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MCON Mincon Group Plc

45.00
0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Mincon Group Plc LSE:MCON London Ordinary Share IE00BD64C665 ORD EUR0.01 (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 45.00 40.00 50.00 45.00 44.50 45.00 3,750 08:00:29
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Mng Machy, Eq, Ex Oil Field 156.93M 7.47M 0.0352 12.78 95.61M

Mincon Group Plc Final Results

11/03/2024 7:00am

RNS Regulatory News


RNS Number : 2121G
Mincon Group Plc
11 March 2024
 

Mincon Group plc

("Mincon" or the "Group")

 

2023 Full Year Financial Results

 

Mincon Group plc (Euronext: MIO AIM:MCON), the Irish engineering group specialising in the design, manufacture, sale and servicing of rock drilling tools and associated products, announces its results for the year ended 31 December 2023.

 

 

2023

2022

Change in period

 

€'000

€'000


Total revenue

156,931

170,008

-8%

Gross profit

45,523

54,070

-16%

EBITDA

21,074

27,531

-23%

Operating profit

12,290

19,749

-38%

Profit for the period

7,470

14,704

-49%

 

Financial Summary

·      2023 Group revenue of €156.9 million, a decrease of 8% versus 2022, with FX headwinds was 5% of the contraction:

The contraction in revenue was primarily driven by disruption in the mining industry:

§ Mining revenue decreased by 16%, with contraction across all our mining regions driven in part by customers resetting stock post covid disruption.

§ Our Waterwell/geothermal revenue grew by 3% in 2023.

§ Construction revenue was up 2% on a constant currency basis although reported revenues fell by 2%.

·      EBITDA of €21.1 million in 2023, slightly ahead of guidance but reflecting a 23% decrease versus 2022:

§ This was a result of the lower revenues and reduced margins as a consequence of smaller volumes through the manufacturing facilities.

We continued with our R&D investment through 2023, with €4.1 million expensed, broadly flat on 2022. However, we are expecting a decrease in R&D spend in 2024.

Measures were taken to protect our margins in the challenging market environment, through cutting costs, bringing some subcontracting back in-house and through a redundancy programme, resulting in a net EBITDA saving of €3.1 million for the Group in 2023.

We have further initiatives ongoing to enhance competitiveness of our cost base.

·      Our net debt position reduced by €6.4 million in 2023.

·      The Group commissioned €10.5 million in capital equipment in 2023, to create greater efficiencies in our operations and catering for further expansion in manufacturing capacity. This reflects a peak of investment in the near term, with capital equipment expected to be less than depreciation levels in 2024.

·      We continued with the execution of our inventory rationalisation programme, with a decrease in our inventory holding of 9% in the year. Also, a more positive trend in the remainder of our working capital.

·      Final dividend of 1.05c per ordinary share recommended, taking the total dividend for 2023 to 2.10c per ordinary share (2021: 2.10c per ordinary share).

 



 

Chief Executive's Review:

2023 has been a challenging year for Mincon in terms of revenue, profitability and ROCE. Revenue in H2 2023 was lower than expected due to a number of factors, notably a slower than expected recovery in mining revenues as customers ran down their inventories and the continuation of more muted conditions in exploration drilling, while we also experienced delays to anticipated commencements on some construction projects during the period.

 

The team at Mincon have worked hard to position the Group against this tough market backdrop and there are some positives to note in respect of our year-end cash and net debt position and the continued good results we have seen from our inventory reduction project. These positive balance sheet movements will continue to be worked on through 2024, something that is vital in the current interest rate environment.

 

With the appointment of Tom Purcell as our COO in 2023, we began the process of carrying out a root and branch review of all our businesses, and that is ongoing into H1 2024. The actions we take now will help ensure that we create a more stable base to better cope with both the challenges and opportunities ahead.

 

Geographic Markets

Our business in the Americas was largely flat on the prior year but it was notable that our construction revenue, although slightly down on the prior year, did have a lot of smaller project revenue which is more sustainable in the longer term. We did have a large construction project delayed from H2 2023 until this year, but we are expecting to get positive news on this in the near term. Elsewhere in the Americas, we have finished a mining supply contract in Chile and the effect of this will be significantly positive for our balance sheet as we unwind the working capital position tied up in the contract. We continue to believe that the Americas represent an area with a lot of potential growth across all our industries, as it has been in the past and, to that end, we intend to capture further growth in the mining and construction industries with further investment in Q1 2024.

 

Our Europe and Middle East (EME) region, like the Americas, was flat on the prior year. This was achieved despite our mining revenue being down, with increases in construction and water well/geothermal markets offsetting this. As this is our primary region for manufacturing activities within the Group, the cost inflation in the region, largely due to the war in Ukraine, has been a significant challenge to deal with in recent periods. As a result, we have been looking closely at every avenue for sensible cost management initiatives to offset these increases.

 

Regarding our business in the Australia Pacific (APAC) region, we experienced a revenue decline of 15% on the prior year. We are continuing to work hard to rebuild our revenues in the region and we are confident that we will make progress through 2024. We see good opportunities to regain lost business here through our strong presence on the ground to support local requirements and to provide a better value proposition to our customers by tailoring products manufactured in - country and supported with our field service technicians.

 

Our business in Africa is a sharp focus for the year ahead, as it experienced a revenue decline of 22% on the prior year. We have put plans in place to regain market share with strategic hires to assist in business development in the West Africa region as well as continuing our focus on revenue generation in Southern Africa through building upon our strong local presence.

 

Business Development

During the year, we continued our collaboration on the Greenhammer project with a major rig manufacturer and this is ready to start drilling on a copper mine in Arizona. We are confident that this approach will realise the potential that this product offers. Following this strategic decision, we elected to discontinue the previous testing on our own rig in Australia during the year. The Greenhammer team in that region are now focused on supporting the opportunity in the US as well as onsite business development work in the APAC region as part of our drive to rebuild our revenues there.

 

Our push to provide larger diameter drilling systems for the construction piling industry was slower to materialise in 2023 than we had originally anticipated. This is due to a lack of suitable project starts in Malaysia following a downturn in that region in the second half of 2023. We anticipate opportunities in H1 2024 and will provide further updates on this product area during the year. Regarding the construction market in general, we still have a significant pipeline of potential projects and have made good progress in some new markets with our spiral flush offering, which augers well for improving our market spread for the year ahead.

 

I am pleased to report that the Subsea project with our collaboration partners, Subsea Micropiles, has progressed well since our last update. The subsea rig has been completed and we have successfully shown that it can be road transported as a fully assembled unit. This significant milestone was achieved in November 2023, when we moved the rig from our plant in Shannon, Ireland to Jamestown Manufacturing Ltd. in Portarlington, Ireland to carry out the commissioning of the rig as well as the terrestrial load testing program essential for certification.

 

The functional testing of the rig has been successful, we have drilled and grouted the templates in place for load testing. We also successfully completed an initial wet test of the drilling system at Killybegs Port. We will hold the system there for now to use it as a base for marine testing in Ireland.

 

The subsea project progress has been closely followed by the offshore industry and there have been some important strategic agreements made with well-funded industry players. These agreements are essential pillars in moving the project closer to commerciality and unlocking the enormous potential that offshore wind represents for Mincon and our collaboration partners, Subsea Micropiles.

 

Sustainability

I am pleased to announce that our third Environment & Sustainability report has been published and outlines the progress that we have made in 2023 toward our goals to reduce emissions as part of our commitment to ensure the long-term sustainability of the business, and our commitment to people and the environment. As first reported for FY2022, we have further refined our scope 3 emissions reporting which clearly points to the engineering challenge of increasing the operational efficiency of our products in order to reduce their carbon emissions in use. This is becoming increasingly critical to the industries in which we work as they all have a pivotal role to play in the global push to reduce emissions. Indeed, in mining alone (currently 4%-7% of global emissions), the increase in output required is anticipated to reach levels never before seen and to achieve this it must be done at dramatically reduced levels of emissions to have any hope of making a positive impact on the environment.

 

Conclusion

 

After a difficult 2023, Mincon is focused on taking the appropriate strategic decisions in 2024 to meet the current market challenges and to position the business to best capitalise on the long-term opportunities we see in our end-markets. The subdued market environment in H2 of 2023 has continued into H1 2024 although we have begun to see some improvement in our order book. We are working hard to improve our competitiveness and input costs which together with potential improvement in the market environment gives us more confidence around performance in the second half of this year. . We must also continue our work on delivering on the promise of our development projects. We also need to complete our root and branch review to put a stable base under the business to both deal with the challenges and realise the significant opportunities ahead.

 

Finally, I would like to acknowledge the global Mincon team for their diligence and commitment through a difficult year in 2023, as well as the continuing support of our Board and investors. I remain confident that if we continue to hold fast and build on the foundation we have created, we will make a positive contribution in terms of our key business metrics and the environment in which we live.

 

11 March 2024

 

For further information, please contact:

 

 

 

 

Mincon Group plc                    Tel: +353 (61) 361 099

Joe Purcell CEO           

Mark McNamara CFO   

           

Davy Corporate Finance

(Nominated Adviser, Euronext Growth Listing Sponsor and Joint Broker) Tel: +353 (1) 679 6363

Anthony Farrell 

Daragh O'Reilly

           

Shore Capital (Joint Broker)     Tel: +44 (0) 20 7408 4090

Malachy McEntyre        

Mark Percy      

Daniel Bush

 



Consolidated Income Statement

 

For the year ended 31 December 2023

 

 

 

 

 

 

 

 

 

 

Notes

 

2023

€'000

 

2022

€'000

Continuing operations

 


 

Revenue

     4

156,931

170,008

Cost of sales

     6

(111,408)

(115,938)

Gross profit

 

45,523

54,070

Operating costs

    6

(33,233)

(34,321)

Operating profit


12,290

19,749

Finance costs

     7

(2,472)

(1,479)

Finance income


90

26

Foreign exchange (loss)/gain


(1,001)

469

Movement on deferred consideration

22

(3)

(31)

Profit before tax

 

8,904

18,734

Income tax expense

11

(1,434)

(4,030)

Profit for the period

 

7,470

14,704

 

 

Profit attributable to:

 

 


- owners of the Parent

 

7,470

14,704

Earnings per Ordinary Share




Basic earnings per share,

20

3.52

6.92

Diluted earnings per share,

20

3.50

6.85


 

The accompanying notes are an integral to these financial statements.

 


Consolidated Statement of Comprehensive Income

 

For the year ended 31 December 2023

 


2023

2022

 

€'000

€'000

Profit for the year

7,470

14,704

Other comprehensive loss:



Items that are or may be reclassified subsequently to profit or loss:



Foreign currency translation - foreign operations

(2,280)

(418)

Other comprehensive (loss)/income for the year

(2,280)

(418)

Total comprehensive income for the year

5,190

14,286

Total comprehensive income attributable to:

 

 

- owners of the Parent

5,190

14,286

 

 

 

The accompanying notes are an integral to these financial statements.

