REG - Mincon Group Plc - Final Results
10/03/2025 07:00
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RNS Number : 8855Z Mincon Group Plc 10 March 2025
Mincon Group plc
("Mincon" or the "Group")
2024 Full 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 results for the year ended 31
December 2024.
Financial Highlights
Total 2024 Continuing Operations 2024(1) Total 2023 Change in Continuing Operations
€'000 €'000 €'000 %
Total revenue 145,866 144,361 156,931 -8%
Gross profit 40,059 40,234 45,523 -12%
EBITDA 14,180 15,955 21,074 -24%
Operating profit 5,506 7,607 12,290 -38%
Profit for the period 1,766 3,392 7,470 -55%
(1) The Group took the decision to close its Mincon Carbide businesses during
the year ended 31 December 2024 and dispose of its assets. The results of
these operations have been re-presented as discontinued operations. See note 9
for further detail.
· Revenue: 2024 Group revenue of €145.9 million, a decrease of 7%
versus 2023. Revenue was €144.4 million for the continuing business.
§ Mining revenue decreased by 7%, with contraction across three of the four
mining regions. However, the EME region saw mining revenue increase 71% as
customers resumed normal ordering patterns in 2024.
§ Construction revenue was flat year-on-year, as the Group generated its
first year of significant construction revenue in APAC, after two major
project wins in Q4, which offset a decrease in revenue in the Group's main
construction markets of North America and Europe.
§ Waterwell/geothermal revenue decreased by 23% in 2024, due to a reduction
in new building construction in Northern Europe, where geothermal energy is
the primary source of heating.
· EBITDA: 2024 EBITDA from continuing operations was approximately
€16 million.
§ Production volumes in H1 2024 dropped significantly compared to 2023 due to
lower sales and continued work to reduce finished goods inventory.
§ Increased market competition and some price reductions in H1 2024 impacted
gross margin.
§ However, market conditions improved in H2 2024. This combined with
operational restructuring led to a recovery in EBITDA in H2 2024.
· Mincon Carbide closure: Following a review of the site, during
2024, the Group decided to close its carbide plant in Sheffield. All costs of
closure were incurred in 2024 and the Group has agreed outsourced arrangements
to supply bit plants on improved cost terms.
· Inventory: as we continued our focus on reducing inventory, 2024
closing inventory decreased by €3.3 million (excluding FX), a positive
result despite challenging market conditions. This will continue to be a focus
area in 2025.
· Capital investment: During the year Mincon commissioned €3.6
million in capital equipment, a significant portion of which included
improving production efficiency through automation at the Group's hammer plant
in Shannon.
· Dividend: Final dividend of 1.05c per ordinary share recommended
by the Board, subject to approval at the AGM, taking the total dividend for
2024 to 2.10c per ordinary share (2023: 2.10c per ordinary share).
Geographical Performance
Revenue in the Americas was down on the prior year by 11% primarily due to
softness in all market segments in H1 2024 and the decision to exit an
unprofitable mining supply contract in Chile, as noted at the time of the
Group's half year results. Mincon experienced an increase in activity across
all markets in H2 2024 and this led to a closing of the gap as the year closed
out. The Group entered 2025 with a strong order book and whilst there is some
uncertainty due to the developing global tariff situation, the Group believes
that its strong manufacturing footprint can mitigate some of the potential
risks.
Revenue in the Europe and Middle East (EME) region was also down on the prior
year by 13%. As the primary manufacturing area for the Group, the Group's
continued focus on increasing revenue while reducing the effects of cost
inflation did start to take effect in H2 2024. This led to a recovery in
revenue and margin to again close the gap on the prior year and come into 2025
with healthy order books across all our plants.
Revenue in the Africa region was down on the prior year by 4%. With a talented
and committed team running the factory in South Africa coupled with a strong
customer support network in the region, we believe we are well positioned to
contribute to the challenge of making Africa more than just a commodity
producer. With that in mind we have a renewed focus on the construction
opportunities that exist and have recently won a large project for delivery in
2025.
Business in the Australia Pacific (APAC) region was up on the prior year by
25% predominantly due to large construction project wins coupled with early
signs of recovery in mining revenue. Mincon has continued to win construction
projects in 2025. This, coupled with some encouraging testing results in
mining applications, gives the Group a positive view for the year ahead in the
APAC region. As part of the ongoing efficiency plans there has been an
extensive input cost review at the Group's plant in Perth. As a result, the
combination of this more price competitive mining market offering with
superior performance and onsite support, should underpin revenue and margin
growth into the future.
Operational and Strategic Performance
Mincon is continuing to focus on driving operational efficiency across the
Group. Our root and branch review and continuous improvement in working
capital management is starting to yield good results. We will endeavour to
consistently improve in these areas.
In Mincon's chosen markets of mining, construction and geothermal/waterwell
drilling, the challenge of reducing emissions has a direct correlation with
reducing cost. As a result, the Mincon ambition, to innovate our products to
become more efficient and in so doing bring significant cost savings to
drilling operations, remains a primary strategic objective. We believe that
this focus has helped to recover Group revenue in H2 2024 and has generated
good order book growth for 2025.
Mincon continues to focus on transformative opportunities like the Greenhammer
collaboration. During 2024 there has been an extensive review of the test
results with the Group's rig manufacturer partner. This has led to the
refinement of the rig conversion design to more efficiently make use of
available power to increase drilling output. The Group is in the process of
finalising a 24/7 contract with a major copper mining company in Arizona who
provided the test site in 2024. Mincon remains confident in the
transformational revenue benefits of the system for the Group and its rig
manufacturer partners, as well as the cost reduction opportunities for large
mining customers.
The Subsea project is progressing very well, and a consented testing site has
been secured for an offshore installation due to be completed at the end of
March 2025. The system has been adapted and successfully tested terrestrially
to use the Mincon spiral flush casing system for reliable drilling through
soft seabed conditions. On successful completion of the offshore
demonstration, the product will be well progressed to certification and more
importantly a pipeline of revenue opportunities that this solution will bring
for Mincon, Subsea Micropiles, and the offshore renewables industry.
Sustainability
Mincon has embraced the challenges around complying with CSRD across the Group
for FY2025 reporting. This is being coordinated by a cross functional team
supported by strategically chosen outside resources to develop a robust
reporting system and demonstrate a genuine commitment to sustainability for
Mincon and all its stakeholders. The Group's fourth Environment and
Sustainability report will be incorporated within this year's annual report.
Chief Executive's Review:
Joe Purcell said "2024 has been a tough year for Mincon but I am pleased to
report that we see an improved global environment in the year ahead for all
our target markets. The weakness we saw at the end of 2023, continued through
H1 2024, but with the moderation of global interest rates and a general uptick
in business confidence, we did see an increase in activity in H2 2024 which
led to a stronger performance, and this improvement has continued into early
2025.
Our root and branch review has resulted in the closure of our business in
Sheffield. This difficult decision was taken due to cost inflation and a
lopsided tariff structure in Europe that meant we could not compete with the
products which were manufactured there. It should be noted that the closure
was not a reflection of the quality and workmanship of the products made at
the plant but simply a matter of market dynamics.
As part of the business review process, a high level of discipline around
working capital management across the Group has been developed. We will ensure
that we maintain and grow this focus in 2025, to positively impact cash
management in the continued business uplift we are seeing this year and
beyond.
We have faced and come through the significant challenges presented to Mincon
in 2024. We have built a strong and resilient business with the discipline and
focus to better take advantage of the opportunities ahead. We will continue to
work on reducing our own cost inputs while our continuous engineering
improvement programme for our product range should contribute to reducing the
significant operational cost challenges in our chosen markets.
These important initiatives, in combination with commercialising the ambitious
and transformational development projects that we have worked so hard to
realise, will set our Group on a growth path that can make a real difference
to emissions reduction in the energy intensive rock drilling markets as well
as contributing significantly to increased revenue for the Group. With that in
mind I would like to thank our global Mincon team as well as our constructive
and supportive Board, for all their work in 2024. I have no doubt that there
will be challenges ahead but if we face these with the commitment we have
demonstrated in the recent period, we will prevail, and I am excited and
confident in the future outlook for the business."
