REG - Mincon Group Plc - Half Yearly Report
06/08/2024 07:00
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RNS Number : 2662Z Mincon Group Plc 06 August 2024
This announcement contains inside information
Mincon Group plc
("Mincon" or the "Group")
2024 Half Year Financial Results
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, announces its half year results for the six
months ended 30 June 2024.
H1 2024 Key Financial Highlights H1 2024 H1 2023
· Revenue €68.0 million €80.6 million
· Gross Profit €17.4 million €25.6 million
· EBITDA €4.7 million €11.8 million
· Operating Profit €0.2 million €7.8 million
Joe Purcell, Chief Executive Officer, commenting on the results, said:
"The first half of 2024 remained challenging in terms of revenue generation
and this has had a knock-on effect to our margins and ROCE. The challenging
market environment that we noted in our Q1 trading update continued; however,
we were encouraged to see a recovery in our order books towards the end of Q2,
which has continued post the period end. We expect a recovery in revenue as
the increased order book begins to be delivered to customers.
We are continuing our sharp focus, started in 2023, on driving operational
efficiencies throughout the business and optimising our balance sheet
management. This has been supported by a root and branch review of our global
operations. This review has led to cost-cutting initiatives, which includes
the decision to close our carbide business in Sheffield later this year. Other
initiatives to drive operational efficiencies include the introduction of
robotics in Shannon, improved procurement to reduce manufacturing input costs,
restructuring in South Africa and refining our innovation management process.
We expect that the decisions we are taking as a result of this review will
have a positive effect on margins in H2 and beyond.
Geographic markets
Our business in the Americas is down on the same period last year. This is
driven by a number of factors including exiting a low margin mining supply
contract in Chile as well as reductions in construction related activities in
North America. The wind-up of the supply contract in Chile will be a positive
for our balance sheet and margins. Construction activity was suppressed in the
first six months, but we still have a large project pipeline and have recently
seen a pickup in project wins and subsequent order activity.
Our Europe & Middle East region is also down on the same period last year.
As our primary manufacturing region for the Group, cost inflation has been a
challenge to deal with in recent periods, but our ongoing work to mitigate
this, as part of our review, should start to come through in H2. Coupled with
stronger order books, mainly for mining and construction customers globally,
we anticipate a recovery in Europe & Middle East region revenue and
margins in H2.
Our Africa region is marginally down on the same period last year. However, we
expect to see our efforts to develop a better market share with improved
revenue and, importantly margins, starting to take effect in H2 and beyond. We
remain committed to this important region due to its proven mineral reserve
levels and the role this will play in the global challenges ahead.
We are pleased to note the recovery in our revenues in the Australia Pacific
region, another important mining area, where proven mineral reserves will
underpin continued production and expected demand for Mincon products in the
long term. Mincon's superior product offering to lower total drilling cost in
production mining is starting to bear fruit in the region and has supported
the recent revenue recovery. This early increase in H1 is anticipated to be
further strengthened in H2 by Mincon's first large construction project win
for a harbour project in Australia. We won this project on the back of our
proven success in other projects in Europe and North America. It is notable
that this win is from a pipeline of projects in Australia that are being
actively pursued and is just reward for the team effort in the region.
Business Development
Given the global interest rate environment that we are operating in,
investments are being delayed in areas such as new or expanded mining
capacity, infrastructure and renewable energy projects. As part of widespread
global ambitions and protocols to reduce emissions, the industry needs to
increase the efficiency of mining methods associated with any increased mining
output of critical metals such as copper and battery metals. Efficiency and
emissions reduction is also the key in delivering ambitious infrastructure and
renewable energy projects.
Mincon has developed a skillset in percussion drilling, which has a critical
part to play in the solution to meet the emissions reduction targets for the
markets which we are supplying. We believe that Mincon's focus on engineering,
manufacturing and service is a compelling offering that will position the
Group well to provide solutions to our clients to increase output with reduced
consumption of energy. The product packages we produce today are market
leading and we continue to innovate and constantly improve these by developing
new technologies and applications that will ensure our future as well as
making a meaningful contribution to global emissions reduction.
Our Greenhammer collaboration is progressing well on the copper mine in
Arizona. Our rig manufacturer partner is also positive about the results, and
we are in active dialogue around its commercial development.
Our subsea project collaboration is also progressing well, and the plan is to
complete an offshore installation at a consented site before the end of this
year. Leading players in the offshore wind industry have been closely
monitoring this project and have attended a number of our testing sites which
underpins our belief in the commercial opportunity for this project. I look
forward to the transformational benefit that this will deliver for Mincon and
the offshore renewables industry.
