Kingspan reports ‘sluggish start’ to year due to weather

Building materials specialist Kingspan has reported a "sluggish start to the year" due to prolonged winter conditions in many regions.

The company, which is holding its annual general meeting on Friday, nonetheless said group sales of €895 million for the three-month period to March 31st were 8 per cent ahead of last year.

In terms of its various markets, Kingspan said the UK was “tough overall” but that insulated panels activity “improved somewhat in recent weeks”.

Mainland Europe was “relatively stable”, while in the Americas the US was “generally positive”, and Canada “showed signs of recovery” from last year.

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Activity in Brazil was “strong” in the first quarter, while Australasia “performed solidly in the main”. Activity in the Middle East was described as “picking up somewhat”.

In terms of the Republic, there has been “a good start to the year” reflecting growth in the residential sector.

The company’s net debt at March 31st was €698 million, an increase of €234 million from the position at last year end, “reflecting the completion of the acquisition of Synthesia in March and the seasonal investment in working capital”.

The group’s funding position is robust with €660 million of committed undrawn facilities and cash balances.

In terms of outlook, the order backlog across the company “points towards a good second quarter”.

“Overall, the acquisitions completed both last year and more recently are performing well and to plan,” it said.

“Given the year-on-year relative mix of markets and activity, combined with the initial impact of acquisitions, the group’s trading margin percentage for the first half will be lower than the same period last year.

“Notwithstanding the present trading environment, the group remains well positioned for the year as a whole and for the longer term given the breadth of our product mix, our extended geography and the ongoing advancement of our high-performance technology.”

Kingspan will issue its half-year financial report for the period ended June 30th, 2018, on August 24th.