Building differentiated growth

With its £45m acquisition of Ronez Ltd, a vertically-integrated aggregates producer in the Channel Islands, SigmaRoc has emerged as a new, growth-orientated construction materials company. But utilising management’s experience with industry majors, its growth model is differentiated from the regionally-focused ‘buy-and-build’ strategy typically employed in the sector – rather than target market share in a particular geography, SigmaRoc is looking to build a portfolio of niche assets that avoid head-on competition with majors and which provide income diversification to maintain robust margins throughout the industry cycle. As the dominant operator in island markets where barriers to entry are high, Ronez fits this model well, and as a high-quality, cash-generative business with a long track record of profitability it also provides SigmaRoc with a solid platform from which to leverage its growth strategy – we expect the group to execute further earnings-accretive transactions and/or organic investments over the coming months which should see the shares re-rate higher as management pursues its ambition of building a £500m market capitalisation business in five years.