Equity Analysis /
United Kingdom

GB : SigmaRoc - Critical mass

    Charlie Campbell
    Charlie Campbell

    Analyst - Building Materials, Equipment Hire & Housebuilders

    Marcus Cole
    Marcus Cole

    Analyst - Building Materials, Equipment Hire & Housebuilders

    CGS-CIMB
    13 April 2021
    Published by

    Clean FY20 EPS beat our expectations by 5%, but the real story of these results is that EBITDA came in ahead of our November 2019 forecast. EBITDA rose 64% through acquisitions, but management has extended its record of improving the returns of acquired businesses. We raise our EBITDA forecasts by c.10% across the forecast period to reflect only the recent Belgian transactions. We raise our target price to 92p per share, set at 10x EV/EBITDA. With these acquisitions now in place, the group has reached critical mass with four platforms and strong enough cash flows to self-fund acquisitions and other opportunities.