Conclusion
The first six months of 2024 have been a challenging period for Mincon.
However, with the recent improvements in our order books and encouraging
contract wins, we see opportunities emerging to recover the lost ground from
H1 2024. Whilst the scheduling of the commencement of large construction
projects will have a bearing on the timing and pace of the Group's recovery,
looking further ahead, the Board retains its confidence in a return to growth
in revenues and margins in H2 2024 versus H1.
With that in mind, I want to acknowledge our team's efforts through the
difficult period we have endured and look forward to better days ahead."
Joseph Purcell
Chief Executive Officer
Key financial commentary
Market Industries and Product Mix
Revenue in the first half of 2024 contracted by 16% versus the first half of
2023, primarily due to a decrease in our construction industry revenue, though
there were also contractions in our mining and waterwell/geothermal revenue.
Foreign exchange movements had a minor impact on the Group's revenue
contraction, at less than 1%.
Industry mix (by revenue)
H1 2024 H1 2023
· Mining 48% 43%
· Construction 36% 39%
· Waterwell / Geothermal 16% 18%
Our revenue from the construction industry contracted by 23% during the
period. However, this has been on the back of significant growth in this
industry, year on year, since 2019.
Most of the slowdown in the construction industry was in the Americas region
where revenue decreased by 29% in H1 2024. The decline in construction revenue
in the Europe & Middle East region for H1 2024 was 17% versus H1 2023.
Across both the Americas and Europe & Middle East regions, interest rates
have been the driving factor in the slowdown. Interest rates increased further
during H2 2023, and this has had a direct impact on the starting date of a
number of construction projects. These are mainly in private sector projects
and others that are deemed non-critical.
We have also seen less revenue in the quarry industry, which forms part of our
construction revenue, as activity and demand for materials for private sector
projects and residential buildings have decreased in certain countries across
Europe and North America. We have also seen reduced demand for products that
are used in tunnelling projects. That impact has mostly been with our European
construction revenue.
Elsewhere in construction, we continue to develop new market opportunities for
our products. Outside of the Europe & Middle East and North American
markets, our construction revenue increased by 46% in the period and accounted
for 9% of our total construction revenue in H1 2024.
Our mining revenue contracted by 6% in H1 2024 versus H1 2023. A large mining
contract that we serviced locally in Chile finished in early Q2 2024, as the
margins required to win a re-tender were ultimately not at a level which the
Group would be willing to contract. This contributed to a fall in mining
revenue in the Americas region of 23% in the period. When we exclude this
contract, our mining revenue in H1 2024 fell by 2%.
Mining revenue in Africa also contracted in the period by 5%, largely due to
reduced activity in the exploration sector.
However, our mining revenue increased by 8% in the Australia Pacific region in
the period, as we recovered some market share. In the Europe & Middle East
region our mining revenue had a significant increase in the period of 89%. We
saw a return to more regular orders in mining in this region during the period
after customer destocking in 2023.
Our revenue in the waterwell/geothermal industry contracted by 22% in H1 2024
versus H1 2023, after growing by 10% in the first half of 2023. This decline
is directly related to a contraction in geothermal drilling, due to a downturn
in the construction industry in Northern Europe. There has also been a slight
contraction in the waterwell industry in North America again tied to a
construction slow down.
Earnings
Our earnings have been impacted in the period due to an increase in
competition for projects which is a result of contraction in our markets,
particularly in the construction and geothermal sectors. This, coupled with
some price reductions in our offerings to customers resulted in less revenue
in H1 2024.
As customer activity reduced, the manufacturing throughput of product in our
own plants has fallen, and this has impacted manufacturing cost per product.
This was compounded in H1 2024 by the continued focus on reducing our
inventory as we manage our working capital levels. As a result, fixed
manufacturing overheads are spread across less factory output. To ensure on
time delivery is met, we have retained a certain level of variable costs and
therefore full cost efficiency could not be met in the period.
However, during the period we further reduced variable costs that are not
directly linked with volume manufacturing, such as manufacturing employee
costs and external subcontracting costs, which reduced by 12% and 37%
respectively during the period versus H1 2023.
Construction projects that have started in the period are more expensive for
contractors due to higher interest rates and inflationary factors during 2023.
