Kingspan profits increase by 34%

KINGSPAN shares rose 3% yesterday after the Cavan-based building materials group delivered a 34% increase in pre-tax profits.

Revenues surged 22% to €958 million for the year to December, allowing the bottom line to come in at €88 million, up from €65 million in 2003.

Chief executive Gene Murtagh, who took the top job in January after his father stepped down to become chairman, said the results were positive and that the group was “in good shape.”

There was good news for shareholders with a 33% hike in the dividend, which rose to 9.6c. Mr Murtagh said there was scope to increase the dividend in the year ahead.

The group made strong progress in all of its major divisions, with raised access flooring regaining the limelight after suffering a slowdown in previous years. Insulated panels, insulation boards and environmental and pollution controls products all had a good year. Kingspan enjoys market-leading positions in most of its chosen sectors.

Davy Stockbrokers said the results were excellent and that the company was well-placed for future growth. Davy analyst Florence O’Donoghue praised the company’s improved margins and its ability to pass on raw material increases to customers.

Tate, the troubled American flooring subsidiary, performed well, with revenues jumping 54% in dollar terms, but the slide in the value of the dollar made this increase less impressive in euro terms. Mr Murtagh was upbeat about Tate’s future and said it had stripped out costs to allow it to pass break-even point last year. Tate broke out of its recent disappointing pattern by reporting a minor profit of about €3 million, but this could rise to €10 million in the future, said Mr Murtagh.

The company also pocketed almost €30m after a long-running legal dispute in relation to the acquisition of Tate was resolved in Kingspan’s favour.

Some of the money was used to repay the company’s debt burden, which fell from €121m to €108m.