 

 

 

 

 


Consolidated Statement of Financial Position

 

As at 31 December 2023

 






 



2023

2022

 

 

Notes

€'000

€'000

 

 

 

 

 

Non-Current Assets

 

 

 

 

Intangible assets and goodwill


12

40,625

40,109

Property, plant and equipment


13

54,763

53,004

Deferred tax asset


11

2,664

2,050

Total Non-Current Assets

 

 

98,052

95,163

Current Assets





Inventory and capital equipment


14

69,730

76,911

Trade and other receivables


15a

21,616

23,872

Prepayments and other current assets


15b

8,609

12,727

Current tax asset                                                                                                                                                         



1,007

305

Cash and cash equivalents


22

20,482

15,939

Total Current Assets

 

 

121,444

129,754

Total Assets

 

 

219,496

224,917

 

 

 

 

 

Equity





Ordinary share capital


19

2,125

2,125

Share premium



67,647

67,647

Undenominated capital



39

39

Merger reserve



(17,393)

(17,393)

Share based payment reserve



2,241

2,505

Foreign currency translation reserve



(7,866)

(5,586)

Retained earnings



107,458

104,449

Total Equity

 


           154,251

           153,786

 

 

 

 

 

Non-Current Liabilities





Loans and borrowings


18

26,032

26,971

Deferred tax liability


11

2,099

2,046

Deferred consideration


22

1,998

1,705

Other liabilities



932

833

Total Non-Current Liabilities

 

 

31,061

31,555

Current Liabilities





Loans and borrowings


18

14,080

14,973

Trade and other payables


16

10,505

14,420

Accrued and other liabilities


16

8,596

8,699

Current tax liability



1,003

1,484

Total Current Liabilities

 

 

34,184

39,576

Total Liabilities

 

 

65,245

71,131

Total Equity and Liabilities

 

 

219,496

224,917

 

The accompanying notes are an integral to these financial statements.

 

On behalf of the Board:

 

 

 

Hugh McCullough                                                              Joseph Purcell

Chairman                                                                            Chief Executive Officer              11 March 2024


Consolidated Statement of Cash Flows

 

For the year ended 31 December 2023

 





 

 

2023

2022


Notes

€'000

€'000

Operating activities:

 

 

 

Profit for the period

 

7,470

14,704

Adjustments to reconcile profit to net cash provided by operating activities:




Depreciation

13

7,997

7,782

Amortisation of intellectual property

12

216

190

Amortisation of internally generated intangible asset

12

485

121

Movement on deferred consideration


3

31

Finance cost

7

2,472

1,479

Finance income


(90)

(26)

(Gain)/loss on sale of property, plant and equipment


(100)

32

Income tax expense

11

1,434

4,030

Other non-cash movements


1,009

            (459)



20,896

27,884

Changes in trade and other receivables


1,694

1,354

Changes in prepayments and other assets


3,993

(3,848)

Changes in inventory


5,596

(13,463)

Changes in trade and other payables


(3,613)

1,632

Cash provided by operations


28,566

13,560

Interest received


90

26

Interest paid


(2,472)

(1,479)

Income taxes paid


(3,693)

(4,042)

Net cash provided by operating activities

 

22,491

8,064

 

 

 

 

Investing activities

 

 

 

Purchase of property, plant and equipment

13

(10,201)

(7,309)

Proceeds from the sale of property, plant and equipment

13

471

996

Investment in intangible assets

12

-

(285)

Acquisitions of subsidiary, net of cash acquired

9

-

(1,014)

Investment in acquired intangible assets

12

(158)

(147)

Payment of deferred consideration

22

(1,054)

(2,628)

Net cash used in investing activities

 

(10,942)

(10,387)

 

 

 

 

Financing activities

 

 

 

Dividends paid

19

(4,461)

(4,462)

Repayment of borrowings

18

(5,350)

(4,107)

Repayment of lease liabilities

18

(4,194)

(3,993)

Drawdown of loans

18

7,223

11,478

Net cash provided (used in) financing activities

 

(6,782)

(1,084)

 

 

 

 

Effect of foreign exchange rate changes on cash


(224)

297

Net increase/(decrease) in cash and cash equivalents

 

4,543

(3,110)

 

 

 

 

Cash and cash equivalents at the beginning of the year


15,939

19,049

Cash and cash equivalents at the end of the year

 

20,482

15,939

 

The notes are an integral part of these consolidated financial statements


 

Consolidated Statement of Changes in Equity

 

For the year ended 31 December 2023

 

 

 Share

capital

Share premium

Merger reserve

Un-denominated

capital

Share based payment reserve

Foreign

currency translation reserve

Retained earnings

Total

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000


 

 

 

 

 

 

 

 

Balances at 1 January 2022

2,125

67,647

(17,393)

39

2,695

(5,168)

94,207

144,152

Comprehensive income:

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

14,704

14,704

Other comprehensive income/(loss):

 

 

 

 

 



 

Foreign currency translation

-

-

-

-

-

(418)

-

(418)

Total comprehensive income

 

 

 

 

 

(418)

14,704

14,286

Transactions with Shareholders:








 

Issuance of share capital

-

-

-

-

-

-

-

-

Share based payments

-

-

-

-

(190)

-

-

(190)

Dividends

-

-

-

-

-

-

(4,462)

(4,462)

Total transactions with Shareholders

-

-

-

-

(190)

-

(4,462)

(4,652)

Balances at 31 December 2022

2,125

67,647

(17,393)

39

2,505

(5,586)

104,449

153,786

Comprehensive income:

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

7,470

7,470

Other comprehensive income/(loss):








 

Foreign currency translation

-

-

-

-

-

(2,280)

-

(2,280)

Total comprehensive income






(2,280)

7,470

5,190

Transactions with Shareholders:









Issuance of share capital

-

-

-

-

-

-

-

-

Share-based payments

-

-

-

-

(264)

-

-

(264)

Dividends

-

-

-

-

-

-

(4,461)

(4,461)

Total transactions with Shareholders

-

-

-

-

(264)

-

(4,461)

(4,725)

Balances at 31 December 2023

2,125

67,647

(17,393)

39

2,241

(7,866)

107,458

154,251

 

 

The notes are an integral part of these consolidated financial statements. See note 19 for explanation of movements in reserve balances.

 


Notes to the Consolidated Financial Statements

 

1.  Description of business

 

The consolidated financial statements of Mincon Group plc (also referred to as "Mincon" or "the Group") comprises the Company and its subsidiaries (together referred to as "the Group"). The companies registered address is Smithstown Industrial Estate, Smithstown, Shannon, Co. Clare, Ireland.

 

The Group is an Irish engineering Group, specialising in the design, manufacturing, sale and servicing of rock drilling tools and associated products. Mincon Group Plc is domiciled in Shannon, Ireland.

 

On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext Growth and the Alternative Investment Market (AIM) of the London Stock Exchange.

 

2.  Basis of preparation

 

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (EU IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and endorsed by the EU.

 

The Group's financial statements consolidate those of the parent company and all of its subsidiaries as of 31 December 2023. All subsidiaries have a reporting date of 31 December.

 

The accounting policies set out in note 3 have been applied consistently in preparing the Group and Company financial statements for the years ended 31 December 2023 and 31 December 2022.

 

The Group and Company financial statements are presented in euro, which is the functional currency of the Company and also the presentation currency for the Group's financial reporting. Unless otherwise indicated, the amounts are presented in thousands of euro. These financial statements are prepared on the historical cost basis.

 

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ materially from these estimates. The areas involving a high degree of judgement and the areas where estimates and assumptions are critical to the consolidated financial statements are discussed in note 3.

 

The directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to continue to prepare our consolidated financial statements on a going concern basis.

 

 

3.  Significant accounting principles, accounting estimates and judgements

 

The accounting principles as set out in the following paragraphs have, unless otherwise stated, been consistently applied to all periods presented in the consolidated financial statements and for all entities included in the consolidated financial statements.

 

The following new and amended standards are not expected to have a significant impact on the Group's consolidated financial statements:

 

New Standards adopted as at 1 January 2023

•             IFRS 17 Insurance Contracts

•             IAS 8 Definition of Accounting Estimates

•             IAS 1 Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

•             IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction

              (Amendments to IAS 12)

•             IAS 12 International Tax Reform - Pillar Two Model Rules

 

 

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Standards, amendments and Interpretations to existing Standards that are not yet effective

•             Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases)

•             Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial 

              Statements)

•            Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)

•             Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial

              Instruments: Disclosures)

 

Segment Reporting

An operating segment is a component of the Group that engages in busi-ness activities from which it may earn revenue and incur expenses, and for which discrete financial information is available. The operating results of the operating segment is reviewed regularly by the Board of Directors, the chief operating decision maker, to make deci-sions about allocation of resources and also to assess  performance.

 

Results are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). Our CODM has been identified as the Board of Directors.

 

The Group has determined that it has one reportable segment (see Note 5). The Group is managed as a single business unit that sells drilling equipment, primarily manufactured by Mincon manufacturing sites.

 

Revenue Recognition

The Group is involved in the sale and servicing of rock drilling tools and associated products. Revenue from the sale of these goods and services to customers is measured at the fair value of the consideration received or receivable (excluding sales taxes). The Group recognises revenue when it transfers control of goods to a customer or has completed a service over a set period (typically one month) for a customer.

 

The following provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.

 

Customers obtain control of products when one of the following conditions are satisfied:

 

1.   The goods have been picked up by the customer from Mincon's premises.

2.   When goods have been shipped by Mincon, the goods are delivered to the customer and have been accepted at their premises, or;

3.   The customer accepts responsibility of the goods during transit that is in line with international commercial terms.     

 

Where the Group provides a service to a customer, who also purchases Mincon manufactured product from the Group, the revenue associated with this service is separately identified in a set period (typically one month) and is recognised in the Groups revenue as it occurs.

 

Invoices are generated when the above conditions are satisfied. Invoices are payable within the timeframe as set in agreement with the customer at the point of placing the order of the product or service. Discounts are provided from time-to-time to customers.

 

Customers may be permitted to return goods where issues are identified with regard to quality of the product. Returned goods are exchanged only for new goods or a credit note. No cash refunds are offered.

 

Where the customer is permitted to return an item, revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the historical data for specific types of product. In these circumstances, a refund liability and a right to recover returned goods asset are recognised.

 

The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as accruals and other liabilities in its consolidated statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its consolidated statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Revenue Recognition (continued)

The Group has elected to apply IFRS 15 Practical expedient, the Group need not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

 

Government Grants

Amounts recognised in the profit and loss account are presented under the heading Operating Costs on a systematic basis in the periods in which the expenses are recognised, unless the conditions for receiving the grant are met after the related expenses have been recognised. In this case, the grant is recognised when it is receivable. Current government grants have no conditions attached.

