hedges			-	-	5,804	-	-	5,804		5,804	-	5,804
Financial liabilities not measured at fair value
Loans			-	-	-	-	235,459	235,459		-	-	-
Finance lease liability			-	-	-	-	27,017	27,017		-	-	-
Trade and other payables (excl. derivative)			-	-	-	-	145,495	145,495		-	-	-

34.  Business Combinations

Johnston Quarry Group

On 31 January 2022, the Group acquired 100 per cent of the share capital of Johnston Quarry Group Limited ('JQG') for a cash consideration of £35.5 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 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	42,046
Repayment of loan	(6,996)
Deferred consideration	8,500
	43,550

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	1,587
Trade and other receivables	2,160
Inventories	881
Property, plant & equipment	16,896
Trade and other payables	(5,840)
Borrowings	(10,795)
Provisions	(325)
Income tax payable	(350)
Deferred tax liability	(826)
Total identifiable net assets	3,388
Goodwill	40,162
Total consideration	43,550

Since 31 January 2022 JQG has contributed a profit of £4.5 million and revenue of £16.5 million. Had JQG been consolidated from 1 January 2022, the consolidated statement of income would show additional profit of £11,000 and revenue of £1.2 million.

RightCast Limited

On 27 April 2022, the Group acquired 100 per cent of the share capital of RightCast Limited ('RightCast') and its subsidiaries for a cash consideration of £2.55 million. RightCast is registered and incorporated in England. RightCast is a precast company specialising in the design, manufacture, supply and installation of bespoke precast concrete products.

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

Total consideration	£'000
Initial Cash	2,550
Working capital adjustment	297
Cash acquired and repatriated to vendors	690
Deferred consideration	450
	3,987

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	315
Trade and other receivables	1,153
Inventories	462
Property, plant & equipment	75
Trade and other payables	(474)
Income tax payable	(57)
Deferred tax liability	(19)
Total identifiable net assets	1,455
Goodwill (refer to Note 17)	2,532
Total consideration	3,987

Since 27 April 2022 RightCast has contributed a profit of £0.5 million and revenue of £2.8 million. Had RightCast been consolidated from 1 January 2022, the consolidated statement of income would show additional profit of £0.1 million and revenue of £0.9 million.

La Belonga

On 31 July 2022, the Group acquired 65 per cent of the share capital of La Belonga with the remaining 35 per cent acquired by CdB. for a cash consideration of €2.2 million. La Belonga is registered and incorporated in Spain. La Belonga is a high-quality producer of limestone. 

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

Total consideration	£'000
Net cash consideration	1,919
Deferred consideration	1,129
	3,048

Recognised amounts of assets and liabilities acquired	£'000
Cash and cash equivalents	127
Trade and other receivables	2,253
Investments	46
Inventories	619
Deferred tax asset	7
Property, plant & equipment	4,740
Intangible assets	23
Trade and other payables	(1,500)
Borrowings	(3,374)
Provisions	(220)
Total identifiable net assets	2,721
Goodwill	327
Total consideration	3,048

Since 31 July 2022 La Belonga has contributed a profit of £0.1 million and revenue of £1.3 million. Had La Belonga been consolidated from 1 January 2022, the consolidated statement of income would show additional profit of £19,000 and revenue of £3.2 million.

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 2022	31 December 2021
	£'000	£'000
Ronez Limited	(22,764)	(18,328)
SigmaGsy Limited	(7,663)	(5,705)
SigmaFin Limited	20,549	20,146
Topcrete Limited	(10,346)	(9,494)
Poundfield Products (Group) Limited	5,356	5,501
Foelfach Stone Limited	557	466
CCP Building Products Limited	4,586	5,647
Carrières du Hainaut SCA	14,948	18,251
GDH (Holdings) Limited	10,035	9,588
B-Mix Beton NV	8,013	1,295
Stone Holdings SA	384	376
Nordkalk Oy Ab	70,196	91,367
Johnston Quarry Group	7,747	-
RightCast Limited	(799)	-
	100,799	119,110

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

All intra Group transactions are eliminated on consolidation.

37.  Ultimate Controlling Party

The Directors believe there is no ultimate controlling party.

38.  Events After the Reporting Date

On 28 February 2023, the Company raised gross proceeds of approximately £30 million through the issue of 55,555,555 new Ordinary Shares at a price of 54 pence per share.

On 10 March, the Company announced the completion of the Goijens and the Juuan Dolomitik acquisitions for an aggregate consideration of £12 million. Goijens operates two concrete plants and concrete recycling facilities, as well as pumping and other services and Juuan Dolomitik, a specialist supplier of high-quality dolomitic limestone. They will be immediately enhancing to the Group's underlying earnings, and the acquisitions were funded from the net cash proceeds generated by the Group's equity fundraising in February 2023.

No further financial information on these transactions is available at this time, due to the proximity of the acquisitions to the reporting date of these financial statements.

On 15 March 2023, the Company announced that it had been successful in its claim to seek compensation from the Swedish state in respect of land use restrictions. The verdict, pronounced on 14 March 2023, made an award to Nordkalk in compensation for economic loss, of which a sum of c. SEK 188 million (c. £17 million) that is to be adjusted for inflation and interest until payment is made, is receivable by the Group as its share. The verdict is subject to appeal until 4 April 2023 and receipt of funds remains subject to the outcome of any appeal, if lodged.

39.  Prior year restatement

As part of previously made acquisitions, a PPA exercise was performed to split out separately identifiable assets from acquired goodwill.  On completion of this exercise, the deferred tax impact on the fair value uplift of the assets identified during the PPA was not correctly reflected in line with IAS 12. As a result, a prior year adjustment is required which results in an increase to the Group's deferred tax liability of £12,527,074 with acquired goodwill increasing by the same amount.  There are no changes to the prior period income statement, statement of comprehensive income, statement of changes in equity or the statement of cash flows.

The impact of the prior year restatement in respect of the classification of the investments held are as follows:

	2021 As presented £'000	Restatement £'000	2021 As restated £'000
Non-current assets
Intangible assets	306,436	12,527	318,963
Non-current liabilities
Deferred tax liability	5,190	12,527	17,717
Net assets	411,154	-	411,154

---

[1] Where industry specifications allow for it

 

END

 

 

FR SESFUMEDSEFD