Kingspan posts marginal drop in sales amid warnings of future cost hikes

Pictured is Chief Executive Officer, Gene Murtagh. Photo:Leah Farrell/RollingNews.ie

Cavan insulation specialists Kingspan saw a marginal decline in sales in the first three months of this year with "seasonal factors" marking to a sluggish start to 2024.

The group said stable pricing so far this year allowed for "positive" trading volumes, however, it noted that primary input costs "could rise again" in the near term. 

Kingspan said ahead of its Annual General Meeting (AGM) on Friday that it had a "reasonable" start to the year despite a slower start.

The company said that total group sales approached €2bn from January to March, down by 1% annually, or 8% down on an underlying basis.

By market, the Americas overall matched last year’s strong start, while Western Europe was “seasonally subdued for the most part, and was slow to get going," with central and eastern Europe remaining “regionally tough.” 

However, the group added that the Middle East and India recorded strong sales growth.

Sales of insulated panels were 6% lower, or 9% on an underlying basis, however, the company noted that global sales were up mid-single digits compared to the same three months last year.

Insulation sales were 13% ahead from January to March, buoyed by the acquisition of a controlling stake in Steico in early January, the group said. 

Underlying sales were 14% lower as with an annual reduction in pricing offsetting modest underlying growth in rigid boards. The compay noted that technical insulation, which experienced an expected slow start, has seen more momentum in recent weeks.

The group's net debt was €1.3bn at the end of March, reflecting an increase of €311m arising from its acquisition of Steico.

Kingspan said its current liquidity is “very strong” with €1.7bn in cash and undrawn facilities.

The board is to instigate a share buyback program of 1.5m ordinary shares, commencing after today’s AGM in order to "offset dilution from share issuances."

"The group’s trading outlook as we move through the early part of the second quarter remains encouraging overall," the company said. 

"The positive trends seen in order intake for much of 2023 have continued into 2024. Order intake volumes in each month of 2024 to date have been stronger than the same month last year."