Kingspan eyes takeovers in Europe, US

Insulation specialist

Kingspan

is eyeing a number of takeover opportunities in

Europe

and the US, and hopes to conclude a deal with at least one

this year.

The Cavan-based manufacturer reported that pre-tax profits in 2013 increased 13 per cent to €102 million from €90 million the previous year. Revenues grew 9.5 per cent to €1.8 billion from €1.63 billion.

Chief executive Eugene Murtagh said the company is considering several acquisition opportunities. "It's our intention to execute at least one of them some time this year," he said, adding that it was possible that Kingspan could do more than one deal.

Buying plans
Even allowing for the group's conservative borrowing targets, Mr Murtagh pointed out that its 2013 earnings before interest tax and write-offs – a measure of the cash generated by the business – of €163 million allowed it the scope to raise up to €350 million to fund acquisitions. "We have even more headroom than we had a year ago because we did not do any acquisitions," he said.

Two companies that Kingspan bought in 2012 – Thyssenkrupp Construction, a subsidiary of the German steel giant, and middle eastern operator, Rigidal Industries – made a significant contribution to sales and profits last year, their first full year as an integrated part of the Irish group in 2013.

Sales of insulated panels increased 23 per cent to €1.04 billion last year, mainly on the back of these purchases.

Mr Murtagh said that while Rigidal was profitable when Kingspan acquired it, the Thyssenkrupp subsidiary was loss-making and required “an awful lot of work” to bed it down as part of the wider group.

Revenues from insulated boards dipped 3 per cent to €455.4 million. Turnover in environmental products slid 12 per cent to €144.7 million while sales of its flooring products were flat at €154.2 million.

The group’s trading profit increased 14 per cent in 2013 to €163 million from €148 million. Earnings per share were up 18 per cent at 51.7 cent. It is proposing a final dividend of 8.5 cent, increasing its total payout to investors for the year by 14 per cent to 14 cent a share.

Kingspan cut its net debt by more than 33 per cent during the year. At December 31st, it stood at €107.6 million, which was about two-thirds of its earnings.

Its home market accounts for just 3 per cent of sales and Irish revenues increased 2 per cent last year.

Mr Murtagh said the group is seeking growth in Britain, northern and central Europe and the Benelux countries.