Tuesday 20 March 2018

Kingspan sees record market capitalisation jump as it shrugs off Brexit

'Positive start,' says Kingspan ceo Gene Murtagh. Photo: David Conachy
'Positive start,' says Kingspan ceo Gene Murtagh. Photo: David Conachy

Fearghal O'Connor

Kingspan showed its largest jump in market capitalisation in a single day last Friday. The Cavan-based company released results for the first half of the year that were slightly ahead of forecasts, shrugging off concerns around how political turmoil in Britain could impact the construction industry.

That led to a 9.9pc jump in share price to €31.50, driving market capitalisation to over €5.6bn on Friday, a day when the overall ISEQ index of Irish shares fell by more than 1pc.

The first-half results saw total revenue rise 19pc to €1.75bn, which resulted in a trading profit growth of 6pc to €178m.

Chief executive Gene Murtagh described the results on a call to analysts as "a very positive start given the uncertainty in the UK and the relatively severe raw material inflationary environment that we've gone through". The company manufactures high performance insulation products and is a key employer in the border region. Analysts have previously cited it as a company that could be hit by Brexit given its border location and its big presence in the UK market.

But despite currency headwinds, the results showed that shares in the company should be "a core holding in construction portfolios", Goodbody analyst Robert Eason wrote in a briefing note.

The company had shown better than expected underlying progress that reflected stronger organic sales growth and strong progress on raw material input cost recovery, wrote Eason.

The company is expected to deliver a continued strong performance from the company across much of Europe and the Nordics, with stable activity expected in North America, he wrote, adding that Goodbody expects to raise its 2017 trading profit forecast for the company by 2pc to 3pc.

Sunday Indo Business

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