Mincon shows strong growth in first quarter of 2018

Irish engineering group Mincon said revenue and profit rose in the first quarter of the year, with strong growth in the first three months of 2018.

Revenue was up 6 per cent for the quarter, with pretax profit of 12.4 per cent up from 10.8 per cent.

Manufactured sales at the firm were up 19 per cent compared with the previous year, with third party sales down 27 per cent. Mincon product sales were 81 per cent of total revenue, up from 73 per cent in the first quarter of last year. The firm said Mincon Nordic and Australia showed particularly strong growth.

The company said an improvement to its product mix was behind the increase.

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“We continue to invest in better engineering as our core proposition, delivering value, and positioning ourselves where this quality provides differentiation in the markets and with the customers we serve,” the company said in a statement. “While we continue to run key factories, machinery and our people beyond the levels of maximum efficiency, this increase in own manufactured revenue underwrites our profit uplift.”

Mincon warned it may be losing out on opportunities due to lengthening order periods caused by constraints in factories. The company has already invested €5 million in raw materials and work in progress in the second half of 2017, to mitigate price increases and to reduce stock depletions due to demand, and €2 million in inventory in the first quarter of the year.

Additional capacity and upgrades will come on-stream later in the year, which is expected to improve the product quality and cost efficiencies.

“We have, to a degree, slowed order intake as an inability to deliver is not helpful to our business or that of our customers,” the company said. “Our business has continued to grow well with the early sector recovery, though we see some caution from market commentators about certain commodities and pricing.”

The Group completed the acquisition of Driconeq ìn the first quarter of the year in an €8 million deal. The company currently makes a gross margin of 22 per cent and will represent one-fifth of Mincon’s revenue in the future. After a number of investments, the company had 18 million in cash at the end March.