Brexit hits Kingspan sales

Kingspan shares have fallen on the Co Cavan-based building insulation specialist reporting slowing sales growth in what it has called fragile end markets, with Brexit having a meaningful negative effect.

The building materials group also said the uncertainty in key markets is likely to dent its first-quarter 2020 sales. The group’s third quarter sales “eased considerably” across the UK, Germany and Ireland, offsetting growth in the US and Australia. UK orders for its key insulated panel products fell by 15% in the quarter, due to Brexit uncertainty squeezing the market.

Kingspan said its total sales for the first nine months of this year rose 8%, in the year, to over €3.4bn, but sales growth for the third quarter slowed to 2%.

Underlying sales excluding acquisition contribution increased 2% over the nine months but were flat in the third quarter. “Overall, our end markets are fragile, reflecting an uncertain global macro backdrop. In particular, we are mindful of the deterioration in sentiment in some markets, most notably in the UK. This is likely to influence sales activity in the first quarter of 2020, at least,” the group said.

However, Kingspan still expects to meet market expectations for 2019, with growth of around 10% in annual trading profits, to approximately €490m.

Kingspan has also confirmed the acquisition, for an undisclosed price, of French insulated panel distributor Group Bacacier, which generated revenues of around €190m last year.

Kingspan recently said it was looking at more European and American acquisitions to mitigate softness in the UK and Germany.

Kingspan’s shares, up by over 18% in the past year, fell nearly 2% on the update, before paring back the bulk of those losses.