Kingspan hopeful of another good year

Kingspan is hopeful of another decent performance this year, despite management anticipating a potentially tricky first half.

The Co Cavan-headquartered building materials and insulation specialist’s 2012 financial results beat market expectations, with trading profit ahead by 12.5% at €107.7m and group revenue rising 5.3% to €1.63bn.

Pre-tax profits grew from €77.8m to just under €90m, with basic earnings per share up by over 18% to 43.8c. A final dividend per share of 7.25c, brought the total dividend for last year to 12.25c; representing an 11% annual increase.

Chief executive Gene Murtagh hailed 2012 as “a good year” in tough trading circumstances and said the group was in “better financial shape than ever”, with a strong balance sheet, but that 2013 was potentially tough.

He said management was hopeful of a reasonable performance in 2013, noting that the company still had a strong order book and project pipeline. However, he warned that a slowdown in some of Kingspan’s key geographical markets — notably Britain and western Europe — pointed to “a tricky first quarter and probably first half”, although better conditions in Germany, the US, and the Gulf region were likely to balance out these problems somewhat.

Nevertheless, Mr Murtagh also noted that construction starts and the company’s own product dispatches were down, in key markets, on a year-on-year basis in the first six weeks of the year.

Another area where Kingspan’s 2012 figures bucked analyst expectations were its net debt levels — lowered by €5m to €165.5m — against external forecasts of end-of-year debt of €204m.

Mr Murtagh said Kingspan’s focus on cash flow this year would “be as intense as ever, but how we deploy it will be a different story”.

The company spent over €72m on acquisitions last year and is looking at more opportunities in mainland Europe and North America, although management is cautious over lofty seller prices of late.