Kingspan sales up 33% to €440m

KINGSPAN said trading in the first four months of 2011 was “well ahead” of the corresponding period last year, with group sales up 33% year-on-year to €439.3m.

The Cavan-based building materials group’s management told shareholders at its annual general meeting yesterday that it is likely to see a year-on-year operating profit increase for the first half of 2011, on the back of strong momentum and a solid order book. Kingspan shares closed yesterday up 4.23% at €6.90.

Speaking after the meeting, Kingspan’s chief executive Gene Murtagh said the group would continue to look for acquisition opportunities, but would be unlikely to make any further significant buys this year. However, if such things could be timed precisely, a buy early next year would be agreeable.

Late last year, Kingspan bought CRH’s European insulation business for around €120m and followed it up, early this year, with a failed €240m bid for Belgian insulation business Recticel. Mr Murtagh said the latter move illustrated Kingspan’s acquisition ambitions.

The CRH deal was formally completed during the period under review and is still being merged with Kingspan’s existing British and European operations. The company is looking to dispose of around 40% of the new entity (it has already sold half of this amount), with the elements based in Scandinavia, Germany and Britain due to go.

“It was an underperforming business for CRH, but that won’t be the case for us. We’re disposing of the non-performing parts and merging the rest with our British and European operations. The end result will be a smaller entity, but a better performing one and one from which we’d expect operating profits of around €12m next year,” Mr Murtagh said.

Allowing for the impact of the CRH purchase, Kingspan’s sales for the year to date are up 20% year-on-year. Since the start of the year, the group has seen a gradual pickup in the British residential market and mainland Europe, with good performances also evident in North America and Australia. Ireland represents just 5% of annual sales.

The group announced the retirement of director Dermot Mulvihill, the promotion of recent board appointment Geoff Doherty to chief financial officer and KPMG as its new auditor, succeeding Grant Thornton.