Press releases

Interim results

8 December 2008

MDM Engineering Group Limited (AIM:MDM) is pleased to announce its unaudited interim results for the six months ended 30 September 2008. MDM Engineering is an African-focused engineering and project management company which provides a range of value added services to the mining industry, including project evaluation, process engineering, design and project management.

Highlights

Financial

  • Revenue of US$17.33 million (2007: US $4.47m)
  • Gross profit of US$8.85 million (2007: US $2.80m)
  • Profit before taxation of US$6.81 million (2007: US $2.24m)
  • Cash and cash equivalents of US$13.76 million (2007: US $1.98m)
  • Basic earnings per share of US 13.16 cents per share (2007: US 7.13 cents)
  • Interim dividend of US 3.75 cents (2007 US 4.00 cents for the 16 month ended 31 March 2008)
  • Strong balance sheet with no gearing
  • Dividend cover of 3.47 times

Operational

  • Project value under current execution at period end of US$210 million
  • Continued focus on cost containment and improvement in operational efficiencies
  • Software and systems upgraded to ensure state of the art engineering processes
  • Carefully directed marketing and business development initiative resulting in a number of new opportunities to expand the order book in 2009

MDM Engineering CEO, Grant Lowman commented:

"MDM Engineering has achieved significant growth in projects under execution, with a concomitant growth in revenue and profit.

The AIM listing in May has given impetus to the growth in the business and has raised MDM Engineering's profile and visibility. In addition, our client focused approach has enhanced the company's reputation as a competitive and innovative niche provider of process engineering and project management solutions.

MDM Engineering is currently in a strong financial position, with substantial cash reserves and positive free cash flows. However, the effects of the global credit crisis and falling commodity prices must be carefully considered at this time as these have had a negative effect on the international mining and resources industry and are expected to continue to do so. This has resulted in production cutbacks, closures and the suspension or delay of certain projects.

Although some of our client's projects have been delayed or suspended, management has taken advantage of the tighter economic conditions to promote the Group's strength in developing cost effective and fit for purpose plant designs, thereby continuing to attract work from discerning clients. MDM Engineering has also focused on continuous improvement in productivity and containing costs, thereby remaining on track to deliver the longer term growth targets outlined at the time of the Initial Public Offer ("IPO").

The current workload ensures that our staff base will be fully utilised well into the next financial year. As a Board, we are cognisant of our duties to MDM Engineering and shareholders and will continue to maintain strict financial controls and a strong balance sheet.

We stated at the time of our IPO that MDM Engineering would provide a premium service to the mining community via a low risk business model that would generate sustainable cash flows for our stakeholders and that we could seek to maintain a dividend policy in order to reward shareholders. The Board has accordingly approved an interim dividend of US 3.75 cents payable on the 12th January 2009 to shareholders registered on the 19th December 2008.

The Board believes that MDM Engineering has a strong business model, is financially sound and well positioned to maintain its business during the current global economic crisis due to its positive cash balances and execution pipeline."

Interim Results for the six months ended 30 September 2008 (PDF - 113KB)

For further information:

MDM Engineering Group Limited

Grant Lowman (Chief Executive)
Tel: +27 (0) 79 525 9997

Dominique de la Roche (Finance Director)
+27 83 307 8953

George Bennett (Executive Director)
Tel: +27 (0) 82 652 8526

Numis Securities Limited

John Harrison (Nominated Adviser)
Tel: +44 (0) 207 260 1000

James Black (Corporate Broker)
Tel: +44 (0) 207 260 1000

Pelham PR

Candice Sgroi
Tel: +44 (0) 207 743 6376

Chelsea Hayes
Tel : +44 (0) 207 743 6675

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