Kingspan shares fell to their lowest level since June after the UK announced a £3.5bn (€4bn) scheme to remove cladding from residential blocks in the wake of the Grenfell fire and after weak results from Danish peer Rockwool.
Away from the cladding controversy, Kingspan’s Danish peer Rockwool, which is also active in the European insulation market, had results yesterday. Its guidance indicated a lower operating market in 2021 and shares were down 5pc.
The UK Housing Department announced a plan yesterday to remove cladding from buildings of six storeys or more that will be part paid for with a levy on property developers, not not construction materials manufacturers.
But Kingspan’s name has been linked to Grenfell since hearings last year of the inquiry into the fire which may have added to sentiment against the shares on the market yesterday.
Kingspan’s Kooltherm K15 insulation was one of the building products used on the Grenfell Tower in London where 72 people died in a 2017 fire. The rapid spread of the fire has been blamed on the use of exterior cladding including US manufacturer Arconic’s Reynobond product.
Kingspan has said it was not aware its product had been used for around 5pc of the insulation at Grenfell and has said would not have recommended its use with Reynobond, but has admitted shortcomings and suffered significant reputational damage after scrutiny at the Inquiry into the tragedy.
In December Kingspan CEO Gene Murtagh admitted "historical unacceptable conduct and process shortcomings" within his firm’s UK insulation boards division and said the problems were "being addressed with the utmost seriousness".
The inquiry had heard evidence that Kingspan relied on outdated and incomplete test results to demonstrate its product was safe for high-rise structures as well as of Kingspan staff taking an apparently dismissive attitude to the issue before the fire.
"All we do is lie in here," wrote one technical employee to another in a text exchange seen by the inquiry.
Meanwhile, the Grenfell Inquiry in London yesterday heard that the firm that sold the cladding itself was aware of the risk of fires in 2013, four years before Grenfell.
The public inquiry was shown an internal email sent by a sales manager at Arconic that warned of the risk of fires in high rise buildings following a series of fires in the United Arab Emirates.