Untroubled by recent resource price weakness, Africa-focused mining engineering and project manager MDM Engineering delivered a strong set of full-year results as a much larger workload translated into soaring revenues. Margins were squeezed slightly, however, as the group expanded its geographic reach and resource companies tightened their budgets - but it still ended the year in its strongest position yet, boasting a robust cash position and a significant pipeline of projects.
MDM has grown its team substantially in recent years, from less than 100 employees in May 2010 to 549 in May 2012, including short-term contractors. This has enabled the group to expand outside of South Africa - which still accounts for 85 per cent of revenue by geography - and into other African countries experiencing booming resource development such as Ghana, Tanzania and the Democratic Republic of Congo. And that diversification looks set to continue as MDM has received expressions of interest from clients active in Zambia and Zimbabwe. A healthy pipeline of feasibility study work also bodes well, with MDM historically enjoying a high success rate of converting studies into project execution work.
Broker Canaccord Genuity forecasts revenues of $120m (£77m) in the year to March 2013, adjusted pre-tax profits up from $7.8m to $12.5m and adjusted EPS of 25¢ (from 16¢ in 2012).
MDM ENGINEERING (MDM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 146p | MARKET VALUE: | £55m | |
| TOUCH: | 143-148p | 12-MONTH HIGH: | 149p | LOW: 93p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 151¢ | NET CASH: | $29m | |
| Year to 31 Mar | Turnover ($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 | 21.1 | 11.3 |
| 2010 | 33.2 | 5.0 | 9.3 | 4.6 |
| 2011 | 20.8 | -2.1 | -3.9 | 3.5 |
| 2012 | 89.1 | 7.8 | 15.4 | 7.7 |
| % change | +328 | - | - | +120 |
Ex-div: 27 Jun Payment: 26 Jul *16-month period £1=$1.555 | ||||