10 March 2025
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 Listing Sponsor and Joint Broker) Tel:
+353 (1) 679 6363
Anthony Farrell
Daragh O'Reilly
Shore Capital (Joint Broker) Tel: +44 (0) 20 7408 4090
Malachy McEntyre
Mark Percy
Daniel Bush
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2024
2024 2024 2023
2024
Notes
Continued Operations Discontinued Operation Note 9 Total Total
€'000 €'000 €'000
€'000
Revenue 4 144,361 1,505 145,866 156,931
Cost of sales 6 (104,127) (1,680) (105,807) (111,408)
Gross profit 40,234 (175) 40,059 45,523
Operating costs 6 (32,627) (1,926) (34,553) (33,233)
Operating profit 7,607 (2,101) 5,506 12,290
Finance costs 7 (2,473) (18) (2,491) (2,472)
Finance income 194 7 201 90
Foreign exchange gain/(loss) 161 (55) 106 (1,001)
Movement on deferred consideration 22 (2) - (2) (3)
Profit before tax 5,487 (2,167) 3,320 8,904
Income tax expense 11 (2,095) 541 (1,554) (1,434)
Profit for the period 3,392 (1,626) 1,766 7,470
Profit attributable to:
- owners of the Parent 3,392 (1,626) 1,766 7,470
Earnings per Ordinary Share
Basic earnings per share, 20 1.60 (0.77) 0.83 3.52
Diluted earnings per share, 20 1.57 (0.75) 0.82 3.50
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
2024 2023
€'000 €'000
Profit for the year 1,766 7,470
Other comprehensive income/(loss):
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation - foreign operations 428 (2,280)
Other comprehensive income/(loss) for the year 428 (2,280)
Total comprehensive income for the year 2,194 5,190
Total comprehensive income attributable to:
- owners of the Parent 2,194 5,190
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
2024 2023
Notes €'000 €'000
Non-Current Assets
Intangible assets and goodwill 12 40,099 40,625
Property, plant and equipment 13 50,945 54,763
Deferred tax asset 11 2,547 2,664
Total Non-Current Assets 93,591 98,052
Non-Current Assets Held for Resale 9 751 -
Current Assets
Inventory and capital equipment 14 67,335 69,730
Trade and other receivables 15a 24,480 21,616
Prepayments and other current assets 15b 9,773 8,609
Current tax 485 1,007
asset
Cash and cash equivalents 22 15,027 20,482
Total Current Assets 117,100 121,444
Total Assets 211,442 219,496
Equity
Ordinary share capital 19 2,125 2,125
Share premium 67,647 67,647
Undenominated capital 39 39
Merger reserve (17,393) (17,393)
Share based payment reserve 2,573 2,241
Foreign currency translation reserve (7,438) (7,866)
Retained earnings 104,762 107,458
Total Equity 152,315 154,251
Non-Current Liabilities
Loans and borrowings 18 23,770 26,032
Deferred tax liability 11 1,535 2,099
Deferred consideration 22 1,641 1,998
Other liabilities 385 932
Total Non-Current Liabilities 27,331 31,061
Current Liabilities
Loans and borrowings 18 13,913 14,080
Trade and other payables 16 9,170 10,505
Accrued and other liabilities 16 8,095 8,596
Current tax liability 618 1,003
Total Current Liabilities 31,796 34,184
Total Liabilities 59,127 65,245
Total Equity and Liabilities 211,442 219,496
On behalf of the Board:
Hugh
McCullough
Joseph Purcell
Chairman
Chief Executive Officer 10 March 2025
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
2024 2023
Notes €'000 €'000
Operating activities:
Profit for the period 1,766 7,470
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation 13 7,913 7,997
Amortisation of intellectual property 12 277 216
Amortisation of internally generated intangible asset 12 485 485
Movement on deferred consideration 2 3
Finance cost 7 2,491 2,472
Finance income (201) (90)
(Gain)/loss on sale of property, plant and equipment 760 (100)
Income tax expense 11 1,554 1,434
Other non-cash movements (353) 1,009
14,694 20,896
Changes in trade and other receivables (2,555) 1,694
Changes in prepayments and other assets 147 3,993
Changes in inventory 3,308 5,596
Changes in trade and other payables (2,457) (3,613)
Cash provided by operations 13,137 28,566
Interest received 201 90
Interest paid (2,491) (2,472)
Income taxes paid (1,866) (3,693)
Net cash provided by operating activities 8,981 22,491
Investing activities
Purchase of property, plant and equipment 13 (3,609) (10,201)
Proceeds from the sale of property, plant and equipment 13 328 471
Investment in intangible assets 12 (91) -
Investment in acquired intangible assets 12 (303) (158)
Payment of deferred consideration 22 (452) (1,054)
Net cash used in investing activities (4,127) (10,942)
Financing activities
Dividends paid 19 (4,462) (4,461)
Repayment of borrowings 18/24 (5,004) (5,350)
Repayment of lease liabilities 18/24 (3,058) (4,194)
Drawdown of loans 18/24 2,210 7,223
Net cash used in financing activities (10,314) (6,782)
Effect of foreign exchange rate changes on cash 5 (224)
Net (decrease)/increase in cash and cash equivalents (5,455) 4,543
Cash and cash equivalents at the beginning of the year 20,482 15,939
Cash and cash equivalents at the end of the year 15,027 20,482
Cash and cash equivalents for discontinued operations (Note 9) 344 -
Cash and cash equivalents for continuing operations 14,683 20,482
Cash and cash equivalents at the end of the year 15,027 20,482
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Share Share premium Merger reserve Un-denominated Share based payment reserve Foreign Retained earnings Total
capital capital currency translation reserve equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balances at 1 January 2023 2,125 67,647 (17,393) 39 2,505 (5,586) 104,449 153,786
Comprehensive income:
Profit for the year - - - - - - 7,470 7,470
Other comprehensive (loss):
Foreign currency translation - - - - - (2,280) - (2,280)
Total comprehensive income (2,280) 7,470 5,190
Transactions with Shareholders:
Issuance of share capital - - - - - - - -
Share based payments - - - - (264) - - (264)
Dividends - - - - - - (4,461) (4,461)
Total transactions with Shareholders - - - - (264) - (4,461) (4,725)
Balances at 31 December 2023 2,125 67,647 (17,393) 39 2,241 (7,866) 107,458 154,251
Comprehensive income:
Profit for the year - - - - - - 1,766 1,766
Other comprehensive income:
Foreign currency translation - - - - - 428 - 428
Total comprehensive income 428 1,766 2,194
Transactions with Shareholders:
Issuance of share capital - - - - - - - -
Share-based payments - - - - 332 - - 332
Dividends - - - - - - (4,462) (4,462)
Total transactions with Shareholders - - - - 332 - (4,462) (4,130)
Balances at 31 December 2024 2,125 67,647 (17,393) 39 2,573 (7,438) 104,762 152,315
Notes to the Consolidated Financial Statements
1. Description of business
The consolidated financial statements of Mincon Group plc (also referred to as
"Mincon" or "the Group") comprises the Company and its subsidiaries (together
referred to as "the Group"). The companies registered address is Smithstown
Industrial Estate, Smithstown, Shannon, Co. Clare, Ireland.
The Group is an Irish engineering Group, specialising in the design,
manufacturing, sale and servicing of rock drilling tools and associated
products. Mincon Group Plc is domiciled in Shannon, Ireland.
On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext
Growth and the Alternative Investment Market (AIM) of the London Stock
Exchange.
2. Basis of preparation
These consolidated financial statements have been prepared in accordance with
the International Financial Reporting Standards as adopted by the European
Union (IFRS), which comprise standards and interpretations approved by the
International Accounting Standards Board (IASB) and endorsed by the EU.
The Group's financial statements consolidate those of the parent company and
all of its subsidiaries as of 31 December 2024. All subsidiaries have a
reporting date of 31 December.
The accounting policies set out in note 3 have been applied consistently in
preparing the Group and Company financial statements for the years ended 31
December 2024 and 31 December 2023.
The Group and Company financial statements are presented in euro, which is the
functional currency of the Company and also the presentation currency for the
Group's financial reporting. Unless otherwise indicated, the amounts are
presented in thousands of euro. These financial statements are prepared on the
historical cost basis.
The preparation of the consolidated financial statements in conformity with
IFRS requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The judgements, estimates and associated
assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances. Actual results could
differ materially from these estimates. The areas involving a high degree of
judgement and the areas where estimates and assumptions are critical to the
consolidated financial statements are discussed in note 3.
The Directors believe that the Group has adequate resources to continue in
operational existence for the foreseeable future and that it is appropriate to
continue to prepare our consolidated financial statements on a going concern
basis.
3. Material accounting principles and significant accounting estimates and
judgements
The accounting principles as set out in the following paragraphs have, unless
otherwise stated, been consistently applied to all periods presented in the
consolidated financial statements and for all entities included in the
consolidated financial statements.
The following new and amended standards are not expected to have a significant
impact on the Group's consolidated financial statements:
New Standards adopted as at 1 January 2024
• Liability in a Sale and Leaseback (Amendments to
IFRS 16 Leases
• Classification of Liabilities as Current or
Non-Current (Amendments to IAS 1 Presentation of Financial
Statements)
• Supplier Finance Arrangements (Amendments to IAS 7
Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures)
• Non-current Liabilities with Covenants (Amendments
to IAS 1)
Standards, amendments and Interpretations to existing Standards that are not
yet effective and have been not adopted early by the Group
• Lack of Exchangeability (Amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates)
• Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7)
• Presentation and base disclosure requirements for
financial statements (Replacement of IAS 1 with IFRS 18)
• Subsidiaries without Public Accountability:
Disclosures (IFRS 19)
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Segment Reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenue and incur expenses, and for which
discrete financial information is available. The operating results of the
operating segment is reviewed regularly by the Board of Directors, the chief
operating decision maker, to make decisions about allocation of resources and
also to assess performance.
Results 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.
The Group has determined that it has one reportable segment (see Note 5). The
Group is managed as a single business unit that sells drilling equipment,
primarily manufactured by Mincon manufacturing sites.
Revenue Recognition
The Group is involved in the sale and servicing of rock drilling tools and
associated products. Revenue from the sale of these goods and services to
customers is measured at the fair value of the consideration received or
receivable (excluding sales taxes). The Group recognises revenue when it
transfers control of goods to a customer or has completed a service over a set
period (typically one month) for a customer.
The following provides information about the nature and timing of the
satisfaction of performance obligations in contracts with customers, including
significant payment terms, and the related revenue recognition policies.
Customers obtain control of products when one of the following conditions are
satisfied:
1. The goods have been picked up by the customer from Mincon's premises;
2. When goods have been shipped by Mincon, the goods are delivered to the
customer and have been accepted at their premises; or
3. The customer accepts responsibility of the goods during transit that is
in line with international commercial terms.
Where the Group provides a service to a customer, who also purchases Mincon
manufactured product from the Group, the revenue associated with this service
is separately identified in a set period (typically one month) and is
recognised in the Groups revenue as it occurs.
Invoices are generated when the above conditions are satisfied. Invoices are
payable within the timeframe as set in agreement with the customer at the
point of placing the order of the product or service. Discounts are provided
from time-to-time to customers.
Customers may be permitted to return goods where issues are identified with
regard to quality of the product. Returned goods are exchanged only for new
goods or a credit note. No cash refunds are offered.
Where the customer is permitted to return an item, revenue is recognised to
the extent that it is highly probable that a significant reversal in the
amount of cumulative revenue recognised will not occur. Therefore, the amount
of revenue recognised is adjusted for expected returns, which are estimated
based on the historical data for specific types of product. In these
circumstances, a refund liability and a right to recover returned goods asset
are recognised.
The Group recognises contract liabilities for consideration received in
respect of unsatisfied performance obligations and reports these amounts as
accruals and other liabilities in its consolidated statement of financial
position. Similarly, if the Group satisfies a performance obligation before it
receives the consideration, the Group recognises either a contract asset or a
receivable in its consolidated statement of financial position, depending on
whether something other than the passage of time is required before the
consideration is due.
The Group has elected to apply IFRS 15 Practical expedient, the Group need not
adjust the promised amount of consideration for the effects of a significant
financing component if the entity expects, at contract inception, that the
period between when the Group transfers a promised good or service to a
customer and when the customer pays for that good or service will be one year
or less.
Government Grants
Amounts recognised in the profit and loss account are presented under the
heading Operating Costs on a systematic basis in the periods in which the
expenses are recognised, unless the conditions for receiving the grant are met
after the related expenses have been recognised. In this case, the grant is
recognised when it is receivable. Current government grants have no conditions
attached.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Operating expenses
Operating expenses are recognised in profit or loss as the service is utilised
or incurred.
Earnings per share
Basic earnings per share is calculated based on the profit for the year
attributable to owners of the Company and the basic weighted average number of
shares outstanding. Diluted earnings per share is calculated based on the
profit for the year attributable to owners of the Company and the diluted
weighted average number of shares outstanding.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either has been
disposed of, or is classified as held for sale. A discontinued operation
represents a separate major line of the business. Profit or loss from
discontinued operations comprises the post-tax profit or loss of discontinued
operations and the post-tax gain or loss recognised on the measurement to fair
value less costs to sell or on the disposal group(s) constituting the
discontinued operation.
Taxation
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are
met.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised
for:
• not a business combination and that affects neither
accounting nor taxable profit or loss;
• temporary differences related to investments in
subsidiaries, associates and joint arrangements to the extent that the Group
is able to control the timing of the reversal of the temporary differences and
it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable
profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are
met.
Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group uses the definition of a
lease in IFRS 16.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Leases (continued)
(i) As a lessee
At commencement or on modification of a contract that contains a lease
component, the Group allocates the consideration in the contract to each lease
component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term, unless the
lease transfers ownership of the underlying asset to the Group by the end of
the lease term or the cost of the right-of-use asset reflects that the Group
will exercise a purchase option. In that case the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined
on the same basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate.
The Group determines its incremental borrowing rate by obtaining interest
rates from various external financing sources.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual value
guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised
in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
(ii) As a lessor
At inception or on modification of a contract that contains a lease component,
the Group allocates the consideration in the contract to each lease component
on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each
lease is a finance lease or an operating lease.
When the Group is an intermediate lessor, it accounts for its interests in the
head lease and the sub-lease separately. It assesses the lease classification
of a sub-lease with reference to the right-of-use asset arising from the head
lease, not with reference to the underlying asset.
Short term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for leases of low-value assets and short-term leases, including IT
equipment. The Group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
Inventories and capital equipment
Inventories and capital equipment (rigs) are valued at the lower of cost or
net realisable value. Net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and
selling expenses. The cost of inventories is based on the first-in, first-out
principle and includes the costs of acquiring inventories and bringing them to
their existing location and condition. Inventories manufactured by the Group
and work in progress include an appropriate share of production overheads
based on normal operating capacity. Inventories are reported net of deductions
for obsolescence.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Intangible Assets and Goodwill
Goodwill
The Group accounts for acquisitions using the purchase accounting method as
outlined in IFRS 3 Business Combinations. Goodwill represents the future
economic benefits arising from a business combination that are
not individually identified and separately recognised. Goodwill is not
amortised and is tested annually.
Intangible assets
Expenditure on research activities is recognised in profit or loss as
incurred.
Development expenditure is capitalised only if the Group can demonstrate if
the expenditure can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable
and the Group intends to and has sufficient resources to complete development
and to use or sell the asset. Otherwise, it is recognised in the profit or
loss as incurred. Subsequent to initial recognition, development expenditure
is measured at cost less accumulated amortisation and any accumulated
impairment losses.
Acquired IP which has been obtained at a cost that can be measured reliably,
and that meets the definition and recognition criteria of IAS38, will be
accounted for as an intangible asset.
Internally developed intangible assets are recognised post the development
phase once the company has assessed the development phase is complete and the
asset is ready for use. Internally generated assets have an finite life. They
will be amortised over a fifteen year period on a straight line basis.
Currently there is twelve years and nine months remaining on the amortisation.
Foreign Currency
Functional and presentation currency
The consolidated financial statements are presented in Euro currency units,
which is also the functional currency of the parent company.
Foreign currency transactions and balances
Transactions in foreign currencies (those which are denominated in a currency
other than the functional currency) are translated at the foreign exchange
rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the foreign exchange
rate at the statement of financial position date. Exchange gains and losses
related to trade receivables and payables, other financial assets and
payables, and other operating receivables and payables are separately
presented on the face of the income statement.
Exchange rate differences on translation to functional currency are reported
in profit or loss, except when reported in other comprehensive income for the
translation of intra-group receivables from, or liabilities to, a foreign
operation that in substance is part of the net investment in the foreign
operation.
Exchange rates for major currencies used in the various reporting periods are
shown in note 22.
Translation of accounts of foreign entities
The assets and liabilities of foreign entities, including goodwill and fair
value adjustments arising on consolidation, are translated to euro at the
exchange rates ruling at the reporting date. Revenues, expenses, gains, and
losses are translated at average exchange rates, when these approximate the
exchange rate for the respective transaction. Foreign exchange differences
arising on translation of foreign entities are recognised in other
comprehensive income and are accumulated in a separate component of equity as
a translation reserve.
On divestment of foreign entities, the accumulated exchange differences, are
recycled through profit or loss, increasing or decreasing the profit or loss
on divestments.
Business combinations and consolidation
The consolidated financial statements include the financial statements of the
Group and all companies in which Mincon Group plc, directly or indirectly, has
control. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date on which control commences until the date on which
control ceases.
The consolidated financial statements have been prepared in accordance with
the acquisition method.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Business combinations and consolidation (continued)
According to this method, business combinations are seen as if the Group
directly acquires the assets and assumes the liabilities of the entity
acquired. At the acquisition date, i.e., the date on which control is
obtained, each identifiable asset acquired, and liability assumed is
recognised at its acquisition-date fair value.
Consideration transferred is measured at its fair value. It includes the sum
of the acquisition date fair values of the assets transferred, liabilities
incurred to the previous owners of the acquiree, and equity interests issued
by the Group. Deferred consideration is initially measured at its
acquisition-date fair value. Any subsequent change in such fair value is
recognised in profit or loss, unless the deferred consideration is classified
as equity. In that case, there is no remeasurement and the subsequent
settlement is accounted for within equity. Deferred consideration arises in
the current year where part payment for an acquisition is deferred to the
following year or years.
Transaction costs that the Group incurs in connection with a business
combination, such as legal fees, due diligence fees, and other professional
and consulting fees are expensed as incurred.
Goodwill is measured as the excess of the fair value of the consideration
transferred, the amount of any non-controlling interest in the acquiree, and
the fair value of the Group's previously held equity interest in the acquiree
(if any) over the net of acquisition-date fair values of the identifiable
assets acquired and liabilities assumed. Goodwill is not amortised but tested
for impairment at least annually.
Non-controlling interest is initially measured either at fair value or at the
non-controlling interest's proportionate share of the fair value of the
acquiree's identifiable net assets. This means that goodwill is either
recorded in "full" (on the total acquired net assets) or in "part" (only on
the Group's share of net assets). The choice of measurement basis is made on
an acquisition-by-acquisition basis.
Earnings from the acquirees are reported in the consolidated income statement
from the date of control.
Intra-group balances and transactions such as income, expenses and dividends
are eliminated in preparing the consolidated financial statements. Profits and
losses resulting from intra-group transactions that are recognised in assets,
such as inventory, are eliminated in full, but losses are only eliminated to
the extent that there is no evidence of impairment.
Property, plant and equipment
Items of property, plant and equipment are carried at cost less accumulated
depreciation and impairment losses. Cost of an item of property, plant and
equipment comprises the purchase price, import duties, and any cost directly
attributable to bringing the asset to its location and condition for use. The
Group capitalises costs on initial recognition and on replacement of
significant parts of property, plant and equipment, if it is probable that the
future economic benefits embodied will flow to the Group and the cost can be
measured reliably. All other costs are recognised as an expense in profit or
loss when incurred.
Depreciation
Depreciation is calculated based on cost using the straight-line method over
the estimated useful life of the asset. The following useful lives are used
for depreciation:
Years
Buildings
20-30
Plant and equipment 3-10
The depreciation methods, useful lives and residual values are reassessed
annually. Land is not depreciated.
Right of use assets are depreciated using the straight-line method over the
estimated useful life of the asset being the remaining duration of the lease
from inception date of the asset. The depreciation methods, useful lives and
residual values are reassessed annually.
Gains or losses arising on the disposal of property, plant and equipment are
determined as the difference between the disposal proceeds and the carrying
amount of the assets and are recognised in profit or loss either within other
income or other expenses
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Financial Assets and Liabilities
Classification and initial measurement of financial assets financial
liabilities.
Financial assets and liabilities are recognised at fair value when the Group
becomes a party to the contractual provisions of the instrument. Purchases and
sales of financial assets are accounted for at trade date, which is the day
when the Group contractually commits to acquire or dispose of the assets.
Trade receivables are recognised once the responsibility associated with
control of the product has transferred to the customer. Liabilities are
recognised when the other party has performed and there is a contractual
obligation to pay. A financial asset and
a financial liability are offset and the net amount presented in the statement
of financial position when there is a legally enforceable right to set off the
recognised amounts and there is an intention to either settle on a net basis
or to realise the asset and settle the liability simultaneously.
The classification is determined by both:
• the entity's business model for managing the financial asset, and
• the contractual cash flow characteristics of the financial asset.
Subsequent measurement of financial assets and financial liabilities
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the
following conditions (and are not designated as FVTPL):
· they are held within a business model whose objective is to hold
the financial assets and collect its contractual cash flows, and
· the contractual terms of the financial assets give rise to cash
flows that are solely payments of principal and interest on the principal
amount outstanding.
After initial recognition, these are measured at amortised cost using the
effective interest method. Discounting is omitted where the effect of
discounting is immaterial.
Financial liabilities at amortised cost
Subsequently, financial liabilities are measured at amortised cost using the
effective interest method.
Derecognition (fully or partially) of a financial asset occurs when the rights
to receive cash flows from the financial instruments expire or are transferred
and substantially all of the risks and rewards of ownership have been removed
from the Group. Financial assets are assessed at each reporting date. The
Group derecognises (fully or partially) a financial liability when the
obligation specified in the contract is discharged or otherwise expires.
Impairment of financial assets
Financial assets are assessed from initial recognition and at each reporting
date to determine whether there is a requirement for impairment. Financial
assets require there expected lifetime losses to be recognised from initial
recognition.
IFRS 9's impairment requirements use forward-looking information to recognise
expected credit losses - the 'expected credit loss (ECL) model'. Instruments
within the scope of the requirements included loans and other debt-type
financial assets measured at amortised cost, trade and other receivables.
The Group considers a broader range of information when assessing credit risk
and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
· financial instruments that have not deteriorated significantly in
credit quality since initial recognition or that have low credit risk ('Stage
1'); and
· financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk is not low
('Stage 2').
'Stage 3' would cover financial assets that have objective evidence of
impairment at the reporting date.
'12-month expected credit losses' are recognised for the first category (ie
Stage 1) while 'lifetime expected credit losses' are recognised for the second
category (ie Stage 2).
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected life of the
financial instrument.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Financial Assets and Liabilities (continued)
Trade and other receivables
The Group makes use of a simplified approach in accounting for trade and other
receivables and records the loss allowance as lifetime expected credit losses.
These are the expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial
instrument. In calculating, the Group uses its historical experience, external
indicators and forward-looking information to calculate the expected credit
losses using a provision matrix.
The Group assesses impairment of trade and other receivables on a collective
basis as they possess shared credit risk characteristics they have been
grouped based on the days past due.
Borrowing costs
All borrowing costs are expensed in accordance with the effective interest
rate method.
Equity
Shares are classified as equity. Incremental costs directly attributable to
the issue of ordinary shares and share options are recognised as a deduction
from equity, net of any tax effect.
Financial instruments carried at fair value: Deferred consideration
Fair value is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the
reporting date. These are set amounts detailed in each contract.
