TIDMMCON
RNS Number : 5546E
Mincon Group Plc
14 March 2022
Mincon Group plc
("Mincon" or the "Group")
2021 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 2021.
Percentage
change
in
2021 2020 period
---------------------------- -------- ------- -----------
Product revenue: EUR'000 EUR'000
Sale of Mincon product 118,802 108,556 +9.4%
Sale of third-party product 25,560 21,347 +19.7%
Total revenue 144,362 129,903 +11.1%
-------
Gross profit 48,763 45,717 +6.7%
---------------------------- -------- ------- -----------
EBITDA 25,212 24,731 +1.9%
---------------------------- -------- ------- -----------
Profit before tax 17,828 17,069 +4.4%
---------------------------- -------- ------- -----------
Financial highlights
-- Growth in revenues of 11.1% in 2021 over 2020.
o 8% like-for-like revenue growth, including growth across all
industries (mining, construction and waterwell/geothermal)
o Strong H2 performance, with revenue growth of 19% on H2 2020
as the production challenges imposed by the COVID-19 pandemic
eased.
-- Gross margin for 2021 of 33.8% (2020: 35.2%) reflected higher
freight costs and input cost inflation in the period, as well as an
increase in the sale of third-party product to compensate for
supply chain disruptions. Price increases were prudently
implemented to pass on cost increases, with further price increases
planned for Q1 2022
-- EBITDA of EUR25.2 million, an increase of 1.9% on 2020
-- Final dividend of 1.05c per ordinary share recommended,
taking the total dividend for 2021 to 2.10c per ordinary share
(2020: 2.10c per ordinary share)
Operational highlights
-- Successfully managed the logistical and material availability
challenges resulting from the pandemic, building inventory levels
to maintain product availability and strong service levels for
customers
-- Completion of two acquisitions in 2021, adding IP in subsea
drilling and distribution in eastern Canada
-- Successful on-site testing of the hydraulic Greenhammer
product and large diameter hammer system on site in Australia and
Malaysia respectively. Greenhammer achieved outstanding results and
the Group is determining the most appropriate commercialisation
route for this product
-- Disruptive Technology Innovation Fund award to a Mincon-led
consortium involved in developing a certified anchor foundation
solution for the offshore wind industry
Current trading and outlook
-- Our order books for 2022 remain healthy as the markets remain
strong. We are passing on inflationary manufacturing cost, such as
increases in energy cost, through price increases to customers. The
Group continues with the momentum from H2 2021 into 2022.
Joe Purcell, Chief Executive Officer, commenting on the results,
said:
We are very pleased to report growth in revenue and
profitability in 2021, following what was another year
characterised by challenging and uncertain market conditions due to
the COVID-19 pandemic.
The start of the year was particularly challenging due to the
impact of the pandemic, but we worked hard to mitigate the impact
by adapting our operations to suit the variable conditions. While
strict COVID-19 health measures remained in place through the year
in some areas, such as Western Australia, we still delivered a
strong performance for the year, particularly in H2 where gross
profits rose 16% on H2 2020.
Revenues
The Group continued its path of revenue growth during the year
across all our industries and finished the year ahead of 2020
revenue by 11%, with 8% of this organically and 3% through
contribution from acquisitions. Our strongest growth was in the
mining industry where our organic revenue grew by 16%. We had fewer
large construction supply contracts in 2021 versus 2020, however we
achieved growth in smaller supply contracts in Europe and the
Americas which drove overall revenue growth in the construction
industry of 7%. The Waterwell/geothermal industry recovered
somewhat from the COVID-19 impacts experienced in 2020 and the
Group took the opportunity to recover some lost ground and grew
revenue across our regions by 5% in the industry in 2021.
Profitability
As previously reported, the areas of procurement and logistics
presented challenges during the period in terms of material
availability, raw material price increases, higher freight costs
and longer transit times (for example, we observed trans-ocean
freight transit times roughly doubling in 2021). As a result, we
chose to increase inventory levels of both raw materials and
finished goods to ensure we maintain continued strong service to
our customers who use our products for business-critical
operations.
Supply chain challenges and increases in raw material prices had
an impact on our margins during the year, along with additional
operational costs brought about by the on-going pandemic. For
instance, our overall manufacturing freight cost increased by 18%.
We were also compelled to purchase local non-Mincon products to
fulfil our customer requirements when Mincon manufactured products
were subject to freight interruptions at seaports, and this also
impacted our gross margin in 2021. We have passed on price
increases to customers to offset increases in manufacturing and
delivery costs, but only when it was considered appropriate to do
so. Despite these challenges, we were able to maintain profit
growth and finished the year 1.4% ahead of prior year profit after
tax.
Our strong regional management structure and global coverage
reduced the potential impact of COVID-19 on the business and has
meant that we can continue to operate with minimal cross-regional
travel. We are keeping this situation under review, and provided
that the global situation continues in the current positive
direction, we intend to ease our restrictions on travel. It is
important to note that we will control travel expenditure carefully
and continue to leverage the strength of our global organisation
and regional hub structure.
Product Development
The pandemic impacted product development throughout 2021.
However, we achieved some important milestones towards the end of
the year:
-- Greenhammer - Our hydraulic Greenhammer ran successfully on
our own Mincon rig at a major open pit iron ore mine in
north-western Australia during the year. Stringent COVID-19
restrictions in Western Australia materially curtailed our ability
to put the outstanding results, in terms of penetration rate
increases and reliability, to commercial use. As a result, and
subject to pandemic restrictions easing in Western Australia, we
are working on alternative routes to commercialising this
transformational opportunity for the Group and the hard rock
surface mining industry. It is important to note that protecting
our hard-earned IP will be at the forefront of any agreements that
we commit to.
-- Large diameter hammer system - Another testing success was
the drilling that was carried out in Malaysia with our new large
diameter hammer system to drill 1750mm diameter rock socket
friction piles. We believe that these are the largest holes ever
drilled with a single hammer. While we need to drill more metres
using the system, the performance, which is several times faster
than the existing technology, gives us great encouragement. We
believe that there is great potential for this product globally as
the preferred method for drilling large diameter construction piles
more efficiently.
Another important milestone during the year was the Disruptive
Technology Innovation Fund award to a Mincon-led consortium
involved in developing a certified anchor foundation solution for
the offshore wind industry. We have made good progress on this
project with our consortium partners, Subsea Micropiles, University
of Limerick and University College Dublin. One of the key aspects
of the project is the self-drilling seawater powered micropile
anchor that we have designed in Mincon. A small-scale prototype has
been test drilled onsite at the Shannon plant and we are continuing
to refine this. We are also working with our partners to develop a
seabed drill rig as part of an overall system to drill, load test
and certify anchor installations at an offshore test site. The
future global requirement for offshore wind power is well
chronicled and we believe this provides a very attractive future
market for Mincon.
Acquisitions
An important contributor towards our development of the seabed
drill rig has been Hammer Drilling Rigs ("HDR"), a specialist in
the supply of hard rock drilling attachments based in the USA. HDR
has a specialism in drill mast attachments to heavy equipment that
is used in a variety of applications, including the installation of
anchor points for solar field projects. In January 2021, Mincon
acquired the intellectual property including the knowledge and
skillsets that the HDR team brings from designing and developing
bespoke rigs for terrestrial applications. This has been, and will
continue to be, very important in our subsea rig development.
There is also a growing interest in and growing order book for
the rigs and masts produced by Hammer Drilling Rigs for terrestrial
applications such as construction and solar field applications,
which will complement the consumable range that we already have
within the Group. We are very happy with the successful integration
of the engineering and production teams into our facility in
Benton, and we believe that the product range has a bright future
within the Group.
In July 2021, we acquired Attakroc, a distribution company.
