Irish engineering group Mincon’s profit before tax declined by almost 13 per cent to €14.2 million last year after it changed the mix of the products it sold.
The company, which specialises in the design, manufacture, sale and servicing of rock-drilling tools and associated products, said revenue rose just 2.5 per cent to €120.7 million in the 12-month period.
Mincon acknowledged that although the headline results showed only "minor revenue growth", "this was not the case in all markets and industry segments in which we operate".
Nevertheless, the Shannon-based company undertook a reorganisation of its activities during the year, “including relocation of activities; closing of regional offices; and redundancies where necessary”.
Mincon disposed of two of its subsidiaries in Sweden and a distribution subsidiary in South Africa during the year, receiving a profit on disposal of €7.48 million. The revenue from those entities accounted for 5 per cent of total revenue in 2018.
The company generated €12.5 million in cash from its operations during the year, up from €3.1 million the previous year due to “profitable trading and stronger working capital management systems”, it said.
Davy analyst Colin Sheridan said Mincon's full-year results were ahead of expectations on an operating level.
“2020 appears to have started very well for the company, with good growth in sales and profit to date. Outside of any potential Covid-19 implications, risk to earnings would be firmly to the upside,” Mr Sheridan said.
The business was also streamlined during the year, with a refocused factory and sales operation leading to a reduction in annualised operating costs.
In the Americas market, Mincon posted growth of 57 per cent after winning a number of “significant construction and mining contracts across that region”.
"While 2019 revenue was flat, it was encouraging that we grew in some markets and built on new revenue streams – which was in line with our strategy," said chief executive John Purcell.
"When we found ourselves with overheads and factory capacity beyond our needs a plan was formulated to reorganise and right-size the business, ensuring that we started 2020 in good shape for future growth," he added, noting that the company completed "build out" of its three core factories in Shannon; Benton, US; and Perth, Australia, last year.
So far this year Mr Purcell added that the company has seen “good growth in the first quarter” having won additional contracts in the Americas.
On Covid-19, the company said it was monitoring the pandemic, and had implemented a travel ban within the group to all employees.
“We are conscious of the potential impact the Covid-19 virus might have on future cashflow requirements. We will continue to monitor and evaluate its impact on the business, and where necessary we will take appropriate steps to limit any personnel and business risks if that might arise,” Mr Purcell said.