Mincon poised to explore new territories

Shannon-based engineering services firm Mincon is expected to complete at least one acquisition before the end of this year.

The Dublin and London-listed firm — which makes drilling equipment for mining and exploration firms — has made no secret of its desire to expand into new territories and grow via acquisition.

When announcing its flotation plans, last November, management said it hoped to complete two-to-three acquisitions over 18 months; with initial focus being on mainland Europe and North America; but the firm also recognises long-term potential in South America and Africa.

In its last financial year — which saw an 18% rise in pre-exceptional item operating profits, to €15m — Mincon opened two new sales offices in Ghana and Peru. More recently — in April, via the publication of its annual results — management noted that it had identified “a number of acquisition targets”, and was at “an advanced stage” on some.

Davy Stockbrokers said that after meeting Mincon’s management at its client conference last week, it expected the firm to conclude on one of its acquisition targets this year.

Davy’s Colin Sheridan said: “We believe that the target would expand the Mincon product suite.”

“Management also pointed to two other ongoing possibilities; one of which we believe to be a selling and distribution business, which would allow Mincon to further expand another part of its current strategy, of having inventory on the ground in new geographies,” Mr Sheridan added.

Davy also noted the recent addition of a new third part product, a drilling rig developed with one of the company’s existing partners.

“While the sales of this would be on the lower-margin side of the business, the development of the third-party suite is important in moving thecompany towards the ‘one-stop-shop’ strategy laid down at the time of the IPO,” Mr Sheridan said.