Kingspan predicts single-digit growth

Cavan-headquartered building insulation specialist Kingspan has said that it is likely to deliver single-digit percentage sales growth for the first half of this year, despite uncertain market conditions.

The group’s management told shareholders at its annual general meeting yesterday that its focus on R&D and proprietary technology, coupled with geographic expansion “should support the further development of the group”.

“The construction environment in our core markets remains stable, albeit uncertain, and it is unlikely that growth will occur in these markets this year,” it said; but added that “market penetration for high-performance insulation and building envelopes continues to build and is a key lever for growth in our business in this environment.”

It summed up performance in the first four months of 2012 as being “solid”, in a subdued global construction market environment. Sales in the year to date are ahead by 8% at €473m.

Speaking afterwards, Kingspan’s chief executive Gene Murtagh said “this will be the environment for the foreseeable future”.

He added, however, that the US market “feels like it is improving“; although he said that Ireland, which is no longer a core sales market for the business, has “drifted” in the past few months and early signs of a pick-up in sales, here, have dissipated.

At the end of last month, Kingspan successfully completed a €300m refinancing of its syndicated bank debt, pushing out debt maturity to 2017. While still undrawn, Mr Murtagh said the facility means Kingspan is now “more than amply funded” for growth opportunities should they present themselves.

On the acquisition front, he said that management had been eyeing up two significant opportunities in the US and Germany. While it recently lost out to a private equity bidder on the former, he said the German deal is still alive.

Regarding the US, he said that, while Kingspan will look at opportunities, there is a limit to what it is prepared to pay for assets, adding that “valuations in North America haven’t adjusted downwards”.