Kingspan forecasts 33% profit slump for 2008

Building materials group Kingspan has forecast a 33% slump in operating profits for the year due to the downturn in the Irish and UK construction sectors as well as rising raw materials costs.

In its latest interim management statement the company said sales had fallen 9% in the 10 months to October 31 compared to the same period in 2007, but were down 3% on a constant currency basis.

"Against this backdrop the group now expects to report a full-year percentage decline in operating profits before exceptionals of approximately 33%," the statement said.

The Co Cavan-based firm said that in its interim results statement issued in August, it had noted that the contraction in construction markets and rising raw materials prices would present challenges in the second half of the year.

"This has transpired, particularly through September and October, when the effects of the contraction in the global economic environment became more evident," today's statement said.

"This has resulted in further reductions in construction activity, particularly in the UK and Ireland.

"Residential construction in these markets has remained weak, and activity in the commercial sector has slowed markedly during the period. "

The company said that 2009 was "almost certain" to provide even tougher challenges than 2008.

"In the short term, management are continuing to take significant actions and initiatives to reduce costs," the statement said.