This has led to contractors pressing consumable suppliers on pricing. Fewer
project starts in H1 2024 also gave rise to further price competition in
tender processes. The combination of these factors has had a significant
bearing on our margins during H1 2024.
Our finance costs have increased marginally in the period on reduced
borrowings. This is a reflection of higher interest rates in H2 2023. The
Group has a number of bank loans and lease liabilities with a mixture of
variable and fixed interest rates.
Balance Sheet and Cash
Our cash generated from operations increased marginally over the same period
in the prior year due to reduced working capital requirements in H1 2024.
We have further reduced our overall inventory held in the first six months of
2024, excluding FX, building on the good work completed by our inventory
reduction team in 2023, and this has strengthened our cash reserves by over
€1 million at the half year-end.
Our debtor balance increased over the prior year end by over €3.5 million,
however this was an expected periodic increase, and we expect this to unwind
by the year end 2024.
We have commissioned property, plant and equipment of €2.5 million in H1
2024, and we expect a similar level of investment in H2 2024, as we move
towards more normalised levels of investment following the recent periods of
heightened capital expenditure in the business. We believe our plants are well
equipped to deliver the Group's expected growth into the future.
Much of the capital expenditure incurred in recent periods is in relation to a
move towards automation of certain manufacturing processes which we anticipate
will bring noticeable efficiency gains when manufacturing volumes increase.
This bespoke automation solution has been the culmination of an eighteen-month
project.
We borrowed further in the first half of 2024, mostly in connection with the
commissioning of the new automation processes in our hammer plant in Shannon.
We borrowed elsewhere in the Group to maintain heat treatment facilities and
to equip our sales force to widen our sales footprint.
During the period we paid €0.5 million for historical acquisitions. We also
paid a final year dividend for 2023 of €2.2 million in June 2024.
For further information, please contact:
Mincon Group
plc
Tel: +353 (61) 361 099
Joe Purcell CEO
Mark McNamara CFO
Tom Purcell COO
Davy Corporate Finance (Nominated Adviser, Euronext Growth
Tel: +353 (1) 679 6363
Adviser and Joint Broker)
Anthony Farrell
Daragh O'Reilly
Shore Capital (Joint
Broker)
Tel: +44 (0) 20 7408 4090
Malachy McEntyre
Mark Percy
Daniel Bush
Mincon Group plc
2024 Half Year Financial Results
Condensed consolidated income statement
For the 6 months ended 30 June 2024
Unaudited Unaudited
H1 2024 H1 2023
Notes €'000 €'000
Continuing operations
Revenue 5 68,011 80,585
Cost of sales 7 (50,655) (54,940)
Gross profit 17,356 25,645
Operating costs 7 (17,107) (17,863)
Operating profit 249 7,782
Finance income 49 19
Finance cost (1,271) (1,175)
Foreign exchange gain/(loss) 102 (503)
Movement on deferred consideration 4 4
(Loss)/Profit before tax (867) 6,127
Income tax expense (116) (1,228)
(Loss)/Profit for the period (983) 4,899
(Loss)/Earnings per Ordinary Share
Basic (loss)/earnings per share 10 (0.46c) 2.31c
Diluted earnings per share 10 (0.00c) 2.28c
Condensed consolidated statement of comprehensive income
For the 6 months ended 30 June 2024
Unaudited Unaudited
2024 2023
H1 H1
€'000 €'000
(Loss)/Profit for the period (983) 4,899
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation - foreign operations 968 (2,840)
Other comprehensive profit/(loss) for the period 968 (2,840)
Total comprehensive (loss)/income for the period (15) 2,059
The accompanying notes are an integral part of these financial statements.
Condensed Consolidated statement of financial position
As at 30 June 2024
Unaudited 31 December
30 June 2023
2024
Notes €'000 €'000
Non-Current Assets
Intangible assets and goodwill 12 40,586 40,625
Property, plant and equipment 13 53,770 54,763
Deferred tax asset 8 3,082 2,664
Total Non-Current Assets 97,438 98,052
Current Assets
Inventory 14 69,421 69,730
Trade and other receivables 15 25,430 21,616
Prepayments and other current assets 8,109 8,609
Current tax asset 8 1,446 1,007
Cash and cash equivalents 15,768 20,482
Total Current Assets 120,174 121,444
Total Assets 217,612 219,496
Equity
Ordinary share capital 9 2,125 2,125
Share premium 67,647 67,647
Undenominated capital 39 39
Merger reserve (17,393) (17,393)
Share based payment reserve 11 2,398 2,241
Foreign currency translation reserve (6,898) (7,866)
Retained earnings 104,244 107,458
Total Equity 152,162 154,251
Non-Current Liabilities
Loans and borrowings 16 25,129 26,032
Deferred tax liability 8 2,123 2,099
Deferred consideration 17 1,837 1,998
Other liabilities 671 932
Total Non-Current Liabilities 29,760 31,061
Current Liabilities
Loans and borrowings 16 13,422 14,080
Trade and other payables 12,493 10,505
Accrued and other liabilities 9,462 8,596
Current tax liability 8 313 1,003
Total Current Liabilities 35,690 34,184
Total Liabilities 65,450 65,245
Total Equity and Liabilities 217,612 219,496
The accompanying notes are an integral part of these financial statements.
