Kingspan shares up as it predicts profits to grow by 15pc
KINGSPAN shares closed up 0.62pc yesterday, paring early gains of more than 3pc, after the company said it expected trading profit for 2018 to be 15pc ahead of last year, at €440m.
Sales in the first nine months of the year were €3.18bn - a jump of 18pc on the year before. Underlying sales, before the impact of currency changes and acquisitions, were up 4pc.
"Overall, our end markets are reasonably stable and, whilst our orders-on-hand are strong, we remain cognisant of the general sense of nervousness prevailing globally," the company said.
"Assuming that currency exchange rates remain relatively constant and, conscious that much of the seasonally-variable fourth quarter is still at play, we expect to deliver full-year trading profit of circa €440m, or growth of approximately 15pc."
Davy analysts Flor O'Donoghue and Robert Gardiner said the projected trading profit was 2pc ahead of Davy's forecasts. "Kingspan remains on track for an eighth successive year of double-digit profit growth. Its latest update... suggests that Kingspan is tracking to trading profit growth of approximately 23pc year-on-year in H2. It is clear that the group remains very well positioned and continues to justify its premium valuation."
The one disappointing part of the business was its access-flooring arm. Access flooring allows for a raised floor put in place in a building that allows cables to run easily underneath.
Sales in that division fell 3pc year-on-year, Kingspan said, but improved in the third quarter. "Datacentre solutions as well as sales of higher-end floor finishes, a product suite developed in recent years, are both advancing," it said. The best-performing division was the 'Light and Air' business, which provide lighting and ventilation services.
It saw sales rise 50pc, reflecting the impact of acquisitions. For that division, mainland Europe was "solid overall" and the US was sluggish due to postponements.