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Shannon-based Mincon shares tumble 20pc on outlook


Thinkstock Images

Thinkstock Images

Thinkstock Images

Shares in Shannon-based mining equipment firm Mincon slumped 20pc yesterday, knocking €32m from its market capitalisation as its sales fell in the third quarter.

Mincon, which floated on London's Alternative Investment Market and Ireland's Enterprise Securities Market last year, has seen its shares tumble 29pc from their 87 cent floatation price to 62 cent, and by 44pc from a high of around €1.10 reached earlier this year.

The company said that core sales in the third quarter fell 9pc compared to the second quarter as the global mining sector struggled.

It said the performance of newly-established units in Peru and Ghana also continues to be slower than expected.

The mining sector accounts for about 50pc of Mincon's overall sales.

"Market conditions for the mining sector of our business remain challenging, especially in the exploration sector given the decline in metal commodity prices throughout the course of 2014," chief executive Kevin Barry said.

"This cyclical weakness, combined with the significant devaluation of certain key currencies in which we trade, has impacted upon the group's year to date result for 2014," Mr Barry added.

Mincon raised €50m on its stock market debut and had net cash of €41.2m at the end of September.

The company continues to be engaged in discussions with a number of potential takeover targets, it said.

It remains focused on potential targets that will enable it to extend its geographic reach and product range.

Davy Stockbrokers analyst Colin Sheridan said that while quarterly numbers at Mincon suffer from volatility, "it is prudent" not to expect a rebound in the fourth quarter. Mr Sheridan said that Davy was therefore cutting its earnings before interest, tax, depreciation and amortisation estimates (EBITDA) for Mincon for 2015 by 17.1pc, and its expected 2015 revenue by nearly 11pc.

However, he said that based on a share price of 65 cent and given the downgrade, the stock is trading at a discount to peers.

Mincon was founded in 1977 by Patrick and Mary Purcell, whose family owned almost 80pc of the company prior the flotation.

Following the stockmarket listing, they retained a 57.7pc stake through their Kingsbell Company investment vehicle, still enabling them to call the shots at the business.

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Chief executive Kevin Barry's family owned just under 20pc of Mincon through a company called Ballybell prior to the stockmarket sale.

Following the flotation, they owned 14.4pc.

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