Mincon bucks mining malaise to drive sales growth
Shannon-based engineering services firm Mincon struck a cautious note yesterday as it announced its third quarter results, even though revenue rose by 43pc year-on-year to €19.3m.
Although much of this was due to acquisitions, stripping that out showed third quarter revenue rose 15pc year-on-year and 4pc against the second quarter, bucking the trend compared to many related companies operating in the mostly depressed mining sector.
The company, which specialises in rock drilling tools and products - including a bit famously used to help free miners trapped in a Chilean mining disaster - said growth in sales was mainly due to expansion in Europe, including Scandinavia. The business had also opened sales offices in South Africa, Chile and Australia.
Gross margin increased from 40pc during the third quarter of last year to 42pc while operating profit margin was 18pc, up from 17pc in 2014.
Mincon said that this was due to "improved trading in the period, and progress in addressing costs to fit the new trading environment".
Net cash increased by €3.4m to leave the company sitting on a cash pile of just under €38m. Mincon said that the strong increase was due to the "strong operating profit recorded in the quarter and reductions in working capital".
Despite the strong performance the company emphasised caution, saying: "The business environment in the mining segment, [which accounts for] approximately 60pc of group turnover, of our business remains challenging and we have no evidence that demand will change significantly in the short term."
Mincon shares were up by 4pc to 52 pence in mid afternoon London trading yesterday.