Kingspan outperforms expectations with robust set of results
Revenues jump by 13 per cent in first half of the year
Kingspan chief executive Gene Murtagh said the group delivered a positive performance against a backdrop of weak European economic conditions and a tough winter across many regions. Photograph: Brenda Fitzsimons / IRISH TIMES
Despite a “relatively sluggish” start to the year, Kingspan saw its sales momentum accelerate through the second quarter to post a 13 per cent increase in first half revenues of €858 million. Pre-tax profits advanced by 5.7 per cent to €47 million at the Irish insulation and building materials group.
Trading profit advanced by 6 per cent, up to €56 million, with trading margin declining from 7 per cent to 6.5 per cent, in the six months to June 30th 2013, due to the initially dilutive impact of the ThyssenKrupp Construction acquisition.
Gene Murtagh, chief executive of Kingspan said that the group delivered a positive performance “ against a backdrop of weak European economic conditions and a tough winter across many regions”.
“ Our strategy of positioning the company at the hub of conversion to lower energy buildings continues to enable us build the business globally notwithstanding the external conditions,” he said.
The UK posted strong second quarter growth for Kingspan, as did North America and the Middle East, with more stable performances in Germany, France, much of Central Europe and Australasia.
Kingspan’s insulated panels division recorded a “strong trading peformance”, with a 34 per cent increase in revenues, and a 24 per cent jump in trading profit. Sales fell in the insulation boards division, down by 3 per cent, although in Ireland this division board grew by 7 per cent as “general construction and refurbishment activity has improved somewhat, with pricing being the key challenge as the market embarks on its long route to recovery”. Sales revenue in environmental dropped by 17 per cent.
Kingspan made two acquisitions in the second half of 2012, Rigidal Industries in the United Arab Emirates, and ThyssenKrupp Construction in Europe. Both performed well year-to-date with a combined turnover in the period of € 138 million, with an improvement in ThyssenKrupp’s profitability moving the business from a significant loss last year to a small profit in the first half.
Davy Stockbrokers said that the results indicate that the group is now “on track to meet full year expectations”.
Kingspan is to increase its interim dividend by 10 per cent, up to 5.5 cent per ordinary share. It will be paid on September 20th to shareholders.
Looking ahead, Kingspan will concentrate on penetration growth, “driven by conversion towards modern high performance insulation and building envelopes ”.
“Kingspan’s commitment to an expanding geographic platform and its recent and new product introductions, combined with a robust order book and pipeline, should deliver an improved year-on-year result in the second half of 2013,” the company said.