Shares in Shannon-based engineering firm Mincon jump on improved profits and sales

The group said revenue for the six months to the end of June rose 8%, year-on-year, to €64.7m.

Mincon has diversified away from exploration services into construction 

Shares in Shannon-based engineering services group Mincon jumped by as much as 8% on the back of it posting a strong set of first-half results showing that it has largely avoided any widespread impact from the Covid-19 pandemic.

The group, which traditionally 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 €64.7m. Gross profit was up 13% at €23.5m and operating profit was 21% ahead of the same period last year at €8.3m.

Back in March, Mincon reported a 9% drop in annual profit for 2019 and only a 2.5% rise in revenue, with its expansion into other sectors not yet having benefited its balance sheet.

Mincon has diversified into servicing more mainstream construction firms and has expanded into the specialist area of geotechnical engineering, which studies rock and soil mechanics and can mitigate damage on building projects caused by natural hazards like landslides, volcanoes, and avalanches.

Mincon has won a significant number of contracts with construction firms in recent times and revenue in this section of the business almost doubled in the first half. Construction now accounts for 27% of the group’s overall revenues, up from 15% in the first half of last year.

"The excellent performance in the construction sector has completely offset any Covid-19 impact across the rest of the business in the first half," said Davy analyst Colin Sheridan.

"The results show that on a headline basis, the company appears to be almost totally unaffected by the Covid-19 pandemic," he said.

Mincon CEO Joe Purcell said the group’s diversification into construction has helped to offset weaknesses in other markets due to the Covid-  19 outbreak.

All of Mincon’s cash-generating factories have remained open except its base in South Africa, where mining was halted during the March/April lockdown period.