Kingspan shares up in 'clear sign of recovery'
Shares in insulation maker Kingspan hit their highest level since late 2007 yesterday as the company said there is "clear evidence" of recovery in some of its UK construction markets.
The firm's shares hit as high as €13.32, a 2.2pc gain, bringing them to a level not seen since December 2007. During the peak of the boom, in mid-2007, they had changed hands at over €22.
Kingspan predicted yesterday that its trading profit for the current financial year is likely to be 10pc higher than in 2012, at €118.5m. That's slightly higher than had been expected by analysts at either Investec or Davy Stockbrokers.
In an interim management statement, the company said that sales in the first nine months of the year were 13pc higher at €1.3bn and were 16pc higher on a constant currency basis compared to the first nine months of 2012.
Excluding acquisitions, sales were 3pc lower and flat on a constant currency basis, however.
Its sales of insulated panels, which are used in the construction of commercial projects such as offices and shopping centres, rose 33pc in the first nine months of the year. In the third quarter, they were 32pc higher. Sales revenue excluding acquisitions was down 2pc but 1pc higher on a constant currency basis.
"Activity in the UK has picked up in more recent months and western Europe saw solid activity through the third quarter similar to what was experienced in the second quarter," said the company, which is headed by chief executive Gene Murtagh.
It added that sales in central and eastern Europe also experienced "improved momentum" in the second quarter and the pattern has continued into the second half of the financial year.
In North America, the pace of sales growth moderated to an extent during the third quarter, while sales in Australia recovered in that period.
"The UK market overall has seen an increase in activity most particularly in new build residential, although the more significant non-residential segment for Kingspan, is not experiencing recovery to the same extent," the company noted.
Kingspan said its net debt at the end of September stood at €146.8m. That's €75.3m lower than at the same point last year.