Which has contributed positively to our revenue and profitability
since joining the Group. The strong customer service ethos that the
Attakroc team has brought will serve us well in our efforts to grow
our market share in the three industries that the Group serves
today in eastern Canada.
We paid a total of EUR3 million in 2021 to bring businesses into
the Group, which is inclusive of 2021 acquisitions, non-business
combinations and historical acquisitions.
Post year-end, in January 2022, we completed the acquisition of
Spartan Drill Tools, based in Fruita Colorado, which produces high
quality drill pipes and related products. This strategic
acquisition introduces this capability into the Americas region to
further strengthen our full package offering for the mining,
construction, and waterwell/geothermal markets. An important aspect
of this acquisition is that we can integrate certain aspects of
drill pipe manufacturing with available capacity and skillsets that
we already have in Benton to generate efficiencies and hence
improve our margins.
Sustainability
Our engineering focus on the efficiency of the products that we
manufacture means that we have always sought to minimise our carbon
footprint. This is more obvious on projects such as Greenhammer and
will be further emphasised by our move into renewables with solar
energy and offshore wind installations. We are also increasing
production efficiencies and are investing in new technologies in
this area to further reduce our impact on the environment. We are
in the process of conducting a detailed review of our carbon
emissions and will be reporting on this and associated reduction
targets in the first half of 2022.
As a truly global Group, we are embedded in a wide range of
cultures and communities across our operations and markets. As a
significant employer in these communities, Mincon has a meaningful
role to play in these societies and we are committed to increasing
opportunities for our employees as well as the wider
communities.
As with the carbon emissions project, we will be reporting on
Corporate Social Responsibility (CSR) initiatives, on our website,
in a more formal manner in the coming year to reflect our continued
commitment to the communities in which we operate.
Dividend
The Board of Mincon Group plc is recommending the payment of a
full year dividend for the year ended 31 December 2021 in the
amount of EUR0.0105 (1.05 cent) per ordinary share, which will be
subject to approval at the Annual General Meeting of the Company in
May 2022. Subject to Shareholder approval at the Company's annual
general meeting, the final dividend will be paid on 17 June 2022 to
Shareholders on the register at the close of business on 27 May
2022.
Concluding Comments
Since our IPO in 2013, we have been on a journey that has filled
out our product offering so that we can now supply a full range of
consumables to the mining, construction, and waterwell/geothermal
markets. Our engineering capacity has been transformed by adding to
our team through acquisition and strategic hiring.
Our desire to focus on efficiency through ambitious product
development projects that have challenged us, but which are now
poised to deliver, has built a knowledge base and honed our
abilities. These engineering skillsets can now be deployed for new
product development in existing markets as well as new areas such
as our move into the renewables space.
Our increased manufacturing capacity, combined with the global
spread of our factories and customer service centres, means that we
have created a platform for future growth. Of course, we remain
cognisant of the challenges that the COVID-19 pandemic still
presents, and we will endeavour to mitigate the effect on our
people. On that note I wish to thank our Board and investors for
their continued support, and all my colleagues for their work,
vigilance and perseverance through these challenging times and look
forward to better days ahead.
S
14 March 2022
For further information, please contact:
Mincon Group plc Tel: +353 (61) 361
099
Joe Purcell CEO
Mark McNamara CFO
Davy Corporate Finance (Nominated Adviser, Tel: +353 (1) 679
Euronext Growth Adviser and Joint Broker) 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
2021
2021 2020
Notes EUR'000 EUR'000
----------------------------------- ------- ---------- ----------
Continuing operations
Revenue 4 144,362 129,903
Cost of sales 6 (95,599) (84,186)
---------- ----------
Gross profit 48,763 45,717
Operating costs 6 (30,656) (27,468)
---------- ----------
Operating profit 18,107 18,249
Finance costs 7 (927) (857)
Finance income 20 42
Foreign exchange gain/(loss) 630 (376)
Movement on deferred consideration 23 (2) 11
Profit before tax 17,828 17,069
-----------------------------------
Income tax expense 11 (3,228) (2,683)
----------------------------------- ------- ---------- ----------
Profit for the period 14,600 14,386
----------------------------------- ------- ---------- ----------
Profit attributable to:
- owners of the Parent 14,600 14,221
- non-controlling interests 19 - 165
----------------------------------- ------- ---------- ----------
Earnings per Ordinary Share
Basic earnings per share, 21 6.87 6.72
Diluted earnings per share, 21 6.69 6.57
----------------------------------- ------- ---------- ----------
The accompanying notes are an integral part of these financial
statements.
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2021
2021 2020
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Profit for the year 14,600 14,386
Other comprehensive loss:
Items that are or may be reclassified subsequently
to profit or loss:
Foreign currency translation - foreign operations 2,865 (4,165)
Other - 156
Other comprehensive income/(loss) for the year 2,865 (4,009)
--------------------------------------------------- -------- --------
Total comprehensive income for the year 17,465 10,377
--------------------------------------------------- -------- --------
Total comprehensive income attributable to:
- owners of the Parent 17,465 10,212
- non-controlling interests - 165
--------------------------------------------------- -------- --------
The accompanying notes are an integral part of these financial
statements.
Consolidated Statement of Financial Position as at 31 December
2021
2021 2020
Notes EUR'000 EUR'000
------------------------------------- ----- ------------------ -----------------
Non-Current Assets
Intangible assets and goodwill 12 40,157 36,987
Property, plant and equipment 13 50,660 45,820
Deferred tax asset 11 1,075 1,093
Total Non-Current Assets 91,892 83,900
-------------------------------------- ----- ------------------ -----------------
Current Assets
Inventory and capital equipment 14 63,050 53,017
Trade and other receivables 15a 25,110 20,640
Prepayments and other current assets 15b 8,822 4,186
Current tax asset 521 311
Cash and cash equivalents 23 19,049 17,045
Total Current Assets 116,552 95,199
-------------------------------------- ----- ------------------ -----------------
Total Assets 208,444 179,099
-------------------------------------- ----- ------------------ -----------------
Equity
Ordinary share capital 20 2,125 2,117
Share premium 67,647 67,647
Undenominated capital 39 39
Merger reserve (17,393) (17,393)
Share based payment reserve 2,695 2,259
Foreign currency translation reserve (5,168) (8,033)
Retained earnings 94,207 86,300
-------------------------------------- ----- ------------------ -----------------
Total Equity 144,152 132,936
-------------------------------------- ----- ------------------ -----------------
Non-Current Liabilities
Loans and borrowings 18 23,265 14,789
Deferred tax liability 11 1,622 1,832
Deferred consideration 23 4,224 4,723
Other liabilities 852 503
Total Non-Current Liabilities 29,963 21,847
-------------------------------------- ----- ------------------ -----------------
Current Liabilities
Loans and borrowings 18 11,205 6,822
Trade and other payables 16 15,683 10,457
Accrued and other liabilities 16 6,027 5,529
Current tax liability 1,414 1,508
Total Current Liabilities 34,329 24,316
-------------------------------------- ----- ------------------ -----------------
Total Liabilities 64,292 46,163
-------------------------------------- ----- ------------------ -----------------
Total Equity and Liabilities 208,444 179,099
-------------------------------------- ----- ------------------ -----------------
The accompanying notes are an integral part of these financial
statements.