Finance income and expenses
Finance income and expense are included in profit or loss using the effective
interest method.
Contingent liabilities
A contingent liability is a possible obligation or a present obligation that
arises from past events that is not reported as a liability or provision, as
it is not probable that an outflow of resources will be required to settle the
obligation or that a sufficiently reliable calculation of the amount cannot be
made.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with
maturities of three months or less.
Non-current assets and liabilities classified as held for sale and
discontinued operations
Non-current assets classified as held for sale are presented separately and
measured at the lower of their carrying amounts immediately prior to their
classification as held for sale and their fair value less costs to sell.
However, some held for sale assets such as financial assets or deferred tax
assets, continue to be measured in accordance with the Group's relevant
accounting policy for those assets. Once classified as held for sale, the
assets are not subject to depreciation or amortisation. Any profit or loss
arising from discontinued operation or its remeasurement to fair value less
costs to sell is presented in the profit or loss from discontinued
operations.
Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that have been
issued. Share premium includes any premiums received on the issue of share
capital. Any transaction costs associated with the issuing of shares are
deducted from share premium, net of any related income tax benefits.
Retained earnings includes all current and prior period retained profits and
share-based employee remuneration.
Dividend distributions payable to equity shareholders are included in other
liabilities when the dividends have been approved in a general meeting prior
to the reporting date.
Provisions
A provision is recognised in the statement of financial position when the
Group has a legal or constructive obligation as a result of a past event, it
is probable that an outflow of economic benefits will be required to settle
the obligation, and the outflow can be estimated reliably. The amount
recognised as a provision is the best estimate of the expenditure required to
settle the present obligation at the reporting date. If the effect of the time
value of money is material, the provision is determined by discounting the
expected future cash flows at a pre-tax rate that reflects the current market
assessments of the time value of money and, where appropriate, the risks
specific to the liability.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Provisions (continued)
A provision for restructuring is recognised when the Group has approved a
detailed and formal restructuring plan and the restructuring has either
commenced or been announced publicly. Future operating losses are not provided
for.
Defined contribution plans
A defined contribution retirement benefit plan is a post-employment benefit
plan under which the Group pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution retirement benefit plans
are recognised as an employee benefit expense in profit or loss when employees
provide services entitling them to the contributions.
Share-based payment transactions
The Group operates a long-term incentive plan which allows the Company to
grant Restricted Share Awards ("RSAs") to the Executive Management Team and
senior management. All schemes are equity settled arrangements under IFRS 2
Share-based Payment.
The grant-date fair value of share-based payment awards granted to employees
is recognised as an employee expense, with a corresponding increase in equity,
over the period that the employees become unconditionally entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number
of awards for which the related service and non-market performance conditions
are expected to be met, such that the amount ultimately recognised as an
expense is based on the number of awards that meet the related service and
non-market performance conditions at the vesting date. It is reversed only
where entitlements do not vest because all
non-market performance conditions have not been met or where an employee in
receipt of share entitlements leaves the Group before the end of the vesting
period and forfeits those options in consequence.
Significant accounting estimates and judgements
The preparation of financial statements requires management's judgement and
the use of estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. These estimates and
associated assumptions are based on historical experience and various other
factors that are believed to be reasonable under the prevailing circumstances.
Actual results may differ from those estimates. The estimates and assumptions
are reviewed on an ongoing basis. Revisions to the accounting estimates are
recognised in the period in which they are revised and in any future periods
affected.
Following are the estimates and judgements which, in the opinion of
management, are significant to the underlying amounts included in the
financial reports and for which there is a significant risk that future events
or new information could entail a change in those estimates or judgements.
Deferred consideration (Note 22)
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 primarily
dependent on the future performance of the acquired businesses against
predetermined targets and on management's current expectations thereof.
Climate-related matters
The long-term consequences of climate changes on financial statements are
difficult to predict and require entities to make significant assumptions and
develop estimates. Consistent with the prior year, as at 31 December 2024 the
Group has not identified significant risks induced by climate changes that
could negatively and materially affect the estimates and judgements currently
used in the Group's financial statements. Management continuously assesses the
impact of climate-related matters.
Goodwill (Note 12)
The initial recognition of goodwill represents management' best estimate of
the fair value of the acquired entities value less the identified assets
acquired.
During the annual impairment assessment over goodwill, management calculate
the recoverable value of the group using their best estimate of the discounted
future cash flows of the group. The fair values were estimated using
management's current and future projections of the Mincon Group's performance
as well as appropriate data inputs and assumptions.
3. Material accounting principles and significant accounting estimates and
judgements (continued)
Significant accounting estimates and judgements (continued)
Useful life and residual values of Intangible Assets (Note 12)
Distinguishing the research and development phase, determining the useful
life, and deciding whether the recognition requirements for the capitalisation
of development costs of new projects are met all require judgement. These
judgements are based on historical experience and various other factors that
are believed to be reasonable under the prevailing circumstances.
After capitalisation, management monitors whether the recognition requirements
continue to be met and whether there are any indicators that capitalised costs
may be impaired.
Trade and other receivables (Note 15)
Trade and other receivables are included in current assets, except for those
with maturities more than 12 months after the reporting date, which are
classified as non-current assets. The Group estimates the risk that
receivables will not be paid and provides for doubtful debts in line with IFRS
9.
The Group applies the simplified approach to providing for expected credit
losses (ECL) permitted by IFRS 9 Financial Instruments, which requires
expected lifetime losses to be recognised from initial recognition of the
receivables and considered at each reporting date. Loss rates are calculated
using a "roll rate" method based on the probability of a receivable
progressing through successive chains of non-payment to write-off.
Trade receivables are written off when there is no reasonable expectation of
recovery, such as a debtor failing to engage in a repayment plan with the
company. Where recoveries are made, these are recognised in the Consolidated
Income Statement.
4. Revenue
In the following table, revenue is disaggregated between Mincon manufactured
product and product that is purchased outside the Group and resold through
Mincon distribution channels.
2024 2023
€'000 €'000
Product revenue:
Sale of Mincon product 117,418 128,294
Sale of third party product 28,448 28,637
Total revenue 145,866 156,931
The Group's revenue disaggregated by primary geographical markets are
disclosed in Note 5.
The Group recognised contract liability amounting to €2 million as at 31
December 2024 (2023:€1 million) which represent customer payments received
in advance of performance that are expected to be recognised within the next
financial year. Contract liability is recorded under Other accruals and other
liabilities (Note 16).
5. Operating Segment
The CODM assesses operating segment performance based on operating profit.
Segment revenue for the year ended 31 December 2024 of €145.9 million (2023:
€156.9 million) is wholly derived from sales to external customers.
Entity-wide disclosures
The business is managed on a worldwide basis but operates manufacturing
facilities and sales offices in Ireland, UK, Sweden, Finland, South Africa,
Western Australia, the United States and Canada and sales offices in ten other
locations including Eastern Australia, South Africa, France, Spain, Namibia,
Sweden, 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.
5. Operating Segment (continued)
Revenue by region (by location of customers):
2024 2023
€'000 €'000
Region:
Ireland 2,161 1,619
Americas 59,481 66,466
Australasia 17,938 14,344
Europe, Middle East, Africa 66,286 74,502
Total revenue ((1)) 145,866 156,931
(1) Total revenue in 2024 includes revenue from discontinued operations.
During 2024, Mincon had sales in the USA of €33.4 million (2023: €38.4
million), Canada of €16.9 million (2023: €15.5) and Australia of €15
million (2023: €12 million), these individually contributed to more than 10%
of the entire Group's sales for 2024.
( ) 2024 2023
€'000 €'000
Region:
Americas 16,088 16,352
Australasia 10,167 11,060
Europe, Middle East, Africa 64,789 67,976
Total non-current assets((1)) 91,044 95,388
(1) Non-current assets exclude deferred tax assets.
During 2024, Mincon held non-current assets (excluding deferred tax assets) in
Ireland of €23.2 million (2023: €23.5 million), in the USA of €12.2
million (2023: €11.7 million) these separately contributed to more than 10%
of the entire Group's non-current assets (excluding deferred tax assets) for
2024.
( ) 2024 2023
€'000 €'000
Region:
Americas 4,900 5,883
Australasia 2,041 1,988
Europe, Middle East, Africa 18,855 21,091
Total non-current liabilities((1)) 25,796 28,962
(1) Non-current liabilities exclude deferred tax liabilities.
During 2024, Mincon held non-current liabilities (excluding deferred tax
liabilities) in Ireland of €13.6 million (2023: €15.7 million), this
contributed to more than 10% of the entire Group's non-current liabilities
(excluding deferred tax liabilities) for 2024.
6. Cost of Sales and operating expenses
Included within cost of sales and operating costs were the following major
components:
Cost of sales
2024 2023
€'000 €'000
Raw materials 43,326 46,201
Third party product purchases 22,081 22,194
Employee costs 19,591 20,980
Depreciation (note 13) 5,416 5,387
In bound costs on purchases 3,527 3,200
Energy costs 2,623 2,735
Maintenance of machinery 1,498 1,529
Subcontracting 4,355 4,884
Amortisation of product development 485 485
Other 2,905 3,813
Total cost of sales ((1)) 105,807 111,408
(1) Total cost of sales in 2024 includes cost of sales from discontinued
operations.
The Group invested approximately €3.8 million on research and development
projects in 2024 (2023: €4.1 million) €3.8 million of this has been
expensed in the period (2023: €4.1 million).
Operating costs
2024 2023
€'000 €'000
Employee costs (including Director emoluments) 19,770 19,726
Depreciation (note 13) 2,497 2,610
Amortisation of acquired IP 277 216
Travel 2,068 1,812
Professional costs 2,759 2,425
Administration 2,806 2,938
Marketing 740 791
Legal cost 783 715
Other 2,853 2,000
Total other operating costs ((1)) 34,553 33,233
(1) Total other operating costs in 2024 includes other operating costs from
discontinued operations.
The Group recognised €92,000 in Government Grants in 2024 (2023: €56,000).
These grants differ in structure from country to country, they primarily
relate to personnel costs.
7. Finance costs
2024 2023
€'000 €'000
Interest on lease liabilities 445 698
Interest on loans and borrowings 2,046 1,774
Finance costs ((1)) 2,491 2,472
(1) Finance costs in 2024 includes finance costs from discontinued operations.
8. Employee information
2024 2023
€'000 €'000
Wages and salaries - excluding Directors 33,171 34,633
Wages, salaries, fees and retirement benefit - Directors (note 10) 721 725
Social security costs 2,952 3,409
Retirement benefit costs of defined contribution plans 2,185 2,203
Share based payment expense (note 21) 332 (264)
Total employee costs ((1)) 39,361 40,706
(1) Total employee costs in 2024 includes employee costs from discontinued
operations.
