Dividend payment sees Kingspan’s shares surge 9%

SHARES in Kingspan surged by an initial 9% yesterday, following the Co Cavan-based building materials company announcing a resumption of dividend payments to shareholders and a better-than-expected set of first-half financial results.

The company has recommended a 4c per share interim dividend payment to its shareholders; the first time it has paid a dividend for two years.

On the back of this – and a positive set of first half results – the company’s share price grew by 9% in early trading, before retreating a little, but still managed to close the day up by over 5.3% – or nearly 30c – at €5.37.

First-half results for the insulation products provider were comfortably ahead of market expectations and detailed growth in each of its main geographical areas; notably mainland Europe and North America.

While Kingspan’s Britain-based operations were affected by the extreme weather conditions at the beginning of the year, they recovered strongly during the second quarter. Only Ireland – where instances of new house builds are yet to pick-up – remained as an under-performing territory for the business; although the company’s home market is no longer seen as a core region.

In terms of expansion, the company is looking at the possibility of growth via acquisition in mainland Europe and North America. While business in Poland, Ukraine and the Baltic States slowed, on a year-on-year basis, its divisions in Germany and the Czech Republic saw like-for-like sales increases of 13% and 37%, respectively.

The group is also hopeful of pushing organic growth in its Middle-East-based operations. There, Kingspan recently won a significant contract for work at Doha International Airport in Qatar. The insulation panels being used in one of the airport’s aircraft hangars – which, alone, is set to be one of the largest buildings in the world – will be provided by the Cavan company; which is hoping to increase its level of business in the area.

Kingspan has a regional office in Dubai and mainly sells into the region through its manufacturing facility in Turkey.