On behalf of the Board:
Hugh McCullough Joseph Purcell
Chairman Chief Executive Officer
Consolidated Statement of Cash Flows for the year ended 31
December 2021
2021 2020
Notes EUR'000 EUR'000
---------------------------------------------------- ------ ------------------- ---------
Operating activities:
Profit for the period 14,600 14,386
Adjustments to reconcile profit to net cash
provided by operating activities:
Depreciation 13 7,105 6,482
Amortisation of intangible assets 12 105 -
Fair value movement on deferred consideration 2 (11)
Finance cost 927 857
Finance income (20) (42)
(Gain)/Loss on sale of property, plant and
equipment (177) 18
Income tax expense 3,228 2,683
Other non-cash movements (633) 1,092
---------------------------------------------------- ------ ------------------- ---------
25,137 25,465
Changes in trade and other receivables (2,695) 919
Changes in prepayments and other assets (4,502) 1,209
Changes in inventory (7,468) (3,228)
Changes in trade and other payables 5,240 (1,812)
Cash provided by operations 15,712 22,553
Interest received 20 42
Interest paid (927) (857)
Income taxes paid (3,627) (2,389)
---------------------------------------------------- ------ ------------------- ---------
Net cash provided by operating activities 11,178 19,349
---------------------------------------------------- ------ ------------------- ---------
Investing activities
Purchase of property, plant and equipment (7,567) (7,222)
Proceeds from the sale of property, plant
and equipment 543 331
Investment in intangible assets (1,139) (1,065)
Proceeds from the issuance of share capital 8 7
Acquisitions of subsidiary, net of cash acquired (681) (7,156)
Investment in acquired intangible assets (275) -
Payment of deferred consideration (2,082) (2,460)
Proceeds from the sale of subsidiaries 111 706
Net cash used in investing activities (11,082) (16,859)
---------------------------------------------------- ------ ------------------- ---------
Financing activities
Dividends paid (6,693) (2,222)
Repayment of borrowings 18 (3,262) (1,536)
Repayment of lease liabilities (3,590) (3,455)
Drawdown of loans 18 15,236 6,622
Purchase of NCI - (1,000)
Net cash provided by/(used in) financing activities 1,691 (1,591)
---------------------------------------------------- ------ ------------------- ---------
Effect of foreign exchange rate changes on
cash 217 (222)
---------------------------------------------------- ------ ------------------- ---------
Net increase in cash and cash equivalents 2,004 677
---------------------------------------------------- ------ ------------------- ---------
Cash and cash equivalents at the beginning
of the year 17,045 16,368
---------------------------------------------------- ------ ------------------- ---------
Cash and cash equivalents at the end of the
year 19,049 17,045
---------------------------------------------------- ------ ------------------- ---------
The accompanying notes are an integral part of these financial
statemen
Consolidated Statement of Changes in Equity for the year ended
31 December 2021
Total
Share Foreign attributable
based currency to owner
Share Share Merger Un-denominated payment translation Retained of the Non-controlling Total
capital premium reserve capital reserve reserve earnings company interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------- -------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Balances at 1
January 2020 2,110 67,647 (17,393) 39 1,629 (3,868) 74,865 125,029 1,115 126,144
-------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Comprehensive
income:
Profit for the
year - - - - - - 14,221 14,221 165 14,386
Other
comprehensive
income/(loss):
Foreign currency
translation - - - - - (4,165) - (4,165) - (4,165)
Other - - - - - - 156 156 - 156
------------- -------- ------------ --------------- -------
Total
comprehensive
income (4,165) 14,377 10,212 165 10,377
------------- -------- ------------ --------------- -------
Transactions
with
Shareholders:
Issuance of
share capital 7 - - - - - - 7 - 7
Share based
payments - - - - 630 - - 630 - 630
Dividends - - - - - - (2,222) (2,222) - (2,222)
-------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Total
transactions
with
Shareholders 7 - - - 630 - (2,222) (1,585) - (1,585)
-------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Acquisition of
non-Controlling
Interest
without a
change
in control
(note 18) - - - - - - (720) (720) (1,280) (2,000)
Balances at 31
December
2020 2,117 67,647 (17,393) 39 2,259 (8,033) 86,300 132,936 - 132,936
---------------- -------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Comprehensive
income:
Profit for the
year - - - - - - 14,600 14,600 - 14,600
Other
comprehensive
income/(loss):
Foreign currency
translation - - - - - 2,865 - 2,865 - 2,865
Total
comprehensive
income 2,865 14,600 17,465 - 17,465
------------- -------- ------------ --------------- -------
Transactions
with
Shareholders:
Issuance of
share capital 8 - - - - - - 8 - 8
Share-based
payments - - - - 436 - - 436 - 436
Dividends - - - - - - (6,693) (6,693) - (6,693)
-------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Total
transactions
with
Shareholders 8 - - - 436 - (6,693) (6,249) - (6,249)
-------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
Balances at 31
December
2021 2,125 67,647 (17,393) 39 2,695 (5,168) 94,207 144,152 - 144,152
---------------- -------- ------- -------- -------------- ------- ------------- -------- ------------ --------------- -------
The accompanying notes are an integral part of these financial
statements. See note 20 for explanation of movements in reserve
balances.
Notes to the 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 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 2021 and 31 December
2020.
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 Group has initially
adopted Interest rate Benchmark Reform- Phase 2 (Amendments to IFRS
9, IAS 39, IFRS7, IFRS 4 and IFRS 16) and it has not had a significant
impact on the Groups financial statements.
The following new and amended standards are not expected to have a
significant impact on the Group's consolidated financial statements:
Effective 01/04/2021
-- COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment
to IFRS 16)
Effective 01/01/2022
-- Annual Improvements to IFRS Standards 2018-2020.
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments
to IAS 16).
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to
IAS 37)
-- Reference to Conceptual Framework (Amendments to IFRS 3).
3. Significant accounting principles, accounting estimates and judgements
(continued)
Effective 01/01/2023
-- Classification of Liabilities as Current or Non-current (Amendments
to IAS 1).c
-- IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance
Contracts.
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2).
-- Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12)
-- Definition of Accounting Estimates (Amendments to IAS 8).
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.
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.
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 calcu-lated 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.
3. Significant accounting principles, accounting estimates and
judgements (continued)
Taxation (continued)
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:
-- temporary differences on the initial recognition of assets or
liabilities in a transaction that is 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.
Leases
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.
3. Significant accounting principles, accounting estimates and
judgements (continued)
Leases (continued)
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.
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.
3. Significant accounting principles, accounting estimates and
judgements (continued)
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 receiv-ables 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
compre-hensive income for the translation of intra-group
receivables from, or liabilities to, a for-eign 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 23.
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.
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.
3. Significant accounting principles, accounting estimates and
judgements (continued)
Business combinations and consolidation (continued)
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.
Financial Assets and Liabilities
Recognition and derecognition
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. 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. The Group derecognises (fully or partially)
a financial liability when the obligation specified in the contract
is discharged or otherwise expires. 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.
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the
relevant periods. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument, or when
appropriate a shorter period, to the net carrying amount of the
financial asset or financial liability. The calculation includes
all fees and points paid or received between parties to the
contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.
Borrowing costs
All borrowing costs are expensed in accordance with the
effective interest rate method.
Investments in subsidiaries - Company
Investments in subsidiary undertakings are stated at cost less
provision for impairment in the Company's statement of financial
position. Loans to subsidiary undertakings are initially recorded
at fair value in the Company statement of financial position and
subsequently at amortised cost using an effective interest rate
methodology.
3. Significant accounting principles, accounting estimates and
judgements (continued)
Financial Assets and Liabilities ( continued)
Impairment of financial assets
Financial assets are assessed at each reporting date to
determine whether there is any objective evidence that they are
impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that
asset.
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.
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
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.
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.
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.
3. Significant accounting principles, accounting estimates and
judgements (continued)
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.
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
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.
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. 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.
2021 2020
EUR'000 EUR'000
---------------------------- ------- -------
Product revenue:
Sale of Mincon product 118,802 108,556
Sale of third party product 25,560 21,347
Total revenue 144,362 129,903
---------------------------- ------- -------
5. Operating Segment
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. The
Group is managed as a single business unit that sells drilling
equipment, primarily manufactured by Mincon manufacturing
sites.