Condensed consolidated statement of cash flows
For the 6 months ended 30 June 2024
Unaudited Unaudited
H1 H1
2024 2023
€'000 €'000
Operating activities:
(Loss)/Profit for the period (983) 4,899
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation 4,048 3,974
Amortisation of internally generated intangible asset 242 242
Amortisation of intellectual property 139 108
Movement on deferred consideration (4) (4)
Finance cost 1,271 1,175
Finance income (49) (19)
Loss on sale of property, plant & equipment (133) 11
Income tax expense 116 1,228
Other non-cash movements (109) 510
4,538 12,124
Changes in trade and other receivables (3,541) (7,272)
Changes in prepayments and other assets 574 (119)
Changes in inventory 1,055 (814)
Changes in trade and other payables 2,291 650
Cash provided by operations 4,917 4,569
Interest received 49 19
Interest paid (1,271) (1,175)
Income taxes paid (1,630) (1,462)
Net cash provided by operating activities 2,065 1,951
Investing activities
Purchase of property, plant and equipment (2,534) (4,278)
Proceeds from the sale of property, plant and equipment 313 288
Payment of deferred consideration (202) (203)
Investment in acquired intangible assets (303) (158)
Net cash provided used in investing activities (2,726) (4,351)
Financing activities
Dividends paid (2,231) (2,231)
Repayment of borrowings (2,270) (2,569)
Repayment of lease liabilities (1,546) (2,112)
Drawdown of loans 1,969 6,472
Net cash provided used in financing activities (4,078) (440)
Effect of foreign exchange rate changes on cash 25 (426)
Net decrease in cash and cash equivalents (4,714) (3,266)
Cash and cash equivalents at the beginning of the year 20,482 15,939
Cash and cash equivalents at the end of the period 15,768 12,673
The accompanying notes are an integral part of these financial statements.
Condensed consolidated statement of changes in equity for the 6 months ended
30 June 2024
Share Share premium Merger reserve Un-denominated Share based payment reserve Foreign Retained earnings Unaudited Total
capital capital currency translation reserve equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balances at 1 July 2023 2,125 67,647 (17,393) 39 2,669 (8,426) 107,117 153,778
Comprehensive income:
Profit for the period - - - - - - 2,572 2,572
Other comprehensive income:
Foreign currency translation - - - - - 560 - 560
Total comprehensive income 560 2,572 3,132
Transactions with Shareholders:
Share-based payments - - - - (428) - - (428)
Dividend payment - - - - - - (2,231) (2,231)
Total transactions with Shareholders - - - - (428) - (2,231) (2,659)
Balances at 31 December 2023 2,125 67,647 (17,393) 39 2,241 (7,866) 107,458 154,251
Comprehensive income:
Loss for the period - - - - - - (983) (983)
Other comprehensive income:
Foreign currency translation - - - - - 968 - 968
Total comprehensive income 968 (983) (15)
Transactions with Shareholders:
Share-based payments - - - - 157 - - 157
Dividend payment - - ,- - - - (2,231) (2,231)
Total transactions with Shareholders - - - - 157 - (2,231) (2,074)
Balances at 30 June 2024 2,125 67,647 (17,393) 39 2,398 (6,898) 104,244 152,162
The accompanying notes are an integral part of these financial statement
Notes to the condensed consolidated interim financial statements
1 Description of business
Mincon Group plc ("the Company") is a company incorporated in the Republic of
Ireland. The unaudited condensed consolidated interim financial statements of
the Company for the six months ended 30 June 2024 (the "Interim Financial
Statements") include the Company and its subsidiaries (together referred to as
the "Group"). The Interim Financial Statements were authorised for issue by
the Directors on 6 August 2024.
