REG - Mincon Group Plc - Interim Trading Update

MinconAnnouncement

09/10/2023 07:15

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RNS Number : 0418P  Mincon Group Plc  09 October 2023

This announcement contains inside information

 

Mincon Group plc

("Mincon" or the "Group")

 

Q3 2023 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 consumable products, today provides a trading update for
the period from 1st January 2023 to date, incorporating the nine months to
30th September 2023.

 

Further to the most recent commentary provided about the challenging market
conditions in which the Company is currently operating, Group revenues
contracted further during Q3 2023 and, for the first nine months of 2023, are
currently 7% below revenues in the same period in 2022. The revenue decrease
in Q3 is attributable to contraction of our sales into the mining industry in
some regions with a particular weakness in Africa in recent months. In
addition, we had anticipated commencing two large scale construction projects
in North America early in Q4 which will no longer take place as planned,
albeit the larger of the two will now commence in 2024. Elsewhere, we have
seen single digit growth in the waterwell / geothermal industry.

 

Our overall working capital position has improved during the period through
our previously announced inventory reduction programme. Our debtor position
has also improved since H1 2023, resulting in decreased payables and an
improved cash position, which has facilitated continued investment into our
new product development projects and positioning the Group for future growth.

 

The progress made on our inventory reduction programme, along with reduced
revenue in the mining industry, has resulted in lower output from our
factories. This, together with a more competitive mining market, has resulted
in a reduced gross margin for the year to Q3 2023 (c. 30.4% vs 32.0% in Q3
2022).

 

As previously guided within our half year results, to progress the
competitiveness of the business into the future, we have continued to
implement our cost reduction programme in the period. The exceptional cost
associated with this (€0.8m year to date) has impacted on our 2023 results
but should yield benefits in 2024 and beyond.

 

In light of the above, looking ahead to the remainder of the year we now
expect to deliver full year EBITDA of approximately €20 million. Our outlook
for the medium term is positive, we will continue to invest, to improve our
competitiveness within our current industries, and focus on delivering new
opportunities in current and new industries to deliver better returns for the
Group.

 

Ends

9(th) October 2023

 

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, Euronext Growth Listing Sponsor and Joint Broker)

Anthony
Farrell
Tel: +353 (1) 679 6363

Daragh O' Reilly

 

Shore Capital (Joint Broker)

Malachy
McEntyre
Tel: +44 (0) 20 7408 4090

Mark Percy

Daniel Bush

 

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.

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