The CODM assesses operating segment performance based on
operating profit. Segment revenue for the year ended 31 December
2021 of EUR144.4 million (2020: EUR129.9 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):
2021 2020
EUR'000 EUR'000
----------------------------------------- ------- -------
Region:
I reland 1,859 1,487
Americas 45,908 43,640
Australasia 17,327 24,754
Europe, Middle East, Africa 79,268 60,022
Total revenue from continuing operations 144,362 129,903
----------------------------------------- ------- -------
During 2021, Mincon had sales in the USA of EUR24.4 million
(2020: EUR24.7 million), Australia of EUR14.7 million (2020:
EUR14.6 million, these separately contributed to more than 10% of
the entire Group's sales for 2021.
Non-current assets by region (location of assets):
2021 2020
EUR'000 EUR'000
Region:
Americas 14,682 11,310
Australasia 11,838 11,338
Europe, Middle East, Africa 64,297 60,159
Total non-current assets(1) 90,817 82,807
---------------------------------------------------- ------- -------
(1) Non-current assets exclude deferred tax assets.
During 2021, Mincon held non-current assets (excluding deferred
tax assets) in Ireland of EUR18.3 million (2020: EUR18.3 million),
in the USA of EUR10.7 million (2020: EUR9.4 million) these
separately contributed to more than 10% of the entire Group's
non-current assets (excluding deferred tax assets) for 2021.
6. Cost of Sales and operating expenses
Included within cost of sales and operating costs were the
following major components:
Cost of sales
2021 2020
EUR'000 EUR'000
------------------------------ ------- -------
Raw materials 37,081 32,860
Third party product purchases 19,275 16,098
Employee costs 19,764 17,504
Depreciation (note 13) 4,801 4,216
In bound costs on purchases 3,772 3,106
Energy costs 2,188 1,623
Maintenance of machinery 1,711 1,392
Subcontracting 5,463 5,364
Other 1,544 2,023
Total cost of sales 95,599 84,186
------------------------------ ------- -------
The Group invested approximately EUR3.9 million on research and
development projects in 2021 (2020: EUR3.7 million). EUR2.8 million
of this has been expensed in the period (2020: EUR2.6 million),
with the balance of EUR1.1 million of development costs capitalised
(2020: EUR1.1 million) (note 12).
Operating costs
2021 2020
EUR'000 EUR'000
----------------------------------------------- ------- -------
Employee costs (including director emoluments) 18,615 17,438
Depreciation (note 13) 2,304 2,266
Amortisation of acquired IP 105 -
Travel 1,238 964
Professional costs 2,589 2,291
Administration 2,841 2,007
Marketing 694 542
Legal cost 629 878
Other 1,641 1,082
Total other operating costs 30,656 27,468
----------------------------------------------- ------- -------
The Group recognised EUR450,000 in Government Grants in 2021
(2020: EUR1.3 million). These grants differ in structure from
country to country, they primarily relate to personnel costs.
Included in professional costs are acquisition costs of
EUR63,000, relating to acquisition of Attakroc and the acquisition
of the IP of Campbell's Welding and Fabrication. Also included in
professional fees is costs relating to the Non-Business Combination
of Hammer Drill Rigs.
7. Finance costs
2021 2020
EUR'000 EUR'000
--------------------------------- ------- -------
Interest on lease liabilities 684 741
Interest on loans and borrowings 243 116
--------------------------------- ------- -------
Finance costs 927 857
--------------------------------- ------- -------
8. Employee information
2021 2020
EUR'000 EUR'000
--------------------------------------------------------- -------- -------
Wages and salaries - excluding directors 31,830 28,753
Wages, salaries, fees and retirement benefit - directors
(note 10) 797 795
Social security costs 3,357 3,029
Retirement benefit costs of defined contribution
plans 1,959 1,735
Share based payment expense (note 22) 436 630
Total employee costs 38,379 34,942
--------------------------------------------------------- -------- -------
In addition to the above employee costs, the Group capitalised payroll
costs of EUR700,000 in 2021 (2020: 500,000) in relation to development.
At 31 December 2021, there was EUR256,000 (2020: EUR219,000) accrued
for and not in paid pension contributions.
The average number of employees was as follows:
2021 2020
Number Number
---------------------------------------------------------- -------- -------
Sales and distribution 136 126
General and administration 75 66
Manufacturing, service and development 383 360
---------------------------------------------------------- -------- -------
Average number of persons employed 594 552
---------------------------------------------------------- -------- -------
Retirement benefit and Other Employee Benefit Plans
The Group operates various defined contribution retirement
benefit plans. During the year ended 31 December 2021, the Group
recorded EUR2 million (2020: EUR1.7 million) of expense in
connection with these plans.
9. Acquisitions & Disposals
In June 2021, Mincon acquired the business of Campbell's Welding
& Fabrication, for a consideration of EUR421,000. This was made
up of a cash consideration of EUR84,000 and deferred consideration
of EUR337,000. Mincon acquired Campbell's Welding & Fabrication
to bring in-house their knowhow and processes.
In June 2021, Mincon acquired 100% shareholding in Attakroc, a
Canadian-based mining and construction product distributor, for a
consideration of EUR1.8 million. The Group acquired Attakroc to
bring in-house their vast experience in selling and servicing the
mining and construction industries in western Canada. Attakroc
brings their knowledge of the local market conditions and give
Mincon a distinctive advantage in this region. The transaction
included a cash consideration of EUR600,000 and deferred
consideration of EUR1.2 million.
A. Consideration transferred
The following table summarises the acquisition date fair value
of each major class of consideration transferred.
Campbell Attakroc Total
Welding
& Fabrication
EUR'000 EUR'000 EUR'000
--------------------------------- --------------- --------- --------
Cash 84 597 681
Deferred consideration 337 1,227 1,564
Total consideration transferred 421 1,824 2,245
----------------------------------- --------------- --------- --------
9. Acquisitions & Disposals (continued)
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
EUR'000
----------------------------------------------- ---------------
Property, plant and equipment 176
Right of use assets 39
Inventories 958
Trade receivables 1,174
Other assets 15
Trade and other payables (699)
Right of use liabilities (39)
Other accruals and liabilities (615)
Fair value of identifiable net assets acquired 1,009
----------------------------------------------- ---------------
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 Market comparison technique and cost technique: The valuation
and equipment 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.
----------- ------------------------------------------------------------
Goodwill
Goodwill arising from the acquisition has been recognised as
follows.
