19 February, 2021
Interim Report: 6 months to 31 December 2020
MHM Automation Limited (MHM) increases profitability in half year to 31 December 2020
Sales Revenue (excluding wage subsidies) of $24.7m for the six months was down 4% on the prior period, mainly due to declining Stainless revenue following the closure of our New Plymouth stainless site. Travel restrictions due to COVID impacted certain Automation project deliveries and the subsequent timing of revenue recognition. Our Automation sales revenue was 85% of group sales for the period.
Operating EBITDA of $1.46m was an increase of 63% on the restated prior period of $896k. The table above shows the impact of the discontinued business. Automation EBITDA of $1.56m was 54% up on the prior period. We are continuing to drive improvement in margins of our automation projects. During the period the warranty provisioning for automation was increased by $347k, due to an increased number of completed projects which are now in a warranty period (typically 12 – 24 months).
The pre-tax profit of $565k was 3% up on the prior year. This includes $245k of cost relating to the closure of New Plymouth vs the comparative that included $260k for the Milmeq acquisition adjustment.
The after tax profit for all operations was $372k which was 17% down on the prior period, this included a $97k loss from the discontinued operation in the current period.
Net debt was $1.2m which was unchanged from 30 June 2020. Total liquidity from cash and undrawn facilities was $5.3m.
We are confident that the financial year to 30 June 2021 will see increased operational profitability from the prior year. The Milmeq product set has strong workflows and is now taking orders for delivery in the back half of 2022. The H&C automated solutions have seen increasing demand and have a strong pipeline of more orders which we expect to convert in the short term. The stainless fabrication business has recently secured a number of large contracts that see those operations largely committed for the financial year.
Longer term we are focused on delivering a sustainable growth strategy that is focused on technology and automation. We are still building the platform to grow and increase profitability, with the focus on:
The full interim report for Mercer Group Limited, 6 months to 31 December 2020, can be downloaded here.