2. Basis of preparation
The Interim Financial Statements have been prepared in accordance with IAS 34,
'Interim Financial Reporting', as adopted by the EU. The Interim Financial
Statements do not include all of the information required for full annual
financial statements and should be read in conjunction with the Group's
consolidated financial statements for the year ended 31 December 2023 as set
out in the 2023 Annual Report (the "2023 Accounts"). The Interim Financial
Statements do, however, include selected explanatory notes to explain events
and transactions that are significant to an understanding of the changes in
the Group's financial position and performance since the last annual financial
statements.
The Interim Financial Statements do not constitute statutory financial
statements. The statutory financial statements for the year ended 31
December 2023, extracts from which are included in these Interim Financial
Statements, were prepared under IFRS as adopted by the EU and will be filed
with the Registrar of Companies together with the Company's 2023 annual
return. They are available from the Company website www.mincon.com and, when
filed, from the registrar of companies. The auditor's report on those
statutory financial statements was unqualified.
The Interim Financial Statements are presented in Euro, rounded to the nearest
thousand, which is the functional currency of the parent company and also the
presentation currency for the Group's financial reporting.
The financial information contained in the Interim Financial Statements has
been prepared in accordance with the accounting policies applied in the 2023
Accounts.
3. Use of estimates and judgements
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income, and expenses. The judgements, estimates and associated assumptions
are based on historical experience and other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ
materially from these estimates. In preparing the Interim Financial
Statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the 2023 Financial Statements.
4. Changes in significant accounting policies
There have been no changes in significant accounting policies applied in these
Interim Financial Statements, they are the same as those applied in the last
annual audited financial statements.
5. Revenue
H1 H1
2024 2023
€'000 €'000
Product revenue:
Sale of Mincon product 54,828 67,190
Sale of third-party product 13,183 13,395
Total revenue 68,011 80,585
6. Operating Segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker (CODM). Our CODM has
been identified as the Board of Directors.
Having assessed the aggregation criteria contained in IFRS 8 operating
segments and considering how the Group manages its business and allocates
resources, the Group has determined that it has one reportable segment. In
particular the Group is managed as a single business unit that sells drilling
equipment, primarily manufactured by Mincon manufacturing sites.
Entity-wide disclosures
The business is managed on a worldwide basis but operates manufacturing
facilities and sales offices in Ireland, Sweden, Finland, South Africa, UK,
Australia, the United States and Canada and sales offices in other locations
including Australia, South Africa, Finland, Spain, Namibia, Ghana, France,
Sweden, Canada, Chile and Peru. In presenting information on geography,
revenue is based on the geographical location of customers and non-current
assets based on the location of these assets.
Revenue by region (by location of customers):
H1 H1
2024 2023
€'000 €'000
Region:
Europe, Middle East, Africa 32,952 38,290
Americas 26,303 34,894
Australasia 7,228 6,729
Ireland 1,528 672
Total revenue from continuing operations 68,011 80,585
Non-current assets by region (location of assets):
30 June 31 December
2024 2023
€'000 €'000
Region: ( )
Europe, Middle East, Africa 66,870 67,976
Americas 16,717 16,352
Australasia 10,769 11,060
Total non-current assets((1)) 94,356 95,388
(1) Non-current assets exclude deferred tax assets.
7. Cost of Sales and operating expenses
Included within cost of sales, operating costs were the following major
components:
Cost of sales
H1 H1
2024 2023
€'000 €'000
Raw materials 20,459 22,364
Third-party product purchases 10,222 10,073
Employee costs 9,961 11,347
Depreciation (note 13) 2,827 2,643
In bound costs on purchases 1,548 1,744
Energy costs 1,289 1,449
Maintenance of machinery 795 832
Subcontracting 1,639 2,612
Amortisation of product development 242 242
Other 1,673 1,634
Total cost of sales 50,655 54,940
Operating costs
H1 H1
2024 2023
€'000 €'000
Employee costs 10,203 10,857
Depreciation (note 13) 1,221 1,331
Amortisation of acquired IP 139 108
Travel 1,075 889
Other 4,469 4,678
Total other operating costs 17,107 17,863
The Group recognised €NIL in Government Grants during H1 2024 (H1 2023:
€32,000). These grants differ in structure from country to country, they
primarily relate to personnel costs.