 

Earnings per share

Basic earnings per share is calculated based on the profit for the year attributable to owners of the Company and the basic weighted average number of shares outstanding. Diluted earnings per share is calculated based on the profit for the year attributable to owners of the Company and the diluted weighted average number of shares outstanding.

 

Taxation

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

 

Current tax assets and liabilities are offset only if certain criteria are met.

 

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

 

•           not a business combination and that affects neither accounting nor taxable profit or loss;

•           temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

•           taxable temporary differences arising on the initial recognition of goodwill.

 

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

 

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

 

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

 

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

 

Deferred tax assets and liabilities are offset only if certain criteria are met.

 

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Leases (continued)

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

 

(i) As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

 

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.

 

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources.

 

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

 

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

 

(ii) As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

 

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

 

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.

 

Short term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

 

 

 

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Inventories and capital equipment

Inventories and capital equipment (rigs) are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. The cost of inventories is based on the first-in, first-out principle and includes the costs of acquiring inventories and bringing them to their existing location and condition. Inventories manufactured by the Group and work in progress include an appropriate share of production overheads based on normal operating capacity. Inventories are reported net of deductions for obsolescence.

 

Intangible Assets and Goodwill

 

Goodwill

The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations. Goodwill is not amortised and is tested annually.

 

Intangible assets

Expenditure on research activities is recognised in profit or loss as incurred.

 

Development expenditure is capitalised only if the Group can demonstrate if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in the profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

 

Acquired IP which has been obtained at a cost that can be measured reliably, and that meets the definition and recognition criteria of IAS38, will be accounted for as an intangible asset.

 

Recognising an internally developed intangible assets post the development phase once the company has assessed the development phase is complete and the asset is ready for use. Internally generated assets have an infinite life. They will be amortised over a fifteen year period on a straight line basis. Currently there is thirteen years and nine months remaining on the amortisation.

 

Foreign Currency

Foreign currency transactions

Transactions in foreign currencies (those which are denominated in a currency other than the functional currency) are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the foreign exchange rate at the statement of financial position date. Exchange gains and losses related to trade receivables and payables, other financial assets and payables, and other operating receivables and payables are separately presented on the face of the income statement.

 

Exchange rate differences on translation to functional currency are reported in profit or loss, except when reported in other comprehensive income for the translation of intra-group receivables from, or liabilities to, a foreign operation that in substance is part of the net investment in the foreign operation.

 

Exchange rates for major currencies used in the various reporting periods are shown in note 22.

 

Translation of accounts of foreign entities

The assets and liabilities of foreign entities, including goodwill and fair value adjustments arising on consolidation, are translated to euro at the exchange rates ruling at the reporting date. Revenues, expenses, gains, and losses are translated at average exchange rates, when these approximate the exchange rate for the respective transaction. Foreign exchange differences arising on translation of foreign entities are recognised in other comprehensive income and are accumulated in a separate component of equity as a translation reserve. On divestment of foreign entities, the accumulated exchange differences, are recycled through profit or loss, increasing or decreasing the profit or loss on divestments.

 

Business combinations and consolidation

The consolidated financial statements include the financial statements of the Group and all companies in which Mincon Group plc, directly or indirectly, has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Business combinations and consolidation (continued)

The consolidated financial statements have been prepared in accordance with the acquisition method.

 

According to this method, business combinations are seen as if the Group directly acquires the assets and assumes the liabilities of the entity acquired. At the acquisition date, i.e., the date on which control is obtained, each identifiable asset acquired, and liability assumed is recognised at its acquisition-date fair value.

 

Consideration transferred is measured at its fair value. It includes the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the previous owners of the acquiree, and equity interests issued by the Group. Deferred consideration is initially measured at its acquisition-date fair value. Any subsequent change in such fair value is recognised in profit or loss, unless the deferred consideration is classified as equity. In that case, there is no remeasurement and the subsequent settlement is accounted for within equity. Deferred consideration arises in the current year where part payment for an acquisition is deferred to the following year or years.

 

Transaction costs that the Group incurs in connection with a business combination, such as legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

 

Goodwill is measured as the excess of the fair value of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the Group's previously held equity interest in the acquiree (if any) over the net of acquisition-date fair values of the identifiable assets acquired and liabilities assumed. Goodwill is not amortised but tested for impairment at least annually.

 

Non-controlling interest is initially measured either at fair value or at the non-controlling interest's proportionate share of the fair value of the acquiree's identifiable net assets. This means that goodwill is either recorded in "full" (on the total acquired net assets) or in "part" (only on the Group's share of net assets). The choice of measurement basis is made on an acquisition-by-acquisition basis.

 

Earnings from the acquirees are reported in the consolidated income statement from the date of control.

 

Intra-group balances and transactions such as income, expenses and dividends are eliminated in preparing the consolidated financial statements. Profits and losses resulting from intra-group transactions that are recognised in assets, such as inventory, are eliminated in full, but losses are only eliminated to the extent that there is no evidence of impairment.

 

Property, plant and equipment

 

Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment losses. Cost of an item of property, plant and equipment comprises the purchase price, import duties, and any cost directly attributable to bringing the asset to its location and condition for use. The Group capitalises costs on initial recognition and on replacement of significant parts of property, plant and equipment, if it is probable that the future economic benefits embodied will flow to the Group and the cost can be measured reliably. All other costs are recognised as an expense in profit or loss when incurred.

 

Depreciation

Depreciation is calculated based on cost using the straight-line method over the estimated useful life of the asset. The following useful lives are used for depreciation:

 

                                                Years

Buildings                                  20-30

Plant and equipment                  3-10

 

The depreciation methods, useful lives and residual values are reassessed annually. Land is not depreciated.

 

Right of use assets are depreciated using the straight-line method over the estimated useful life of the asset being the remaining duration of the lease from inception date of the asset. The depreciation methods, useful lives and residual values are reassessed annually.

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Financial Assets and Liabilities

 

Classification and initial measurement of financial assets financial liabilities.

Financial assets and liabilities are recognised at fair value when the Group becomes a party to the contractual provisions of the instrument. Purchases and sales of financial assets are accounted for at trade date, which is the day when the Group contractually commits to acquire or dispose of the assets. Trade receivables are recognised once the responsibility associated with control of the product has transferred to the customer. Liabilities are recognised when the other party has performed and there is a contractual obligation to pay. A financial asset and a financial liability are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to either settle on a net basis or to realise the asset and settle the liability simultaneously.

The classification is determined by both:

• the entity's business model for managing the financial asset, and

• the contractual cash flow characteristics of the financial asset.

 

Subsequent measurement of financial assets and financial liabilities

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

·      they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows, and

·      the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

 

Financial liabilities at amortised cost

Subsequently, financial liabilities are measured at amortised cost using the effective interest method.

 

Derecognition (fully or partially) of a financial asset occurs when the rights to receive cash flows from the financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been removed from the Group. Financial assets are assessed at each reporting date. The Group derecognises (fully or partially) a financial liability when the obligation specified in the contract is discharged or otherwise expires.

 

Impairment of financial assets

Financial assets are assessed from initial recognition and at each reporting date to determine whether there is a requirement for impairment. Financial assets require there expected lifetime losses to be recognised from initial recognition.

 

IFRS 9's impairment requirements use forward-looking information to recognise expected credit losses - the 'expected credit loss (ECL) model'. Instruments within the scope of the requirements included loans and other debt-type financial assets measured at amortised cost, trade and other receivables.

 

The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

 

In applying this forward-looking approach, a distinction is made between:

·      financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk ('Stage 1') and

·      financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low ('Stage 2').

 

'Stage 3' would cover financial assets that have objective evidence of impairment at the reporting date.

 

'12-month expected credit losses' are recognised for the first category (ie Stage 1) while 'lifetime expected credit losses' are recognised for the second category (ie Stage 2).

 

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Financial Assets and Liabilities (continued)

 

Trade and other receivables

The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

 

The Group assesses impairment of trade and other receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due.

 

Borrowing costs

All borrowing costs are expensed in accordance with the effective interest rate method.

 

Equity

Shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effect.

 

Financial instruments carried at fair value: Deferred consideration

Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. These are set amounts detailed in each contract.

 

Finance income and expenses

Finance income and expense are included in profit or loss using the effective interest method.

 

Contingent liabilities

A contingent liability is a possible obligation or a present obligation that arises from past events that is not reported as a liability or provision, as it is not probable that an outflow of resources will be required to settle the obligation or that a sufficiently reliable calculation of the amount cannot be made.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less.

 

Provisions

A provision is recognised in the statement of financial position when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the outflow can be estimated reliably. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date. If the effect of the time value of money is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. 

 

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or been announced publicly. Future operating losses are not provided for.

 

Defined contribution plans

A defined contribution retirement benefit plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution retirement benefit plans are recognised as an employee benefit expense in profit or loss when employees provide services entitling them to the contributions.

 

Share-based payment transactions

The Group operates a long term incentive plan which allows the Company to grant Restricted Share Awards ("RSAs") to executive directors and senior management. All schemes are equity settled arrangements under IFRS 2 Share-based Payment.

 

 

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Financial Assets and Liabilities (continued)

 

Share-based payment transactions (continued)

 

The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. It is reversed only where entitlements do not vest because all

non-market performance conditions have not been met or where an employee in receipt of share entitlements leaves the Group before the end of the vesting period and forfeits those options in consequence.

 

Critical accounting estimates and judgements

The preparation of financial statements requires management's judgement and the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the prevailing circumstances. Actual results may differ from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which they are revised and in any future periods affected.

 

Following are the estimates and judgements which, in the opinion of management, are significant to the underlying amounts included in the financial reports and for which there is a significant risk that future events or new information could entail a change in those estimates or judgements.

 

Deferred consideration

The deferred 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 consideration is primarily dependent on the future performance of the acquired businesses against predetermined targets and on management's current expectations thereof.

 

Climate-related matters

Consistent with the prior year, as at 31 December 2023, the Group has not identified significant risks induced by climate changes that could negatively and materially affect the estimates and judgements currently used in the Group's financial statements. Management continuously assesses the impact of climate-related matters.

 

Goodwill

The initial recognition of goodwill represents management' best estimate of the fair value of the acquired entities value less the identified assets acquired.

 

During the annual impairment assessment over goodwill, management calculate the recoverable value of the group using their best estimate of the discounted future cash flows of the group. The fair values were estimated using management's current and future projections of the Mincon Group's performance as well as appropriate data inputs and assumptions.

 

Useful life and residual values of Intangible Assets

Distinguishing the research and development phase, determining the useful life, and deciding whether the recognition requirements for the capitalisation of development costs of new projects are met all require judgement. These judgements are based on historical experience and various other factors that are believed to be reasonable under the prevailing circumstances.

