17th Aug 2015 11:52
LONDON (Alliance News) - Expectations have been "somewhat dampened" for Mincon's interim results on Wednesday, according to analysts at Davy, due to pricing pressure flagged by the Irish engineering company earlier this year and weak results from some of its peers.
"Use of cash, cost-cutting measures and updates on the acquisition pipeline are likely to receive the main attention," Davy said in a note to clients on Monday.
In May, Mincon had said its gross margin was 38% in the first quarter of 2015, down from 50% in the same period a year before.
The research note said that revenue is likely to significantly increase, largely due to the acquisitions of Rotacan, ABC Products and Omina Supplies in August 2014, as well as a contribution from the completion of the purchase of Marshalls Hard Metals in March.
Davy is forecasting sales of EUR34.2 million for the six months, up about 46% on the first half of 2014.
The research note says that the risk to the numbers is "clearly" to the downside, with the analysts citing the pricing pressure already highlighted by the company and the "intensification of this pressure" during the second quarter.
"We believe the market will be focused on how the company has managed cash in a weak market and whether any cost measures have been implemented," Davy adds.
Mincon shares are untraded on Monday in London at 47.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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