At 31 December 2024, there was €206,000 (2023: €445,000) accrued for and
not in paid pension contributions.
The average number of employees was as follows:
2024 2023
Number Number
Sales and distribution 123 136
General and administration 75 77
Manufacturing, service and development 332 391
Average number of persons employed 530 604
Retirement benefit and Other Employee Benefit Plans
The Group operates various defined contribution retirement benefit plans.
During the year ended 31 December 2024, the Group recorded €2.2 million
(2023: €2.2 million) of expense in connection with these plans.
9. Non-Current Assets Held for Resale and Discontinued Operations
During 2024, Mincon's Group Board of Director made the decision to cease
trading of its subsidiary Mincon Carbide in Sheffield UK.
All contracts with customers in Mincon Carbide were fulfilled and all
inventory and portion of the property and equipment have been sold. As at 31
December 2024, few employees are still employed to execute outstanding
administrative activities. The Group assessed that Mincon Carbide has ceased
to be used and thus represents a discontinued operation as at the reporting
period.
At 31 December 2024, the property, plant and equipment owned by Mincon
Carbide was in the process of being sold to a third party. The sale was
completed on 17 January 2025 for a total consideration of £1.8 million
(€2.2 million).
As at 31 December 2024, the property, plant and equipment of Mincon Carbide
amounting to €751,000 was reclassified to Non-current assets held for
resale. This balance is made up of land and buildings of €740,000 and plant
& equipment of €11,000 (Note 13). Apart from the property, plant and
equipment, no other major classes of assets and liabilities of Mincon Carbide
were classified as held for sale.
Cashflows generated by Mincon Carbide for the year ended 31 December 2024 are
as follows:
€'000
Operating 137
activities...............................................................................................................................................
Investing 241
activities................................................................................................................................................
Financing (699)
activities...............................................................................................................................................
Opening cash balance 665
..........................................................................................................................................
Cash flows from discontinued 344
operations............................................................................................................
10. Statutory and other required disclosures
Operating profit is stated after charging the following amounts: 2024 2023
€'000 €'000
Directors' remuneration
Fees 235 234
Wages and salaries 426 432
Retirement benefit contributions 60 59
Total Directors' remuneration 721 725
Auditor's remuneration 2024 2023
€'000 €'000
Auditor's remuneration - Fees payable to lead audit firm
Audit of the Group financial statements 195 188
Audit of the Company financial statements 10 10
Other assurance services 15 15
220 213
Auditor's remuneration - Fees payable to other firms in lead audit firm's
network
Audit services 44 36
Other assurance services - -
Tax advisory services 2 2
Total auditor's remuneration 46 38
11. Income tax
Tax recognised in income statement:
2024 2023
Current tax expense €'000 €'000
Current year 1,950 1,995
Adjustment for prior years 51 -
Total current tax expense 2,001 1,995
Deferred tax expense
Origination and reversal of temporary differences (447) (561)
Total deferred tax expense (447) (561)
Total income tax expense ((1)) 1,554 1,434
(1) Total income tax expense in 2024 includes income tax from discontinued
operations.
A reconciliation of the expected income tax expense is computed by applying
the standard Irish tax rate to the profit before tax and the reconciliation to
the actual income tax expense is as follows:
2024 2023
€'000 €'000
Profit before tax 3,320 8,904
Irish standard tax rate (12.5%) 12.5% 12.5%
Taxes at the Irish standard rate 415 1,113
Foreign income at rates other than the Irish standard rate 226 (462)
Losses created/utilised 40 (61)
Other 873 844
Total income tax expense ((1)) 1,554 1,434
(1) Total income tax expense in 2024 includes income tax from discontinued
operations.
11. Income tax (continued)
The Group's net deferred taxation liability was as follows:
2024 2023
€'000 €'000
Deferred taxation assets:
Reserves, provisions and tax credits 2,008 2,012
Tax losses and unrealised FX gains 539 652
Total deferred taxation asset 2,547 2,664
Deferred taxation liabilities:
Property, plant and equipment (1,535) (2,099)
Total deferred taxation liabilities (1,535) (2,099)
Net deferred taxation asset 1,012 565
The movement in temporary differences during the year were as follows:
Balance Recognised in Balance
1 January Profit or Loss 31 December
1 January 2023 - 31 December 2023 €'000 €'000 €'000
Deferred taxation assets:
Reserves, provisions and tax credits 1,044 968 2,012
Tax losses 1,006 (354) 652
Total deferred taxation asset 2,050 614 2,664
Deferred taxation liabilities:
Property, plant and equipment (1,808) (291) (2,099)
Profit not yet taxable (238) 238 -
Total deferred taxation liabilities (2,046) (53) (2,099)
Net deferred taxation liability 4 561 565
Balance Recognised in Balance
1 January Profit or Loss 31 December
1 January 2024 - 31 December 2024 €'000 €'000 €'000
Deferred taxation assets:
Reserves, provisions and tax credits 2,012 (5) 2,007
Tax losses 652 (112) 540
Total deferred taxation asset 2,664 (117) 2,547
Deferred taxation liabilities:
Property, plant and equipment (2,099) 564 (1,535)
Total deferred taxation liabilities (2,099) 564 (1,535)
Net deferred taxation liability 565 447 1,012
Deferred taxation assets have not been recognised in respect of the following
items:
2024 2023
€'000 €'000
Tax losses 3,829 3,789
Total 3,829 3,789
12. Intangible assets and goodwill
Internally generated intangible asset Goodwill Acquired Total
intellectual
property
€'000 €'000 €'000 €'000
Balance at 1 January 2023 7,150 32,328 631 40,109
Acquired intellectual property - - 1,517 1,517
Amortisation of intellectual property - - (216) (216)
Amortisation of product development (485) - - (485)
Translation differences - (278) (22) (300)
Balance at 31 December 2023 6,665 32,050 1,910 40,625
Acquired intellectual property - - 394 394
Amortisation of intellectual property - - (277) (277)
Amortisation of product development (485) - - (485)
Translation differences - (283) 125 (158)
Balance at 31 December 2024 6,180 31,767 2,152 40,099
Goodwill relates to the acquisition of the below companies, being the dates
that the Group obtained control of these business:
· The remaining 60% of DDS-SA Pty Limited in November 2009
· The 60% acquisition of Omina Supplies in August 2014
· The 65% acquisition of Rotacan in August 2014
· The acquisition of ABC products in August 2014
· The acquisition of Ozmine in January 2015
· The acquisition of Mincon Chile in March 2015
· The acquisition of Mincon Tanzania in March 2015
· The acquisition of Premier in November 2016
· The acquisition of Rockdrill Engineering in November 2016
· The acquisition of PPV in April 2017
· The acquisition of Viqing July 2017
· The acquisition of Driconeq in March 2018
· The acquisition of Pacific Bit of Canada in January 2019
· The acquisition of Lehti Group in January 2020
· The acquisition of Rocdrill in May 2020
· The acquisition of Attakroc in June 2021
· The acquisition of Spartan Drilling Tools in January 2022
The Group accounts for acquisitions using the purchase accounting method as
outlined in IFRS 3 Business Combinations.
The recoverable amount of goodwill has been assessed based on estimates of
fair value less costs of disposal (FVLCD). The FVLCD valuation is calculated
on the basis of a discounted cash flow ("DCF") model. The most significant
assumptions within the DCF are weighted average cost of capital ("WACC"), tax
rates and terminal value assumptions. Goodwill impairment testing did not
indicate any impairment during any of the periods being reported. Four
sensitivities are applied as part of the analysis considering the effects of
changes in:
1) the WACC,
2) the EBITDA margin,
3) the long term growth rate and
4) the level of terminal value capital expenditure.
The sensitivities calculate downside scenarios to assess potential indications
of impairments due to changes in key assumptions. The results from the
sensitivity analysis did not suggest that goodwill would be impaired when
those sensitivities were applied.
12. Intangible assets and goodwill (continued)
The carrying amount of the CGU was determined to be lower than its fair value
less costs of disposal by €9 million (2023: €5.3 million), giving
management headroom and comfort in the above stated impairment assessment.
The key assumptions used in the estimation of the fair value less cost
calculation were as follows:
( )
2024 2023
WACC 13.55% 11.35%
EBITDA margin 17.96% 16.18%
Long term growth rate 2.35% 2.29%
Terminal value capital expenditure €7.2 million €9.8 million
The WACC calculation considers market data and data from comparable public
companies. Peer group data was especially considered for the beta factor and
assumed financing structure (gearing level). The analysis resulted in a
discount rate range of 12.5% to 14.6% (2023: 10.15% to 12.55%). This results
in a midpoint WACC being used of 13.55% (2023: 11.35%).
The Long term growth rate of 2.35% (2023: 2.30%) applied is based on a
weighted average of the long term inflation rates of the countries in which
Mincon generates revenues and earnings.
The budgeted EBITDA was based on expectations of future outcomes, taking
account for past experience, adjusted for anticipated revenue growth as
detailed in managements approved Budget. No EBITDA margin effect is assumed in
the terminal value i.e. the budgeted EBITDA margin of 18% for 2027 (2023:
16.20% for 2026) is assumed in the Terminal Value calculation used to arrive
at the FVLCD.
Terminal value capital expenditure assumes no balance sheet growth is assumed
in the terminal value, capital expenditure is assumed to equal depreciation of
€7.2 million (2023: €9.8 million).
The following table shows the amount by which the two assumptions below would
need to change to individually for the estimated recoverable amount to be
equal to the carrying amount.
( ) 2024 2023
WACC 14.16% 11.63%
Long term growth rate 1.12% 1.73%
13. Property, plant and equipment
Land & Plant & ROU
Buildings Equipment Assets Total
€'000 €'000 €'000 €'000
Cost: ( )
At 1 January 2023 18,157 64,508 11,531 94,196
Additions 3,824 6,378 1,013 11,215
Disposals and derecognition of ROU assets - (1,734) (656) (2,390)
Foreign exchange differences (337) (1,029) (292) (1,658)
At 31 December 2023 21,644 68,123 11,596 101,363
Additions 73 3,536 3,182 6,791
Transfer of Non-Current Assets Held for Re-Sale (Note 9). (844) (25) - (869)
Disposals and derecognition of ROU assets - (5,332) (192) (5,524)
Foreign exchange differences 136 783 74 993
At 31 December 2024 21,009 67,085 14,660 102,754
Accumulated depreciation: ( )
At 1 January 2023 (4,242) (32,187) (4,763) (41,192)
Charged in year (648) (5,144) (2,205) (7,997)
Disposals (10) 1,372 567 1,929
Foreign exchange differences 50 501 109 660
At 31 December 2023 (4,850) (35,458) (6,292) (46,600)
Charged in year (762) (5,081) (2,070) (7,913)
Transfer of Non-Current Assets Held for Re-Sale (Note 9) 104 14 - 118
Disposals - 2,994 192 3,186
Foreign exchange differences (62) (495) (43) (600)
At 31 December 2024 (5,570) (38,026) (8,213) (51,809)
Carrying amount: 31 December 2024 15,439 29,059 6,447 50,945
Carrying amount: 31 December 2023 16,794 32,665 5,304 54,763
Carrying amount: 1 January 2023 13,915 32,321 6,768 53,004
ROU assets includes Property of €5.5 million (2023: €4.2 million) and
Plant and Equipment of €967,000 (2023: €1.1 million).