Attakroc Total
EUR'000 2021
EUR'000
--------------------------------------- --------- ---------
Consideration transferred 1,824 1,824
Fair value of identifiable net assets (1,009) (1,009)
--------------------------------------- --------- ---------
Goodwill 815 815
--------------------------------------- --------- ---------
10. Statutory and other required disclosures
Operating profit is stated after charging the following 2021 2020
amounts:
EUR'000 EUR'000
-------------------------------------------------------- ---------------- ---------------
Directors' remuneration
Fees 220 165
Wages and salaries 522 574
Retirement benefit contributions 55 56
-------------------------------------------------------- ---------------- ---------------
Total directors' remuneration 797 795
-------------------------------------------------------- ---------------- ---------------
Auditor's remuneration 2021 2020
EUR'000 EUR'000
----------------------------------------------------- -------- --------
Auditor's remuneration - Fees payable to lead audit
firm
Audit of the Group financial statements 205 205
Audit of the Company financial statements 15 15
Other assurance services 20 20
240 240
----------------------------------------------------- -------- --------
Auditor's remuneration - Fees payable to other firms
in lead audit firm's network
Audit services 149 112
Other assurance services 3 2
Tax advisory services - 9
Total auditor's remuneration 152 123
----------------------------------------------------- -------- --------
11. Income tax
Tax recognised in income statement:
2021 2020
Current tax expense EUR'000 EUR'000
-------------------------------------------------- ------- --------
Current year 3,427 3,224
Adjustment for prior years (7) (103)
-------------------------------------------------- ------- --------
Total current tax expense 3,420 3,121
-------------------------------------------------- ------- --------
Deferred tax expense
Origination and reversal of temporary differences (192) (438)
Adjustment for prior years - -
Total deferred tax expense (192) (438)
-------------------------------------------------- ------- --------
Total income tax expense 3,228 2,683
-------------------------------------------------- ------- --------
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:
2021 2020
EUR'000 EUR'000
------------------------------------------------------ ------- -------
Profit before tax from continuing operations 17,828 17,069
Irish standard tax rate (12.5%) 12.5% 12.5%
Taxes at the Irish standard rate 2,229 2,134
Foreign income at rates other than the Irish standard
rate 691 849
Losses created/(utilised) 277 (843)
Other 31 543
------------------------------------------------------ ------- -------
Total income tax expense 3,228 2,683
------------------------------------------------------ ------- -------
The Group's net deferred taxation liability was as follows:
2021 2020
EUR'000 EUR'000
------------------------------------- ------- --------
Deferred taxation assets:
Reserves, provisions and tax credits 741 585
Accrued income - 31
Tax losses and unrealised FX gains 334 477
Total deferred taxation asset 1,075 1,093
------------------------------------- ------- --------
Deferred taxation liabilities:
Property, plant and equipment (1,332) (1,780)
Profit not yet taxable (290) (52)
Total deferred taxation liabilities (1,622) (1,832)
------------------------------------- ------- --------
Net deferred taxation liability (547) (739)
------------------------------------- ------- --------
11. Income tax (continued)
The movement in temporary differences during
the year were as follows:
Balance Recognised Acquired in Balance
in a
1 January Profit or Business combination 31 December
Loss
1 January 2020 - 31 December
2020 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------------ --------- ---------- -------------------- ------------
Deferred taxation assets:
Reserves, provisions and tax
credits 610 (25) - 585
Accrued income - 31 - 31
Tax losses 6 471 - 477
------------------------------------ --------- ---------- -------------------- ------------
Total deferred taxation asset 616 477 - 1,093
------------------------------------ --------- ---------- -------------------- ------------
Deferred taxation liabilities:
Property, plant and equipment (1,742) (38) - (1,780)
Profit not yet taxable (52) - - (52)
------------------------------------ --------- ---------- -------------------- ------------
Total deferred taxation liabilities (1,794) (38) - (1,832)
------------------------------------ --------- ---------- -------------------- ------------
Net deferred taxation liability (1,178) 439 - (739)
------------------------------------ --------- ---------- -------------------- ------------
Balance Recognised Acquired in Balance
in a
1 January Profit or Business combination 31 December
Loss
1 January 2021 - 31 December
2021 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------------ --------- ---------- -------------------- ------------
Deferred taxation assets:
Reserves, provisions and tax
credits 585 156 - 741
Accrued income 31 (31) - -
Tax losses 477 (143) - 334
------------------------------------ --------- ---------- -------------------- ------------
Total deferred taxation asset 1,093 (18) - 1,075
------------------------------------ --------- ---------- -------------------- ------------
Deferred taxation liabilities:
Property, plant and equipment (1,780) 448 - (1,332)
Profit not yet taxable (52) (238) - (290)
------------------------------------ --------- ---------- -------------------- ------------
Total deferred taxation liabilities (1,832) 210 - (1,622)
------------------------------------ --------- ---------- -------------------- ------------
Net deferred taxation liability (739) 192 - (547)
------------------------------------ --------- ---------- -------------------- ------------
Deferred taxation assets have not been recognised in respect of
the following items:
2021 2020
EUR'000 EUR'000
----------- ------- --------
Tax losses 566 843
Total 566 843
----------- ------- --------
12. Intangible assets and goodwill
Acquired
intellectual
Product development Goodwill property Total
EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------------- ------------------- --------- -------------- --------
Balance at 1 January 2020 4,782 27,155 - 31,937
-------------------------------------- ------------------- --------- -------------- --------
Internally developed 1,065 - - 1,065
-------------------------------------- ------------------- --------- -------------- --------
Acquisitions - 4,533 - 4,533
-------------------------------------- ------------------- --------- -------------- --------
Translation differences - (548) - (548)
-------------------------------------- ------------------- --------- -------------- --------
Balance at 31 December 2020 5,847 31,140 - 36,987
-------------------------------------- ------------------- --------- -------------- --------
Internally developed 1,139 - - 1,139
-------------------------------------- ------------------- --------- -------------- --------
Acquisitions (note 10) - 815 - 815
-------------------------------------- ------------------- --------- -------------- --------
Acquired intellectual property - - 696* 696
-------------------------------------- ------------------- --------- -------------- --------
Amortisation of intellectual property - - (105) (105)
-------------------------------------- ------------------- --------- -------------- --------
Translation differences - 590 35 625
-------------------------------------- ------------------- --------- -------------- --------
Balance at 31 December 2021 6,986 32,545 626 40,157
-------------------------------------- ------------------- --------- -------------- --------
* Included is EUR275,000 for the Non-Business Combination of
Hammer Drilling Rigs in January 2021. Also included is the
acquisition of the IP of Campbell Welding & Fabrication
EUR421,000.
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 and 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 Group accounts for acquisitions using the purchase
accounting method as outlined in IFRS 3 Business Combinations.
The businesses acquired were integrated with other Group
operations soon after acquisition. Impairment testing (including
sensitivity analysis) is performed at each period end. Group
management has determined that the Group has one cash generating
unit and one operating segment and therefore all goodwill is tested
for impairment at Group level.
The recoverable amount of goodwill has been assessed based on
estimates of fair value less costs to sell (FVLCS). The FVLCS
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.
12. Intangible assets and goodwill (continued)
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 cost to sell by EUR42.9 million (2020: EUR68.4
million), giving management substantial 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:
2021 2020
----------------------------------- -------------- ---------
WACC 9.60% 10.50%
EBIDTA margin 16.69% 17.84%
Long term growth rate 2.24% 2.25%
EUR7.1
Terminal value capital expenditure EUR9.3 million 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
8.70% to 10.50%. This results in a midpoint WACC being used of
9.6%.
The Long term growth rate of 2.24% 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 16.69% for 2024 is assumed in
the Terminal Value calculation used to arrive at the FVLCS.
Terminal value capital expenditure assumes no balance sheet
growth is assumed in the terminal value, capital expenditure is
assumed to equal depreciation of EUR9.3 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.
2021 2020
---------------------- ------ -------
WACC 10.60% 13.28%
Long term growth rate 1.48% 1.50%
---------------------- ------ -------
Investment expenditure of EUR1.1 million, which has been
capitalised, is in relation to ongoing product development within
the Group. Amortisation will begin at the stage of
commercialisation and charged to the income statement over a period
of three to five years, or the capitalised amount will be written
off if the project is deemed no longer viable by management.
