Mincon announce new acquisition as profit soars
Irish engineering firm Mincon has announced the acquisition of Driconeq, the holding company for the Driconeq Group of companies.
Driconeq is a global supplier of drill pipes and accessories for down-the-hole (DTH), rotary and reverse-circulation applications. It has factories in Sunne, Sweden, Johannesburg, South Africa and Perth Australia.
The combined Driconeq businesses for their financial year ended 31 December, 2017 had revenues of €25.2m and operating profit of €892,000. Mincon is already a large customer of Driconeq, accounting for approximately €4m of Driconeq's revenue in 2017.
"We are delighted to add these businesses and their teams to our Group," Joe Purcell, chief executive officer of Mincon, said.
"We are at heart an engineering group, an industrial group, and these businesses should receive an opportunity to grow and develop over the coming years."
Altogether another 125 staff will join Mincon with this acquisition.
The acquisition was announced as Mincon reported revenue of €97m for 2017, a 28pc increase on the same period in 2016, according to the company’s full year results for the year.
Operating profit at the company was €14m for 2017, a 38pc increase on the previous year, with the group reporting a "strong" year of organic growth.
However, the group’s gross margin was down slightly at 39pc, just shy of the 40pc recorded by the company in the previous year.
Commenting on the results, Mr Purcell said that the protection of the gross margin is important to the company, and that it sees pressure there due to increasing costs of supplies to the group.
During the year the group acquired PPV, a company in Finland that it said can bring it into the construction industry. In addition, the acquisition has given Mincon a new suite of products, the company said.
The group also acquired Viqing, a start-up drill pipe manufacturer in Sweden.
Looking forwards, the company said that on current volumes it has potential revenue of €120m plus for 2018. However the group said that its organic growth may be constrained to single digits in the first half of 2018.
"If we can build sustainable organic growth on top of the acquisition growth, we will deliver another very strong year," Mr Purcell said.
"The group is growing strongly, we have continued to build and invest, and we have made great strides in improving our culture and control."