Mincon shares fall on missed earnings and revenue targets

Mincon shares fall on missed earnings and revenue targets

Shares in Irish engineering services group Mincon fell nearly 2% on the back of the company's first-half earnings and revenues missing analyst targets.

Its shares have now fallen by nearly 28% in the past 12 months.

The Shannon-based company, which makes drilling equipment for the mining and exploration sectors, said revenue for the six months to the end of June rose 8%, year-on-year to €60m and profit was up 14% to €7.2m.

However, operating profit excluding impairments was down 14% on the same period last year to €6.9m. Adjusted earnings came in at just under €9.5m, 20% lower than Davy Stockbrokers' forecasts. The net profit figure was 5% below Davy's target.

Davy had also expected Mincon to show first-half organic revenue growth of 8%. Organic sales were, in fact, flat, with overall revenue growth boosted by the contribution from Driconeq, the South African drill maker bought last year.

Mincon said its production capacity "caught up" with its order book during the first half of the year, but overall market demand had softened. The company said a full-scale review of its business, targeting €3m in cost reductions via non-core asset disposals and a 10% reduction in employee headcount, is largely complete.

"The various programme costs have impacted in the first half, and the benefits will come through in the second half and beyond," Mincon said.

The company also said that it has won a number of large contracts recently, which it said: "should see a return to organic growth as they come on stream".

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