Kingspan shares up on Covid recovery sales but raw material costs rise

Shares in the building materials maker rose 1.5% on a sales update as the company highlighted a 'significant' pick-up in raw material costs  

Kingspan chief executive Gene Murtagh. Picture: Sam Boal/Rollingnews.ie

Shares in Kingspan rose 1.5% on a sales update but continue to trade below their all-time peak before the fallout of the Grenfell Fire Inquiry in London as the company also highlighted a "significant" pick-up in raw material costs.     

It comes as the recovery for the Irish building materials maker benefitted from British and continental building sites that never fully closed during the Covid pandemic this year.   

Total sales of €1.28bn in the first three months were up 24% from a year earlier – covering the early months of the onset of the Covid crisis – after a boost from Germany, France, and the Benelux countries, in particular, Kingspan said. 

Sales in Latin America and North America were also up significantly, while "the UK business has also been strong year to date with buoyant sales and order intake activity", it said. 

Sales rebound

The sales rebound was spread across most of the parts of the business, including the insulation boards business. The sales report does not include at this stage its acquisition last month of Logstor for €253m as the company expands further into continental Europe.

At the end of March, the acquisition was reflected in Kingspan carrying a net debt load of €352m and €2bn in cash loan facilities.

On the outlook for inflation, it warned that "raw material inflation, and indeed availability of same, is increasingly a challenge and we are doing our utmost to limit any impact on our own end markets". 

"We have a strong backlog on hand which augurs well for the period ahead although in the current environment we are cautious about looking too far forward," it said. 

Its shares were up 1.5% but still short of the all-time high of €84.55 last autumn before its evidence to the Grenfell Inquiry. 

Kingspan subsequently apologised for the misuse of its products in the refurbishment of the London residential tower where a fire killed 72 people in June 2017.