Kingspan sales up 15.5% in 2004

Construction products company Kingspan achieved 15.5% sales growth in the first half of 2004, according to a trading statement from the company today.

As the momentum continued into the second half with some further price inflation, Kingspan said full year sales were expected to be up by more than 18% on 2003.

EBITA margin is ahead of the 10.1% achieved in 2003 and should be in line with the consensus expectation of 10.7%, the company added.

Kingspan expect full year after tax earnings to be in the region of 30% up on 2003, ahead of current market expectations.

Net debt at the year end is expected to be approximately €110 to €112m compared to €121m at the end of 2003. This includes the receipt of $36m in relation to Tate Arbitration proceeds. Capital expenditure in 2004 was approximately €60m and the company spent some €20m on bolt-on acquisitions, most notably €15m on Apco, a panel business based in Belgium.

Sales in the panel, insulation and structural and offsite divisions grew by more than 20% in 2004. Environmental Container sales are expected to be up over 10% versus 2003. Sales of access floors in the US have grown very strongly in 2004, while the rate of decline in Europe has slowed somewhat in the second half.

Looking forward, Kingspan said today that it expects overall construction market conditions in 2005 to be "reasonably favourable".

"The benefits of both capital investment and bolt-on acquisitions during 2004 should impact positively on efficiency and volumes in the current financial year," the company said today.

Taking into account an element of price inflation, as well as 2004 acquisitions, Kingspan expects 2005 sales growth to be at a similar rate to that achieved in 2004, though some raw material price increases could put pressure on margins in 2005.