Building products group Kingspan buys two firms for €72m

Building products group Kingspan has ramped up investment in its UK operations, via further acquisition, despite seeing an easing of business in the run-up to the June 23 Brexit vote.

Uncertainty hasn’t affected Kingspan’s spending powers, however.

It closed two acquisitions in the past week or so for a combined €72m.

Further details will be disclosed with the group’s half-year results, but Mr Murtagh told reporters that the larger of the firms is a UK-based insulated panels specialist with the smaller purchase being on the environmental side and based in Australia.

The Co Cavan-based insulation and environmental- focused building materials group yesterday reported group sales of €903m for the first four months of 2016, up 25% on the same period last year and reflective of the contribution from its two big 2015 buys — north American firm Vicwest Building Products and Belgium’s Joris Ide.

Revenues were ahead in three of the group’s four key divisions — insulated panels, access floors and insulation boards; but down marginally in its environmental arm.

Additionally, an easing in business orders in the UK —which accounts for 30% of group revenues — was evident due to uncertainty about Brexit.

The residential sector there hasn’t been affected but Kingspan’s UK business is 75% weighted towards the commercial/non-residential space.

Speaking after the group’s agm in Dublin yesterday chief executive Gene Murtagh said management is unconcerned about how June’s Brexit vote will go, saying if the UK were to exit the EU Kingspan would still have a strong export base from its British manufacturing facilities.

“We can deal with a lag because our pipeline [of UK business] is strong and that’s the important thing. Once the [Brexit] cloud lifts it will be back to normal”, he said, but added the overall consequences of a Brexit are “unquantifiable at present”.

Mr Murtagh said the group could comfortably afford to spend €400m on further acquisitions this year if opportunities arose.

Kingspan is still keen on expanding into South America, particularly Brazil, in the medium term and has recently made a small investment in a greenfield manufacturing facility in Iran.

While all resolutions were approved at the agm, the vote on executive pay passed with a 70%-30% majority.

The dissenters weren’t against the near €8.7m paid to the executive directors, more so the timing of a boosted incentive plan altered due to last year’s acquisitions.

Mr Murtagh also said that Kingspan’s annual sales should top €3bn this year.