Kingspan ‘cautious’ despite results

Kingspan has reported a strong set of first-half results — including a 23% year-on-year increase in pre-tax profits — but said it remains cautious in terms of full-year outlook.

Pre-tax profits, for the six months to the end of June, amounted to just under €44.52m — up from a total of €36.2m for the same period last year. Group revenue was up by 3%, at €757.4m; with EBITDA (earnings before interest, taxes, depreciation, and amortisation) rising by over 13% to €71.9m and after- tax profits increasing by 27.4% to €37.2m. Earnings per share for the period rose by nearly 28% to 22.1c.

With the figures coming in ahead of most market estimates, Gene Murtagh, CEO of the building insulation specialists, said management was “very pleased” to report another period of progress, achieved through a combination of organic growth and the successful integration of acquisitions.

However, he also said that management at the Cavan- headquartered firm remains “cautious” about ongoing growth; but that the group is trading well in markets such as North America, and Australasia and Europe.

He noted, though, that revenues are down in the Netherlands and are holding steady, at best, in Britain.

The UK market remains Kingspan’s biggest market; contributing around 39% of group sales, ahead of mainland Europe which accounts for 37% of annual revenue.

That is likely to change next year, however, with the recent €65m acquisition of the construction arm of German steel giant, ThyssenKrupp set to help boost mainland Europe revenue to around 50% by the end of 2013.

Regarding the first-half figures, Mr Murtagh added: “The trading environment — across many of our geographies — continues to be very uncertain, which is having a moderating impact, albeit with Kingspan continuing to outperform the general markets in which we operate.”

In divisional terms, Kingspan saw first-half revenues rise in its access flooring, insulated panels and insulation boards departments; with its environmental arm the only one which saw a decline.

Geographically, the period saw 1% year-on-year revenue rises in Britain and mainland Europe; with sales up by 9% in North America and by 32% in Australasia. Kingspan’s Irish business — which represents just 6% of group revenue — suffered a like-for-like revenue fall of 13%.

Following the Thyssen buy and the purchase of Dubai-based roofing systems specialist, Rigidal, Mr Murtagh said that while consolidation will be the focus, the company remains “open-minded” regarding future acquisitions.

Analyst reaction to the figures was positive, with Goodbody reiterating full- year forecasts of an 11% rise in trading profits to between €106m-€107m.


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