Revenues rise at Kingspan as it buys Ondura in €550m deal

Revenues at insulation-maker Kingspan rose 42 per cent to €6.5 billion last year as it announced a €550 million deal to buy French roofing membranes provider Ondura.

The company reported a 49 per cent rise in trading profit to €755 million for the full year, with basic earnings per share (EPS) up 48 per cent to 305.6 cents.

Acquisitions contributed 12 per cent to sales growth and 11 per cent to trading profit, Kingspan said.

It announced a final dividend per share of 26 cent, giving a total dividend for the year of 45.9 cent. At year-end net debt stood at €756.1 million, as against €236.2 million in 2020.

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“The business delivered an exceptional performance last year, with our growing sales to customers in the technology, online distribution, and automotive sectors instrumental in the results. Whilst dramatic input price inflation was a major feature our cost-recovery efforts helped ensure continued margin improvement,” said chief executive Gene Murtagh.

“Despite a slower fourth quarter, with a large order backlog we are cautiously optimistic about the outlook for this year, whilst mindful of the high bar in comparison with last year’s performance. High energy costs and supply threats around the world are a catalyst for a focus on conservation measures, which is likely to accelerate the demand for lower energy solutions which we believe will be supportive of demand for our products,” he added.

The company said it spent over €500 million in acquisitions in 2021, and since year-end has committed a further €800 million on three transactions.

Kingspan said the acquisition of Ondura, which is expected to complete in the second half, will increase earnings by about 7 per cent annually.

Ondura is a provider of roofing membranes and associated solutions. It has 14 manufacturing sites and a distribution network in 100 countries. The company recorded revenues of €424 million last year with earnings before interest, taxes, depreciation, and amortisation (ebitda) totalling €63 million and a trading profit of €55 million. Gross assets as of the end of 2020 were €387 million.

Solutions

“The acquisition is fully aligned with Kingspan’s long-stated strategy to develop multiple technologies in roofing applications, and will serve as our global platform for advancing these solutions,” the insulation-maker said.

Following completion of the deal the existing Ondura management teams will be retained.

In a note to investors Davy hailed an “outstanding” performance from Kingspan. “We expect to raise our current year trading profit forecast by 4 per cent to 5 per cent and this does not include the three acquisitions that have been announced. We estimate that the three deals when completed will add circa 9 per cent to current trading profits over a full year,” it said.

“As ever there is the near-term mix of risks, challenges and opportunities, but the longer-term growth dynamic remains compelling.”