Shares fall at Kingspan after investor cuts stake over Grenfell fire

Liontrust highlights ‘serious concerns’ raised by inquiry into London tower block disaster

Kingspan maintains that it would never have recommended that its products be used on Grenfell when the tower block was refitted

Kingspan maintains that it would never have recommended that its products be used on Grenfell when the tower block was refitted

 

Kingspan shares fell almost 2.8 per cent in Dublin on Friday after a long-time investor confirmed that it had cut its stake in the Irish insulation maker on concerns raised about the business at an inquiry into a London tower block fire.

Liontrust Asset Management cut its holding in Kingspan by about 400,000 shares to 1.2 per cent from 1.5 per cent following revelations about the Irish company at an inquiry into the Grenfell Tower fire in June 2017, in which 72 people died.

Kingspan’s shares fell 2.78 per cent to €62.95 in Dublin. They were down 2 .7 per cent at €62.80 in London.

The asset manager said that it had sought to meet Kingspan after it was scheduled to respond to the inquiry this month.

“Due to Covid lockdowns, however, the response has been delayed until early February,” Liontrust said.

It noted that its sustainable investment team had been investors in Kingspan for more than 15 years, and held the company in high regard.

However, Liontrust said the Grenfell inquiry “raised serious concerns about the culture and controls within the insulation business at Kingspan” .

Joked

The investigation unearthed emails in which staff at a Kingspan UK business joked about safety.

“Based on what we have learned and, it must be said, in advance of the company being able to respond to the inquiry, we decided to downgrade Kingspan’s sustainability rating from A1 to A4 in December 2020,” Liontrust added.

The firm explained that the rating downgrade meant “we view a company as higher risk and its weighting in our portfolios should be smaller”.

Kingspan last month acknowledged “unacceptable conduct” at its UK insulation business following revelations at the public investigation into the deaths at Grenfell in west London.

About 5 per cent of the material used on Grenfell’s facade, through which the fire spread, was made up of Kingspan’s Kooltherm K15 product. The rest was supplied by a rival.

The Irish company maintains that it would never have recommended that its products be used on Grenfell when the tower block was refitted.

Unaware

Kingspan was unaware that its product was used on the tower until after the fire, chief executive Gene Murtagh said in an email to staff last month.

A spokesperson for Kingspan declined to comment on Liontrust’s statement.

Kingspan has long been a top pick for fund managers looking to buy into environmental stocks. Its appeal to green investors is simple: buildings are responsible for about 40 per cent of the European Union’s greenhouse gas emissions from energy use, and insulation can help cut carbon emissions.

Liontrust said Kingspan’s statement last month on the inquiry showed the company “will learn from their mistakes and are taking appropriate actions to ensure that such conduct never happens again”.

Still, the asset manager said it will reserve judgment until the inquiry concludes, and will maintain its stake as it engages with Kingspan’s management.

– Additional reporting Bloomberg