Shannon-based company buys Swedish firm for €7.9m

Shannon-based engineering and mining services group Mincon has acquired Swedish company Viqing Drilling Equipment for nearly €8m and is continuing to look for more acquisition opportunities.

Mincon said yesterday —on the back of a strong set of first-half results — that it continues to “engage” with acquisition opportunities and has a number of organic investment projects coming to fruition this year and next that can drive further growth.

The company, which makes industrial drilling tools for use by mining companies, has paid an initial €3.2m for Viqing, with the final figure set to reach €7.9m. The Swedish firm makes drill pipes, something which Mincon has been selling as a third party product up to now.

Mincon, whose shares soared nearly 20% yesterday, spent around €5.4m on acquisitions last month, also exercising its right to buy the 35% it doesn’t already own in Canadian drill bit manufacturing firm Rotacan. Mincon acquired 65% of Rotacan, for €7m, in 2014.

“Further acquisitions have been announced and the company should continue to grow well into the medium term,” said Colin Sheridan at Davy Stockbrokers.

His comments followed Mincon publishing financial figures for the first six months of the year, showing strong growth despite exceptional charges and currency headwinds. Total revenue was up by 29%, on a year-on-year basis, at €46.95m, with pre-tax profits ahead by 26% at €6.32m. As of the end of June, Mincon had net assets worth €106m and net cash of €32m, slightly down due to capital expenditure and acquisition spend.

First-half operating profit amounted to just under €6.8m, 39% ahead on a year-on-year basis and around 10% better than analyst expectations.

Chief executive Joe Purcell said Mincon is beginning to make “real headway” as the mining sector improves and that the second quarter saw the group build on the momentum seen in the first three months of the year after aggressive targets for sales and profit growth had been set at the end of last year.

“We have driven good growth in our current product ranges and we have the new products, the new factories and the investment of the last couple of years to come on stream. We have a very strong balance sheet, adequate cash resources and an ambitious, experienced team in a sector that continues to improve,” he said.


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