LONDON (ShareCast) - (Sharecast News) - Ireland-based rock drilling engineering company Mincon Group said its revenue was up 4% overall in its first quarter on Tuesday.
The AIM-traded firm reported an improved gross margin of 35.2% in the three months ended 31 March, from 33.6% a year earlier, which it said reflected a higher proportion of Mincon-manufactured products.

It said the Covid-19 coronavirus pandemic was impacting on some of its operations and markets, but in most of the countries where it was active, the factories and related customer sites were regarded as critical, and remained open.

The integration of Lehti into the Mincon Group had proceeded smoothly since its acquisition in January, the board added.

It said Lehti also experienced growth in the first quarter, on a year-on-year basis.

"The group's strategy of improving our sales offering through the diversification of our income streams has provided us with continued revenue growth from the sale of Mincon-manufactured products during the first quarter of 2020, with our group wide revenue in line with our expectations for the period," the board said in its statement.

"The acquisition of the Lehti Group in January has resulted in Mincon achieving a better consolidated gross margin as we now own the manufacturing of all Mincon-designed products.

"The performance of the Lehti Group has been in line with our expectations during this transitional period into the Mincon Group."

The firm expected to have completed the consolidation of its operations in Finland by September.

"We have seen restrictive measures in the southern African market during March," it said of the Covid-19 impact.

"Our drill rod factory in South Africa had been closed in March along with much of the mining activity there, however those restrictions have started to ease.

"We have experienced some difficulty in moving products by air during March, mostly seen in Australia where it is very common to move specialised parts using this method."

In parts of Central and South America, it added that mining production was temporarily interrupted, although that was in areas where it had a "relatively minor" presence.

"Generally, our order book remains steady, and our factories are viewed as essential manufacturing in almost every jurisdiction we are located in.

"However, the effect and duration of the pandemic remains uncertain, and we have put in place additional lines of credit with our banking partners in different regions where it is felt appropriate to do so.

"We have not drawn on any of this additional credit, but it is available to us if needed in the future."

Mincon said its balance sheet remained "very strong", adding that it had not experienced any losses or any material effects on the inflow of debtor payments.

"Drilling with our Greenhammer systems has been delayed due to Covid-19 site restrictions implemented by the customer.

"The customer has restricted site access to essential employees only during the lockdown.

"We would hope to begin drilling on both the 10-inch and 12-inch system within a matter of weeks once these restrictions have been lifted."

At 1148 BST, shares in Mincon Group were up 1.71% at 74.25p.

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