13. Property, plant and equipment
Land & Plant & ROU
Buildings Equipment Assets Total
EUR'000 EUR'000 EUR'000 EUR'000
------------------------------------------- --------- --------- -------- --------
Cost:
At 1 January 2020 16,228 45,829 4,832 66,889
------------------------------------------- --------- --------- -------- --------
Acquisitions through business combinations 95 2,542 3,385 6,022
Additions 387 6,835 102 7,324
Disposals and derecognition of ROU
assets - (2,282) (1,199) (3,481)
Foreign exchange differences (419) (1,384) (233) (2,036)
At 31 December 2020 16,291 51,540 6,887 74,718
------------------------------------------- --------- --------- -------- --------
Acquisitions through business combinations - 176 39 215
Additions 1,524 6,043 3,419 10,986
Disposals and derecognition of ROU
assets (264) (570) (1,022) (1,856)
Foreign exchange differences 496 1,586 122 2,204
At 31 December 2021 18,047 58,775 9,445 86,267
------------------------------------------- --------- --------- -------- --------
Accumulated depreciation:
At 1 January 2020 (3,027) (21,346) (1,344) (25,717)
------------------------------------------- --------- --------- -------- --------
Charged in year (461) (4,205) (1,816) (6,482)
Disposals - 1,969 432 2,401
Foreign exchange differences 68 750 82 900
--------- --------- -------- --------
At 31 December 2020 (3,420) (22,832) (2,646) (28,898)
------------------------------------------- --------- --------- -------- --------
Charged in year (524) (4,685) (1,896) (7,105)
Disposals 18 450 866 1,334
Foreign exchange differences (79) (786) (73) (938)
------------------------------------------- --------- --------- -------- --------
At 31 December 2021 (4,005) (27,853) (3,749) (35,607)
------------------------------------------- --------- --------- -------- --------
Carrying amount: 31 December 2021 14,042 30,922 5,696 50,660
------------------------------------------- --------- --------- -------- --------
Carrying amount: 31 December 2020 12,871 28,708 4,241 45,820
------------------------------------------- --------- --------- -------- --------
Carrying amount: 1 January 2020 13,201 24,483 3,488 41,172
------------------------------------------- --------- --------- -------- --------
ROU assets includes Property of EUR5 million (2020: EUR3.6
million) and Plant and Equipment of EUR700,000 (2020: EUR1.1
million).
The depreciation charge for property, plant and equipment is
recognised in the following line items in the income statement:
2021 2020
EUR'000 EUR'000
-------------------------------------------------- ------- --------
Cost of sales 4,413 3,744
Cost of sales ROU assets 388 472
Operating expenses 796 922
Operating expenses ROU asset 1,508 1,344
Total depreciation charge for property, plant and
equipment 7,105 6,482
-------------------------------------------------- ------- --------
14. Inventory and capital equipment
2021 2020
EUR'000 EUR'000
------------------ ------- --------
Finished goods 42,396 34,120
Work-in-progress 9,596 8,206
Raw materials 11,058 10,187
Capital equipment - 504
------------------ ------- --------
Total inventory 63,050 53,017
------------------ ------- --------
The Group recorded an impairment of EUR22,000 against inventory
to take account of net realisable value during the year ended 31
December 2021 (2020: EUR80,000). Write-downs are included in cost
of sales.
At 31 December 2020, capital equipment are rigs held in South
Africa for resale, during 2021 these rigs were sold.
15. Trade and other receivables and other current assets
a) Trade and other receivables
2020 2020
EUR'000 EUR'000
-------------------------------- ------- --------
Gross receivable 26,047 21,830
Provision for impairment (937) (1,190)
Net trade and other receivables 25,110 20,640
-------------------------------- ------- --------
Provision
for impairment
EUR'000
------------------------------------------------------------ ----------------
Balance at 1 January 2021 (1,190)
Reduction in provision arising from prior years receivables
impairment 136
Reduction in ECL model 117
Balance at 31 December 2021 (937)
------------------------------------------------------------ ----------------
The following table provides the information about the exposure
to credit risk and ECL's for trade receivables as at 31 December
2021.
Weighted Gross Loss allowance
average carrying ....
loss rate amount EUR'000
% EUR'000
Current (not past due) 1% 19,804 198
1-30 days past due 5% 3,749 187
31-60 days past due 14% 1,649 230
61 to 90 days 17% 628 106
More than 90 days past due 100% 216 216
-------------------------------- ---------- ---------------
Net trade and other receivables 26,047 937
-------------------------------- ---------- ---------------
The following table provides the information about the exposure
to credit risk and ECL's for trade receivables as at 31 December
2020.
Weighted Gross Loss allowance
average carrying ....
loss rate amount EUR'000
% EUR'000
Current (not past due) 2% 12,709 254
1-30 days past due 5% 5,169 258
31-60 days past due 14% 1,350 189
61 to 90 days 9% 2,312 199
More than 90 days past due 100% 290 290
-------------------------------- ---------- ---------------
Net trade and other receivables 21,830 1,190
-------------------------------- ---------- ---------------
15. Trade and other receivables and other current assets
(continued)
b) Prepayments and other current assets
2021 2020
EUR'000 EUR'000
------------------------------------- -------- -------
Plant and machinery prepaid 5,781 1,597
Prepayments and other current assets 3,041 2,589
Prepayments and other current assets 8,822 4,186
------------------------------------- -------- -------
16. Trade creditors, accruals and other liabilities
2021 2020
EUR'000 EUR'000
----------------------------------- -------- -------
Trade creditors 15,683 10,457
Total creditors and other payables 15,683 10,457
----------------------------------- -------- -------
2021 2020
EUR'000 EUR'000
------------------------------------- -------- -------
VAT 31 390
Social security costs 768 1,088
Other accruals and liabilities 5,228 4,051
Total accruals and other liabilities 6,027 5,529
------------------------------------- -------- -------
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).
2021 2020
EUR'000 EUR'000
-------------------------------- --------- --------
Total liabilities (64,292) (46,163)
Less: cash and cash equivalents 19,049 17,045
Net debt (45,243) (29,118)
-------------------------------- --------- --------
Total equity 144,152 132,936
-------------------------------- --------- --------
Net debt to equity ratio 0.31 0.22
-------------------------------- --------- --------
18. Loans and borrowings
2021 2020
Maturity EUR'000 EUR'000
-------------------------------------- ------- --------
Bank loans 2022-2036 23,391 11,090
Lease Liabilities 2022-2031 11,079 10,521
Total loans and borrowings 34,470 21,611
------- --------
Current 11,205 6,822
------- --------
Non-current 23,265 14,789
------- --------
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 EUR10.5
million (2020: EUR4 million) carry restrictive financial covenants
including, EBITA to be no less than EUR18 million at end of each
reporting period, interest cover to be 3:1 and to maintain a
minimum cash balance of EUR5 million.
Interest rates on current borrowings are at an average rate of
4.64%
During 2021, the Group availed of the option to enter into
overdraft facilities and to draw down loans of EUR15.2 million,
EUR12.4 million in loans and EUR2.8 million in overdraft
facilities. At 31 December 2021, Mincon Group has EUR2.5 million to
drawdown on existing loan facilities.
Loans are repayable in line with their specific terms, the Group
has one bullet repayment due in 2026 of EUR5 million.
Reconciliation of movements of liabilities to cash flows arising
from financing activities
Balance Arising Cash movements Non-cash Foreign Balance
at 1 January from acquisition movements exchange at 31
2021 differences December
2021
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------- ------------- ----------------- -------------- ---------- ------------ ---------
Loans and borrowings 11,090 83 11,974 - 244 23,391
Lease liabilities 10,521 39 (3,590) 3,943 166 11,079
Total 21,611 122 8,384 3,943 410 34,470
--------------------- ------------- ----------------- -------------- ---------- ------------ ---------
Interest Effective
rate range interest
rate
---------------------------------------------------------------------------------------------- ----------- ---------
Bank
loans........................................................................................
................................. 1% - 7.8% 3.4%
Lease
Liabilities..................................................................................
............................... 2% - 15% 5.4%
---------------------------------------------------------------------------------------------- ----------- ---------
19. Non-controlling interest
The following table summarises the information relating to the
Group's subsidiary, Mincon West Africa SL, Mincon Group plc
acquired the additional 20% interest in the voting shares of Mincon
West Africa on 1 October 2020, increasing its ownership interest to
100%.
