MHM has transitioned to a technology-led future through divesting non-core businesses and operational changes. Financial year to 30 June 2020 saw EBITDA increase 199% to $2.4m.
The original MHM Automation Limited company was established in 1884 by Mr James Mercer in Christchurch, New Zealand.
MHM Automation, now with four New Zealand manufacturing plants, has grown to become an international leader in the design and manufacture of innovative technology solutions and the fabrication of stainless steel products.
Following the restructuring in 2015, MHM Automation seeks to generate long-term shareholder value by focusing on its portfolio of food processing and packaging IP which are sold globally while continuing to drive efficiencies in its core fabrication business.
In addition, MHM Automation is seeking to commercialise the S-Clave technology and get it into market within a compressed time frame.
The following information was extracted from MHM Automation Limited’s full year results, released 25 August 2020:
Highlights for the 12 months to 30 June 2020:
• Revenue of $51.6m, an increase of 35% over the prior year
• Automation 81% of group sales revenue vs 61% for the prior year
• Automation revenue increased 79%
• EBITDA $2.4m a 199% increase on the prior year’s EBITDA of $0.8m
• After tax profit was $0.9m, an increase of $1.9m on the prior year.
• Milmeq acquisition completed for a value of $50,000 and the repayment of the $1m interest free vendor financing
In the 2020 financial year, revenue increased 35% to $51.6m, driven by a $18.5m revenue increase in the Automation business. The Automation business reported revenue of $41.8m, which was 81% of total group revenue.
The full year contribution of Milmeq products was a key driver to the year on year growth, which aligns with our stated strategy of being an automation lead business. This also changed our revenue profile to be more Australasian domiciled. This increasing diversification of products and markets is another strategic goal that we continue to work on.
The Stainless business had a difficult year with several customers delaying investment decisions due to the uncertainty from the pandemic, and revenue reduced by $5m.
EBITDA of $2.4m, was a $1.6m improvement on the prior year with a strong contribution from the Automation business. We continue to drive initiatives to improve EBITDA margins, which will be a focus over the next period.
Finance costs (excluding finance costs for leases) were $0.287m down from $0.319m which continues the trend in lower average drawn debt levels and the positive cash flows from operations.
The after-tax profit for the year was $0.93m, which was an improvement of the prior year’s $1.0m loss.
Closing net debt (excluding lease liabilities) was $1.27m which continues the trend of lower average drawn debt for the year. The closing net debt reflects the repayment of the Milmeq vendor financing advance of $1m during the year.
Our banking facilities have been renewed and in line with our improving performance the facilities have been extended for two years to September 2022.
Would you invest in it?
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