Kingspan's profits to hit €250m in 2015
Published 10/11/2015 | 02:30
Shares in Cavan-based insulation maker Kingspan soared almost 5pc yesterday after it said it expects to generate profits of about €250m this year - 8pc ahead of analyst forecasts.
The company said that revenues rose 54pc in the third quarter and were 3pc higher on a constant currency basis.
It added that sales in the first nine months of the year jumped 44pc to €2bn, and were up 33pc on a constant currency basis.
The company, headed by chief executive Gene Murtagh, said that it had recorded a "strong sales performance" in the third quarter, boosted by the contribution from acquisitions.
Underlying sales, excluding favourable foreign exchange movements and acquisitions, were up 3pc both in the year to date and third quarter.
Goodbody said the better-than-expected update results in an 8pc upgrade to both trading profits and earnings per share at Kingspan for 2015. The earnings per share figure is now expected to be 106 cent.
The upgrade for 2016 will be about 5pc, making for earnings per share next year of 111 cent. That's 30pc more than what was forecast at the beginning of this year.
"This highlights the momentum that currently exists in the business and is a clear differentiator from the general building materials sector where the bias to forecasts has been more on the downside," said Goodbody analyst Robert Eason.
Kingspan said that sales of insulation panels rose 54pc in the first nine months of the year, and by 73pc in the third quarter. Excluding currency movements, the figures were up 46pc and 65pc respectively.
"The UK continues to perform solidly, albeit with some moderation since September. Mainland Europe recorded a steady sales performance overall with reasonable activity in most key markets," it said. Kingspan added that sales in North America had grown strongly during the year to date, with the US outpacing Canada, which has been more variable.
Sales of insulation boards in the first nine months of the year rose 39pc, and 38pc in the third quarter. On a constant currency basis they were both up 29pc. Underlying sales growth, excluding currency movements and acquisitions, was 4pc in the first nine months and 1pc in the third quarter.
Davy Stockbrokers analyst Flor O'Donoghue said Kingspan's numbers provide "further proof" that the company is in "exceptional shape at present, albeit the current year result will be flattered to some extent by some one-off items". Those one-off items include not having the loss-making winter months for its Joris Ide and Vicwest units included. "Hence, while we expect to upgrade our 2016 estimates, the uplift will not be as great as that for the current year forecasts," said Mr O'Donoghue.
This year, Kingspan announced the €315m acquisition of Joris Ide, a European maker of insulated panels. It also completed the acquisition of the building division of Canadian firm Vicwest for about €110m.
The company is also planning a foray into Mexico.