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Mincon Grp Share Discussion Threads
Showing 26 to 47 of 50 messages
|Just the two of us then . It seems to have edged up on very little volume recently.|
|Is anyone else watching this ?|
|Company: Mincon Group
Prior Post(s): None New IPO (Nov-2013)
Price: EUR 0.975
Not to be unfortunately mistaken for rubbish like Minco (MIO:LN)... Mincon IPOed in late 2013: The company was established in 1977 by the Purcells, and now has manufacturing plants in Ireland (Shannon), the US (Benton, IL) & Australia (Perth). It sells (& services) rock hammers & bits to the mining industry (& distributes related third party products) for example, the San Jose miners in Chile were rescued with Mincon equipment back in 2010. Its products are considered consumables, rather than capital items, so customer loyalty & revenues are far more predictable its customer base is also more diverse than you might expect, with its top 10 customers typically accounting for about 30% of revenue.
2013 was a fairly tough year for the industry, and 2014 promises more of the same but recent results were still encouraging. Revenue declined 17%, but this was primarily due to a 43% fall in third party product revenues (after some one-off deals in 2012). On the other hand, adjusted operating profit (of EUR 15.0 million) was up an astonishing 18%, but this was flattered by some exceptional 2012 expenses (mostly bonus payments) I estimate underlying operating profit fell marginally, which still amounts to an excellent performance. This pegs the operating profit margin at a remarkable 28.7%, which obviously masks an even higher margin for Mincon's own product range. I do notice some cash flow shortfalls in the past 2 years, but that kind of margin still deserves a 2.5 P/S multiple. This margin would also support a good slug of leverage: I calculate EUR 43 M of debt would cap interest expense at 15% of operating profit let's haircut this total by 50%. We can also add cash on hand, plus net IPO proceeds:
(EUR 52 M Revenue * 2.5 P/S + 50 M Cash + 43 M Debt Adjustment * 50%) / 207 M Shares = EUR 0.98
Mincon Group's fairly valued a view on the commodities/mining industry may be essential here. Meanwhile, it's worth noting Mincon's still very much an owner-operated firm Paddy Purcell's a non-executive director, while Tommy & Joe Purcell are Sales Director & Chief Technology Officer respectively, plus the CEO Kevin Barry's also been with the company for 3 decades now. This involvement's also reflected in their continuing 58% (Purcell family) & 14% (Barry) stakes. [Incidentally, the average employee has also been with the company for nigh on a decade]. Some investors prefer to avoid this kind of ownership, others will actively embrace it. It could also prove a double-edged sword when it comes to acquisitions: Mincon's already earmarked its available cash for a likely deal or two in 2014 their tight-knit culture may offer a good home for similar firms, or prove a real integration challenge.
Price Target: EUR 0.98
|Starting to move up slowly and surely. Anyone know when dividend announcement is due? Looks like they paid a divi in August 2013 before the float.|
|So 33000 shares traded, all sells, and share price goes up by 2.7%. Mms are buying at a higher price because they know it's going to blow? Otherwise I am confused.|
|Nice gesture! Shows a lot of confidence in where this company is going...:-)|
|Blimey - I'd be lucky to get a bottle of wine at Christmas with my employer.......|
|Forgot to mention, SG.
If they fail to grow the business as stated in the offer document they could easily take the business back and the pi would suffer.
That's the risk that I see.
My hook was the track record of the company in producing kit that the users could not afford to fail, and it's a consumable. Bit like Weir.
OT: Traded in RDSB for ELM and SPX today. More VEC looked too rich.
A Happy New Year to you.
Don't own any at the moment, keep looking at it to see if I can find a hook to make me buy. Forgot about the dividend, that would interest income funds as the founders placed stock.
For now, I'll keep watching.
|A guesstimate on the rating:
~PAT - £8.75m
~EPS - 4.22p
~P/E @ 78.5p = 18.6x
~P/E net cash of £39.4m = 14.1x
Any views, does that stack up?
Say they can double the company by end 2015:
PAT of £16m = 7.7p.
Is it a bargain?
How are fundies going to chase the stock when it is so tightly held? Is it left to PI's to move the rating, will enough of them be interested?|
|Apparently the 1% commission is because it is an Irish share. The deal size could be an issue|
|Had a dry run with Selftrade. Yes 1% SD is payable (I'd have assumed it's just another aim stock.) There's a separate issue - ST only takes market orders up to 1,500 shares!|
|MFM Techinvest special situation has got 3.27% stake in his smaller companies fund.|
|Not happy about paying 1% stamp duty - putting me off a bit but I like the company|
|Sorry m, it's not a company it's Physical Vapour Deposition, which is where their patents and competitive advantage lies.
|Haven't heard of PVD, and I can't find any reference to them. My best performing share is Treatt, I bought it last December because it was operating in a niche market, lets hope mincon is the same.|
|I had a look at KMK and rejected it as too risky. I think that the PVD of the sensor material is a sound technological advantage, but they are putting it together with cameras and software to make products in three sectors. Too ambitious for my taste.
|I have done quite well with a few recent IPOs. ABDP, GAM & KMK (they are based not very far from where I work) and two recent ones KLBT and MCON.
My gut feel is that ABDP has had its run, but It's a remarkably good and young company, so i am still holding.
I think MCON will do well, it is capable of generating cash in a tough market and very low P/E ratio.|
|4 MMs, one offering 79p max 3,500.
|Bought some on Friday. Operating in quite a niche market. Any good news will push the price up as there aren't many shares in public hands.|
|"(Sharewatch) Mincon (MCON; 82p) has all three features (excellent demand profile, 20% operating margins, well spread "repeat" customers) that characterise really successful businesses. The company supplies rockdrills. Conventional ones work by a percussion mechanism, operated by compressed air to break hard rock into dust, which is then blown clear by the air exhaust. It might look boring but it's so niche and Mincon continued its profit climb even during the recent mining downturn. Depleted ore-reserves mean that new mines process mainly low grade ore and as more ore is processed, more drill heads break. Between 2010-2012, helped by geographic expansion, Mincon grew sales from Eu33.8m to Eu63.1m and operating profit doubled from Eu6.22m to Eu13.22m. The case for investing looks two-fold. Their existing product line up means it is already a world leader with commanding market shares for its niche consumables. But the key plank is that the market is fragmented and it is planning acquisitions within the rock drilling consumables space. The placing at 73p has raised £47m new money (valuing Mincon at £151.3m) to help fulfil its ambition of doubling in size in 18 months. Buy."|