Double blow for Mincon profits

Irish engineering company Mincon yesterday blamed a weakening of the global exploration and mining market and the devaluation of key currencies for a poor first half of the year during which revenues and profit fell significantly.

Double blow for Mincon profits

Company revenues fell by 15% to €23.4m while operating profit tumbled by almost 40% in the opening six months of the year, compared with the same period in 2013.

Earnings per share also fell sharply — by more than 40% — as the company struggled with wider macro-economic factors impacting upon its business.

“The weakness in the global exploration and mining market, driven by the decline in the price of precious metals, which was a feature of 2013 and... continued into 2014 impact[ed] the drilling products market in which we operate, particularly in relation to third party product,” said Mincon chief executive Kevin Barry.

“This weakness, combined with the significant devaluation of certain key currencies in which we trade, has impacted upon the group’s result for the period resulting in a 15% decline in revenue and 21% decline in profit attributable to shareholders,” he added.

It was also announced yesterday that chairman Peter E Lynch is to take up a new executive position in a consulting capacity with particular focus on mergers and acquisitions. He will be replaced as chairman by senior independent director Padraig McManus.

The company sounded a positive note saying it believes the weakness in the global drilling market started to abate in the second quarter of the year with invoiced sales 14% ahead of the average for the previous three quarters.

The board recommended the payment of an interim dividend of €0.01 per ordinary share — the group’s first as a public company.

The company also announced that it had acquired 65% interests in two companies and a 60% interest in a third company, with an option in each case to acquire the remaining assets.

An outlay of €8.7m was required to acquire the stakes in Canadian product design and manufacturing firm, Rotacan; and distribution companies ABC Products and Omina Supplies, based in Australia and Namibia respectively.

Davy Stockbrokers said the acquisitions fit the group’s strategy.

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