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Reassuring to see such a strong share price performance even after a large placing - a good indicator that market sentiment is very positive.
The good news keeps on coming,
https://www.dailymail.co.uk/news/article-9941815/Ministers-set-unveil-8bn-plan-build-119-000-properties.html
Huge investments by UK PLC.
Still it goes up, really positive noises coming from SRC, the number for the enlarged company should be easy this year , then the real challenges start to maximise the combined company along with the further acquisitions, I'm expecting yet a bigger deal in the next 12 months, with backing from borrowings and a placing at higher levels to really push SRC along, whilst the EU/UK is spending large on building anything , I think SRC are really set to continue their growth.
The only flaw here for me is if another company tries to buy SRC before the journey is done, lets hope that SRC can stay independent for at least 36 months to get the full potential out.
24 month target price for me, is an eye watering £3
DYOR / IMO
Peel Hunt says SigmaRoc looks ‘very good value’
Building materials company SigmaRoc (SRC) has delivered ‘strong first-half progress’ and broker Peel Hunt expects momentum to continue.
Analyst Clyde Lewis maintained his ‘buy’ recommendation and 135p target price on the stock, which closed up 2.5%, or 2.5p, at 104p on Monday.
Lewis said solid interim numbers had been driven by acquisitions, a market recovery and internal efficiency measures, while the recent deal to buy Finland’s Nordkalk, which quarries and manufactures limestone-based products, was another positive step.
‘There is more of that to come in the second half, especially with the Nordkalk deal completing shortly,’ said Lewis.
‘We are not changing our forecasts at this stage but continue to believe the shares look very good value given the material upside potential we expect from Nordkalk and the opportunities for further bolt-ons and incremental investments.
Update from Simon after market closed.
https://www.investorschronicle.co.uk/ideas/2021/08/23/bargain-shares-on-the-earnings-upgrade/
GLA
I'd be surprised if we saw any dividends any time soon given, as you say, they are still in acquisition and investment mode.
Nordkalk does seem to be very cash-generative - perhaps that will be the future engine for pay-outs, but I can't help feeling that SRC is likely to be sold itself before too long if it continues to deliver.
any views on potential dividends from SRC, guess they are in acquisition mode for the foreseeable future so no divi'd , but personally, I think in the medium term dividends are likely to follow, which for me is the compelling part of SRC strategy to go from penny share to medium size company, lets hope no one else notices what good job is being done here or else it will be come a target itself.
DYOR
Hi ihalliwell10
Couldn't agree more with your comments. This business has excellent momentum and is going to benefit significantly from infra demand over the next few years. I really like the CEO too - concise and decisive.
+1, this looks like a tremendous update with the acquisition numbers to be folded in, the next 12 months likely to repeat what we have just experienced in terms of share price growth, anything between £1.30 and £3 for me, nothing not to like as long as the resources and deliveries are maintained, the UK&EU is going to need resources for big building projects over the next 5/10 years to keep the economy on track.
Excellent announcement this morning - strong performance and a very positive outlook. Currently one of my favourite direct holdings.
I have some investments [such as this share] that have been made with the aim of benefitting from the 'Build Back Better' post-covid economy. Foundations specialist Van Elle released their accounts today, noting;
'We are currently experiencing some current supply chain challenges, particularly with regard to cement, concrete and steel pricing and availability.'
A good sign for demand for, and the margin of, Sigmaroc's products going forward.
The bid is not gonna stay sub 100 for very long...
Sell before the news..... or just hold for 2 years......
I was thinking the same, I think this will propel the shareprice in the medium term, could be a good opportunity to buy some additional, this is the first stock I will be adding to a position.
I see SRC continuing their buy and build strategy and the EU govs backing the build strategies to the hilt
Reading the circular dated 15 July this looks like a really important acquisition which takes SRC into a different league.
Nordkalk is clearly a quality business with good performance metrics which make the acquisition price look reasonable enough. It is also going to be immediately significantly earnings enhancing.
If the share price drifts down at all in the short term given the amount of new stock I will add again. I bought at 54p and 70p, then sold a few at 93p a short time ago to trim the position, but this deal looks like a step-change for the company.
I didn't even get asked,
Amazing the speed. All sorted while the market ended...
Just received notification that I received the full amount subscribed for.
As long as the EU / Uk keeps on building then SRC seem to be building a business that is profitable and positioned to take advantages of bigger scale efficiencies, every acquisition seem to be smart from a proven board.
I'm backing these all the way, medium terms growth story is looking solid.
DYOR
Missed the Primary Bid Offer congratulations to those who have managed to snap up some cheaper shares. Still happy with this relatively massive deal. Nordkalk is probably crying out for a radical efficiency overhaul. Sigmaroc have the track record to do it, though likely to demand plenty of thought and attention in the short term. Resulting improved operational activity will mean an uplift on expected increased profits and quicker debt repayment in the coming years.
The limestone assets being targeted here, convinces me that as well as being a major constituent in the manufacture of cement, it is also required to manufacture Greenbloc.. No mention in the rns, however, does highlight its importance in the manufacture of construction materials.. Regardless, the limestone assets are inflation proof.. A good long term buy, would expect the sp to return to 95p pretty quickly with the placing fully subscribed.
Looks to close tonight. I have just subscribed as recently sold a portion of my holding.
I am in for £10k. This is an excellent deal. Can't understand why nomlungu thinks it is disappointing.
7.5 times cash earnings. Large proportion via debt. Opens up a number of new markets. Great pricing for anyone that's held Sigmaroc for a while now.