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Sedgman merger & trading update

30 May 2013

Sedgman Merger Update

Further to the announcement of 15 May 2013, MDM Engineering Group Limited (“MDM” or the “Company”) (AIM: MDM), the minerals process and project management company focused on the mining industry, advises that it has today received a notice, from Sedgman Limited (“Sedgman”), of termination of the Merger Implementation Agreement (“MIA”) which was orginally announced on 28 November 2012. Accordingly the proposed merger between MDM and Sedgman will not proceed.

Trading Update

The MDM Board is pleased to provide the following update in relation to the financial performance and position of the Company. Based on unaudited management accounts, MDM expects to report revenue of US$138.3m, up by 155% from the previous years’ US$89.1m, and Net Profit Before Tax of approximately US$20.3m, up by 260% from the previous years US$7.8m, for the financial year ended 31 March 2013. The MDM Board also advises that as at the end of April 2013, MDM’s cash balance was approximately US$35.5m and the Company has nil debt.

Audited accounts for the year ended 31 March 2013 are expected to be released in July 2013.

The Board considers that the combination of MDM’s strong balance sheet coupled with the Company’s order book and pipeline provides MDM a strong position from which to organically grow the business as well as consider alternative strategic growth opportunities and capital management initiatives including increased or special dividends to shareholders over and above the Company’s existing policy. 

George Bennett, MDM Executive Director, commented:It is disappointing that the merger will not proceed.  However, the Board will continue to drive the business forward as well as consider alternative strategic growth opportunities and capital management initiatives to deliver value for shareholders. As can be seen from the unaudited results, the Company is performing well and MDM continues to see ongoing organic growth opportunities in our core markets on the African continent helped by strong relationships with our key clients. The Company’s future is underpinned by its robust financial position."

Enquiries:

MDM Engineering Group Limited

Martin Smith (CEO)
George Bennett (Executive Director)
Dominique de la Roche (Finance Director)
Tel: +27 (0) 11 993 4300

Canaccord Genuity Limited

Andrew Chubb / Christopher Fincken
Tel: +44 (0)20 7523 8000

Tavistock Communications Limited

Jos Simson / Emily Fenton
Tel: +44 (0)20 7920 3150

 

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