Irish engineering group Mincon said revenue rose 40 per cent in the first quarter of the year as additional revenue from acquisitions boosted results.
Excluding the impact of the new buys, the company’s revenue was flat, with the first quarter of the year traditionally a quieter period following winter shutdowns and vacation time.
On a like for like basis, revenue from manufactured products - Mincon’s biggest business - rose 2 per cent compared with the first quarter in 2014. Sales of third party traded product, which accounts for about 20 per cent of revenue, fell by 16 per cent year on year.
The company noted that market conditions for capital equipment sales were challenging, with no rig sales in the first quarter of 2015 or the corresponding period in 2014.
“The sale of rigs remains a key part of our strategy for the Southern Africa region,” Mincon said in a statement. “There is significant interest in the rigs and negotiations with parties regarding potential sales or leases are ongoing, however, current market conditions for capital equipment sales remain challenging.”
Mincon said it would take steps to address costs as a significant drop incommodity prices had put pressure on prices, with the benefits of the measures expected to be seen in second half of the year.
The engineering group is still on the acquisition trail, saying that it was engaged in discussions with a number of potential targets. In March, it bought Sheffield-based manufacturer Marshalls Carbide Limited, along with sales firms Ozmine, Two Tusks and Rotacan Sudamericana in the first quarter of the year.
At the end of March 2015, Mincon has €37 million in net cash, a fall of €4.6 million compared with the end of 2014 as the firm paid €3.4 million for acquisitions, €800,000 for rigs payments, and a €1.7 million increase in working capital as it expanded the group.
“However, management remain cognisant of the need for a disciplined approach to working capital management and are taking initiatives to reduce working capital levels while continuing to invest for future growth,” the company said.
