Mincon on the lookout for acquisitions as first-half results disappoint
Irish engineering group Mincon said it is in talks with several acquisition targets as it reported lower first-half profit in what was described as a "disappointing" series of results.
Total group revenue at the Shannon-based firm increased to €32.7m compared to €23.4m in the same period in 2014, a rise of 40pc despite the continued downturn in the mining industry. The company also saw sales of its own products remain stable, increasing from €18.9m to 25.5m.
However, pre-tax profits in the six months to the end of June fell to €4.5m from €5.5m due to a hike in operating costs to €9m from €5.9m a year ago.
Chief executive Joe Purcell said the operating profit margin reduced "due to the combination of lower margins from acquired entities and a pressure on pricing in our market."
Mr Purcell said the operating profit was impacted by one-time costs of €380,000 associated with "acquisitions and restructuring". Earlier this year Mincon bought UK tungsten carbide manufacturer Marshalls Hard Metals. He also said that the company will focus on integration of the businesses acquired, including cost discipline.
He added: "We are in discussions with potential acquisition targets with a view to further extending the group's product range. Overall we have significantly improved our market position. The investment strategy remains intact and we are ambitious for further growth."
The results were generally viewed as being weak. Davy Stockbrokers analyst Colin Sheridan said that the company expects to downgrade estimates "on the back of this set of results".
He added: "The company sees no evidence that the demand in its markets will change significantly in the second half, and the current challenging environment could remain." Shares in Mincon were broadly flat after the announcement.