Mincon primes itself for renewed acquisitions drive
The maker of industrial drilling tools for use by mining companies yesterday reported a strong set of full-year results for 2016. These showed a €6m jump in revenues to €76.2m and a near 18% rise in pre-tax profit to €11.33m.
The company has been on the outlook for takeover opportunities for some time but has been put off by what it deemed unrealistically high transaction values. That said, it has spent €15.4m on nine purchases in the past three years, with all proceeds coming from the €47m it rose via its 2013 flotation.
The company yesterday said it still has IPO cash available for acquisitions, but would use debt where a potential investment justified raising funds that way.
“Our net acquisition cash remains intact and the group is largely free of debt,” it said. “To be quite clear, we do not lack ambition to invest and acquire, but we are keenly interested in buying what adds value to our manufacturing base, to our distribution footprint, to our access to markets and sectors and in bringing people who have a contribution to make onto our management team,” the company added.
Mincon closed 2016 with €35m in net cash, leaving it well-placed to take advantage of acquisition opportunities.
Mincon’s share price was marginally down yesterday, but Davy Stockbrokers suggested mining-related stocks are finally exiting a long period of weak markets.
“The trend for demand is now towards the upside again, and Mincon remains well-placed to take advantage of this,” said Davy’s Colin Sheridan.
