Kingspan sees revenue rise 13%

Specialist building materials group Kingspan has hinted at a recovery in the construction sector, with double-digit percentage growth evident in its Irish operations during the first six months of the year.

Speaking on the back of a better-than-expected set of first-half group financial results, Kingspan’s CEO Gene Murtagh said that particular momentum was evident in June, with good progress seen in its operations in North America and the Middle East.

Group revenue rose by 13% year-on-year to €858.4m; with after-tax profits rising by 6% on the corresponding period last year to €39.2m; earnings per share up by 4% at 23c; earnings before interest, taxes, depreciation, and amortisation increasing by 6% to €75.9m; net debt down further to just under €166m, and the interim dividend up by 10% to 5.5c.

Back in May, the Cavan- headquartered group — which specialises in insulation and environmental materials — said it had seen a solid start to 2013, albeit with a slow first quarter.

However, pick-up was evident in the second quarter and management is anticipating a strong showing for the current third quarter.

Mr Murtagh called the first half showing “a positive performance against a backdrop of weak European economic conditions and a tough winter”.

Regarding Ireland — which saw a 19% revenue rise — he said some signs of growth are now evident.

“I would say we’re seeing the beginnings of a recovery in Ireland, but it’s a slow one and we must be measured in how we categorise it — it’s a recovery from where the sector has been not to where it was [at its height].”

However, he also noted that this set of results marked the first time “in a number of years” where growth has been achieved in all of Kingspan’s business divisions in Ireland.

Britain and mainland Europe contribute the bulk of Kingspan’s group revenues, with North America and Australia in the low double-digit percentages. UK sales fell by 3% in the first half, but a doubling in revenues was evident in continental Europe and the Middle East and a 10% rise was seen in north America.

On a divisional basis, turnover dipped by 17% in the environmental unit and by 3% in insulation boards and rose by 1% in access floors. However, in the insulated panels division, turnover rose by 34% with trading profit ahead by 24%.

Kingspan’s acquisitions of European steel producer, ThyssenKrupp Construction and Dubai-based roofing specialist, Rigidal Industries, provided positive momentum to first-half earnings and Mr Murtagh said yesterday, that management continues to look at further takeover opportunities with insulation-related firms in Central Europe and the Americas likely targets.

He said that while valuations are always a hurdle, the firm’s balance sheet could absorb deals worth between €250m and €300m.

Kingspan’s shares were up by nearly 6% yesterday.

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