The depreciation charge for property, plant and equipment is recognised in the
following line items in the income statement:
2024 2023
€'000 €'000
Cost of sales 4,971 4,994
Cost of sales ROU assets 445 393
Operating expenses 872 830
Operating expenses ROU asset 1,625 1,780
Total depreciation charge for property, plant and equipment 7,913 7,997
14. Inventory and capital equipment
2024 2023
€'000 €'000
Finished goods 44,807 45,953
Work-in-progress 9,309 9,060
Raw materials 13,219 14,717
Total inventory 67,335 69,730
The Group recorded an impairment of €NIL against inventory to take account
of net realisable value during the year ended 31 December 2024 (2023:
€87,000). Write-downs are included in cost of sales.
15. Trade and other receivables and other current assets
a) Trade and other receivables
2024 2023
€'000 €'000
Gross receivable 26,165 23,129
Provision for impairment (1,685) (1,513)
Net trade and other receivables 24,480 21,616
Provision for impairment
€'000
Balance at 1 January 2024 (1,513)
Decrease in provision arising from prior years receivables impairment 30
Increase in ECL model (202)
Balance at 31 December 2024 (1,685)
The following table provides the information about the exposure to credit risk
and ECL's for trade receivables as at 31 December 2024.
Weighted average loss rate % Gross carrying amount €'000 Loss
allowance
€'000
Current (not past due) 2% 16,800 374
1-30 days past due 12% 3,825 459
31-60 days past due 19% 1,793 340
61 to 90 days 11% 3,624 389
More than 90 days past due 100% 123 123
Net trade and other receivables 26,165 1,685
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
15. Trade and other receivables and other current assets (continued)
b) Prepayments and other current assets
( ) 2024 2023
€'000 €'000
Plant and machinery prepaid and under commission 5,736 6,607
Prepayments and other current assets 4,037 2,002
Prepayments and other current assets 9,773 8,609
16. Trade creditors, accruals and other liabilities
( ) 2024 2023
€'000 €'000
Trade creditors 9,170 10,505
Total creditors and other payables 9,170 10,505
( ) 2024 2023
€'000 €'000
VAT 351 664
Social security costs 1,299 1,810
Other accruals and liabilities 6,445 6,122
Total accruals and other liabilities 8,095 8,596
17. Capital management
The Group's policy is to have a strong capital base in order to maintain
investor, creditor and market confidence and to sustain future development of
the business. Management monitors the return on capital, as well as the level
of dividends to ordinary shareholders.
The Board of Directors seeks to maintain a balance between the higher returns
that might be possible with higher levels of borrowing and the advantages and
security afforded by a sound capital position.
The Group monitors capital using a ratio of 'net debt' to equity. Net debt is
calculated as total liabilities less cash and cash equivalents (as shown in
the statement of financial position).
( ) 2024 2023
€'000 €'000
Total liabilities (59,127) (65,245)
Less: cash and cash equivalents 15,027 20,482
Net debt (44,100) (44,763)
Total equity 152,315 154,251
Net debt to equity ratio 0.29 0.29
18. Loans and borrowings
2024 2023
Maturity €'000 €'000
Bank loans 2025-2036 29,802 32,486
Lease Liabilities 2025-2032 7,881 7,626
Total loans and borrowings 37,683 40,112
Current 13,913 14,080
Non-current 23,770 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.
The Group has been in compliance with all debt agreements during the periods
presented. The loan agreements in Ireland of €12.5 million (2023: €14.5
million) carry restrictive financial covenants. During 2024, the restrictive
covenants have been updated to EBITDA to be no less than €12 million at end
of 31 December 2024.
Interest rates on current borrowings are at an average rate of 5.51% (2023:
5.12%).
During 2024, the Group availed of the option to enter into overdraft
facilities and to draw down loans of €2.2 million (2023: €7.2 million),
€1.5 million (2023: €6.9 million) in loans and €650,000 (2023:
€300,000) in overdraft facilities.
Loans are repayable in line with their specific terms, the Group has one
bullet repayment due in 2026 of €5 million.
Reconciliation of movements of liabilities to cash flows arising from
financing activities
( ) Balance at 1 January 2023 Arising from acquisition Cash movements Non-cash movements Foreign exchange differences Balance at 31 December 2023
( ) €'000 €'000 €'000 €'000 €'000 €'000
Loans and borrowings 30,848 - 1,873 - (235) 32,486
Lease liabilities 11,096 - (4,194) 1,018 (294) 7,626
Total 41,944 - (2,321) 1,018 (529) 40,112
( ) Balance at 1 January 2024 Arising from acquisition Cash movements Non-cash movements Foreign exchange differences Balance at 31 December 2024
( ) €'000 €'000 €'000 €'000 €'000 €'000
Loans and borrowings 32,486 - (2,826) - 142 29,802
Lease liabilities 7,626 - (3,026) 3,219 62 7,881
Total 40,112 - (5,852) 3,219 204 37,683
2024 Interest rate range 2024 Effective interest rate
Bank loans 1% - 16% 5.30%
Lease Liabilities 1% - 17% 5.81%
2023 Interest rate range 2023 Effective interest rate
Bank loans 1% - 16% 5%
Lease Liabilities 3% - 17% 5.41%
19. Share capital and reserves
At 31 December 2023
Authorised Share Capital Number €000
Ordinary Shares of €0.01 each 500,000,000 5,000
Allotted, called-up and fully paid up shares Number €000
Ordinary Shares of €0.01 each 212,472,413 2,125
( ) 2024 2023
Opening Share Capital 212,472,413 212,472,413
Share Awards vested during year - -
Authorised Share Capital 212,472,413 212,472,413
Share issuances
On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext
Growth and the Alternative Investment Market (AIM) of the London Stock
Exchange.
Voting rights
The holders of Ordinary Shares have the right to receive notice of and attend
and vote at all general meetings of the Company and they are entitled, on a
poll or a show of hands, to one vote for every Ordinary Share they hold. Votes
at general meetings may be given either personally or by proxy. Subject to the
Companies Act and any special rights or restrictions as to voting attached to
any shares, on a show of hands every member who (being an individual) is
present in person and every proxy and every member (being a corporation) who
is present by a representative duly authorised, shall have one vote, so,
however, that no individual shall have more than one vote for every share
carrying voting rights and on a poll every member present in person or by
proxy shall have one vote for every share of which he is the holder.
Dividends
In June 2024, Mincon Group plc paid a final dividend for 2023 of €0.0105
(1.05 cent) per ordinary share (€2.2 million).
In December 2024, Mincon Group plc paid an interim dividend in the amount of
€0.0105 (1.05 cent) per ordinary share (€2.2 million total payment), which
was paid to shareholders on the register at the close of business on 15
November 2024.
The Directors recommend the payment of a final dividend of €0.0105 (1.05
cent) per share for the year ended 31 December 2024 (31 December 2023: 1.05
cent per share).
Share premium and other reserves
As part of a Group reorganisation of the Company, Mincon Group plc, became the
ultimate parent entity of the Group. On 30 August 2013, the Company acquired
100% of the issued share capital in Smithstown Holdings and acquired (directly
or indirectly) the shareholdings previously held by Smithstown Holdings in
each of its subsidiaries, thereby creating a merger reserve.
20. 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 years ended
31 December:
20. Earnings per share (continued)
2024 2023
Numerator (amounts in €'000):
Profit attributable to owners of the Parent 1,766 7,470
Denominator (Number):
Basic shares outstanding
Restricted share awards
Diluted weighted average shares outstanding
212,472,413 212,472,413
3,640,000 830,000
216,112,414 213,302,413
Earnings per Ordinary Share
Basic earnings per share, € 0.83 3.52
Diluted earnings per share, € 0.82 3.50
Diluted weighted average shares outstanding
212,472,413
212,472,413
3,640,000
830,000
216,112,414
213,302,413
Earnings per Ordinary Share
Basic earnings per share, €
Diluted earnings per share, €
0.83
0.82
3.52
3.50
Earnings per Ordinary Share 2024 2024 2024 2023
Continued Operations Discontinued Operation Total Total
Profit attributable to owners of the Parent 3,392 (1,626) 1,766 7,470
Basic earnings per share, € 1.60 (0.77) 0.83 3.52
Diluted earnings per share, € 1.57 (0.75) 0.82 3.50
21. 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 participants
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 Awards Number of Awards
in thousands 2024 in thousands 2023
Outstanding on 1 January 830 -
Forfeited during the year (50) (40)
Exercised during the year - -
Granted during the year - 870
Outstanding at 31 December 780 830
Reconciliation of outstanding share awards
Number of Options Number of Options
in thousands 2024 in thousands 2023
Outstanding on 1 January - 2,030
Forfeited during the year - (2,030)
Exercised during the year - -
Granted during the year 2,860 -
Outstanding at 31 December 2,860 -
21. Share based payment (continued)
LTIP Scheme
Conditional Award at Grant Date
Conditional Option Invitation date April 2024
Year of Potential vesting 2027/2031
Share price at grant date €0.52
Exercise price per share/share options €0.52
Expected Volatility 40.67%
Expected life 7 years
Risk free rate 2.29%
Expected dividend yield 3.32%
Fair value at grant date €0.16
Valuation model Black & Scholes Model
The expected volatility was based on the standard deviation of the Company's
historical price returns (weekly observations) over a period corresponding to
the expected life of the options.
22. Financial risk management
The Group is exposed to various financial risks arising in the normal course
of business. Its financial risk exposures are predominantly related to changes
in foreign currency exchange rates and interest rates, as well as the
creditworthiness of our counterparties.
The Company's Board of Directors has overall responsibility for the
establishment and oversight of the Group's risk management framework. The
Group's risk management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and controls and to
monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's
activities. The Group, through its training and management standards and
procedures, aims to maintain a disciplined and constructive control
environment in which all employees understand their roles and obligations.
The Group audit committee oversees how management monitors compliance with the
Group's risk management policies and procedures, and reviews the adequacy of
the risk management framework in relation to the risks faced by the Group.
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 as
at 31 December 2024 and 31 December 2023 were as follows:
( ) 2024 2023
€'000 €'000
Cash and cash equivalents 15,027 20,482
Loans and borrowings 37,683 40,112
Shareholders' equity 152,315 154,251
22. Financial risk management (continued)
a) Liquidity and capital (continued)
The Group frequently assess its liquidity requirements, together with this
requirement and the rate return of long term euro deposits, the Group has
decided to keep all cash readily available that is accessible within a month
or less. Cash at bank earns interest at floating rates based on daily bank
deposits. The fair value of cash and cash equivalents equals the carrying
amount.
