Kingspan shakes off Grenfell share slump as profits reach record levels

Kingspan CEO Gene Murtagh said the building insulation group had a strong pipeline of demand and was positive about its prospects for the remainder of the year.

Kingspan shares rose on the back of the building insulation provider reporting record first-half profits and revenues, with the stock now well recovered from the slump it suffered after the Grenfell Tower inquiry last year.

The Cavan-headquartered group said its revenue grew by 41% to €2.9bn in the six months to the end of June. Trading profit rose by 64% to €329m. New acquisitions contributed 8% to revenue growth and 7% to trading profit growth. 

Sales of Kingspan’s core product, insulated panels, surged by 44% year-on-year, as construction activity returned in force following Covid lockdowns in key markets.

Kingspan has said it is confident of its financial prospects for the full year after posting what it called an “extraordinary” performance for the first six months.

Kingspan’s shares were up by about 2%, but had jumped by as high as nearly 4% in earlier trading. The stock is now trading at over €96. 

It fell to about €53 late last year after Kingspan gave evidence in the inquiry into the Grenfell Tower block fire in London, where one of its products was used against its knowledge in non-compliant building works.

'Unprecedented' demand

The group said it saw “unprecedented” demand and sales growth in all major markets in the first half.

“Growth in the first half of the year has been remarkably strong, with revenue and trading profit at record levels, driven by high levels of demand and a global recovery in the construction sector,” said Kingspan chief executive Gene Murtagh.

“A strong pipeline of future demand means we are positive about the outlook for the second half of the year,” he said.

Mr Murtagh said Kingspan would also benefit from a continuing move towards decarbonisation and a growing environmental awareness in the construction sector worldwide.

Kingspan said it has traded through “acute supply constraints” and an inflationary curve “never experienced before”. It said it would have had to recover “well in excess” of €600m in raw material cost increases this year.

Supply constraints are expected to continue to be the main threat to the industry into next year.

Nevertheless, analysts have moved to raise their full-year forecasts for Kingspan and expect it to post profits of €683m-€700m. 

Kingspan generated trading profits of just over €508m last year.