Kingspan profit rise to shake off Brexit impact, Davy says

Kingspan rose in early trading on Monday as analysts at Davy said the insulation panels maker is well placed to shake off the negative impact of Brexit and post a solid set of interim results next week.

Shares in the Cavan-based company rose 1.7 per cent to €22.18, to count among the top performers on the Irish market, though they remain 11 per cent below where they traded before the UK referendum.

Dynamic growth potential

"The upcoming interim results should indicate that Kingspan will have done much of the heavy lifting towards reaching full-year earnings expectations," said Davy analysts Flor O'Donoghue and Michael Mitchell in a note. "We remain very positive on the outlook for the group and its dynamic growth potential."

Davy estimates Kingspan’s revenue rose 20 per cent in the six months to the end of June to €1.47 billion from the year-earlier period and that it posted a €144 million trading profit, up 30 per cent.

This would mark a 13th consecutive half of trading profit growth, “a record we suspect is unmatched in the building materials sector,” the analysts said.

“There is clearly considerable uncertainty regarding the near-term prospects for construction activity in the UK, still an important jurisdiction for Kingspan at circa 25 per cent of group revenues. However, we believe Kingspan is well placed to absorb any stresses – especially with the group making so much progress elsewhere.”