independent

Saturday 19 April 2014

Kingspan not joining exodus for a listing in London

CAVAN-based insulation maker Kingspan says sales of its products in Ireland are likely to remain subdued for years as a result of the economic slump.

But speaking to the Irish Independent yesterday after the company released a solid set of full-year results, chief executive Gene Murtagh said Kingpsan has no intention of shifting its primary listing to the UK despite the Irish market now accounting for just a small percentage of its total sales.

"We're an Irish business and we're based in Ireland," he said.

Mr Murtagh said that moving the primary listing "simply replaces one shareholder with another" and that investors will find value and good prospects no matter where they are.

Kingspan's revenue, excluding acquisitions, dipped 1pc last year to €1.6bn. When acquisitions are included, the figure was 5pc higher.

Its trading profit soared 12pc to €107.7m, excluding acquisitions and was up 13pc when they're included.

Kingspan generated 38pc of its sales in the UK last year. Another 37pc came from the Benelux, central Europe and countries including Germany.

The company said that the volume of sales of insulated panels – widely used in commercial construction projects such as offices and retail projects – fell 17pc in Ireland last year, but appear to have "found a base".

"Volumes are now at exceptionally low levels, reflecting weak indigenous new build demand combined with the excess space built in better times," said the company.

"The continued absorption of this vacant space can be expected to suppress demand for our products for a few years to come. However, we remain fully committed to the longer term development of our business in Ireland."

But overall insulated panel sales at Kingpsan rose 11pc last year to €840.14m, while insulated boards sales – used in home building – rose 2pc to €470.4m.

Sales at its access flooring unit were 22pc higher at €154.1m, while at its environment division, revenue fell 19pc to €163.8m.

Mr Murtagh said that despite an announcement last week by NAMA that it plans to invest a large chunk of money building office space in Dublin's IFSC, he believes that growth in the construction market in Ireland will ultimately be driven by a return to sustainable house building.

"I'd be more encouraged by residential potential than by non-residential," he said. "There are clear pockets where there is a shortage of decent homes in prime areas."

Analyst Flor O'Donoghue at Davy Stockbrokers said Kingpsan has entered 2013 in "excellent shape – financially, operationally and strategically". He said the company had delivered an "impressive margin improvement" despite a very challenging end-market backdrop.

Mr Murtagh said Kingspan retains "more firepower than we'd be prepared to use" in terms of acquisitions, but that it remains ready to make deals when opportunities arise.

Irish Independent

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