 

After capitalisation, management monitors whether the recognition requirements continue to be met and whether there are any indicators that capitalised costs may be impaired.

 

Trade and other receivables

Trade and other receivables are included in current assets, except for those with maturities more than 12 months after the reporting date, which are classified as non-current assets. The Group estimates the risk that receivables will not be paid and provides for doubtful debts in line with IFRS 9.

 

 

 

 

3.  Significant accounting principles, accounting estimates and judgements (continued)

 

Critical accounting estimates and judgements (continued)

 

Trade and other receivables (continued)

The Group applies the simplified approach to providing for expected credit losses (ECL) permitted by IFRS 9 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables and considered at each reporting date. Loss rates are calculated using a "roll rate" method based on the probability of a receivable progressing through successive chains of non-payment to write-off.

 

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the company. Where recoveries are made, these are recognised in the Consolidated Income Statement.

 

4.  Revenue

 

In the following table, revenue is disaggregated between Mincon manufactured product and product that is purchased outside the Group and resold through Mincon distribution channels.

 


2023

2022

 

€'000

€'000

Product revenue:

 


Sale of Mincon product                                                           

128,294

141,830

Sale of third party product                                                          

28,637

28,178

Total revenue                                                                            

156,931

170,008

 

The Group's revenue disaggregated by primary geographical markets are disclosed in Note 5.

 

The Group recognised contract liability amounting to €1 million as at 31 December 2023 (2022:€NIL) which represent customer payments received in advance of performance that are expected to be recognised within the next financial year. Contract liability is recorded under Other accruals and other liabilities (Note 16).

 

5.  Operating Segment

 

The CODM assesses operating segment performance based on operating profit. Segment revenue for the year ended 31 December 2023 of €156.9 million (2022: €170 million) is wholly derived from sales to external customers.

 

Entity-wide disclosures

 

The business is managed on a worldwide basis but operates manufacturing facilities and sales offices in Ireland, UK, Sweden, Finland, South Africa, Western Australia, the United States and Canada and sales offices in ten other locations including Eastern Australia, South Africa, France, Spain, Namibia, Sweden, Chile and Peru. In presenting information on geography, revenue is based on the geographical location of customers and non-current assets based on the location of these assets.

 

Revenue by region (by location of customers):

 

2023

2022


€'000

€'000

Region:



Ireland             

1,619

2,974

Americas                                                                      

66,466

69,752

Australasia                                                               

14,344

16,882

Europe, Middle East, Africa                                       

74,502

80,400

Total revenue from continuing operations                 

156,931

170,008

 

 

 

 

 

 

 

 

5.  Operating Segment (continued)

 

During 2023, Mincon had sales in the USA of €38.4 million (2022: €42.4 million), this contributed to more than 10% of the entire Group's sales for 2023.

 

 

 

 

2023

2022

 

€'000

€'000

Region:



Americas                                                          

16,352

17,752

Australasia                                                       

11,060

12,252

Europe, Middle East, Africa                               

67,976

63,109

Total non-current assets(1)                                 

95,388

93,113

(1) Non-current assets exclude deferred tax assets.

 

 

 

During 2023, Mincon held non-current assets (excluding deferred tax assets) in Ireland of €23.5 million (2022: €17.6 million), in the USA of €11.7 million (2022: €12.5 million) these separately contributed to more than 10% of the entire Group's non-current assets (excluding deferred tax assets) for 2023.

 

 

 

 

2023

2022

 

€'000

€'000

Region:



Americas                                                                

5,883

6,839

Australasia                                                              

1,988

2,555

Europe, Middle East, Africa                                        

21,091

20,115

Total non-current liabilities(1)                                    

28,962

29,509

(1) Non-current liabilities exclude deferred tax liabilities.

 

 

 

During 2023, Mincon held non-current liabilities (excluding deferred tax liabilities) in Ireland of €15.7 million (2022: €13.5 million), this contributed to more than 10% of the entire Group's non-current liabilities (excluding deferred tax liabilities) for 2023.

 

6.  Cost of Sales and operating expenses

 

Included within cost of sales and operating costs were the following major components:

 




Cost of sales

 

 

 

2023

2022

 

€'000

€'000

Raw materials

46,201

45,523

Third party product purchases

22,194

21,838

Employee costs

 20,980

23,093

Depreciation (note 13)

 5,387

5,194

In bound costs on purchases

 3,200

4,759

Energy costs                                                                

 2,735

3,116

Maintenance of machinery                                             

 1,529

2,120

Subcontracting                                                             

 4,884

7,139

Amortisation of product development                             

 485

121

Other                                                      

 3,813

3,035

Total cost of sales                                   

111,408

115,938

 

The Group invested approximately €4.1 million on research and development projects in 2023 (2022: €4.4 million). €4.1 million of this has been expensed in the period (2022: €4.1 million), with the balance of €NIL of development costs capitalised (2022: €285,000) (note 12).

 

 

 

 

 

 

6.  Cost of Sales and operating expenses (continued)

 

Operating costs





2023

2022


€'000

€'000

Employee costs (including director emoluments)                  

19,726

20,370

Depreciation (note 13)                                                         

2,610

2,588

Amortisation of acquired IP                                       

215

190

Travel                                                                       

1,812

1,927

Professional costs                                                     

2,425

2,637

Administration                                                           

2,938

2,997

Marketing                                                                  

791

706

Legal cost                                                                 

715

846

Other                                                                  

2,001

2,060

Total other operating costs                               

33,233

34,321

 

The Group recognised €56,000 in Government Grants in 2023 (2022: €119,000). These grants differ in structure from country to country, they primarily relate to personnel costs.

 

7.  Finance costs

 

2023

 2022

 

€'000

€'000

Interest on lease liabilities

698

609

Interest on loans and borrowings

1,774

870

Finance costs

2,472

1,479

 

8.  Employee information




2023

2022


€'000

€'000

Wages and salaries - excluding directors

34,633

36,085

Wages, salaries, fees and retirement benefit - directors (note 10)

725

868

Social security costs                                                                      

3,409

4,428

Retirement benefit costs of defined contribution plans

2,203

2,272

Share based payment expense (note 21)

(264)

(190)

Total employee costs

40,706

43,463

 

In addition to the above employee costs, the Group capitalised payroll costs of €NIL in 2023 (2022: €151,000) in relation to development.

 

At 31 December 2023, there was €445,000 (2022: €234,000) accrued for and not in paid pension contributions.

 


 

 

The average number of employees was as follows:

 

 

 

2023

2022

 

Number

Number

Sales and distribution

136

133

General and administration

77

75

Manufacturing, service and development

391

417

Average number of persons employed

604

625

 

Retirement benefit and Other Employee Benefit Plans

 

The Group operates various defined contribution retirement benefit plans. During the year ended 31 December 2023, the Group recorded €2.2 million (2022: €2.3 million) of expense in connection with these plans.

 

 

 

 

 

9.  Acquisitions & Disposals

 

2023 Acquisition

 

Mincon Group had no acquisitions in 2023.

 

2022 Acquisition

 

In January 2022, Mincon acquired 100% shareholding in Spartan Drilling Tools, a manufacturer of drill pipe and related products based in the USA for a consideration of €1,014,000. Spartan Drilling Tools was acquired to manufacture drill pipe closer to the end user in the America's region.

 

A.    Consideration transferred

 

The following table summarises the acquisition date fair value of each major class of consideration transferred.

 







 

 

 

 

Spartan Drilling Tools

Total


 

 

 

€'000

€'000

Consideration transferred


1,014

1,014

Total consideration transferred

 

1,014

1,014

 

B.    Identifiable assets acquired and liabilities assumed

 

The following table summarises the recognised amounts of assets and liabilities assumed at the date of acquisition.

 

Total


€'000

Property, plant and equipment                                                          

480

Right of use assets                                                                           

455

Inventories                                                                                        

369

Trade receivables                                                                               

133

Other assets                                                                                      

63

Trade and other payables                                                                   

(83)

Right of use liabilities                                                                            

(455)

Other accruals and liabilities                                                                  

(109)

Fair value of identifiable net assets acquired                                       

853

 

Measurement of fair values

The valuation techniques used for measuring the fair value of material assets acquired were as follows.

 

Assets acquired

Valuation Technique

 

Property, plant and equipment

Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available, and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

 

Inventories

Market comparison technique: The fair value is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

 

Assets acquired

Valuation Technique

Trade receivables

All receivable balances were assessed and all are collectable.

 

Trade and other payables

All were accessed and deemed payable to credible suppliers

Other current assets

All were accessed for recoverability and all is recoverable

 

Other accruals and liabilities

All were assessed for credibility and deemed payable

 

 

9.  Acquisitions & Disposals (continued)

 

The loss from the acquisition of Spartan Drilling Tools has been consolidated into the Mincon Group 2022 profit for the reporting period.

 

 

 

Goodwill

Goodwill of €161,000 is primarily due to growth expectations, expected future profitability and expected cost synergies.

 

Goodwill arising from the acquisition has been recognised as follows.

 


Spartan Drilling Tools

€'000

Total

2022

€'000

Consideration transferred

1,014

1,014

Fair value of identifiable net assets

(853)

(853)

Goodwill                                                               

161

161

 

 

10.  Statutory and other required disclosures

 

Operating profit is stated after charging the following amounts:

 

2023

2022

 

€'000

€'000

Directors' remuneration



Fees                                                                          

234

210

Wages and salaries                                                    

             432

             599

Retirement benefit contributions                                

59

59

Total directors' remuneration                                  

725

868

 

Auditor's remuneration

 

 

2023

€'000

2022

€'000

Auditor's remuneration - Fees payable to lead audit firm



Audit of the Group financial statements

188

180

Audit of the Company financial statements

10

10

Other assurance services

15

13

           

213

203

Auditor's remuneration - Fees payable to other firms in lead audit firm's network



Audit services                                                      

36

35

Other assurance services                                     

-

-

Tax advisory services                                          

2

2

Total auditor's remuneration                              

38

37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11.  Income tax

 

Tax recognised in income statement:

 

2023

2022

Current tax expense

€'000

€'000

Current year                                       

1,995

4,409

Adjustment for prior years                   

-

172

Total current tax expense                         

1,995

4,581

Deferred tax expense



Origination and reversal of temporary differences

(561)

(551)

Total deferred tax expense

(561)

(551)




Total income tax expense

1,434

4,030

 

A reconciliation of the expected income tax expense for continuing operations is computed by applying the standard Irish tax rate to the profit before tax and the reconciliation to the actual income tax expense is as follows:

 


2023

2022


€'000

€'000

Profit before tax from continuing operations

8,904

18,734

Irish standard tax rate (12.5%)

12.5%

12.5%

Taxes at the Irish standard rate 

1,113

2,342

Foreign income at rates other than the Irish standard rate 

(462)

