Mincon reports increased revenue and profits despite Covid-19

Strategic acquisition boosts margins at Irish engineering group

 

Irish engineering group Mincon’s revenue rose 8 per cent in the first half of 2020 despite the challenging backdrop of Covid-19.

The company, which specialises in the design and manufacture of rock drilling tools, reported turnover of €64.7 million for the six months to the end of June.

Operating profit rose 21 per cent to €8.3 million.

Mincon recently acquired Finnish company Lehti, which allowed it bring the manufacturing margin for its Geotech products inhouse. This, coupled with increasing the capacity to support large Geotech contracts in the construction industry, has helped to increase its gross margin and offset general market weakness related to Covid-19, it said.

“The first half of 2020 was a return to increasing revenue, profitability and cash generation for the Mincon Group. This was achieved despite the challenging operating environment due to the Covid-19 crisis,”chief executive Joe Purcell said.

“In January we completed the substantial acquisition of Lehti Group to bring the manufacturing margin for our Geotech products inhouse. This, coupled with increasing our capacity to support large Geotech contracts in the construction industry, has helped to increase our gross margin in a growing and important sector for the Group,”

“Indeed, this growth has helped to offset weakness in other markets due to Covid-19,” he said.

Davy Stockbrokers described the results as “ staggeringly good”.

“The excellent performance in the construction sector has completely offset any Covid-19 impact across the rest of the business in H1. With limited downside to estimates, the stock now looks very cheap relative to peers, and we reiterate our ‘outperform’ rating,” Davy said.