2021 2020
Non-controlling Interest 20% EUR'000 EUR'000
------------------------------- -------- -------
Non-current assets - -
Current assets - -
Non-current liabilities - -
Current liabilities - -
------------------------------- -------- -------
Net assets - -
------------------------------- -------- -------
Net assets attributable to NCI - -
------------------------------- -------- -------
Revenue - 6,919
------------------------------- -------- -------
Profit - 826
------------------------------- -------- -------
OCI - -
------------------------------- -------- -------
Total comprehensive income - 826
------------------------------- -------- -------
Profit allocated to NCI - 165
------------------------------- -------- -------
20. Share capital and reserves
At 31 December 2021
Authorised Share Capital Number EUR000
-------------------------------- ----------- ------
Ordinary Shares of EUR0.01 each 500,000,000 5,000
Allotted, called-up and fully paid up shares Number EUR000
--------------------------------------------- ----------- ------
Ordinary Shares of EUR0.01 each 212,472,414 2,125
2021 2020
-------------------------------- ------------ -----------
Opening Share Capital 211,675,02 210,973,102
Share Awards vested during year 797,390 701,922
Authorised Share Capital 212,472,414 211,675,024
-------------------------------- ------------ -----------
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 2021, Mincon Group plc paid a final dividend for 2020 of
EUR0.021 (2.10 cent) per ordinary share (EUR4.5 million).
In September 2021, Mincon Group plc paid an interim dividend in
the amount of EUR0.0105 (1.05 cent) per ordinary share (EUR2.2
million total payment), which was paid to shareholders on the
register at the close of business on 20 August 2021.
The Directors recommend the payment of a final dividend of
EUR0.0105 (1.05 cent) per share for the year ended 31 December 2021
(31 December 2020: 1.05 cent per share).
20. Share capital and reserves (continued)
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.
21. 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:
2021 2020
Numerator (amounts in EUR'000):
Profit attributable to owners of the Parent 14,600 14,221
Denominator (Number):Basic shares outstanding
Restricted share awards
Diluted weighted average shares outstanding 212,472,414 211,675,024
----------------------------------------------
5,820,000 4,825,517
218,292,414 216,500,544
---------------------------------------------- ----------- -----------
Earnings per Ordinary Share
Basic earnings per share, EUR 6,87 6.72
Diluted earnings per share, EUR 6.69 6.57
-----------
22. 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.
i. Share Awards
In March 2021, 516,128 Restricted Share Awards (RSAs) met the
vesting conditions set down by the board of directors and were
allotted to the recipients of the awards.
In April 2021, a further 281,261 Restricted Share Awards (RSAs)
met the vesting conditions set down by the board of directors and
were allotted to the recipients of the awards.
Number of
Awards
Reconciliation of outstanding share awards in thousand
--------------------------------------------- ------------
Outstanding on 1 January 2021 844
Forfeited during the year (47)
Exercised during the year (797)
Granted during the year -
Outstanding at 31 December 2021 -
--------------------------------------------- ------------
22. Share based payment (continued)
ii. Share Options
During the year ended 31 December 2021, the Remuneration
Committee made a grant of approximately 2,060,000 Restricted Share
Options (RSAs) to members of the senior management team.
Number of
Options
Reconciliation of outstanding share options in thousands
--------------------------------------------- --------------
Outstanding on 1 January 2021 3,981
Forfeited during the year (221)
Exercised during the year -
Granted during the year 2,060
Outstanding at 31 December 2021 5,820
--------------------------------------------- --------------
2021 Conditional Award 2020 Conditional Award
LTIP Scheme at Grant Date at Grant Date
---------------------------------- ---------------------- -----------------------
Conditional Award Invitation date April 2021 April 2020
Year of Potential vesting 2024/2028 2023/2027
Share price at grant date EUR1.35 EUR0.80
Exercise price per share/share
options EUR1.35 EUR0.80
Expected Volatility 36.57% 36.81%
Expected life 7 years 7 years
Risk free rate (0.53%) (0.50%)
Expected dividend yield 1.58% 2.53%
Fair value at grant date EUR0.39 EUR0.21
Valuation model Black & Scholes Model Black & Scholes Model
23. 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 2021 and
31 December 2020 were as follows:
2021 2020
EUR'000 EUR'000
-------------------------- ------- -------
Cash and cash equivalents 19,049 17,045
Loans and borrowings 34,470 21,611
Shareholders' equity 144,152 132,936
-------------------------- ------- -------
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 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.
23. 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
2021 2020
EUR'000 EUR'000
----------------------------------------------------- ----------- -----------
Ireland 4,760 1,870
Americas 3,136 2,989
Australasia 1,108 1,723
Europe, Middle East, Africa 10,045 10,463
----------------------------------------------------- ----------- -----------
Total cash, cash equivalents and short term deposits 19,049 17,045
----------------------------------------------------- ----------- -----------
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 Total Undiscounted Less More
Value of contractual than than
Cash Flows
Cash Flows 1 Year 1-3 Years 3-5 Years 5 Years
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------- ---------- ------------------ -------------------- --------- --------- -------------------
At 31 December
2020:
Deferred
consideration 4,723 4,803 2,068 2,252 370 113
Loans and
borrowings 11,090 11,313 3,666 3,991 1,937 1,719
Lease liabilities 10,521 10,742 3,155 5,534 1,936 117
Trade and other
payables 10,457 10,457 10,457 - - -
Accrued and other
financial
liabilities 5,529 5,529 5,529 - - -
------------------- ---------- ------------------ -------------------- --------- --------- -------------------
Total at 31
December 2020 42,320 42,844 24,875 11,777 4,243 1,949
------------------- ---------- ------------------ -------------------- --------- --------- -------------------
At 31 December
2021:
Deferred
consideration 4,224 4,281 2,319 1,759 203 -
Loans and
borrowings 23,391 23,866 7,565 7,163 4,409 4,729
Lease liabilities 11,079 11,302 3,640 5,249 1,699 714
Trade and other
payables 15,683 15,683 15,683 - - -
Accrued and other
financial
liabilities 6,027 6,027 6,027 - - -
------------------- ---------- ------------------ -------------------- --------- --------- -------------------
Total at 31
December 2021 60,404 61,159 35,234 14,171 6,311 5,443
------------------- ---------- ------------------ -------------------- --------- --------- -------------------
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.
23. Financial risk management (continued)
b) Foreign currency risk (continued)
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 when
compared year on year. During 2021, currencies were volatile due to
the COVID-19 Global pandemic, however the euro remained relatively
steady against all major currencies the Group trades in.
-- The US dollar increased by 7% against the closing 2020 euro
rate (2020 decrease of 9% against 2019).
-- The Australian dollar increased by 2% against the closing
2020 euro rated (2020 remained flat against 2019).
-- The South African rand remained flat against the closing 2020
euro rated (2020 decrease of 14% against 2019).
-- The Swedish Krona has decreased 2% against the closing 2020
euro rated (2020 increase of 4% against 2019).
In 2021, 54% (2020: 57%) of Mincon's revenue EUR144 million
(2020: EUR130 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 EUR4.8 million
was held in US dollar (USD 5.5 million), EUR2.5 million was held in
Swedish krona (SEK 25.6 million) and the euro equivalent of EUR1.1
million was held in Australian dollar (AUD 1.7 million).
2021 2020
Euro exchange rates Closing Average Closing Average
US Dollar 1.13 1.18 1.22 1.14
Australian Dollar 1.56 1.57 1.59 1.66
South African Rand 18.06 17.47 17.91 18.76
Swedish Krona 10.26 10.14 10.06 10.48
-------------------- ------- -------- -------- --------
23. Financial risk management (continued)
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.
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.
