31st Oct 2019 13:48
(Alliance News) - Mincon Group PLC on Thursday reported a "disappointing" third quarter and said that it expects improved margins in the final quarter of 2019 following a redeployment of investments and overheads where they can deliver better value.
"This was the weakest quarter of the year, and a considerable step down from the same record quarter last year when we cleared the final backlog in orders. While this was a disappointment, the stance we took in reducing overheads in H1, fed through into Q3, and we believe we are beginning to see the recovery in profits and cash," the Irish engineering company said.
Mincon's revenue in the first nine months of 2019 remained flat at just over EUR86 million, with small acquisitions being offset by the small disposals. Profitability for the period also remained at around the same levels as 2018, with some reduction in the quality of those profits due to the corporate reorganisation.
Gross margin in the period was about 3% lower than last year due to product mix changes, loss of contracts and some softness in the mid-range hammer and bit sizes.
Mincon, however, said margins would normalise again in the fourth quarter of 2019 with lower cost base and distortions caused by the reorganisation activity subsiding.
Mincon shares in London were down 4.3% at 90 pence each on Thursday afternoon.
By Tapan Panchal; [email protected]
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