Cash and cash equivalents are held by major Irish, European, United States,
Canadian and Australian institutions with credit rating of A3 or better. The
Company deposits cash with individual institutions to avoid concentration of
risk with any one counterparty. The Group has also engaged the services of a
depository to ensure the security of the cash assets.
Risk of counterparty default arising on cash and cash equivalents and
derivative financial instruments is controlled by dealing with high-quality
institutions and by policy, limiting the amount of credit exposure to any one
bank or institution.
At year-end, the Group's total cash and cash equivalents were held in the
following jurisdictions:
31 December 31 December
2024 2023
€'000 €'000
Ireland 666 2,088
Americas 4,471 3,517
Australasia 1,098 657
Europe, Middle East, Africa 8,792 14,220
Total cash, cash equivalents and short term deposits 15,027 20,482
There are currently no restrictions that would have a material adverse impact
on the Group in relation to the intercompany transfer of cash held by its
foreign subsidiaries. The Group continually evaluates its liquidity
requirements, capital needs and availability of resources in view of, among
other things, alternative uses of capital, the cost of debt and equity capital
and estimated future operating cash flow.
In the normal course of business, the Group may investigate, evaluate, discuss
and engage in future company or product acquisitions, capital expenditures,
investments and other business opportunities. In the event of any future
acquisitions, capital expenditures, investments or other business
opportunities, the Group may consider using available cash or raising
additional capital, including the issuance of additional debt. The maturity of
the contractual undiscounted cash flows (including estimated future interest
payments on debt) of the Group's financial liabilities as at 31 December were
as follows:
( )
( ) Total Current Value of Total Undiscounted contractual Less than More than
( ) Cash Flows Cash Flows 1 Year 1-3 Years 3-5 Years 5 Years
( ) €'000 €'000 €'000 €'000 €'000 €'000
At 31 December 2023:
Deferred consideration 1,998 2,045 442 1,603 - -
Loans and borrowings 32,486 33,124 11,212 6,738 14,520 654
Lease liabilities 7,626 7,769 2,869 3,061 963 876
Trade and other payables 10,505 10,505 10,505 - - -
Accrued and other financial liabilities 8,596 8,596 8,596 - - -
Total at 31 December 2023 61,211 62,039 33,624 11,402 15,483 1,530
At 31 December 2024:
Deferred consideration 1,641 1,670 680 495 495 -
Loans and borrowings 29,802 30,357 11,295 13,358 4,950 754
Lease liabilities 7,881 8,039 2,617 2,998 1,825 599
Trade and other payables 9,170 9,170 9,170 - - -
Accrued and other financial liabilities 8,095 8,095 8,095 - - -
Total at 31 December 2024 56,589 57,331 31,857 16,851 7,270 1,353
22. 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 the appropriateness of this
policy.
Foreign currency denominated financial assets and liabilities which expose the
Group to currency risk are disclosed below. The amounts shown are those
reported to key management translated into EURO at the closing rate:
( ) Short-term exposure Long-term debt
( ) USD SEK ZAR USD SEK ZAR
( ) €'000 €'000 €'000 €'000 €'000 €'000
At 31 December 2024:
Financial assets 28,004 11,370 10,196 - - -
Financial liabilities (3,054) (1,880) (1,119) (2,645) (642) (333)
Total Exposure 24,950 9,490 9,077 (2,645) (642) (333)
At 31 December 2023:
Financial assets 27,756 13,387 9,675 - - -
Financial liabilities (3,666) (2,235) (1,386) (3,010) (892) (764)
Total Exposure 24,090 11,152 8,289 (3,010) (892) (764)
The following table illustrates the sensitivity of profit and equity in
relating to the Group's financial assets and financial liabilities and the
USD/EUR exchange rate, SEK/EUR exchange rate and ZAR/EUR exchange rate 'all
other things being equal'.
It assumes a +/- 3% change of the EUR/USD exchange rate for the year ended as
at 31 December 2024 (2023: 1%).
A +/- 1% change is considered for the EUR/SEK exchange rate (2023: 2%).
It assumes a +/- 2% change of the EUR/ZAR exchange rate for the year ended as
at 31 December 2024 (2023: 8%).
Both of these percentages have been determined based on the average market
volatility in exchange rates in the previous twelve months.
( ) Profit for the year Equity
( ) USD SEK ZAR USD SEK ZAR
( ) €'000 €'000 €'000 €'000 €'000 €'000
31 December 2024 (34) 19 12 566 243 210
31 December 2023 (10) 34 54 194 499 722
( ) Profit for the year Equity
( ) USD SEK ZAR USD SEK ZAR
( ) €'000 €'000 €'000 €'000 €'000 €'000
31 December 2024 36 (19) (12) (601) (248) (219)
31 December 2023 10 (36) (64) (198) (519) (847)
22. Financial risk management (continued)
b) Foreign currency risk
The Group has material subsidiaries with a functional currency other than the
euro, such as US dollar, Australian dollar, South African rand, and Swedish
krona. Changes in the exchange rate year on year between the reporting
currencies of these operations and the Euro, have an impact on the Group's
consolidated reported result.
The Group's worldwide presence creates currency volatility, as reported in the
Group's results, when compared year on year. During 2024, the currencies that
the Group trades with were volatile due to local economic performances and
geopolitical issues. As a result, all major currencies that we trade in
weekend against the euro in 2024.
In 2024, 57% (2023: 56%) of Mincon's revenue €146 million (2023: €157
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
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.
The Group is also exposed to foreign currency risk on its liquid resources
(cash) as shown in the table below.
2024 2023
Amount in Local currency Euro (€) Local currency amount Euro(€)
equivalent
equivalent
'000
'000
'000 €'000
Currency
US Dollar USD3,300 3,200 USD4,200 3,800
Swedish Krona SEK32,600 2,800 SEK38,800 3,500
Canadian Dollar CAD2,900 1,900 CAD1,400 973
South African Rand ZAR18,300 934 ZAR21,500 1,100
The Euro exchange rates used by the Group in 2024 and 2023 are as follows:
2024 2023
Euro exchange rates Closing Average Closing Average
US Dollar 1.04 1.08 1.10 1.08
Australian Dollar 1.67 1.64 1.62 1.63
South African Rand 19.55 19.81 20.18 19.94
Swedish Krona 11.46 11.43 11.13 11.47
c) Credit risk
Credit risk is the risk that the possibility that the Group's customers may
experience financial difficulty and be unable to meet their obligations. The
Group monitors its collection experience on a monthly basis and ensures that a
stringent policy is adopted to provide for all past due amounts. The majority
of the Group's customers are third party distributors and end users of
drilling tools and equipment.
Credit risk management
The credit risk is managed on a group basis based on the Group's credit risk
management policies and procedures.
The credit risk in respect of cash balances held with banks and deposits with
banks are managed via diversification of bank deposits, and are only with
major reputable financial institutions.
The Group continuously monitors the credit quality of customers. Where
available, external credit ratings and/or reports on customers are obtained
and used. The credit terms range between 30 and 90 days. The credit terms for
customers as negotiated with customers are subject to an internal approval.
The ongoing credit risk is managed through regular review of ageing analysis.
Trade receivables consist of a large number of customers in various industries
and geographical areas.
22. Financial risk management (continued)
c) Credit risk (continued)
Trade receivables and contract assets
The Group applies the IFRS 9 simplified model of recognising lifetime expected
credit losses for all trade receivables as these items do not have a
significant financing component.
In measuring the expected credit losses, the trade receivables have been
assessed on a collective basis as they possess shared credit risk
characteristics. They have been grouped based on the days past due and also
according to the geographical location of customers.
Trade receivables are written off (i.e. derecognised) when there is no
reasonable expectation of recovery. Failure to make payments within 180 days
from the invoice date and failure to engage with the Group on alternative
payment arrangement amongst other is considered indicators of no reasonable
expectation of recovery.
The closing balance of the trade receivables loss allowance as at 31 December
2024 reconciles with the trade receivables loss allowance opening balance as
follows:
( ) Trade receivables
( ) €'000
Opening loss allowance as at 1 January 2023 1,103
Loss allowance recognised during the year 410
Loss allowance as at 31 December 2023 1,513
Loss allowance recognised during the year 172
Loss allowance as at 31 December 2024 1,685
Expected credit loss assessment
The Group allocates each exposure to a credit risk grade based on data that is
determined to be predictive of the risk of loss and applying experienced
credit judgement. Credit risk grades are defined using quantitative factors
that are indicative of the risk of default and are aligned to past
experiences. Loss rates are based on accrual credit loss experience over the
past five years.(Note 15)
The maximum exposure to credit risk for trade and other receivables at 31
December 2024 and 31 December 2023 by geographic region was as follows:
2024 2023
€'000 €'000
Americas 8,617 8,704
Australasia 1,957 1,900
Europe, Middle East, Africa 13,906 11,012
Total amounts owed 24,480 21,616
d) Interest rate risk
Interest Rate Risk on financial liabilities
Interest rates continued to increase during 2024, while not at the rate in
2023 we still could see the impact due to the various fixed loans that we
entered into in 2024. While the variable rates decreased from Q3 2024 onwards,
there was little movement in the income statement compared to 2023.
Interest Rate Risk on cash and cash equivalents
Our exposure to interest rate risk on cash and cash equivalents is actively
monitored and managed, the rate risk on cash and cash equivalents is not
considered material to the Group
22. Financial risk management (continued)
e) Fair values
Fair value is the amount at which a financial instrument could be exchanged in
an arms-length transaction between informed and willing parties, other than in
a forced or liquidation sale. The contractual amounts payable less impairment
provision of trade receivables, trade payables and other accrued liabilities
approximate to their fair values.
Financial assets and financial liabilities measured at fair value in the
consolidated statement of financial position are grouped into three levels of
a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset
or liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
Mincon Group plc only apply level 3 for fair value, using the detail displayed
above.
Deferred consideration
The movements in respect of the deferred consideration value in the year to 31
December 2024 are as follows:
( ) Level 3
€'000
Balance at 1 January 2024 1,998
Arising on acquisition -
Cash payment (452)
Foreign currency translation adjustment 93
Unwinding of discount on deferred consideration 2
Balance at 31 December 2024 1,641
Deferred consideration includes multiple deferred payments for prior
acquisitions over a fixed period of time. These carry no significant
observational inputs.
