Friday 14 December 2018

Kingspan's 'sluggish start' to year fails to deter investors

Kingspan chief executive Gene Murtagh
Kingspan chief executive Gene Murtagh
John Mulligan

John Mulligan

Kingspan's admission that it had a "sluggish start" to the year did little to deter investors yesterday, with shares in the Cavan-based insulation maker jumping more than 4pc at one stage before it held its annual general meeting in Dublin.

Kingspan said in a trading update that some markets had been "slow to get moving" because of a prolonged winter in Europe, which saw cold snaps persist until recently.

But it said group sales in the three months to the end of March were 8pc higher at €895m, and 1pc higher on an organic basis that stripped out acquisitions.

It added that the UK was "tough overall", but that sales of insulated panels "improved somewhat" in recent weeks,

"Mainland Europe has been relatively stable," it added, noting that its operations in the Americas and the United States were "generally positive".

"Activity in Brazil has been strong in the first quarter," the company said in its trading update. "Australasia performed solidly in the main, while activity in the Middle East has been picking up somewhat."

Kingspan, whose chief executive is Gene Murtagh, said that the Irish market has had a good start to the year as residential construction activity continues to improve.

The company added that the order backlog across the group points towards a good second quarter.

"Overall, the acquisitions completed both last year and more recently are performing well and to plan," it added.

Last year, Kingspan committed about €620m to 10 acquisitions. The single largest deal was an agreement to buy Barcelona-based Synthesia for €250m. The Cavan-headquartered group also agreed to buy Brakel, a Dutch firm that provides daylight access, fire safety and ventilation solutions. It also signed a deal to buy Polish insulation firm Balek Metal. Those three acquisitions will add about €740m in annual revenue to Kingspan.

"Given the year-on-year relative mix of markets and activity, combined with the initial impact of acquisitions, the group's trading margin percentage for the first half will be lower than the same period last year," said Kingspan yesterday.

It added: "Notwithstanding the present trading environment, the group remains well positioned for the year as a whole and for the longer term."

Davy Stockbrokers said it was unlikely to alter its full-year financial forecasts for Kingspan.

Irish Independent

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