Mincon Group Plc Interim Trading Update (6752L)
05 May 2020 - 7:21PM
UK Regulatory
TIDMMCON
RNS Number : 6752L
Mincon Group Plc
05 May 2020
MINCON GROUP PLC
("Mincon" or the "Group")
INTERIM TRADING UPDATE
Mincon Group plc (Euronext:MIO AIM:MCON), the Irish engineering
group specialising in the design, manufacture, sale and servicing
of rock drilling tools and associated products, today provides an
interim trading update for the period from 1st January 2020 to
date, incorporating the first quarter to 31st March 2020.
Key elements (comparison of Q1, 2020 to Q1, 2019):
Q1 results show a period of steady progress -
-- Revenue up 4% overall
-- Gross margin up to 35.2% from 33.6% reflecting a higher
proportion of Mincon manufactured product
-- Covid-19 impacting on certain operations and markets but in
most of the countries where we are active the factories and related
customer sites are regarded as critical and remain open
-- Integration of Lehti into the Mincon Group has proceeded
smoothly since its acquisition in January 2020. Lehti has also
experienced growth in Q1 2020 compared to Q1 2019
Trading
The Group's strategy of improving our sales offering through the
diversification of our income streams has provided us with
continued revenue growth from the sale of Mincon manufactured
product during the first quarter of 2020, with our Group wide
revenue in line with our expectations for the period.
The acquisition of the Lehti Group in January 2020 has resulted
in Mincon achieving a better consolidated gross margin as we now
own the manufacturing of all Mincon designed products. The
performance of the Lehti Group has been in line with our
expectations during this transitional period into the Mincon Group.
We expect to have completed the consolidation of our operations in
Finland by September 2020.
Covid-19
We have seen restrictive measures in the Southern African market
during March 2020. Our drill rod factory in South Africa had been
closed in March along with much of the of the mining activity
there, however, those restrictions have started to ease.
We have experienced some difficulty in moving product by air
during March, mostly seen in Australia where it is very common to
move specialised parts using this method. In parts of central and
South America mining production has temporarily been interrupted,
however this is in areas where we have a relatively minor
presence.
Generally, our order book remains steady, and our factories are
viewed as essential manufacturing in almost every jurisdiction we
are located in. However, the effect and duration of the pandemic
remains uncertain, and we have put in place additional lines of
credit with our banking partners in different regions where it is
felt appropriate to do so. We have not drawn on any of this
additional credit, but it is available to us if needed in the
future. Our balance sheet remains very strong, and we have not
experienced any losses or any material effects on the inflow of
debtor payments.
Product Development
Drilling with our Greenhammer systems has been delayed due to
Covid-19 site restrictions implemented by the customer. The
customer has restricted site access to essential employees only
during the lockdown. We would hope to begin drilling on both the
10" and 12" system within a matter of weeks once these restrictions
have been lifted.
Forward looking statements
Any forward-looking statements made in this document represent
the Board's best judgment as to what may occur in the future.
However, the Group's actual results for the current and future
financial periods and corporate developments will depend on a
number of economic, competitive and other factors, some of which
will be outside the control of the Group. Such factors could cause
the Group's actual results for future periods to differ materially
from those expressed in any forward-looking statements included in
this announcement.
Ends
5(th) May 2020
For further information please contact
Mincon Group plc
Joe Purcell - Chief Executive Officer Tel: +353 (61) 361 099
Mark McNamara - Chief Financial Officer
Davy Corporate Finance (Nominated Adviser and Euronext Growth
adviser)
Anthony Farrell Tel: +353 (1) 679 6363
Daragh O' Reilly
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Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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