Mincon Group Posts Solid Results As It Acquires Swedish Firm

20th Mar 2018 11:52

LONDON (Alliance News) - Irish engineer Mincon Group PLC's shares rose on Tuesday as the company profit growth on a strong revenue performance, as it also announced a EUR8.0 million acquisition.

Mincon's stock was up 11% on Tuesday at a price of 114.99 pence per share.

Mincon, which specialises in making rock drilling tools and other associated products, posted total revenue in 2017 of EUR97.4 million, up 28% on the prior year. Sales of its own products were up 33% to EUR75.0 million, and third party product sales increased 13% to EUR22.4 million.

Mincon's pretax profit rose to EUR12.6 million from EUR11.3 million in 2016, and operating profit climbed 38% to EUR14.0 million.

Mincon is to pay a final dividend of 1.05 euro cents, compared to a final dividend of 1 cent in 2016. This, alongside the 1 cent interim dividend, takes the total to 2.05 cents, up from 2.00 cents in 2016.

The company said the year was better than results suggest, with its 2017 own product sales eclipsing total sales for 2016.

Mincon is renewing product ranges as it protects its market position, and it said its Greenhammer hydraulic project is ready to approach commercialisation, something it described as an "exciting" prospect for 2018 and beyond.

The firm also announced on Tuesday the acquisition of Driconeq AB, a Sweden-based supplier of drill pipes and accessories for down-the-hole, rotary, and reverse circulation applications.

The agreed price is SEK65.0 million, plus a cost of SEK7.0 million to buy a minority stake in a Driconeq subsidiary, as well as a payment contingent on performance in 2018 of up to SEK5.0 million. Together with costs the total consideration will be approximately SEK81.0 million, or EUR8.0 million.

Mincon will pay for the deal from its existing cash, and no debt has been placed on Mincon subsidiaries.

Commenting on the acquisition, Chief Executive Joe Purcell said: "We are delighted to add these businesses and their teams to our group."

"We are at heart an engineering group, an industrial group, and these businesses should receive an opportunity to grow and develop over the coming years."