Press releases

MDM project pipeline shift

MDM's full year results to 31 March 2010

14 July 2010

MDM Engineering Group Limited (AIM: MDM) is pleased to announce its audited results for the year ended 31 March 2010. MDM is an African-focused engineering and project management group which provides a range of value added services to the mining industry, including project evaluation, process engineering, design and project management.

2010 Highlights


  • Revenue of US$33.2 million (2009: US$36.0 million)
  • Gross profit of US$10.1 million (2009: US$16.7 million)
  • Net profit of US$3.5 million (2009: US$7.8 million)
  • Pre-tax profit of US$5.0 million (2009: US$11.6 million)
  • Cash position of US$10.0 million (2009: US$14.0 million)
  • Basic earnings per share of US9.25 cents per share (2009: US21.15 cents)
  • Full dividend of US4.60 cents per share (2009: US11.25 cents)
  • Final cash dividend of US0.85 cents per share
  • Dividend cover of 2.0 times


  • Increased requests for study proposals and tenders were received and submitted since the beginning of the calendar year
  • Two new execution projects and five studies awarded since 31 March 2010
  • Management focussed on cost saving and the preservation of cash
  • New General Manager projects appointed to enhance controls and project capabilities


  • Appointment of Martin Smith as new Chief Executive Officer

The 2010 year has been difficult for MDM as evidenced by the decrease in earnings. Net profit for the year showed a decrease of 56% to US$3.5 million (2009: US$ 7.8 million) with earnings per share showing a decrease of 56% to US9.25 cents per share (2009: US21.15 cents).  This decrease was primarily driven by the settlement with First Uranium Corporation Limited (“FIU”) on the close out of the Ezulwini project, as well as the suspension of both Mine Waste Solution’s (“MWS”) Phase 1b and Phase 2 projects in early February 2010.

The performance of the Group needs to be viewed in the context of the global economic crisis that commenced in late 2008. The recovery has taken somewhat longer than anticipated and many of MDM’s clients have deferred execution of projects which in turn has moved MDM’s anticipated project pipeline towards the latter part of the 2011 financial year. Further to this, MDM is experiencing fierce competition amongst the engineering companies, reducing margins during tendering to increase the probability of securing work.

Summary of Financial Results
Consolidated net earnings for the 12 month period ending 31 March 2010 were US$3.5million, which equates to basic earnings per share of US9.25 cents.

The Directors of MDM have declared a final cash dividend of US0.85 cents per share payable on the 20th of August 2010 to shareholders registered on the 23rd of July 2010. This is in line with the stated dividend policy whereby approximately 50% of after tax earnings will be paid out as a dividend.

MDM CEO Martin Smith commented:
“MDM demonstrated resilience during the 12 month period ending 31 March 2010 by conserving cash reserves and maintaining a steady workload through what has been a continued stressed market.

In spite of the global economic crisis and reduced activity in the project market over the last 12 months, MDM has used the time to strengthen its execution capability by recruiting key management and technical resources, cutting costs but also enhancing internal processes which will ensure more effective project delivery for our clients into the future.

The Group’s business has slowed due to general caution in the market, mostly related to securing of project funding. However, given the sustained interest being shown in MDM’s services, the Directors believe that the project pipeline is anticipated to recover towards the latter part of the 2011 financial reporting period and indeed there are already signs of this happening with increased requested for feasibility studies and project execution tenders being received.”

Financials and Chairman's Statement (PDF)

Key Information:

MDM Engineering Group Limited is a minerals process and project management company focused on the mining industry. The Company provides a wide range of services from preliminary and final feasibility studies, through to plant design, construction and commissioning. To date, the Company's clients have largely been junior and mid-tier mining corporations with operations in Africa.

In May 2008, the Company successfully listed on the AIM market of the London Stock Exchange. The MDM Engineering core technical team has a 22 year track record of completing a wide range of studies and execution projects across a variety of minerals, including precious metals, base metals, ferrous and non-ferrous metals, uranium and diamonds.

The Company has adopted an approach to project execution based on an open-book Engineering, Procurement, Construction Management ("EPCM" or ";cost-plus") basis. With a core focus on Africa, MDM Engineering is setting the benchmark standard for best practice in the mining services industry through its commitment to providing the highest quality services and actively engaging with clients to ensure maximum transparency.


MDM Engineering Group Limited

Martin Smith (CEO)
Tel: +27 (0) 11 993 4300

George Bennett (Executive Director)
Tel: +27 (0) 11 993 4300

Dominique de la Roche (Finance Director)
Tel: +27 (0) 11 993 4300

Numis Securities Limited

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

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


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