Kingspan set for strong year after stellar first half

Analysts are anticipating a near €100m jump in annual trading profits for Kingspan, this year, following what the company itself called “an exceptionally strong start to the year”.

The Cavan-based international building insulation specialist yesterday reported a near 40% year-on-year increase in first-half revenues, to €1.24bn; with trading profit, for the six months to the end of June, up by 61% to almost €112m.

While “solid” organic growth was noted, acquisitions contributed 26% to sales growth and 31% to trading profit growth in the period.

During the period, Kingspan completed two mega-deals, in the form of the €320m takeover of Belgian building materials firm, Joris Ide and the €139m takeover of the building products division of US business, Vicwest.

Both have, according to management, performed ahead of expectations, with their integration processes running very smoothly.

Outside of that, Kingspan saw good earnings and revenue growth in each of its divisions, the main area of insulated panels showing 43% sales growth and a 61% profit rise.

All geographical markets also showed continued recovery; notably the US and UK (which cater for half of Kingspan’s annual revenues).

A recent easing in the latter is not causing concern, given the company’s strong order pipeline in the country.

“The first half of 2015 will be remembered as a momentous period for Kingspan. The group’s financial profile was transformed with the acquisitions of Joris Ide and Vicwest.

“Our initial sense is that trading profit of €230m for the year is now possible,” Davy Stockbrokers analysts said in a research note yesterday.

Last year, Kingspan reported a trading profit of €148.5m.

“With reduced levels of economic uncertainty in continental Europe and improving levels of building activity in the UK and US, we are optimistic about the outlook for the full year,” said Kingspan’s chief executive, Gene Murtagh.

Mr Murtagh said the key near-term focus is to continue the integration of recent acquisitions and to lower debt, which on the back of those buys was up to €449m at the end of June.


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