INSULATION giant Kingspan is "very well placed" to take advantage of any potential opportunities as a result of Covid-19, according to analysts.
Flor O'Donoghue, of Davy Stockbrokers, said while Kingspan had been early in identifying the challenges posed by Covid-19, it would not prevent a "material hit" to this year's earnings.
"But the business remains in fundamentally good health as evident in its financial position. With crisis comes opportunity and, in this regard, Kingspan is well placed," Mr O'Donoghue said.
On a call with investors following its full year results in February, Kingspan CEO Gene Murtagh said everything the company is looking at in the area of mergers and acquisitions is "bolt-on to medium-size and very absorbable".
The primary focus of Kingspan's M&A activity will be around further consolidating its position in the panels and boards markets.
"However, also our Light & Air business is focusing on a number of opportunities that we hope to land this year as well," Mr Murtagh added at the time.
In yesterday's trading update the Cavan-headquartered group said global sales had decreased by almost 35pc in April compared to the same period last year as construction sites temporarily shut.
The company currently expects to record a result close to break-even for April.
As Kingspan would probably look to generate trading profit of €40m-€45m a month, it is now "not unreasonable" to estimate a shortfall of around €100m for the second quarter of the year compared to what would have been expected pre-Covid-19, according to Mr O'Donoghue. "We are in the process of reviewing forecasts but a trading profit range of €350m-€400m for the year now appears a realistic scenario," he added.
Last year Kingspan reported a profit of €497m.
In Ireland, Kingspan's sales activity fell by more than 80pc in April compared to 2019, as the fall-out from the pandemic forced building sites across the country to close.
The Americas has been robust so far for the group, as has Germany and parts of central Europe. However, France and southern Europe have been particularly weak, Kingspan said.
In the UK, activity is less than half what it was in April last year, but the company said Ireland was "a clear standout".
The company's bank debt as at April 27 was €551m and it has in excess of €1bn of cash on hand and committed undrawn facilities.
Meanwhile, group sales were €1.03bn for the three-month period to March 31, 3pc down on 2019.
The current lockdown did not significantly affect activity for most of the first quarter, the company said. During the three months the UK saw a pickup in order intake activity, while mainland Europe was "solid overall".
Shares in the group were down 3pc in afternoon trading yesterday.