Friday 23 March 2018

Revenue up almost 20pc at Kingspan however trading margin declines slightly

Gene Murtagh, the chief executive of global insulation maker Kingspan. Photo: David Conachy
Gene Murtagh, the chief executive of global insulation maker Kingspan. Photo: David Conachy
Ellie Donnelly

Ellie Donnelly

Revenue at Kingspan increased 19pc year-on-year to €1.75bn in the six months to 30 June, according to the company’s half year results.

Operating profit at the company, which produces high performance insulation and building envelope solutions, increased 6pc to €177.8m year-on-year during the six month period.

While earnings before interest, taxation, depreciation, and amortization were €209m, up 6pc year-on-year.

The results were driven by acquisitions, which contributed 10pc to sales growth during the period and insulated panel sales growth which increased 17pc year-on-year.

Net debt at the Cavan-based company was €440m at the end of the six months, an increase from €348m on the same period last year.

Read more: Over 25pc of shareholder votes against new incentive scheme for staff at Kingspan’s agm

In addition the company’s trading margin of 10.2pc was down slightly on the same period in 2016, which Mr Murtagh said was due to cost inflation that would take two to three months to pass on.

Commenting on the results, chief executive Gene Murtagh, described the first six months of 2017 as a "strong" period for Kingspan.

Mr Murtagh noted in his comments that margins had contracted however he said that the company anticipate further recovery of input increases in the second half of 2017.

"Our balance sheet is strong and ready to support our development agenda as the opportunities unfold," Mr Murtagh said.

The company’s interim dividend per share was up 10pc to 11 cent.

Looking at the different divisions of the company, insulation board sales experienced growth of 8pc year-on-year, while its light & air division had sales of €81.7m, making what the company described as a "strong start" in its maiden results period.

In Ireland the company’s performance was flat and Kingspan said that it expects the remainder of 2017 to be similar.

In Latin America the company launched in Mexico and also acquired 51pc of Panelmet in Colombia.

Kingspan expects its end markets to be broadly positive for the remainder of the year with a “solid performance” expected in the UK and Ireland and continued strength across much of Western Europe and the Nordics. North America is expected to be reasonably stable.


Speaking on RTE Radio One this morning Mr Murtagh said that so far the company have seen virtually no impact from Brexit,

"Where we do see some potential weakness is in the City of London with office construction," Mr Murtagh said.

On the issue of borders in Ireland, Mr Murtagh said that Kingspan would not be making any decisions until it was "abundantly clear" what was going to happen.

In April this year over a quarter of shareholder votes went against a new incentive scheme for senior staff at Kingspan.

The scheme had been criticised by shareholder advisory firm ISS, who took a view that the plan released too many shares to executives at a certain performance level.

Commenting at the time chief executive Gene Murtagh defended the plan, saying he was "surprised with the amount of focus it's getting for a business that's performed so well over the last 10 years".

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