Member Info for Corriedog

Good article in this week’s investor’s chronicle and US equivalents to Sigmaroc. Vulcan on a p/e of 24 and eagle on 12. Eagle focuses on residential which is perceived as weaker.
Sigmaroc trades on a historic p/e of 8 and is a real growth company with strong barriers to entry.
Vulcan would pay twice today’s share price to buy Sigmaroc. And Sigmaroc management haven’t finished their growth plans yet. Share price has improved somewhat but due a re rating

Couldn’t agree more. Digital is the fourth Industrial Revolution, just started.

This company is very well positioned to be one of the winners

I can’t see anything to worry about in the accounts in fact quite the contrary.
A very comprehensive and clean audit report, signed in only three and a half months- and lots of fees paid to the auditors.
Remuneration of directors not excessive.
Getting to grips with margin and cash management.
Balance sheet will look better with another year of free cash flow generation as net current assets a bit weak but not unusual for a growth business.
Lack of big impairment charges shows that they have bought well.
A proper company and have bought some more whilst they remain significantly undervalued.

Another thought! What would this be priced at as a private company about to IPO with SMS only a non exec chairman? £1 more than today’s price?

It is about instinct. This is really cheap which initially makes you think that something has to be wrong. But there isn’t. This company is about more than one man.
Assume no acquisitions and look forward one year on Board projections. Circa £180m Ebitda on £1.2bn turnover- and set to rise to £240m in short order. Debt of £200m with all deferred consideration paid in cash.
What multiple to apply to just £180m Ebitda for enterprise value. To get to today’s equity value then only 5.5.
Priced to fail and I don’t think that it will.
What about a multiple of 10 on £240m and debt paid off with no more acquisitions and not much organic growth on whoppers. Even that alone gets over £4 per share.

Even better to buy at 1850

Looks very cheap against the Blackstone deal for Industrials REIT. Must be due a re rate or bid approach.

A company delivers more than forecast and without any dramas and projects to continue to beat the market and share moves down 7%. Cheap as chips but hampers deal making.
Time to move listing to US.

I reckon that the current Ebitda to enterprise value multiple should be at least 7 to give an enterprise value of over £700m. Even that is quite cheap.
With the scale and geography that they are building then they would be looking for a multiple of at least 10 if they were trying to sell.
On current numbers that values the equity at circa £800m or double today’s market cap.
And Ebitda should grow and debt fall to improve it still further.
They have impressively managed the challenges of the last 12 months whilst still growing the company in a disciplined fashion.
Yes I am a fan - based on facts.

Maths is incorrect. It is Ebitda to enterprise value which is just over 5. Could stop growing and pay off debt in 18/24 months and is then on a multiple of 3.5.
Share price is depressed because of continuous sales by Blackrock.
Quality company with quality management who always put their own cash in and don’t just rely on options. A lot more to come here.

Snapp

Lack of communication

Very bad move not to have restored the dividend even to a nominal amount. Shows a lack of confidence.

There needs to be an update on SMS health and an actual date for release of the results. Too quiet!

Not true
I do this for a living

Deferred tax is a real tax charge, not notional.
It is payable in the future. Simple and hence the word used is deferred.
The rns says payable in 2024.

What better example could there be that the UK is uninvestable due to government fiscal policy. A great company badly damaged by unpredictable tax.
Look at average prices realised. Windfall? Me thinks not.
Amazing that all of this done by a so called Tory government.
And Labour wants to increase the tax and backdate it!
What a mess.

This is and has been a growth share with very able management.
Normally such buy and build strategies are PE backed and not played out in public markets like Sigmaroc is doing.
The financial performance and communication with shareholders is excellent.
Management have always put their own cash into fundraising and not relied on options.
The only thing wrong is the share price! A bit too high at 110p when Blackrock started selling.
This will be a very good investment

I should have added that I bought a decent chunk of shares on Friday at 19p but was that sensible?

What on earth is the real value of this share and is it investable?
The enterprise value is about £1m (debt and value of shares) which is circa twice the free cash flow for 2022.
By any normal standard that is very cheap but is it?
Free cash flow in 2023 is maybe (a guess) £200m.
So the multiple is 4/5 rather than 2 which is still cheap but not quite so.
The negatives are -
1. No shareholder returns. It wouldn’t take much to pay a dividend of £35m to give a yield of 10% or so. One holds shares that generate an income or grow or both.
2. No strategy
3. No explanation of what SV development might achieve or risks involved and hurdles to overcome or timing
4. Likely Labour government back dating and increasing already high taxes by ?