Kingspan forecasting a ‘strong’ first-half performance

Kingspan has reported a near 30% increase in group sales for the first four months of the year, driven by favourable currency movements and strong performances in its core markets of the UK and north America.

The Cavan-headquartered international specialist building materials/ insulation products provider said, yesterday, that sales in the year to date have reached €719m, 28% ahead of the same period last year.

It said that underlying profitability has been strong, “complemented further by favourable translation, reflecting euro/sterling and euro/ dollar exchange rates, which are significantly better than the average rates of the last 10 years.”

Management said that current trading patterns coupled with a strong order backlog point to a strong first half for the group, despite flat conditions in mainland Europe and “impending weakness” in both Canada and Australia.

“The combination of recent development activity, growing conversion, a strong innovation pipeline and the increasing emphasis worldwide on energy efficiency, leave us confident about Kingspan’s longer term future,” management said in a trading update coinciding with the group’s AGM in Dublin yesterday.

Earlier this year, Kingspan closed its €315m takeover of Belgian building materials firm, Joris Ide. While that deal helped push the group’s net debt levels up by €273m, to almost €400m since the turn of the year, Kingspan still has a “robust” funding position, with €425m of lending facilities still undrawn.

Sales in Kingspan’s core insulated panels division increased 28%, year-on-year, in the four months to the end of April, aided by a 3% boost from acquisitions.

Insulation board sales revenues were up by 40% and access floors saw a 19% revenue rise.

The environmental division saw a 9% sales rise. Analysts were predictably upbeat on the back of yesterday’s statement.

Davy said the business offers “a very powerful investment proposition,” based on growth potential, scope for margin and return enhancement and Kingspan’s “deepening footprint, both geographically and by product category”.

The group said recently that it was eyeing up Latin America as a likely next step in its ongoing geographical expansion, with some kind of presence likely to be taken in Brazil and Mexico over the next few years.

Kingspan’s shares were up by just over 1% yesterday afternoon.