Confident Kingspan calls €105m profit despite slower trade
Published 13/11/2012 | 05:00
Cavan-based insulation firm Kingspan expects to make a €105m profit this year – 10pc higher than in 2011 – despite warnings that business sentiment in its main markets has waned substantially since the summer.
Releasing an interim management statement yesterday, Kingspan said that revenue in the nine months to the end of September climbed 1.6pc to €1.16bn compared to the corresponding period in 2011.
But it noted that the pace of sales growth moderated during the third quarter, falling by 0.7pc compared to the third quarter last year.
It said that it had delivered "solid progress" despite the economic difficulties in its main markets, which include the UK and the US.
"Sentiment has undoubtedly weakened further, driven in particular by a deepening lack of confidence in Europe and with the US commercial construction market being in somewhat of a holding pattern," the company noted.
Kingspan, which is headed by chief executive Gene Murtagh, said that while construction activity in Australia was slowing, its sales there continued to grow. Ireland accounts for just 4pc of Kingspan's total sales.
"Overall, general building activity across a number of the group's markets has been easing, with some pockets of relative buoyancy including central and eastern Europe, most notably Germany," the company said.
It said that it was "clearly difficult to fully counter persistent economic and construction weaknesses" and warned that those weaknesses could become more pronounced in early 2013.
But it insisted that the "structural and global dimensions" to its business should help offset those difficulties.
Sales of Kingspan's insulated panels – which are used primarily in commercial projects and which last year accounted for about half the company's €1.54bn in sales – rose 3pc in the first nine months of the year but were up just 2pc in the third quarter.
On a constant currency basis, the figures were down 1pc and down 3pc. In the UK – which accounts for about 40pc of total revenue – insulated panel orders fell 7pc in Q3. Sales in North America were also "subdued".
Sales of its insulated boards – used largely in residential schemes – also climbed 3pc in the first nine months, but were flat on a constant currency basis. It described the UK market as "solid", but the Netherlands as "persistently weak".
Kingspan's net debt climbed to €222m at the end of September from €171m at the end of June.
The increase came as it bought the insulation panels business of ThyssenKrupp for €65m and Dubai-based Rigidal Industries for €31.4m.
Shares in the company were down over 2pc in afternoon trading yesterday. They've risen over 27pc in the past year.