662

Losses created/utilised                                                      

(61)

304

Other                                                                               

844

722

Total income tax expense                                               

1,434

4,030

 

The Group's net deferred taxation liability was as follows:


2023

2022

 

€'000

€'000

Deferred taxation assets:

 


Reserves, provisions and tax credits

2,012

1,044

Tax losses and unrealised FX gains

652

1,006

Total deferred taxation asset

2,664

2,050

Deferred taxation liabilities:

 

 

Property, plant and equipment                          

(2,099)

(1,808)

Profit not yet taxable

-

(238)

Total deferred taxation liabilities                      

(2,099)

(2,046)




Net deferred taxation asset/(liability)

565

4

 

The movement in temporary differences during the year were as follows:


 

 

 

 


Balance

Recognised in

Balance


1 January

Profit or Loss

31 December

1 January 2022 - 31 December 2022

€'000

€'000

€'000

Deferred taxation assets:




Reserves, provisions and tax credits

741

303

1,044

Tax losses                                    

334

672

1,006

Total deferred taxation asset                

1,075

975

2,050

Deferred taxation liabilities:




Property, plant and equipment

(1,332)

(476)

(1,808)

Profit not yet taxable

(290)

52

(238)

Total deferred taxation liabilities         

(1,622)

(424)

(2,046)





Net deferred taxation liability

(547)

551

4

 

11.  Income tax (continued)

 


Balance

Recognised in

Balance


1 January

Profit or Loss

31 December

1 January 2023 - 31 December 2023

€'000

€'000

€'000

Deferred taxation assets:




Reserves, provisions and tax credits

1,044

968

2,012

Tax losses                                     

1,006

(354)

652

Total deferred taxation asset           

2,050

614

2,664

Deferred taxation liabilities:

 

 

 

Property, plant and equipment

(1,808)

(291)

(2,099)

Profit not yet taxable

(238)

238

-

Total deferred taxation liabilities

(2,046)

(53)

(2,099)





Net deferred taxation liability

4

561

565

 

Deferred taxation assets have not been recognised in respect of the following items:

 

2023

2022

 

€'000

€'000

Tax losses

3,789

3,850

Total

3,789

3,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.  Intangible assets and goodwill

 

Product development

Internally generated intangible asset

Goodwill

Acquired

intellectual

property

Total

 

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2022                

6,986

-

32,545

626

40,157

Internally developed                       

285

-

-

-

285

Acquisitions (note 9)                         

-

-

161

-

161

Transfer to internally generated intangible asset

(7,271)

7,271

-

-

-

Acquired intellectual property

-

-

-

147

147

Amortisation of intellectual property

-

-

-

(190)

(190)

Amortisation of product development

-

(121)

-

-

(121)

Translation differences                    

-

-

(378)

48

(330)

Balance at 31 December 2022

-

7,150

32,328

631

40,109

Acquired intellectual property        

-

-

-

1,517

1,517

Amortisation of intellectual property

-

-

-

(216)

(216)

Amortisation of product development

-

(485)

-

-

(485)

Translation differences                        

-

-

(278)

(22)

(300)

Balance at 31 December 2023

-

6,665

32,050

1,910

40,625

 

 

Goodwill relates to the acquisition of the below companies, being the dates that the Group obtained control of these business:

·..... The remaining 60% of DDS-SA Pty Limited in November 2009

·..... The 60% acquisition of Omina Supplies in August 2014

·..... The 65% acquisition of Rotacan in August 2014

·..... The acquisition of ABC products in August 2014

·..... The acquisition of Ozmine in January 2015

·..... The acquisition of Mincon Chile in March 2015

·..... The acquisition of Mincon Tanzania in March 2015

·..... The acquisition of Premier in November 2016

·..... The acquisition of Rockdrill Engineering in November 2016

·..... The acquisition of PPV in April 2017

·..... The acquisition of Viqing July 2017

·..... The acquisition of Driconeq in March 2018

·..... The acquisition of Pacific Bit of Canada in January 2019

·..... The acquisition of Lehti Group in January 2020

·..... The acquisition of Rocdrill in May 2020

·..... The acquisition of Attakroc in June 2021

·..... The acquisition of Spartan Drilling Tools in January 2022

 

 

The Group accounts for acquisitions using the purchase accounting method as outlined in IFRS 3 Business Combinations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.  Intangible assets and goodwill (continued)

 

The recoverable amount of goodwill has been assessed based on estimates of fair value less costs of disposal (FVLCD). The FVLCD valuation is calculated on the basis of a discounted cash flow ("DCF") model. The most significant assumptions within the DCF are weighted average cost of capital ("WACC"), tax rates and terminal value assumptions. Goodwill impairment testing did not indicate any impairment during any of the periods being reported. Four sensitivities are applied as part of the analysis considering the effects of changes in:

 

     1) the WACC,

     2) the EBITDA margin,

     3) the long term growth rate and

     4) the level of terminal value capital expenditure.

 

 

The sensitivities calculate downside scenarios to assess potential indications of impairments due to changes in key assumptions. The results from the sensitivity analysis did not suggest that goodwill would be impaired when those sensitivities were applied.

 

The carrying amount of the CGU was determined to be lower than its fair value less costs of disposal by €5.3 million (2022: €52.4 million), giving management headroom and comfort in the above stated impairment assessment.

 

The key assumptions used in the estimation of the fair value less cost calculation were as follows:

 

 

 

 

 

2023

2022

 

WACC

11.35%

12.60%

 

EBITDA margin

16.18%

20.23%

 

Long term growth rate

2.29%

2.20%

 

Terminal value capital expenditure

€9.8 million

€10.6 million

 

 

The WACC calculation considers market data and data from comparable public companies. Peer group data was especially considered for the beta factor and assumed financing structure (gearing level). The analysis resulted in a discount rate range of 10.15% to 12.55%. This results in a midpoint WACC being used of 11.35%.

 

The Long term growth rate of 2.30% applied is based on a weighted average of the long term inflation rates of the countries in which Mincon generates revenues and earnings.

 

The budgeted EBITDA was based on expectations of future outcomes, taking account for past experience, adjusted for anticipated revenue growth as detailed in managements approved Budget. No EBITDA margin effect is assumed in the terminal value i.e. the budgeted EBITDA margin of 16.20% for 2026 is assumed in the Terminal Value calculation used to arrive at the FVLCD.

 

Terminal value capital expenditure assumes no balance sheet growth is assumed in the terminal value, capital expenditure is assumed to equal depreciation of €9.8 million.

 

The following table shows the amount by which the two assumptions below would need to change to individually for the estimated recoverable amount to be equal to the carrying amount.

 

 

2023

2022

WACC

11.63%

14.80%

Long term growth rate

1.73%

1.35%

 

Investment expenditure of €NIL (2022: €285,000), which has been capitalised, is in relation to ongoing product development within the Group. Amortisation began in October 2022 once the project was commercialised. Amortisation is charged into the income statement over fifteen years on a straight line basis.

 

 

 

 

 

 

 

13.  Property, plant and equipment


Land &

Plant &

ROU

 

 

Buildings

Equipment

Assets

Total

 

€'000

€'000

€'000

€'000

Cost:

 

 

 

 

At 1 January 2022

18,047

58,775

9,445

86,267

Acquisitions through business combinations

9

471

455

935

Additions

1,146

6,164

2,880

10,190

Disposals and derecognition of ROU assets

(1,226)

(1,176)

(1,191)

(3,593)

Foreign exchange differences

181

274

(58)

397

At 31 December 2022

18,157

64,508

11,531

94,196






Additions

3,824

6,378

1,013

11,215

Disposals and derecognition of ROU assets

-

(1,734)

(656)

(2,390)

Foreign exchange differences

(337)

(1,029)

(292)

(1,658)

At 31 December 2023

21,644

68,123

11,596

101,363






Accumulated depreciation:

 

 



At 1 January 2022

(4,005)

(27,853)

(3,749)

(35,607)

Charged in year

(577)

(5,046)

(2,159)

(7,782)

Disposals

381

994

1,134

2,509

Foreign exchange differences

(41)

(282)

11

(312)

At 31 December 2022

(4,242)

(32,187)

(4,763)

(41,192)






Charged in year

(648)

(5,144)

(2,205)

(7,997)

Disposals

(10)

1,372

567

1,929

Foreign exchange differences

50

501

109

660

At 31 December 2023

(4,850)

(35,458)

(6,292)

(46,600)






Carrying amount: 31 December 2023

16,794

32,665

5,304

54,763

Carrying amount: 31 December 2022

13,915

32,321

6,768

53,004

Carrying amount: 1 January 2022

14,042

30,922

5,696

50,660

 

ROU assets includes Property of €4.2 million (2022: €6 million) and Plant and Equipment of €1.1 million (2022: € 800,000).

 

The depreciation charge for property, plant and equipment is recognised in the following line items in the income statement:

 





2023

2022


€'000

€'000

Cost of sales

4,994

4,768

Cost of sales ROU assets

393

426

Operating expenses

830

852

Operating expenses ROU asset

1,780

1,736

Total depreciation charge for property, plant and equipment

7,997

7,782

 

 

 



14.  Inventory and capital equipment


2023

2022


€'000

€'000

Finished goods

45,953

47,983

Work-in-progress

9,060

12,943

Raw materials

14,717

15,985

Total inventory

69,730

76,911

 

The Group recorded an impairment of €87,000 against inventory to take account of net realisable value during the year ended 31 December 2023 (2022: 128,000). Write-downs are included in cost of sales.

 

 

15.  Trade and other receivables and other current assets

 

a) Trade and other receivables


2023

2022


€'000

€'000

Gross receivable

23,129

24,975

Provision for impairment

(1,513)

(1,103)

Net trade and other receivables

21,616

23,872

 

 

 

Provision for impairment


€'000

Balance at 1 January 2023

(1,103)

Increase in provision arising from prior years receivables impairment

2

Increase in ECL model

(412)

Balance at 31 December 2023

(1,513)

 

The following table provides the information about the exposure to credit risk and ECL's for trade receivables as at 31 December 2023.


Weighted average loss rate %

Gross carrying amount €'000

              Loss allowance                                   €'000    

Current (not past due)

2%

15,924

280

1-30 days past due

9%

3,145

275

31-60 days past due

22%

1,538

345

61 to 90 days

15%

2,250

341

More than 90 days past due

100%

272

272

Net trade and other receivables


23,129

1,513

 

The following table provides the information about the exposure to credit risk and ECL's for trade receivables as at 31 December 2022.

