Kingspan tells of difficulties ahead but still expects 26pc rise in profits
Cavan-based insulation manufacturer Kingspan has warned that the threat of its markets retreating next year remains a "real possibility", but has still pencilled in as much as a 26pc rise in operating profits for the year.
It issued the caution yesterday even as it reported sales of €1.14bn for the three months to the end of September, 30pc higher than the corresponding period last year and up 14pc when acquisitions are excluded.
But the company told investors that the sales rise wasn't attributable to a more general recovery in its markets, and was instead driven by increased market penetration, refurbishment activity and geographic expansion. Its activity in Ireland remains "subdued at exceptionally low levels", it said.
Kingspan also warned that building activity in its geographic markets has eased in recent months, due largely to "persistent economic uncertainty", particularly in the European Union.
"This has been evident in the group's quotation levels and order intake levels, where modest reductions have been experienced during the third quarter," according to the company.
However, the group said it expects operating profit for the current year to be between €82m and €85m, up from the €67.4m it reported in 2010.
"The threat of markets retreating somewhat in 2012, however, remains a real possibility although visibility is more difficult in this environment," said Kingspan.
Goodbody Stockbrokers analyst Robert Eason said the expected profit levels at the company highlighted "superior growth dynamics" at Kingspan compared to its peers.
The Cavan company added that activity levels in the UK market had remained "resilient", while activity in Germany has also been strong, but with lower levels of growth compared to those experienced at the beginning of the year.
Kingspan said that despite the US construction market remaining difficult, sales of its insulated panels there were "well ahead" of last year.
Shares in Kingspan edged 0.8pc higher in Dublin to €6.05.