Mining engineer and project manager MDM Engineering delivered a strong set of maiden full-year results following its admission to the Alternative Investment Market (Aim) last May. Revenue and profit increased sharply, albeit from a low base, despite the backdrop of depressed commodity prices and a global recession that have caused the mothballing or abandonment of many mining projects.
Chief executive Grant Lowman commented: "Despite the decreased activity in our industry, MDM has continued to grow, albeit at a slower rate." The downturn has actually aided MDM's growth by easing the skills shortage and allowing the company to recruit highly qualified staff.
MDM continues to seek to work with clients through the entire project lifetime, from feasibility study through to engineering and construction, and boasts a strong pipeline. Projects and studies in progress at the year-end had a project value of $300m (£185m), which Mr Lowman considers "adequate" for the current year and notes an upturn in enquiries during the past four to six weeks.
The cash position remains strong and work is well spread geographically and by commodity. MDM has a lot of experience in gold projects; recent activity in uranium and the targeting of coal reflect the board's view that energy is a good area to be in.
Broker Numis Securities is forecasting pre-tax profits of $7.1m and EPS of 14¢ for the 12 months to 31 March 2010, rising to $14.3m and 27¢, respectively, in 2011.
| MDM ENGINEERING (MDM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 101p | MARKET VALUE: | £37.6m | |
| TOUCH: | 98-104p | 12-MONTH HIGH: | 203p | LOW: 39p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 43¢ | NET CASH: | $13.9m | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008* | 13.6 | 4.5 | 12.9 | 4.0 |
| 2009 | 35.9 | 11.6 | 21.2 | 11.3 |
| % change | +164 | +156 | +63 | +181 |
Ex-div:15 Jul Payment:10 Aug *16-month period £1=$1.62 | ||||