 


Weighted average loss rate %

Gross carrying amount €'000

 

Loss allowance                                   €'000    

Current (not past due)

1%

17,929

179

1-30 days past due

5%

4,245

211

31-60 days past due

13%

1,459

189

61 to 90 days

21%

1,034

216

More than 90 days past due

100%

308

308

Net trade and other receivables


24,975

1,103

 

 

 

 

 

 

15.  Trade and other receivables and other current assets (continued)

 

b) Prepayments and other current assets




 

2023

2022

 

€'000

€'000

Plant and machinery prepaid and under commission

6,607

9,852

Prepayments and other current assets

2,002

2,875

Prepayments and other current assets

8,609

12,727

 

 

16. Trade creditors, accruals and other liabilities

 

2023

2022

 

€'000

€'000

Trade creditors

10,505

14,420

Total creditors and other payables

10,505

14,420

 

 

 

2023

2022

 

€'000

€'000

VAT

664

104

Social security costs

1,810

1,929

Other accruals and liabilities

6,122

6,666

Total accruals and other liabilities

8,596

8,699

 

 

 

17.  Capital management

 

The Group's policy is to have a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders.

 

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

 

The Group monitors capital using a ratio of 'net debt' to equity. Net debt is calculated as total liabilities less cash and cash equivalents (as shown in the statement of financial position).

 

 

2023

2022

 

€'000

€'000

Total liabilities

(65,245)

(71,131)

Less: cash and cash equivalents

20,482

15,939

Net debt

(44,763)

(55,192)

Total equity

154,251

153,786

Net debt to equity ratio

0.29

0.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.  Loans and borrowings

 


2023

2022

 

Maturity

€'000

€'000

Bank loans

2024-2036

32,486  

30,848  

Lease Liabilities

2024-2032

7,626

11,096

Total loans and borrowings

 

40,112

41,944

Current


14,080

14,973

Non-current


26,032

26,971

 

The Group has a number of bank loans and lease liabilities with a mixture of variable and fixed interest rates. The Group has not been in default on any of these debt agreements during any of the periods presented. The loans are secured against the assets for which they have been drawn down for.

 

The Group has been in compliance with all debt agreements during the periods presented. The loan agreements in Ireland of €11.5 million (2022: €13.5 million) carry restrictive financial covenants including, EBITDA to be no less than €18 million at end of each reporting period, interest cover to be 3:1 and to maintain a minimum cash balance of €5 million.

 

Interest rates on current borrowings are at an average rate of 5.12% (2022: 4.89%)

 

During 2023, the Group availed of the option to enter into overdraft facilities and to draw down loans of €7.2 million (2022: €11.5 million), €6.9 million (2022: €8.8 million) in loans and €300,000 (2022: €2.7 million) in overdraft facilities.

 

Loans are repayable in line with their specific terms, the Group has one bullet repayment due in 2026 of €5 million.

 

Reconciliation of movements of liabilities to cash flows arising from financing activities

 

 

  

Balance at 1 January 2022

Arising from acquisition

Cash movements

Non-cash movements

Foreign exchange differences

Balance at 31 December 2022

  

€'000

€'000

€'000

€'000

€'000

€'000

Loans and borrowings

23,391

109

7,372

-

(24)

30,848

Lease liabilities

11,079

            455     

(3,993)

3,604

(49)

11,096

Total

34,470

564

3,379

3,604

(73)

41,944

 

 

 

  

Balance at 1 January 2023

Arising from acquisition

Cash movements

Non-cash movements

Foreign exchange differences

Balance at 31 December 2023

  

€'000

€'000

€'000

€'000

€'000

€'000

Loans and borrowings

30,848

-

1,873

-

(235)

32,486

Lease liabilities

11,096

-

(4,194)

1,018

(294)

7,626

Total

41,944

-

(2,321)

1,018

(529)

40,112

 




 

Interest rate range

Effective interest rate

Bank loans

1% - 16%

5%

Lease Liabilities

3% - 10%

5.41%

 

 

 

 

 

 

 

 

19.  Share capital and reserves

 

At 31 December 2023

 

 

 

 

 

Authorised Share Capital

Number

€000

Ordinary Shares of €0.01 each

500,000,000

5,000

 

Allotted, called-up and fully paid up shares

Number

€000

Ordinary Shares of €0.01 each

212,472,413

2,125

 

 

2023

                              2022

Opening Share Capital

212,472,413

212,472,413

Share Awards vested during year

-

-

Authorised Share Capital

212,472,413

212,472,413

 

Share issuances

On 26 November 2013, Mincon Group plc was admitted to trading on the Euronext Growth and the Alternative Investment Market (AIM) of the London Stock Exchange.

 

Voting rights

The holders of Ordinary Shares have the right to receive notice of and attend and vote at all general meetings of the Company and they are entitled, on a poll or a show of hands, to one vote for every Ordinary Share they hold. Votes at general meetings may be given either personally or by proxy. Subject to the Companies Act and any special rights or restrictions as to voting attached to any shares, on a show of hands every member who (being an individual) is present in person and every proxy and every member (being a corporation) who is present by a representative duly authorised, shall have one vote, so, however, that no individual shall have more than one vote for every share carrying voting rights and on a poll every member present in person or by proxy shall have one vote for every share of which he is the holder.

 

Dividends

In June 2023, Mincon Group plc paid a final dividend for 2022 of €0.0105 (1.05 cent) per ordinary share (€2.2 million).

 

In December 2023, Mincon Group plc paid an interim dividend in the amount of €0.0105 (1.05 cent) per ordinary share (€2.2 million total payment), which was paid to shareholders on the register at the close of business on 17 November 2023.

 

The Directors recommend the payment of a final dividend of €0.0105 (1.05 cent) per share for the year ended 31 December 2023 (31 December 2022: 1.05 cent per share).

 

Share premium and other reserves

As part of a Group reorganisation of the Company, Mincon Group plc, became the ultimate parent entity of the Group. On 30 August 2013, the Company acquired 100% of the issued share capital in Smithstown Holdings and acquired (directly or indirectly) the shareholdings previously held by Smithstown Holdings in each of its subsidiaries, thereby creating a merger reserve.  

20.  Earnings per share

 

Basic earnings per share (EPS) is computed by dividing the profit for the period available to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period. Diluted earnings per share is computed by dividing the profit for the period by the weighted average number of Ordinary Shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares. The following table sets forth the computation for basic and diluted net profit per share for the years ended 31 December:

 

 

 

 

 

 

 

 

 

 

20.  Earnings per share (continued)


2023

2022

Numerator (amounts in €'000):

 


Profit attributable to owners of the Parent

7,470

14,704

Denominator (Number):

Basic shares outstanding

Restricted share awards

Diluted weighted average shares outstanding



212,472,413

212,472,413

830,000

2,030,000

213,302,413

214,502,413

Earnings per Ordinary Share



Basic earnings per share, €

Diluted earnings per share, €

3.52

              3.50

6.92

6.85

 

21.  Share based payment

 

The vesting conditions of the scheme state that the minimum growth in EPS shall be CPI plus 5% per annum, compounded annually, over the relevant three accounting years up to the share award of 100% of the participants

basic salary. Where awards have been granted to a participant in excess of 100% of their basic salary, the performance condition for the element that is in excess of 100% of basic salary is that the minimum growth in EPS shall be CPI plus 10% per annum, compounded annually, over the three accounting years.

Reconciliation of outstanding share options

 

 

Number of Options

in thousands

Outstanding on 1 January 2022

5,820

*Forfeited during the year

(3,790)

Exercised during the year

-

Granted during the year

-

Outstanding at 31 December 2022

2,030

 

*Based on the conditions set out in the 2023 conditional awards agreement, all shares were forfeited as conditions were not met.

Reconciliation of outstanding share options

 

Number of Options

in thousands

Outstanding on 1 January 2023

2,030

*Forfeited during the year

(2,070)

Exercised during the year

-

Granted during the year

870

Outstanding at 31 December 2023

830

 

*Based on the conditions set out in the 2024 conditional awards agreement, all shares were forfeited as conditions were not met.

LTIP Scheme

                                   Conditional Award at Grant Date

Conditional Award Invitation date

April 2021

Year of Potential vesting

2024/2028

Share price at grant date

€1.35

Exercise price per share/share options

€1.35

Expected Volatility

36.57%

Expected life

7 years

Risk free rate

(0.53%)

Expected dividend yield

1.58%

Fair value at grant date

€0.39

Valuation model

Black & Scholes Model

 

 

 

22.  Financial risk management

 

The Group is exposed to various financial risks arising in the normal course of business. Its financial risk exposures are predominantly related to changes in foreign currency exchange rates and interest rates, as well as the creditworthiness of our counterparties.

 

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

 

The Group audit committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

 

a) Liquidity and capital

The Group defines liquid resources as the total of its cash, cash equivalents and short term deposits. Capital is defined as the Group's shareholders' equity and borrowings.

 

The Group's objectives when managing its liquid resources are:

•           To maintain adequate liquid resources to fund its ongoing operations and safeguard its ability to continue as a going concern, so that it can continue to create value for investors;

•           To have available the necessary financial resources to allow it to invest in areas that may create value for shareholders; and

•           To maintain sufficient financial resources to mitigate against risks and unforeseen events.

 

Liquid and capital resources are monitored on the basis of the total amount of such resources available and the Group's anticipated requirements for the foreseeable future. The Group's liquid resources and shareholders' equity at 31 December 2023 and 31 December 2022 were as follows:

 

 


2023

2022

 

 

 

€'000

€'000

Cash and cash equivalents

20,482

15,939

Loans and borrowings

40,112

41,944

Shareholders' equity

154,251

153,786

 

 

The Group frequently assess its liquidity requirements, together with this requirement and the rate return of long term euro deposits, the Group has decided to keep all cash readily available that is accessible within a month or less. Cash at bank earns interest at floating rates based on daily bank deposits. The fair value of cash and cash equivalents equals the carrying amount.

 

Cash and cash equivalents are held by major Irish, European, United States, Canadian and Australian institutions with credit rating of A3 or better. The Company deposits cash with individual institutions to avoid concentration of risk with any one counterparty. The Group has also engaged the services of a depository to ensure the security of the cash assets.

 

Risk of counterparty default arising on cash and cash equivalents and derivative financial instruments is controlled by dealing with high-quality institutions and by policy, limiting the amount of credit exposure to any one bank or institution.

 

 

 

 

 

 

 

 

 

 

 

22.  Financial risk management (continued)

 

a)   Liquidity and capital (continued)

 

At year-end, the Group's total cash and cash equivalents were held in the following jurisdictions:

 


31 December

31 December


2023

2022


€'000

€'000

Ireland

2,088

3,668

Americas

3,517

3,039

Australasia

657

347

Europe, Middle East, Africa

14,220

8,885

Total cash, cash equivalents and short term deposits

20,482

15,939

 

There are currently no restrictions that would have a material adverse impact on the Group in relation to the intercompany transfer of cash held by its foreign subsidiaries. The Group continually evaluates its liquidity requirements, capital needs and availability of resources in view of, among other things, alternative uses of capital, the cost of debt and equity capital and estimated future operating cash flow.

