Friday 21 October 2016

Kingspan's Murtagh sells off €3.6m in shares as price soars

Published 06/09/2015 | 02:30

Kingspan's chief executive Gene Murtagh
Kingspan's chief executive Gene Murtagh

Kingspan chief executive Gene Murtagh made a near €3.6m profit by exercising a large block of stock options and selling the whole lot. Company filings show that Murtagh cashed in 36,195 options at a price of €10.90 each before selling them at €21.60. He also cashed in a further 148,000 special options at 13 cent each before selling them all last Wednesday. Murtagh still has 1.13m shares worth close to €25m.

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Kingspan's share price has risen sharply this year boosted by strong trading and the seamless integration of major acquisitions. Kingspan inked two major buyout deals this year, 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. The insulation firm's share price has just passed its pre-economic crash high. The Cavan headquartered company has more than quadrupled in value since the market lows of 2009.

Last month Kingspan revealed that revenues had jumped 39pc to €1.2bn in the first half of the year with trading profits rising 69pc. Murtagh described Kingspan's trading performance as "exceptionally strong" noting that it had been "a record period" for the green insulation manufacturer and developer. "Kingspan has had an exceptionally strong start to the year, underpinned by solid organic growth. Good progress has also been made with the integration of the Joris Ide and Vicwest businesses acquired during the period, both of which contribute significantly to the global evolution of Kingspan," said the CEO.

The acquisition of Belgium-based manufacturer Joris Ide and Canadian-based manufacturer Vicwest chipped in 26pc to sales growth and 31pc to trading profit growth in the first half of the year. "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," he added.

Murtagh suggested that the key near-term focus for Kingspan and its management team 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. However Kingspan's debt-to-earnings ratio is well below management limits of two times, giving it the scope for further buyouts particularly if earnings continue to grow. Murtagh has indicated that it could have "a few hundred" million euro war chest available.

Analysts believe that the strong trading could see Kingspan hike its trading profits by over €100m this year. "Our initial sense is that trading profit of €230m for the year is now possible," Davy Stockbrokers analysts said in a research note following the Kingspan results. Last year, Kingspan reported a trading profit of €148.5m.

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