23. Subsidiary undertakings
At 31 December 2024, the Group had the following subsidiary undertakings:
Group Registered Office &
Company Share %* Country of Incorporation
Mincon International Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Manufacturer of rock drilling equipment
Mincon Rockdrills PTY Ltd 100% 8 Fargo Way, Welshpool, WA 6106, Australia
Manufacturer of rock drilling equipment
1676427 Ontario Inc. (Operating as Mincon Canada) 100% 400B Kirkpatrick Street, North Bay,
Ontario, P1B 8G5, Canada
Manufacturer of rock drilling equipment
Mincon Carbide Ltd 100% Windsor St, Sheffield S4 7WB, United Kingdom
Manufacturer of tungsten carbide
Note 9
Mincon Inc. 100% 109 Norfolk Ave SW,Suite 3, Roanoke, VA 24011, USA
Sales company
Mincon Sweden AB 100% Industrivagen 2-4, 61202 Finspang, Sweden
Sales company
Mincon Nordic OY 100% Menotie 1, 33470 YLÖJÄRVI, Pirkanmaa Finland.
Sales company
Mincon Holdings Southern Africa (Pty) 100% Cnr. Harriet Ave. & James Bright Ave. Driehoek, Gauteng, RSA
Sales company
Mincon Australia Pty Ltd 100% 2/57 Alexandra Street, North Rockhampton, Queensland, 4701 Australia
Sales company
Mincon West Africa SL 100% Calle Adolfo Alonso Fernández, s/n, Parcela P-16, Zona Franca de Gran
Canaria, Puerto de la Luz, Código Postal 35008, Las Palmas de Gran Canaria,
Spain
Sales company
Mincon Poland 100% ul.Mickiewicza 32, 32-050 Skawina, Poland
Dormant company
Mincon Canada - Western Service Centre (previously Pacific Bit of Canada) 100% 3568-191 Street, Unit 101, Surrey BC, V3Z 0P6, Canada
Sales company
23. Subsidiary undertakings (continued)
Group Registered Office &
Company Share %* Country of Incorporation
Mincon Rockdrills Ghana Limited 100% C1, Alfesco Estate, Okpoi Gonno, Accra, Ghana. GZ-190-5540
Dormant company
Mincon S.A.C. 100% Calle La Arboleda 151, Dpto 201, La Planicie, La Molina, Peru
Sales company
Ozmine International Pty Limited 100% Gidgegannup, WA 6083, Australia
Dormant company
Mincon Chile 100% Américo Vespucio 1385, Módulo 31 Quilicura, Santiago, Chile
Sales company
Mincon Namibia Pty Ltd Unit 402, 4(th) Floor, Frans Indongo Gardens, Dr FA Indongo Street, Windhoek,
Naminia
100%
Sales company
Mincon Mining Equipment Inc 100% 808 Nelson Street, Suite 1008, Vancouver, BC V6Z 2H2
Sales company
Mincon Exports USA Inc. 100% 109 Norfolk Ave SW,Suite 3, Roanoke, VA 24011, USA
Group finance company
Mincon International Shannon 100% Smithstown, Shannon, Co. Clare, Ireland
Dormant company
Smithstown Holdings 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
Mincon Canada Drilling Products Inc. 100% 400 Kirkpatrick St, North Bay, ON P1B 8655
Holding company
MGP Investments Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Holding Company
Lotusglade Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
Floralglade Company 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
Spartan Drilling Tools 100% 1882 US HWY 6 & 50 Fruita, CO 81521, USA
Manufacturing facility
23. Subsidiary undertakings (continued)
Group Registered Office &
Company Share %* Country of Incorporation
Castle Heat Treatment Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
Mincon Microcare Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
Driconeq AB 100% Svetsarevägen 4, 686 33, Sunne, Sweden
Holding company
Driconeq Production AB 100% Svetsarevägen 4, 686 33, Sunne, Sweden
Manufacturing facility
Driconeq Fastighet AB 100% Svetsarevägen 4, 686 33, Sunne, Sweden
Property holding company
Driconeq Do Brasil 100% Rua Dr. Ramiro De Araujo Filho, 348, Jundai, SP, Brasil
Dormant company
Mincon South Africa 100% Cnr of Harriet and James Bright Avenue, Driehoek. Germiston 1400, RSA
Manufacturing facility
Driconeq Australia Holdings Pty Ltd 100% Welshpool, WA 6106, Australia
Holding company
Driconeq Australia Pty Ltd 100% Welshpool, WA 6106, Australia
Manufacturing facility
Mincon Drill String AB 100% Svetsarevägen 4, 686 33, Sunne, Sweden
Holding company
EURL Roc Drill 100% 3 Rue Charles Rolland, 29650 Guerlesquin, France
Sales company
Attakroc Inc 100% 6330-300, Zéphirin-Paquet, Quebec, QC G2C 0M2
Sales company
Mincon Quebec 100% 3000-1 Place Ville-Marie, Montreal, Quebec, H3B 4N8
Holding company
*All shares held are ordinary shares.
24. Leases
A. Leases as Lessees (IFRS 16)
The Group leases property, plant and equipment across its global operations.
Mincon Group PLC has elected to apply the practical expedient allowed under
IFRS 16 for short-term leases by class of underlying asset to which the right
of use relates. A class of underlying asset is a grouping of underlying assets
of a similar nature and use in an entity's operations. The class of underlying
assets this applies to short term leases of office equipment.
Information about leases for which the Group is a lessee is presented below.
i) Right-of-use
assets
31 December 2023
€'000
Balance at 1 January 2023 6,768
Depreciation charge for the year (2,205)
Additions to right of use assets 1,013
Disposal of right of use asset (89)
Foreign exchange difference (183)
Balance at 31 December 2023 5,304
31 December 2024
€'000
Balance at 1 January 2024 5,304
Depreciation charge for the year (2,070)
Additions to right of use assets 3,182
Disposal of right of use asset (192)
Foreign exchange difference 223
Balance at 31 December 2024 6,447
ii) Amounts recognised in income statement.
2024 2023
€'000 €'000
Interest on lease liabilities 445 698
Expenses related to short term leases 4 5
Leases under IFRS 16 449 703
iii) Amounts recognised in statement of cash flows
2024 2023
€'000 €'000
Total cash outflow for leases 3,058 4,194
Total cash outflow of leases 3,058 4,194
24. Leases (continued)
A. Leases as Lessees (IFRS 16) (continued)
iv) Extension options
Some property leases contain extension options exercisable by the Group. The
Group assesses at lease commencement date whether it is reasonably certain to
exercise the extension options. The Group is reasonably certain it will not
incur future lease liabilities beyond what is currently calculated.
The following table sets out a maturity analysis of lease liabilities, showing
the undiscounted lease payments to be paid after the reporting date.
31 December 2024
€'000
Less than one year 2,010
One to two years 2,530
Two to five years 1,763
More than 5 years 580
Total 6,883
31 December 2023
€'000
Less than one year 2,068
One to two years 2,042
Two to five years 788
More than 5 years 850
Total 5,748
B. Leases as Lessor (IFRS 16)
i) Financing Lease
The Group subleased a properties that had been recognised as a right of use
asset in Finland and Australia. The Group recognised income interest in the
year in relation to this totalling €10,000 (2023: €132,000).
The Group manages the risk to retain the right to the assets as they have a
right to inspect the property, the right to enforce the contractual
arrangement with the lessee and the right to perform maintenance.
The following table sets out a maturity analysis of lease receivable, showing
the undiscounted lease payments to be received after the reporting date.
31 December 2024 31 December 2023
€'000 €'000
Less than one year - 11
Balance at 31 December - 11
Unearned finance income - -
Total undiscounted lease receivable - 11
ii) Operating leases
The group leases company owned property out to tenants in the USA under
various agreements. The group recognises these leases as operating leases from
a lessor perspective due to the fact they do not transfer substantially all of
the risks and rewards incidental to the ownership of the assets.
Rental income recognised by the Group during 2024 was €133,000 (2023:
€120,000).
24. Leases (continued)
B. Leases as Lessor (IFRS 16)
i) Operating leases (continued)
The following table sets out a maturity analysis of lease receivable, showing
the undiscounted lease payments to be received after the reporting date.
31 December 2024
€'000
Less than one year 32
One to two years 68
Two to three years 36
Total 136
31 December 2023
€'000
Less than one year 73
One to two years 30
Two to three years 32
Total 135
25. Commitments
The following capital commitments for the purchase of property, plant and
equipment had been authorised by the Directors as at 31 December 2024:
31 December 31 December
2024 2023
€'000 €'000
Contracted for 2,017 1,585
Not-contracted for - -
Total 2,017 1,585
26. Litigation
The Group is not involved in legal proceedings that could have a material
adverse effect on its results or financial position.
27. Related parties
As at 31 December 2024, the share capital of Mincon Group plc was 56.32% owned
by Kingbell Company which is ultimately controlled by Patrick Purcell and
members of the Purcell family. Patrick Purcell is also a Director of the
Company.
In June 2024, the Group paid a final dividend for 2023 of €0.0105 to all
shareholders. The total dividend paid to Kingbell Company was €1,256,477.
In December 2024, the Group paid an interim dividend for 2024 of €0.0105 to
all shareholders. The total dividend paid to Kingbell Company was €1,256,477
(December 2023: €1,256,477).
The Group has a related party relationship with its subsidiary undertakings
(see note 23) for a list of these undertakings), Directors and officers. All
transactions with subsidiaries eliminate on consolidation and are not
disclosed.
27. Related parties (continued)
Transactions with Directors
The Group is owed €Nil from Directors and shareholders at 31 December 2024
and 2023. The Group has amounts owing to Directors of €Nil as at 31 December
2023 and 2024.
Key management compensation
The profit before tax from continuing operations has been arrived at after
charging the following key management compensation:
2024 2023
€'000 €'000
Short term employee benefits ( ) 1,430 1,616
Bonus and other emoluments 16 24
Post-employment contributions ( ) 128 156
Social security costs 101 117
Share based payment charged in the year 26 (160)
Total 1,701 1,753
The key management compensation amounts disclosed above represent compensation
to those people having the authority and responsibility for planning,
directing and controlling the activities of the Group, which comprises the
Board of Directors and executive management (twelve in total at year end).
Amounts included above are time weighted for the period of the individuals
employment.
28. Events after the reporting date
The Board of Mincon Group plc is recommending the payment of a final dividend
for the year ended 31 December 2024 in the amount of €0.0105 (1.05 cent) per
ordinary share, which will be subject to approval at the Annual General
Meeting of the Company in May 2025. Subject to Shareholder approval at the
Company's annual general meeting, the final dividend will be paid on 13 June
2025 to Shareholders on the register at the close of business on 23 May 2025.
At 31 December 2024, the property, plant and equipment owned by Mincon Carbide
was in the process of being sold to a third party. The sale was completed on
17 January 2025 for a total consideration of £1.8 million (€2.2 million).
29. Approval of financial statements
The Board of Directors approved the consolidated financial statements on 10
March 2025.
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