 

In the normal course of business, the Group may investigate, evaluate, discuss and engage in future company or product acquisitions, capital expenditures, investments and other business opportunities. In the event of any future acquisitions, capital expenditures, investments or other business opportunities, the Group may consider using available cash or raising additional capital, including the issuance of additional debt. The maturity of the contractual undiscounted cash flows (including estimated future interest payments on debt) of the Group's financial liabilities at 31 December were as follows:

 

  

Total

 

 

 

 

 

  

Current Value of

Total Undiscounted contractual      Cash Flows

                 Less than

 

 

               More than

  

Cash Flows

 

1 Year

1-3 Years

3-5 Years

5 Years

  

€'000

€'000

€'000

€'000

€'000

€'000

At 31 December 2022:

 

 

 

 

 

 

Deferred consideration

1,705

1,725

1,054

671

-

-

Loans and borrowings

30,848

31,443

11,024

6,805

13,306

308

Lease liabilities

11,096

11,309

3,949

4,695

2,082

584

Trade and other payables

14,420

14,420

14,420

-

-

-

Accrued and other financial liabilities

8,699

8,699

8,699

-

-

-

Total at 31 December 2022

66,768

67,596

39,146

12,171

15,388

892

At 31 December 2023:

 

 

 

 

 

 

Deferred consideration

1,998

2,045

442

1,603

-

-

Loans and borrowings

32,486

33,124

11,212

6,738

14,520

654

Lease liabilities

7,626

7,769

2,869

3,061

963

876

Trade and other payables

10,505

10,505

10,505

-

-

-

Accrued and other financial liabilities

8,596

8,596

8,596

-

-

-

Total at 31 December 2023

61,211

62,039

33,624

11,402

15,483

1,530

b) Foreign currency risk

 

The Group is a multinational business operating in a number of countries and the euro is the presentation currency. The Group, however, does have revenues, costs, assets and liabilities denominated in currencies other than euro.

 

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. The resulting monetary assets and liabilities are translated into the appropriate functional currency at exchange rates prevailing at the reporting date and the resulting gains and losses are recognised in the income statement. The Group manages some of its transaction exposure by matching cash inflows and outflows of the same currencies. The Group does not engage in hedging transactions and therefore any movements in the primary transactional currencies will impact profitability. The Group continues to monitor the appropriateness of this policy.

 

 

 

22.  Financial risk management (continued)

 

b) Foreign currency risk (continued)

 

Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts shown are those reported to key management translated into EURO at the closing rate:

 

  

Short-term exposure

Long-term debt

 

  

USD

SEK

ZAR

USD

SEK

ZAR

  

€'000

€'000

€'000

€'000

€'000

€'000

At 31 December 2023:

 

 

 

 

 

 

Financial assets

27,756

13,387

9,675

-

-

-

Financial liabilities 

(3,666)

(2,235)

(1,386)

(3,010)

(892)

(764)

Total Exposure

24,090

11,152

8,289

(3,010)

(892)

(764)

 







At 31 December 2022:

 

 

 

 

 

 

Financial assets

31,075

12,476

10,790

-

-

-

Financial liabilities 

(4,483)

(2,613)

(1,608)

(3,284)

(1,136)

(1,372)

Total Exposure

26,592

9,863

9,182

(3,284)

(1,136)

(1,372)

 

 

The following table illustrates the sensitivity of profit and equity in relating to the Group's financial assets and financial liabilities and the USD/EUR exchange rate, SEK/EUR exchange rate and ZAR/EUR exchange rate 'all other things being equal'. It assumes a +/- 1% change of the EUR/USD exchange rate for the year ended at 31 December 2023 (2022: 4%). A +/- 2% change is considered for the EUR/SEK exchange rate (2022: 4%). It assumes a +/- 8% change of the EUR/ZAR exchange rate for the year ended at 31 December 2023 (2022: 4%). Both of these percentages have been determined based on the average market volatility in exchange rates in the previous twelve months.

 

  

Profit for the year

Equity

  

USD

SEK

ZAR

USD

SEK

ZAR

 

  

€'000

€'000

€'000

€'000

€'000

€'000

 

31 December 2023

(10)

34

54

194

499

722

 

31 December 2022

(3)

35

14

218

244

98

 

 

  

Profit for the year

Equity

  

USD

SEK

ZAR

USD

SEK

ZAR

 

  

€'000

€'000

€'000

€'000

€'000

€'000

 

31 December 2023

10

(36)

(64)

(198)

(519)

(847)

 

31 December 2022

12

(147)

(58)

(917)

(1,026)

(412)

 

 

 

The Group has material subsidiaries with a functional currency other than the euro, such as US dollar, Australian dollar, South African rand, Canadian dollar, British pound and Swedish krona. Changes in the exchange rate year on year between the reporting currencies of these operations and the Euro, have an impact on the Group's consolidated reported result.

 

The Group's worldwide presence creates currency volatility, as reported in the Group's results, when compared year on year. During 2023, the currencies that the Group trades with were volatile due to local economic performances and geopolitical issues. As a result, all major currencies that we trade in weekend against the euro in 2023.

 

 

 

 

 

 

 

22.  Financial risk management (continued)

 

b) Foreign currency risk

 

In 2023, 56% (2022: 56%) of Mincon's revenue €158 million (2022: €170 million) was generated in AUD, SEK and USD. The majority of the Group's manufacturing base has a euro, US dollar or Swedish Krona cost base. While Group management makes every effort to reduce the impact of this currency volatility, it is impossible to eliminate or significantly reduce given the fact that the highest grades of our key raw materials are either not available or not denominated in these markets and currencies. Additionally, the ability to increase prices for our products in these jurisdictions is limited by the current market factors. 

 

The Group is also exposed to foreign currency risk on its liquid resources (cash), of which the euro equivalent of €3.8 million was held in US dollar (USD 4.2 million), €3.5 million was held in Swedish krona (SEK 38.8 million), €1.1 million was held in South Africa rand (ZAR 21.5 million), and the euro equivalent of €973,000 on was held in Canadian  dollar (CAD 1.4 million).

 

 

 

2023

2022

Euro exchange rates

Closing

Average

Closing

Average

US Dollar

1.10

1.08

1.07

1.05

Australian Dollar

1.62

1.63

1.57

1.52

South African Rand

20.18

19.94

18.18

17.19

Swedish Krona

11.13

11.47

11.15

10.63

 

 

c) Credit risk

 

Credit risk is the risk that the possibility that the Group's customers may experience financial difficulty and be unable to meet their obligations. The Group monitors its collection experience on a monthly basis and ensures that a stringent policy is adopted to provide for all past due amounts. The majority of the Group's customers are third party distributors and end users of drilling tools and equipment.

 

Credit risk management

 

The credit risk is managed on a group basis based on the Group's credit risk management policies and procedures.

 

The credit risk in respect of cash balances held with banks and deposits with banks are managed via diversification of bank deposits, and are only with major reputable financial institutions.

 

The Group continuously monitors the credit quality of customers. Where available, external credit ratings and/or reports on customers are obtained and used. The credit terms range between 30 and 90 days. The credit terms for customers as negotiated with customers are subject to an internal approval. The ongoing credit risk is managed through regular review of ageing analysis.

 

Trade receivables consist of a large number of customers in various industries and geographical areas.

 

Trade receivables and contract assets

 

The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component.

 

In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.

 

 

 

 

 

 

 

 

 

22.  Financial risk management (continued)

 

c) Credit risk (continued)

 

Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst other is considered indicators of no reasonable expectation of recovery.

The closing balance of the trade receivables loss allowance as at 31 December 2023 reconciles with the trade receivables loss allowance opening balance as follows:

 

 

  

Trade receivables

  

€'000

Opening loss allowance as at 1 January 2022

937

Loss allowance recognised during the year

166

Loss allowance as at 31 December 2022

1,103

Loss allowance recognised during the year

410

Loss allowance as at 31 December 2023

1,513

 

Expected credit loss assessment

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss and applying experienced credit judgement. Credit risk grades are defined using quantitative factors that are indicative of the risk of default and are aligned to past experiences. Loss rates are based on accrual credit loss experience over the past five years.(Note 15)

 

The maximum exposure to credit risk for trade and other receivables at 31 December 2023 and 31 December 2022 by geographic region was as follows:

 

 

2023

2022

 

€'000

€'000

Americas

8,704

8,173

Australasia

1,900

3,300

Europe, Middle East, Africa

11,012

12,399

Total amounts owed

21,616

23,872

 

d) Interest rate risk

 

Interest Rate Risk on financial liabilities

Interest rates increased rapidly through 2023. As a result, the Group variable rate lending had a significant impact on our income statement during the year. This is very noteworthy when it is shown in contrast to our interest payments during 2022, as the 2023 level of Group lending was relatively flat and comparable to 2022.

 

Interest Rate Risk on cash and cash equivalents

Our exposure to interest rate risk on cash and cash equivalents is actively monitored and managed, the rate risk on cash and cash equivalents is not considered material to the Group.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.  Financial risk management (continued)

 

e) 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.

 

Financial assets and financial liabilities measured at fair value in the consolidated statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

 

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset

  or liability, either directly or indirectly

• Level 3: unobservable inputs for the asset or liability.

 

Mincon Group plc only apply level 3 for fair value, using the detail displayed above.

 

Deferred consideration

The movements in respect of the deferred consideration value in the year to 31 December 2023 are as follows:

 



 

Level 3

 

€'000

Balance at 1 January 2023

1,705

Arising on acquisition

1,359

Cash payment

(1,054)

Foreign currency translation adjustment

(15)

Unwinding of discount on deferred consideration

3

Balance at 31 December 2023

1,998

 

Deferred consideration includes multiple deferred payments for prior acquisitions over a fixed period of time. These carry no significant observational inputs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23.  Subsidiary undertakings

 

At 31 December 2023, the Group had the following subsidiary undertakings:

 

 

Company

Group

Share %*    

Registered Office &

Country of Incorporation

Mincon International Limited

100%

Smithstown, Shannon, Co. Clare, Ireland

Manufacturer of rock drilling equipment






Mincon Rockdrills PTY Ltd

100%

8 Fargo Way, Welshpool, WA 6106, Australia

Manufacturer of rock drilling equipment






1676427 Ontario Inc. (Operating as Mincon Canada)

100%

400B Kirkpatrick Street, North Bay,

Ontario, P1B 8G5, Canada

Manufacturer of rock drilling equipment





Mincon Carbide Ltd

100%

Windsor St, Sheffield S4 7WB, United Kingdom

Manufacturer of tungsten carbide






Mincon Inc.