The maximum exposure to credit risk for trade and other
receivables at 31 December 2021 and 31 December 2020 by geographic
region was as follows:
2021 2020
EUR'000 EUR'000
---------------------------- ------- -------
Americas 7,969 7,298
Australasia 3,330 2,540
Europe, Middle East, Africa 13,811 10,802
Total amounts owed 25,110 20,640
---------------------------- ------- -------
d) Interest rate risk
Interest Rate Risk on financial liabilities
There were no significant changes in interest rates during 2021 and
therefore there was no significant impact. Movements in interest rates
had no significant impact on our financial liabilities or finance
cost recognised in either 2020 or 2021.
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.
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.
f) Deferred consideration
The movements in respect of the deferred consideration value in
the year to 31 December 2021 are as follows:
Deferred
consideration
EUR'000
------------------------------------------------ --------------
Balance at 1 January 2021 4,723
Arising on acquisition 1,564
Cash payment (2,082)
Foreign currency translation adjustment 17
Unwinding of discount on deferred consideration 2
Balance at 31 December 2021 4,224
------------------------------------------------ --------------
24. Subsidiary undertakings
At 31 December 2021, the Group had the following subsidiary
undertakings:
Group Registered Office &
Company Share % 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 SARL 100% Villa TF 4635 GRD, Almadies, Dakar B.P. 45534,
Senegal
-----------------------------------------------------
Dormant 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 100% 3568-191 Street, Unit 101, Surrey BC, V3Z 0P6, Canada
Pacific Bit of Canada)
Sales company
----------------------------------------------------- -------- -----------------------------------------------------
24. Subsidiary undertakings (continued)
Group Registered Office &
Company Share % 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 Russia 100% 4,4 Lesnoy In,125047 Moscow, Russia
Dormant 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%
---------------------------------------------------------------
Holding company Suite 1800-355 Burrard Street, Vancouver, BC V6C 268, Canada
------------------------------------------ -------- ---------------------------------------------------------------
Lotusglade Limited 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
------------------------------------------ -------- ---------------------------------------------------------------
Floralglade Company 100% Smithstown, Shannon, Co. Clare, Ireland
Holding company
------------------------------------------ -------- ---------------------------------------------------------------
24. Subsidiary undertakings (continued)
Group Registered Office &
Company Share % 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 100% Rue Charles Rolland, 29650 Guerlesquin, France
Sales company
Attakroc Inc 100% 601, rue Adanac, Quebec, G1C 7G6, Canada
Sales company
Mincon Quebec 100% 601, rue Adanac, Quebec, G1C 7G6, Canada
Holding company
25. Leases
A. Leases as Lessees (IFRS 16)
The Group leases property, plant and equipment across its global
operations.
During 2020, one of the leased properties in Finland was sublet.
The lease and sublease expire in 2023
During 2019, one of the leased properties in Australia was
sublet. The lease and sublease expire in 2024.
The Group leases IT and other equipment with contract terms of
less than 12 months and also for low value items.
The Group has elected not to recognise right-of -use assets and
lease liabilities for these leases in line with availing of the
exemptions for such leases allowable under IFRS16.
Information about leases for which the Group is a lessee is
presented below.
i) Right-of-use assets
31 December
2020
EUR'000
Balance at 1 January 3,488
Depreciation charge for the year (1,816)
Additions to right of use assets 3,487
Disposal of right of use asset (536)
Derecognition of right of use asset* (231)
Foreign exchange difference (151)
------------------------------------- ---------------
Balance at 31 December 2020 4,241
------------------------------------- ---------------
31 December
2021
EUR'000
Balance at 1 January 4,241
Depreciation charge for the year (1,896)
Additions to right of use assets 3,458
Disposal of right of use asset (156)
Derecognition of right of use asset* -
Foreign exchange difference 49
------------------------------------- -------------
Balance at 31 December 2021 5,696
------------------------------------- -------------
*Derecognition of the right of use asset during 2020 is as a
result of entering into a finance sub-lease.
ii) Amounts recognised in income statement.
2021 2020
EUR'000 EUR'000
----------------------------------------------- ------- -------
Interest on lease liabilities 308 332
Expenses related to short term leases 311 314
Expenses related to leases of low value assets 65 95
----------------------------------------------- ------- -------
-Leases under IFRS 16 684 741
----------------------------------------------- ------- -------
iii) Amounts recognised in statement of cash flows
2021 2020
EUR'000 EUR'000
------------------------------ ---------------- ----------------
Total cash outflow for leases 3,590 3,455
------------------------------ ---------------- ----------------
Total cash outflow of leases 3,590 3,455
------------------------------ ---------------- ----------------
25. 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.
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
EUR194,000.
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 31 December
2021 2020
EUR'000 EUR'000
Less than one year 192 188
One to two years 146 185
Two to three years - 140
Balance at 31 December 2021 338 513
------------------------------------ ----------- ---------------
Unearned finance income (22) (43)
------------------------------------ ----------- ---------------
Total undiscounted lease receivable 316 470
------------------------------------ ----------- ---------------
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 2021 was EUR214,000
(2020: EUR213,000).
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
2021
EUR'000
Less than one year 65
One to two years 20
Total 85
-------------------- -----------
26. Commitments
The following capital commitments for the purchase of property,
plant and equipment had been authorised by the directors at 31
December 2021:
31 December 31 December
2021 2020
EUR'000 EUR'000
Contracted for 2,837 3,044
Not-contracted for 772 521
------------------- ----------- ------------
Total 3,609 3,565
------------------- ----------- ------------
27. Litigation
The Group is not involved in legal proceedings that could have a
material adverse effect on its results or financial position.
28. Related parties
As at 31 December 2021, 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 2021, the Group paid a final dividend for 2020 of
EUR0.210 to all shareholders. The total dividend paid to Kingbell
Company was EUR2,411,545.
In September 2021, the Group paid an interim dividend for 2021
of EUR0.0105 to all shareholders. The total dividend paid to
Kingbell Company was EUR1,261,385 (September 2020:
EUR1,256,551).
The Group has a related party relationship with its subsidiary
and its joint venture undertakings (see note 24) for a list of
these undertakings), directors and officers. All transactions with
subsidiaries eliminate on consolidation and are not disclosed.
Transactions with Directors
The Group is owed EURNil from directors and shareholders at 31
December 2021 and 2020. The Group has amounts owing to directors of
EURNil as at 31 December 2021 and 2020.
Key management compensation
The profit before tax from continuing operations has been
arrived at after charging the following key management
compensation:
2021 2020
EUR'000 EUR'000
Short term employee benefits 1,514 1,441
Bonus and other emoluments 320 347
Post-employment contributions 145 126
Social security costs 109 86
Share based payment charged in the year 221 96
---------------------------------------- ------- -------
Total 2,309 2,096
---------------------------------------- ------- -------
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 (ten in total at year end). Amounts included
above are time weighted for the period of the individuals
employment.
29. Events after the reporting date
The Board of Mincon Group plc is recommending the payment of a
full year dividend for the year ended 31 December 202 1 in the
amount of EUR0.0 105 ( 1.05 cent) per ordinary share, which will be
subject to approval at the Annual General Meeting of the Company in
May 202 2 . Subject to Shareholder approval at the Company's annual
general meeting, the final dividend will be paid on 1 7 June 202 2
to Shareholders on the register at the close of business on 2 7 May
202 2 .
Acquisition of the Spartan Drilling Tools
On 1 January 2022, the Group acquired 100% shareholding in
Spartan Drilling Tools, a manufacturer of drill pipe and related
products based in the USA for a consideration of EUR925,000. The
goodwill arising on acquisition is circa EUR200,000, with expected
2022 revenue of EUR3 million.
30. Approval of financial statements
The Board of Directors approved the consolidated financial
statements on 11 March 2022.
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END
FR EAKDFFEXAEFA
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March 14, 2022 03:00 ET (07:00 GMT)
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