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Mincon results to spur re-rate: broker

Dublin stockbroker Davy has raised its 2021 sales and valuation expectations for Mincon Group after the UK drilling products manufacturer this week reported a 7.7% year-on-year increase in its revenues and whopping 50.7% increase in net profit to €14.4 million for FY20.
Mincon results to spur re-rate: broker Mincon results to spur re-rate: broker Mincon results to spur re-rate: broker Mincon results to spur re-rate: broker Mincon results to spur re-rate: broker

Staff reporter

Davy is modelling FY21 and FY22 annual revenues of €139.1 million and €153.7 million, respectively, after Mincon booked FY20 revenue of €129.9 million, and believes the company "should re-rate from current levels relative to peers".

The stock is up 41% in the past year to €1.30, capitalising the company at €270.94 million.

"We still believe that the stock is good value despite a good start to the year," Davy said.

"At current levels, the stock is trading at 15.4x 2021 EBIT, which is a circa-25% discount to both its closest peers (20.5x) and the wider European Industrial Engineering sector (20.3x). We see good upside to the stock and believe that 2021 catalysts [including Greenhammer commercialisation and construction market pipeline] will drive this in the coming 12 months.

"We reiterate our outperform rating."