100%

603 Centre Avenue, N.W. Roanoke, VA 24016, USA

Sales company





Mincon Sweden AB

100%

Industrivagen 2-4, 61202 Finspang, Sweden

Sales company






Mincon Nordic OY

100%

Hulikanmutka 6, 37570 Lempäälä, Finland

Sales company






Mincon Holdings Southern Africa (Pty)

100%

1 Northlake, Jetpark 1469, Gauteng, South Africa

Sales company






ABC Products (Rocky) Pty Ltd

100%

2/57 Alexandra Street, North Rockhampton, Queensland, 4701 Australia

Sales company





Mincon West Africa SL

100%

Calle Adolfo Alonso Fernández, s/n, Parcela P-16, Planta 2, Oficina 23, Zona Franca de Gran Canaria, Puerto de la Luz, Código Postal 35008, Las Palmas de Gran Canari

 

Sales company





Mincon Poland

100%

ul.Mickiewicza 32, 32-050 Skawina, Poland

Dormant company






Mincon Canada - Western Service Centre (previously Pacific Bit of Canada)

100%

3568-191 Street, Unit 101, Surrey BC, V3Z 0P6, Canada

Sales company





 

23.  Subsidiary undertakings (continued)

 

 


 

Company

Group

Share %*    

Registered Office &

Country of Incorporation




Mincon Rockdrills Ghana Limited

100%

P.O. Box CT5105, Accra,

Ghana

Dormant company





Mincon S.A.C.

100%

Calle La Arboleda 151, Dpto 201, La Planicie, La Molina, Peru

Sales company





Ozmine International Pty Limited

100%

Gidgegannup, WA 6083, Australia

Dormant company





Mincon Chile

100%

Av. La Dehesa #1201, Torre Norte, Lo Barnechea, Santiago, Chile

Sales company





Mincon Tanzania

100%

Plot 1/3 Nyakato Road,

Mwanza, Tanzania

Dormant company





Mincon Namibia Pty Ltd

100%

Ausspannplatz, Windhoek, Namibia

Sales company






Mincon Mining Equipment Inc

100%

19789-92a Avenue, Langley, British Columbia V1M3B3, Canada

Sales company





Mincon Exports USA Inc.

100%

603 Centre Ave, Roanoke VA 24016, USA

Group finance company





Mincon International Shannon

100%

Smithstown, Shannon, Co. Clare, Ireland

Dormant company






Smithstown Holdings

100%

Smithstown, Shannon, Co. Clare, Ireland

Holding company



 

Mincon Canada Drilling Products Inc.

 

100%

 

Suite 1800-355 Burrard Street, Vancouver, BC V6C 268, Canada

Holding company


MGP Investments Limited

Holding Company

100%

Smithstown, Shannon, Co. Clare, Ireland

 

 

 




Lotusglade Limited

100%

Smithstown, Shannon, Co. Clare, Ireland

Holding company






Floralglade Company

100%

Smithstown, Shannon, Co. Clare, Ireland

Holding company






Spartan Drilling Tools

 

Manufacturing facility

 

 

 

 

 

23.  Subsidiary undertakings (continued)

 

100%

1882 US HWY 6 & 50 Fruita, CO 81507, USA

 

Company

Group

Share %*    

Registered Office &

Country of Incorporation




Castle Heat Treatment Limited

100%

Smithstown, Shannon, Co. Clare, Ireland

Holding company






Mincon Microcare Limited

100%

Smithstown, Shannon, Co. Clare, Ireland

Holding company



Driconeq AB

100%

Svetsarevägen 4, 686 33, Sunne, Sweden

 

Holding company






Driconeq Production AB

100%

Svetsarevägen 4, 686 33, Sunne, Sweden

 

Manufacturing facility






Driconeq Fastighet AB

100%

Svetsarevägen 4, 686 33, Sunne, Sweden

 

Property holding company






Driconeq Do Brasil

100%

Rua Dr. Ramiro De Araujo Filho, 348, Jundai, SP, Brasil

Sales company






Driconeq Africa Ltd

100%

Cnr of Harriet and James Bright Avenue, Driehoek. Germiston 1400

Manufacturing facility






Driconeq Australia Holdings Pty Ltd

100%

47 Greenwich Parade, AU-6031 Neerabup, WA, Australia

Holding company






Driconeq Australia Pty Ltd

100%

47 Greenwich Parade, AU-6031 Neerabup, WA, Australia

Manufacturing facility






Mincon Drill String AB

100%

Svetsarevägen 4, 686 33, Sunne, Sweden

 

Holding company



 

EURL Roc Drill

 

Sales company

 

100%

 

Rue Charles Rolland, 29650 Guerlesquin, France

 

 

Attakroc Inc

 

Sales company

 

100%

 

601, rue Adanac, Quebec, G1C 7G6, Canada

 

Mincon Quebec

 

Holding company

 

100%

 

601, rue Adanac, Quebec, G1C 7G6, Canada




*All shares held are ordinary shares.

 

 

 

 

 

 



24.  Leases

 

A.   Leases as Lessees (IFRS 16) 

 

The Group leases property, plant and equipment across its global operations.

 

Mincon Group PLC has elected to apply the practical expedient allowed under IFRS 16 for short-term leases by class of underlying asset to which the right of use relates. A class of underlying asset is a grouping of underlying assets of a similar nature and use in an entity's operations. The class of underlying assets this applies to short term leases of office equipment.

 

Information about leases for which the Group is a lessee is presented below.

 

 

i)          Right-of-use assets                                                                                                                                 

 

31 December 2022

 

€'000

Balance at 1 January 2022

5,696

Depreciation charge for the year

(2,159)

Additions to right of use assets

3,334

Disposal of right of use asset

(57)

Foreign exchange difference

(46)

Balance at 31 December 2022

6,768

 

 

31 December 2023

 

 

€'000

 

Balance at 1 January 2023

6,768

 

Depreciation charge for the year

(2,205)

 

Additions to right of use assets

1,013

 

Disposal of right of use asset

(89)

 

Foreign exchange difference

(183)

 

Balance at 31 December 2023

5,304

 

 

 

 

ii)          Amounts recognised in income statement.

 

2023

2022

 

€'000

€'000

Interest on lease liabilities

698

354

Expenses related to short term leases

5

245

Expenses related to leases of low value assets

-

10

Leases under IFRS 16

703

609

 

 

 

iii)         Amounts recognised in statement of cash flows

 

2023

2022

 

€'000

€'000

Total cash outflow for leases  

            4,194

            3,994

Total cash outflow of leases

            4,194

            3,994

 

 

 

 

 

 

 

 

 

 

24.  Leases (continued)

 

iv)         Extension options

 

Some property leases contain extension options exercisable by the Group. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group is reasonably certain it will not incur future lease liabilities beyond what is currently calculated.

 

The following table sets out a maturity analysis of lease liabilities, showing the undiscounted lease payments to be paid after the reporting date.

 

 

 

31 December 2023

 

 

€'000

Less than one year


2,068

One to two years


2,042

Two to five years


788

More than 5 years


850

Total

 

5,748

 

 

 

31 December 2022

 

 

€'000

Less than one year


2,219

One to two years


3,068

Two to five years


1,525

More than 5 years


568

Total

 

7,290

 

 

B.   Leases as Lessor (IFRS 16)

 

i)          Financing Lease

 

The Group subleased a properties that had been recognised as a right of use asset in Finland and Australia. The Group recognised income interest in the year in relation to this totalling €132,000 (2022: €193,000).

 

The Group manages the risk to retain the right to the assets as they have a right to inspect the property, the right to enforce the contractual arrangement with the lessee and the right to perform maintenance.

 

The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received after the reporting date.

 

 

31 December 2023

31 December 2022

 

€'000

€'000

Less than one year

11

147

One to two years

-

-

Balance at 31 December 

11

147

Unearned finance income

-

(10)

Total undiscounted lease receivable

11

137

 

ii)          Operating leases

                                                                                                                       

The group leases company owned property out to tenants in the USA under various agreements. The group recognises these leases as operating leases from a lessor perspective due to the fact they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. 

 

Rental income recognised by the Group during 2023 was €120,000 (2022: €180,000).

 

 

 

 

24.  Leases (continued)

 

 

B.   Leases as Lessor (IFRS 16)

 

i)          Operating leases (continued)

 

 

The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received after the reporting date.

 

 

 

31 December 2023

 

 

€'000

Less than one year


73

One to two years


30

Two to three years

 

32

Total

 

135

 

 

 

31 December 2022

 

 

€'000

Less than one year


22

Total

 

22

 

25.  Commitments

 

The following capital commitments for the purchase of property, plant and equipment had been authorised by the directors at 31 December 2023:

 

 

31 December

31 December

 

2023

2022

 

€'000

€'000

Contracted for

1,585

3,360

Not-contracted for

-

229

Total

1,585

3,589

 

 

26.  Litigation

 

The Group is not involved in legal proceedings that could have a material adverse effect on its results or financial position.

 

 

27.  Related parties

 

As at 31 December 2023, the share capital of Mincon Group plc was 56.32% 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.

 

In June 2023, the Group paid a final dividend for 2022 of €0.0105 to all shareholders. The total dividend paid to Kingbell Company was €1,256,477.

 

In December 2023, the Group paid an interim dividend for 2023 of €0.0105 to all shareholders. The total dividend paid to Kingbell Company was €1,256,477 (September 2022: €1,256,477).

 

The Group has a related party relationship with its subsidiary undertakings (see note 23) for a list of these undertakings), directors and officers. All transactions with subsidiaries eliminate on consolidation and are not disclosed.

 

 

 

 

27.  Related parties (continued)

 

Transactions with Directors

The Group is owed €Nil from directors and shareholders at 31 December 2023 and 2022. The Group has amounts owing to directors of €Nil as at 31 December 2023 and 2022.

 

Key management compensation

The profit before tax from continuing operations has been arrived at after charging the following key management compensation:

 

2023

2022

 

€'000

€'000

Short term employee benefits  

1,616

1,561

Bonus and other emoluments

24

348

Post-employment contributions  

156

149

Social security costs

117

110

Share based payment charged in the year

(160)

(153)

Total

1,753

2,015

 

The key management compensation amounts disclosed above represent compensation to those people having the authority and responsibility for planning, directing and controlling the activities of the Group, which comprises the Board of Directors and executive management (twelve in total at year end). Amounts included above are time weighted for the period of the individuals employment.

 

28.  Events after the reporting date

 

The Board of Mincon Group plc is recommending the payment of a final dividend for the year ended 31 December 2023 in the amount of €0.0105 (1.05 cent) per ordinary share, which will be subject to approval at the Annual General Meeting of the Company in May 2024. Subject to Shareholder approval at the Company's annual general meeting, the final dividend will be paid on 14 June 2024 to Shareholders on the register at the close of business on 24 May 2024.

 

29.  Approval of financial statements

 

The Board of Directors approved the consolidated financial statements on 11 March 2024.

 

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