Employee information
H1 H1
2024 2023
€'000 €'000
Wages and salaries 17,265 19,450
Social security costs 1,602 1,426
Pension costs of defined contribution plans 1,140 1,164
Share based payments (note 11) 157 164
Total employee costs 20,164 22,204
The average number of employees was as follows:
H1 H1
2024 2023
Number Number
Sales and distribution 125 138
General and administration 74 80
Manufacturing, service and development 335 406
Average number of persons employed 534 624
8. Income Tax
The Group's consolidated effective tax rate in respect of operations for the
six months ended 30 June 2024 was (-13%) (30 June 2023: 20%). The effective
rate of tax is forecast at 12% for 2024. The tax charge for the six months
ended 30 June 2024 of €116,000 (30 June 2023: €1.2 million) includes
deferred tax relating to movements in provisions, net operating losses forward
and the temporary differences for property, plant and equipment recognised in
the income statement.
The net current tax liability at period-end was as follows:
30 June 31 December
2024 2023
€'000 €'000
Current tax prepayments 1,446 1,007
Current tax payable (313) (1,003)
Net current tax 1,133 4
The net deferred tax liability at period-end was as follows:
30 June 31 December
2024 2023
€'000 €'000
Deferred tax asset 3,082 2,664
Deferred tax liability (2,123) (2,099)
Net deferred tax 959 565
9. Share capital
Allotted, called- up and fully paid up shares Number €000
01 January 2024 212,472,413 2,125
30 June 2024 212,472,413 2,125
Share issuances
On 26 November 2013, Mincon Group plc was admitted to trading on the
Enterprise Securities Market (ESM) of the Euronext Dublin and the Alternative
Investment Market (AIM) of the London Stock Exchange.
10. (Loss)/Earnings per share
Basic earnings per share (EPS) is computed by dividing the profit for the
period available to ordinary shareholders by the weighted average number of
Ordinary Shares outstanding during the period. Diluted earnings per share is
computed by dividing the profit for the period by the weighted average number
of Ordinary Shares outstanding and, when dilutive, adjusted for the effect of
all potentially dilutive shares. The following table sets forth the
computation for basic and diluted net profit per share for the periods ended
30 June:
H1 2024 H1 2023
Numerator (amounts in €'000):
(Loss)/Profit attributable to owners of the Parent (983) 4,899
Denominator (Number):
Basic shares outstanding
Restricted share options
Diluted weighted average shares outstanding
212,472,413 212,472,413
3,690,000 2,780,000
216,162,413 215,252,413
Earnings per Ordinary Share
Basic (loss)/earnings per share, € (0.46c) 2.31c
Diluted earnings per share, € (0.00c) 2.28c
Diluted weighted average shares outstanding
212,472,413
212,472,413
3,690,000
2,780,000
216,162,413
215,252,413
Earnings per Ordinary Share
Basic (loss)/earnings per share, €
Diluted earnings per share, €
(0.46c)
(0.00c)
2.31c
2.28c
For the period ended 30 June 2024, the inclusion of potentially issuable
ordinary shares would result in a decrease in the loss per share, thus, they
are considered to be anti-dilutive and as such, a diluted loss per share was
not included.
11. Share based payment
The vesting conditions of the scheme state that the minimum growth in EPS
shall be CPI plus 5% per annum, compounded annually, over the relevant three
accounting years up to the share award of 100% of the participant's basic
salary. Where awards have been granted to a participant in excess of 100% of
their basic salary, the performance condition for the element that is in
excess of 100% of basic salary is that the minimum growth in EPS shall be CPI
plus 10% per annum, compounded annually, over the three accounting years.
Reconciliation of outstanding share options Number of Options in thousands
Outstanding on 1 January 2024 830
Forfeited during the period -
Exercised during the period -
Granted during the period 2,860
Outstanding at 30 June 2024 3,690
12. Intangible Assets and Goodwill
Internally generated intangible assets Goodwill Total
Acquired intellectual property
€'000 €'000 €'000 €'000
Balance at 1 January 2024 6,665 32,050 1,910 40,625
Amortisation of product development (242) - - (242)
Acquired intellectual property - - 303 303
Amortisation of intellectual property - - (139) (139)
Foreign currency translation differences - (26) 65 39
Balance at 30 June 2024 6,423 32,024 2,139 40,586
13. Property, Plant and Equipment
Capital expenditure in the first half-year amounted to €2.5 million (30 June
2023: €4.3 million), of which €2.2 million was invested in plant and
equipment (30 June 2023: €4.1 million) and €38,000 in ROU assets (30 June
2023: €800,000). The depreciation charge for property, plant and equipment
is recognised in the following line items in the income statement:
H1 H1
2024 2023
€'000 €'000
Cost of sales (note 7) 2,827 2,643
Operating Costs (note 7) 1,221 1,331
Total depreciation charge for property, plant and equipment 4,048 3,974
14. Inventory
30 June 31 December
2024 2023
€'000 €'000
Finished goods 47,079 45,953
Work-in-progress 8,912 9,060
Raw materials 13,430 14,717
Total inventory 69,421 69,730
The Group recorded an impairment of €NIL against inventory to take account
of net realisable value during the period ended 30 June 2024 (30 June 2023:
€58,000).
