Saturday 23 June 2018

Murtagh: Kingspan will replace lost Brexit business

   

Kingspan chief executive Gene Murtagh said it has had a ‘very good run’ in Western Europe. Photo: David Conachy
Kingspan chief executive Gene Murtagh said it has had a ‘very good run’ in Western Europe. Photo: David Conachy

Fearghal O'Connor

It is hard "to magic away" the impact Brexit is having on Kingspan but business lost in the UK will be replaced "over time", chief executive Gene Murtagh has said.

But he warned the situation "is probably going to get worse before it gets better because people that have the ability to hold back an investment in the UK at the minute will wait "until the clouds clear".

On Friday, the Cavan-based building materials manufacturer's share price plunged 11pc before recovering to end the day down 4pc, despite posting big revenue and profit jumps for last year.

"I guess we probably spooked [the markets] a little with our comments on the UK non-residential side of things where we have seen a fairly sharp recent decline. Understandably, there was a cautious reaction to that," he told this newspaper.

The company had said on Friday that the "Brexit quagmire" had led to a 15pc decline in that part of its business. The UK insulation panels business accounts for about 12pc of Kingspan's revenue.

"If that [decline] were sustained it would be meaningful for the rest of the year," he said.

"So long as uncertainty prevails I don't see what catalyses a reversal of that.

"I wouldn't go so far as to say we will easily absorb this. At the end of the day it has been our most important market for decades now.

"It will mean a lot to us, but we have lots of compensating factors elsewhere in the world that we have been working on for some time and that will obviously help us."

Murtagh said that over 10 years the UK has gone from 75pc of the Kingspan business to 25pc.

"It is declining for the right reasons because we have internationalised. That pattern is going to continue. The lion's share of our investment will all be outside the UK."

The company has had "a very good run in Western Europe", he said, highlighting the Benelux countries, France and the Nordic countries in particular. He said North America had also grown substantially and was now 20pc of the business and Kingspan was also seeing "encouraging signs" in Latin America after substantial investment.

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