REG - Mincon Group Plc - Half Yearly Report <Origin Href="QuoteRef">MCON.I</Origin> - Part 2

MinconAnnouncement

17/08/2017 07:05

- Part 2: For the preceding part double click  ID:nRSQ2123Oa 

end. There has been no material change in the euro exchange
rate since 31 December 2016, with the exception of the US dollar, which has
weakened resulting in a foreign exchange loss being recognised in other
comprehensive income and the foreign currency translation reserve. 
 
Average and closing exchange rates for the Group's primary currency exposures
were as disclosed in the table below for the period presented. 
 
                      30 June2017  H1 2017  31 December2016  H1 2016  
 Euro exchange rates  Closing      Average  Closing          Average  
 US Dollar            1.14         1.083    1.05             1.12     
 Australian Dollar    1.49         1.44     1.46             1.52     
 Sterling             0.88         0.86     0.85             0.79     
 South African Rand   14.90        14.284   14.41            17.19    
 Swedish Krona        9.65         9.59     9.54             9.30     
 
 
There has been no material change in the Group's currency exposure since 31
December 2016. Such exposure comprises the monetary assets and monetary
liabilities that are not denominated in the functional currency of the
operating unit involved. 
 
16. Financial Risk Management (continued) 
 
c) 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. Under IFRS 7, the disclosure of fair values
is not required when the carrying amount is the reasonable approximation of
fair value. 
 
As the 35% minority shareholding in Rotacan was acquired in June 2017 with a
cash payment of CA$3 million (circa E2 million), the fair value moment
resulting from this transaction was a E3.1 million credit to the income
statement. 
 
There are no material differences between the carrying amounts and fair value
of our financial liabilities as at 31 December 2016 or 30 June 2017. 
 
Financial instruments carried at fair value 
 
The deferred contingent 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 contingent
consideration is primarily dependent on the future performance of the acquired
businesses against predetermined targets and on management's current
expectations thereof. 
 
Movements in the year in respect of Level 3 financial instruments carried at
fair value 
 
The movements in respect of the financial assets and liabilities carried at
fair value in the period ended to 30 June 2017 are as follows: 
 
                                           Deferred contingent consideration  
                                           E'000                              
 Balance at 1 January 2017                 5,669                              
 Arising on acquisition (note 7)           2,000                              
 Other liabilities (note 6)                (2,023)                            
 Fair value movement                       (3,123)                            
 Foreign currency translation differences  (267)                              
 Balance at 30 June 2017                   2,256                              
 
 
16. Litigation 
 
The Group is not involved in legal proceedings that could have a material
adverse effect on its results or financial position. 
 
17. Related Parties 
 
We have related party relationships with our subsidiaries, directors and
senior key management personnel. All transactions with subsidiaries eliminate
on consolidation and are not disclosed. 
 
As at 30 June 2017 and 31 December 2016, the share capital of Mincon Group plc
was 56.84% 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. Ballybell Limited, a company controlled by Kevin Barry, held
7.09% of the equity of the Company. In June 2017, the Group paid a final
dividend of E0.01 to all shareholders on the register at 26 May 2017. The
total dividend paid to Kingbell and Ballybell Limited was E1,196,712 and
E116,327 respectively. 
 
There were no other related party transactions in the half year ended 30 June
2017 that affected the financial position or the performance of the Company
during that period and there were no changes in the related party transactions
described in the 2016 Annual Report that could have a material effect on the
financial position or performance of the Company in the same period. 
 
18. Events after the reporting date 
 
Dividend 
 
On 17 August 2017, the Board of Mincon Group plc approved the payment of an
interim dividend in the amount of E0.01 (1 cent) per ordinary share. This
amounts to a total dividend payment of E2.1m which will be paid on 26
September 2017 to shareholders on the register at the close of business on 1
September 2017. 
 
Viqing acquisition 
 
On 6 July, 2017 we acquired Viqing Drilling Equipment AB, through our Mincon
Nordic OY subsidiary, for E3.2 million in cash, and deferred conditional
payments amounting to E4.7 million. This drill pipe manufacturer is based in
Sunne, Sweden. 
 
19. Approval of financial statements 
 
The Board of Directors approved the interim condensed consolidated financial
statements for the six months ended 30 June 2017 on 17 August 2017. 
 
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