15. Trade and other receivables
30 June 31 December
2024 2023
€'000 €'000
Gross receivable 27,188 23,129
Provision for impairment (1,758) (1,513)
Net trade and other receivables 25,430 21,616
Provision for impairment
€'000
Balance at 1 January 2024 (1,513)
Additions (245)
Balance at 30 June 2024 (1,758)
The following table provides the information about the exposure to credit risk
and ECL's for trade receivables as at 30 June 2024.
Weighted average loss rate % Gross carrying amount €'000 Loss
allowance
€'000
Current (not past due) 1.8% 19,194 346
1-30 days past due 10.6% 3,392 360
31-60 days past due 11.9% 2,868 341
61 to 90 days 17% 1,233 210
More than 90 days past due 100% 501 501
Net trade and other receivables 27,188 1,758
The following table provides the information about the exposure to credit risk
and ECL's for trade receivables as at 31 December 2023.
Weighted average loss rate % Gross carrying amount €'000 Loss
allowance
€'000
Current (not past due) 2% 15,924 280
1-30 days past due 9% 3,145 275
31-60 days past due 22% 1,538 345
61 to 90 days 15% 2,250 341
More than 90 days past due 100% 272 272
Net trade and other receivables 23,129 1,513
16. Loans, borrowings and lease liabilities
30 June 31 December
2024 2023
Maturity €'000 €'000
Loans and borrowings 2024-2036 32,320 32,486
Lease 2024-2032 6,231 7,626
liabilities..........................................................................................................................................................
Total Loans, borrowings and lease liabilities 38,551 40,112
Current 13,422 14,080
Non-current 25,129 26,032
The Group has a number of bank loans and lease liabilities with a mixture of
variable and fixed interest rates. The Group has not been in default on any of
these debt agreements during any of the periods presented. The loans are
secured against the assets for which they have been drawn down for.
17. Financial Risk Management
The Group is exposed to various financial risks arising in the normal course
of business. Our financial risk exposures are predominantly related to changes
in foreign currency exchange rates as well as the creditworthiness of our
financial asset counterparties.
The half-year financial statements do not include all financial risk
management information and disclosures required in the annual financial
statements and should be read in conjunction with the 2023 Annual Report.
There have been no changes in our risk management policies since year-end and
no material changes in our interest rate risk.
a) Liquidity and Capital
The Group defines liquid resources as the total of its cash, cash equivalents
and short term deposits. Capital is defined as the Group's shareholders'
equity and borrowings.
The Group's objectives when managing its liquid resources are:
• To maintain adequate liquid resources to fund its
ongoing operations and safeguard its ability to continue as a going concern,
so that it can continue to create value for investors;
• To have available the necessary financial resources to
allow it to invest in areas that may create value for shareholders; and
• To maintain sufficient financial resources to mitigate
against risks and unforeseen events.
Liquid and capital resources are monitored on the basis of the total amount of
such resources available and the Group's anticipated requirements for the
foreseeable future. The Group's liquid resources and shareholders' equity at
30 June 2024 and 31 December 2023 were as follows:
30 June 2024 31 December 2023
€'000 €'000
Cash and cash equivalents 15,768 20,482
Loans and borrowings 38,551 40,112
Shareholders' equity 152,162 154,251
17. Financial Risk Management (continued)
b) Foreign currency risk
The Group is a multinational business operating in a number of countries and
the euro is the presentation currency. The Group, however, does have revenues,
costs, assets and liabilities denominated in currencies other than euro.
Transactions in foreign currencies are recorded at the exchange rate
prevailing at the date of the transaction. The resulting monetary assets and
liabilities are translated into the appropriate functional currency at
exchange rates prevailing at the reporting date and the resulting gains and
losses are recognised in the income statement. The Group manages some of its
transaction exposure by matching cash inflows and outflows of the same
currencies. The Group does not engage in hedging transactions and therefore
any movements in the primary transactional currencies will impact
profitability. The Group continues to monitor appropriateness of this policy.
The Group's global operations create a translation exposure on the Group's net
assets since the financial statements of entities with non-euro functional
currencies are translated to euro when preparing the consolidated financial
statements. The Group does not use derivative instruments to hedge these net
investments.
The principal foreign currency risks to which the Group is exposed relate to
movements in the exchange rate of the euro against US dollar, South African
rand, Australian dollar, Swedish krona, British Pound and Canadian dollar.
The Group has material subsidiaries with a functional currency other than the
euro, such as US dollar, Australian dollar, South African rand, Canadian
dollar, British pound and Swedish krona.
In 2024, 55% (2023: 56%) of Mincon's revenue €68 million (30 June 2023:
€81 million) was generated in AUD, SEK and USD. The majority of the Group's
manufacturing base has a Euro, US dollar or Swedish krona cost base. While
Group management makes every effort to reduce the impact of this currency
volatility, it is impossible to eliminate or significantly reduce given the
fact that the highest grades of our key raw materials are either not available
or not denominated in these markets and currencies. Additionally, the ability
to increase prices for our products in these jurisdictions is limited by the
current market factors.
Currency also has a significant transactional impact on the Group as
outstanding balances in foreign currencies are retranslated at closing rates
at each period end. The changes in the South African Rand, Australian Dollar,
Swedish Krona and British Pound have either weakened or strengthened,
resulting in a foreign exchange loss being recognised in other comprehensive
income and a significant movement in foreign currency translation reserve.
Average and closing exchange rates for the Group's primary currency exposures
were as disclosed in the table below for the period presented.
30 June H1 2024 31 December H1 2023
2024 2023
Euro exchange rates Closing Average Closing Average
US Dollar 1.07 1.08 1.10 1.08
Australian Dollar 1.61 1.64 1.62 1.60
Canadian Dollar 1.47 1.47 1.46 1.46
Great British Pound 0.85 0.85 0.87 0.88
South African Rand 19.46 20.22 20.18 19.67
Swedish Krona 11.35 11.39 11.13 11.33
There has been no material change in the Group's currency exposure since 31
December 2023. Such exposure comprises the monetary assets and monetary
liabilities that are not denominated in the functional currency of the
operating unit involved.
17. Financial Risk Management (continued)
c) Fair values
Financial instruments carried at fair value
The deferred consideration payable represents management's best estimate of
the fair value of the amounts that will be payable, discounted as appropriate
using a market interest rate. The fair value was estimated by assigning
probabilities, based on management's current expectations, to the potential
pay-out scenarios. The fair value of deferred consideration is not dependent
on the future performance of the acquired businesses against predetermined
targets and on management's current expectations thereof.
Movements in the year in respect of Level 3 financial instruments carried at
fair value
The movements in respect of the financial assets and liabilities carried at
fair value in the period ended to 30 June 2024 are as follows:
Deferred
consideration
€'000
Balance at 1 January 2024 1,998
Cash payment (202)
Foreign currency translation adjustment 45
Unwinding of discount on deferred consideration (4)
Balance at 30 June 2024 1,837
18. Commitments
The following capital commitments for the purchase of property, plant and
equipment had been authorised by the directors at 30 June 2024:
Total
€'000
Contracted for 1,013
Not contracted for 37
Total 1,050
19. Litigation
The Group is not involved in legal proceedings that could have a material
adverse effect on its results or financial position.
20. Related Parties
The Group has relationships with its subsidiaries, directors and senior key
management personnel. All transactions with subsidiaries eliminate on
consolidation and are not disclosed.
As at 30 June 2024, the share capital of Mincon Group plc was 56.32% owned by
Kingbell Company (31 December 2023 56.32%), this company is ultimately
controlled by Patrick Purcell and members of the Purcell family. Patrick
Purcell is also a director of the Company. The Group paid the final dividend
for 2023 in June 2024, Kingbell Company receive €1.3 million.
There were no other related party transactions in the half year ended 30 June
2024 that affected the financial position or the performance of the Company
during that period and there were no changes in the related party transactions
described in the 2023 Annual Report that could have a material effect on the
financial position or performance of the Company in the same period.
21. Subsequent events
There have been no significant events subsequent to the period end 30 June
2024 affecting the Group.
22. Approval of financial statements
The Board of Directors approved the interim condensed consolidated financial
statements for the six months ended 30 June 2024 on 06 August 2024.
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